Globalisation Influences: Governance, Leadership, Culture & Functions

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Added on 2023/06/15

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This report provides a comprehensive analysis of the global business environment, focusing on the key factors that drive global commerce and trade, including cost, market, environment, and competition. It explains the strategic challenges faced by organizations operating globally, using PESTLE analysis to illustrate these complexities with examples such as Deliveroo. The report also evaluates the influences of globalisation on organizational governance, leadership, structure, culture, and functions, utilizing models like McKinsey 7S and Hofstede to assess internal strategies and performance. Furthermore, it determines and articulates various routes to internationalisation that an organisation may adopt, while also addressing key barriers. The impact of digital technology on globalisation is discussed, highlighting its role in facilitating business expansion and efficiency. The report concludes with recommendations for businesses to adapt to customer preferences and leverage technology for optimal delivery and customer satisfaction.

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GLOBAL BUSINESS
ENVIRONMENT

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Table of Contents
INTRODUCTION...........................................................................................................................3
Analyse key factors of cost, market, environment and competition that drive global commerce
and trade...........................................................................................................................................3
Explain the complexity of strategic challenges faced by organisations when operating in a global
environment. ...................................................................................................................................4
Challenges faced by organisation when operating in global business environment........................6
Recommendations............................................................................................................................7
Evaluate the influences of globalisation on organisational governance and leadership, structure,
culture and functions........................................................................................................................7
Influence of ethical and sustainable globalisation on organisation functions................................10
Evaluate different ways decision making can work effectively in a global context......................11
Determine and articulate the
various routes to
internationalisation an organisation may adopt, including key barriers.......................................12
CONCLUSION .............................................................................................................................14
REFERENCES.............................................................................................................................. 15

INTRODUCTION
Globalisation is the process of spreading of products, technology, information and
interaction with peoples, organisations, governments all over the world. This helps in increasing
trade and cultural exchange as world is becoming interconnected. By globalisation biggest
companies become multinational organization with subsidiaries in another country(Aslan and
Altinoz, 2021). It helps in freely movement of goods and services. It helps the consumers is
selecting the goods internationally with wider variety of choices. It helps the companies in
decreasing the cost of manufacturing of products and it contributes to increases in standard of
living of individual. Globalisation helps in creating more wealth in the developing countries. The
aim of globalisation is the development of people throughout the world. This report focuses on
the factors of cost, market, environment and competition that drives the global commerce,
complexities of challenges faced by organisations when they are operated in global environment,
TASK
Analyse key factors of cost, market, environment and competition that drive
global commerce and trade.
Globalisation is driven by four key factors. They are cost, market, environment and
competition(Jurriëns, 2021). These factors drive global trade and commerce. These factors are as
follows:-
 Cost:- The motive of global companies is to maximise the investment. The nation
markets might not be enough to provide subsidiaries economies of scale and scope. The
aim is to get the best from the investment cost. Advertising and promotion can be a better
plan across borders as it makes awareness of making the product available where people
are going to hear about it(Ahmed and Le, 2021). Cost will lead to major decisions about
which markets, customer segments or focus on product positioning. The marketers who
opted high differentiation in products may not forget to monitor costs.
 Market:- In advanced economies customers are becoming similar in terms of education,
incomes, lifestyle, and others. Certain product marketers find ready buyers in some
countries with high purchasing power and well formulated infrastructures. Global
strategy does not mean serving the entire globe. Critical choices includes where to spend
the resources and where not. The approach is to start picking regions and then countries.

