Analysis of Global Business Environment for CAMECO (Unit 18)

This report provides a comprehensive analysis of the global business environment, focusing on the case of CAMECO. It begins with an introduction to globalization, explaining its driving factors and the impact of digital technology. A PESTLE analysis is presented to assess external factors influencing CAMECO's operations, particularly in the context of potential expansion. The report then delves into the challenges globalization poses to organizations, including strategic implications and recommendations for overcoming these obstacles. Furthermore, the report evaluates CAMECO's structure, culture, and governance using McKinsey’s 7S model and Hofstede’s Dimensions of Culture. Ethical and sustainable factors in a global market are assessed, along with their impact on decision-making. Finally, the strategic expansion routes taken by CAMECO are analyzed, highlighting both advantages and disadvantages, concluding with key findings and recommendations for future growth in the global market.

Unit Number and Title Unit18 Global Business Environment
Learning
Outcomes
Feedback Grades
awarded
LO 1
LO 2
LO 3
LO 4
1

Guidance for improvement / Action Plan / General comments
Date project marked:__________________________
2

Unit 18: Global Business
Environment
3

Table of Contents
Introduction ..........................................................................................................................
LO1 & LO2.............................................................................................................................
1. An introduction to the concept of globalization.............................................................
2. An explanation on the driving factors of globalization...................................................
3. The significant impact of digital technology upon globalization....................................
4. Complete and present a PEST/LE analysis of the organisation. ....................................
5. Explain the challenges of globalization and the strategic challenges this
represents for the organization. ........................................................................................
6. Provide recommendations on how to overcome these challenges................................
LO3 & LO4.............................................................................................................................
Introduction........................................................................................................................
1. Explain the structure, culture and governance of the organization and
apply McKinsey’s 7S model and checklist to illustrate an overview of the
organization. .....................................................................................................................
2. Evaluate how the above has been influenced by global operations and
how the organization has adapted to operating in a global market. Apply
Hofstede’s Dimensions of Culture to demonstrate how the organization has
been influenced. ...............................................................................................................
3. Evaluate ethical and sustainable factors that the organization has to
consider in a global market. ..............................................................................................
4. Assess how these factors have affected decision making in a global
context. .............................................................................................................................
5. Assess which strategic expansion routes the organization took and
analyze both advantages and disadvantages. ..................................................................
Conclusion .........................................................................................................................
Conclusion ............................................................................................................................
Reference List.......................................................................................................................
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Introduction
Globalization can be defined as the process that aids business organizations
to make international connections and expand its branches in other
countries. This process aids people, government and organizations to
interact as well as integrate with each other on a globally or international
scale. It has brought people and organizations based in different parts of the
world closer. Globalization has taken place at various levels namely,
economic, social and political.
In this project, the factors of globalization has been analysed along with the
challenges that have emerged in the global environment. The influence of
globalization on CAMECO’s decision making process has been evaluated and
its impact on its structure and culture has been described.
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LO1 & LO2
1. An introduction to the concept of globalization
Globalization has paved way for the organization to develop as it has made
trades on international scale easier. It has brought people and organizations
based in different parts of the world closer. In this project, the factors that
drive globalization have been discussed along with ways digital technology
has influenced globalization. PESTEL analysis of CAMECO has been illustrated
along with the challenges globalization has imposed on CAMECO has been
elaborated. Recommendations have been provided such that the challenges
the organization is facing can m be conquered.
2. An explanation on the driving factors of globalization
Globalization has affected the operation of every organization in the world.
Various factors have stimulated globalization and have encouraged the
organization to grow. There are several factors that drive globalization that
has been explained below:
 Containerisation: The costs or the expenditures of ocean shipping
have reduced as a result of containerisation and bulk shipping (Bozyk,
2019). The reduction in the cost have resulted the organizations to
become stable as transportation charges have gown down.
 Economies of scale: Minimum Efficient Scale (MES) has increased
thereby aiding the organizations to expand the as with rise in MES
selling needs increased.
 Technological Change: The developments that have been taking
place in the technological field has aided in the minimisation of cost of
communication and transmission of data or information. Therefore, this
has enabled the organizations to expand globally.
