Global Commerce and Strategic Challenges: CM Downton Report

This report analyzes the global business environment, focusing on CM Downton, a leading logistics company. It examines key factors driving global commerce, including cost, market, environment, and competition. The report explores strategic challenges such as communication difficulties, foreign laws, and international company structures. It evaluates the impact of globalization on organizational governance, leadership, structure, culture, and functions, including Hofstede's cultural model. Furthermore, the report analyzes the effects of sustainable and ethical globalization on organizational activities, decision-making processes, and different paths to internationalization. The analysis covers various aspects of globalization and its implications for businesses operating in a global context, providing a comprehensive overview of the challenges and opportunities in the international business environment.

GLOBAL BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION................................................................................................................................3
P1 Analyse key factors of cost, market, environment and competition that drive global commerce
and trade...........................................................................................................................................3
P2 Explain the complexity of strategic challenges faced by organisations when operating in a
global environment supported by specific examples.......................................................................4
P3 Evaluate the influences of globalisation on organisational governance and leadership,
structure, culture and functions........................................................................................................5
P4 Analyse effects of sustainable and ethical globalisation on organisational activities and
functions...........................................................................................................................................6
P5 Analyse the different ways decision making which can work effectively in global context......8
P6 Determine different path to internationalisation an enterprise ................................................10
CONCLUSION- ................................................................................................................................11
REFERENCES...................................................................................................................................12
Books and journals.........................................................................................................................12

INTRODUCTION
Market is expanding and competition is rising with a rapid speed due to which companies
are enhancing their business at global level. Global environment in business refers to surroundings
in different region of countries which affect the resources and decision making process of business.
Every corporation has different types of strategies and tactics of doing business and on basis of
those factors they operate their functions globally (Kasemsap 2016) . CM Downton is a leading
logistics company headquartered in UK. In this report, topics that have been covered are
analysing factors of cost and market that drive global commerce and trade , complexity of strategic
challenges faced by firm , effects of ethics and sustainability in context to globalisation, operation
functions, different entry to international business / barriers and decision making process methods.
P1 Analyse key factors of cost, market, environment and competition that drive global commerce
and trade.
Globalisation is defined as the process through which the people are interconnected to
each other and it involves the combination of the several companies and governments throughout
the world(Hamilton and Webster 2018). It is the development of the products, technology and
other cultures by providing them the best job opportunity. It is a concept which includes the
international trade with the new technologies.
Cost factor -The cost factor refers to the trading of goods to the other countries which
includes currency tax and duties that are affected by the market at a global level. While, sales and
purchases of the products and services into the competitive market. Further, it involves the
imports and exports that should be considered high costs in expanding the business
internationally into the other markets. High costs lead to the low profitability in the existing
market(Doh, Luthans and Slocum 2016). In context to C M Downton Ltd, it has the low cost
while it provides the logistic services in order to reduced the tax rate while importing and
exporting
Market factor -The market factors are affected by the demand of the customers for the
similar products and services could increased in various parts of the world. When it explore its
business throughout the world various market costs are included such as transportation costs,
tariff barriers etc. This involves the highest cost in importing and exporting the products and
services and usage of different marketing channels in the foreign trade. The manager of C M
Downton Ltd found the best strategies for reducing the market cost which leads to the high

profitability in the business. It could helps in minimizing the cost of the products and sevices
which isd provided by the company.
Environment factor- each and every company has its environment which is affected by the
competitors in the market. It further includes social, technological factors which are important for
making business strategies. This factor affects on the geographic conditions such as physical
features, climate etc. the market that determines the opportunities and threats of the business. In
addition to this, this factor emphasis the nature of the company in order to gain the challenges faced
in the development of the products. With reference to C M Downton Ltd the manager of this
company provides the use of vehicles and ships which produce less emission of Co2 gases.
Competition factors - this factor avail the products and services in the competitive
companies to assist in the international market. In the global market, the company increases its
competition to be forced by the organisation. It helps to understand the companies strengths and
weaknesses within the foreign competitors (Berman and Dalzell-Payne 2018). Further, it is
interdependent between the countries. Competition are on the basis of the buying and selling of
the products by foreign trade which enhances their sustainability in the market. In context to C M
Downton Ltd this could improve the product quality in order to meet the competition among the
existing companies. It involves the brand recognition in the boundary of the country. Hence,
foreign companies have the higher competition with the local companies to meet its goals and
objectives.
P2 Explain the complexity of strategic challenges faced by organisations when operating in a global
environment supported by specific examples.
Strategic challenges refers to the organisation's possibilities and capabilities which would
succeed in the future. It is a strategy which leads to the misleading of the communication and
lack of leadership(Wei, Thurasamy and Popa 2018).
Communication difficulties and cultural differences it is referred to the good
communication among the workers or employees to meet the best strategy of the business.
Productive communication with the clients and the customers is important for the growth of the
business. This includes the barrier which is non-verbal communication that may break the
business contracts with the clients. In context to C M Downton Ltd the manager of this company
could have the good communication skills between the customers in order to acquire the future
growth of the business. For example, if a client is exporting their product to the other client that
they cannot recognize their language which leads to the barriers in the communication.
Foreign laws and regulations this factor comprises the structure of the company in

