Comprehensive Report: Global Business Environment for RC Logistics

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This report provides a comprehensive analysis of the global business environment, focusing on RC Logistics, a 3PL logistics company. It explores key factors driving globalization, such as economic, technological, cultural, and political influences, and critically examines their impact on the global business environment. The report delves into the strategic complexities faced by organizations operating globally, including political, economic, social, technological, environmental, and legal challenges. It assesses these challenges in the context of risk and diversification strategies, as well as supply chain flow. The report also evaluates the impact of globalization on organizational administration, leadership, structure, culture, and functions, while also measuring the influence of ethical and sustainable globalization. Furthermore, it explores various decision-making approaches and strategies for internationalization, identifying key barriers to global business and offering recommendations. Finally, the report reviews strategies that can be adopted by companies operating in the international business environment.
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Table of Contents
Introduction......................................................................................................................................1
TASK 1............................................................................................................................................1
Key factors driving Globalisation...............................................................................................1
Critically study the impact that key factors have on the global business environment..............2
TASK 2............................................................................................................................................3
State the complexity of strategic challenges faced by organisation when operate in global
environment................................................................................................................................3
Critically examine strategic challenges in context of risk and diversification strategies and the
supply chain flow........................................................................................................................4
Critically assess the global business environment in terms of opportunities and challenges.....5
TASK 3............................................................................................................................................5
Measure the impact of globalisation on organisational administration, leadership, structure,
culture and functions...................................................................................................................5
Measure the influences of ethical and sustainable globalisation on organisational functions. ..6
Critically measure global market influences in application to appropriate theories and models
relating to organisational structure and culture...........................................................................8
TASK 4............................................................................................................................................8
Evaluate various way of decision making that can be effective ion business.............................8
Ascertain the different ways to internationalisation can adopt by company and the key barriers
of it............................................................................................................................................10
Critically measure the key barriers of doing business globally and suggest recommendations.
...................................................................................................................................................11
Review strategies that can be adopted by company while operating in international business
environment..............................................................................................................................12
Conclusion.....................................................................................................................................12
References......................................................................................................................................13
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Introduction
Globalization refers to fostering relationship among nations at the international level. It
can be simply state the increasing interdependence among different cultures, economies,culture
as well as population. Global business discovers the real truth of the international trade practices
(Dzwigol, Dzwigol-Barosz, M. and Kwilinski, 2021). It encourages to develop healthier
relationship with the aim of sharing and unifying business environment at a global level. RC
logistics, is one of the established 3PL logistic company that provides services in context of
warehousing as well as distribution services. This project covers diverse aspects of global
environment of the company. This includes the key factors, strategic complexities that occur for
doing it, it's influences on the Organization's structure, culture , functions, decision making and
developing strategies.
TASK 1
Key factors driving Globalisation.
Globalisation promotes international trade. This has a huge influence on the business
performance of all the companies throughout the world (Hampden-Turner and Trompenaars,
2020). There are number of factors responsible for driving global trade. It can be detailed below
for better understanding.
Economic: The factor states the current situation of the economy. It can be further be
elaborated in various ways that includes flow of good in long distances, capital, services
as well as informations. Along with this, it further includes the changes occurring in the
market currently. In help the company in achieving large economies of scales.
Technology: As the environment is dynamic and changing very rapidly, it is must for the
company to adopt sustainable measures that is vital for their survival in the long term.
Globalisation has aided them to reduced the cost of transmitting diverse information
irrespective of the physical distance through web technology.
Differences in Tax system: This factor states that each nation follows different tax
system that is different in different nations. As they operate in business environment with
the motive for lowering costs that includes labours as well as other factors. This further
encourages them to make appropriate adjustments in different tax systems by attracting
foreign direct investments. It facilitates the countries to engage in increasing tax
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competitions in order to grab the most favourable opportunity in being profitable in long
term.
Cultural: The company realises the different current could crop up misunderstanding in
communication. The company aims to respect the culture of different nation with respect
to their shared believes, customs and behaviour that empowers the interaction among the
nations. The company ensures that there is common communication language that is
easily under stable by all.
Political: It is important of R.G logistic to be well informed about all the political laws of
the nations they are engaging in trade relation with. This includes all the policies
regarding subsidizing export, restriction on imports as well as privacy.
Social: There can be various social factor that isn't controllable. That is mostly be
determines on the basic of the culture of the individual that is highly dependant on
one's nation. This is done by the company by develop strict regulation that aids that them
to engage in discussion with one another by giving due respect to each other.
