Globalization's Influence on Business Operations: A Ray C Smith Report

This report analyzes the impact of globalization on business operations, using Ray C Smith, a family-owned transportation and warehousing business, as a case study. It explores key factors driving global commerce, including cost, market, and environmental considerations, and examines the strategic challenges associated with operating in a global environment, such as entry fees, legal frameworks, and cultural complexities. The report evaluates the influence of the global market on the organization's governance, leadership, culture, structure, and functions, utilizing the McKinsey 7S model and Hofstede's Six Dimensions of Culture. Furthermore, it discusses the influences of ethical and sustainable globalization on company functions and the importance of effective decision-making in an international context, along with the various routes to internationalization a company can adopt. The report aims to provide a comprehensive understanding of the complexities and opportunities presented by globalization in the business world.

Impact Of Globalization On
Business Operations

TABLE OF CONTENTS
INTRODUCTION..........................................................................................................3
LO1................................................................................................................................3
P1 Analyzing key factors that drive global commerce and trade...............................3
LO2................................................................................................................................4
P2 Various strategic challenges associated with the operating in a global
environment............................................................................................................................4
LO3................................................................................................................................5
P3 Evaluating the global market influence on the organization’s governance,
leadership, culture, structure and function.............................................................................5
P4 Influences of ethical and sustainable globalization on company functions..........7
P5- Different ways decision making could work effectively in international context
................................................................................................................................................8
P6- Varied routes to internationalization an company can adopt, including
challenges...............................................................................................................................9
CONCLUSION............................................................................................................10
REFERENCES.............................................................................................................11

INTRODUCTION
For the purpose of remaining in the market it is crucial for the business organization
for expanding its business which will help in attaining higher profits. Globalisation is the
process which accounts for the interaction and integration of the people, government,
corporates all across the world. There are various challenges that come across with the
opportunities which are required to be identified and take competitive advantage.This report
is based on the Ray C Smithwhich is a family owned business in the year 1973 providing
transportation and warehousing solutions to its clients. This report provides an insight on the
key factors which is used for making businesses global along with strategic complexities in
relation to operating in the global environment. It also covers that how the foreign market has
the capacity to impact the company’s culture, structure and discusses the impact of global
business operation upon the organizational decision making and strategy formulation.
LO1
P1 Analyzing key factors that drive global commerce and trade
When the organizations expand their business in the international market, it come
across various challenges along with the opportunities. There are various types of factors
having an influence over the business entity in regard to its business operations. Therefore, it
is the responsibility of the manager of Ray C Smith in respect to analyzing the factors and its
impact and then formulating the strategies according to it. Following are the factors which
drives globalization.
Cost factor: For the purpose of expanding the business in the international market the
company is required to analyze the cost factor associated with it. As the organization requires
to analyze the cost in relation to providing its products and services in the new global market
(Alsaad and et.al., 2018). This factor is considered as the most important factor having an
influence over the business operation. Ray C Smith requires to undergo R&D which requires
incurring huge amount of money along with the adoption of the latest technology which
would be a costly affair.This factor is challenging for the company before expanding the
business.
Market factor: This factor is also very important which determines the change in
terms of the demand of the customers which might have an influence over the company in
respect to the number transport vehicles required. This factor is crucial in globalizing the
company. This will provide benefits to the company in terms of the increase in the
profitability along with taking advantage of economies of scale (Abdallah Alsaad, Taamneh

