Organisational Behaviour and Management: Global Business Analysis

This essay provides an in-depth analysis of global business operations, focusing on the phase model of globalization. It begins by defining global business and differentiating it from international business, highlighting its expansion strategies and reduced reliance on local markets. The essay then delves into the four stages of the phase model: exporting, cooperative contracts (licensing and franchising), strategic alliances, and wholly-owned affiliates. Each stage is examined with respect to its strengths and weaknesses, such as the exposure to new management practices through exporting and the potential for communication and cultural barriers in strategic alliances. The essay uses examples like Speedo to illustrate the concepts and concludes by emphasizing the impact of these stages on business development and organizational behaviour.

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Introduction
 Globalization has been augmented with the decline of trade obstructions with the spread
of unrestricted trade as well as trade management in the digital era thus reflecting decline
in the bureaucraticism related to international trade. Global business primarily refers to
global trade. However, in different terms a global business is recognized as an
organization executing its business across the world (Andreasson and Johansson 2018).
 This type of business tends to draw variance from an international business which trades
products and merchandises, yet has provisions particularly in its home nation. According
to Agrawal (201), through a broad network of their branches in number of countries,
global business aims for expanding their industries along with marketing operations.
 Furthermore, global business shows great competence of decreasing its level of reliance
on the local markets (Nikolova, Rodionov and Afanasyeva 2017). Even during extreme
stagnation of local competition, global businesses can continually depend on additional
markets in order to trade its products or services.
 The essay will evaluate functioning of global business and classify the stages in the phase
model of globalization. Additionally, enlighten the strengths and weaknesses embedded
in those stages to analyse significant aspects of executing business operations during
globalisation.
Background
Analysis of four stages in phase model of globalisation
 The four stages in the phase model of globalisation have been incorporating
disseminating, cooperative contracts, strategic alliances and lastly wholly owned
affiliates. In recent times, with increasing rate of globalisation, the yearly earnings of

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planetary business in the signifier of exports as well as imports have been anticipated to
transcend nearly $12 trillion.
 According to Tessema (2016), few years before, global business has systematically
developed at a rapid rate as compared to global productivity. Nikolova, Rodionov and
Afanasyeva (2017) have found that the concept of ‘export’ in the phase model of
globalisation has been derived from the conceptual importance as to transport the goods
as well as services out of the port of state wherein company trades domestically produced
goods to customers in overseas states.
 However, in the view of Tessema (2016), selling products domestically encountered
critical hazards with exportation related to increased financial outlays along with
complex political, legal as well as cultural impediments.
 Van den Berg and Lewer (2015) have cited example of Speedo, renowned Australian
swimsuit trading company exports their products to states like the U.K, Italy, France and
Japan. By drawing relevance from marketing strategy of Speedo, number of Australian
interior designer has increased the exportation of their designs along with products. The
subsequent stage in the phase model of globalization involves cooperative concerts
comprises of licensing as well as franchising.
 Licensing is known as the understanding whereby domestic organization commonly
receives royalty reimbursements for authorizing licensee in order to utilize company’s
trade name in specified overseas market (De et al. 2015).
 On the other hand, the strategic alliances stage is related to an understanding wherein
organization involve fundamental resources, expenditures, manufacturing and labour
forces. According to Harding and Venables (2016), strategic alliances are developing

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greater exceptionalities in the universal financial system; over 20,000 corporate
associations have been formed across the world over last few decades.
 Additionally, there have been identified four kinds of strategic confederations namely
mutual undertakings, equity strategic association along with non-equity planned
confederation as well as universal strategic confederations.
 Moreover the typical signifier of strategic confederation relies on joint undertakings
which consist of more than two corporations or companies or personnel in a partnership
for a specific objective (Driffield, Love and Yang 2016).
 The concluding stage of phase model of globalisation involves wholly-owned affiliates,
wherein companies execute their business operations as overseas offices by working on
installations besides fabrication which are fully owned by the parent organization.
 According to Andreasson and Johansson (2018), conditions affecting firm-specific
possessions, wholly-owned subordinates tend to reduce the threats of possession as well
as timeserving conduct by partners in uncertain setting.
Analysing strengths and weaknesses of four stages in the phase model of globalisation
 Exporting (Strengths) - Exporting tends to enable global business in attaining exposure to
novel concepts, management practices along with marketing strategies. Moreover,
exportation to international markets facilitates global businesses in recent times to handle
uncertain economic conditions in unfavourable domestic markets (Agrawal 2015).
 Weaknesses- However, one of the major shortfalls of exporting in global business is
associated with rising expenditures with time collective trade obstacles in addition to
advanced political, legal and cultural complexness.

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 Strategic alliances (Strengths) - The major strength of strategic alliances relates to the
complementary possessions upheld by local company, the more probable overseas
company will take a cooperative undertaking as an agency in order to penetrate into the
host market.
 Weaknesses- Major disadvantage of second phase of globalization relates to the phase of
incapacitating of linguistic communication as well as cultural obstacles along with
company developments, entailing contradictory purposes, arrangements, business values
as well as ethical criterions (Tessema 2016).
 Cooperative contracts (Strengths) - The usage of licensing in business will extend the
spread for dangers to materialize, related to licensor providing regulation over the
excellence of the production or the provision retailed by the overseas licensee in addition
to licensees.
 Weaknesses- In comparison to franchising, licencing in this stage shows major hazards at
the terminal of the franchise duration, wherein the franchisor is non-obliged to
reintroduce the franchise, wherein the concern as well as its good will return to the
franchisor (Harding and Venables 2016).
 Wholly-owned affiliates- One of the distinguishable benefits wherein the parent
corporation generally accepts major proportion of the gross earnings and has full
regulation over the overseas installations.
 Weaknesses- One of the major disadvantage to the use of this wholly-owned affiliate
stage in concern has been related to the disbursal of fabricating new processes or
acquiring apprehensions. However, the last stage is considered normal as referred to as
structure or purchase (Driffield, Love and Yang 2016).

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Conclusion
 Therefore, it can be concluded that all of the four phases in the stage of globalization
have significant impact on the way apprehensions and companies progress through clip.
 Business tends to draw variance from an international business which trades products and
merchandises, yet has provisions particularly in its home nation.
 Through a broad network of their branches in number of countries, global business aims
for expanding their industries along with marketing operations.


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References
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Driffield, N., Love, J.H. and Yang, Y., 2016. Reverse international knowledge transfer in the
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Harding, T. and Venables, A.J., 2016. The implications of natural resource exports for
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Nikolova, L.V., Rodionov, D.G. and Afanasyeva, N.V., 2017. Impact of globalization on
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Tessema, B.T., 2016. The Relation Ship between Import, Exports and Economic Growth in
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