Global Business Environment: Factors, Challenges, and Impact

This document provides an analysis of the key factors, challenges, and impact of the global business environment on organizations. It explores factors such as cost, market, environment, and competition that drive global commerce and trade. It also discusses the complexity of strategic challenges faced by organizations in the global environment, the influence of globalisation on governance, leadership, structure, culture, and functions, and the influences of ethical and sustainable globalisation on organizational functions.

Unit 18 Global Business
Environment

INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
P1 Analyse key factors of cost, market, environment and competition that drive global
commerce and trade................................................................................................................4
TASK 2............................................................................................................................................4
P2 Complexity of strategic challenges that has been faced by organisations while operating
their functions in global environment.....................................................................................4
P3 Globalisation influence on an organisational governance and leadership, structure, culture
and functions..........................................................................................................................6
P4 Influences of ethical and sustainable globalisation on organisational functions..............7
P5 Various ways decision making can work effectively in a global context.........................8
P6. Various routes to internationalisation including the key barriers..................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
Books and Journals........................................................................................................................12

INTRODUCTION
Global Business Environment is termed as an environment in which diverse range of
sovereign countries along with many influencing factors like culture, geographical location,
politics are included that affect organisation decisions on resource capabilities and use. Global
business has significant impact upon business operations of corporate and economic activities
that they undertake place across different countries (Kasemsap, 2020). Main component of
global business environment include demographic, political and legal, social and cultural,
economic and technological environment. Globalisation facilitate business organisation to
undertake advanatge of potential level of talent and other resources from various geographical
locations that further facilitate organisation to increase their overall growth with great efficiency.
Along with this, globalisation also allow to expand their business operations that will further
assist them to gain more prominent advancements. Proper understanding of all these functions
allow organisation to develop formative strategies and measure through which entity can
undertake profit making opportunity for their business growth, international reputation and
international growth. Present report has been made own Allan Reeder trusted dairy suppliers that
supply butter and cream to bakeries, coffee shop, restaurant, hotel pub, contractor and more. This
organisation offer wide range of dairy products with high quality with a commitment to make
their consumers happy. Present report includes formative discussion upon factors like
environment, cost, competition, market drive, global commerce as well as trade. In addition to
this report include complexity of strategic challenges that organisation is facing, along with

sustainable and ethical globalisation impact upon entity functions. Lastly in this report wide
range of internationalisation roots is being involved along with key barriers.
TASK 1
P1 Analyse key factors of cost, market, environment and competition that drive global commerce
and trade
Globalisation is defined as an exchange of services, products, information’s, labour,
technologies etc among different countries. However it include different factors that are
influencing business operation and further provide different type of advantages to country such
as job opportunities, increasing per capita income, easy availability of resources etc.
Globalisation allow free trade movement of data, technology, products, services through which
entity can maximize their effectiveness performing their operations in different countries where
there services have not reached yet. In context to Allan Reeder this has been evaluated that as to
maximize their international market shares effectively organisation is looking forward to expand
their business services in Spain marketplace in order to drive their profitability in upward
margin. However in this process that are wide range of driving factors that can have influence
upon organisation expansion process such as market factors, technological advancement, cost,
competition and more.
Market Factor:
It has been evaluated that market involves different type of factors which entity can
undertake effectively in order to ensure that successful expansion at global stage. In the present
case scenario by taking assistance of global business expansion Allan Reeder can get maximum
shareholding, in this entity is required to evaluate actual needs and importance of consumers and
further fulfil them accordingly in order to generate more effectiveness.
Cost Factor:
It is one of the most important factors and has number of variations according to
countries (Rajagopal, 2020). In this Allan Reeder is required to evaluate cost factors in Spain in
terms of sales volumes, raw materials, production process etc in order to successfully operate
that business in respective entity.
Competition:

