ASSIGNMENT 1 FRONT SHEET

Qualification BTEC Level 5 HND Diploma in Business

Unit number and title Unit 25: Global Business Environment

Submission date 30th June 2023 Date Received 1st submission 30th June 2023

Re-submission Date Date Received 2nd submission

Student Name Le Trung Thuan Student ID BS00007

Class BA05201 Assessor name Dang Phuong Thao

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 Table of Contents
Introduction......................................................................................................................................................................... 4
I. Define the concept globalization in terms of different dimensions.....................................................................................5
1. Economic globalization............................................................................................................................................. 5
2. Political globalization............................................................................................................................................... 5
3. Cultural globalization............................................................................................................................................... 6
II. Discuss key drivers of cost, market, environment and competition affecting organizations to go globalization..................6
1. Cost......................................................................................................................................................................... 6
2. Market..................................................................................................................................................................... 7
3. Environment............................................................................................................................................................ 8
4. Competition........................................................................................................................................................... 10
III. Explain the complexity of strategic challenges faced by organizations when operating in a global environment.............11
Conclusion......................................................................................................................................................................... 14
Reference.......................................................................................................................................................................... 15
Introduction

The international business environment is a complex and dynamic one that is continually changing as a
result of numerous causes. In the linked world of today, businesses are expanding their global operations
to take advantage of the benefits and overcome the difficulties posed by globalization. The primary
drivers of globalization and their effects on the global business environment will be analyzed and
evaluated in this assignment. Economic, political, and cultural facets are only a few of the many
dimensions that the concept of globalization embraces. Investigate the main forces that push businesses
toward globalization. Cost, market, environmental, and competitive concerns are a few of these
motivators. With the use of pertinent data and examplesThe strategic challenges of operating in a global
setting will also be made more clear by this project. This assignment will critically assess the global
business landscape within a particular industry to offer a practical viewpoint. We will evaluate the
opportunities and problems faced by businesses working in the software manufacturing industries during
the past three decades, using FPT, a worldwide organization, as an example. We will learn important
insights about the intricacies of the global business world by examining industry-specific trends, market
dynamics, and competitive factors., we will critically analyze how these elements affect an organization's
decision to go global.
I. Define the concept globalization in terms of different dimensions.

1. Economic globalization

Economic globalization, generally speaking, is the process of growing national economies' global
connectivity, primarily through trade and financial flows. Trade in products and services, capital
transfers, the exchange of assets (such as money and stocks), the transfer of technology and ideas, and
international labor or migration flows are all aspects of economic globalization. Numerous eras of
economic globalization have occurred; some experts also assert that there have been eras of
deglobalization or the slowing or reversal of globalization.

According to academic research, the most recent phase of economic globalization began in one of the
decades that followed World War II. Global commerce as a share of GDP grew from 25% to 60% between
1960 and 2019. Global commerce regularly increased faster than GDP during the post-World War II era,
however this tendency has slowed recently. As a percentage of global GDP, foreign direct investment
(FDI) increased from 6% in 1980 to 42% in 2019. Numerous technological developments in
communication and transportation have greatly lowered the physical distances that currently divide
economies, which has enabled the international economy's rising integration. Additionally, after World
War II, domestic and international policies have steadily reduced man-made barriers to international
trade (such as tariffs, quotas, subsidies, immigration laws, and capital restrictions). While the majority of
economists argue that globalization has raised living standards everywhere, there is continuous
disagreement over the degree to which increased economic integration has been inclusive, benefited
some groups more than others, and exacerbated inequality within nations. ( wita, n.d ).

2. Political globalization

Political globalization is the term used to describe the persistence and cascading effects of political ties
across nations.

Another illustration of this form of globalization is the establishment of multinational organizations like
the UN, NATO, and WTO that discuss and govern worldwide trade and politics. ( usemultiplier, n.d ).

3. Cultural globalization
The phenomenon whereby the globalization of cultural expressions is reflected in the experience of daily
life as influenced by the spread of ideas and goods. Globalization has been perceived as a tendency
toward homogeneity that will eventually render the human experience almost the same everywhere,
driven by the effectiveness or allure of wireless communications, internet commerce, popular culture,
and worldwide travel. However, it appears that this is overstating the situation. Even though there are
homogenizing tendencies, they are not even close to establishing a single global culture. ( James L.
Watson, 2023 ).