Domestic regulations: This is one of the most common as well as the prominent
differences that arises due to government regulation of one's own nation. This is further
explained in terms to legal rights that is dependant on the purpose of each policies
developed by them. It is important for the logistic company to address these concerns in
order to cope up with the in-efficiencies that may negatively impact their trade relations.
Critically study the impact that key factors have on the global business environment.
The impact of above key factors on global business can be benefiting to the organisation
but sometimes may pose challenges as well. As when organisation operate on a global level, the
complexities in operating business are most common thing. Any changes in global business
environment like politics, legal or any economical level can have huge outcome on the
operations. Since such factors are uncontrollable by business owner thus in order to survive they
need to accept challenges and grow with them.
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TASK 2
State the complexity of strategic challenges faced by organisation when operate in global
environment.
Global business environment is considered as full of dynamism and uncertainty which
bring complexities in strategy formulation and implementation. Thus it make economic activities
advanced with globalisation, technological advancement etc. it reinforce complexities while
operating in such environment (Barac and et. al., 2016). So it implies that there is lot of risk s
and challenges are associated which results from these strategic complexities. Since markets and
competitions have become global with growing use of technology, international trade
agreement, transport facilities etc. between countries. Therefore firms have become
interdependent and connected with a complex system. Therefore using PESTEL analysis can
help in understanding the strategic complexities of organisation while operate on global level.
Complexities in political environment: Companies while operate on a global level often have
long term goals (Kokodey, Gnezdova and Lomachenko, 2018). With global operation company
have to face political complexities of a country as well. It is impossible to predict the political
stability in a country. So its policies like, tax, trade facilities and much more. Since inability in
prediction bring strategic complexities in the organisation. As organisation is part of the society
hence it also get tensed due to any unstable political situation of a country.
Complexities in Economic environment: Economic factors play a serious role in organisational
strategies. Such as, unsolved issue of Brexit where global organisation were totally unaware
about the outcome of It (Kotabe and Helsen, 2020). Companies wonder whether they have to
keep operate in UK on past Brexit. This result into relocation of some company's headquarters
other European countries whereas some suspended there operations. So it is seen that due to
uncertainty in the UK thus such environment create a tension of future of whole economy. This
not only create questions for future business but also started affect on employment . Because it
lead people to think economic depression may happen in the country. Ultimately the situation of
Brexit have impact on financial markets thus effect the performance and decisions of the
company (Belás and et. al., 2019).
Complexities in Social and cultural environment: It refers to changes in demographic pattern,
lifestyles, religious beliefs etc. Therefore any change in socio- cultural environment give rise to
strategic complexities. This changes are becoming faster due to technological upgradation such
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as using of social media, following online trends etc. have influence in taste and preferences of
customers as well.
Changes in Technological environment: The rapid growth in technological environment have
both positive as well as negative impact. Countries who adapt such advancement at equal pace
when it takes place are in advantageous position. Technology have ease different functions such
as, e-comm business. E-commerce firms (Xie and Redding, 201). Such as, A largest on line
retailer Amazon Co. have earn excellent operations and now company obtaining firms which
functions using traditional method of business at small level. So it pin out that changes in
technology have increased the potency of competition in which a new online business company
can become a strong competitor for another company around the world. Thus, strategic
competitor analysis has become significantly tough due to change in technology.
Issue in the Environment: Strategic complexities are also increasing due to rise environmental
concern and issues due to increased awareness about different environment issues currently
whole world is facing and this have force businesses to consider business operations in
sustainable manner. Such as, one of the famous activists like Greenpeace can adversely affect a
company's face when it discovered that its operations are a threat to the environment
(Greenpeace. 2020). Different laws related with business and its operations are made such as,
environmental protection, energy consumption and waste disposal laws etc. but they are not
enforced equally in all countries. So that makes organisation behave differently highly depending
on a country’s environmental awareness.
Complexities in legal environment: Every country have their own law and legislative
framework. Sometime fail to to close recognition of such legalities may create complex
environment for organisation. Thus it curb company and its ability to make appropriate plans,
decisions and choices in overall functioning.
Critically examine strategic challenges in context of risk and diversification strategies and the
supply chain flow.
Any change in in supply chain management is considered as inevitable and unavoidable
as risk is essential for the success. Any changes in overall external environment could have
ground breaking impact on the strategies of the organisation as the firm work with some pre-
designed way to achieve its objectives. Modification or diversification in strategies can result
either will be in favour of the firm or may not be. For instance, when Brexit was introduced in
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UK the industries from different sectors started feel uncertain about the ultimate outcome of the
decisions. However, on a close look if have not impact any severe damage or even advantage as
the EU have provided nation with some benefits that act as backup which help in reduce the
impact of Brexit at UK.