 Different tax systems: The businesses have a desire to derive
benefits from lower rate of per unit labour and other factors that might
prove to be favourable for production. Thus, this has resulted in the
countries to adjust the systems of tax there so that they are able to
attract FDI (Foreign Direct Investment). Consequently, various
countries have indulged in tax competition so that they can attract
foreign direct investment (Bhalla, 2013).
 Growth Strategies: The organizations are investment on its
expansion so that it can grow and increase its profitability.
Globalization has aided the organizations to increase its customer base
and increase its profitability therefore as a part of growth strategy the
organizations adopt the process of globalization.
3. The significant impact of digital technology upon globalization
With developments and advancements in the world of technology,
globalization has been stimulated as the rates of communication have gone
down. Not only communication or the transfer of data or information has
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become cheap but along with it, the rates of transportation of goods and
products have gone down. Technical advancements have leaded the
organizations to increase the scale of market along with economies of scale
(Selwyn, 2012). It has aided the organizations to exploit market in foreign
countries without facing any competition from its rivals or competitors. The
use of technology will aid CAMECO to conduct proper research of the market
where it is willing to expand and to devise apt strategies so that it can take
over the market in that country.
The introduction of World Wide Web or www has aided to decrease the delay
that used to take place earlier for making business deals. The sellers and the
buyers have been enabled to make transactions anytime they want from any
place of their choice (Cronin, 2012). The developments in technology have
made it possible for developing countries to combine technology with
labours at low rate. Therefore the developed countries outsource their work
to developing countries so that their work can be completed at low cost.
4. Complete and present a PEST/LE analysis of the organisation.
CAMECO is Chemical and Energy Company based in South Africa. The
organization has expanded its branches in several countries nevertheless
the management of the organization is planning to expand its branches in
several other countries. Nevertheless, in order to expand it is necessary for
the management of the organization to analyze the external factors or
macro-environmental factor that can affect its operation in the areas or
places it is planning or willing to expand. PESTLE analysis of the areas where
the organization is planning to expand (United Kingdom) would aid the
organization to evaluate the impact of the forces on the organization in the
following ways:
 Political Factors: The political stability of the country where an
organization is willing to expand plays a key role in determining its
success. The management of CAMECO needs to consider the political
factors of the area where it is willing to expand like the intervention of
the government in the operation of any organization, the stability of
the government, tax policy, corruption, labor law, foreign trade policy,
restrictions on trade and environmental law. These factors affect the
operation of an organization therefore it is necessary to asses these
factors in order to determine the success factor in the potential market
(Pestle analysis, 2018). However, United Kingdom is politically stable
thus CAMECO can expand in this country and earn profit.
 Economic Factors: The economic growth of the country is of prime
importance as it determines the success rate of the organization. The
other economic factors that have to be considered before expansion
are rates of inflation and interest. The exchange rates, unemployment
rates and the consumers’ disposable income are other factors that
have to be considered because it aids to determine the prices at which
the products can be offered as it signifies the purchasing capacity of
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the customers. United Kingdom is politically stable thus; CAMECO can
expand here and earn profit.
 Social Factors: The trends that the population of the area where
CAMECO is willing to expand will affect its growth in that particular
area as it will aid the marketers to target the potential customers. The
demand of the product in that country is an important factor that
affects the success rate of the organization in that area.
 Technological Factors: The technical advancement of the country or
the area where an organization is planning its expansion as it affects
the decisions made by the organization that actually determines the
future of the organization (Widya et al., 2018). This way an
organization is helped as it is prevented from launching any sort of
technology that might become obsolete soon. The innovations in terms
of technology affects the market, therefore, it is necessary that
CAMECO consider the technical factors of the countries where it is
willing to expand. United Kingdom is technologically advanced thus
CAMECO can expand in the country and operate profitably.
 Environmental Factors: Nowadays, the countries have become alert
regarding the degradation of environment; thus, they are taking
several steps to make the world a better place to live. However, this
affects the operation of the organizations in those locations therefore,
it is necessary that any organization operating in such areas adhere to
the environmental policies formulated by the government of that area.
