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Global Organizations

INTRODUCTION

 

A global organization is different from other multinational or international organization as they operate as they operate with similar industrial sector in different countries. On the other hand the Global organization operates with different sectors in different courtiers e.g. sourcing of raw material from courtiers where it is cheaper, carrying out industrial activity in the country where there is lowest cost of production. A global company keep abstract of differences in cultural, political, legal and economical factors in different countries e.g. Coca Cola change the taste of the syrup for different countries to adapt to the difference in culture and taste.

 

 

            Organizations Operating in Different Sectors:

a)      An analysis of the key differences between organisations operating in different sectors. Industries and contexts on a global scale.

 

Organizations operated globally have to consider differences in law, culture of different countries applicable to different industrial sector. A UK company selling vine cannot operate in Muslim country in same way as selling of vine in banned or limited with quota for sale to non Muslim. Further no advertising and promotion is allowed e.g. in UAE vine can be sold to non Muslims which you will not see any advertisement for sale of vine. Moreover an organization providing health related product like cigarette, medicine i.e. phrmasuitical industry it has to follow the law of that country because in some countries laws relating to these industries are very strict. Further the companies in service sector need to consider the culture of each country where it’s operating and has to change selling and promotional campaign accordingly.

 

b)      An assessment of the responsibilities of organisations operating on a global scale.

 

The companies operating globally has the responsibility to provide its customer quality product at economical price according to their needs e.g. tyre companies change the tyre according to the requirement of different companies e.g. company selling tyres in UAE change the tyre to make them hot resistant by considering the weather in those countries. An organization also has responsibility towards shareholder i.e. providing them good return on investment and providing them with the information about the activities of the organization. For the companies operating globally has keep their global share holder informed about the company’s profitability by publishing the result on the web site or by sending them new letter monthly.

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Lot of companies like DENSO group which try to make the environment safe “it organized an environmental education program launched in 2001 Various experts are invited each time to provide children with opportunities to directly experience and think about the actual physical environment so as to enable children to understand the importance of environmental preservation. A total of 2,400 children have taken part in this program as of 2012.

 

 

c)      An evaluation of strategies employed by different organisations that operate globally.

Global companies use the strategy of “think globally act locally”.  The organizations operating globally always identify the differences and harmony between taste, habit and culture of the people all over the world. Global organizations gain competitive by producing the product which has similarities in taste and habit rather the variable product for each courtier where it is operating.

 

National Economy Impacts on Business:

a)      An analysis of how the performance of a national economy impacts on business

The economy of any organization has a great impact on any business whether it local or global. In a weak economic condition where inflation is high there is low demand for the good and people become conservative in their spending. The slow economy will have impact on company sales, its worker as the company will cut jobs, its production hence the profitability of the company.

In good economic condition the sales will be high; the company will be earning profit, increasing its capacity. Good economic condition will result from low inflation, low interest rate and high GDP ratio.

Case Study:

In the time of recession in Nike sales was gown down globally and in UK. Further the

recessions in Asia also has an impact on its business since most of its products are made in Asia. In 2009 when recession hit the global economy Nike sales decrease from 19.176 billion US$ 2009 to 19.014 billion US$ 2010. The impact on Nike was less than other courtiers due to increase in sports activity globally. This decrease in sales was second to in Nike history because it was decrease first time years back in 1999.

 

b)       An explanation of how governments take measures to influence the activities of business organisations.

 

The government of a country have great influence on the business activity by providing tax incentive, good infrastructure and by implanting laws like prohibiting or imposing import of goods and giving incentive to local manufacturer. Government by increase expenditure on infrastructure and development or by reducing taxes can create jobs, more business as the people will have money to make investment.

Case Study:

The Government of United States has made law application to food industry. These rules affect the sales and marketing efforts of Coca Cola. US government imposes sanction of Burma where it was not sold like this US Government ban the sale of Coca Cola in North Korea and Cuba. Thus similarly Government may impose different sanctions on any organization to operate.

 

Global Organizations:

 

 

GLOBAL ORGANIZATION

 

IMPLICATION OF GLOBAL INTEGRATION ON BUSINESS ORGANIZATION

 

·        People in different countries have different language, culture, religion and habits. Identifying the difference and similarities between people of different countries is not easy for the global company.

 

·         Global integration becomes difficulty where an organization is operating in countries which have different laws and economic condition. For example centrally planned Government while in other countries Government maintain only some control over the business activities.

