Impact of Global Business Environment on Tommy Hilfiger - Report

This report provides a comprehensive analysis of the global business environment, focusing on the American premium clothing company, Tommy Hilfiger. It explores the impact of globalization on organizational governance, leadership, structure, culture, and functions, emphasizing the challenges and opportunities presented by international expansion. The report delves into the decision-making processes of global companies, highlighting the importance of strategic planning and adaptation to diverse market conditions. It examines various routes to internationalization, including the McKinsey 7S model, and discusses the influences of ethical and sustainable globalization on organizational functions. The report also addresses key barriers to internationalization and offers insights into how companies can navigate the complexities of the global business landscape. The report emphasizes the need for managers to adapt their skills and leadership styles to effectively manage international operations and meet the demands of global customers. The report also highlights the significance of ethical practices and sustainable strategies in achieving long-term success in the global market.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 3............................................................................................................................................1
P3 Cause of globalisation on organisational governance and leadership, structure, culture and
functions......................................................................................................................................1
TASK 4............................................................................................................................................5
P5 Decision making process of global companies......................................................................5
P6 Various routes to internationalisation on organisation may adopt key barriers.....................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................7
.........................................................................................................................................................8

INTRODUCTION
Global business environment is the environment in different self-governing countries, with
factors exogenous to the home environment of the organization, influencing decision making on
resource use and capabilities. This refers to place where small and big enterprises sell their
commodities at same place. With this assistance, a project has been made on Tommy Hilfigers,
which is an American premium clothing company founded in 1985 by Tommy Hilfigers in
Amsterdam, Netherlands. This firm seeks to expand its business operations in international
market so, its managers are required to analyse all major factors of environment. The present
report emphasises on arising competition in these firms in order to gain large number of
customers. Globalisation leads a company to sell or buy their commodities at international
market. Competition at global market as compared to domestic countries is more. Therefore,
managers need to analyse needs and demands of international market before launching business
at global level (Alqahtani and Saba, 2013).
TASK 3
P3 Cause of globalisation on organisational governance and leadership, structure, culture and
functions
Globalisation is a method of doing business operations at an international scale and
expand their organisation in various countries. Usually, organisation tries to launch their outlets
in territorial areas in which there is a high as well as sustainable economy level and income.
This would be beneficial in raising sales and productivity of them. But by doing expansion of
business develops an impact on leadership, business structure, corporate governance, and
operational function of similar kinds of companies. Organisational governance can be referred to
as a process by which business environment sustain its discipline. In order to control various
activities or tasks within an organisation such as business operations, functioning of an
enterprise as well as responsibilities of workforce, employers develop some set of regulations
and rules which must be abided by all personnel in order to make decision-making effective and
correct (Black, Morrison and Gregersen, 2013). Various other factors that are being impacted by
globalisation and exist within a company are being described below.
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Leadership: Within an organisation, managers and leaders are the people who plays a
vital role and under take different responsibilities so that they can balance employees and all the
functions of a company. They try to encourage personnel towards objectives and goals of a firm
by giving them clarity of vision. Moreover, along with this, they also provide required training
and development programmes to workforce in case there are changes being made within an
organisation. Related to organisation, because of changes in strategies which are being set,
employees work also get disturbed and it give rises to various issues such as sustainability of
workers, grievances, turnover of employees and many more. Henceforth, managers and leaders
of Tommy Hilfiger are required to alter their managerial skills and also adapt different
leadership styles. This would be helpful is solving similar kind of problems and influence
workforce so that they can effectively work in order attain higher results and requirements of
international customers can be fulfilled on time (Cavusgil and et. al., 2014).
Structure: This is also being impacted because of globalisation. When companies launch
their business operation within a new place or sell products within international market, then
they must change the culture of organisation. Under this process, employees must be recruited
who possess knowledge and skills which will be utilised for dealing with international and
national clients. By their contribution and efforts, managers can analyse requirements of
customers and can effectively communicate with them. This would be beneficial for them to
attain objectives that are being set in a proper manner.
Culture: This is another factor which is being affected because of globalisation. When
new workforce is being hired who have diversified culture then it will give rise to different issues
within an organisation. This involves problems such as clashes among workforce, hence
organisation managers must develop strong relationship between them. In regards to customers,
when clients belonging to diversified religion, culture and area then it will arise many issues for
employers as they are required to acknowledge their needs and give them satisfaction. Therefore,
Tommy Hilfiger, must give products and services to customers keeping in mind their culture.
