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Student ID
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Assessor Name
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Qualification
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Pearson BTEC Level 5 HND Diploma Business (Management) |
Unit Number & Unit Title
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Unit 18:Global Business Environment(GBE) |
Assignment Title
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Vodafone |
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Introduction
Global Business Environment is considered as environment in different countries and affects factors of home country impacting their decision making process for using resources and capabilities held by them. In this report, the major focus will be done on theories, concepts, drivers, and the strategic complexities that are linked with global environment (Wetherly, and Otter, 2014). The evaluation of key drivers of globalization and their impact on global business environment will be done. The major challenges faced by the business in global environment will be outlined. The way in which globalization impacts the leadership and corporate governance, culture, ethics, and structure will be defined. There are different global market entry strategies and ways of decision making will be evaluated in global context.
The organization chosen is Vodafone Group. It is a British Multinational telecommunication company, and has its registered office in Berkshire. It is world best telecom service provider and connects more than 700 million people (Vodafone, 2021).
Task 1
Introduction to the concept of globalization.
Globalization is considered as the approach of growth on a universal scale. It is the procedure for integration and has international impact of cultures and economies. With the concept of globalization, the world is taking initiative to become increasingly interconnected with each other as a result of massively enhanced trade and cultural exchange. It has led to the increment in production of goods and services. The companies on large scale are no longer called national firm but Multinational corporations. MNCs are known as the large and the powerful business that have factories and make goods and offices that sell products in different places or countries. The different advantages or benefits of globalization are evaluated below:
It has increase the international trade
The company has the opportunity to operate in more than one country
The firm is highly dependent on global economy
There is free movement of capital, services and goods.
Some of the example of Multinational Corporation who has presence in different parts of world is McDonald’s, Nike, Coca-Cola, Ford, and many more companies. These companies faced many difficulties in entering international market but now have its presence in different parts of world. There is the need for Vodafone Company to conduct research to know these companies global market entry strategies in effective manner (Passaris, 2016).
1.1 An analysis of the key drivers of globalization (P1&M1)
It
is very important for the Vodafone Company to examine different key
driver of globalization, so that the firm can maximize different
benefits from its global operations. Some of key drivers are as
follows:
Cost: Vodafone Company has a very high cost structure. There is the need for the firm to reduce its services prices to attract more and more customers. The reduced cost structure of company will lead to new expansion of telecom operation in different place. It can be seen that cost and efficiency vary from place to place and company can highly take advantage of this factor.
Market: The global market is more customer abundance as compared to the domestic one. In the global market, there is effective differentiated strategy and customized services that attract customers and enhance firm profits. Vodafone Company is constantly engaging in innovative and new activities to keep itself ahead of its competitors.
Environment: Both internal and external environment has a huge impact on extension of telecommunication company operations. Different countries and regions of firm operational area in the world motivate the firm to bring new differential services according to environment and strategic policies. The company should be prepared in advance to face the environment hazards in effective manner.
Competition: Vodafone Company has to face intensive competition in the global operation of its company as compared to domestic one (Goeltz, 2014). Apple can be a major competitor of Vodafone as the firm is planting its operation new firm. The factors like new regulations, call termination prices, roaming laws, etc. impact the company.
Technology: This factor also has a huge impact on firm operations. High cost is involved in adopting new and advance technology. Vodafone, in order to attract customers is taking initiative to get new technologies like high resolution colour screens, megapixel camera, effective internet access, etc., to attract buyers and enhance its sales.
The above drivers of globalization like cost, technology, market, business environment and competition has both challenges and benefits. When the company goes international then it has to face struggle and benefits in same amount. It can be seen that Vodafone operation in international market will expand its connection in different parts of world and the companies sales will be taken by larger number of customers. The technologies adopted by the company will help in transforming lifestyle of people and provide them best experience. The company can raise the economy of the country by providing employees employment and opportunity to grow. There are various challenges faced by the Vodafone Company related to cultural diversity as there was problem in communicating, and coordination with members of different cultures. There is need for the Vodafone Company to prepare itself for difficult situation as the environment factors can be changed easily and the company will require a lot of money to implement new strategies (Erixon, 2018).
