The Responsibilities Of Organizations Operating Globally

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02 Nov 2017

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Unit Number and Title: 5.2 Business Organisation in a Global Context

Name: Mst Fahima Khatun

Student ID: 2008

Table of Contents

Introduction:

The term globalization describes the broader view of products, ideas, technologies, cultures throughout the geographical area of various nations. Globalization in business organization implies the worldwide movement of economic and financial activities by expanding business activities. This is the process of communicating with all over the places of world market and production (Manfred, 2003).

However because of the welfare of globalization, the barriers of communication with long distance and as well as the trade obligations has been removed. For this reason national boundary does not hamper the business activities. People can easily reach their products and services in global market places. Because of this process people of one corner of the world also can be very knowledgeable and well aware of the product or activities of other corner ( Charles, 2007).

Makro is one of the leading UK based superstore. It provides customers the highest quality products from 30 different locations throughout the England and also takes online orders. As the assistant of the CEO of Makro, I think this stage we need to move our business in global context. Moreover in this age of globalization our company will get privilege as it serves quality products according to the desire of customers. In this report we will clarify various strategies to cope with the global context as we are moving our business national to global entity.

Section 1:

The key differences between global business operations

Analysis of the key differences between organisations working in different sectors, industries and contexts:

To evaluate the differences between global business operations, we must need to clarify the sectors, ownership pattern and also the global context of business organizations. According to the legal ownership level organizations can be partnership, sole proprietorship, company. Sole proprietorship is owned and controlled by single person who takes all profit or loss(Robbins, 2002). Partnership is owned by twoor more persons.On the other side company is the broadest sector of business. Structure of a company is complex than others. It can be public limited and international equivalent.

Organizations in different industries can be demonstrated as private, public and not for profit organizations.Private organizations are for the welfare of people whereas private industries make large profits. Not for profit organizations basically build up awareness and enhance knowledge.

If we evaluate organizations globally we can differentiate them as international, national and local. International organizations spread out globally all over the world, whereas national company makes business around several territories inside the country. However local organizations fulfill the demand of particular region.

Assessment of the responsibilities of organizations operating globally:

Giant global organizations or multinational corporations always try to accomplish their responsibilities towards various parties. Globalization makes it lot easier to be connected with all the parties to shorten the gap (Jagdish, 2004). The responsibilities are given below.

Responsibilities to shareholders: Shareholders are the main source of the money to start any business. Thus when a company expands its business globally, its unavoidable responsibility is to focus on the way the shareholders wants to control the company and creates supreme value.

Responsibilities to employees: As the employees are the operator of the business stream, thus the organization need to confirm proper care and satisfaction of its employees. If the employees don’t get good working environment, proper motivation, security and suitable support when they need, they will not give concentration in their work. For example in good multinational corporations like Apple, Samsung, MacDonald’s etc. always focus on employees need.

Responsibilities to customers: customers are the ultimate decider of a company’s success. Because of the globalization business people more emphasize on customer driven marketing policy. For example as global economy is facing recession recent years, Wal-Mart focuses on the consumer’s economic view and grab most of the customers.

Responsibilities to environment: Environmental situation of current world is threatening day by day. In these circumstances this is one of the prime responsibilities of any business organization to protect the environment. For this many industries use environment friendly machineries, thus environment doesn’t pollute.

Ethical responsibilities: In this era of globalization, any kind unethical scandals spread out quickly. Thus companies must need to ensure those ethical issues like not to give defected products, not to take unethical price etc.

Responsibilities to other stakeholders: All the stakeholders are equally important for companies which operate globally. Organizations also calculate the expectations of other stakeholders like suppliers, resellers, manufacturers etc.

1.3. Evaluation of the strategies employed by organizations operating globally:

Enhancement of globalization proves the rapid growth and development of human civilization. It is only possible because of the accurate strategies followed by various organizations. The evaluation of those strategies is following.

Human resources policy:Global business organizations must need to make sure strong human resource management policies. It improvises communication skills with prospective customers. For example Microsoft builds effective human resource policies.

Ethics policy: To achieve customers satisfaction, organizations obviously maintain ethical factors thus their customer never cheated.

Collection of personal information: personal information describes about customers preferences about product. That’s why after certain period Adidas makes survey to identify changing personal choices of customers.

