Global Business Environment

This project identifies the key factors of cost, market, environment and competition that drive global business. It further determines complex strategies which are being challenged in operating business at international environment. The project also influences globalisation at organisational governance, leadership, structure, culture and functions. Additionally, it justifies ethical and sustainable globalise over various roles of organisation. This also elaborates various ways of decision-making process and articulate different routes of internationalism that organisation adopts including key barriers.

Unit – 18
Global
Business
Environment

Table of Contents
INTRODUCTION.................................................................................................................................3
TASK – 1..............................................................................................................................................3
P1. Identify the key factors of expenditure, marketplace, atmosphere and competition for driving
global trade........................................................................................................................................3
TASK – 2..............................................................................................................................................5
P2. Determine the complex strategies that are challenged in operating business at international
environment.......................................................................................................................................5
TASK – 3..............................................................................................................................................6
P3. Examine the influence of globalisation at organisational governance, leadership, structure,
civilization and functions...................................................................................................................6
P4. Justify the impact of ethical and stable globalisation over organisational roles...........................8
TASK – 4..............................................................................................................................................9
P5. Elaborate various ways of decision making that can work effectively at international trade.......9
P6. Determine and articulate the various routes to internationalisation an organisation may adopt,
including key barriers......................................................................................................................10
CONCLUSION...................................................................................................................................11
REFERENCES....................................................................................................................................12

INTRODUCTION
The globalisation has derived from Latin word “globalize” at 1990, which refers to the
international trade exchanging products and services from one country to another. The global business
environment focuses on spreading merchandise, information technology and trading experiences
across the world. In this project, Allan Reeder has been described as sole trader which usually
supplies cream and butter at bakeries. It believes in customers leads to another as being headquartered
in London, United Kingdom. This project identifies the key factors of cost, market, environment and
competition that drive global business (Bejinariu, 2020). It further determines complex strategies
which are being challenged in operating business at international environment. The project also
influences globalisation at organisational governance, leadership, structure, culture and functions.
Additionally, it justifies ethical and sustainable globalise over various roles of organisation. This also
elaborates various ways of decision-making process and articulate different routes of internationalism
that organisation adopts including key barriers.
LO 1
Key elements that drive global trade
Allan Reeder:- The Allan Reeder is highly established business which empower in dealing
wholesale sector through supplying superior and assured quality products. The managers of this
company are beneficial with the good interpersonal relations of directors, leaders and workforce that
collaborate with each other to achieve specific target. This creates prospect for company to develop
trust and faith of its customers from restaurants and pub bakers, delicate and contract caterers for
increasing sales. Its website is https://www.allanreederltd.co.uk and email id refers as
[e-mail] for enlarging customers. The Allan Reeder further focus on delivering high
quality dairy products throughout London, as being partnered with Samsara for distributing best
customer service.
Global Business Environment:- It is defined as ability of managers for expanding business
in domestic and international market by creating competition for its rivalries through generating
competitive strategies (Calof, Arcos and Sewdass, 2018). The managers of Allan Reeder aim to
develop partnership with Samsara for expanding business at different nations that leads to attain
growth and development as being stable in competitive market.
Cultural:- The managers of Allan Reeder focus on varied culture of people at different
nations that differentiates each other from customs, values, respect, ethos, etc. The managers of
Allan Reeder focus on this cultural differences as varied people have specialised demands that is

