Influences of Globalisation on Organisational Governance and Leadership

This article evaluates the influences of globalisation on organisational governance and leadership, structure, culture, and functions. It discusses the impact of globalisation on decision making, strategy, and performance in a global environment.

Unit 18
Global Business
environment

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analyse key factors of cost, market, environment and competition that drive global
commerce and trade.....................................................................................................................3
TASK 2............................................................................................................................................5
P2 Explain the complexity of strategic challenges faced by organisations when operating in a
global environment supported by specific examples...................................................................5
TASK 3............................................................................................................................................6
P3 Evaluate the influences of globalisation on organisational governance and leadership,
structure, culture and functions....................................................................................................6
P4 Evaluate the influences of ethical and sustainable globalisation on organisational functions.
.....................................................................................................................................................8
TASK 4............................................................................................................................................9
P5 Evaluate the different ways decision making can work effectively in a global context........9
P6 Determine and articulate the various routes to internationalisation an organisation may
adopt, including key barriers.....................................................................................................11
CONCLUSION..............................................................................................................................12
REFRENCES.................................................................................................................................13

INTRODUCTION
Global business environment is defined as dynamic environment that has a direct
influence how they operate and manage the business activities in changing environment. This is
important for all organization to understand the needs and wants of their customers then
formulate the planning and strategies which can help to increase the organizational performance
and profitability (Nădrag and Buzarna-Tihenea, 2018). Business owners and managers are
playing an important role as they control over all activities and functions in relation to
organization and increase the business productivity effectively. The global environment consider
internal and external factors that are related to business organization and needs to complete on
time which can help to increase the organizational productivity and profitability. The concept of
globalization means not new industry. The globalization refers as concept of integration of
international trade, culture, information technology and investment that uses to operate the
business and increase the organizational performance. This report is based on RCS Logistics that
is family owned business in 1973 and became the larger organization in the global environment.
This organization established in 1973 and currently its transport and warehouse solutions that are
mainly uses by some biggest companies in retail sector and manufacturing companies. This
report covers factors that drive globalisation, how operation influences am organization's
structure, culture and functions, influence of globalisation on organizational decision making and
strategy that can help to increase organizational productivity.
TASK 1
P1 Analyse key factors of cost, market, environment and competition that drive global commerce
and trade.
Globalization is defined as process and practices by which the world is becoming
increasingly interconnected as massively increase trade and cultural exchange. Every
organization wants to increase their sales and profitability so that globalization is the only way
which can be uses by company to increase their performance and profitability. In global
environment all activities and functions are properly managed and organised then it will be an
opportunity for organization to attain the competitive advantages and maintain the higher
profitability. The management and leader is a person who perform all actions and activities in
systematic manner then bring the uses of effective planning that can help to manage the

performance by developing a business. For example, RCS Logistics considered as small size
organization at the time of establishment but after adopting globalization process it has increased
the organizational productivity and profitability. The management of chosen organization are
understand all requirement of business and bring the uses of new technology that can help to
increase sales. Some factors that are uses in driving the global trade and commerce that are as
explained:
Cost: This can be explained as economical consideration that needs to consider while
running a business. While expanding the business in global environment there is need to know
cost of investment, return, employment rate and disposable income and operation cost in new
market. RCS Logistics is considering this factor while expansion of business in global
environment where it get to know disposable income of people and decide the cost of their
products and services that drives global business (Borchardt and et.al., 2020). In this,
management of chosen organization identify the cost that incurs while running a project. In this,
management come to know how much cost have arise in administration, selling, marketing and
other activity then formulate the strategy which helps to take the higher benefits by managing all
expenses. As result, RCS Logistics is driving their trade in competitive global environment.
Market: This can be explained as cultural consideration that involves is culture of
organization suit globalization, and how to learn new things while adopting new environment.
RCS Logistics is using this factor before going in to global environment where it learns new
things and adopt the new environment that can help to increase the business performance
profitability. For increasing the business performance, management conduct the proper research
and expand their services at another location or market which helps to drive the commerce in
global environment.
Environment: The relation of environment with political consideration where company
looks towards stability in government, changes in policies, relationship between two
government, and tax incentives that can help to operate a business. RCS Logistics establish its
business in global environment as it follows all regulation, policies, tax rates and others that can
help to increase the sales and business profitability.
Competition: This refers as social consideration where organization needs to know the
needs and wants of customers which supports an organization to grow their business and attain
the profitability. RCS Logistics is facing the competition as number of organization are exists in