understanding the laws and regulations of the government which is the main target of the market.
There are certain factors which are included while entering in the new market such as legal costs
and tariffs. Hence, Laws and regulations of the various countries differ from each other. In
addition to this, it involves the complexity in foreign trade while they are not aware about the
employment laws. The manager of C M Downton Ltd announces the different laws which is
considered through investing in the foreign trade. The company would follow the certain
guidelines which is not written in the particular laws and regulations. For example, if a company
introduces its new product in any country which is not in the culture then this could not compete
with the market.
International company structure this could be considered as the structure of the
company and the specified location for the stakeholders. It also helps to understand the culture of
the market by hiring the local people. It all depends on the product and size of the business in the
international market(Prakash and Barua 2016). In context to C M Downton Ltd, the head
manager of this company could analyse the structure of the business to meets its goals and
objectives in the global market. For example, a company which has the good international brand
across the global that could analyse the framework and nationality of the business.
Cost calculation and global pricing strategy while facing the challenges of the
company it could consider about the costs which leads to the profitability of the business. The
cost of labour and marketing & selling evaluate the margins in order to gain the productivity in
the market. With reference to C M Downton, this company can choose its product with
maximising the cost that leads to the benefits in the future. Whenever, the company could cut
their prices its main target is to boost more sales between the customers. However, this would
involves the local competitors which enhances their production more cheaper.
P3 Evaluate the influences of globalisation on organisational governance and leadership, structure,
culture and functions.
Global governance is a action regarding the political collaboration between the
transnational factors which aims the problems faced that is affected by state to state(Stonkutė and
Vveinhardt 2016). The existence of globalisation consists of the political and economical. Whether,
it is the process which involves the rules and regulations at a global scale.
Governance and Leadership there are several organisations in the market which has its
different goals and objectives. The variations depends upon the governance and leadership of the
organisation. This influences the globalisation that helps in determining the communications among

the employees and the assigning of their duties and responsibilities. In context to C M Downton,
which emphasis the best leadership styles that lead to the diversification of the governance
authority.
Structure is defined as the organisation structure of various businesses which is divided
among the divisions of different product sizes. It is ascertain through the different regions which
includes the various sectors and segments. There are diverse activities of the market which
influences the arrangement of the characteristics of the business (Lewis and et. al., 2017) . It is
considered to be the monopoly competition in order to increase the large number of sellers. With
reference to C M Downton Ltd it could analyse the market structure with the specified brand
recognition in order to meet its goals.
Culture it is refers to the people which communicates among the people and also affected
by the global market. The cultural differences affects the global business in various ways such as
communication and organisational hierarchy towards the management can also vary between the
cultures(Benmamoun and et. al., 2016). In C M Downton Ltd, this company provides the ideas and
social behaviour of the people or society. It could recognise the culture norms which is understood
by the clients in order to avoid the misunderstandings among them.
Functions is defined as to identify the needs of the customers and carry out the marketing
operations which satisfies those needs. It involves the basic functions in the international marketing
a well as domestic marketing. With reference to C M Down it provides the best services to its
customer in order to expand the business global. It helps in boosting productivity and profitability in
the overall international market.
HOFSTEDE'S Cultural Model
This model depicts the different factors which affect the organisation in various culture.
There are various types of culture which are mentioned below-
Power- In this, it includes discrimination as well as inequalities in society/ organisation. In
this, high power states that people react and changes their behaviour according to their status. In
low power, individual fight for their rights and does not accept the inequality. Governance and
leadership in this segment mostly have both the powers and organisation has a deep impact on its
productivity.
Individualism- In this, individual in organisation focus about themselves whereas in
collectivism people in organisation focuses about member of the team. Structure of organisation in
individualism is only to finish the assigned task and structure of collectivism reflect group members
helps each other and focus on team target.