difficult to be fulfilled for providing them high satisfaction level. It further takes necessary steps
such as manufacturing and supplying those commodities which are highly consumed by whole
target market with high quality at low price. The managers of Allan Reeder emphasize on the
culture of its workforce for encouraging them to complete their task with the motive of award-
winning functions that leads company to sustain in competitive market. It also focuses on
developing good relations among workforce by understanding their emotions and circumstances
and granting them leaves when necessary.
Economical:- It is described as the economic change in different nations that includes
regional, local and national customers pertains. The economic factor also focuses on high
unemployment rate that has to be utilised by creating job opportunities for workers in order to
develop their loyalty. Managers of Allan Reeder emphasize on this category as introducing its
products and services which are new for others and supplying it with the motive to enrich sales
(Deng and Zhang, 2018). The Allan Reeder further focus on its economical situation through
hiring and selecting more of its candidates with the motive to restrict unemployment rate that is
beneficial for economic growth. It is very difficult for company to exchange products through
export and import with trade restrictions and high taxation rates that includes 1 US Dollar is equal
to Rs.74..69.
Political:- The political factor comprise of rules and regulations imposed by government and
the stability of political leaders. It is essential for managers of Allan Reeder to analyse the
government stability in an organisation while expanding its business. The Company is highly
beneficial with the good relations for government of United Kingdom that leads to exchange
trades across the boundaries for purchasing raw materials at least cost.
Social:- The social factor describes that in varied nations which differentiate in high or low
populations growth, employment rate, change in taste and preference of customers, etc. Managers
of Allan Reeder emphasize on this sector as to develop those qualitative products and services
that which are highly consumed by society and leads company to sustain in perfect competition
marketplace. The Allan Reeder Company face challenges from societal factor as these customers
are aware of actual cost which tends to minimise the price at very low rate which creates
difficulty in accomplishment of goals and objectives.
Technological: This is another element that influence organisation to expand their business
activities beyond domestic boundaries. Updated technology help companies in implement their
business activities in a better and cost efficient manner. With help effective technologies such as
Artificial Intelligence Allan Reeder can improvise its commercial activities and can offer better
services to its customers.

Factors that drive globalisation are as follows:-
 International economic integration:- It refers as the process through which different nations
collaborate with one another for diminishing trade barriers. The managers of Allan Reeder are
highly beneficial with free trade, custom union, common market, economic and political
union that results in not imposing laws in against of other country.
 Foreign Direct Investment (FDI):- This is defined as one company from a specific or
domestic nation aims to expand its business in another country with foreign direct investment.
The managers of Allan Reeder focus on these companies that supply its fund or infuse at
other country with the expectation to enlarge customers for enriching high profit-margin.
Some key factors of global business environment are mentioned as under:-
 Cost:- The managers of Allan Reeder focus on generating its price strategy by analysing
demands of customers for satisfying them with superior products and services (Gereffi, 2019).
It is essential for company directors to minimise its expenditure that creates opportunity for
enlarging buyers to consume more products. The Company face challenge in minimising the
cost through effective utilisation of scarce resources and further aims to recycle the waste that
creates prospect for managing the price of commodity. Cost is one of the element that
influence firms to carry out their activities at global level. When company start manufacturing
its products and services at large level then it ensures optimum utilisation of resources and
decrease the cost of products. All this help company in offer its products to its customers at
low prices which provide them competitive benefit.
 Market:- Managers of Allan Reeder emphasize on the international market by identifying the
environment of competitive marketplace. It is most important for managers to determine the
weak spots as compared to competitors for taking corrective measures to restrict it in gaining
aggressive strategies. It further analyses various ways to promote its products through offline
and online media with the motive to maximise revenue and market share. The Allan Reeder
has further capture most of the market economy with its diverse products that includes milk,
butter, margarine, cheese, juices, bread, pastry, yeast, etc. It is beneficial for company to
enlarge customers with the motive to maximise revenue and profitability ratios.
 Environment:- Allan Reeder managers focus on both intrinsic and extrinsic environment of
business for analysing the capabilities that creates prospect for being steady at international
environment. The main purpose for managers of Allan Reeder is to analyse the environmental
issues that might affect its stability through natural disasters which consists of Tsunami,
earthquakes, etc. It is essential for managers to take protective measures in order to minimise
the coercion from these factors.