2.0 An explanation on the complexity of strategic challenges faced by global businesses (P2)
The global business environment mainly comprises of uncertainty and dynamism because of turbulence that brings complexity in making decision and effective development. Strategy in the business helps in facilitating changes and achieving long term goals under competitive pressure, uncertainty and complexity. The different issues faced by the Vodafone Company while entering the global market are as follows:
Political: The political forces on the Vodafone company has steadily led to development or growth of the firm through acquisition and entering of new Easter market, Asia Europe and many others. The factors like tax policy, environmental law, labour law, trade regulation, tariff policies and many more will impact the operation of Vodafone Company (Yüksel, 2012).
Social: The impact of social factors on Vodafone cultural diversity can cause issues related to communication, motivation and coordination. There is the need for the firm to have gadgets for every age group and satisfaction is provided to all members. Vodafone company manager should understand the reason behind its employee’s low morale, and should adopt effective approach to address their issues and enhance communication.
Economic: The economic factors mainly comprises of issues like interest rate, growth rate, inflation rate and many more. The increase or decrease in sale of the company might impact its personnel and due to arise of economic factors, Vodafone Company has to offer new services and products and find new ways to save its costs and reduce losses. The company is last years have issued a heavy debt and floated around the world to gain the funds required for auctions.
Technological: The growth of mobile industry has enhanced the number of internet users and provided them new experience of things like shopping, banking and many more facilities. While adopting new technology, high cost or investment is required and to meet the customer demand and enhance competition, there is the need for Vodafone to adopt it in all circumstances. The company is taking initiative to adopt new technology like two mega pixel camera, high resolution colour screen, effective internet facility and many more.
Environmental: Vodafone Company is encouraging its customers to make use of such technology that reduce the environment impact. The company make use of biodegradable material like scratch cards, and also has its recycling programme in its entire retail store. In the global companies it is very essential to have followed the environment protection laws in effective manner (Obstfeld, 2021).
2.1 A critical analysis on the strategic challenges caused by globalization on risk, diversification strategies and supply chain (M2)
Vodafone
Company has to deal with variety of risk or challenges in the journey
of global business development. The risk that occurs can be both
operative and strategic. Effective measure to minimize or reduce risk
in global operation in the firm should be taken in effective manner.
The strategy of risk diversification of employee rotation, product
services, etc. will help in improving the risk situation of the
Vodafone PLC. The major challenges that Vodafone will face is
starting of its global business in any country might include:
International recruiting of employees
Challenges for pay role and compliance
Difficulties in global expansion
Cultural diversity issues
There should be proper management of supply chain while developing the global presence of the telecom company like Vodafone. The goods of the company should be received on time and for this firm need to have completion dates and shipping timeframe. If there is planned and smooth supply chain then this will diversify the business risk potential of global business of Vodafone (Martinez?Fernandez, et. al., 2012).
2.2 A critical evaluation of the global business environment(D1)
Globalization is uncertain concept as the businessmen has to consider effective research to reach business aims and goals in effective manner. The potential advantages and disadvantages that will be experienced by Vodafone Company in global market as follows:
The company will gain new customer for its service and products.
International operation will allow company to develop low-cost production facility in location.
The competition from rival firm will be less.
The country’s language, culture, value system might act as a barrier to manage people and communicate.
The company can be affected by external forces like political, environmental, social, economic, etc. while doing global business.
Globalization provided business both opportunities and challenges and it depends on the manager how they carry their firm and achieve their goals. Vodafone Company can easily grow in international market, if it adopts the best marketing practices and policies (Grossman, and Helpman, 2015).
Task 2
3.0 (a) An evaluation of the influences of globalisation on organisational governance and leadership(Part of P3)
Other than the external factors impacting company, there are internal factor like organization leadership and governance that impact its operations. The globalization has highly impacted leadership and management by customer base, competition, employee transfer rates, and many more factor. Vodafone Company need to follow the government regulation to enhance its business beyond domestic area. There is the need for the company to adopt new governing policies of operation in operative and strategic management.