There is high competition prevailing in respect of industrial sector in international market
segment as different type of organisations operates the functions aggressive competition. It is one
of the most important factors that have significant impact of entity operations. In this by taking
advantage of diversification Allan Reeder can increase their competitive edge and sales. In
addition to this in order to overcome this aspect company by taking advantage of technology can
provide high quality goods and services to customers in affordable price range.
Environmental Factor:
The factor involves different type of elements that are legal, political, environment, and
social, technological. All these elements are required to be evaluated by Allan Reeder manager in
order further develop strategies and policies against them to enhance possible advantages in
international market. It allow entity to increase the profitability along with effectiveness through
which they can conduct their operations in a well defined and effective manner.
TASK 2
P2 Complexity of strategic challenges that has been faced by organisations while operating their
functions in global environment
PESTEL Analysis
Strategic challenges are those issues that an organisation faces in the process of
internationalisation. These challenges are having direct or indirect impact upon internal and
external processes of entity (Jena and Pradhan, 2020). In terms with internal challenge these can
include lack of resources, failure in production process etc. While if it is talked about external
challenges these are related to technological, economical, financials in order to overcome these
Allan Reeder can undertake use of pestle analysis:
Political:
It includes factors like economic condition, political stability or instability, unemployment
rate, taxation or more (Noor, Panigrahi and Rahim, 2020). As Allan Reeder is looking forward
to expand their operations in Spain, it has been provided that Spain is having stable economical
forces that allow organisation to conduct their operations effectively. For this, entity is required
to underline their strategies and plans according to government of Spain regulations and it can
allow them to get maximum political advantages.
Economical:

This factor of pestle analysis includes elements that are related to economical aspect of a
country (Just, 2020). In order to ensure successful expansion in Spain Allan Reeder is required to
effectively consider labour cost, as this play challenging role in their decision making and other
activities. In context of this entity is required to formulate their budget in which are required to
keep their salary shift upward in order to attract potential workforce to enhance entity
economical growth.
Social:
It has been identified that behaviour of consumers in Spain are dynamically changing
according to latest trend and with the passage of time, they are expected towards flexible return
policy. In context to this, Allan Reeder is required to undertake the consumer’s requirement and
then formulate strategies and plans according to their need in order to attract them for long
period of time (Balanova, Mezinova and Zhelev, 2020). This assure entity expansion in
successful manner, in addition to this entity is also required to make closed ties with their
consumers as to enhance their long term sustainable development.
Technological:
Technology is rapidly changing and is having direct or indirect impact upon organisational
functions. In order to influence large base of consumers in Spain entity is required to undertake
utilisation of high-tech technology and upgraded software’s through which the provide their
products and services to consumers (Cross and Miller, 2020). It allows entity to fulfil their goals
while assuring long-term success. In addition to this company is also required to opt for new
digital payment method to make their payment in an easy and effective manner to avoid any
delay.
Environmental:
Individuals and government organisations in Spain are having their maximum consideration
towards environmental factors in which they have their positive concern towards environment
safety. There are different types of laws and legislation enforced by government for entities in
order to protect climate, weather and other environmental elements (Kotabe and Helsen, 2020).
In addition to this Allan Reeder is required to have their focus upon operating their functions
with no or less carbon footprints in order to contribute in safe and clean environment. In addition
to this by staying committed towards utilisation of renewable energy also allow entity to ensure
their successful expansion.

Legal:
There is wide range of legal laws and legislation formulated by government of respective
country and is required to be abide by Allan Reeder, in terms with dairy industry government of
Spain have enforced wide range of legislation in order to protect consumer’s safety. All the legal
measures are required to abide by entity and negligence of this can impact their profitability and
market sustainability (Trad, 2020). In addition to this entity is required to ensure that they
implement all the safety and security concern for employer in their workplace structure.
P3 Globalisation influence on an organisational governance and leadership, structure, culture and
functions
Globalisation on governance:
Herein formative methods, rules and policies are involved, which leads towards effective
guidance to companies (Vasyurenko, Danylenko and Jing, 2020). In addition to this, it hep in
providing effective balance of stakeholders, consumers, suppliers, management, workers and so
on. By the assistance of this, Allan Reeder can effectively perform their operations in a proper
manner.
Governance on leadership:
It is consider as one of the most essential factor that help Allan Reeder to gain advantage
of using different theories that is situational leadership, contingency leadership and many more.
along with this, it is analyse that if company have effective teams then it can make use of
democratic leadership style that motivate employees and enhance their overall productivity and
profitability.
Governance on functions:
For attaining success and enhance productivity, it is important for Allan Reeder to
evaluate every aspect of business environment like current trends of market, customer demand
and so on. By the assistance of this, company is bale to satisfy customer and reach on economies
of scale. In addition to this, it aid company to operate in other countries such as Spain through
partnership and Joint venture as well.
Globalisation on structure:
Allan Reeder is one of the growing and leading company in market. It adopt MCkinsey
model in order to evaluate globalisation structure:

Strategy: By developing effective strategies, Allan Reeder can gain opportunities and
decline the level of barriers in an effective manner. In addition to this, it also help in expanding
its operations globally.
Structure: It is important for mangers of Allan Reeder to maintain proper structure that
help in identifying organisational requirements.
System: For maintain standard at work, it is significant for Allan Reeder to carry out all
activities as per schedule and in a systematic manner. It can make use of different tools, which
will help in attaining competitive advantage.
Shared Values: It is determine as one of the effective factor as companies implement
their functions on some value and to regulate them help in attaining success rapidly and
effectively.
Style: By the assistance of Democratic leadership style, Allan Reeder can attain its
desired goals and objectives in a timely and appropriate manner.
Staff: It is essential for company to hire effective and talented staff members who has the
ability to perform all activities and reaches company towards success.
Skills: By the assistance of various skills such as effective communication, hard work
and so on will help company to improve its productivity and profitability level.
All such factors help respective company to gain an insight about its internal environment
and capabilities which in turn aid in making improvements and enhance overall productivity of
an organisation. In addition to this, it is important for an entity to analyse impact of globalisation
on culture, leadership and structure as well as it assist in developing effective strategy and
decline the level of risk in an appropriate manner. Moreover, choosing of appropriate style of
leadership help an entity to implement all activities and operations in a systematic and smooth
manner.
P4 Influences of ethical and sustainable globalisation on organisational functions
Ethical globalisation is defined as a process within which information, technology, data,
services and other essential things get shifted in ethical manner from one organisation to other.
This is mainly a wide concept in which consideration of different stakeholders like community,
shareholders, government; consumer, suppliers, employees etc are undertaken with and aim to
engage each of them in entity decision making process to drive more successful growth.
Sustainable globalisation is termed as a business activity across border through which entity can

assure that long term sustainability in competitive advantage (Daudisa and Vevere, 2020). It
allow organisation to maximize their profitability, in this process company undertake various
modifications in their business structure as per according to international business requirement
which is necessary for them to survive. However in order to conduct business at international
market segment there are number of challenges due to legal requirement as well as formality that
can be faced by organisation along with cut throat competition. Ethical and sustainable
globalisation has significant impact upon entity functions are profitability, public image,
shareholding and revenue. Thus, in order to have positive impact entity are required to undertake
certain activities that are being defined below:
Human resource:
In thus, entity is required to select talented and potential employer and further place them
in right position in organisation. HR department of entity is having most essential responsibility
to have stable workforce in which there is proper flow of skilled and talented employees through
which entity can accomplish their goals (Lines and Evans, 2020). In terms with Allan Reeder,
HR department is having key responsibility to evaluate all the legislative impact upon entity
business operations and are required to implement all the legal measures of country in which
they are planning to expand. Along with this HR department is also having responsibility to
determine workforce diversity requirement and further fulfil them with different practices in
order to ensure on successful expansion and conduct their functions in ethical and friendly
manner by allowing employees engagement.
Marketing:
It is one of the most essential yet complex and much-needed function of an organisation
through which they can influence individuals and make them aware entity offerings. In this
company is required to identify the targeted consumers and further evaluate their actual needs
and demand to offer them maximum satisfaction. In relation to this Allan Reeder is required to
have certain policies in initial stage as to attract large base of consumers as to get maximum
share holding in international market. In this marketing department of Allan Reeder is having
responsibility to design and undertake diverse range of promotional activities according to
International culture and modify them accordingly according to consumer preferences to gain
maximum successful advantages.

According to the evaluation it has been evaluated that there are wide range of elements that
are having significant impact upon business operation. In this entity human resource, marketing
and other departments are required to perform their functions in a co-ordinating manner during
expansion process in order to ensure that day acts activities in ethical and sustainable manner by
modifying and developing new strategies and actions to accomplish their goals.
P5 Various ways decision making can work effectively in a global context
Decision making by managers play a vital role in every organisation as it directly
contributes in implementing activities in an appropriate manner (Contractor, Nuruzzaman and
Raghunath, 2020). It is consider as a process of choosing most effective from all the alternatives
available for execution of activities. Therefore, it is significant for higher authorities to take
decision by considering factors such as market trends, future needs, different events and so on. In
addition to this, it is determine that effective implementation of all operations as well as activities
help company to enhance their productivity and profitability level. In relation Allan Reeder, the
higher authorities or top management is responsible for taking decisions and evaluate all factors
in a proper manner. It will help company to reach on their desired goals within given time
period.
Steps for improving decision making-
In order to improve decision making, there are various steps that can be followed and the
first one is clarity of goals and objectives to all the members of company. The second step is,
decisions will be made and applied on number of events in order to get resolved effectively.
Adding with this, proper evaluation of decisions taken by top management in an effective
manner will improve decision making.