If the grouping is according to existing structure and frameworks, the data might be
readily available.
 Environment:- Global products and services continue to accelerate demand by
increasing consumer wealth and information transfer across borders, promotion about the
benefits of globalisation and technological revolution. As increase in trading regions and
technologies, global player is taking advantage(Jackson and Dunn-Jensen, 2021). New
markets are benefited from communication by leaping over economic development
stages. The small bureaucracies allow the companies to move to conquer the market,
develop new products or change directions when the situation arises.
 Competition:- Global rivals have to escalate their market elsewhere by try to sustain
advantages. And if gets weakened it could lead to erosion of market share world wide.
The companies who face competition introduce new products, upgrade and distribute
products very fast than ever before. The company that does not remain ahead of
competition risks themselves as there innovative ideas picked off by other global
marketers. The leading companies drives the globalisation process. Manufactured goods
and commodities are already in globalized state while many goods are quicken towards
globalisation.
Explain the complexity of strategic challenges faced by organisations when
operating in a global environment.
Global business impacts every business and everyone have to care about the global
economy whether or not business produce and sell goods internationally(Stevenson and Youde,
2021). PESTLE analysis helps the company in facing challenges. The PESTLE analysis of
Deliveroo company is as follows:-
 Political factors:- Online food platform encourages the UK government to loose
immigration rule to allow for curry chefs to meet the demands in the restaurant. EU laws
informed the visa decisions to tightened when UK leaves the EU. UK government states
that companies pay should link closely to minimum wage but deliveroo do not fall under
the minimum wage law and keep their prices competitive.
 Economic factors:- Britain is in negations to leave the EU and the Deliveroo is facing a
harder time to compete with the pool of workers. The weakening of pound have led the

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workers to leave the UK. For food takeaway companies, UK have leave the single market
and left the importers facing extra cost of £1.2bn(Deliveroo PESTEL Analysis, 2022).
This would give growth to average import tariffs to 22% and affect the food industry who
would have passed the costs to customers.
 Social factors:- Brexit force lot of workers to leave the UK. Deliveroo is looking for new
workforce of students to meet the demands. With the current lawsuits impacting pay, as
they are not able to joining the company as quickly as required deliveroo is facing a PR
crisis with new workforce. The company is also investigated for low safety standards
with new workers. The company is facing increased costs in meeting the safety standard
of health and training, food and road safety.
 Technological factors:- People use deliveroo to order food online has led to a growth of
21% due to innovation in smartphone technology. The company also creates a custom
app to create low maintenance workforce so that workers easily communicated via one
app. This reduces the traditional delivery service set up costs and helps the deliveroo to
become market leaders. The company is also trialling self-directed kitchens that directly
communicate with the online orders to meet the rising demands for the takeaway orders.
The company expects to increase the delivery volume by 500% by cutting the
middleman.
 Environmental factors:- Deliveroo operates in environment friendly service which
aims to reduce pollution through the emphasis is on using the fleet of bicycles and
scooters as compared to cars and other transportation conveyance. The company also
actively works with European local authorities to evolve and convey initiatives to assist
businesses and the possible impact of climate change.
 Legal factors:- Over 200 workers filed a law suite against the company arguing that
company failed to provide minimum wage, holiday pay and age discrimination. The
company costs increases as if forced to improve pay for its self employed couriers.
Deliveroo also faces a lawsuit of London based employment stating that the company is
preventing employers from joining any unions and gaining workers rights.

