Impact of Globalization on BMW's Corporate Structure

Desklib provides solved assignments and past papers to help students succeed.

1
Research Project
Impact of Globalisation on the Corporate Structures of Large Multinational Companies and the
Major Challenges They Face: A Case of BMW
Student’s ID:
University Name:
Author’s Note:

2
Abstract
The research study will support to analyse the impact of globalisation on the business strategies
of multinational companies like BMW. In future, the research will help to gain the knowledge of
globalisation in terms of BMW. The researcher will carry out several regions of BMW’s
business activities to know the impact of globalisation. Research methodology will be taken to
obtaining the proper idea and results according to the given topic. Utilisation of primary and
secondary has been taken to conduct the survey and interview strategies. Research outcomes will
be given to know the future of company. Along with these, recommendations and conclusion are
provided for enlarging the topic.

3
Acknowledgement
I would like to extend my heartfelt thanks to my supervisors for their guidance and support.
Without their gracious co-operation, it would not have been possible for me to complete this
research work by covering all the aspects of research.

4
Table of Contents
A. Introduction.................................................................................................................................5
Background of the research.........................................................................................................5
Reasons for choosing the topic....................................................................................................5
Research Aim and Objectives......................................................................................................5
Research Questions......................................................................................................................6
B. Literature Review........................................................................................................................6
Introduction..................................................................................................................................6
Effect of globalisation over the corporate structures of MNC’s like BMW................................6
Main challenges while assess the impact of globalisation on the corporate structures...............8
Factors responsible for facilitation of the globalisation of multinational companies..................9
Aspects influencing the globalisation in regard with corporate structure.................................10
Literature Conclusion................................................................................................................11
C. Research Methodology.............................................................................................................11
Research Approach....................................................................................................................11
Data Collection..........................................................................................................................12
Sampling method.......................................................................................................................12
Questionnaire design.................................................................................................................13
Timeline.....................................................................................................................................13
D. Data Analysis and Interpretations.............................................................................................14
Quantitative questions...............................................................................................................14
Qualitative questions.................................................................................................................24
Research Findings......................................................................................................................26
E. Research Outcomes...................................................................................................................27
F. Reflection and recommendations for alternative methodology.................................................32

5
Recommendations from the findings.........................................................................................32
Reflection on what you have gained from the research.............................................................32
Alternative methodology chosen...................................................................................................32
G. Conclusion................................................................................................................................33
References......................................................................................................................................34

6
A. Introduction
Background of the research
The globalisation acts as a driving force of an organisation in remodeling and adapting the
business structure. The way an organisation is implementing and managing different disciplines,
finds an integrated working environment gain the organisation. On the other, the globalisation is
also important for an organisation to implement the corporate strategy there (Wang, 2011). In
this research, the study is based upon the identification of the impacts of globalisation, which is
observed within a multinational company for overspreading their business. The organisation
selected for the study is BMW. In this study, the effects of globalisation on the company are
experienced in the terms of both economic and technological growth. The company is showing
their financial development in the recent time, along with the increase in productivity (Miller et
al. 2011). In addition, the company got a competitive edge in the market, which dramatically
changes the economical standard of the organisation. Therefore, it is suggested that there is a
sign of development of the company as a whole, in which globalisation plays the most important
factor.
Reasons for choosing the topic
The globalisation makes large impacts on the overall operations of a company, mainly in those,
which are operating their business in multiple countries (Underwood, 2012). Therefore, it can be
stated that the subject selected for the research plays the most important in the following context.
The impacts of globalisation can be observed in both the multinational and international
companies. In this case, as the selected company BMW is a multinational automobile company,
the business of the organisation is divided in several disciplines. All of these sectors observed
firm impacts because of globalisation. Besides, the sustainability of the organisation is also
dependent on the impacts of globalisation and way the company is dealing with it. The research
is based on how company can make them able to mitigate the impacts of globalisation and retain
their position in the market. Besides, the research will help to outline the corporate structure for
the company, with developing the marketing strategy.