and Ismail, 2018). This will provide opportunity to the company in providing goods to the
company as per the demand and customers requirement in the respective country. This proves
a challenge for the organization in regard to timely transporting the products to the specific
market pertaining to the demand which also requires latest technology which is again costly.
Environmental factor:While expanding business in a global market it is very
important or the company to deeply analyze the various macro-economic factors prevailing in
the country. Ray C Smith requires to determine the political, legal and the social factors
which can have a huge impact over its business operation and expansion plan. This would be
beneficial for the organization to carry out its work considering the political and legal rules of
that country along with the social and cultural trend of the same (Degain, Meng and Wang,
2017). Thus, this will help in enhancing the productivity and profitability of the company.
But on the other hand, it might become challenging as working in accordance with the rule of
the other country might turn out to be a complex process.
Competition:Since, there is a lot of competition prevailing in the market which makes
the Ray C Smith, to effectively and extensively analyze the competitors. In order to overcome
such intense competition, Ray C Smith requires to provide quality services to its customers
with additional benefits which will help in grabbing the larger market share and take
competitive advantage.
Thus, these factors will have a huge impact over the business operation. Analyzing
each of these factors will result into identifying the ways or the strategies which can be
implemented by the company. But on the other side, it is important to focus on the thing that
for carrying out such analysis will require huge amount of fund which might pose as a big
challenge for the company.
LO2
P2 Various strategic challenges associated with the operating in a global environment
When an organization thinks into expanding its business operation beyond its
geographical, the company like Ray C Smith have to implement different types of strategic
challenges which ranges from the financial and non-financial, an example of which are
provided below.
Entry Fee:Ray C Smith can go to the international market by the way of exchanging
the export or the transportation fees. The company can establish or enter into the new market
by setting up a new branch as a wholly owned entity (Clift and et.al.,2017). This entry fees

will determine the advantages and the challenges point of equilibrium of the strategic
decision of the company.
Legal framework:The company has to undergo various types of local and
international rules and regulations which helps in determining the limits within which the
business should be operated. For example, Ray C Smith will be required to comply with laws
pertaining to the transportation and warehousing in the expected market. Along with that, the
company is having different scope in respect to practicing the legal behaviour in different
countries which helps in smoothening the operation in other country.
Cultural complexity:The established business of the Ray C Smith is based upon the
culture followed by the family as it is a family owned business, providing transport and
warehouse services to all types of clients small and large. Therefore, the same type of
business culture might not be right in the other country (Ali and Garg, 2017). Thus, the
strategies should be formulated focusing more on local clients in the foreign market. It is very
much necessary for bringing cultural similarity; thus, the management team requires to learn
and train its employees the culture pertaining to the operating country. Therefore, Ray C
Smith needs to take initiative for enriching the local cultural orientation.
Ray C Smith will be having risk of different kinds in its internal business operation
pertaining to logistics. These risks can be strategic and operative. Thus, appropriate steps for
minimising the risks of the global operation has to be taken from different dimensions. The
risk diversification is the only way through which level of risk can be handled. Therefore, the
quantitative analysis will help in determining the measure of risk. Apart from this, proper
supply chain management, is a crucial factor in risk management of the issue that will be
faced by company in global market. Linking of supply chain with the business operation will
help in generating better outcome for the risk diversification.
LO3
P3 Evaluating the global market influence on the organization’s governance, leadership,
culture, structure and function
Other than the external factors there are few internal factors having an impact over the
global business environment. A detailed discussion is given below.
Organizational governance:
The current or the existing corporate governance might not be appropriate in respect
to going beyond the domestic area. The company is required to consider new governance
policies pertaining to the business operation in both strategic and operative management. All

the activities of the foreign branch should be as per the new corporate governance. Currently,
the company committed to the high corporate standards and governance and so for the
foreign business company needs to have comprehensive range of policies.
Leadership:
The executives and workers are to be more prepared up for the compatibility of the
worldwide logistics business where the client and the accomplices are more complex than the
local client. The managers and the top management are to be more found out about the
current business climate and overall set of laws of the working nations and home one. The
head of the workers and the business jobs have such leadership impacts of the
internationalization of the operationalactivities of Ray C Smith. The way of handling things
changes and therefore, the leadership style.
Organizational structure:
For ensuring success it is important to have well organized and structured
organization structure. This can be understood with the help of McKinsey 7S model which s
tool used for analysing the organizational structure of the company. The structure, strategy
and the systems account for the hard elements while others are the soft elements.
Structure: The organizational structure of the company is hierarchical which can be
its main drawback which results into ineffective management of the time, communication gap
and requires action on immediate basis.
Strategy:The company has always focused on valued services which has resulted into
providing various advantages to the company (What is the McKinsey 7S Model? 2020).
Systems: the system implemented by the organization is very well established which
helps in effectively meeting with the daily requirements and carrying out the activities
properly.
Skills:The representatives of RCS have all around prepared and able enough to deal
with the business and addressing the necessities and desires for its clients.
Style:RCS is utilizing autocraticleadership style which has hampered the creativity
and innovative mind of its workers.
Staff:The company hires its staff by looking at their capabilities and how it can be
productive for the company.
Shared values: RCS is built on its core values which accounts for high quality which
is its strength in attaining its objectives.
Culture:

The global business also has an impact over the organizational culture in a various
way. This has been explained using the Hofstede's Six Dimensions of Culture.
 Power Distance Index:It accounts for the distribution of power in the culture. For
instance, RCS follows stringent hierarchies for the purpose of decision making which will
require high power distance as decision making authority is with top management.
 Individualism versus Collectivism: It refers to how the personal needs of the
individual is prioritized in contrast to the needs of the group. High IDV score means slower
interpersonal connection.
 Masculinity Versus Femininity:Under this, the role of men and women is decided.
From eth corporate view, it is intermingled and formed into a new culture.
 Uncertainty Avoidance Index:This index shows the ability to manage the situation of
uncertainty along with unpredictable results (Hofstede's Cultural Dimensions. 2020). It is
also a measure of conservatism which states that the high index will convey higher
conservatism and the resistance to adopt new things while on the other hand low index shows
less resistance.
 Long- Versus Short-Term Orientation:This dimension analyses the ability of eth
group in regard to adapting changes as per the situation. The cultures with the long term
approach will be more open to accepting changes while the short term will be less willing to
adapt new ones.
 Indulgence Versus Restraint:It characterizes the culture’s openness either by
accepting the gratification of having fun or by regulating it by strict social norms.
Function:
The functioning of the global business is different from that of the local one. The
function will be more focused on the strategic front like introduction of the new function
which will be helpful in foreign market.
Therefore, the global business operation has an impact over the organization’s
governance and leadership, culture, structure and functions.
P4 Influences of ethical and sustainable globalization on company functions.
The influence of ethical and sustainable globalization can be understood to ben highly
informative and functionally wide for stronger working goodwill on higher informative
synergy which upscales larger domains of new sustainable direction. RCS with adoption of
ethical and sustainable globalization aims for stronger innovative diversity on varied grounds,
where ethical diversity and sustainable goodwill upraises higher informative parameters of

upscaled growth among targeted standards. Globalization fosters currency areas within
international domains for innovative business metrics and stronger market positional services,
where RCS with ethical business practices have been aiming for larger technical diversity
within wider paradigms(Paganetto and Scandizzo, 2020). Ethical functional standards also
bring marketers and customers close towards goodwill horizons for competitive growth in
industry where increased popularity opens up paths for higher active dominants, RCS by
working on sustainable advanced globalization will be able to cater on stronger informative
productive horizons where evocative marketing has high scope for gaining informative
goodwill within industry. Globalization competently energizes company functional approach
to be widely advanced, strongly focused on working towards new paradigms of efficacy
within longer run through which potentialities for entering within untapped business areas are
explored. Ethical business CSR activities bring on evolving synergy for stronger metrics of
higher informative business sources and also for upscaling revenue on higher informative
grounds to be actively used to ensure new scale synergy of targeted revenue enhance. RCS
will be able to govern also upscale working horizons of profound goodwill by keeping strong
sustainable diversity.
P5- Different ways decision making could work effectively in international context
Ray C Smith has operated their business with skilled workforce and talented people
who can contribute in world of business where competition level is very high. Organization
due to this reason and other as well take decision to expand its venture in most profitable
market like East Midlands which bring a lot of benefits for company in term of increasing
sales, profitability and productivity level even better.
Decision making is key procedure that drives organizations towards success and
better growth. It is act selecting effective approaches and methods that can boost productivity
of Ray C Smith. This activity can excellently work in global context because it allow firm to
consider profitable and productive methods like expansion which in return generate revenue
even better and permit to build strong brand image across local boundaries. Any decision
could be made through either reasoned or an intuitive procedure or a mix of these two
(Bashan and Armon, 2019).
Right decision taken by leader and manager can influence business in positive manner
and it drive them towards grab accessible opportunities like competitive advantages, reach at
global level and increase customer’s base. By operating business at local level company can
sustain in existing market, which is not sufficient they need to consider growth chances and