Challenges faced by organisation when operating in global business
environment
The trend for online food delivery is increasing so it is necessary for the business owners
to keep updated with the new trends. The challenges faced by the organisation is as follows:-
 Developing app for customers:- The customers want wide variety of food on the menu
but many businesses failed to offer it. They should understand that customer want that
food that is available easily and according to the taste and preference of the
customer(Paplekaj, 2021). They want easy access to order food from the nearby
restaurants but the deliveroo failed to provide the facility.
 Developing delivery service solution:- The orders placed by customers should be visible
to delivery person in effective manner. It also have to show the active status of delivery
person. The delivery person should also have the option to select inactive in case if they
want to remain inactive due to some reasons. The company fails to provide the solution
of placed order shown instantly and active status of delivery person not shown as a result
the delivery might gets late.
 Developing restaurant manager solution:- The restaurant manager should have easy
access to know that what customers are ordering. The manager should not have any
confusion about the food order placed by hungry customers. Due to any confusion if the
restaurant delivers the wrong order to the customers it will be harmful to the restaurant
reputation(Bolton, Goosen and Kritzinger, 2021). So there should be proper connection
between delivery person, customer and the restaurant for smooth delivery of the orders.
Impact of digital technology on globalisation
Globalisation facilitated the advancements in technology. Digital technology grows
rapidly than any innovation. Almost all the people around the world uses digital technology. It
helps the individual to get connected with anything at a one touch. The main forces that drives
globalisation is technological progress. It Stimulate the business enterprises to become global by
increasing the economies of scale(Zenkina and Zvyagintseva, 2021). Advancement in technology
cut down the cost of transportation and communication across nations and thereby assists
sourcing of raw material and other inputs globally. Globalisation also promotes by patents
technology as the business owning the patent can exploit foreign markets without competition.
Information technology has led the growth of global village. The world wide web has reduced

the obstacle of time and place in business transactions. Buyers and sellers can make transaction
at any place at any time and at any part of the globe. Earlier rich countries have the high
production technology with high wages and now innovation can be easily transferred to
developing countries where high technology production combined with low wages. Large firms
in advanced countries outsourcing labour services from developing nations like India. Digital
technology ease the international trade by speed up the customs at borders, transfer money more
efficiently and moves goods faster as innovation in flights improves. It also contributed to rising
domestic productivity levels. Digital Technology helps to produce goods efficiently with less
workers which makes the goods cheaper and allows the businesses to grow at a fast pace and
allows the produced goods to make available to the whole world(Martínez-Avella and et. al.,
2022). It also helps the world to connected and communicate and it makes the nation to become
one world economy.
Recommendations
The company should put on the menu only that food items that customers prefer
according to the needs and wants. They should try to eliminate the items that are not preferring
anyone and also add the favourite mark on the app so that regular customer mark and order it
rapidly anytime. The company should use the best technology to accept the online orders
instantly and provide the right time according to the location to it was delivering. This gave the
satisfaction to the customers about the delivery and if in case the delivery gets late as the time
provided in app goes beyond that the customer gets frustrated. The company should have
standardised delivery process so that it should provide the real time updates to the consumer and
also provide the live location of the delivery person so that customer can track their orders. And
the company should also use the rating system on the app so that customers can rate the delivery
and the organization accordingly analyses where it goes wrong.
Evaluate the influences of globalisation on organisational governance and
leadership, structure, culture and functions.
McKinsey 7S model and Hofstede model helps the business organisation to evaluate their
internal strategy, structure and styles. It benefits the company in improving the performance. The
models are as follows:-
The McKinsey 7S model:-

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The McKinsey 7S model is a tool that analyses the company's organisation design. The
aim of this model is to represent how effectiveness can be achieved in an organisation through
the use of seven elements. The seven elements are- Structure, strategy, skill, system, shared
values, style and staff. The 7S is as follows:-
 Strategy:- It refers to the business plan that allows the company to design a plan to
achieve the desired objectives. The company makes strategy in order to remain
competitive in the market. Deliveroo makes strategy in order to remain ahead of
competition and clearly communicates what the organisation objectives are.
 Structure:- It refers to the way company is organised. The chain of command and
accountability relationships defines how the operations should perform. Deliveroo uses
this to configure management and assign responsibilities to workers(Safeer and et. al.,
2021).
 Systems:- This refers to the daily procedure, decisions that make the standard
operations in the company. Deliveroo uses an organisational system in which daily tasks
are done on regular basis.
 Skills:- This refers to the talents and ability of the organisation employees which defines
the types of achievement and work the company can accomplish. Deliveroo have the
skilled employees that helps the company to attain the achievements.
 Shared values:- These are the commonly accepted standards in the company that
influences the employees and management. It refers to the acceptable behaviour in the
organisation. Deliveroo have the shared values of employees and management to behave
with others in the right manner.
 Style:- It is the approach that management takes in directing the company and how this
influence the performance, corporate culture and productivity. Deliveroo uses this
approach to lead the company in the right direction.
 Staff:- This refers to the personnel of the organisation. How large the workforce is and
how to trained them properly are the tasks connected with this element. Deliveroo uses
this element to train their employees properly and to attain the tasks.
Hofstede’s Dimensions of Culture:-

