Impact of Globalisation on Business Operations Assignment Sample

Introduction

The globalisation refers to an interchange of different elements among various communities, which is not a recent development, but a continuing process. What makes the modern-day trend of globalisation distinctive and distinguished from the earlier ones is the rapid rise in the frequency and the intensity of such interchanges (Agwu, 2020). The present report will discuss the concept of globalisation and the key factors that drive the globalisation process. It will further identify the strategic challenges and benefit of the key drivers in creating opportunities and threats for RCS Logistics in operating business in the global environment. The company operates a storage and transport business and has years of experience in this sector as a senior body in operations, business development, management and sales. The report will then understand globalisation's influence on various organisational aspects of RCS Logistics and develop strategies with key barriers and their mitigation approaches.

1. Key Drivers of Globalisation

1.1 Key factors driving global commerce and trade

1.1.1 Cost

Various factors such as growth, location and demographics vary among countries, and the cost of production factors inevitably vary in accordance. These gaps, as per Goharian (2019), boost trade and investment abroad and thus help to drive foreign trade. An accurate and realistic evaluation of global opportunities and costs would possibly lead to difficult decisions on which markets, consumer groups and product positioning are focused on and which are bypassed and where solutions are acceptable.

1.1.2 Market

Organisations must collaborate to be able to operate on the international market and adapt their organisations following their respective market environments. In the advanced economies customers in terms of education, jobs, behaviours, expectations, and the usage of leisure time is becoming more and more identical. Marketing teams of certain companies find suitable customers in nations that have high-capacity and well-developed infrastructure.

1.1.3 Environment

Expanding and exploring new markets is encouraged by global trade expansion, though it does not ensure their success. According to Picincu (2018), various environmental factors will make or break a business, including national legal practises, politics, social systems and technologies. The international system, however, cannot be controlled by businesses which plan to go global. Therefore the host country and its markets must be researched before a company extend its business.

1.1.4 Competition

Competition in global trade and commerce is the shared situation of merchants or industrialists who are seeking to draw consumers with more favourable price rates, improved sales conditions or supply of better quality (Adiguzel, 2020). The uprising concept of cost minimisation and risk reduction, intending to survive in a competitive environment, has led to the rapid growth of the internationalisation process.

1.2 Benefits and challenges created by key factors on global business

2. Strategic Complexities of Business Operation in the Global Environment

2.1 Complexities and challenges of strategies for global business

When challenges to trade across national boundaries are eliminated, a business environment becomes global. It implies that companies and countries become interdependent, making virtually non-existent national boundaries. In this process of globalisation, as per Bowen, Baker and Powell (2015), an organisation might face complexities in its globalisation strategy from political, economic, social, technological, legal and environmental perspectives. While long-term managerial goals of RCS might face vagueness of future political stability, policies and tax, the same level of uncertainty is applied with the economic challenges. Socio-cultural diversity is another point of complex approach that RCS would face while expanding the business in other regions with different consumer preferences and behaviours. Alongside, RCS might face international trade laws as a challenge as they are different in different economies and make business and marketing plans accordingly. Environmental protection, energy consumption and waste disposal create challenges in business strategies as well. Apart from that, different countries might adopt technological innovations differently, including access to the internet, adaptation to advanced infrastructure etc.

Competitive environment and markets have turned into global, supported by technical development, and strengthened networks of transportation and among others, regional trade agreements (Oghenejode, 2017). Companies and nations are thus interdependent and interrelated, creating a dynamic structure. There can be no simple evaluation, interpretation, influencing, and estimation of the behaviour of a complex system. This makes it impossible to make strategic decisions when the environment is turbulent and unpredictable.

2.2 Strategic challenges related to risk, diversification strategy and supply chain flow

2.2.1 Risk related challenges

A business is ought to face a bunch of risks in any stage of operation, and it must be ready for confronting and mitigating such risks. Naturally, a complicated process of expanding and operating the business in the global market possesses numerous transparent and vague risks in the strategy that is being implemented for expansion. One of the most important strategic risks for RCS is to identify the exact leadership style for the business in a certain regional market, as well as finding the most effective ways for public relation there.

2.2.2 Diversification related challenges

Diversification is what companies consider for fresh approaches of growth, and it demands them to diversify into various fields and pursuits. However, such a critical strategy throws challenges in the way of smooth business operation of a company. One such challenge of overextension of resources occurs when companies do not approach diversification with caution, and many operational units might face a lack of resources (Bowen, Baker and Powell, 2015). RCS would need infrastructure, training of workers and travel between distinct fields for diversification, which might lead to the risk of increasing the overall organisational cost. Besides, wide and sudden diversification of small businesses with specific goals might lead to losing or lessening their focus, and their innovative attributes might deem. Furthermore, if RCS wants to expand into an unrelated area of business, will fall apart if a proper and adequate set-up is not done, which might be completely different from the ongoing business.