the market where it operate its business by delivering better quality of products and services to
its all clients which can help to increase the sales and performance (Cano-Kollmann, Hannigan
and Mudambi, 2018).
Impacts of digital technology on Globalization
The impacts of digital technology on business operation is great as it helps to increase the
business activities from one country on another by using internet, maintaining software, and
using data information that can help to increase the business performance. RCS Logistics us
using digital technology as it has increased its business from one country to multiple where
management are responsible to manage and arrange the all function with the help to internet and
other digital process that supports to increase the productivity and sales profitability effectively.
Factors are driving global commerce in relation to cost and market
In business environment there are many factors such as digital technology, changing
needs and wants of customers that can help- to provide the products and services accordingly
which develop the organizational performance.
TASK 2
P2 Explain the complexity of strategic challenges faced by organisations when operating in a
global environment supported by specific examples.
Strategic challenges are defined as problems and issues which can be arise while
operating a business in international market. The challenges can be external and internal that has
created an impacts on decision making and other process. RCS Logistics is comprises with
different factors that occurs in operation faces the different challenges such as failure in
production process, unskilled employees, lack of resources, lower profitability and others that
reduced the performance. RCS Logistics is using PESTLE analysis for operating business in
global environment by analysing some factors such as:
Political: The organisation carries out its duties as well as its activities in different
countries, including Europe and Asia. They include political variables such as political
uncertainty, tax rate, economic situation, legislation, unemployment rate and many others that
influence RCS Logistics' judgement process. Because of this operational planner, plans and
strategies can be formulated in a relevant way by which they can execute business activities and
functions in an appropriate manner (Markey and et.al., 2018).

Economical: These variables include certain components that are related to the country
and organization's economic conditions. With regards to decision making and retail operations,
labour costs play an effective role in this. As of 2018, the UK minimum wage rate has been
raised by 4.4% for workers over 25 years of age. With respect to RCS Logistics, which is
equivalent to millions of pounds in the UK, this expenditure linked to wage change is upwards.
Social: Customer behaviour is altered in terms of time and patterns in the delivery of
services and goods on the same day and demands a flexible return policy. Aside from this, they
often enjoy shopping at one stop. With regard to RCS Logistics, they interpret customer
expectations as well as needs and effectively devise plans & strategies accordingly. Through this
they will maintain and attract customers for a longer period and this will result in business
growth in an acceptable manner (Kwak, Seo and Mason, 2018).
Technological: Due to rapid technological advancement, RCS Logistics is creating
different opportunities. Organizations can generate new as well as creative goods by using
upgraded technology, which will increase profitability as well as organisational growth. In
efficient ventures, RCS Logistics has invested its resources, which leads to decreases in
increasing revenue and profitability in evolving markets, which can help improve efficiency and
brand awareness.
Environmental: Until business operations are extended in the international sector, the
company must take environmental considerations into account. Different variables, such as
temperature, atmosphere and many others are analysed. In the coming year, RCS Logistics has
concentrated on growing their carbon footprints by 50%, i.e. 2020, so that they can have a
healthy and sustainable climate. In addition, the related company has committed to preparing to
use renewable energy to produce 100 % electricity.
Legal: Government-formulated policies have a direct effect on RCS Logistics' working
culture. Before functioning abroad, organisations need to specify the rules and regulations of the
countries in which they operate. The Oil Pricing Business Commission Act was passed in 2014.
Accordingly, without giving proper notice to the public in this respect, the organization makes
price adjustments. As per this, their tactics are generated by organisation (Lam and Wong, 2018).