The management of CAMECO needs to figure out the environmental
laws pertaining to that area and needs to follow it strictly for its
efficient operation.
 Legal Factors: The legal factors that affect the operation of an
organization in a country are the employment laws, discrimination
laws, consumer protection laws and antitrust laws. Health and safety
laws also affect the operation of an organization. Therefore, it is
necessary that the organizations have proper knowledge of the legal
factors of a country so that it can carry out the trades ethically in that
area such that the organization can grow without any hindrance. The
government of the United Kingdom does not intervene in the operation
of an organization thus; CAMECO can expand its branch here.
5. Explain the challenges of globalization and the strategic
challenges this represents for the organization.
Globalization has brought people closer and has made the world smaller as it
has bridged the gaps that used to exist earlier. However, there are several
challenges that have imposed threat and needs to be tackled effectively so
that the issues can be resolved. The challenges of globalization are that it is
not mandatory that the process benefit every country in the world at the
same time. It has to clarified especially for the developing countries that
globalization leads to instability. The fear that the developing countries have
regarding globalization has to be taken care and eradicated (Payne and
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Askeland, 2016). The other challenge of globalization is that the industries
fear that globalization will adversely affect the employment practices, wages
of the laboursa and their rights along with the environment at their
workplace.
CAMECO must make sure that its employees are satisfied that the
organization makes and must do proper analysis of the area where it is
willing to expand. Globalization has increased the emission of carbon dioxide
and has made the resources extinct as it has increased the pace of its user
(Stromquist and Monkman, 2014). It has increased the price of oil and has
been more fruitful for developed countries.
6. Provide recommendations on how to overcome these challenges.
CAMECO can overcome these challenges by devising effective plans and
implementing it in the organization. The management of the organization
must make sure that its employees do not fear from the strategies the
organization implements and the decisions it makes. The increase in the
prices of oil has to be dealt by decreasing its use. The organization must
make sure to devise plans so that the emission of carbon dioxide can be
reduced and the resources are utilised effectively. It has to work on the
strategies it adopts and implement it carefully.
9

LO3 & LO4
Executive Summary
CAMECO wants to expand its branches in order to increase its customer base
and profitability. In order to attain this it is necessary that the management
of the organization considers Mc Kinsey’s 7S model and Hofstede’s
Dimensions of Culture so that it is able to make its decisions properly. In this
way, the organization will be enabled to function properly and achieve
success.
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Introduction
CAMECO has its branches in various countries like Canada, Australia, Gabon
and Mozambique and wants to expand in other countries like United
Kingdom in order to develop and increase its profitability. However, in order
to expand it is necessary that the management of the organization adopts
certain procedures and follow it to achieve success.
1. Explain the structure, culture and governance of the organization
and apply McKinsey’s 7S model and checklist to illustrate an
overview of the organization.
Globalization has improved the way of interaction among business
organizations all across the world by integrating culture, society and politics.
The way the organizations used to operate has changed with the advent of
globalization. It has affected the planning strategy of the organizations as
based on the situation of the market the firms make decisions and
implement them. Globalization has introduced several changes in the global
market that has affected the operation of every company in the world.
CAMECO has been affected by globalization as it has planned to expand its
branches in several countries. Mc Kinsey’s 7S model that is a model of
management developed in 1980’s by Tom Peters and Robert H. Waterman.
As per Mc Kinsey’s 7S model the effect of globalization on the operation of
CAMECO has been described below:
Structure: In order to expand the organization it is necessary that
management takes care of the structure of the organization, that is, how the
employees to coordinate with each other in their work and how and to whom
they report their work.
 Strategy: It is necessary that the management of the organization
devises proper strategy and implements it properly so that it can gain
competitive edge over other organizations in the market in the area
where it wants to expand (Cox et al., 2018).
 Systems: It is of utmost importance that the activities of the
employees are monitored on a daily basis so that the job is completed
properly. The management of CAMECO must pay proper attention on
this matter.
 Skills: CAMECO must take care that the employees it recruits in the
new venture that it is willing to undertake are skilled so that its
objectives can be attained.