II. Discuss key drivers of cost, market, environment and competition affecting organizations to go
globalization.

1. Cost

Organizations may incur costs when they expand internationally. The following are a few of the costs of
globalization:

Study and development expenses: Before going global, businesses need to do a lot of study to see if their
goods or services are viable in other countries. A great amount of effort and money must be spent on
this.

Legal and regulatory expenses: Organizations must abide by a variety of laws and regulations in various
nations. To negotiate the complicated legal systems of other nations, this calls for the appointment of
legal professionals.

Infrastructure costs: In order to support their international operations, organizations must spend in
infrastructure including factories, warehouses, and distribution hubs.

Costs associated with marketing and advertising: Companies must spend money on these activities in
order to gain a foothold in international markets. To do this, specific branding and marketing tactics must
be created to appeal to various audiences and cultural groups.

Costs associated with human resources: As a result of globalization, businesses are now required to hire
workers from other nations, adding to their costs for things like recruiting, training, and relocation.
Costs associated with supply chains: To grow internationally, businesses must create and oversee supply
chains in several nations. This entails additional costs for things like shipping, logistics, and customs fees.

Overall, the price of globalization can be high, thus before choosing to grow worldwide, businesses must
carefully consider the advantages and disadvantages. ( Tejvan Pettinger, 2019 ).

Example: One example of a company that incurs costs when going global is McDonald's. When
McDonald's expands into a new country, they have to invest in market research, legal fees, and
advertising to establish their brand and understand the local market. They also have to adapt their menu
and food preparation processes to comply with local regulations and cultural preferences. Additionally,
they may have to deal with currency exchange rates, tariffs, and transportation costs to import
ingredients and products from their home country. All of these expenses can add up and impact the
company's financial performance.

2. Market

As businesses try to expand outside of their own nations and take advantage of new markets, resources,
and possibilities, the globalization market has been expanding recently. This tendency is being fueled by
a number of causes, including:

Competition has intensified, and as a result, businesses are looking to international markets to acquire
new clients and sources of income.

Rapid technological breakthroughs have made it simpler for businesses to communicate with and
manage activities in various parts of the world.

Economic advantages: Organizations can benefit from lower-cost labor and resources in other nations
thanks to globalization, which boosts productivity and profits.

Economic advantages: Organizations can benefit from lower-cost labor and resources in other nations
thanks to globalization, which boosts productivity and profits.

Political and regulatory changes: The adoption of new laws and regulations has simplified the process
for businesses looking to grow internationally and into new markets.
Consumer preferences are evolving as consumers become more international and seek for goods and
services that match their wide range of preferences.

In conclusion, a mix of economic, technological, and social reasons have fueled the market for
globalization. Organizations that can successfully navigate the potential and challenges of globalization
will be well-positioned to succeed in the global economy as the globe becomes more linked. ( Theodore
Levitt, 1983 ).

Example: One example of a company that helps organizations to go global is Globalization Partners.
They provide a Global Employer of Record platform that enables companies to hire and manage
employees in over 170 countries without having to set up their own legal entities or subsidiaries in each
country. They offer a range of services, including payroll, compliance, and HR support, which help
organizations to navigate the complexities of global expansion and ensure that they are operating in
compliance with local laws and regulations.

3. Environment

The choice of an organization to go global can be influenced by a variety of environmental

circumstances. These elements consist of the following:

Economic variables: The decision of a business to go global can be influenced by economic variables such
as market size, growth rate, competition, and the availability of resources. Increased competition in their
native market may drive firms to explore for other markets to expand into, while large markets and rapid
growth rates in a given location may entice organizations to extend their operations there.

Technical considerations Organizations now find it simpler to engage with their stakeholders all over the
world because of technological improvements. Organizations may now quickly and effectively transmit
commodities, money, and other resources across borders thanks to the internet and other new
communication technology.

Political and Legal Aspects: The choice of an organization to go global can be greatly influenced by
political and legal aspects, such as laws, regulations, and trade agreements. Global business expansion
can be encouraged by enabling political and legal conditions that support free trade and investment.
Language, habits, and attitudes are just a few examples of social and cultural aspects that can have a
significant impact on an organization's decision to expand internationally. To succeed, the company must
be aware of cultural variations and modify its business procedures to fit the local way of life.

