Influences of Globalisation on Leadership and Organisational Structure

Global Business Environment
1

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Analysis of various key factors of market, cost, environment & competition is that driving
global commerce & trade.......................................................................................................3
TASK 2............................................................................................................................................6
Explain the complexity of strategic challenges faced by organisations when operating in a
global environment supported by specific examples..............................................................6
TASK 3............................................................................................................................................7
Influences of globalisation on leadership, and organisational, governance structure, culture &
functions.................................................................................................................................7
Influences of ethical & sustainable globalisation on functions of a organisation................11
TASK 4..........................................................................................................................................15
Different ways decision making can work effectively in a global context..........................15
Routes to internationalisation that a organisation may adopt...............................................18
CONCLUSION..............................................................................................................................20
REFERNCES.................................................................................................................................21
2

INTRODUCTION
Global business environment consists of many different brands that are part of different
industries and operating their business functions in this dynamic environment. There are many
different aspects like political culture social technological that have to be considered by
organisation before formation of strategies. What is based on Allan Reeder London-based start
up established in the year 1971 (Banka, 2017). They are dealing in providing personal services
and sole trader supplying butter to Bakery screen and all the dairy products. They have a strong
management of customer relations and marketing department. In the present scenario this
organisation is willing to expand themselves to other countries apart from UK and they are
targeting Australia. For this there is discussion of various aspects of changing Global Business
Environment. So that there can be dealing with all the prospective risk and formation of
strategies in order to internationalise the brand.
TASK 1
Analysis of various key factors of market, cost, environment & competition is that driving global
commerce & trade.
Globalisation can be defined as a scenario of development taking place across borders. With the
changing scenario there has been a completely different opinion in which globalisation is
perceived as a concept by different people (Bedianashvili, 2016). From the economic it is related
with long distance flow of goods services and capital along with perceptions and information that
is accompanying the market exchange process.
Political view point is related with diffusion of government policies taking place across
International borders.
In social aspect globalisation can be said as present of information images people and Idea.
The culture dimension is related with of an exchanging culture that takes place with different
countries because of influencing Each Other in Sub dimension. Cultural dimension refers to
transmitting of values meanings and ideas and there is circulation of culture that enables
individuals in extending their social relations across boundaries.
3

There are certain factors of dimension globalisation:
International economy: International economy refers to a field of study that is used for
assessing the implications of international trade in services and goods and also having relation
with international investment. There are two major fields that is international economy consist of
international finance and international trade. National finance applies to different
macroeconomic models in understanding international economy (Chasdi, 2017). It focuses on
internet relationship between variable like unemployment rate, exchange rate inflation rate and
interest rate. It is also focusing on significance of trade in margins aggregate effects of
government monetary and determinants of exchange rate. Most important issues is related with
pros and cons of fixed and the floating system of exchange rate.
Foreign direct investment: FDI investment that is made by individual or organisation of one
country in the business that is located our present in another country. This usually takes place
when an investor is willing to establish foreign business operations are willing to acquire foreign
business assets for a foreign organisation. It is generally result of portfolio investment that is
made by Investor by purchasing of equities in the foreign based organisations. These are type of
direct investments are generally made in Open Economy that are offering a skilled workforce
and having a growth prospects for investor. They are frequently involving more than capital
investment and consist of provisions of Technology and Management (Endongand Essoh, 2019).
International business & trends: International business refers to the treat taking place related
with services good technology capital and knowledge across International borders and also at a
transnational scale (Gunn, 2017). There are some major things that a part of the international
business according to the year 2020.
Globalisation and interconnectivity that is resulting of superfast broadband and it has a major
impact on businesses functioning. From the economic perspective 2020 there is very threat for
countries like China for their International Business expansion (Hamilton, and Webster, 2018).
4

There is also a complete change entrenched in the way there is perceiving of Corporate Social
responsibilities businesses are extending beyond just environment and moving towards General
awareness and their causes impact on the society.
Key factors affecting globalisation:
1) Cost:
Cost is a very important structure and in case of Allen leader there are certain situations
of cost that can lead to decision of expansion or not expansion to other different parts of the
world. Cost structure that has to be considered is related to higher amount of structural
unemployment environmental cost. There is situation of tax competition and also Brain drain
from many countries all these is leading to less cultural diversity and impact on higher costs for
the organisations. For example: In Allan Reeder there has been accidents of high cost all the
situation to create a high burden on Allan Reeder and there is inadequate availability of financial
resources for fulfilling the requirements of globalisation but there have been certain incidents
like partnership with Samsara to undertake new technologies and optimization of delivering of
customer service (Allan Reeder, 2020).
5
Illustration 1: Financial data of Allen Reeder for year ending
2018

Allan Reeder has total assets worth 7.72 million in the year 2019 and their net assets are just 5.57
million in the year 2020. further their turnover is 33.81 million and debt equity ratio is at 27.87
percent that has increased as compared to year 2017all this financial data clearly indicates that in
case of Allen Reeder there are no sufficient financial resources that can be used by organisation
for purpose of expanding them to other countries (Allan Reeder Limited, 2018).
2) Market:
There are opportunities and threats both part of environment in which a particular
organisation is functioning (Tsanwani, Mulaudzi, and Raselekoane, 2017). There are certain is
that are part of external environment that consists of integration of multinational organisation,
effective communication improve means of transport. That is leading to higher business
opportunities for smaller organisations like Allan Reeder.
3) Competitive factors:
There are many competitive factors such as domestic monopolies have lead to removal of
competition. But globalisation is a scenario that helps organisation to phrase higher amount of
competition from other foreign organisations.
4) Environment:
The external environment consists of certain factors that are very critical and are
impacting the organisation. Allan Reeder has to consider all the different factors that are
affecting and part of the external business environment.
TASK 2
Explain the complexity of strategic challenges faced by organisations when operating in a global
environment supported by specific examples
Trading of goods and services as well as carrying out business operations and functions at
worldwide level is knows Globalisation. There are various laws and regulations related with
international trade which needs to be followed and considered by the management team while
doing business operations. Also it has been said that there are risk associated with diversification
which have there both as well as negative aspects. Some elements such as WTO, GATT,
6