Global Business Environment: Strategic Challenges for C M Downton Ltd

This report provides a comprehensive analysis of the global business environment, focusing on C M Downton Ltd, a logistics and supply chain management company. The report begins by examining the key factors driving global commerce and trade, including cost, market, environment, and competition. It then delves into the strategic challenges organizations face in a global context, such as existing monopolies, laws and regulations, political risks, and communication and cultural differences. The influence of globalization on governance, leadership, structure, culture, and functions within Downton is discussed, along with an exploration of Hofstede's cultural dimensions. Furthermore, the report assesses the impact of ethical and sustainable globalization on organizational functions, including human resource management, marketing, and supply chain management. It also evaluates different decision-making approaches effective in a global context and explores various routes to internationalization, including key barriers. The report concludes with an overview of the challenges and opportunities Downton faces in the global market, and the importance of adapting strategies to remain competitive.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Analyse key factors of cost, market, environment and competition that drive global
commerce and trade....................................................................................................................1
TASK 2............................................................................................................................................1
P2. Explain the complexity of strategic challenges faced by organisations...............................1
TASK 3............................................................................................................................................1
P3.Influences of globalisation on globalisational governance and leadership, structure, culture
and functions...............................................................................................................................1
P4. The influences of ethical and sustainable globalisation on organisational functions...........1
TASK 4............................................................................................................................................3
P5. Evaluate different ways of decision making that can work effectively in a global context. 3
P6. Various routes to internationalisation an organisation may adopt including key barriers....4
CONCLUSION ...............................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Global business environment refers to an environment in which companies operate their
business actions and operations. It consists politics, technology, culture and economics and at
time of business operations, the management of a company include these all factors in its
business. When a firm operate its business in global business environment then it should be
aware about the changes which are occurred in the business and affect it in favourable and
unfavourable manner (Aithal, 2017). This assignment is based on C m Downton Ltd which
operates its business in logistic and supply chain management industry. This company was
incorporated in 1955 as an independent logistics firm. This written document will discus about
key factors that drive globalisation and strategic complexities associated with operating in a
global environment. Further, will cover information about influences of globalisation, effect of
ethical and sustainable globalisation. Different ways of decision making and various routes of
internationalisation will also describe that can adopt by companies.
TASK 1
P1. Analyse key factors of cost, market, environment and competition that drive global
commerce and trade
The process in which individual, companies or governments of different countries or nations
come together to carry on international trade is known as globalisation. Globalisation has an
effect on all the functions of business. Major factors that results in globalisation are cost,
market, environment and competition. These driving forces are mentioned below-
Cost factor- The cost of all goods or services differ from one country to another. Cost
drivers also include cost of raw materials, labour etc. All these factors help a firm to be cost
competitive in local market as well as in market overseas. Global sourcing is finding out low
cost raw material from around the world. With help of it business profits can be increased
through cost reduction and increased revenue in global market. Downton looked into all of
these factors carefully before going for globalisation.
Market Factor- Demand, supply, equilibrium, prices or products etc. are called as
market factors. Due to saturation of domestic market, opportunities in global market have
increased (Gaganis, Pasiouras and Voulgari, 2019). Downton is a logistics company and
globalisation of any other company indirectly affects it. When companies go global, they will
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need logistics to export their products. Downton is taking benefit of this market situation while
executing plans for expanding its operations to other countries.
Environment factor- The surrounding in which a business operates is called
environment. Environment consists of major factors which are social, technological, legal and
political. Downton took care of all these factors while going global (Wang and Peyvandi, 2018).
The rules and laws, social norms and government intervention, all these matters were looked
into by Downton in each country it expanded to.
Competition- Competitors are the major threat a company might face in a market.
Therefore, its becomes very important for a company to analyse their competitors before
entering into a foreign market. Wincanton plc, Purolator, CEVA Logistics, XPO Logistics are
some of the major competitors of Downton. Company critically looks into working of all its
competitors , their strategies and technologies used by them before globalising.
There are a number of challenges faced by company going global. Downton being a
logistics company have different set of challenges faced by companies dealing in this segment.
One of the major difficulty is supplying to high-profile and cultural events. A suitable supply
chain has to be made to meet specific demands of these specific customers. These cultural
events are unique projects. Failure in delivering these services could negatively affect goodwill
of company. Along with these challenges Downton also have a number of opportunities. All
multinationals need a partner to carry on their logistics business. Also with globalisation number
of technological innovations are being introduced to make job of logistics company hassle free.
These innovations include upgraded weighing scales, IT developments and technological
advancement in warehouses. Downton have utilised all these opportunities of globalisation and
continues to have a strong foothold in logistics market globally.