TASK 3
P3 Evaluate the influences of globalisation on organisational governance and leadership,
structure, culture and functions.
RCS Logistics is running their business by following the all legislations which are
formulated by government in different country, providing products as per different culture,
participating in CSR, focusing on leadership and management that influences the number of
people in global environment and increases the sales and performance.
Mentioned below there is an globalisation influence on leadership, culture, structure and
governance:
Globalisation on governance:
This means formulation of rules, regulations, and methods which are formulated by
government for the purpose of running a business and increasing the organizational performance.
RCS Logistics is following all regulation while operating a business as it maintain good relation
with suppliers, consumers, shareholders and management which can help to work effectively and
attain the higher performance (Teece, 2018). Whenever a business is going to govern then it is
required to get permission and need to follow rules which can help to run a business.
Governance on leadership:
Leadership is the main activity which uses by organization in order to operate and run a
business effectively. Leader is a person who understand the problems of their employees and
provide them optimum solution which can help to attain the higher productivity and profitability.
In context to RCS Logistics, following democratic leadership style that can help to allocate the
role and responsibilities between employees and complete the work in effective manner which
can help to increase the organizational productivity and effectiveness.
In CSR function
CSR is becoming most important activity for organization as it involves many task that is
required to complete in order to increase the value of business. This means corporate social
responsibility which is important aspects as need to participate for developing the performance.
RCS Logistics is performing such functions effectively by taking part in CSR activities as it
contribute a percentage of their income in social work, providing better quality of service and
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saving the cost which build the organization value in the eyesight of customers and develop the
organizational performance.
Governance on functions:
For running a business and increasing overall effectiveness of organization there is need
to perform all functions accurately by understanding demand of customers, providing better
quality of products and service, and understanding current trend which is prevailing in market
that can help operate the all functions and activities effectively. RCS Logistics get benefits to
expand their area of business by managing and running all activities effectively in the changing
environment (Chatterjee, 2020).
Globalisation on structure:
RCS Logistics is defined as one of the leading and growing organization that is operating
all activities by adopting an appropriate structure in globalization and maintain the good business
effectiveness. The organization is using McKindsey's Model for increasing the workings and
maintaining performance in competitive environment that are as explained:
Strategy: This is important for organization to adopt an effective planning which can
help to gain more advancement by removing all barriers and attain the more profitability. RCS
Logistics is adopting market penetration pricing strategy which influence large size of
supermarket to maintain effective operation and develop a business.
Structure: This can be defined as culture and structure where all workings are needed to
complete in certain time. RCS Logistics is following democratic organizational structure and
also focuses on effective culture that can help to fill all requirements and attain the higher
profitability (Holbeche, 2018).
System: This can be explained as regular standard of work that is important for all
organization to follow for the purpose of managing the work and attaining the performance. RCS
Logistics is maintaining interpretative tool and system that supports to manage the all workings
and attain the higher performance in competitive environment.
Shared Values: This can be defined as superordinate factor that should be follow by
organization by managing all activities and increasing performance. RCS Logistics
understanding needs of their customers and provide them better quality of products and services
that deliver higher value and performance in competitive environment.
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Style: In RCS Logistics, management are following the effective managerial and
leadership style by maintaining good code of conduct and interacting in a good way which can
help to increase the sales by attaining goals of company effectively.
Staff: The employees of RCS Logistics are highly skilled, talented and proper organised
that perform all functions effectively by accomplishing the organizational goals and objectives.
Skills: This can be explained as employees of chosen organization are enough capable
and competent who manages all workings and deliver the better quality of products and services
which can help to increase organizational profitability (Peršič, Markič and Peršič, 2018).
P4 Evaluate the influences of ethical and sustainable globalisation on organisational functions.
Ethical globalisation is a process in which knowledge, data, products, services,
innovation and many other items are ethically transferred from one entity to another. It is a
broader term that takes into account different stockholders, government, society, suppliers,
workers, clients, etc. The underlying aim is to inspire each person to work morally to achieve an
organization's goals and objectives. Sustaining a position and gaining a competitive advantage is
critical. The effect of the carrying activities is expressed in a positive manner in earnings, sales,
income, share and public image.
Sustainable globalization refers to cross-border business practises that help companies
reach a point of equilibrium where sustainable market survival can be achieved. It would boost
the company's earnings by using them to succeed in the long run. Under this, an organisation
makes changes to the corporate structure according to the international business sector conditions
that are required for survival. Because of the number of legal formalities and conditions that are
necessary for growth and survival in cut throat competition, conducting business at the
international level can be difficult. There are various positions that will have a potential effect on
the business. The following explanations include some of the organisational operations or
functions:
Human resource: Within the framework of RCS Logistics, all the regulations relevant to
it that must be complied with should be defined by the HR department. When a business operates
outside its home country, this becomes essential to abide by laws and regulations that can
adversely affect the company. In order to preserve competitiveness, RCS Logistics has
acknowledged the value of employee diversity and the fulfilment of their desires for which it has
selected human practices (De Mooij, 2018).
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Marketing The function by which an organisation generates knowledge of its products or
services is both complex and essential. Identifying target customers by evaluating their desires
and demands in order to deliver products that will provide them with positive attitude is the key
operation carried out (Paschek, Ivascu and Draghici, 2018). With respect to RCS Logistics, it
has an initial-level strategy of selling products to draw more buyers and gain huge market share
in foreign markets. In addition, the marketing department of RCS Logistic is planning a range of
promotional events that will be carried out globally.
Finance: This position is synonymous with retaining cash flow so business operations
are carried out smoothly. Without any hindrance, every business raises funds to carry out its
