2014

Unit-5.2-EDEXCEL
BUSINESS
ORGANIZATION IN
GLOBAL CONTEXT

saumen

[UNIT-5.2-BOGC]

BUSINESS ORGANIZATION IN GLOBAL CONTEXT
ACTIVITY ONE
1.1 Differences between organizations working in different sectors , industries
and context s on a global scale

Outrageous variety of choices Choices in this context is the choices to be made in
the type of business to indulge in whereby there are varieties of businesses that
cant be expounded.
Competition Not every organization will take up globalization in it since some of
the organizations dont even meet the demand of the surrounding environment.
Market Some of the businesses are only ran within the area and not globally thus a
cub since there businesses that are ran internationally. Small businesses may be a
problem since when supply is higher than the demand most of the time the
organization shall only be running on losses.
Ability to expand There business that once you invest in them you can grow unlike
others.eg. No time you will ever invest in monopoly businesses since the
government runs them. Therefore, you should always go for Organizations that got a
future growth.
Cost of Investment The amount invested in an organization too also sets the
difference of one business to another. Thus the saying that the high the risk the
higher the returns.

1.2 Responsibilities of Organizations operating on a global scale.
Practice Corporate social responsibility These is a way of appreciation to the
community at large by the Organizations in order to retain the good relations and
maintain a good working environment. Some of these practices could include;
voluntary works, cleaning up of the city, assist in education etc.
Management of accounting records these is a guideline to ensure that the records
kept, whereby they also act as a guide to every changing trend. Gives a follow up of
the progress of the business; is it making profits or making losses?
Ensure ethical behavior and pressures An organization operating on a global scale
should be a mirror for the rest to toe to the trend thus should portray ethical
behaviors and pressures. This also acts as a way of customer satisfaction since the
organization gives priority to the customers, they being the organizations asset.
Maintain Business Issues Ensuring that business information is kept under
security so as to protect some of the business affairs.
Maintains Communication The communication gap should be minimal if any since
the Organization ought to keep running thus to enhance the same, communication
should be kept all the time to the responsible channels so as to maintain in the
global scale.

1.3 Strategies employed by different organizations that operate globally.

Employing of the SWOT analysis technique. SWOT meaning Strengths, Weaknesses,
Opportunities and Threats. This provides a frame of reference for further
assessment of organizational strengths and weakness. Then strategies can be
chosen and give the organization a strategic advantage relative to its competitors.
Pricing strategies the organization must come up with a pricing strategy that is
acceptable internationally. Thus must put all considerations at stake to ensure that
they come up with the most favorable price for a product.
Maintenance of value Here, different organizations emphasis on quality so that
they can give the recommended value. They employ Total quality Management to
ensure that the products price is a match of its quality.
Surviving Strategies These is ensuring that as much as they perform globally, there
home market should be fully sufficient and provided to. That by concentrating on
the advantages they enjoy in their home market.
Marketing Ability to win a market niche and venture to begin
operations.Marketing is a strategy that every organization operates to enhance since
you have to sell and convince a buyer to use your product and not any other.

ACTIVITY TWO
2.1 How does the performance of a national economy impacts on business
organizations.
Provision of a wide market - Provides presence and a way through for international
market. The National economy ensures that businesses are working promptly to
maneuver in the international market.
Increase on the tax base levels This comes in where the Increasing levels of
corporate taxation would have negative impacts for businesses. Where by a
business person sees it better to quiet rather than pay too much tax that is not
realistic.
Stability of the business organizations While the national performance is high
during its growth there is stability of the economy and thus the same impact on the
business organizations.
Reduction if lending rates These bring impact to the business in that, even the
bank reduce their interest rates thus helping the growth of business organizations
since they are in a position to borrow loan for investing in their businesses.

2.2 Measures taken by the government to influence the activities of business
organization
Setting of Pricing strategies the government set a give price for each commodity to
act as a guideline while set of prices in organizations.
Provision of rules and regulations - Businesses are usually profit motivated. Many
times in order to gain more profit the business might neglect issues like
environmental protection and production of harmful and dangerous products. Thus
the government comes in to ensure that the Organizations are taking care of the
environment and are producing value goods.
Controlling what to be produced - In order to safeguard the interest of the
community government may ban or limit the production of certain goods and
services.
Also large businesses might take the advantage of their size and exploit consumers,
employees and even use unfair tactics to overcome competition from small
businesses.
Employee protection legislation The government may pass laws in order to
protect the rights of the employee e.g. Laws against unfair discrimination at work
and when applying for jobs


