Globalisation Impact and Strategic Direction for Cameco Company

This report provides a comprehensive analysis of Cameco's globalisation strategy, examining the key factors driving its international expansion and the strategic challenges it faces in a global environment. It explores the influence of global markets on the company's organizational structure, culture, and functions, utilizing frameworks like the McKinsey 7S model and PESTEL analysis to assess internal and external factors. The report delves into the influence of globalisation on organisational decision-making and strategy, evaluating different approaches to effective decision-making in a global context and identifying various routes to internationalization, including key barriers. The analysis covers cost, market, environmental, and competitive factors, offering recommendations to address challenges such as cost increases and cultural rifts. The report highlights the importance of shared vision, employee diversity, and strategic partnerships for successful global operations. Overall, the report offers valuable insights into Cameco's globalisation journey, providing a detailed overview of the content.

Impact and Strategic Direction

Table of Contents
.........................................................................................................................................................1
INTRODUCTION...........................................................................................................................2
LO1 Analyse the Key factors that drive globalisation. .........................................................2
LO2 Determine various strategic challenges associated with operating in a global
environment............................................................................................................................4
LO3 Global market influence on organisational structure, culture and functions ...............6
a) Discuss global market influence on organizations structure, culture and Functions ........6
b) Influence of ethical and sustainable globalisation on organizational functions.................9
LO4 Influence of globalisation of organisational decision making and strategy.................10
a) Evaluate different ways decision making can work effectively in a global context. .....10
b) Determine various routes to internationalization including its key barriers. ..................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................12
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INTRODUCTION
In order to sustain in this competitive business environment it is necessary for every
organisations to expand their business globally and attains maximum profitability. Globalisation
is the process of interaction and integration among individuals, companies and government
worldwide (Alkhafaji and Nelson, 2013). Expanding business globally is a key challenge for the
the companies as well as opportunities for the business to attain competitive advantages. When
companies expand their business globally it greatly affects their structure and creates problem in
decision making but also has various opportunities associated with it. This project is based on
the CAMECO company which is a fast growing energy and a chemical company based in South
Africa and has expanded its business operations in Mozambique, Canada, gabon and Australia
and focusing to expand in other countries soon. This report is going on throw lights on key
factors which makes the companies globalise its business as well as the strategic complexities
associated with operating in global environment . It also elaborates how global market influence
organisation structure, culture and discusses influence of globalisation on organisational decision
making and strategy. This
LO1 Analyse the Key factors that drive globalisation.
When company expands its business operations globally it posses various challenges and
opportunities for the company. There are various factors which influence the companies to
globalise its business operations. Hence it is the responsibility of the managers at the Cameco to
analyse the impact and formulate the strategies accordingly. Key factors which drives
globalisation are as follows-
 Cost Factor- When expanding business operations globally Cameco companies need to
analyse the cost factor. As the company needs to analyse the cost that would be required
to provide goods and services to the individuals globally. This is the major factor
influencing company to globalise its business operations (Amran, Lee and Devi, 2014).
Cameco manufacture good in different countries, they should globalise their business to
enhance their profitability level. As company would be expanding its business
operations globally it requires to do lot of research and development regarding its
production activities and should adopt to recent technology which would be costly for
the company. This proves challenge for the company to incur huge cost before
expanding its business operations. Benefit of this cost factor includes Cameco to increase
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its production activities and supply chemicals to many industries which would in turn
maintains high level of profitability for the company. This will assist the company to
expand its business operations effectively (Bititci, Cocca and Ates, 2016 ).
 Market factor- This factor is concerned with changes in the demands of the customer
which influences the company to change its products. This is the major factor influences
the companies to globalise its market operations. This would benefit the company in
terms of increasing profitability and economies of scale, moreover this provide an
opportunity to the company to enhance its good will in the market by providing products
according to the people in respective country. This proves challenge for the company to
provide specific goods according to their particular demands, and requires advanced
technology which would be a costly process for the company.
 Environmental factor- When companies expand their business operations they have to
determine political, social, technological, legal and economic factors which are
prevailing in the respective country. This assist the company to globalise its busines
operations. This would benefit the Cameco to work according to the political rules and
regulations and adopt to the recent technology by providing goods according to the
requirement in the country where Cameco is going to expand its business operations and
enhance their profitability levels. But sometimes it becomes challenging for the economy
to work according to the rules and regulations of the different countries and makes it a
complex process to work according to different policies and regulations.(Globalization
Benefits and Challenges. 2019.)
 Competition- As there is lot of competition prevailing in the market place, it makes the
respective company to globalise its business operations to enhance goodwill of its
business and maintains sustainability in market for a long period of time. Cameco
should provide high quality products so as to aid competitive advantage to the firm. This
proves to a benefit for the company to provide high quality specialised products in order
to beat the rivals in the market place and attains a competitive advantage and but the
challenge faced is the company needs to analyse different strategies of its competitors in
different countries and make up gradation in their products which would be a costly
factor for the company.