Critically assess the global business environment in terms of opportunities and challenges.
The global business environment is changing continuously with change in different
aspects like; technology, laws, population etc. that providing opportunities and challenge side by
side. Organisation who adopt challenge and take step with changes in environment get benefit
either way, that is growth and sustainability (Stverkova and Pohludka, 2018). However it is
mostly depend upon the type of situation company is currently facing. Company then with the
help of suitable techniques can identify what are the current position of the company in terms of
global market and particular industry they are belonging.
TASK 3
Measure the impact of globalisation on organisational administration, leadership, structure,
culture and functions.
An organisational structure which work as blue print, in where it outline certain activities
in order to achieve organisational objectives (Belyaeva, 2018). An organisational structure also
determine how information flows. An efficient organisational structure allow to remain focused
on its tasks. To understand the organisational design of RCS, the McKinsey’s 7s model can help.
The model was established by McKinsey. which comprises of seven components. The ultimate
principle of the model is that all the seven components are interrelated which mean any change
in one of the component can change the rest of the organisation for which it is functioning
respectively.
The model can be valuable tool when organizational design is at question and can be applied to
many situations. The most common uses of it are as follows:
It help in organizational change.
It can help in adopting new strategy.
Help in identifying areas that can change in future.
It can ease in merge of the organizations.
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Strategy: A clearly defines strategy is the one which can clearly segmented, have long-term
visions, increase competitive advantage for the company and is strengthen by strong dedication
for the organisation. However, sometimes it is not easy to conclude if the strategy is perfectly
line up with other elements as well. So strategies allows the company to develop structure and
formulate plans and other elements too.
Structure: It presents the way business divisions or departments are organise and which include
the pattern information flow that is, who is responsible to whom. In other words, structure is the
organizational blueprint of the organisation. It is also one of the most easy to change element and
visible to the framework.
System: It is the the processes of the company where it disclose daily activities of the business
and the decisions, and how they are made. System is the area of the firm which determine how
business is doing, whether proper functions are followed one after one and it must be the
significant focusing area for authorities during any change in organizational hierarchy.
Skill: It refers to the ability of organisation's employees perform their task well manner with
their skill set. Which include competency level and capabilities of different individuals. During
any change in organization, the most common question arises that what are the skills company
exactly need to increase the strengthen the its new strategy and new structure.
Staff: Staffs and employees refers to what type of individual with required skill set to meet the
objectives and number of employees a company may need and how they will be recruited,
trained, motivated as per the criteria of the vacancy for new talents and need of the situation for
already existing staff.
Style: This represents the way the company is managed by top-level managers and how they
interact with other employees, what actions do they take and their symbolic value. In other
words, it is the style of company’s management.
Shared Goal: Goals and objectives are the ultimate core of the model. Company have certain
procedures and standards that guide employees overall behaviour within the organisation and its
actions and thus, these are the primary motive of every organization.
Measure the influences of ethical and sustainable globalisation on organisational functions.
As per the present market scenario, the concept of sustainable development is an
everlasting concept in the economic development of a country (Cygler and et. al., 2018). Ray C
Smith is a logistic company who is genuinely a coal merchant. RCS is specialise in the
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delivering supply chain warehousing and transportation. RCS in present focus on the sustainable
business development where sustainable development for them is a development that stays last.
Since, sustainable development is emerging as basic goal of every organisation, there are factors
that impact organisational functions i.e. ethical and sustainable globalisation.
Ethics at RCS refers to the set of policies, procedure and culture of doing the correct and
legitimate manner, ethics are often a subject of controversial issues. Ethics in present times
receives wider attention because for ethics are essential for RCS sustainability development.
Influence of ethics on the firm functions are as following:
A firm who adopted ethical norms in their business creates a positive image in the mind
of various stakeholder, thus when organisation functions are accordance to ehtics, it
allows a firm to develop brand image or reputation,
An ethical organisation have a capability to retain the skilled employee that is
experienced and knowledgable, hence organisation can witness low labour turnover
ratio. Low labour ratio will beneficial for a firm as they don't have to burn money on the
training of new employee and enjoy greater output regarding service.
A organisation who supports ethics tends to deliver a positive working environment,
hence a positive working culture leads to improves morale among the worker. Therefore
this initiative will boost the productivity and loyalty
organisation that fails in maintaining ethics in organisations structure and culture would
find it difficult to maintain market credibility.