Masculinity/ Femininity- In masculinity, organisation culture focuses on achieving target,
rigid in nature and are competitive. In femininity, culture of organisation is coordinates amongst
themselves, help each other and relationship is maintained.
Time orientation- Time orientation shows the time period at different levels in
organisation.
Long term- Function in organisation are carried out for long term considering future perspectives
goals. Short term- In this organisation functions are carried out for achieving the nearby targets.
Thus, organisation and globalisation are two different concepts which affect the business at broader
level. Organisation culture, function, structure, governance and leadership are considered as
important elements in relevance with internationalisation.
P4 Analyse effects of sustainable and ethical globalisation on organisational activities and
functions.
Organisation is dynamic and ongoing continuing process and there are several factors which affect
the business at broad level and globalisation is one of them. Globalisation has deep impact on firm
activities. There are various types of globalisation factors which affect the business which are
mentioned below-
Ethical Globalisation- These refers to morals and code of conducts regarding what is right
and wrong. These are important in business because they help in better decision making and
improves relation with society, employees and customers. Also, this reflect recognition of people
and globally thinking of personnel in the business. In this type of globalisation, some enterprises
does not follow ethics in their business such as using child as labour, discrimination, etc. These
types of factors affect the globalisation of enterprises at deep level.
Ethics in context of globalisation reflects the mobility, behaviour and perception of people.
Sustainable Globalisation- It refers to transformation of human resources and activities for
fulfilment of needs and adopting different approaches of doing business globally. It is often said that
sustainable globalisation is unstable because of some factors such as economic, social and
ecological. Both ethics as well as sustainable globalisation affects the organisational functions and
its broad level (Rowell 2017) .
Organisational Functions- These functions are those which are carried out by firms in
order to attain the output. Theses functions simplify the organisational work so that they can focus
on their core activities. Firm divides its resource activities into these functions so that every part of
business produce efficient output as well input. In context to CM Downton, there operational

functions are being managed by head of the department. Different departments perform various
functions in relation with product specification and resources available to them. Thus, in firm
Authority is distributed to each department on basis of expertise and skills.
These functions holds the main activities of business. Types and effects on organisation functions
are:
Research and development- This function refers to improvement in products operations,
adopting of new methods as well as technologies in order to increase their efficiency and reliability.
This function is responsible for overall development of product and organisation growth. Ethical
and sustainable globalization affects this function because policies, rules and regulations varies
when doing business globally. Thus, R&D department needs funding for development of the
product as well as for adoption of new technology and it depends on firm goodwill weather the
country in which business is being carried out is ready for assist or not. So, CM Downton has
managed to be a better service provider and because of positive feedback from the clients firm is
heavily funded from financial institutions. (Hakanen, Valkokari 2017)
Sales and marketing function- This depicts the promoting, advertising and marketing of
products and delivering to the target customers. In this function, customer's preferences, feedback,
and types of target customers which the firm is aiming are analysed. This is most important function
of any organisation because products main activities are carried out. Thus, ethical and sustainable
globalization affects this function because people with different country have different taste and
perception regarding needs and resources. In relation with CM Downton, their sales and marketing
team are aware about the outcomes of their products and services. But due to fluctuating market,
sustainable and ethical globalisation effect the activities of sales as due to corruption by some of the
exporters to rivals can affect firms and products goodwill which leads to rare availability of
resources.
Human Resource Function- In this function, hiring, recruiting, selecting are the main focus
area of the HR team. These functions are carried out to fulfil the organisational overall objectives
with efficient resources. HR functions are crucial for every firm to provide enterprise with better
workforce to achieve the specified target. (Kirton, and Trebilcock 2017). Effects of sustainable and
ethical globalization in this function is at deep level because acquiring efficient resources is the
main motive of HR team in every enterprises. It depends on availability of resources in countries
where business is being operated. In CM Downton, there HR function is followed in appropriate
manner and with optimum use of resources as well as time management.

P5 Analyse the different ways decision making which can work effectively in global context
Decision making is necessary in every business for effective results. Decision making refers
to selecting and adopting the best alternatives. In this function of management, choices are made
and evaluated after analysing benefits and limitations of chosen alternatives. Thus, it gives a
blueprint of every business weather it will be effective or not in future prospectives. This process of
choosing decision making. In global context, it can be both practical as well as theoretical
depending on decision maker style. So, CM Downton when comes to decision making process
analyse the situation and scenario with appropriate manner.(Charles, Schmidheiny and Watts 2017).
There are two types of strategies which can affects and produce effective results globally. They are-
Proactive decision making strategy- In this strategy, elimination or reduction of problems
is done prior to the arrival of events. This strategy is useful because problems are anticipated earlier
and times is saved for other activities in the business. Organisation can use this strategy which will
assist them in improving their productivity and reliability of output will be enhanced globally. Also,
availability of resources will be known prior to the events.
Reactive decision making strategy- In this strategy, decisions are made after happening of
the event. This strategy is made under pressure because of sudden occurrence of problems or
situations. Also, organisation is unaware about the resource availability for the solution of outcome.
CM down town can use proactive strategy because as it is logistic company, they make
decisions about the services as well as products earlier so that their clients will get what they wants..
This helps them in cost saving, efficient output and goodwill of the firm.(Mamic 2017). That is why
their distribution channel is wider and company has covered almost all the area of market in UK.
Another factors which decision making are-
Leadership- Leadership is broad and wider concept which affect the globalisation and
decision making in organisation. Leaders adopts different styles according to the situation and
decision making process is affected so global leaders should be aware about how to manage,
coordinate and stimulates the business activities and management.
Strategic Capability- It is one of the most important factors which is to be considered because
implementation of strategies is essential for every organisation. These strategic capability affects
decision making because firm without strategies cannot survive in this competitive market.
According to Patterson, there are different methods of decision making which are discussed below-
Command- In this method, there is no involvement while making decisions. This method is
effective when organisation is good enough in handling situation and events.

