Influence of Globalisation on Organisational Governance and Leadership

Global Business Environment

Table of Contents
Global Business Environment..........................................................................................................1
INTRODUCTION...........................................................................................................................3
LO1..................................................................................................................................................3
P1 Key factors Affecting Global commerce and trade...............................................................3
LO2..................................................................................................................................................4
P2 Complexity of strategic challenges faced by organizations in global environment...............4
LO3..................................................................................................................................................6
P3 Influence of Globalisation on organisational governance and leadership, structure, culture
and function-................................................................................................................................6
P4 Influence of Ethical and Sustainable globalisation on business functions-............................8
LO4 .................................................................................................................................................9
P5 Different ways decision making can work in global context-................................................9
P6 Routes to Internationalization-.............................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
This file includes key factors that affect global business and international environment of
business. There are various factors that include internal and external environment of business and
when firm operates n global level influence of external factors are more then internal factors and
this more complex than in domestic market. Challenges faced by business in context of global
environment have been also included in this report. This challenges includes laws and regulation
of various countries and international standard for business operations. Further report also
includes influence globalisation has on various factors of the business like culture, strategies,
people and governance etc. influence that ethical and sustainable globalisation have on business
functioning is also a part of this report. By the end report also includes how businesses can make
effective decisions in context of global business and at the end routes through which company
can reach internationalization and barriers that can come in its ways have also been included
making the report a brief of global business environment.
LO1
P1 Key factors Affecting Global commerce and trade
Globalization is the way in factors around the world interacts with each other. It is driven
by various developments and up-gradation in the world economy. Firms go global to expand
their market and thus increasing their sales and profit. Important factor behind the expansion of
international trade is increased medium of communication (Bende-Nabende, 2017).The main
drivers for increased globalization are technological advancements, reduced cost trade barriers,
high competition, increased demand of goods and services.
Political factors: Political relations between the parent company country and host country plays
an important role for global trade and commerce. Trade policies, policies and regulations are
responsible for global competitive environment in the industry. With more intertwined political
and legal factors multinational companies started paying attention to these non market factors as
well. The increased globalization has made change in balance between power of national and
multinational corporations.
Economic factors: Expansion of Customer needs, scale of operations, standardization will affect
the pace of globalization. Economies of scale, production level, and difference in cost of factors
in production are of great importance in global expansion of businesses. In case of Tufwell
glass ,short a single market will never be able to meet large competition on global scale (Najam,

Runnalls and Halle, 2016). Global scaling have a great impact on the profitability of business.
On one hand more economies of scale with build a strong competition in the global market and
harder entry of new competitors. Thus, due to these barriers to entry of entrants will increase and
rivalry will also increase with high effect of competition among the dependent and
interdependent national and international competitors. Other factor driving cost competition in
global market are taxation policies of a country, import and export duties. These are the main
factors affecting cost in the globalization. For example going global can increase the cost for the
company as there are various tactics which a company needs adopt that can prove costly like
developing market strategies, maintaining the quality standards, entry costs, market research etc.
Social Factors: As customer's demand around the world is increasing for a common
product and services. However, common needs, tastes and preferences vary depending on the
product on it also depends on factors such as cultural differences, level of income and degree of
homogeneity of products which are used (Nikolova, Rodionov and Afanasyeva, 2017). It can
positively impact the company as it has an opportunity to meet the new requirements of the
customer. Due lack of understanding and knowledge it can affect the strategies of the company
in a negative manner. This is applied on consumer products and industrial products and services
as well. In most of the industries global distribution channel are emerging to satisfy the customer
base. Hence, homogeneous consumption pattern has increased demand of products globally and
global marketing and branding has emerged its own importance.
Technological Factors: Environmental globalization drivers are presence and absence of
advance technologies. A level of global technology development can also affect the global trade
and commerce as it make it easy for the company to carry out its business in different countries
of the world. Like online trading and e-commerce.
Legal Factors: These factors such that degree of total industry sales made from import and
export, extent to which major players globalized their sales and operation, and they created an
interdependence of competitive strategies (Vasin and Gamidullaeva, 2015). The entry barriers
and trading polices can have a strong impact on the business. For example if entry barriers are
lenient it can make easy for the company to setup a trade in another country if not it can creat
various issues for the company to enter in new country. Level of trade, competitive strategy, and
interdependence of operation leads to the expansion of globalization. Industrial revolution plays
a great role in the industrial globalization. As underlying characteristics of industrial changes