 Competition:- The managers of Allan Reeder emphasize on high competition in global
business environment by examining the new entrants, customers and suppliers power, threats
of substitutes and competitive rivalry (Hartmann and Vachon, 2018). It further takes
precautionary measures to minimise the uncontrollable risk by increasing its potential power
and opportunities. The Company majorly focus on manufacturing its merchandise at
distinctive nature with attractive design that encourages customers to purchase it easily. The
managers of Allan Reeder highly face competition with McDowell as being number one
brand of whisky and rum. It is essential for managers to adopt competitive strategies for being
stable at international market by creating threat for opponent.
LO 2
Explain the challenges faced by organisation while operate in a business environment
Global strategic complexities:- It is the process through which an organisation face
challenge from various complexities that might create instability at competitive market. The managers
of Allan Reeder focus on developing good and aggressive strategies that builds potential capabilities
of business to remain stable at perfect competition market.
The challenges of globalisation faced by managers of Allan Reeder are shown as under:-
 Changing customer tastes and preferences: - The managers of business focus on dealing
with the changing demands of customers with increasing population rate that fluctuates needs
and wants of end-users. Managers of Allan Reeder highly emphasize on changing taste and
preference in order to plan their innovative ideas for strategic decision-making procedure that
result in gaining market growth by satisfying their demands. It is the most important
challenge faced by companies which drive change in customer preferences that results lack in
their satisfaction (Joly and Nikiema, 2019).
(a) Specific Example 1: - When needs and wants of customers change at a fast speed then it
become difficult for company to fulfil their requirements. This directly affect sales and
profit of organisation.
(b) Specific Example 2: - Fluctuations in needs and wants of customers largely affect
production and manufacturing process of company which sometimes affect pricing policy
of company in negative manner.
 High Competition: - It is most highly competitive for an organisation to sustain in global
marketplace by developing its aggressive strategies that embrace growth in an economy.
Allan Reeder managers highly focus on increasing competition for other companies by
improving its effectiveness and efficacy that leads to compete with rivalries.

(a) Specific Example 1:- The managers of Allan Reeder face challenge through high
competition as every nation consists of various companies which is difficult to analyse
their strategies.
(b) Specific Example 2:- The Allan Reeder managers are adversely affected by the
increasing competition that results in through threats of new entrants and substitutes.
 Fast change in technology adoption:- The main motive for director is to adopt varied
technology that is difficult for rivalry to imitate for compete. Allan Reeder managers highly
aim to involve distinctive technology or equipment that develops opportunity for surviving
effectively in competitive market. This furthermore emphasizes other companies to rebuild
their creative thinking skills in order to manufacture specialised products with quality and
time management.
(a) Specific Example 1:- The manager of Allan Reeder face complexity in adopting new
technology at its cost is very high which affect its estimated budget.
(b) Specific Example 2:- The Allan Reeder managers further face challenge through
increasing adoption of technology which is difficult to analyse the best equipment to be
adopted for company.
(c) Threats of terrorism:- It is the usual problem or issue being faced by an organisation
that competitive nations aim to attack with terrorism for pertaining fear in other to
drawback their future plans and increase their stability possibilities. This adversely
impacts the functions of organisation by restricting their continuous procedure of growth
and development that creates delay in goal accomplishment. Allan Reeder managers are
precautious and aim to take corrective as well as protective measures for minimising the
negative impact over business operations (Landenberg, 2019).
(a) Specific Example 1:- The managers of Allan Reeder further face challenge due to lack in
good terms and relations of adverse government which face threats of terrorism and lacks
in accomplishment of goal and employee well-being.
(b) Specific Example 2:- It is the major problem being faced by managers of Allan Reeder
that affects stability of company and create adverse image in front of its target market
which results in decrease of sales and profits.
(d) International Trade Law:- The main challenge being faced by managers of business
administration for managing and running enterprise in accordance with different legal
legislations at various boundaries. It is the highest and difficult task for entrepreneurs to
solve this through effective measures which creates threats for company to remain stable
at competitive market. Managers of Allan Reeder further lacks in accomplishment of
target and results in bad image and reputation among its customers which affects its
revenue and profitability ratios.