Environmental Aspects: The decision of an organization to go global may be influenced by environmental

aspects such as geography, climate, and natural resources. For instance, businesses might decide to base
their operations in areas with plenty of natural resources or suitable weather.

In order to fully appreciate the opportunities and challenges given by the global market, firms must take
into account the aforementioned environmental aspects before expanding their activities internationally.
( Tim Stobierski, 2021 ).

Example: One example of a company that has been affected by the environment to go globalization is
Coca-Cola. Coca-Cola is a multinational corporation that operates in over 200 countries worldwide. The
company has been affected by the environment in several ways that have influenced its decision to go
global. First, the global trend of increasing urbanization has created a larger market for Coca-Cola's
products, as more people move to cities and have access to disposable income. Second, the rise of digital
technology has made it easier for Coca-Cola to connect with consumers around the world and expand
their reach through global marketing campaigns. Third, changes in trade policies and regulations have
made it easier for Coca-Cola to operate in international markets. All of these environmental factors have
contributed to Coca-Cola's decision to go global and expand their operations beyond their headquarters
in the United States. By going global, Coca-Cola has been able to increase their revenue and brand
recognition, while also adapting to the changing needs of consumers in different regions of the world.

4. Competition

The process of extending firms beyond their domestic borders and engaging in worldwide trade is
known as globalization. Organizations are impacted by the fierce competition in the global market in
several ways. The following are some of the elements that influence organizations' decisions to go
global:

Entry to new markets Businesses can reach new markets by going global. However, to win in these new
markets, businesses must set themselves apart from their rivals because they are frequently quite
competitive.

Cheaper manufacturing costs: Taking advantage of cheaper production costs in other nations is one of
the key drivers of globalization for businesses. Local businesses with a greater grasp of the area's market
and lower operational costs, however, are a threat to many enterprises.

Technological developments: As a result of the development of technology, businesses now compete

with international companies who may use technology to boost productivity and raise the caliber of
their goods and services.

Increased competitiveness: As more firms enter the market as a result of globalization, there is more
competition. In order to be competitive and relevant in the ever evolving global market, organizations
must adopt strategies.

Cultural differences: When businesses expand internationally, they must contend with cultural
differences as well. For them to be successful, they must be aware of the local cultures in the nations
where they do business. ( bookboon, 2011 ).

Example: One example of a company that was affected by competition and went global is Coca-Cola.
Due to competition from other soft drink brands and the saturation of the domestic market, Coca-Cola
expanded its operations globally in the 1900s. It started exporting its products to other countries and
establishing local bottling plants in different regions of the world. This allowed Coca-Cola to tap into new
markets and increase its customer base, leading to higher profits and revenue. The company's
globalization strategy has also helped it diversify its operations and reduce its dependence on any one
market. Today, Coca-Cola is one of the most recognizable brands in the world and has a significant
global presence, with operations in over 200 countries.

III. Explain the complexity of strategic challenges faced by organizations when operating in a global
environment.

A. Cultural complexity

In their international operations, multinational firms must navigate a variety of challenging cultural
issues. These difficulties may result from linguistic, cultural, religious, and ethical differences between
workers, clients, and other stakeholders who come from various cultural backgrounds. Communication is
one of these cultural problems' biggest effects. The inability of multinational firms to successfully
communicate with staff members and clients from various cultural backgrounds can result in
misunderstandings, misinterpretations, and disputes. As people from various cultures may approach
issues and work methods in different ways, this may also have an impact on cooperation and teamwork.
Cultural difficulties also have an effect on strategy and decision-making. The cultural norms and
expectations of various locations can make it difficult for multinational firms to coordinate their
corporate goals and strategies, which can result in inefficient or unsuccessful operations. The success of
the organization as a whole may be impacted by the way choices are made as a result of cultural
differences. Finally, cultural difficulties might have an effect on the brand and reputation of international
firms. Misunderstandings or lapses in communication and cultural awareness can result in unfavorable
opinions among stakeholders and consumers, which can harm the business's reputation and financial
results. Overall, to flourish in the current global business climate, multinational firms need to be aware of
and overcome cultural barriers. Cultural sensitivity, good communication, and flexibility in adjusting to
various cultural norms and expectations are requirements for this. ( academia, n.d ).

