1 Unit 18:GLOBAL BUSINESS ENVIRONMENT Lo 3:

Transcript:1 Unit 18:GLOBAL BUSINESS ENVIRONMENT Lo 3::
1 Unit 18:GLOBAL BUSINESS ENVIRONMENT Lo 3: evaluate how operating in a global market influences an organization’s structure, culture and functions 2 Unit 18: global business environment p3: evaluate the influences of globalization on organizational governance and leadership, structure, culture and functions. 3 THE EFFECT OF GLOBALISATION ON Organisational governance Globalisation is a leading concept which has become the main factor in the operations of businesses during the last few decades. This phenomenon affects the economy, business life, society and environment in different ways, and almost all corporations have been affected by these changes. 4 THE EFFECT OF GLOBALISATION ON Organisational governance Changes in the operations of business is mostly as a result of the following:- -Increasing competition - Rapid changing of technology - Information transfer. The issue stated above makes corporations more profit oriented instead of a long term and sustainable company. However, corporations are a vital part of society which needs to be organised properly. 5 THE EFFECT OF GLOBALISATION ON Organisational governance The competition from globalisation can be related to products and service costs and prices, target market, technological adaptation, quick response and quick production by companies, in addition to such things as quality and customer satisfaction. When a company produces with less cost and sells cheaper, it will be able to increase its market share. 6 THE EFFECT OF GLOBALISATION ON Organisational governance Customers have choices in the market and because of this they want to acquire goods and services quickly and in a more efficient way. And they are also expecting high quality at a cheap price which they are willing to pay. These expectations need a response from the company, otherwise the sales of the company will decrease and they will lose profit and market share. A company must always be ready for price competitions for product and service and for changes in customer preferences because all of these are global market requirements. 7 THE EFFECT OF GLOBALISATION ON Organisational governance The introduction of new technology is one of the main factors that lead to globalisation. This has lead to entrepreneur and internationally oriented firms exploiting new business opportunities. Internet and e-commerce procedures hold particular potential for SMEs seeking to broaden their involvement into new international markets (Wrighta & Etemad, 2001). Technology is also one of the main tools of competition and for enhancing the quality of goods and services it can also lead