This model has become an internationally recognised standard for understanding
differences in cultural. It defines the one culture from another. The cultures are as follows:-
 Power Distance index:- This refers to the level to which how society accepts the
distance of power and authority. This culture assesses the inequalities among society
members. It also have significant impact on international business negotiations. This
index differs into high power and low power. Deliveroo uses high power in US
where less powerful people easily accept the unequal power distribution. Deliveroo
uses low power in UK in which distance societies attempt to equalise the distribution
of power and demand justification for inequality of power.
 Individualism Vs Collectivism:- Individual people like to work alone and desires
credit for their work. People in this culture want to work independent and they set
independent goals. On the other hand collectivism refers to the collectivistic culture
of society where people prefer to work together and encourage interdependent
achievement. They opt to work in groups instead of working alone. Deliveroo
maintains a mix of both to promote the employee performance as well as business
growth. And in US the company uses Individualism approach and want to work
alone(Das and et. al., 2021).
 Masculinity Vs Femininity:- This refers to the distribution of role of men and
women. Masculinity refer to traits related with self assured culture in society. Men
focus on personal project and material success in masculine culture. Feminine
associated with nurture culture in society. They focus on the relationships and quality
of life. Deliveroo does not differentiated in gender and all roles are designed equally
but the company in US uses the masculinity as they prefer male to work and not the
females.
 Uncertainty avoidance index:- This describes how people from different countries
deals with indeterminate situations. People in high uncertainty avoidance society
follows the rules and regulation thoroughly to avoid unwanted moments. On the other
hand people with low avoidance society are comfortable with unwanted moments.
They try to reduce the unnecessary rules. These people are relaxed and open minded.
Deliveroo uses the low avoidance as the organisation is open to change and in US the
company uses High avoidance to avoid the risks.

 Long Vs Short term orientation:- The people in long term orientation focused on
the future and considers it to be more precious than the past. They spend more time in
achieving long term goals. People in the short term focuses on the present as well as
past. They enjoys the current situation irrespective of the future goals. Deliveroo uses
the long term orientation to focus on future and development of company and the
company in US uses the short term approach to execute the daily operations.
 Indulgence Vs Restraint:- It refers to the society where high percentage of people
admit that they are directing a happy life. In this society people enjoys life freely and
they have fun and positive attitude. On the other hand restraint refers to the society
where small proportion of people announce that they are leading a happy life. They
regulate their life traditionally and have negative attitude. Deliveroo uses the mix of
both the aspects and in US the company uses indulgence and want to enjoy the life
freely.
Influence of ethical and sustainable globalisation on organisation functions.
Ethical and sustainability factors are important when operating on global markets. The
organisation needs high regulatory standards to operate in developed countries. The factors that
businesses need to consider while operating in international markets are:-
 Environmental and regulatory considerations:- Environment considerations are
important for operating internationally. The companies choose to manufacture and
conducts business internationally to pursuit the lenient environment standards. Doing
business globally is not an excuse to spread the pollution and not taking care of
environment standards. The company have to use the same regulations that are abiding in
the origin country(He and et. al., 2021).
 Social and cultural impacts:- Social and cultural impacts raises when operating in a
global environment. Understanding the social and cultural norms helps to serve the
business. If the company adopts these norms they are in profitable position as these are
easily accepted by local communities.
 Cultural marketing considerations:- To run a business on global scale is not always
enough as the companies have change their products/ services and menu according to the
culture. Marketing messages should also shift to cultural norms. This is the reason many