then take decision which make them able to move at international stage where success factors
are high.
Decision making is one of the most essential part of business as it help to achieve set
goals and objectives of company and strength firm to reach at global level where potential
buyers are seeks to purchase quality products and services in exchange of money. It can
increase sales, productivity and profits margin even better.
Business expansion is the right and most beneficial decision of chosen brand that
enhance chance to lead achieve global market opportunities and boost performance level of
brand. On the other hand, it can be said when decision taken by leader could be wrong it can
lead success failure as it can eliminate chance for gaining better growth opportunities in
context of global level (Maes and Weldy, 2018).
All above discussion, define that decision making can work excellently in global or
globalization situation when it can be taken smartly, especially after analysing overall
situation of market and industry where chosen company operated.
P6- Varied routes to internationalization an company can adopt, including challenges
Internationalization can be defined as procedure of increasing involvement of
companies in global markets. In recent time, there are varied ways accessible in business
world that Ray C smithy can consider in context of above term.
Joint venture-
In order to enter into new market or expand business at international level, chosen
firm can consider and adopt this route. According to this way, company can make agreement
with local company operated in market where they wish to enter. This contract can connect
two companies together and allow selling their products and services successfully (Riaz,
2017). It can access firm to gain new knowledge about new customer and market
appropriately that can be used in further.
Business acquisition-
This route can be recognizes as procedure of acquiring a profitable organization either
small or large to build on weakness or strengths of acquire firm. It can help chosen brand to
enter into new market and allow reaching at global level. It can similar to an acquisition but
known as strictly to combine all interests of firms into a powerful individual enterprise. It can
give chance to acquire most of companies sales to gain control.
Franchise-
This route is quite common as many companies adopt it and use to gain in future
benefits like increase profit margins and customer base even better. This route connects

franchisor and franchisee together. When company adopt this approach they can take
franchise of other brand and sell their goods through that which is quite beneficial and helpful
as it contributes in global context and allow become market leader.
Challenges-
 The biggest challenge company can face while using franchise as route of
internationalization is changing consumer demand which can impact existing services
and products offering.
 Another challenge firm can face with Joint venture and that is failure to consider there
is no such thing is fair and equal partners.
 With business acquisition, company can face barriers in term of losing faith and
positive relation with important stakeholders.
CONCLUSION
It can be inferred from the above that there are various factors which should be taken
into account in respect to expanding the business in the foreign market. These can pose
challenges for the business operation along with the better opportunities. Apart from this,
operation in a foreign market also has an influence on the company’s culture, structure and so
forth. There is an impact of ethical and sustainable globalisation of the business on the
business functions which are required to be analysed. At last, there are various routes to
internationalization but with that there are certain barriers which is required to be taken into
account.

REFERENCES
Books and Journals
Abdallah Alsaad, R.M., Taamneh, A. and Ismail, N.A., 2018. What drives global B2B e-
commerce usage: an analysis of the effect of the complexity of trading system and
competition pressure.
Ali, I. and Garg, R.K., 2017. Marketing of Services: Challenges & Opportunities in Context
of the Globalization of Business. International Journal of Engineering and
Management Research (IJEMR). 7(3). pp.522-526.
Alsaad, A., and et.al., 2018. What drives global B2B e-commerce usage: an analysis of the
effect of the complexity of trading system and competition pressure. Technology
Analysis & Strategic Management. 30(8). pp.980-992.
Bashan, A. and Armon, D., 2019. Quality management challenges in a dynamic reality of
mergers, acquisitions and global expansion. International Journal of Quality &
Reliability Management.
Clift, R., and et.al.,2017. The challenges of applying planetary boundaries as a basis for
strategic decision-making in companies with global supply
chains. Sustainability. 9(2). p.279.
Degain, C., Meng, B. and Wang, Z., 2017. Recent trends in global trade and global value
chains. Global Value Chain Development Report (2017).
Maes, J.D. and Weldy, T.G., 2018. Building effective virtual teams: Expanding OD research
and practice. Organization Development Journal. 36(3).
Paganetto, L. and Scandizzo, P.L., 2020. Is Globalization Sustainable?. In Capitalism, Global
Change and Sustainable Development (pp. 261-270). Springer, Cham.
Riaz, M.T., 2017. Internationalization of SMEs through Joint Ventures. Asia Pacific Journal
of Emerging Markets. 1(1). p.1.
Online
Hofstede's Cultural Dimensions. 2020. [Online]. Available
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