 

·         Many companies in China sources their raw material from their parents companies outside China. For example Appliance sources their major raw material from subsidiary in France. Therefore there can be stringent regulation, import duties etc.  By the government on importing from countries where subsidiary operate create implication on integration.

 

EFFECT OF GLOBAL ECONOMY ON BUSINESS

 

·        A change in global economic condition not only effects the global or multinational organization but also has impact on the local companies. For example a local company selling goods to exporter will be affected by the low sale due to decrease sales of exporter.

 

·        In the time of global economic crises there will be high inflation rates consumer spending will go down as result there will be less import and export hence less sales which will affect the profitability of any business. On the other hand in case of good economic condition people’s spending will increase and there will be more activity in the market.

 

·        The recent world economic crises also has an impact of tourism business in the UAE because of low spending people travel less to abroad thus there will be less tourist visiting the country.

 

·        Business profits, revenue affected by the change in global economic condition a crises or growth in economy may have impact of businesses exporting goods in Europe. China’s export in Europe makes healthy contribution to the economy hence when crises hit the UK economy Chinese companies’ suffers most in the time of crises.

 

 

INFORMATION AND COMMUNICATIONS TECHNOLOGIES HAVE FACILITATED GLOBALISATION

 

 

·         Information technology has played a vital role use of email, fax, mobile phone make it easy to send the letter or image of paper easily at any part of the world.

 

·         A number of application in mobile phone e.g. what’s app which facilitate sending of document from anywhere to anywhere in the world in seconds.

 

·         People can have meeting over the video conferencing without travelling thousands of kilometre saving in time any money. Global companies having their offices in different parts of the world are connected by video conferencing.

 

·         Web based accounting software has led the companies to record their financial transaction from any part of the word. Also the manager can view the financial position from any place.

 

·         The businesses can easily reach to the customer globally by use of internet.  There are number of companies using internet to sales its goods.

 

 INTERNATIONAL TRADE CAN EFFECT DOMESTIC PRODUCTS AND SERVICES.

 

·         There are lot companies who are providing goods and services to the companies doing international business e.g. A export of bed sheet which buy dying and printing services from the local service provide thus in case of low export of bed sheet there will be less services being bought from the domestic service provider.

 

·         A company providing goods and services internationally has to maintain the slandered of the goods and services sold locally so to keep good image in term of quality of the goods to be sold.

 

·         Companies exporting goods to various countries have to follow and depend the quality standards required by the customers. Further they have comply with the human resource law e.g. providing safe and healthy conditions to workers these factor has an effet the goods and services locally sold by any organization carrying on business internationally. Many companies has comply with the requirement of quality and has obtained ISO-9001, 14001 certificate to comply this requirement. This makes local product quality better and compatible with international market.

 

 

 

Global Environment:

TO: MR. A

FROM: XX

 

REPORT ON GLOBAL ENVIRONMENT

 

Dear Sir,

 

 

1)     GLOABL ENVIORNEMNT IN WHICH BUSINESS OPERATES

 

The companies operating globally is subject to the different environmental factor such as PEST (Political, Environmental, Social, Technological) specially the companies operating globally with different industrial sector as it has to comply with the legal requirement of each countries in respect of the industry in which it is operating. Bakhresa / Azam group of companies operating in different sector such as food, agro, petroleum, logistic is not only subject the laws of the country in which it is based but also has to comply with the Food and agriculture law of India where it is also carrying on its business activities including other countries like Tanzania, Zanzibar, Uganda, Kenya, Rwanda, Burundi, Zambia, Malawi and in Mozambique. These people of these countries have different culture language and religion which for which the company has to make viable strategy. Further duties, taxes political stability of the above countries also taken into account by Bakhresa group. The above countries’ exchange rate any restriction to transfer fund to main head quarter also effect the sales prices and business strateggies of Bakhresa. The company employee staff people from different culture and religion thus has to make policies to avoid any kind of discrimination.

STRATEGIES TO ADDRESS ISSUES AFFECTING BUSINESS ACTIVITIES.

The Bakhresa has its head quarter in Dar al Islam Tanzania where its main activities and manufacturing are being carried out. Its HR policy to employee staff from different culture to cater the cultural difference faced by the company. Further the company employee local staff of each country where it is operating which keeping its decision making at its head quarter at Tansania. All the sales prices, marketing campaign and other decision are taken at head office keeping in view political environment and tax structure of different countries it is operating.

 

Regards,

 

AAA

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