This will lead to higher sales and profits of the organisation (Ferraro and Briody, 2013).
Functions: In order to move forward in modern era, company is required to do a lot of
alterations in operational and functional activities. To bring improvement in company as well as
organisation's system, they must analyse marketplace demand in an effective way. Henceforth, it
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is important for managers to make changes in manufacturing of products according to
requirements of of clients.
McKinsey 7S model: It is a management model was a vision for strategic for groups, in
order to include teams, businesses and business units. It divided key elements into two parts that
is hard and soft elements. Tommy Hilfiger has implemented McKinsey’s model so that they have
clear vision of their governance, structure and culture. This model involves various elements that
are being described below (Kasemsap, 2014).
Hard Element: These elements are analysed by mangers so that they have knowledge of
system, strategy and structure. In relation to Tommy Hilfiger, various hard elements are being
described below.
 Strategy(Governance): Managers of Tommy Hilfiger have adapted various kinds of
strategies in order to expand its business activities all around the world. This will also
give an advantage to their competitors.
 Structures: Tommy Hilfiger, follows a proper organisational structure in which firms
includes various divisions of business, operations, units for e.g. accounts etc.
 Systems: This refers to as procedure, routine and process which are followed by
employees of an organisation. With this context, Tommy Hilfiger's, staff members
follows the pattern of working that is required to complete a particular action.
Soft element (Culture): They are elements that interact company's qualitative aspect like staff
members like shared values of employees and style that contributes to culture of an organisation.
Here, in relation to Tommy Hilfiger, soft elements are being described below.
 Shared values (culture): They basically follows rules and regulations of a company that
impacts personnel and managers behaviour. In Tommy Hilfiger, values are being shared
related to organisation's practices to do operations in an ethical manner that do not cause
harm to community in any way (Laudon and Laudon, 2015).
 Skills: Tommy Hilfiger's department of HR select those personnel who have operational
skills in a manner which is needed by organisation. Along with this, firms recruits those
people in whom they determine enthusiasm to do work as per organisation vision's.
 Style: Tommy Hilfiger abides by democratic style of leadership in which they can see
equality among employees within an organisation. In this leaders have faith in potential
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of employees and henceforth share their work with staff members with an aim of earning
long term productivity and profits.
 Staff: Company has more than 15000 staff members across the globe (Lee, Olson and
Trimi, 2012).
P4Influences of ethical and sustainable globalisation on organisational functions
Ethics means individual's behavior in context with the manner which is required for
performing. They basically take into consideration principles which governs staff members
decision making and characteristics. It is important for every business enterprise to adapt
various kinds of procedures, practices, techniques, methods and frameworks that are helpful for
the society in which the organization carries out its business operations. In Tommy Hilfiger,
managers makes sure that a company works in an ethical way along with the help of sustainable
techniques. Moreover, along with this, firms aims at providing satisfaction of their customers and
long term objectives of organization to do expansion of its business activities at an international
market.
According to current conditions, penetrating into new market places is about
transformation that is unexpected. Henceforth, organizations that operates on a large scale must
develop different kinds of strategies and policies by keeping in mind political laws of country
which is being targeted. Moreover, they must also introduce ethics within business that builds a
positive affect both on behavior of an organization and workforce. Since Tommy Hilfiger is
doing business at an international level, it is important for their managers to have knowledge of
laws related to territorial regions which are being developed by government. Related to this,
when organizations carry out business operations at other countries, than they usually face many
problems while expansion. This involves political issues, economic problems and many more
factors. So in order to in order to cope up and resolve these issues within a proper time, it is
important to determine these elements and do proper planning to make employees abides by all
laws (Ramamurti, 2012).
By implementing business activities according to regulations, over all performance of a
company will be raised in an effective way. Henceforth it is important, to do consider ethical
practices while developing strategies which will be beneficial in sustaining positivity within a
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company and develop good influence on workforce. Whereas globalization is sustaining when a
firms raise effectively market share by which they can give a competitive advantage to
competitors within a market place. Tommy Hilfiger have taken consideration of sustainable and
ethical globalization both in a effective way in order to deal in market effectively. Effect of both
have made an important affect on company's operations which are essential for proper pattern
of working (Savrul, Incekara and Sener, 2014).