2.2.3 Supply chain flow related challenges

The operation of suppliers and supply chains could also be a complicated method when it comes to obtaining goods and services internationally. Sadly, the scope and complexity of supply chains increase the likelihood of dealing with suppliers in business practises who are illegal and unethical. Another big problem is that each organisation in the chain has conflicting strategic priorities and criteria. For instance, a raw material retailer, such as RCS with its coal section, would like a production firm to routinely purchase large quantities of raw materials (Wu and Chen, 2018). The retailer, on the other hand, would still like its raw product at the best possible price.

3. Influence of Global Market Operation on Organisational Culture, Structure and Functions

3.1 Influence of globalisation on organisational governance, leadership, structure and culture

In the international business market, the term globalisation is a regulating and developing factor. It has an exquisite impact on all aspects of the organisation. It is an effective concept which expands the globally business outcomes in the organisation. The globalisation has a huge impact on organisational governance, leadership, structure, culture and functions. In an organisational operating program, globalisation has a deep influence on the organisational structure. Globalisation reflects the potent pressure on the aspect of governance. In the changing globalised platform, the board members have to be changed the governance policies (Lewis, Boston and Peterson, 2017). Leadership is also influenced by globalisation. Due to the globalisation leaders also changes their thoughts and perspectives towards the business expansion.

The governance policies of the leaders are changing due to the demand of the international market and its choices. It can help defenestrate all kind of international business obstacles. Globalisation also affects organisational culture. The concept of globalisation reflects the adjustment of the cross-cultural atmosphere. It can change the organisational behaviour and ethics. In the global business platform, the concepts of globalisation provoke all the organisations to enter a new cultural sphere (Farooq, Hao and Liu, 2019). Globalisation affects the organisational structure and its management. Likewise, RCS organisation also affected through the concept of globalisation on its several aspects mentioned above.

3.1.1 Globalisation theories and models relating to organisational structure and culture

McKinsey 7S Model

This model has introduced the interconnection between the six elements which are categorized by "Soft Ss" and "Hard Ss". Structure, Strategy and system consist of "Hard Ss". And skills, styles, staff consist of "Soft Ss". These elements have connected somehow to each other respectively.

Figure: McKinsey 7S Model

Source: (Lewis, Boston and Peterson, 2017)

In the context of the globalisation, an organisation can use this model to build an overall prominent structure. A proper strategy can develop an organisation and gives it a lot of competitive advantages (Roy, 2020). RCS organisation has interested to enlarge its services in a wide way. The proper strategy helps to achieve the key to success in business expansion. RCS organisation has a splendid structure and organisational system. Their services are in 365 and 24/7 in a year and management controlled by the experienced team. They always try to reflect the best treatment towards their customers and give them the finest fit solution. RCS provides the best training to their employees to gives them innovative ideas to regulate any kind of critical service. But, RCS organisation has to gain some more strategic implementations. They have to do more advertisement through an online platform for their services. McKinsey 7S Model provides the interconnection of the six elements which helps to build the concept of the globalisation. Each element represents helps build an expansion in the international level (Cuervo?Cazurra, Doz and Gaur, 2020). In the international level, several organisations used this theory in the context of the globalisation and have got a great success. Likewise, RCS organisation if follow this model with concern then it will more helpful for the organisation.

Hofstede's Cultural Dimension

Figure: Hofstede's Cultural Dimension

Source: (Shamne, Milovanova and Malushko, 2019)

The theory of the Hofstede's Cultural Dimension reflects the understanding the cultural differences globally. In this model, there are six elements which help in identifying the different cultural atmosphere. These are:

1. Power distance Index

In the international global market, the organisations have to use this model to understand the difference between the several cultural aspects. In the power distance index, there are two types of PDI: high PDI and low PDI. This section helps to understand the cultural demand about equal and unequal power distribution towards the society members. By using this concept RCS organisation understand the difference the acceptance of the services towards the society.

2. Individualism versus collectivism

Individualism versus collectivism helps the organisation to understand the expansion of its business internationally (Shaqrah, 2018). In the international level which country has the concept of the individualism that means weak interpersonal connections among peoples, the RCS organisation will not promote their services there.

3. Masculinity versus Femininity

The Masculinity and Femininity reflect the understanding of differences of thoughts in the masculine and feminine culture. As an example, Japan is the MAS society where female candidates have not enough advantages to growing themselves in a workplace. By comparison¸ Sweden is a more feminine society where female candidates have equal advantages in an organisation (Shaqrah, 2018). In the context of the globalisation, RCS management has to select the country for international business expansion where male and female both prioritised in the workplace.

