Applying Contextual Factors
In the current business environment, all of people and companies are aware about the concept of the globalisation. The concept of the globalisation is related to free movement of the goods and service between the two countries. The term globalisation is the result of the free movement of goods and service and the free economic in the world. Globalisation is a process of interaction between the people and companies with the help of the business process.
Globalisation is a significant aspect that has become a concerning aspect in the business since the last 2 decades (Scherer& Palazzo, 2011). It affects the economic condition, business cycle and society and development. It also affects the business structure of the company and business strategy.
In the current business environment, it can be seen that there is huge influences globalisation on the business. In the same concern, this report explains contextual factors (globalisation) and how it affects business structures and strategy of the company. This report also provides the recommendations for well justified and feasible business recommendations based on the analysis conducted.
Effect of globalisation on the business structure and strategy
The term business structure demonstrates the feature of the organisational that become different one organisation from another organisation. The nature of the business is a concerning aspect in the selection of the business structure (McMillan &Rodrik, 2011).
At the same time, the business structure of the organisation can be influenced by the various aspect of the globalisation. In the business scenario, the organisational structure is concerning aspect when the company is dealing at the international level. Typically globalisation leads to competition in the business.
Due to the globalisation, it has been observing that competition can be seen in the context of the price, design and quality, target market and technology. At the same time, it can also be seen that if a company is able to provide the goods and services at the minimum cost then it is able to get the market share (Cavusgil et al., 2014).
It is because a customer always wants to the product at the minimum price which advantage can get the company that provides product at the less cost. It helps the company to increase the market share and customer base.
Due to the application of the globalisation, the customers have a large choice of the product range. This affects organisation strategy in the context of achieving the organisational goals and objective. It also affects the pricing strategy of the organisation in the reference to the high quality and low price (Voegtlin et al., 2012).
In order to get the market share companies have to prepare the effective marketing strategy that to satisfy the customers in the context of the providing the high quality at the minimum price. Hence, it can be said the globalisation affect the structure and pricing strategy of the company.
In the same concern of this, it can be said that globalisation also affects the business structure and strategy. Exchange of the technology is one of the main factors under the globalisation that affect organisational operation. Due to the globalisation in the business environment companies have to use high standard technologies to maintain standards of the organisation.
In the current business scenario, the use of the technology is a significant aspect that affects the business structure and strategy. If a company deals at the international level then the company has to maintain the standard of the goods and service (Crane &Matten, 2016). For this, the company has to prepare an effective strategy.
The term globalisation also contains the aspect of the theory of the political realism. This theory allows the companies mitigate the limitation of the political boundaries.
The concept of the globalisation allows the companies to freely deal in the different political boundaries. In the different political boundaries, it can be seen that companies have to adopt the different organisational structure according to the requirement.
Hence, it can be said the aspect of the globalisation influences the organisational structure. It is also found that globalisation has helped to provide the opportunity of employment for the various people throughout the globe.
When a business goes for globalisation it offers the opportunity of employment to the people. People get a new chance to work with the businesses that outsource their business practices. As businesses go out for globalisation the resources are also increased and it creates the opportunity for people to grow (Kose et al., 2012).
People get the chances to move abroad and enjoy the other lucrative benefits. This also has an effect on the immigration rates as it also gets increased. Thus as the employment increases, it creates an effect on the economy level of the nation. People get the chance to grow socially as well as economically.
Globalisation also helps to increase the foreign investment and this in return helps the country to grow economically more (Ueda, 2012). As it is very beneficial for the country, every country must go for globalisation. The impact of globalisation can also be seen on the imports of the country which tends to be increased now.
If the business goes globally they get the chance to explore the wide availability of resources that are presented in other markets. Also, the companies get the opportunity to have access to the cheap labor which is available in the market (Pieterse, 2015).
This is called as outsourcing. The labor obtained for cheap costs also contributes to cheaper costs for the company which in return helps to increase the profits for the company. Economies of scale: globalisation also helps the businesses to attain or gain economies of scale by selling across various countries. It also helps the companies to become competitive.
The customers got the chance to avail a variety of new products which were earlier limited. This helps the customers to get new products which are having the advanced features and are of the latest technology. In the same concern of this, it is also determined thatwith companies going globally it offers them the option of having a wide skilled labor with specialised skills, abilities, and knowledge (Welch et al., 2011).
The business can have employees from various places irrespective of the age, gender, religion, race, etc. Moreover, globalisation also creates an impact on the culture of the business. People learn new work culture, new practices, new way of doing the work, new customs, language, etc. Globalisation has also let to have an effect on the prices of the company.
As business goes global they face competition which keeps on increasing. This forces the companies to lower their prices for the products. On the other hand, it reduces the ability to sustain the social welfare (Birkinshaw et al., 2011).
From the above analysis, it is found that companies have influences on the business structure and strategy. It affects the ways of the company to do business in the market. Therefore, it can be recommended to the company that it effectively analyse the international business before doing trade. A company should analyse the business environment of a company in the different ways such as political, legal, economic, technology and social etc (Scherer& Palazzo, 2011).
At the same time, it can also be recommended the companies to develop and implement the effective strategy for facing the challenges of the globalisation. The company can develop the strategy on the basis of the analysis of the macro analysis. Furthermore, it is found that companies should also high the skilled and effective workforce that has experience in the international business environment.
In order to maintain the competitive position in the global business environment, it is also recommended to the companies that they should analyse the competitive strategy of the company; it will be helpful to identify the reason why companies achieve benefit over the competition (Ferreira et al., 2014). Furthermore, it is also recommended that companies should also use advance technology in the business environment.
It will support the operation of the company and get the quick results. At the same time, companies should also invest for the research and development to run the business in the global environment.
From the above discussion, it can be concluded that globalisation is a significant contextual factor that affects business structures and strategy. In this, it is found that globalisation affects the organisational structure and business strategy in the different context such as competition in the market that affects the pricing strategy of the company.
It can also be summarised that globalisation also influences internal business in the context of the use of technology. It is also analysed that due to globalisation, business structure and strategy of the company are affected in the references of the employment, risk in investment level, cheaper resources, deliver the better product, workforce diversity and cross culture diversity.
For this, it can be recommended the companies that they should develop and implement the effective business strategy. Companies should also analyse the macro environment and should hire the effective employee for achieving the business goals.
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