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LO2 Determine various strategic challenges associated with operating in a global
environment.
Concept of globalisation
Globalisation is a process which create a link between people,cities, regions and countries
closely through global network of trade and communication. In Context of CAMECO,
globalisation means that it is increasing its market share geographically by working in different
countries and regions. They are interacting with different people, companies and government all
over the world. It involves internationalisation of goods, services. Economic resources and
technology of the company. Globalisation also help the company to perform better by attaining
knowledge and experience while working in different countries (ColtmanTallon, Sharma and
Queiroz, 2015).
Impact of digital technology on globalisation:
 Time barriers- Digital technology has positive impact on globalisation as it reduces the
time barriers in business deals. Now just by one click informations can be transferred to
anywhere in the world. Now people do not have to wait for it. Same with CAMECO,
globalisation became easy for it because of the digitisation of technologies.
 Transaction cost- Digitisation also help globalised company to reduce their transactional
costs. With the help of the world wide web transactions can be made at any time and to
the any part of the globe. Now transfer of physical form of documents has reduced and
instead of that it is transferred via internet or through simple SMS service.
 Reach to information- It has also become easy for the globalised company to reach to
any needed information without much efforts. And this is all because of increase in
digital technology. Company can search the information on internet and can get all the
answers. It even save their time, money and energy (Daley, 2012).
 Unite world- Technology digitisation help the company to unite it globally. Headquarter
of CAMECO get every information of its each unit. And communication has also become
easy because of it which create a satisfied working conditions.
Pestle analysis of Cameco
PESTEL is a tool that every company take in use for better decision making by knowing
about the impact of these factors in their company. It stands for political, economical, social,
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technological, environmental, legal. CAMECO is also applying this technique into their
organisation because it operates in dynamic environment.
Political- These factors tell how much government can influence working of an
organisation. In case of CAMECO, local government of USA have important role in making
policies and regulations which company has to follow. They are not allowed to follow nation-
wide policies, it may impact the work environment of the company.
Economical- USA exchange rate keeps on fluctuating rapidly which is impacting
Cameco because company's investment get disturbed by this volatility in short run as well as in
long run (Dubihlela and Sandada, 2014).
Social- Migration is the example of social factor in case of Cameco because attitude
toward migration in USA is not so good which affect the ability of company for getting
international workers who can operate in organisation.
Technological- Developed mobile technologies have impacted the company in such a
way that customers expectation from this sector has transformed. So now company is innovating
itself to move ahead and be in the competition.
Environmental- US government is providing subsidies to the investors of renewable
sector which is a good thing for Cameco as it can leverage the trends in this sector.
Legal- There are some laws made that company has to follow while working and one of
them is health and safety law which impact the company because they are indirectly dealing in
chemicals which is not good for the environment as well as for the health of people.
Globlisation challenges faced by company
 Cost- In case of globalisation of CAMECO, company face problem of rising cost while
working in different countries. Cost rises because company spend a lot of money on
research, equipments, hiring talents, advertisements,transportation etc.
 Cultural rift- This is again a challenge for company as it work out of USA they may
find out that population of that country are not ready to accept this company. CAMECO
also may not able to work in their because of different working culture.
 Legal and regulatory structure- This is also the challenge that company is facing in
case of globalisation. Because while working in different country is not so easy, every
country have their own regulatory and legal structure that company has to follow if they
want to proceed in it. This make difficult for company to survive some time.
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Recommendation for these challenges:
 Company should do a good R&D on whole market so that it can find out the ways to
reduce these cost of working in new market. By doing this they can get an idea about
places or sources from where they can buy equipments on low prices and can get cheap
transportation services (Eden and Ackermann, 2013).
 Shared vision is a good recommendation for the company like Cameco. It help the
company to share this vision across geographies which make their employees motivated
and dedicated toward their work. It bring all teams together working for the common goal
and help them to share their success and struggles.
 Company should hire employees from every area so that they can work globally without
any culture problem. It also help the company to understand the legal and regulatory
structure of different countries (Elbanna, Andrews and Pollanen, 2016).
 Company should work in favour of the country or they should do it as a joint project with
the country so that the population welcome them with full interest and This may also help
the company to stay and work their with less difficulties.