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large advertising companies opens offices around the world. The method to build a
business across the world is to work with the cultures of different countries.
 Safe working conditions:- Wages are important but providing workers with safe
working condition is also important. Each and every worker wants to conduct their daily
tasks in a safe place. Operating in international market doesn't mean that company not
taking care of safe working place. The company should provide the workers every safety
measures in a consistent manner across the globe.
Evaluate different ways decision making can work effectively in a global
context.
The different ways in which decision can work effectively in global context are as
follows:-
 Leadership styles:- The leaders often have combination of qualities. They should have
creativity, motivation and vision. The successful leaders adapts the need of different
situations and modifies the decisions accordingly. The managers uses the leadership to
guide the members and improve the organisation decision making. This helps the
organisation in making decisions effective.
 Reduce international trade barriers:- Government has reduced the barriers to
international trade and most countries accepted the change. The managers have to decide
whether to enter a certain foreign market or not. Natural barriers to trade have greatly
decreased since borders are now easier to cross when there are free trade agreements
between countries(Назаров, 2021). This makes informed decision making and helps the
organisations to make their decisions accordingly.
 Diversification:- The increase in decision risk and competition forced the firm to
diversify their operations to grow business and market size. International diversification
helps the businesses to utilise the firm strategic capability, benefit from economies from
scale and reduction of production costs through relocate production to countries with low
labour cost. These helps the organisation to take decisions accordingly or modify it
according to the situation.

Determine and articulate the
various routes to
internationalisation an organisation may adopt, including key barriers.
There are many ways in which an organisation can enter into international markets. The
following are the strategies that are available to the company
 Licensing:- It is an arrangement where a firm transfers the right to use of a product or
service to other firm. The licensee is required to pay fee in order to use the rights. It
requires a little investment and provides high return on investment. A major disadvantage
is that company dependence on licensee to produce goods and paid royalty according to
percentage on sale volume. If the company does not produce revenue then the royalty
from sale may suffer.
 Franchising:- It is similar to licensing in which property rights are sold to franchisee.
The rulers for how the franchisee operates the business is very strict as the processes
must be followed or any specific component which franchiser used should also be used
by franchisee. The barriers in this is that the owner does not have control on the business
as it should be followed according to the prescribed guidelines.
 Exporting:- It is the direct sale of goods and services in another country. It is the best
way to enter into foreign market. This method did not involve investment in the foreign
country as the goods are produced in the origin country and then dispatched to another
country for sale. If the transportation charges increases it is not possible for exporters to
export goods. This method will only possible if the transportation charges are normal.
 Joint venture:- It is a jointly owned business consisting of two business. The both
companies agree to work jointly in specific market and creates a new company to
undertake the older one. Profits and losses are shared equally. This allows the benefit of
local knowledge of foreign market and allows to share costs. The main barriers is conflict
between partners(Woodward, 2021). This may results in end of the joint venture. Mutual
conversation is the solution if conflict arises.
 Foreign direct investment:- When a company directly invest in foreign market is known
as foreign direct investment. This requires a lot of capital to cover the costs of premises,
technology, and many more. It can be done by establishing a new venture or by acquiring

an existing organisation. Lack of decision making authority with the governments is the
barriers in this route.

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CONCLUSION
From the above report it has been concluded that globalisation has contributed largely in
developing nations. It provides opportunities for higher incomes and better living standards. It
has been analysed that which factors drive global markets and what are the challenges faced by
organisation. PESTLE analysis has been applied for determining the challenges faced by
companies in global market and recommendations how to overcome the challenges. This report
also focuses on the impact of digital technology on globalisation, What is the influence of
globalisation on organisation governance and leadership and influence of ethical and sustainable
globalisation on functions of organisation. Moreover this report also focuses on different ways
how decision making can work effectively and the routes to going global with key barriers.

REFERENCES
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