It is very important for the Vodafone Company to have effective leadership practices as the employees should be highly trained for compatibility of global marketing as there the partners and customers are more sophisticated as compared to local one. The leaders should have the knowledge of both current legal system and business environment of operating country. In the Vodafone Company, the executive committee is highly responsible for delivering and implementing new strategies agreed by Board for its operation management.
b) An evaluation of the influences of globalisation on organisational structure(Part of P3)
Globalization has the ability to impact every aspect of business and when the technology and communication blend in firm culture then the structure will change along with it. In the Vodafone Company a good cultural structure for management of global business is required in effective manner. The company should set its culture according to country ethics and norms and according to customer needs and wants. Vodafone will hold its operations by applying organization strategies tool, effective techniques to reduce cost, and many other practices. Vodafone will follow the marketing practices that are followed by its competitors but will differ from them (Abhishek, 2013). It follows the divisional structure and is highly designed to focus more attention to customers in both local and international market, facilitate coordinated delivery of 5G network across market, and have a simplified decision making and governance structure to speed up its execution.
c) An evaluation of the influences of globalisation on organisational culture(Part of P3)
The companies that exist in variable environment are directly impacted by globalization process. The globalization process in company will led to many social changes and also changes in national culture. The Vodafone Company entering in new market has to contribute to exchange of cultural values of different countries. The globalization of culture will contribute exchange of culture values and the convergence of traditions. Vodafone company support the innovation and technological culture as in such telecom industry change is highly required to meet its customer demands. The customer needs and demands changes from time to time, so firm should take initiative to adopt the measure that customer wants as this will help in increasing competition in the market and revenues.
d) An evaluation of the influences of globalisation on organisational functions (Part of P3)
Globalization of Vodafone Company has enhanced competition, and it can be in terms of services and product price & cost, technological adaptation, target market, quick response and many more of them. The function of Vodafone is different from its local business operations. The company is more operational and cultural focused and has practices that promotes growth and provide satisfaction to customers. The company will bring new technology or innovation and lower its prices to stay competitive in market. The function of the company will be based on broad level and provides strategy to lower product cost of its products (Tallman, Luo, and Buckley, 2018).
3.1a) An evaluation of the influences of ethics on organisational functions(Part of P4)
Ethics are considered to be the essential part of the business as it offers many benefits. Vodafone PLC Company allows CSR activities to hold a substantial part while conducting its business activities and draft its strategies on such a manner that it acquires its business goals in responsible manner. The ethical approach in term of globalization of Vodafone Company will help firm to look after the betterment and welfare of people and business environment when it has to create new branches in global area. The ethical practices will help the company to take different project and face challenges which are not harmful for the overall scope of the business environment. Some of the ethical practices of Vodafone Company include the following:
Observing Integrity in activities of company
Disclosure of important information its employees and stakeholders
The business comply will all necessary laws (Muscalu, 2014).
It has detail & comprehensive code of conduct list
b) An evaluation of the influences of global sustainability on organisational function (Part of P4 )
A sustainable business effectively lead to have a healthy structure within which operates and help in constructing such a business environment where a business can thrive successfully. Sustainability in Vodafone Company will help in developing a perfect image of the company by its goodwill and quality of goods and services provided. It can be seen that the company is highly working to reduce the environmental impact and move to 100% renewable energy by year 2022. The company has adopted such technology that allows business to reduce Co2 emissions and help in creating a zero carbon future.
The evaluation of both ethical and sustainable globalization practices of Vodafone operation is highly important for developing a good impression of firm in global market (Wibbeke, and McArthur, 2013).
3. 2 (a) Application of McKinSey 7S Model on organisational structure in case the of Vodafone Plc (Part of M3)
The
practices of global business strategies will impact the structural
image of the business function and need for reshaping the structure
and culture of business will help in providing the best instruction.
McKinsey 7S Model is chosen for shaping the organization structure of
Vodafone PLC Company. This model is very perfect for shaping the
effective project design. The elements of the model are categorized
by Hard Ss and Soft Ss. The structure of McKinsey model for Vodafone
Company is as follows:
Structure: The Vodafone Company will structure its practices in organized manner. The firm will follow chain of commands and accountability relationship with different countries and members. The company make effective chart that is visible to all its members and easy to make changes according to changes in market and in demands of customers. Structure will help in motivating staff members and allow them achieve their aims and goals in desired manner.
Strategy: This is the plan that is adopted by the company to achieve the competitive advantage and effectively compete in market. Vodafone Company will clearly define its mission and vision and values so that the employees and other members remain aware and follow the desired practices of the firm. These should be mixture of both long term and short term strategies (Kim, and Park, 2016).