LO3 Global market influence on organisational structure, culture and functions
a) Discuss global market influence on organizations structure, culture and Functions
When companies globalists their business operations their performance is influenced
because of the various political and economic and legal factors which are different in different
countries. Cameco needs to analyze such influencing factors and adopts effective strategy to
maintain sustainability in the business for a long period of time. Company adopted various
theories in order to evaluate the global market influence on respective organization structure,
culture and function. This is described as follows-
McKinsey 7S model of organisational structure
McKinsey 7s model is a framework for analyses the internal changes within the firm for
organizations effectiveness. It consist of 7 basic elements such as strategy, structure, style,skills,
shared values, systems which are directly connected to each other. This model will help Cameco
to improve their performance by developing and implementing the strategies according to the
changes while expanding business globally.
Hard Elements- It includes organisational strategy, structure, system and shared values which
could be easily modified according to the needs within the Cameco.
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Soft Elements- It includes organizations shared values, skills, styles and staff which needs to be
modified according to the requirement in Cameco (Khan and Khalique, 2014).
Hard Elements
 Strategy- In order to perform effectively respective company needs to formulate
effective strategy in order to sustain in market for a long period of time. As Cameco is
expanding its business operations in many more more countries it needs to develop
effective strategies while working in different countries.
 Structure- As the respective company has its business operations at a global level,
Cameco needs to change its organisational structure and work according to the
requirement. While expanding its business operations in Australia Cameco company
needs to adopt to flatter organisational structure minimizing hierarchical structure and
hence when company operates in US they should develop more hierarchical structure and
work under proper rules and regulations.
 Systems- It is concerned with Cameco to adopt system of production which would
enhance their productivity level and provides goods according to the demands in the
respective country. It has global market influence in which company needs to adopt to
efficient system and adopts to the recent technology (Kirchoff, Tate and Mollenkopf,
2016).
Soft Elements-
 Shared Values- It is concerned with values and beliefs that Cameco practices at their
wok place. Cameco uses ethical values and beliefs to produce goods ethically according
to requirement in the country and reduce its global market influence.
 Skills- It is concerned with the capability of the employee to perform effectively, Cameco
should enhance the skills and capabilities of the individual to make them work effectively
in a global market.
 Staff- It is concerned with the number of employees within the respective organization to
perform its business operation globally. It has around 3300 employees globally and
should recruit more employees as it is expanding its business operations globally.
 Style- It is concerned to which democratic style Cameco should adopt to create a
harmonious work place environment and effectively globalise its business. Respective
company should adopt to democratic style of leadership and make the employees
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motivated by assigning certain roles and responsibilities and makes the employee
motivated to work effectively (Liu and Wang, 2014).
Hofstede’s Dimensions of Culture
Companies have different perceptions, values and beliefs towards their work but is
influenced by the global market influence. Cameco has adopted Hofstede's Dimension of culture
to determine how company is influenced by the globalization . It is discussed as follows-
 Power Distance Index- It refers to the power inequality between the superiors and the
subordinates in the organization. When Cameco expands its business operations in Arab
countries it needs to be more hierarchical in nature as there is a high power distance but
when Cameco expands its business operations in Asia it needs to be more participate in
nature. This is the cultural influence of the different countries in Cameco.
 Individualism v/s collectivism- Individualism is concerned with self oriented members
which focuses on their self achievement and collectivism focuses on individuals work in
a group harmony towards effective realization of goals. In countries like Mexico and
Asia individuals works in a team but in United states individuals normally follow
individualistic culture which affects performance of Cameco while expanding globally.
 Uncertainty avoidance- It refers to how members of the society responds to uncertainty,
countries like britian have a high power culture of uncertainty avoidance they avoid risk
in their work but countries like UK are highly risky and innovative in nature to achieve
successful outcomes (Noble and Nwanekezie, 2017).
 Masculinity vs femininity- It is concerned to difference between the role of men and
women within the respective organisation. Cameco should consider the role of both the
genders within the organisation in order to avoid cultural differences and work effectively
in a global market.
 Indulgence vs. restraint- It is concerned to which indulgence employees enjoys their life
on their own emotions and restraint employees are concerned about their behavior
according to their social norms. Cameco should maintain effective organisational culture
by providing a proper work life balance to make them enjoy their work and attain their targets.
 Long term orientation vs Short term orientation- Cameco should perform its business
activities in such a manner that it is able to achieve long term and short term goals within
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specified time period. Cameco should maintain a effective organisation culture by
expanding business operations globally (Okeke, Onuorah and Jakpa, 2016).
b) Influence of ethical and sustainable globalisation on organizational functions
There are various organisational functions such as finance, human resource, sales or marketing
and others that are need by the organisations to produce and sell products or services. These
influence of ethical and sustainable globalization on organisational functions are as following:
Finance- In Cameco, this function or department id responsible for administering
employee expenses and salaries or providing funds to manufacture products such as uranium, an
electricity. The company operate its business globally by following all the rules and regulations
of the company and this positively influence this function because the management department
of the company will not be incurred in unethical activities. For example, if this firm import its
product such as uranium etc. according to the rules and regulations of different countries than
this positively influence its finance because it will not pay extra amount to unethical manners or
government. The management department can invest that fund in the growth of the company or
the finance department have proper information and maintain budget of its finance and fund
which is invest in production or other things.