Reliable import and export processes: Consistent export and import policies remove trade barriers and facilitate organization to connect with other countries.

Using modern technologies: For the welfare of exclusive modern technologies many organization advanced in their way of development. For example Samsung gives customers newer application and quality full use of software.

Section 2:

2.1 The performance of a national economy impacts on the activities of business organizations:

The advancement of globalization makes continuous progress in every field. People are now living very much closer in this global village (Manfred, 2003). But the overall contribution and performance of national economy impacts on the activities of business organization. The total size of the population and its labor market determine how well the organization will be executed. The cost of labor unit determines the price of the product. For this reason the production cost and the price of the products of USA is high. While the production cost and the price of the products of China is low.

Education of an economy prescribes the ability of organizations of a country. Thus the growth rate of an educated country is better than uneducated one. When organizations of a country get more knowledge workers they can take effective strategies and decisions to stay in the global market (Needle, 2004).

One of the major external factors which impact the business activities is the growth rate of the economy. When the growth rate of an economy is high then organizations can make good profit and build strong sustainable relationship with their profitable customers. When per head GDP and GNP increases then purchasing ability of customers also increases (Soskice, 2001). Proper public financing and availability of credit control the flow of money in inverse situation. It operates the smooth activities of business. High tax rate also hampers the productivity of an organization. So the growth related economic factors which can make difference in the business organizations are:

Gross National Product (GNP)

Balance of payments

Inflation rates

Government borrowing

Trade balance

Public finances

Taxation

National debt

Availability of credit etc.

As consumers are the heart of any business, their confidence and satisfaction about products vary the organizational performance. If consumers are satisfied with the product, their involvement will increase which happened in Makro, thus it is now starting business globally. Investing pattern for organizations vary the productivity rate. Besides all these government is the central policy maker of the way organizations will execute. So if the government gives any objection to produce any product that will be very costly for that organization.

2.2 Explanation of the measures taken by governments to influence the activities of business organizations:

Business organizations are the fundamental equipment for the development of an economy. That’s why government takes some steps to encourage the business persons. The initiatives of government are following.

Fiscal policies:Government stabilized policies to set the tax rate or government purchasing tools within a given period of time are called fiscal policies. Sometimes government decreases the tax rate or purchase products by giving fair price to encourage business organizations.

Monetary policies: This policy controls the interest rates money supply in the country. It is basically controlled by the central bank of a country. When inflation rate is high or low, then government takes this strategy to confirm sufficient follow of money.

Regional policies: Government takes initiatives to support economically backward region to boost up the activities of business organizations.

Competition policies: Sometimes government creates competition among companies to give better service and announce reward like best brand of the year, quality product of the season etc.

Apprenticeship programs:To make the business persons more knowledgeable and dexterous government provides various teaching centers. People can easily build up their leadership skills and learn how to manage business organizations efficiently. Thus government encourages business minded people.

Section 3

The impact of global factors on business organizations:

3.1 Explanation of the implications of global integration on business organizations:

As the standard of living is changing dramatically, demand for quality products and services increasing day by day.Well-developed integration of globalization helps to obtain the zenith of success to the organizations. This integration remarkably facilitates international and broader perspective of business. Trading blocs remove the international barriers of business organizations. To integrate the concept of globalization skills of employees must need to develop.These skills can develop the potentiality of an organization as well as make it strong competitor in the world market (Joshi, 2009). Organizational culture need to be unique as it is operating with lots of countries. New cultural activities may slow down the speed of the company.

Severalauthentic organizations like World Bank, IMF, G20, OPEC etc.for the betterment of global organizations. They give financial assistance as well as consultancy to improve the quality of service. Business strategies and infrastructure need to be useful for geographical condition (Sloman, 2005). So we can say that professional development, organizational strategies, culture, and supportive international organizationsare the basis of global integration.

3.2 Assessment of the effect of international trade on domestic products and services:

International trade has both positive and negative effect on domestic product. Positive aspects are following.

With the widen spread of international market, domestic product and service can identify their lacking through comparing.

It encourages the domestic producers to give better service.

International trade makes more competition in the market thus domestic producers also keep going with exclusive service.

It lessens the pressure of local production rate.

Domestic investors invest more to develop newer innovation and creative production.

The negative aspects of globalization are given below.

Demand of domestic products may decrease.