 Style: The management must look after the leadership style that is
adopted in the organization so that the organization can operate
effectively (Thornton, Ocasio and Lounsbury, 2012).
 Staff: The employees that CAMECO will recruit must be trained at
regular intervals so that their level of performance can be leveraged.
 Shared values: The culture and the values that CAMECO has adopted
play a key role in determining its success.
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2. Evaluate how the above has been influenced by global
operations and how the organization has adapted to operating
in a global market. Apply Hofstede’s Dimensions of Culture to
demonstrate how the organization has been influenced.
CAMECO has its branches in various countries like Canada, Australia, Gabon
and Mozambique. However, it wants to expand its branches in several other
countries but in order to expand it is necessary that its management
assesses the factors affecting that place and devise apt plans to achieve
success. Hofstede’s Dimensions of Culture is used to describe the effect of
culture of society on its members and analyses its effect on their behavior.
Since, CAMECO wants to expand in the United Kingdom its operation can be
analyzed using Hofstede’s Dimensions of Culture in the following ways:
 Power distance index (Low): The United Kingdom has low PDI thus,
it has flat organizational structures thus CAMECO’s structure must be
flat.
 Individualism (High): The United Kingdom’s IDV is high as the
privacy of people is respected thus, CAMECO must ensure that the
employees are rewarded and their privacy is respected
 Masculinity (Medium): The country has medium MAS as women in
the country have equal rights as that of men. CAMECO must give equal
opportunities to every individual irrespective of gender (Beugelsdijkb
et al., 2017).
 Uncertainty avoidance index (Low): The United Kingdom has low
UAI as it supports innovation thus CAMECO has to lay emphasis on
innovation.
 Long/ short-term orientation (Long): In the United Kingdom
modesty and virtues are emphasized thus the management of
CAMECO must make sure that it makes sure its employees follow it
(Deephouse et al., 2017).
3. Evaluate ethical and sustainable factors that the organization has
to consider in a global market.
Ethical globalization is the commitment of the organization operations
as well as norms that help the international organization to integrate
business operation globally. It basically involve the behavioral practices that
need to be followed by each and every representative of an organizational
as these guidelines are common for all level of management whether they
are at top level or low level. The primary purpose of ethical factor is to
ensure the welfare that work for the welfare of an organization and avoid the
malpractice for the betterment of society. Along with that Sustainable
globalization refers to the expansion of business worldwide which help to
safeguarding the interest of different stakeholders as well as external
environment for the long term sustainable development of business. Here,
business basically makes the use of environment friendly techniques that
does not harm the external environment.
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Thus, the ethical as well as sustainable factor which is considered by
the CAMECO for global expansion are defined below:
Corporate social responsibility: It is the business practice that help
to integrate the program as well as organizational culture in order to attain
the long term profitability by retaining the employee for longer duration. This
include the social as well as environment concern by meeting the
expectation of different stakeholders of business. The main priority of the
organization is to boost up the brand and make the optimum utilization of
resources in order to gain sustainable development. It is even mandatory for
all organization to make the necessary contribution for the welfare of
environment or by making valuable contribution to the unprivileged section
of the society. Herein, CAMECO company has adopt CSR activity and
constantly expand its operation in various countries like Canada, Australia
and so on. Thus, this helps the firm to maintain the positive image and gain
the trust of internal (employee) as well as external (customer) stakeholders.
Some of the CSR activity adopted by company are defined below:
 The company adopt uniform policies or regulation for all its employees
and offer them fair wages on the basis of their roles and responsibility.
Further, the company provide growth opportunity to their employees
which help them to exist for long duration.
 The company achieve development by taking special precaution for
the environment like it adopt environment friendly activity, reduce the
emission of useful gases liker carbon and avoid plastic usage to gain
sustainable development.
Regulation: There are specific guideline or the regulation on the basis
of which CAMECO company need to comply with the law. These laws are
basically designed by the local authority that look for the welfare of each
and every citizen of the society. Thus, adoption of such regulation help the
firm to expand their business overseas effectively.