P6. Various routes to internationalisation including the key barriers
There are diverse range of expansion routes that allow an organisation to achieve
successful internationalisation through which they can maximize their consumer and profitability
base. However it is also having certain barriers with the proper understanding of which
respective organisation can successfully expand their business in selected marketplace.
Licensing:
In this mode organisation provide their brand licence to other company through which
that organisation operates their function in the name of former company. By undertaking use of
licensing company can charge them fee or royalty in order to allow them to use their technology
and brand. In this method two entities are included in the name licensor and licensee in a
contract. This method allow entity to provide licence of their business to other to conduct
business operation, it further allow Allan Reeder to undertake use of opportunities for maximum
income generation and can assure large number of consumer base in new location. However this
method is having drawback in which it has been evaluated that licensing make Allan Reeder to
fully dependent upon other organisation that increases competition in market.
Exporting:
This method states as a process within which entity supply or export services and product
in a new marketplace (Moresová, Sedliačiková and Kaščáková, 2020). In context with Allan
Reeder if they take advantage of exporting method then they are required to offer their business
offerings in international market place that further allows them to drive maximum number of
benefits. It further allows entity to enhance their sales and undertake more competitive
advantage. However this method of internationalisation include aggressive competition along
with many other issues like export, legislation of diverse countries that can act as barrier, for
which there is required to make strategic plan and measures.
KEY BARRIERS WHILE FACILITATING INTERNATIONALISATION
 Barriers of internationalisation process include inefficiency in proper funding that can
further create many obstacles in front of company for smooth internationalisation process
to global stage as it affect their business operations for this in order to overcome this
Allan Reeder can undertake utilisation of acquisition and mergers.
 Cultural differences also act as barrier that can create number of issues, as every country
is having different culture. In this it is required for Allan Reeder to have comprehensive

understanding of culture of the selected location in order to achieve success of their
internationalisation process.
CONCLUSION
As per the given report, this has been concluded that Global Business Environment involves
wide range of factors as well as elements those are having direct or indirect impact of an
organisation functioning and activities. These functions can influence organisation decision
making process along with productivity and profitability in a positive or negative aspect. It is
important for an entity to make consider factors that drive global business. These factors are cost,
market trends, competitors and many more. Formative understanding of this will aid entity to
overcome adverse impact of these factors by turning them into growth opportunities. This can be
done with the assistance of policies as well as strategies. In addition to this entities are also
required to have understanding of regulations, policies, norms, laws of a country in which they
are planning to expand their functions in order to undertake more growth advantages. In addition
to this, there are various sources of internationalization such as licensing, exporting and many
more. Furthermore, it is significant for higher authorities to develop a strategy in order to decline
the impact of barriers in carrying out business effectively. It is analysed that ethical and
sustainable globalisation has direct influence on marketing and Human resource function so it is
essential for respective company to maintain co-ordination between them in order to attain
business objectives in a timely and appropriate manner.

REFERENCES
Books and Journals
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Kasemsap, K., 2020. The role of strategic outsourcing in global business. In Foreign Direct
Investments: Concepts, Methodologies, Tools, and Applications (pp. 236-268). IGI
Global.
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regulations and business environment impact foreign direct investment (FDI)
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Lines, D. and Evans, C., 2020. The Global Business of Coaching: A Meta-Analytical
Perspective. Routledge.
Nadakavukaren, A. and Caravanos, J., 2020. Our global environment: A health perspective.
Waveland Press.
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Daudisa, T. and Vevere, V., 2020. Importance of professional ethics and corporate social
responsibility within business studies curriculum within context global economy. In SHS
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Rajagopal, A., 2020. Understanding Start-Up Enterprises. In Managing Startup Enterprises in
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Jena, L.K. and Pradhan, S., 2020. Workplace persuasion: Conceptual model, development and
validation. Global Business Review, 21(2), pp.567-585.
Cross, F.B. and Miller, R.L., 2020. The legal environment of business: Text and cases. Cengage
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Just, V., 2020. Research On The Improvement Of Business Processes In Global Companies
Within A Sustainable Framework. In Sustainable Business Processes in Global
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Noor, A., Zainuddin, Y., Panigrahi, S.K. and Rahim, F.B.T., 2020. Investigating the Relationship
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Factors in IT Project Management (pp. 304-339). IGI Global.
Kotabe, M.M. and Helsen, K., 2020. Global marketing management. John Wiley & Sons.
Balanova, M., Bodiagin, O., Mezinova, I. and Zhelev, P., 2020, May. I-Business Firms in the
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