TASK 2
P2. Explain the complexity of strategic challenges faced by organisations
Globalisation refers to trading or carrying on a business worldwide. Globalisation is a great
opportunity for developing countries to modernize, provide job opportunities to its unemployed
population and also develop infrastructure of country. Globalisation promotes integration of
international, national and regional economies (Rupidara and Darby, 2017). The factors which
influence globalisation are mentioned below-
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Technological Change- Technological change have a huge impact on globalisation. With
help of latest technologies, communication and transportation costs have reduced. Also for
those firms who own patents can independently exploit foreign markets without worrying about
their competitors.
Economies of Scale- Economies of scale is a cost advantage which arises from increased
production of outputs. This is the reason behind production or certain goods in certain areas or
countries (Charter and Polonsky, 2017). Globalization also helps to improve operational
efficiency and increases specialization.
Although globalization is very useful in increasing revenues of the company but it also
brings along many disadvantages. There occurs a lot of differences amongst employees due to
culture and beliefs which creates a negative environment in workplace. Downton faced many
such issues while globalising. Some of the challenges faced by Downton are:
Existing Monopoly- Monopoly is a situation when a single firm has cost and competitive
leadership in marketplace. Monopoly in logistics business is with cargo. Cargo shipment have
leadership is many parts of the world. This makes it difficult for Downton to venture in new
countries. They need to work on new strategies to gain market share and compete with cargo.
Laws and Regulations: The laws and rules through which businesses are governed are
different in different parts of world. It is very important to go through all these rules in order to
setup business in other country. With reference Downton organisation, it considers various laws
which would affect its business in certain countries. Employment laws, labour laws, laws
regarding wages and industries are some of the important laws company needs to abide by while
expanding business in a new country.
Political risks- This includes rules which are established by political party ruling in the
country. In reference of Downton, it is affected by many such risks like import or export
policies, fiscal policies , economic policies and taxation policies . These policies are directly
related to growth and development of that company in different countries.
Communication and cultural differences- Process of sharing information or data in
verbal or written form is called communication. In order to run an organization successfully
smooth flow of communication is essential (Rialp-Criado and Komochkova, 2017). While
globalising companies ensure that miscommunication due to cultural differences does not arises.
In context of Downton, there is need to recruit local labours wherever they start their business.
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Extra measures are taken by Downton like training their employees to eliminate any
communication gap which may arise in future.
TASK 3
P3.Influences of globalisation on globalisational governance and leadership, structure, culture
and functions
The set of rules, laws or processes which help in operation, regulation and controlling a
business is known as corporate governance. An effective corporate governance helps a firm to
attain its business objectives and goals.
Structure: In Downton , superior to subordinate structure is followed. The flow of orders
happen in downward direction (Vokoun and Daza Aramayo, 2017). Flow of information takes
place horizontally that is between managers working at same level. While flow of ideas or
suggestions is upward from lower level employees to top level executives.
Culture: Downton follows a soft culture model in which importance to both tangible as
well as intangible objectives of company are given equal importance. It is difficult for business
to incorporate a newly recruited highly skilled employee from a business of totally different
culture. Even then Downton hire skilled employee to increase efficiency of organisation which
will gradually increase its profits.
Leadership: Leadership style followed by Downton is participative. This helps leaders
to create a sense of support among employees of the company. This is an effective way of
leadership which helps in increasing productivity of firm through developing viewpoint and
opinions of employees.
Functions: Downton is a logistics company. They help others to transport their goods
goods from one place to another. The main functions company are transporting, loading,
unloading and packaging. In context of Downton, after globalisation it is looking for better and
low cost methods to complete these functions effectively.
Governance: To do better in its business management team of Downton is developing
efficient decisions and policies. In effect with globalisation these policies and rules are more
concerned with running business in different parts of world (da Silva Lopes, Lubinski and
Tworek, 2019). While making these policies they make sure that any conflicting situation due to
them does not arise in different countries.
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Hofstede's Model
Geert Hofstede found this model according to which culture is beliefs, practices,
ideologies which differentiate organisations from one another. The four major elements of this
model are-
Masculinity vs. Femininity:This means giving power to females over males. In
masculinity vs femininity Downton states that they have started including females in decision-
making process because male employees take decision in anger or aggression (Reiche, Bird and
Osland, 2017).
Power Distance: Power distance means delegating powers to one's immediate
subordinate. In context of Downton they believe in delegating powers to their subordinates so
that at the time of emergency decisions can be taken by them. Everyone is given equal powers in
order to avoid any differences or conflicts which might arise in future.
Individualism vs. collectivism: Individualism refers to letting an individual employee
take decision. In Downton each individual is given equal rights and their involvement in
decision-making process is made mandatory. Exchange of ideas and opinions amongst
employees helps to increase output and innovate something new in the organisation.
