Comprehensive Report: Global Business Environment of Tesco PLC

This report provides a comprehensive analysis of Tesco PLC's global business environment. It begins with an introduction to the concept of the global business environment and its impact on organizational aspects such as governance, leadership, structure, culture, and functions. The report then explores the influences of ethical and sustainable globalization on Tesco's operations, highlighting their importance in a competitive market. It also delves into the application of force field analysis in Tesco's decision-making processes, particularly concerning globalization strategies. Furthermore, the report examines various strategies for entering the global market, such as the multi-domestic strategy, and offers recommendations for organizational structure and decision-making processes. The report evaluates different decision-making approaches, including reactive and proactive strategies, and identifies various routes to internationalization along with key barriers that Tesco may face. Finally, the report emphasizes the significance of ethical and sustainable practices in driving functional efficiencies and long-term business success, providing valuable insights for students seeking to understand global business dynamics.

Global Business Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
LO3..................................................................................................................................................1
P3 Influences of globalization.....................................................................................................1
P4 Influences of ethical and sustainable globalisation on organisational functions....................2
M3 Force field analysis and their impact on decision making....................................................3
D2 Strategy adopted by organisation in a global market and recommendations for adoption of
organisational structure and decision-making processes.............................................................4
LO4..................................................................................................................................................5
P5 Evaluation of decision making in the global context.............................................................5
P6 Various routes to internationalisation and key barriers..........................................................6
M4 Barriers in internationalisation of business and recommendations for overcoming with
barriers.........................................................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Global business environment is a combination of three words “global”, ”business”,
”environment”. These three words together describe a nature of company who are doing their
business internationally (Salvatore, 2015). Tesco PLC is a multinational company which was
founded by Jack Cohen in year 1919. It is one of the leading company in retail industry
(Kasemsap, 2016).
Present report will highlight the impact of globalization on various organizational aspects. It
will also evaluate the influence of ethical and sustainable globalization on organization. It will
also tell about the force field analysis and their impact on decision making. It will also describe
the strategy which helps company to operate its business in global market. It will demonstrate the
different ways of decision making and various ways to make its business global. It will also
recommend on their adoption of organizational structure & decision making processes and ways
to overcome with the barriers to globalization.
LO3
P3 Influences of globalization
Globalisation affects the organisation through many organisational aspects. These aspects
and impact of globalisation on these aspects are as follows -
Organisational Governance
Organisational governance is a system and procedure in which organisation set its
objectives and make & implement decisions in order to achieve those objectives. Tesco
organisational governance consists of Boards of directors and management teams.
Tesco organisational governance is all about maximizing the organisation value regarding
various financial, legal, contractual and others obligations which can be fulfil by globalisation of
company. In this way, globalization affects the company's corporate governance and its ways to
achieve the organisational goals (Hamilton and Webster, 2018).
Organisational Leadership
Organisational leadership refers to the required skills which motivates employees to do
their work effectively and efficiently in order to achieve organisational goals.
Tesco leadership is highly impact by the globalisation. Because here leaders has to
change himself and find ways to adopt those changes which is due to globalisation. Because
globalisation means new changes, new ideas, new strategies, new work ethics, new work style,
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new cultures which is not easy for employees of Tesco to accept. Thus, in this way, globalisation
impact the Tesco leadership.
Organisational Structure
Organisational structure refers to the system which helps organisation to maintain their
activities in a systematic ways so that objectives can be achieve with the helps of rules,
regulations, roles, powers and responsibilities.
Tesco has adopted hierarchical structure. Due to globalisation, number of employees,
number of activities and objectives of company has increased which lead company not to able to
handle such situation with the limited resources and limited human resources. Thus, company
add more layers in their organisational structure (Lewis and et.al., 2017). Like this, globalisation
impact the organisational structure and make it more complex.
Organisational Culture
Organisational culture refers to the terms which represent the beliefs, assumptions,
values, norms, attitudes and work styles of the employees in the context of particular
organisation.
Due to globalisation, Tesco organisational culture become cross culture in which there is
diversification in the background, history, cultures and behaviours of the employees. Now
company has to deals with the diversification in proper manner so that company can create
respect, trust and co-ordination between them for the better working environment in the
company.
Organisational Functions
Organisational functions are those activities which is carried by organisation and their
members in order to achieve the organisational goals.
Due to globalisation, company has to increase their departments which lead to increase in
the activities carry out by these departments. Also, due to focus on every aspects of organization,
number of job position, their roles and responsibilities has to be increased in the company. Thus,
globalisation impacts the activities by making it more complex for the organisation at the
international level.
P4 Influences of ethical and sustainable globalisation on organisational functions
Ethical Globalisation
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Ethical globalisation refers to the process of interaction between people, companies and
market in that way which can create a base where fairer trade is a mean for any organisation.
Sustainable Globalisation
Sustainable globalisation refers to the process of interaction between people, companies
and market in that way which can create the sustainability growth of economy of nation as well
as company too (Nohria, 2017).