Thus, in order to operate globally it is necessary that the organizations
consider certain factors and follow it so that it can attain success in its
ventures. Therefore, on the basis of CSR activity and compliance of business
with rules and regulation so of the factors that CAMECO has to consider in
order to achieve its goals and objectives are:
 It must trust its employees and treat them impartially. The decisions
its management will take must be unbiased.
 The manufacturing process that CAMECO will adopt must be
sustainable (Wigley and et. al., 2012).
 The management of the organization must lay emphasis on integrity
so that the business relationships it develops are fair and good.
 The products that CAMECO will develop must be considered ethically
so that its customers do not feel cheated and are satisfied with the
products they received.
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4. Assess how these factors have affected decision making in a
global context.
The factors that have been explained ab5. Assess which strategic expansion
routes the organization took and analyze both advantages and
disadvantages. ove affects the decisions made by the management of
CAMECO as it influences the decisions it makes. The management has to
make sure that the performance of its employees is carefully monitored and
the decisions that its management makes in order to reward or punish its
employees are made without being biased. The process of manufacturing
that the organization will undertake must be sustainable so that the
environment is not affected and the comfort or peace of people residing
nearby is not compromised. The business deals that CAMECO will make in
the country must be valued and respected so that the relationships it builds
with other organizations are fair and good.
5. Assess which strategic expansion routes the organization took
and analyse both advantages and disadvantages.
Expansion refer to the diversification of business from national market
to the international market by making adequate strategy and achieve the
objective successfully. This help the firm to analyze the market and manage
the obstacle for the proper functioning of business that lead to long term
sustainable growth. Herein, CAMECO adopted market expansion strategy in
order to penetrate the market. Its management has devised ways of
expanding its branches one by one in several countries. The advantages of
market expansion are:
 Per unit cost of production is lowered (Lynch and Jin, 2016)
 Higher profitability
The disadvantages of market expansion are:
 There can be deficit of cash
 The operation of the organization becomes complex
Thus, there are various expansion route and each route has its
advantage as well as disadvantage that is discussed below:
Export: It is one of the common kind of expansion routes where
production process takes place at one place where resources can be easily
extracted. Further, the final product is distributed to various international
boundaries. In relation to CAMECO can use this method to expand their
customer base and enhance the long term profitability successfully.
Advantage
 Export is an effective practice that can help the firm to take the
advantage of their economies of scale and enhances the foreign direct
investment.
 Such practice helps to mitigate the chances of competitive risk due to
portfolio investment.
Disadvantage
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 Initially the company has to bear additional cost on activities like
packaging or production. Thus, lack of profitability and lead to huge
strain on the overall operation of company.
 It may at-times become difficult for CAMECO to analyze the external
market and cope up with the sudden changes within international
market.
Licensing: Licensing is an effective expansion tool within which the
licensor gives the authority to the licensee over the product. This help both
the part to share mutual benefit and diversify the business operation
effectively.
Advantage:
 This can help the CAMECO to gain easy accessibility of the technology
and can help the firm to remain competitive by coming up with latest
trend and innovation.
 This process makes it easier foe the company to easily diversify the
product or enter in new market.
Disadvantage:
 Improper management or lack of coordination among license and
licensor and damage the brand reputation.
 Such agreement is usually for specific time interval.
Barrier of international expansion
 As the culture, language and attitude of people differ from one
geographical area to another due to which it may become complicated
for the company to expand its operations worldwide.
 The local residence have strong faith or loyalty over the existing brand
because of which the new firm may take time to incur their position in
new geographical market.
Conclusion
The strategy devised by CAMECO to expand one by one has both advantages
as well as disadvantages. However, the management of CAMECO must
ensure that the values and the beliefs of the country where it wants to
expand are not affected by its strategy of expansion.
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Conclusion
Globalization has changed the ways organizations used to operate earlier. It
has paved new ways for the organizations to increase its profitability. It has
aided the organizations to decrease or lower its cost of production as it has
enabled the organization to higher labor at cheap rates and get resources at
low rates. Therefore, it has proved to be beneficial for the organizations to
increase its productivity and profitability. CAMECO wants to expand its
business in other countries however in order to achieve this it is necessary
that it makes sure that the values and beliefs of people of the country are
respected.
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