Consult- This method of decision making is most effective because organisation tke advice
and consult from other people, employees and subsidiaries. Thus, chances of errors are reduced
when going with this style of decision making.
Vote- This type of decision making style is used when decision is made from number of
alternatives available. In this style, voting is done on the basis of which best option is selected by
organisation.
Consensus- It refers to approach when organisation wants everyone involvement but
decisions are made on basis of everyone's agreed point weather it is favourable or against. This
method of decision making reduces the conflicts and everyone's ideas are taken and listen carefully.
Hence, morale of subordinates does not get affected while adopting this method.
After a brief study of above methods of decision making process it can be analysed that CM
Downton can use this consult method of decision making because morale of subordinates goes up,
productivity and goodwill of the firm increases and its clients gets what they want from the
company. So, enterprise, subordinates and clients gets total satisfaction while using this method.
Hence, it is declared as a most appropriate method or style of decision making which can work
efficiently in global context.(Wang ,2016)
P6 Determine different path to internationalisation an enterprise
To get globalised every organisation needs some sources/path through which they expand
their business and market. So,internationalisation refers to exploring and expanding market and
business internationally. Thus their various routes through which firm can enter into foreign
markets. Some of them are-
Joint Venture- It is form of agreement in which business is carried out by two or more than
two parties in which both the party shares equal risk, profit, loss and resources. In context to CM
Downtown, to save the cost and time company can use this path for expanding business for short
period of time. So, organisation use this mode of entry to convert themselves internationally and
opportunities becomes wider for their business.
Merger and acquisitions- This is another route to explore business at internationally level.
Merger refers to consolidation of companies to become one entity. Acquisition refers to when one
entity gets takeover by other firm. Both are modes of entry to foreign markets or expanding
business internationally. So, adoption of this method by CM Downton will lead to awareness of
their brand and services. It depends on enterprises to go through which path or to adopt both the

routes.
Franchising- It is also a route for organisation to become internationally. It refers to
allowing other party; franchisee to use services and products for specified period of time. This, path
is considered as most safe and less riskier as compared to other modes. Because involvement of cost
is less and time is saved for other activities. So, in relation with CM Downton they can use this
method for recognition of their brand and can maintain relation with other organisation also. Thus,
services and companies products will be noticeable by countries too.
While entering internationally and expanding business globally there are some barriers also which
affects the entries of firm. Some of them are discussed below-
Monopolies- It refers to when product has only one owner in the market. Monopolies are
the barriers when firm wants to go through internationalisation. So, in context to CM Downton it
cannot expand their business or offer such services/ products into target country where those
resources are already taken by other enterprises.
Legal protection- In this kind of barriers, products or resources are under protection or say
they are under intellectual property rights such as patents, trademarks, and copyrights. Thus, CM
Downton should be well aware about market,products and business which they want to expand in
the target country. So, losses have to bear by the company if these barriers are neglected by
enterprises.

CONCLUSION-
After a brief study of report, it can be analysed that firm should be active toward its all the
activities which has been carried out by the business. Strategic complexities play major role in
global environment. Structure of enterprises are affected by global market also at a deep level.
Globalization is the focused area for every enterprises so, all the factors and methods has been
considered and determined briefly. There are various factors which stimulates the globalisation/
internationalisation such as cost, market environment etc. Thus, it is crucial to determine the effects
of all the methods; ethical, sustainability and there effect on operational activities. Global business
environment is essential for every firm so that goals and objectives are achieved in proper manner
and impact globalisation is known in appropriate manner. Decision making is crucial in business
and various factors are there which affect the process such as leadership, strategic capability etc.
Different routes to internationalisation is important to access business globally also barriers to
globalisation should be undertaken briefly in such activities. Thus, internationalisation as well as
globalization are the key factors of every enterprises.

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