Economies across the globe are growing faster, with the expansion of integration of business
activities across the geographical boundary enables a business to grow faster. Globalisation is an
emerging aspect for doing business at present. Since, globalisation has boosted growth and
prosperity worldwide but the at the same time it creates consequences for social justices, this
concept gives rise to aspect of sustainable globalisation. Sustainable globalisation is the outcome
of globalisation practice to deliver sustainability development by befitting society and
community. Sustainable globalisation gives a breakthrough in the practice for doing business in
accordance to sustainability development (Dalton, 2003). RCS have adopted sustainable
globalisation to full fill their corporate social responsibilities. CSR are the obligatory regulation
which RCS need to maintain for being accountable to its stakeholders. Moreover, sustainable
globalisation can impact on an organisational functions as the firm is heading towards delivering
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sustainability in performance, thus they need to burn some pounds in their CSR activity to for
maintaining organisational credibility. When an global company is accountable for social
responsibility, this improves their global image. When a firm operating globally it need a people
to work and manage their operations. RCS is successful from its beginning only because of its
diversify quality skills workforce.
Critically measure global market influences in application to appropriate theories and models
relating to organisational structure and culture.
The McKinsey’s model which help in analyse the firm' internal environment by
considering seven interconnected elements of the model. Since global market offer globally
standardized products which are advanced in terms of functions and reliability. The model help
in determining the global market like what structure should adopted, what system need to follow
in the organisation, what strategy could be useful and suitable and firm's management style and
much more (How does the Global Market Influence Organisations?. 2020). Thus a global
marketplace influence organisation by influence both hard and soft core elements of the model.
As all the elements are interrelated and dependent on each other in a complex way.
TASK 4
Evaluate various way of decision making that can be effective ion business.
The company's all over the world follows new as well as effective approaches to
enhance their decision making abilities. This is done, to be flexible and utilize the most recent
tools that will be help them to develop as well as sustain their position not only at the national
level but also at a global level (Nyashina and et. al., 2018). Internationalization includes many
influences in variety of ways that includes cross broader and adopt powerful strategies to
establish themselves at a global level. trends For doing this, it is must to understand different
ways in order to improve it's efficiency in order to survive and maintain their unique position at a
global level. This can be described in detail below:
Product cost: It is one of the important think to be done by all the company that wants to
establish itself on a global level. It is done in order to minimize their cost lowest as
possible in order to maximize their profitability. This needs to be done by the company in
various ways with the main to reduce their labour cost that benefits that in arriving at
large economies of scale.
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New Markets: This is done by many companies throughout the world. It is most viable by
companies by thorough analysis by investing research and development. This will aids
them to access all possible ways to make effective decision that is fruitful for them to
attract new customers. This will further enable R.C. Logistics to earn higher revenue and
profitability and gain higher market share specially among their immediate competitors
to achieve leadership position in their industry.
Learn from Global operation: This again requires the company to undertake detail
analysis of the various companies that have already established themselves at a global
level. They can do this, by utilizing scared resources by focussing more on their
competitors who are engaged in similar offering. It is must for them to learn from the
mistakes done by them and prepare powerful strategies in order to address the
discrepancies that may have negative influence on their profitability. They can do this
garnering information about various logistic companies particularly the one who have
established in recent times.
Reduce Risk: It is important for all the companies who desires to expand their business at
a global level. It is again important to conduct thorough research in this aspect also. It can
be done by them by diversifying their business. Diversification particularly deals in
engaging in more than one line of business (Phuong and Nguyen, 2019). This may be
advantageous for them to mitigate the risk and the loss arising from one particular line
may be avoided or at least reduced to a lowest level. For doing this, they have to perform
in depth analysis of their competitors. This will help them access all the available
opportunities to evaluate the line of business that they can add that cost them less. At the
same time, they need to analyse, that make accurate predictions in order to arrive at the
most favourable position. Along with this, it will most beneficial for them to adopt
related diversification.
It is import for R.C logistics to consider all the above factors. They need to do this, by
utilizing the firms unique capabilities and enhance it by utilizing the most recent technology that
is being used in their economies and mainly their sectors. Adding to this they have utilized the
various opportunity available to them at a current point of time that mainly includes economies
of scale, search for ways that can minimize their product cost, learn from mistakes done by
businesses who were in their positions and take the most effective decision (RAO, 2020). They
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should make full utilization of their taskforce by considering the opinion of diverse minds and
providing them performance based rewards. They can even hire experienced staffs that are
already knowledgable. This will reduced their cost and unify the efforts of their entire taskforce
in order to establish as well as sustain their position at a global level and attain them achieve
their business objective on a long term.