Uncertainty Avoidance: In this factor in situation of conflicts behaviour of individual is
analysed. With reference to Downton, they train their employees so that at times of any conflict
or unwanted situation they do not loose their hopes and deal with it confidently.
P4. The influences of ethical and sustainable globalisation on organisational functions
Ethical globalization indicates to a procedure of sharing different information or data,
goods and services in an ethical way. Along with it, ethical globalization encourages
stakeholders, government, consumer, suppliers and society to work in ethical manner that assist
them to attain rivals benefits (Bhagra and Sharma, 2018). In term of output, it will aid the firm in
successful way to achieve company's aims which will help in development, increase market
share and revenue of firm.
Sustainable globalization states make expansion in business operations at international
extent in such a way that will assist in maximize its sustainability till long term. Along with it, it
is a tool and technique that transfer the way of running business globally as per accepted
structure of sustainability. In term of maintaining long term sustainability at global extent,
organisation have to follow all legal formalities fro their survival and development in
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competitive market. Different organisational functions will be influence by ethical and
sustainable globalisation. These organisational functions are as below:
Human resource management- It is one of the most essential or valuable function to a
company. Because with the assistance of it, organisation hire skilled and knowledgable
employees and accomplish the aims and objectives in an appropriate manner (Chasdi, 2017). In
context of C M Downton, the management of this company should follow all laws and legal
formalities in ethical way. Laws and legislations of operating nation should consider and follow
the company in term of accomplish their aims. Regarding respective company, it can be analysed
that administrators of enterprise should accept human activities in term of maintain long term
sustain ability in market and provide rights to workforce to maintain high performance which
will assist in accomplishing their set aims and objectives.
Marketing function- It is most important and crucial function for a business firm
because it familiar organization with needs and demands of customer and market so that the
management can offer products and services as per need and requirement. Marketing function
also assists the company in creating social awareness in community regarding a specific good
and service. In context of C M Downton, if the management of the company adopt globalization
then it is crucial follow all the rules and legislation of marking, in term of supply and export
products and services, that are devices by the specific nation for marketing of products and
services. Along with it, to maximize profitability, the respective firm also frame marketing
strategies and follow them in ethical manner so that the firm can maintain their sustainability till
long term.
Finance function- It is an essential function because it is the route of each business. With
the help of finance every business company can operate its business in smooth way. In addition
to it, the major purpose of enterprise is to effective use of their finance for smooth running of
their business activities and operations (Fabuš, 2017). In context of C M Downton, the finance
manager of the company is responsible to gather needed monetary value in an ethical way. Along
with it, the person use funds in effective way in order to operate its business activities like supply
of goods and services. Effective market analysis of market also consume more cost but with the
help of it, company aware with market requirement and supply material according to that. It help
in smooth and sustainable development and growth of the company and operating business in
ethical manner in global business environment.
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From the above define content, it has been analyzed that there are diverse factors that
impact working environment of an organization. Human resource, finance and marketing are
functions of an enterprise and will impact the company at the time of global business expansion
(Ferraro and Briody, 2017). It is crucial for firm or its administrators to execute each action in
ethical and sustainable way. Furthermore, there are different phase that can be accepted by
respective firm in term of develop effective decision.
For example, when an organization operate its business global level then it should
consider intellectual rights protection and environmental issues etc. if company set a business in
another nation then the process of intellectual property rightists can be differ which influence
organizational functions in different manner. The process of registration and the time duration
that is provided in form og property rights can be differ in comparison to other nation. For
instant, if a company operate its business international level then it should also consider
environmental act to provide protection to environment. If a company operate its business in
Eastern nation then it highly focus on environmental act like pollution act and carbon emission
in comparison to western nations. If the organizations will not consist environmental protection
factor then can create issues for environment and also affect the sustainability and business of
thye company in specific business industry.
TASK 4
P5. Evaluate different ways of decision making that can work effectively in a global context
Decision making of an administrator or leaders is plays an important role in operating and
organising business activities and operations in effective and efficient manner. Decision making
of an individual is based on the situation from which an organisation is going through. So it is
essential to an administrator to develop or make determination as per condition of working
environment in which a company running so that it will directs to make maximisation in profit
and productivity. To develop determination devising of C M Downton , the management must
consist different factors like organise analysis of situation, improve decision that can be modify
or update as per the situation and reduce or minimise issue and complexities in appropriate
manner.