activities. With regard to RCS Logistics, it is the duty of the finance manager to procure funds on
the basis of the different requirements created by the company. It should be collected in an
ethical way. In addition, the finance department makes sufficient allocation of finance so that
products of high standard quality can be made. An estimation should however be made to
evaluate current market dynamics and other factors that relate to customer catering requirements
(Avesani, 2020).
TASK 4
P5 Evaluate the different ways decision making can work effectively in a global context.
Decision making is the continuous process in each organization that important for each
organization as management analysis the business position and formulate the planning which can
help to make right business decision. In any organization management and leader are playing
important role as they analysis the functions and formulate effective planning which can help to
develop a business and attain the profitability. In context to RCS Logistics, managers and leaders
are effective person who find out the problems which are pertaining in current environment and
providing good quality of products and services that can help to operate a business and increase
the organizational productivity. This is important for all organization to analyse the situation and
formulate the effective planning which can help to develop a business and maintain the higher
performance.
Steps for improving decision making-
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This is important for RCS Logistics to understand how their business can be grow in
competitive market and maintain the effectiveness. The management of chosen organization uses
different steps for making right business decision that are as explained:
Identification of problem – This is the first stage which uses by management of each
organization to identify the problem and issues which are pertaining in the environment and find
out the causes. Such as RCS Logistics uses this stage for the purpose of identifying the problem
and reason of lower sales that can help to make planning.
Gather relevant information – This is the stage where all informations in relation to
business are collected if once problem has been identified that can help to find out the solution.
RCS Logistic's management gather the all relevant information about customer's requirement,
market trends and others which can help to get an optimum solution (Dörrenbächer and
Gammelgaard, 2019).
Identify alternatives – In this stage, management of RCS Logistics can find out various
alternatives which can help to provide the solution so that problem can be resolved.
Choosing best option – From the above identified all alternative management of RCS
Logistics is required to select the best option out of many which is best that can help to resolve
problem and complete the workings in certain period of time.
Take action – This stage is uses by all companies to take the right action which can help
to expand a business in changing environment and maintain the all business activities effectively.
RCS Logistic's management take the right action after analysing all activities and functions
which are important to perform that can help to increase workings and maintain higher
profitability.
Review the decision – This stage is uses before declaring any decision and action which
are going to take by company. RCS Logistics uses this stage for analysing and reviewing their
decision which can help to maintain the higher productivity and profitability in changing
environment.
RCS Logistics have decided to bring the new innovation and technology that can help to
make easy the delivery of products and safety. This helps to increase the customer satisfaction
and organizational productivity in competitive environment. As management have identified the
customers are facing the problem in getting right delivery and safety product due to which they
ate going towards other brand. To solve such problem decision of new technology and fast
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delivery has been made which can help to attracts the large number of customers as it influences
decision making process.
P6 Determine and articulate the various routes to internationalisation an organisation may adopt,
including key barriers
In hyper competitive era, the aim of each and every business is to run their business and
expand it by increasing their operation, activities, and performance. To increase the sales and
productivity there is need to go internationally which can help to increase the sales and
performance in changing market and develop the business effectiveness. RCS Logistics is using
different methods and routes to go internationally that are as explained:
Licensing - This can be explained as important route and method which uses by an
individual and organization to get rights of using products and services. It can be defined as
optimal planning which uses to maintain effective operation and proper arrangement of all
activities by using a licence that can help to operate a business regularly. In other words, it can
be explained as official permission or permit to do, use and own something which can help to
manage the all workings and attain the higher productivity. The licence is granted by a party to
another party as an element of an agreement between two parties. With respect to RCS Logistics,
the company can charge loyalty or fee by giving the permission to others of using the licence and
increase the business activities. The benefits of such method is to get the opportunity to gain
additional income and improve the brand image in global environment. For entering in to
international market RCS Logistics can use the licence method where it can give permission to
other business concern to run their business in new market and increase the customer awareness
which can help to increase the business revenues and maintain the higher profitability effectively
(Fatehi and Choi, 2019).
Exporting – This is the another way which can be use by organization to increase their
sales and productivity by exporting the products and services in new market. Exporting is the
process of selling the products and services in new market that drives the higher performance
and profitability in global environment. In context to RCS Logistics, management can use this
method for the purpose of increasing their sales and profitability by delivering better quality of
operational services that is the effective way to go internationally and attain the competitive
advantages.
KEY BARRIERS WHILE FACILITATING INTERNATIONALISATION
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In global business environment there are many barriers which can be arise while
facilitating internationalisation such as:
Lack of proper funding: To run a business in international market this barrier can face
by RCS Logistics company as funds are needed to operate a business and increase the workings
in competitive environment (Rinkinen and Harmaakorpi, 2018).
Cultural difference: This is another problem which can face by organization as to run
business in other country there is need to know culture and other activity of their business. This
can be difficulty for RCS Logistics to face cultural difference problem as people belongs to
different culture that can create the hurdles in going internationally.
CONCLUSION
From the above report it can be concluded that in business environment many factors
arises which are related to social, political, economical and environment needs to consider while
running a business that can be crate the challenges in global environment. PESTLE analysis is
uses to know which factor can influence the global environment, and governance on leadership,
structure and functions are important to run a business. To go internationally there are various
routes such as licence, exporting, and merger and acquisition which uses to increase business
performance in competitive environment.
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(Kwak, Seo and Mason, 2018) (Lam and Wong, 2018) (Avesani, 2020) (Markey and et.al.,
2018)
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