Ascertain the different ways to internationalisation can adopt by company and the key barriers of
it.
There are different ways are available through which RCS can internationalize it
business. Since the company deals in logistics. Therefore only some favourable options will
discussed in next section. However the process and different internationalisation have some
degree of barriers as well (Tallman, Luo and Buckley, 2018) 8.
Foreign Direct Investment: Acquire a company abroad. Company can use strategy of FDI to
reach the foreign markets. Through FDI, company can operate on partial level or total accession
of the organisation which already operates on foreign country (Damarwulan, and Farida, 2018).
The process involve high cost though the alternative can be adopted to lower the risk of enter
into new market and country by investing on a company that already operates in abroad and so it
minimize the risk of success and failure of whole implementation process.
Different barriers to FDI: Many countries have restrictions on it. Which can create
hesitation in the mind of the business whether to use this strategy of internationalisation or not.
Some of the common barriers are discussed below:
Governmental restrictions to promote local businesses.
High tariff rates.
Lack of decision making authority in host country.
No liberalisation on exit.
Strict labour laws.
Opening Franchise: With franchising or by doing commercial affiliation, the company choose
to be an affiliate company, where they only have to pay a some amount to the franchisor of the
brand. The franchisee is authorized to sell products and services under the franchise format.
Company after choosing as franchise as a mode of internationalization, must follow the
franchisor's yardstick to deliver quality, quantity and advertising on a given limit. Company
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opting for this method of internationalisation believe that this can bring success in the
international market while using someone else's brand and its face to grow business globally.
Barriers of Opening Franchisee: Expanding business globally can sometime be a
profitable venture however some drawbacks are there too. On a closer look many companies
have flopped and affect the face of the company because they failed to take consider and lack of
assessing power the financial risk which count in with it. So in franchisee as well, it have some
restrictions as discussed below:
Cultural differences where people may not respond as company may expect.
Company also may suffer compliance challenge with host country.
Financial risk is also involve because company made huge investments in opening up of
franchisee. Fail to make market can lead loss for the company.
Unfavourable market can also affect the brand reputation.
Critically measure the key barriers of doing business globally and suggest recommendations.
Company while doing business internationally can face many challenges before them. As
this process not an easy one because it involve laws and regulations, customers and stakeholder
from more than one nation (Small business growth. 2017). Some of the major key barriers are:
Language and cultural barriers. It is the most common issue can be observed in company who
work with global clients and agents. Since each country have their own language and intend
meaning can also be different using in different situation.
However there are some ways that can be adopted to remove such barriers. Such
company can adapt as per the environment where company I operating and can also establish
Go-To-Market strategy or GTM as more company work on global level more they get chance
know about what can be best suitable to company. This help company to develop marketing
strategy as well.
Supply-Chain Risk is involve. All the elements of supply-chain such as; imports, export,
logistic, shipping etc. management become complex as compare to domestic business. There are
different types of risk factors are there one the common are; delay, cost involvement, paperwork
etc.
However company need to develop strategies in a way that it need power to predict all
types of risk that may involve with this. Strong back-up plan makes uncertain risks much easy to
digest than any uncertain plan.
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Competition from the Local. When company operate on global level, ultimately have to face
competition with local player and vice versa. Thus for reduce the competition level company
need to follow innovation that can distinguish the international product from local one. Though
total elimination is not possible because for growth healthy competition must be maintain but
without any thought of killing the each other business.
However international players can do like partnership with local firms as this will ensure
mutual growth and improve the relation with the locals. With the help of local firm company can
only get benefits as the close contact help international brands to increase its brand value more
logically.
Review strategies that can be adopted by company while operating in international business
environment.
Since business is changing at rapid pace. The important thing business can do in order to
match with the pace is bring innovation what they are offering to it customers and attract
potential customers. As new technologies are leading from front line and forcing business to
bring changes to be competitive. At RC logistics, company by developing different strategies for
and by remain open to ideas and new point of view from its workforce can be helpful to the
company for growth at international level (Nejad, Behbodi and Ravanfar, 2015). The more
company have open end communication system the more the company can welcome the ideas.
Conclusion
It is observed from above that business environment is so dynamic that it bring
opportunities as well as risk. Keeping in mind both factors company can wise choose the
internationalisation strategies. Since any option while choosing internationalisation comes with
few barriers too. Analysing these barriers and choosing right option is very crucial for company.
Since environment is most significant aspect for surviving of the business. Assessing all the
strategies for growth company can prosper its business both internationally and locally.
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