Steps for improving decision making
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There are several phases that can b adopt by a company to make development and
improvement in their decision making. In first step, the management of respective company can
find out clear aims and objectives on which decisions are based. Because if the goals are clear
and understandable then decision can be take in effective manner as per the situation (Hamilton
and Webster, 2018). In next phase, the administrator can take decision to get over problems and
organise process in adequate and appropriate manner. After it, in next phase, the management
will evaluate decision to analyse that they are effective to resolve complexities or not. It is
crucial for administrator and leader to consider these phases so that they can work effectively
when they operate their business in global context. If they follow these steps then they can take
decision as per situation and develop them according to condition.
When a company operate its business global level the better decision making help in
effective running of the company in indifferent nations. For example, if the firm operate local
level with the help of less number of employees and fund. But when it operate international level
then the decision will be change and it will require number of workforce and capital so that the
business can be run in proper manner and company can sustain till long term. Apart from it, the
management of the firm will make change in its decision making in context of selecting
marketing channels to create awareness about products at global level and find out the needs of
the customers. To make global expansion in effective manner, the company also frame different
strategies in term of localised business. So that, the company can survive in competitive market
at international level.
P6. Various routes to internationalisation an organisation may adopt including key barriers
In current era companies want to expand their business at global level in context making
more development and growth in the business in term of gaining profit improve customer base
(Kasemsap, 2018). But when an organisation make expansion in its business globally then there
are various routes and ways that can be adopt by firm. In context of C M Downton, the
description of different routes of globalisation are as below:
Licensing- It is a method in which an organisation offer its license to other firm through
which that organisation operate its business by using the name of respective enterprise. In
context of C M Downton, they can charge fro fee and royalty to usage brand and technology of
their company. If the company adopt this way of internationalisation then there are basically two
parties which are licensor and licensee. Licensor is one who offer licence to other firm and
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licensee is that enterprise who take licence to operate business. It advantageous fro company as
well as play negative role for C M Dwonton. It is effective for the company because it help in
providing various growth opportunity and maximising profit of the firm. In addition to it, with
the assistance of this route, the firm can develop job opportunities for individual of both nations.
Their are some limitation of this tool like license enterprise is totally got dependent on licensor
which enhance competition in market. Apart from it licensee has to pay more fund to get licence
without having information about succession rate.
Exporting- It indicates to an activity within an organisation supply its goods and services
to other place of nation. In context of C M Downton, if the company adopt this way of
globalisation then, they can export their products and services to another locations and global
market and gain different advantages (Lewis and et. al., 2017). With the help of it, respective
organisation can increase its sales, increase profitability and gain competitive benefits. There are
some drawback of this tool like when respective organisation make expansion in its business by
adopting this tool then it may face high level of competition in market. Another barrier which
can be face by them related to export legislation of different countries and cause of them the firm
have to formulate plans of nation and devise tactics accordingly.
Joint venture- It is an another route of globalisation in which two or more than two
companies are entered with the motive of specific project and other business action. In this both
organisations have some proprietary or ownership basis for in the shared interest. In reference to
C M Downton, this method can be adopt by the company to operate its business global level
(Pikhart, 2017). If the firm accept it then both enterprises which are joined to accomplish specific
aim and project responsible to share their profits and losses. This tool can be beneficial for the
company because it offers companies with the options to gain new capacity and expertise. It will
also crucial because it shares risks or threats with a venture partner. There are different barriers
that can be generate by adopting this route of globalisation like different culture and management
styles provides poor integration and co operation. Another drawback can be face regarding
unclear and unrealistic objectives that may be set up by both partners enterprises.
From the preceding explain information, it can be suggested to C M Downton that the
management can adopt licence method to operate its business globally (Reyes, Roberts and Xu,
2017). Because respective company operate its business in logistic and supply chain
management so it is for them to expand business functions and operations.
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It can be evaluated form the above information that to operate the business of the firm
global level, the management should consider different factors like strategic capability,
leadership and decision making. With the help of strategic capability, the management can take
effective decision that help in minimising the risk of international operation that are occurred due
to competition and policies or plans of different nations. By considering decision making factor,
the firm can efficaciously select the effective way of global business expansion through which it
can effectively operate its business in domestic market.
CONCLUSION
It has been summarised from preceding explain information that business environment
plays an important role to achieve business aims and objectives in appropriate manner. Different
environmental components effect the firm in favourable as well as negative way at the time of
making business expansion in global business environment. Companies should adopt and frame
different plan of action in order to accomplish or gain market profit and growth opportunities
while expanding business in international market. Apart from this, it is also essential to
administrators of the firm to analyse and monitor current growth options and future risks so that
they can frame and design plans and plan of actions as per changing environment. The managers
of organisation implement different norms, structure and policies to their workforce in order to
improve execution and effectiveness. As an outcome, it will also aids organisation in maintaining
rivals benefits while operating in home and host country.
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