Impact of Ethical globalisation on organisational functions of Tesco Company
Ethics plays an important role in competitive business environment. Due to ethical
globalization, stakeholders of the company are able to take their responsibilities towards their
business and roles which improves their functional efficiency and increase the business
profitability. Ethics globalization helps Tesco to gain loyal employees who complete their tasks
on time and helps company to complete its target which increase the wealth of shareholders.
Also, due to ethical aspects, employees do behave and think in an ethical way which improves
the functional efficiencies.
Impact of Sustainable globalisation on organisation functions of Tesco Company
Due to sustainable globalization, company is able to maintain its functions and business
for longer time. Also, company is becoming experts in their every functions which will reduce
the costs of functions carried out and increase the efficiencies of functions. Like this, Sustainable
globalisation helps company to gain more and more effectiveness in their functions, activities
and business (Adekola and Sergi, 2016).
M3 Force field analysis and their impact on decision making
Force Field Analysis
It is a model which is developed by Kurt Lewin. It can be used by any kind of
organisation. Organisation uses this model for decision making process regarding change
planning and implementation of change in the context of company.
Impact of Force Field Analysis on the decision making of Tesco regarding Globalisation
Tesco used Force field analysis decision making regarding globalisation. This analysis
helps company to understand various factors which may impact the company positively and
negatively. These factors are as follows -
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Driving Force (Factor) – Differentiate products – Due to globalisation, Company has to
produce so many products and services which lead customers to easy access of these products
and services at one place which increase the profitability of the company.
Restraining Force (Factor) – Rules and Regulations – Due to globalisation, Company is
entering into various markets of various nations where rules and regulations regarding
organisational aspects are different which lead company to pay high costs. This lead company's
profitability to be reduced (Nambisan, Zahra and Luo, 2019).
D2 Strategy adopted by organisation in a global market and recommendations for adoption of
organisational structure and decision-making processes
Strategy adopted for going global
There are various strategies which can be adopted by Tesco Company to make its business
global. For the successful globalization of its business, company can choose Multi-domestic
Strategy in which company will sale its products and services according to the needs and wants
of the nation’s cultures, demands and perceptions. It can be benefit for the company because
company is focusing on the needs of particular nation & accordingly producing & distributing
the products & services. Disadvantages of this strategy is that every nation’s perception,
demands and needs for goods and services are different which lead company to produce different
kinds of products and services which cause company to bear a lot of costs regarding products and
services (Uchihira, Ishimatsu and Inoue, 2016).
Recommendations
Tesco Company is all set to make their presence in global market. Thus, for the company,
following points (which is related to the structure and decision making process) can be
recommend –
Company can make its organization structure international division structure in which
company can create separates division for the management of operations at the international
level. For example – for example company is planning to enter into all developing countries such
as China, India, Bhutan, Malaysia, Maldives, Sri Lanka and Turkey etc. So company will built
different division on the name of these countries in which it is planning to enter.
Company can hire high professional managers and employees from every countries and
decentralized its decision making power along with their activities, roles and responsibilities in
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order to make business successful at global market. In this, company can encourage their
employees and stakeholders to share their ideas in order to do some innovative in the business.
LO4
P5 Evaluation of decision making in the global context
There are various ways through which company’s decision making regarding making
global business successfully and effectively. Also, Tesco has to make quick and accurate
decisions in different situations. These ways of decision making are as follows –
Reactive Decision Making Strategy
This type of decision making strategy is only adopted when company faces some issues
and finding solutions for those issues only after it arisen. It is basically looking at the present
outcomes which were the result of past business action.
In this strategy, company will look at the present issues which are arising due to past
decisions or actions of company regarding globalisation. After looking at the issues, company
will analysis the problems and try to find out the problems in order to solve the issues (Groşanu
and et.al., 2015).
For example – After enter into Australia market, company faces a issue in which
company can’t sale their products to the Australian customers after a limit number of units. After
analysis of this issue, company come to a solution in which company will bring more
diversification in their products and services line. After that they will sell it to the Australian
market in that limited units.
Proactive Decision Making Strategy
This type of decision making strategy is only adopted to find possible ways of solutions
of all those challenges or issues which can be face by company in future. It is basically looking
at the future outcomes which are a result of present business action.
In this strategy, company will look for the future opportunities, do analysis of that
opportunities and gather information on the advantages, disadvantages, impact and problems
which can be arise due to grabbing opportunities. Accordingly, decision maker of the company
will take decisions about the solutions of potential problems (Boshyk, 2016).
For example – Suppose Tesco see opportunities in the developing countries where
population is high. After that company do analysis of those countries and find that customers of
those countries consume a lot of goods and services which is related to the business line of
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Tesco. But Tesco decision maker will also know that along those opportunities, company has to
face a lot of legal and economic risks. Thus, company will before arising of these problems
complete the legal requirements and do analysis of needs & wants of the customers, their life
styles and quality standards so that company can avoid economic issues in the future.