Example: One example of a complex culture of a multinational corporation is Google. Google is known
for having a unique and innovative culture that encourages creativity, collaboration, and diversity.At
Google, employees are given a lot of autonomy and freedom to pursue their ideas. The company
encourages its employees to think big and take risks, which has led to some of the most innovative
products and services in the tech industry. Google also has a strong focus on diversity and inclusion. The
company has implemented policies and programs to support underrepresented groups, such as women
and people of color. Google also provides its employees with opportunities for personal and professional
growth, such as career development programs and leadership training.In addition, Google has a strong
commitment to social responsibility and sustainability. The company has invested in renewable energy,
reduced its carbon footprint, and implemented programs to support local communities. Overall, Google's
complex culture is a reflection of its core values and mission to organize the world's information and
make it accessible to everyone.

B. Tough management
To make sure these businesses are acting morally and responsibly, tough management of global
organizations may be required. To do this, there are severalof measures that may be performed, such as:

Establishing precise rules and regulations There should be clear rules and regulations in place for
multinational firms that specify how they should do business. Human rights, environmental preservation,
and work standards should all be covered by these regulations.

Putting tight monitoring and auditing into place: Multinational firms may assist to guarantee that they
are adhering to the rules and regulations they have created by conducting regular monitoring and audits.
This may involve external audits and on-site inspections.

Accountability of management: If ethical standards or corporate policies are broken, management needs
to be held responsible for their actions. This can entail penalties, fines, or even legal action.

Promoting transparency: It is important to encourage multinational firms to be open about their

strategies and methods. This may entail working with stakeholders to resolve issues as well as producing
reports on sustainability and social responsibility.

These actions may be taken to make sure that multinational firms are doing their business in a morally
and responsibly manner while still attaining their objectives. ( Martina Sageder & Birgit Feldbauer-
Durstmüller , 2019 ).

Example: One example of tough management of a brand company is Nike's handling of their brand image
in the wake of controversy surrounding their labor practices in third-world countries. Nike was accused
of using sweatshop labor to produce their products, which caused public outcry and damaged their
reputation. In response, Nike made significant changes to their supply chain management and labor
practices, including implementing strict monitoring and auditing procedures, increasing transparency and
accountability, and investing in better working conditions and wages for their employees. Despite the
significant costs involved, Nike was committed to upholding their brand values and reputation, and took
the necessary steps to address the issue and prevent it from happening again. This tough management
decision ensured that Nike was able to maintain their market position and continue to grow their brand,
even in the face of significant challenges.
C. Legal

The laws of the nations in which multinational firms operate apply to them. They must abide by all
applicable municipal rules and ordinances, including those governing labor, taxes, and environmental
protection. Multinational firms may also be governed by other countries' laws, including conventions and
accords governing international trade.

Multinational firms frequently employ legal teams to provide legal counsel, ensure adherence to laws
and regulations, and assure compliance with these laws. To make sure that all applicable rules and
regulations are followed, these legal teams may collaborate closely with local counsel in each nation.

Multinational firms occasionally run into legal issues with their business practices, like litigation by
workers' or environmental rights organizations. These problems can be complicated, and dealing with
them will take a lot of legal resources.

To avoid legal problems and preserve a positive reputation in the international business community,
multinational firms must generally be rigorous in their attempts to comply with all applicable laws and
regulations. ( Menno T. Kamminga, 2017 )

Example: One example of the legal aspect of a brand company is trademark law. A brand company must
ensure that its brand name, logo, and other identifying marks are protected by trademark registration.
This ensures that other companies cannot use the same or similar marks to confuse consumers or profit
off of the brand company's reputation. The brand company must also monitor and enforce its trademark
rights to prevent infringement by others. Failure to protect and enforce its trademarks can result in legal
disputes and damage to the brand's reputation.

Conclusion

In conclusion, many elements shape many elements that shape the global business environment, which
is dynamic and complex. The main forces influencing globalization and their effects on firms have been
analyzed and evaluated in this project. The connectivity and interdependence of nations are highlighted
by the multifaceted nature of globalization, which includes economic, political, and cultural dimensions.
The assessment of the global business environment within a particular industry, like the software
manufacturing sector represented by FPT, also sheds light on the opportunities and difficulties that
businesses have experienced over the previous three decades. The potential for growth and expansion
in the global corporate environment is enormous. But it also presents difficulties that call for tactical
flexibility and adaptability. To succeed in this changing environment, organizations must stay abreast of
global trends, embrace innovation, and cultivate strong connections.
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