Systems: System is considered as the procedure and process that will allow company to provide direction and make decisions. Systems in the company effectively help in defining the major practices of Vodafone Company and the managers will focus in organizational changes. The system of Vodafone will be based on global country culture and values.
Style: This will allow firm to known how the company is managed by top-level managers and how they interact with other companies. Vodafone will develop an effective code of conduct according to its business environment and will follow the transformational leadership style to motivate its employees in desired manner or way.
Shared Values: Shared values are known as the standards and norms that will allow Vodafone Company to guide the employee’s behaviour and organization actions and rules. The company will play an effective role in looking after key elements to maintain an effective design of organization.
Staff: The Vodafone Company will hire the staff members according to firm needs and strategies for their recruitment, motivation, rewards, etc. It is very difficult to hire best employees in Vodafone Company (Cox, Pinfield, and Rutter, 2019).
Application of Hofstede's Cultural Dimensions theory in the case of Vodafone Plc(Part of M3)
The organization culture evaluates the personality of the firm. It helps in evaluating the environment in which the employees work. Culture of the company includes diverse variety like work environment, firm mission, vision, goals and many more. It is very important for Vodafone PLC to adopt the Hofstede Cultural Dimension Theory. This will allow firm to understand different culture in different countries. The theory was originated in year 1980. With the help of power index the Vodafone Company will help in accepting inequality and power differences and increase organization structure in desired manner. The company will also support both masculinity and femininity and provide support to both male and female members in the firm. Such practices adopted in the Vodafone will help in creating an effective business environment and goodwill of the firm (Huhtala, et. al., 2013).
4.0 (a) An evaluation of different ways decision making can work effectively in a global context (P5)
Decision making in business is considered as the procedure for making choices and identifying decision and providing best solution to problems. Decision making process in global business in very important. The different decision making methods are as follows:
Logical thinking: It is the part of effective decision making process and is not best for beating decision making and participant views. The making of effective decision will emit best impacts.
Expert Thinking: Here the decisions are not viable by the logical thinking and will help in determining decision in the end. In global promotion effective decision are required.
Major Decision: It is the democratic way of making decision and can take strategic and operative decision based on decision making process (Andrijauskien?, and Dum?iuvien?, 2017).
If the strategic decision making is involved in Vodafone Company then there will be increase or decrease in firm size and workforce will be critical to firm success. The decision in the company will be made in relation to change in leadership style, utilization of international business diversification, and reduction in international barriers.
(b) Ways(strategies) to enter global markets(P6)
There are different strategies which can be used by Vodafone Company to enter the international market in effective manner. These include the following:
Exporting: This is the best and easiest way to enter other country. The risk under such strategy is very low and is a very cost effective method. Vodafone will exports its goods to other country and make sure customers are satisfied.
Licensing: This strategy will allow company to use property of target country. These are the mode of export that require little investment and provide high return on investment (Croucher, 2018).
Franchising: It is similar to licensing to intellectual property rights.
Foreign Direct Investment: FDI is considered as the direct investment in foreign market. It needs huge amount of capital to cover the prices of technology, and staff.
Joint Venture: It is development of two joint businesses. The owner of the company will be local businessmen. It will benefit local market and allow sharing of cost.
(c) A critical evaluation of the key barriers to globalization and recommendations to overcome them.(P6 & M4)
There
are various barriers in international business as there are natural
barriers like language, tariff, taxes, imported goods, exchange
controls and many more. The recommendation provided to Vodafone
Company to reduce its barriers is as follows:
The company will look after both internal and external opportunities and threats before entering global business.
Vodafone should grab the opportunity to make use of competencies of both internal and strength and weakness.
Customer and market analysis will be done before going to foreign expansion of local operation.
Before entering market, the availability of man power ad resources to be considered.
There is a need to analyse political and legal environment before entering respective countries (Butt, et. al., 2017).
Conclusion
From the above report, it has been summarised that opening business at global level is not an easy process, as there is need to have a proper understanding of market. Vodafone Company has the potential to enter the international market and enhance its sales and revenues. There are various challenges or issues faced by the company and the ethics, sustainability and other factors are highly important to consider in such market.
References
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