7
Research Aim and Objectives
By this research, it is aimed to identify the impacts of globalisation, which an organisation
experienced in the business. However, the research is made on an international company, BMW.
The aims and objectives of the research are as following:
 To assess the effect of globalisation over the corporate structures of worldwide
companies like BMW
 To evaluate the factors that are useful in obtaining the advantages of globalisation on
international companies
 To identify the major challenges while developing the corporate structure of BMW
Research Questions
The questions, which are followed during the course of the research, are as follow:
1. Does globalisation affect the business structures of international companies like BMW?
2. What are the main problems to assess the globalisation effect on the business structures?
3. How the large companies gain the benefits while developing the corporate structure in
terms of globalisation?
B. Literature Review
Introduction
Globalisation has always been a key supporting factor for internationalisation and globalisation
of the various kinds of businesses and Multinational companies such as BMW. Due to this
factor, the growth and expansion of the business along with market penetration by the companies
in various levels of markets has been made easier than before. In similar way, there are many
effects of globalisation of MNC’s, which are discussed in the following literature accompanied
by the factors involved in the globalisation.
Effect of globalisation over the corporate structures of MNC’s like BMW

8
According to Mangram (2012), the globalisation plays the most important role in the different
disciplines of an organisation, mainly in the multinational companies. The globalisation has
started before few years and its impacts are clearly found in the business of several companies.
In case of BMW, the globalisation makes firm positive impacts in the business. Different
disciplines of the automobile industry are not improved after the implementation of
globalisation. This can be observed as the organisation adapted several strategies, which shaped
the organisation in an improve way. Besides, the integrity in different disciplines of the
organisation is also occurred after the introduction of globalisation. As mentioned by Kapferer
(2012), there is also an evidence of increased investment in the organisation from international
sources, which is a result of globalisation. The market for BMW in multiple countries is
occurred, which is reflected by the increased collection of revenue and increased production. The
capital and investment in the company is increased, which suggests that the economy of the
organisation also was improved by this action. The organisation is now penetrating in different
countries, which means it is introducing themselves to new customers. By the globalisation, the
interaction in between the customers was increased. In addition, by the globalisation, the
workforce and the resources of the automobile industry are increased, which indirectly
promoting the economy.
On the other hand, the globalisation is also a controversial topic in case of development and
management of an organisation. Stewart (2013) commented that it has both pros and cons in its
activity, which makes impacts on the overall performance of the organisation. However, in case
of BMW, the organisation introduced modern technologies in their services, which helps in
bringing the customers in a closer proximity. Therefore, it can be stated that this step provides
two-way advantage to the organisation. Firstly, it provides a competitive edge to the organisation
over its rivals, and next it makes the relationship of the organisation with the customer better. In
addition, it is found that the introduction of globalisation within BMW helped the company in
reaching to the potential markets, such as China, which is now considered as the third leading
market for BMW. Besides, the production of the company is also increased over 10%, which can
also be stated as a reflection of globalisation. In addition, this is also helping the organisation in
creating an environment for the automobile industry, which is helpful for achieving success in
the business (Karayel, 2017). The globalisation is also creating a global business environment for
the organisation, which increases the production and sales of the organisation. This is helping in

9
the development of a corporate structure in the business. However, as the business of the
organisation has overspread in different countries, there is inclusion of workforce from different
backgrounds. In addition, there is also an example of having customers of multiple countries,
which are effectively managed by the corporate team of BMW.
Main challenges while assess the impact of globalisation on the corporate structures
According to Hanssens et al. (2013), the implementation of globalisation makes several
challenges, which influences the overall performances of an organisation. These challenges can
also make hindrance in assessing the impacts of globalisation in an organisation. In case of
BMW, the major challenge is observed in the trading, this is mainly occurred because of unfair
exchange in different companies. Although globalisation supports the enhancement of connected
economy, there is an issue of having long-term advantage in the organisation. In case of a large
industrialized economy, globalisation causes capture of severe market share, in terms of financial
control. The exchange of large share can make advantage the organisation over other, but it
results victimizing the other nations. As mentioned by Salvioni et al. (2014), the major impacts
of the globalisation in this case are faced by the developing and undeveloped countries, which
may even cause the damage of the economic status of the country. This may lead to the
development of illegal labor practice, consumerism, weaken cultural values and so on. Besides,
there is an evidence of having faulty communication system in BMW, which is making serious
grievances among the customers of the organisation. The durability of the products and
infotainments are major disappointing factors for the users of BMW, which are serious
influencing the customers in making decisions for the purchasing the products and making
inclination over others.
As mentioned by Olamade et al. (2014), the products BMW is not free from the environmental
impacts. Besides, the automobile products of the organisation often are defected by the carbon
monoxide. In addition, this is also causing impacts on the customers as this carbon monoxide is
directly passed through the passengers section, while these are used. On the other hand, there is
another defect in the cars of BMW is excessive jerking, which makes the user feel uncomfortable
while they are using it. In addition, there are several other drawbacks in the overall performance
of the organisation, which is making a challenge in assessing the impacts of globalisation.