(a) Specific Example 1:- It is the biggest problem being faced by managers of Allan Reeder
as there is no good terms and relation of different countries which become in high
conflicts and face terrorism. This affects stability of company for accomplishing
objectives at certain period.
(b) Specific Example 2:- The Allan Reeder managers face complexities in foreign exchange
transactions being restricted by government that affects the production and sales of
company.
Complexities of international supply chain management:-
 Customers:- The customers are described as King for an organisation in order to satisfy their
demands though manufacturing specialised goods that embrace loyalty at which they are
ready to pay premium. Managers of Allan Reeder highly focus on their customers to meet
their desires by satisfying them through qualitative production.
 Countries:- It is most important for managers within an organisation at domestic nation that
aims to fulfil the desire and wants of customers at distinctive nations. The managers of Allan
Reeder focus on expanding their business through foreign direct investment which leads to
supply products and services at international market. The managers face challenge through
trade restrictions, high taxation charges, etc., which increase the cost of products and restrict
in purchase of commodities by customers.
 Logistics channels:- The logistic channels refers as supply chain engaged in transportation,
handling, warehousing, information sharing, etc. The main purpose for managers of Allan
Reeder is to implement the channel of distribution for delivering its products at varied
geographical areas to maximise wealth and profitability ratios. The challenge faced by Allan
Reeder is it creates difficulty as to transport production from one nation to another in trade
restriction (Maune, 2018).
LO 3
Evaluation of influence of globalisation on company
Corporate governance:- The governance which combines rules, regulations and process of
laws by which managers operates their business as per the legal legislations of political leaders or
government. It is essential for managers of Allan Reeder to follow all these policies and procedures
imposed by government of different nations in order to sustain at international marketplace.
 Leadership:- The managers of Allan Reeder highly emphasize on leaders for generating
competitive strategies through proper management of employee relations by motivating them
to give their best efforts for company. This is beneficial for directors as to build aggressive

strength with accomplishment of target at specific duration that leads to maximise wealth and
profits. The managers aim to adopt various approaches of leadership styles that include
situational, system and contingency theory for achieving the ambition and intention
efficiently (Miklian and Schouten, 2019). Expand business activities in other areas of world
affect the working pattern of workers and that’s why it also affect the leaders of company.
Sometimes globalisation affect in positive manner and sometimes in negative manner. In
order to take effective decision and to formulate better policies, it is very essential for leaders
to carry out proper research.
 Function: - Allan Reeder managers focus on their functions of business activities by
monitoring and controlling the actions being performed by workers to restrict errors that
create delay for company in goal completion. It further emphasize on people, process,
purpose and performance of workforce for identifying the ability and keen interest of workers
to achieve success with efficacy.
McKinsey 7S model for organisational structure:- This theory is implemented by
managers of Allan Reeder for developing organisational structure in order to remain stable through
competing with rivalries. It is most important for an organisation to evaluate performance of business
by identifying the actions done will leads to gain success.
 The Structure: - The managers of Allan Reeder focus on adopting divisional structure for
performing their business activities with ease and comfort. It also results in distributing the
work as per the capability of an individual to complete it's task with specialisation.
 The System: - Allan Reeder managers focus on adopting various systems such as discipline
manner that creates opportunity for managers to guide workers for completing their activities
as per instruction that restricts errors.
 The Strategy: - The managers of Allan Reeder emphasize on adopting various strategies and
tactics with the motive to achieve target at certain period. They majorly aim to motivate its
workforce by developing their keen interest for performing roles with perfection.
 The Skills: - Allan Reeder managers emphasize on improving the skills of individuals
through good interpersonal relations that leads to collaborate and interest with each other for
learning new experiences to omit mistakes (Oak, 2020).
 The Staffs:- The managers of Allan Reeder focus on building good relations among
workforce that leads to co-ordinate for performing task and helping each other to achieve
specific target on certain date.
 The Styles:- Allan Reeder managers emphasize on implementing various leadership styles for
encouraging workers to give their high efforts towards company in order to ascertain vision
and mission with individual goals.