ACTIVITY THREE
3.1 Implications of global integration on business organizations
Increased transparency - In the case of the European Union and the emergence of
the euro currency. The euro brought about transparency in the European Business.
Increased transparency has implications for global business, implications that are
profound in pricing.
Low Price seeking - Transparency implies that it will be easier for consumers to
perform cross-country price comparisons. Given ease of price comparisons, some
form of price arbitrage may arise as consumers seek a product at its lowest price, no
matter its country location.
Down shift in prices - As consumers undertake cross-country price comparisons and
shift their purchase locus to a lowest price country, a downward shift in prices likely
occurs.
Profit Erosion - The implications of a movement toward low price points and
downward pressure on prices are profound.

3.2 How the global economy affects businesses
Finance access - Small businesses have a greater dependency on bank financing than
larger businesses. After an Economic Report done in the year 2012 the Great
Recession, loans to small businesses were subsequently reduced.
Post-recession lending - Large firms are frequently able to rely on more diverse
capital finance options, such as equity stock and public bond markets. Thus able to
borrow funds from the government unlike the small business with no basis and
foundation.
Federal government resources - The Small Business Jobs Act of 2010 was signed by
U.S. President Barack Obama to boost domestic small-business markets. The Act
aimed to increase access to small-business federal contracting and small-business
exports. Here small businesses are looked at whereby they have the opportunity to
transact abroad.
Macro-economic Outlook - Small businesses will have to access their individual
operational realities to current economic data to obtain a more accurate assessment
of projected economic outlooks.


3.3 How has ICT facilitated globalization?
Integration of markets and cyberspace - Workflow software allow individuals and
teams geographically far apart working on different components of a product to
collaborate by working in parallel and produce the final product most efficiently.
Transfer from the physical to the digital domain - ICT, in particular the Internet,
enables the shift in value of products and services from the physical to the digital
domain. The strong growth of computing devices used throughout the business
processes is tilting the balance from the physical to the digital domain. Whereby it
even makes work easier and reduces on paper work.
Organizations moving from hierarchical to network organizational structures -
Networks are replacing hierarchies in the basic organizational structures. The non-
centralized character of networks distributes the authority exercised by any
discrete geographic entity.
Re-defining how business is done internationally These has brought about online
marketing and presence of market websites where you can shop even at the
comfort of your house
Complexity of products and services - The costs, risks and complexity involved in
the production process for many industries require a minimum effective market
size larger than that of the domestic market. This has been made easy by ICT.


3.4 How does International trade effect domestic products and services
Loss of jobs This is one of the greatest threats to every countries economy .This is
because all jobs are going oversees thus denying those who got the skill on the same.
Trade concerns Its where a country has more imports than the exports.This
deficit is caused by consumers who buy perceived value regardless of the country of
origin. Some raise questions about fairness in foreign trade.
Lack of market These could be brought about by too much export of products
whereby the supplier first satisfy the international market other than the local
market. The local consumers will opt to import since they were not given preference
thus loss of the market to the supplier in the local area.
Differences in the prices Every individual will opt for an export since they make an
additional coin unlike in the domestic market. Thus making the domestic products
and services retained for long whereby advertising will have to be done for the
product to be bought which may be bought at a very low price.

ACTIVITY FOUR
4.1 Name of the Country and its factors
For my report and out of research I will refer to the country Kenya. Kenya developing and
is a third world country.Due to globalization Kenya has had its impacts as an economy to
the business organizations within it. Having set a vision 2030 the country has all through
been working towards the same, implementing ICT facilities in all business organizations.
The country has also emphasized on the importance of peace and stability in the journey
towards vision 2030.
In Kenya a company like Cadburys has penetrated through the market whereby it operates
globally. Other such companies may include Coca-Cola Company that has continuously
provided its services to the globe at large.

4.2 Some of the strategies such companies have implemented include;
Government Influence These has helped the investors to fully conform to the laws
and regulations that the government has set in order to see to the continuity of the
business and also for it to pick globally.
Maximizing on their Strengths and minimizing on the weakness of the Organization.
Ensuring that they grab every opportunity that comes by and fully deliver to ensure
satisfaction of the end user.
Marketing Ability to win a market niche and venture to begin operations.
Marketing is a strategy that every organization operates to enhance since you have
to sell and convince a buyer to use your product and not any other.
Ensure that the quality of their product or service is the best so that they could
prevail in achieve the long term goals for the economy and the organization too. In
this case the long term objective is to achieve the goals set for the year 2030.