4. Uncertainty Avoidance Index

In the context of the globalisation, the association of the uncertain avoidance concept has released the characteristics of the peoples. High UAI reflects the conservative, structured, many social conventions and expressive minded people (Shamne, Milovanova and Malushko, 2019). Low UAI reflects the inclusive, innovative but less sense of urgency minded people. For the multinational expansion of RCS organisation, it is necessary to understand the proper country to execute their programs. That will give them a good and positive response from the people. However, RCS organisation has a great understanding and aims among all the employees in every logistics.

5. Long Versus short Term orientation

. In the concept of the long versus short term the RCS, the organisation has well maintained the long term implementation process with expertise seniors and management. This concept reflects the time period of business development based on the countries.

6. Indulgence versus Restraint

The last one is indulgence and Restraint that is helping to identify the IVR score among the several countries. As an example, the IVR score of Russia is low, that means here people are less interested to busy themselves all-time in the workplace, they want sometimes a leisure time. For the future multinational expansion, RCS organisation has put a glance on this matter then it will beneficial for them. In the concept of the globalisation, these theories are helpful to execute the sense among the international companies.

3.2 Influence of ethical and sustainable globalisation on organisational function

In the functional aspect of the organisation, the ethics of the globalisation has affected severally. The ethics of globalisation can able to emerge the organisational services in a wide range. Globalisation ethics are changes in the organisation functional procedure. Business enlargement in multinational level, adopt the cross-cultural atmosphere, portable working criteria for employees all these are affected through the concept of the globalisation. Globalisation affects the sustainability and development of an organisation (Lewis, Boston and Peterson, 2017). Likewise, the RCS organisation has given a virtuous impact for the globalisation. The organisation has made a wider range of market at the international level. In the multinational level, the organisation can enlarge its business in several countries and make it moiré stronger in the platform of the global business. The effect of the globalisation also reduces global business risks. The organisation can learn the global market and its choices. According to the demand, the organisation expands its business worldwide. It also helps the organisation to take a potent decision-making process about business implementation (Farooq, Hao and Liu, 2019). The management function of RCS has received a clear scenario in the worldwide for the adopted concept of the globalisation.

4. Influence of Globalisation on Organisational Decision Making and Strategy

4.1 Different way of the effectiveness of decision-making

In the global business market there several multinational organisations who have continuously updated the operational program due to the global market. According to the global business market, the organisation must be changed their decision. Globalisation helps to changes the mindset of the management of the organisation about business expansion. The decision-making process of the managers is a vital role in an organisation. In the global market to lead the place of the best performance the decision have to perfect for implementation. The concept of the globalisation provokes the organisation to promote its business at the international level. For the wide level of experience makes the decision more strong and relevant to the global market. There is nothing confusion and several involvements occur. The global concept helps the managers to choose the alternative best decision for the competitive market (Roy, 2020). Thus, in the gigantic worldwide business platform, the concept of globalisation helps to construct a potent decision-making mindset.

4.2 Different routes of internationalisation to adopt and critically analyse key barriers and their mitigation process in operating business internationally

A proper strategy has a valuable role in every organisation's business expansion. An organisation can produce a proper management strategy with knowledge of the global market. Expand the business internationally it is important for the organisation to understand the ethics of the globalisation. Globalisation can mix up the business strategy and international strategy which reflect global strategic management. Following the global strategic plan, the organisation emerge its business in multinational level (Cuervo?Cazurra, Doz and Gaur, 2020). Globalisation requires more global business strategic concept which rectifies the barriers and risk factors in the way of business international level. The management can define the international market and its demand. Based on this market choice the organisations build their strategic promotion. Globalisation also reduces the financial risk of international platforms. RCS organisation has to follow these requirements with the concept of the globalisation which beneficial fact for it.

Conclusion and Recommendations

Globalisation, as described in the report, is a far-reaching phenomenon with its mark left, though in differing degrees, in all walks of contemporary human lives. In terms of business operation, the transition toward a more interdependent and interconnected global economy provides greater prospects for international markets. Such globalisation, where trade barriers decline and consumers' tastes evolve, will take place in the markets. As RCS is considering entering the global business of transport and logistics, it must follow some key recommendations below:

• The company must concentrate on how the key drivers of globalisation are influencing in the business and marketing plan for each target market.
• RCS, with a good collaboration among employees, needs accurate strategic leadership to retain the success in foreign markets as well.
• With a proper understanding of the organisational structure, culture and function according to targeted country and strategically following the business plan, it will gain knowledge on potential consumers and provide most effective logistic and transport solution to them.
• While entering the global market, RCS needs to focus on the risks, challenges and barriers and implement the recommended mitigation approaches for effective operation.

References

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