Foreign product may hold the market share and dominant the market by dumping.

Interdependence for a product increases which deprive new innovation.

Structure of domestic products faces difficulties to cope with foreign products especially if the country is not developed.

It discourages investment as new investors face much difficulty to stay in the competition.

3.3 Review of the impact of the global economy on businesses:

Rapid growth of global organizations connects people very close all over the world. As the production method and communication system also has changed dramatically. Impact of global economy on business is enormous. However as a future global competitive organization, our company Makro also needs to analyze those global economic factors which are following.

Globalization increases the competition among business organizations. The complex nature of the global economy is now everyone tries to give better service to customers to get position in customers mind. Organizations try to give something different to the customers, thus choice and demand of customers increasing day by day (Wilminson, 2004). Customers now justify hundreds of brands for a single product.

In this global market, organizations invent new products and create demand for those products. Faster growth of the economy implies that virtual organizations also can make huge profit through outsourcing. International trade helps organizations to build strong network with all profitable customers. It provides customers instant solution of their product (Dicken, 2003).

3.4 Assessment of how ICT has facilitated globalization:

Information Communication Technology (ICT) builds strong media to communicate with customers. Use of modern technology facilitate the globalization and also make convenience for both employees and managers. It identifies the low cost labor forces and connected them by spreading organizational activities. These modern technologies help to control workforces from far distance (Schreuder, 2002). Advancement of internet and development of software and computer make this world more globalized. Now it is very easy to being connected with people. Information technologies assist us to store, manipulate and receive vital information. It develops strong communication with all the parties related to business.

For example: email, facebook, video conferencing, fax, online survey, skype etc. make the procedure of globalization very perfect. Those information communication technologies create bigger prospect for present business organizations. It also emerge the globalization.

Section 4

A review of the current issues impacting on business activities:

4.1Global environment in UK:

UK is one of the leading market controllers in global entity. As a rising business person in this country my perception is, the global environment of UK is very much friendly towards the business organizations. The domestic market is quite constructive and well organized. Though there is strong competition but one brand doesn’t hamper the activities of others. A research shows that immigrant persons of this country are very much interested for entering domestic market. As globalization has increased the pace of business, thus the policies of domestic market and a well as global market changed significantly (Jagdish, 2004).

Domestic markets always try to fulfill the local demand of the country. Thus it creates superior customer value and provides the best quality product to the customers. Invention of newer technologies facilitates the all global business especially business of UK based companies. Because this country always tries to invent the utmost demanded technologies. Government also gives proper support to establish international trade by maintaining business friendly monetary and fiscal policies (Weatherston, 2004). They also provide highly skilled employees by giving extensive training. Thus the companies of UK are very much ahead in the competition of global market.

Although there was massive economic recession throughout the world, proper assistance from the government as well as the support of international organizations (WB, IMF, G-20 etc.) made effective policies and support free trade to get rid of that situation. Various government incentives and trade blocs encourage marketers to expand market globally.

4.2 Proposed strategies to address issues affecting business activities in UK:

Modern technologies and strategic management planners make successful business activities in England. As a top level manager I can suggest that if the environmental situation will get sustainable to the marketers, UK will be undefeatable market leader in global context. The strategies which are affecting business activities in this country are following.

Innovation of newer technologies builds mass communication among all class of people. It decreases the difficulties of British people as well other nation’s people. They focus on latest technologies and make demand for new products. For example Apple provides updated technologies to change the taste of customers.

It creates and develops new markets for business and burnishes them properly in order to fulfil customer’s preferences.

Organizations collect personal information about customers to understand the needs and demand of customers. For example Nike collects information about customers and change their style and colour of products.

Business structures also changing day by day. Shorter versions of businesses expand their activities. For example our company Makro is will experience domestic pattern to international pattern.

Conclusion:

The current world is swiftly moving from national entity to global era as trade barriers are decreasing day by day. Because of globalization countries experiencing low labor cost will get competitive advantage. The employment rate and Gross Domestic Production rate also increasing (Smith, 2007). Foreign Direct Investment also growing quickly. In this circumstances this the perfect time for our business organization to enter in the global market. There are mere possibilities to face inverse reaction of customers as we are providing most essential equipment and food products, though we need to be aware to give supreme customer value. For this reason globalization makes world trade very much competitive.



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