P6 Various routes to internationalisation and key barriers
There are various routes (strategies) through which Tesco Company can expand its
business at the global level and make their organization international. These various routes or
strategies are as follows –
International Strategy
Tesco can choose this strategy and expand its business in those foreign markets where
products and services offer by Tesco are not available. Tesco can open its business in those
markets and invest in human resources and other resources. Tesco can hire various small retailers
and whole-sellers for distributing their products and services.
Key barrier in this strategy is that company has to find ideal location for their
establishment of office and it is not necessary for them to access that location. Also, company
might face challenge in their selling strategies and for that they need to invest their lot of money
in marketing and promotional strategies (Lasserre, 2017).
Multi-domestic Strategy
Tesco also can choose this strategy and expand its business in foreign market and global
market by producing only those products and services which are most demandable in that nation.
In this strategy, company has to invest their time and money in research and development
procedure in order to create a lot of innovative products and services in order to sustain their
business for longer time.
Key barrier in this strategy, adjustments according to the customers in the nation can be
expensive for the company. Also another barrier company may face financial risk, if company is
not able to stand on customers’ preferences.
Global Strategy
In order to going into global market and expand business, Tesco can choose Global
Strategy. In this strategy, Tesco will make those products and services at low cost only in which
company has expertise / specialization. Also, Tesco will only choose some foreign markets
according to their preferences regarding every aspect of investments and profitability.
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In this strategy, company may has to faced dependency issues because company operates
its administrative works from that place where its headquarters are established and run in its
businesses in various countries by opening small firms under its name. In case any decisions
which are needed to be take quickly, but due to far distance and administrative structure,
decisions are taken to be slow speed and after time out.
Transnational Strategy
In this strategy, Tesco can use the combination of multi-domestic and global strategy.
This means company will use only those products and services in which they are experts and
provide it at the low cost structure. After that company will sell these products and services to
only those countries where the demand for products and services are high (Expansion through
Internationalization, 2018).
In this strategy, company may have to face the challenge regarding to identify the best
management strategy in order to achieve the economies of scale and increment in efficiency.
M4 Barriers in internationalisation of business and recommendations for overcoming with
barriers
Due to globalization, Tesco Company has to bear a lot of costs on every aspects of their
business such as production, research & development, organization structure, organizational
management and leadership etc. Also company might face the risk of failure of these strategies if
there is any mistake in implementation or execution or planning (Cavusgil and Knight, 2015).
Recommendations for overcoming with barriers
Tesco Company can understand all the cultures and their values so that company can
respect it. Because Cultural challenges are one of the major challenge in globalization. Also,
company can organize cultural events and their activities in order to create awareness of cultural
values in their customers and stakeholders. This also can help company to attract their customers
also.
Tesco can invest their time, efforts and money in invention and innovation of products
and technologies so that they can fulfil their customers ‘needs quickly with low price and
advance techniques.
CONCLUSION
From the above study, it has been summarized that globalization impacts the organization
positively or negatively. It all depends upon the business strategies, business tactics, business
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decision making and products and services offering by business. It not only depends upon the
business aspects, but also depends upon the human resources efforts, customers’ perceptions and
procedures of expanding business. Globalization comes with a lot of challenges which needs to
be address by company in many ways in order to mitigate the negative impacts of that challenges
on business activities. Strategies adopted by company for their expansion of business towards
global markets needs a lot of planning, investments and knowledge. Thus company should adopt
these strategies only on the basis of availed resources and requirements.
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REFERENCES
Books and Journals
Adekola, A. and Sergi, B.S., 2016. Global business management: A cross-cultural perspective.
Routledge.
Boshyk, Y. ed., 2016. Business driven action learning: Global best practices. Springer.
Cavusgil, S.T. and Knight, G., 2015. The born global firm: An entrepreneurial and capabilities
perspective on early and rapid internationalization. Journal of International Business
Studies. 46(1). pp.3-16.
Groşanu, A., and et.al., 2015. The influence of country-level governance on business
environment and entrepreneurship: A global perspective. Amfiteatru Economic
Journal. 17(38). pp.60-75.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Kasemsap, K., 2016. The roles of knowledge management and organizational innovation in
global business. In Civil and Environmental Engineering: Concepts, Methodologies,
Tools, and Applications. (pp. 1156-1180). IGI Global.
Lasserre, P., 2017. Global strategic management. Macmillan International Higher Education.
Lewis, H., and et.al., 2017. Design+ environment: a global guide to designing greener goods.
Routledge.
Nambisan, S., Zahra, A. and Luo, Y., 2019. Global platforms and ecosystems: implications for
international business theories. J. Int. Bus. Stud.
Nohria, N., 2017. Fast forward: The best ideas on managing business change. Business
Review. 9. p.10.
Salvatore, D., 2015. Managerial economics in a global economy. OUP Catalogue.
Uchihira, N., Ishimatsu, H. and Inoue, K., 2016, September. IoT service business ecosystem
design in a global, competitive, and collaborative environment. In 2016 Portland
International Conference on Management of Engineering and Technology
(PICMET). (pp. 1195-1201). IEEE.
Online
Expansion through Internationalization. 2018. [ONLINE]. Available through :<
https://businessjargons.com/expansion-through-internationalization.html >
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