 The Shared Values:- The managers of Allan Reeder focus on sharing values among
managers, leaders and workers through understanding emotions, views and information. This
results in attaining business growth and contentment for gaining pleasure to meet customer
demands.
Hofstede Model for organisational culture:- Allan Reeder managers are highly capable in
managing and running their business with courtesy that results in developing calm and beautiful
environment for workers to perform their actions. It majorly focus on workforce to share their views
and information among each other that result in high understanding for co-ordinating themselves for
completing target collectively (Pal, Harper and Vellesalu, 2018).
 Power Distance Index (PDI):- The managers of Allan Reeder focus on this as to distribute
power and authority of individuals equally with actual compensation for every worker
performing similar task. It is essential for an organisation to give minimum wages and power
to workers for surviving their life effectively.
 Individualism versus Collectivism (IDV):- Allan Reeder managers emphasize on leaders to
develop co-operation among workforce which tends to complete task collectively. It further
focuses on delegating the roles of target in accordance with specialisation that leads to
achieve target on particular time period.
 Masculinity v/s Femininity (MAS):- The managers of Allan Reeder focus on equally
treating its male and female workers while performing their similar task within the
organisation. It encourages workers to perform their business activities with keen interest for
achieving personal and organisational goals.
 Uncertainty Avoidance (UAI):- Allan Reeder managers emphasize on restricting the
possibility of conflicts by improving the tolerance capability of workers that diminish the
divergence. It is essential for an organisation to build good terms and nature among working
environment that leads to complete task with eagerness.
 Long-Term Orientation:- The managers of Allan Reeder focus on its short and long term
goals that has to be achieved by good participation of workforce which creates opportunity
for company to attain success. It further increases the ability of managers to compete with
rivalries through being successful at competitive market (Pop, 2019).
Evaluation of influences of sustainable and ethical globalisation on functions of
company
Ethical and sustainable globalization affects the organizational functions of Allan Reeder
because in order to expand their business into international market. They need to work on strong
ethics which motivate their employees to perform their task properly. Such as in financial function, if
employees has low ethics then they are unable to achieve their operational goals and similarly unable

to get success in the international market. In the organizational functions, staff members should
follow their fundamental values which provide them global success. Effective implementation of
sustainable globalization affects the organizational functions where staff needs to follow fundamental
values and focus on triple bottom line.
The process through which managers of Allan Reeder focus on generating its stability at
global marketplace by improving its roles and functions through adoption of various technologies that
leads to manage its task efficiently. It is essential for business managers to run their business by
motivating its workforce for finishing their specified roles at particular time period. The managers
further aims to accomplish success efficiently by competing with rivalries through proper
management of quantity, quality and time (Ren and Jackson, 2019).
The main objective for managers of Allan Reeder is to effectively utilise scarce resources that
create aggressive strategies for company to remain stable in global market. It is most important for
managers to manage and run their business by motivating them to complete their task with eagerness
for achieving their personal goals.
In order to operate effectively in other countries, it is very essential for Allan Reeder to adopt
ethical and sustainable approach adopt by the country in which it wants to operate. when company
adopt sustainable approach then it affects business operations in positive manner as this enhance
brand reputation of company and help in retain a large market share.
LO 4
Evaluation of decision making in a global context
Decision-making process:- The managers aim to develop innovative idea with creative
thinking skills for identifying various techniques to remain stable in perfect competition market.
Managers of Allan Reeder implement and execute this procedure for identifying the business
activities being performed by workers is able to meet the desires of target market. The managers
further emphasize on leaders to take necessary steps for motivating workforce to complete their task
with quality management that leads to enlarge customers at global marketplace.
 Brainstorming:- Allan Reeder managers focus on problem solving and taking decisions for
identifying issues that creates threats for company to sustain at international marketplace. The
Allan Reeder further take corrective measures to minimise the errors and develop innovative
ideas for manufacturing specialised products in order to launch it at globalised market
(Seeger, 2019). It is essential for company to generate competitive strategy that leads to
compete with rivalries.