10
According to Cassim et al (2014), one of the major issues in the organisation, influencing the
corporate structure is the ethical concerns, which is found in several disciplines of the entire
business. These are the safety of the products, labor practice and others. Besides, the organisation
is also suffering issues in their organisational structure, which is a significant challenge to
introduce corporate structure and evaluate the efficiency of globalisation. The international
affairs of the company must require a big investment. This can be done in different disciplines,
such as to manage different sections of the organisation, which are included in the strategic
business unit. Besides, the maintenance of the public relationship is another factor, which is
making hindrance in the business of the organisation and assessing the impacts of globalisation.
Factors responsible for facilitation of the globalisation of multinational companies
Globalisation has been made possible and has gained rapid pace in the recent times due to
several factors. According to Hopper et al. (2017), these different kinds of factors have helped in
facilitation of globalisation of the MNC’s present in the global business sector. These factors are
comprised of various political, economic and judiciary dimensions along with the components of
technological and transportation areas. In the opinion of Siddiqui (2012), all these factors have
altogether elevated the potential and extent of globalisation of the MNC’s. These factors are
mentioned as follows:
Development in IT and telecommunication technology-
This factor is one of the most vital and highly accountable factors, which has elated the process
of globalisation of the multinational companies. As opined by Jha and Krishnan (2013), it would
not be possible if the information technology and telecommunication were not developed as now.
Due to development in these sectors, connections and relations were built between two different
business entities separated by the geographical boundaries in a time and cost efficient manner.
Containerization-
This factor has been a boon for those industries or companies, which are majorly indulged in
transport business. According to Gerybadze and Merk (2014), the transportation of goods are
facilitated through containers of steels, which can be shipped through trucks, ships, railways etc.
this made the transport easier for the MNC’s.

11
Economics of scale
This trend in the production area of the globalisation of business has raised the bar of market
economy and more and more number of MNC’s has been focusing on increasing the production
capacity. According to Stephen (2011), this is because larger the economy of scale is, larger will
be the sales growth of the MNC’s. This has facilitated the global expansion of the MNC’S.
Tax system differences
Many of the developing countries make adjustments in their taxation system as it helps in
attracting MNC’s of different countries to make investment in the country. In the opinion of
Berden et al. (2014), this factor in turn increases the rate of foreign direct investment made in the
country.
Social media
Rise in usage of social media has also aided the process of globalisation of the MNC’s.
According to Waddell (2017), business has been able to target and reach up to global audience
through social media. This provides opportunity for increasing the sales and profit of the
company.
Advancement in technology
Due to development in technology, the machineries, tools and equipment have been imported. As
opined by Saheed (2013), this has helped in carrying out business activities effectively and thus
has promoted the globalisation of MNC’s.
Aspects influencing the globalisation in regard with corporate structure
The concept of globalisation is purely based on the relations developed among the various
nations of the globe. Therefore, it becomes very clear that for facilitating better globalisations,
there is a keen requirement of developing and fostering the relationships between the nations,
culture and economies. As opined by Senses (2017), the demand and supply is also another
factor, which helps in expansion of business from domestic level of market to the higher and
international level of markets. BMW has always been in demand by its customers and the
company has succeeded in fulfilling these demands of the global customers. According to

12
Rogalska (2016), corporate structure of the company is one of the crucial parts for globalisation
of BMW. Therefore, the corporate strategy and its components are very significant for the
prosperous globalisation of the company. Korowicz (2011) has suggested that there are several
factors including social and ecological factors along with economic, social and historical factors.
According to Frambach et al. (2012), the services and products served by the BMW are of
standard quality and therefore leading in the market economy. The advent of socialisation
through social media and internet has been another advantage for the company in its
globalisation. Hopper et al. (2017) has stated that it has facilitated wider reach of the company
towards more customer base. Due to this factor, more profit and sales ratios are gained by BMW.
This proves to be a great competitive advantage for the company. Practicing sustainable policies
and activities in the corporate structure and environment of the company will aid its
globalisation. It has been suggested by Siddiqui (2012), that sustainability can be brought by
BMW for provision of eco-friendly services through its fuel-efficient vehicles. Along with
sustainability, the security of the vehicle is another factor that needs to be enhanced. This will
strengthen the position of the market and will boost the global reach of the company. In the
opinion of Jha and Krishnan (2013), providing innovative products and technologies to the
customers will help the company in sustaining its customer base. In this way, the perpetual
succession of BMW in the automobile industry can be ensured prosperously.
Literature Conclusion
BMW is a leading name in the automotive industry and successfully carrying out its
globalisation in the global market. There are various factors, which have aided its globalisation
process. Through these factors, the company has gained various benefits and advantages also.
However, there are some challenges and obstruction amidst the path of globalisation of the
company. By eliminating these obstacles, BMW can ensure its leading position and perpetual
leadership in the market.
C. Research Methodology
Research Approach