TASK 4
P5 Decision making process of global companies
Doing an effective decision within a company is the most difficult task. Companies
manager takes all responsibilities so that they make judgment for association. Their decisions
gives impact on performance of company and function of entire system of working. Within an
organization there are various responsibilities is being taken by managers such as managing
organization, staffing, directing, planning and many more. They do different activities so that
they can raise productivity of an organization and increase business growth in an effective
manner. Moreover, they take in charge to bring modifications within a workplace and
operational activities for producing innovative and creative products at a market place.
Furthermore, with this, they launched advancement of techniques and new technologies in
structure of business to make better modifications. They also encourage employees to work in an
effective way and contribute in achieving success of business. These processes can be done by
doing correct decision so that they can attain resistivity at market of new countries. Here,
related to Tommy Hilfiger, for doing operations in various countries, it must create provide
wider range of quality products (Simic and Dimitrijevic, 2012).
Managers must make new objectives as well as plans of association according to
requirement of business. Moreover, they can also give correct supervision to workforce and
delegate them work according to their knowledge and skills. This would be helpful in achieving
higher productivity and increased contribution to aim at target of business. All these processes,
can be implemented by taking two type of decisions that has been discussed below.
Programmed decision making: This kind of decision is termed as a tried as well as tested
method which is took by managers and leaders of an organization so that they can achieve better
results. They coordinate with each other in taking decisions which are programmed by take into
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consideration previous performance of a firm. This involves different strategies by which
objectives as well as aims can be achieved in an effective way. Furthermore, these are proper and
traditional strategies that are being implemented and led to giving a positive a result. Examples
can be held of workforce who solve issues by troubleshooting them. It is dine in a continuous
and repetitive way by an individual person. Therefore, it is important for managers of Tommy
Hilfiger to do effective and efficient decision. Moreover, they can also implement all decisions
on a right time period (Solomon and et. al., 2014.).
Unprogrammed decision making: This factor involves elements that are present in
external environment and also affects the activities of business. Henceforth, it is important for
managers to analyze affects of them and take decisions within a short duration of time. Descions
which are being involved in process of similar kinds are done in order to change technologies
and adapt new ones that are coming in market place. This would be helpful in raising profits and
productivity within a work place.
P6 Various routes to internationalisation on organisation may adopt key barriers
There are so many barriers with the help of which company can set their business
successfully in international market. In order to enter in new market segment it is necessary for
every business organisations to make effective strategies to ensure success for long term. There
are some ways with the help of which Tommy Hilfigers can ensure sustainability and
profitability:
Licensing: It is basically a agreement between two entities in which one give
authoritative permission or right to other. Tommy Hilfigers can take advantage of this method in
order to expand their business functions and operations. With this company can increase their
area of market share and profitability (Voegtlin, Patzer and Scherer, 2012).
Franchising: With this method Tommy Hilfigers can more rapidly expand their number
of outlets in market. Franchising are helpful to those organisations who are consist of repeatable
business models.
Joint Ventures: In this method there is creation of other different and independent
company. In this two companies collaborate together to perform their business operations in a
market. Tommy Hilfigers adopt this method to earn more base of market share and profitability.
Key barrier to globalisation
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There are numerous barriers that can directly affect growth of business functions. There
are some factors mentioned below that affect business operations:
Financial Barriers: Limitation in financial resources can increase obstacles in functions of
business organisations. It can hold company to expand their business and get various benefits.
Therefore, it is essential for Tommy Hilfigers to secure their position in financial segment and
find more formative measures in finding fund sources (Wetherly, 2014).
Market – based Barriers: Lack of related knowledge towards any marketplace is one of the
major obstacle in the sector of internationalization. Therefore, it is important for Tommy
Hilfigers to acquire all information related to market, tarrifs, culture and social conditions to
easily expand their area of services (Wild, Wild and Han, 2014).
CONCLUSION
From the above report on globalisation, it has been concluded that business environment
at international level is termed as component which impacts on operations of firms in a large
manner. By taking business at global level, a company can generate high revenues. For this
process, a firm requires to adopt effective management techniques. These managerial techniques
assist in analysing business needs properly as well as key factors which impact on operations of
firms in a large manner. Along with this, it has also evaluated from this report that in order to
gain competitive advancement industries are required to develop strategies, high leadership
qualities and effective techniques in production and operations.
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