Human resource- In Cameco, it is responsible to hire, recruit, select and development of
the staff and employees. If the HR department of the company properly follow all the rules and
legislations they will hire qualified candidate who help the organisation to achieve its business
objectives. By organising recruitment and selection process the manager of the company can find
skilled employees and they help in development of the firm. By providing equal rights to
employees and equal pay, the HR manager can motivate their employee and they do their work
with more effectiveness and achieve the business objectives in given period of time which make
sustainability in the business of the company. It positively influence this function because if the
employees do better and help in firm's growth, the HR department also provide them training,
learning and motivational functions or rewards also according their performance.
From the above discussed organisational functions, if the company follow all the laws,
regulation and operate its business ethically at global level. This positively influence the
organisational functions and help in proper running of the organisation business and achieving
organisational objectives.
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LO4 Influence of globalisation of organisational decision making and strategy
a) Evaluate different ways decision making can work effectively in a global context.
There are various ways that can help in the decision making of the company to do work
effectively, they are as following:
Organisational Readiness- Cause of cultural differences which is related to costumes,
values, language and regulations, the firms needs to rise flexible in within the organisation. In
Cameco, the management department of the company can generate flexibility by making change
in the policies and procedure of the firm. The manager of the company can provide various kind
of flexibility such as in work, in policies and others so that the employees of the company can do
their work according them and achieve their gaols. The organisation can develop competitive
benefits program to attract the skilled and talented candidates or employees so that they can help
in the organisational growth.
Change in Leadership style- In Cameco, according to the problems, issues and
situations, the manger or the leader can make change in the leadership style so the employees
and workers can do their work properly in each situation. When the company operate its business
at global level, the leaders of the firm can follow democratic leadership approach and autocratic
leadership style to engage and participate in the decision making process. The managers of the
company also work according these style and help in maintaining healthy and friendly workplace
where workers can do their work effectively. This will help in improving performance and
productivity of the company and effective in taking decision at global level or global context. If
the leader and manager of the company make change in their leadership style, they also learn
various things and gain knowledge or can lead or motivate the employees by different ways
towards their goals.
From all above discussed ways, the employees of the organisation can do their work
effectively and help in the organisational growth or achieving the business objectives of the
company.
b) Determine various routes to internationalization including its key barriers.
Their are various routes to internationalization for the Cameco business which is
described as follows-
 Exporting- It is an easiest way to enter into an international market and is the most
successful mode of entry for many of the firms. Exporting is concerned with sale of
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products and services in the foreign market from the home country. This mode of entry
will allow Cameco to enter successfully in foreign countries. The greatest advantage of
this mode of entry is that its reduces the expenses of Cameco to establish operations in
the foreign countries. They could provide their products while doing contractual
agreements with local distributor, but the key barriers associated with exporting goods
are transporting goods to the country which would be a costly factor for the Cameco and
exporting in some countries will incur heavy tariffs which will impact profit of the
company (Owolabi and Makinde, 2012).
 Partnership and Strategic Alliances- It is the effective mode of entry into the foreign
markets. Cameco could under a strategic alliance with the local partners and expands its
business gradually. Strategic alliance should involve a contractual agreement between
two or more enterprises and works effectively to achieve a common purpose goal. The
main advantage of making partnership with the local firm will allow Cameco to properly
understand local culture, market and doesn't requires to do much investment while
analyzing the needs of the social people. If Cameco would come under partnership with a
recognized and a reputed brand. This will allow Cameco to maintain its sustainability in
the market and enhance its profitability level (Pathak, Hoskisson and Johnson, 2014).
This strategic alliance is advantageous for the small companies who have small amount
of funds and this way it becomes easy for the firm to enter in a new market effectively.
Key barriers associated with this route that when Cameco comes in partnership it may
lead to possibility in the difference between firms and the partners goals. Moreover
Cameco when comes in partnership with other firm it may lead to difference in their
organisational structure and indirectly affects their performance of work (Scott, 2013).
 Franchising- It is an effective mode of entry in which franchisee such as Cameco
which pays fees to a parent country in the foreign market and in return for the rights to
be identified for its trade mark to sell its products and services under their name. The
main advantage of this mode of entry is it is less risky and there is advantage of the
expertise of the franchiser which allows Cameco to sell its products and services under a
well established name. But the key barrier associated with is the coming under
partnership with wrong franchise may ruin Cameco image and goodwill and in future
both cab be a tough competition to each other.
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