(a) Pros:- The managers of Allan Reeder further emphasize on developing various inventive
strategies which is computable and may lead company to gain success.
(b) Cons:- It is very difficult for managers of Allan Reeder to select the best decision from
various ideas as the suitable idea to attain victory.
 Nominal group technique:- It is the process through which discriminate its functions into
various departments by delegating roles and responsibility to workers. The managers of Allan
Reeder emphasize on dealing with situation by segregating the people into small groups in
accordance to their specialisation and encourage them to complete task with perfection. It is
beneficial for company to remove barriers of conflicts, jealousy and partiality by treating
individuals equally.
(a) Pros:- The managers of Allan Reeder develops various technique to improve its working
styles that results in high efficiency for being sustainable at competitive market.
(b) Cons:- The managers of Allan Reeder face challenge through this technique as it lacks in
analysing the capability of individual and results in high conflicts and disputes among
workers.
 Delphi Method:- It is described as forecasting method implemented by managers of Allan
Reeder as it creates opportunity for other departments to brainstorm their ideas for developing
interest towards goal accomplishment. It is beneficial for company as they don’t properly
disclose their ideas and involve creative thinking skills of other staffs for developing varied
strategies and tactics.
(a) Pros:- The managers of Allan Reeder are beneficial with this method as it encourage
other department manager to involves in various activities that increase their value.
(b) Cons:- The managers of Allan Reeder face difficulty in this process as it take huge time
which result in delay for attaining ambition and intention.
 Electronic method:- The managers of Allan Reeder are highly beneficial by tapping into
international market and developing collaboration with other nations. This results in analysing
the change in technology being adopted by its nations that creates prospect for company to
implement and execute with the motive to sustain in global market. The adoption of
technology leads organisation to improve its business activities with total quality management
that leads to satisfy the needs and wants of customers by efficiency. It is also beneficial for
enriching its customers through expansion that builds strength for company to increase its
potential power and capabilities for minimising the weak spots and coercion.
(a) Pros:- The managers of Allan Reeder are highly advantageous in technology adoption
that leads to restrict labour capital by minimising them to pay compensation and result in
accomplishment of target at certain duration.
(b) Cons:- The managers of Allan Reeder also face challenge in adopting technologies by
admiring that this will be obsolete in future which results in high expenditure.

Determine various routes to internalisation for an organisation
There are numerous routs to internationalizing the organization where management need to
adopt several factors and it will include key barriers as well. All are discussed below in context of
Allan Reeder where several opportunities and barriers discussed:
Routs of internationalizing:
 Growth motives: A few recent studies highlighted the opportunities for growth involved in
international marketplaces as a driving force of firm internationalisation. Other economies
have recognized growth potential and increased profits from growth markets as key drivers
for exports (Tarek, Zouhayer and Adel, 2019). In stepping abroad, the Allen Reeder decision
can also appears to be inspired by the need for company's growth, profits, greater market size,
higher market position etc.
 Knowledge related motives: It is pushing and pulling small and medium-sized businesses
into international markets. The 'push' element is related to the success of past managerial
degree of management teams and similar aspects in the managerial capacity. There are also
connected findings on internationalization which trigger the impacts of knowledge elements,
such as R&D spending, capacity for innovation etc. In order to gain some knowledge from
international market, Allen Reeder can use this route for internationalization.
Barriers of internationalizing:
 Financial barrier: Financial resource is limited which continually been addressed as a barrier
to SMEs such as Allan Reeder being internationalised. This included financial difficulties, on
the whole as, resource distribution, overseas operating costs and restricted capital investment
and credit. Compared to their more established equivalents, the credible information includes
the failures faced by the new global new ventures or initial-stage SME export markets in
terms of access to operation and maintenance and term loans. Allan Reeder also reported lack
of capital requirements as well as other company's resources, and restricted access to key
facilities
 Managerial barrier: Problems arising from limited base of knowledge in planning are
presented in a series of recent survey data as a top barrier for small and medium-sized
enterprises like Allan Reeder internationalization. Organizational barriers include
management attitudes, lack of global experience and skills, limited period of time
management, dedication and problems with partnerships. The primary reasons for not
engaging in community trade have been managerial preconceptions of danger and lack of
understanding about the global markets. Limitations in the information about
internationalization of managers have also as a bottleneck leading to export initiation.

Growth and knowledge based motives are the routes of internationalization and the other side,
there are some berries which affect the Allan Reeder such as financial, managerial etc.
CONCLUSION
From the above discussion it have been concluded that global business environment majorly
emphasize on expanding business at various nations. Its motive is to enlarge customers by attracting
them to purchase goods at low price at varied nations. This project identifies the key factors of
expenditure, marketplace, atmosphere and competition that drive global business. It further
determines complex strategies which are being challenged in operating business at international
environment. The project also influences globalisation at organisational governance, leadership,
construction, civilization and functions with the execution of McKinsey 7S model and Hofstede
culture. Apartly, it justifies ethical and sustainable globalise over various roles of organisation. This
also elaborates various ways of decision-making process that are brainstorming, nominal group
technique, Delphi and electronic method. It further articulate different routes of internationalism that
organisation adopts including key barriers.

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