1. What does it mean by Globalisation?

Answer:- In today’s business world, managers, politicians, journalists and academics

commonly use the concepts of ‘globalisation’, ‘global industries’, ‘global competition’,
‘global strategies’ and ‘global corporations’. More and more companies are confronted
with the need to globalise or die. While those concepts are widely used, their meaning is
often not well understood. For some people, globalisation means to expand the
company’s presence abroad, for others it means standardising a product and selling it to
the world, for yet others it denotes an approach to management in which decision-making
is centralised at corporate headquarters. There are many reasons for this confusion; one is
due to the fact that the concept of globalisation is relatively new. Before the 1970s almost
no one talked about globalisation; the most frequently used terminology, when referring
to companies operating in various part of the world, was ‘multinational’ or occasionally
‘transnational’. Multinational companies have been around for many years. Even if we
ignore the East India Company, which started in the early seventeenth century, modern
corporations like Unilever, Nestlé, and Procter & Gamble were operating all over the
world at the end of the nineteenth century. They are known as multinational companies,
but nobody would have called them global.

Globalization refers to any activity that brings the people, cultures and economies of
different countries closer together. In business, "globalization" refers to practices by
which organizations become better connected to their customers around the world. This
includes any aspect of operating in different national markets, from product design to
marketing.
Globalization Examples
If that’s still a bit vague for you, here are a few examples of globalization in the world of
business: Online marketplaces like eBay and Amazon make it easy to buy products from
businesses or individuals on the other side of the planet. Even products sold in traditional
brick-and-mortar stores like Target often make stops in several different countries before
reaching their final destinations. Consumer electronics, for example, are commonly
sourced from raw materials in India, made in China, then sold in America.
Many large restaurant chains, like McDonald's, operate in dozens of countries.
McDonald's specifically has franchises in upwards of one hundred countries, and diners
around the world recognize its brand and logo.
Netflix operates in more than 190 countries and customizes content offerings for
individual markets with subtitles and programming in local languages.
The instantly recognizable "swoosh" logo of Nike transcends different cultures and
languages. Nike has formed partnerships with athletes who play a variety of sports in
many different countries and uses these endorsements to support its worldwide
expansion.
 2. Factors that push globalization, The benefits of globalization, factors that
work against globalization.

Answer:-

 Factors that push globalization

Technological change

Rapid and sustained technological change has reduced the cost of transmitting and
communicating information – sometimes known as “the death of distance” – a key factor behind
trade in knowledge products using web technology

Economies of scale

Many economists believe that there has been an increase in the minimum efficient scale (MES)
associated with some industries. If the MES is rising, a domestic market may be regarded as too
small to satisfy the selling needs of these industries. Many emerging countries have their own
transnational corporations

Differences in tax systems

The desire of businesses to benefit from lower unit labour costs and other favourable production
factors abroad has encouraged countries to adjust their tax systems to attract foreign direct
investment (FDI). Many countries have become engaged in tax competition between each other
in a bid to win lucrative foreign investment projects.

Less protectionism

Old forms of non-tariff protection such as import licensing and foreign exchange controls have
gradually been dismantled. Borders have opened and average import tariff levels have fallen.

That said, it is worth knowing that, in the last few years, there has been a rise in non-tariff
barriers such as import quotas as countries have struggled to achieve real economic growth and
as a response to persistent trade and current account deficits.

Growth Strategies of Transnational and Multinational Companies

In their pursuit of revenue and profit growth, increasingly global businesses and brands have
invested significantly in expanding internationally. This is particularly the case for businesses
owning brands that have proved they have the potential to be successfully globally, particularly
in faster-growing economies fuelled by growing numbers of middle class consumers.
Political Factors
Technological Factors.
  factors that work against globalization

Cultural factors: attitudes, tastes, behaviour and social codes When the consumption of a
product or a service is linked to traditions and national or religious values, global standardisation
is not effective. Some products – for instance, Kretek (tobacco and clove) cigarettes in Indonesia,
or the Pachinko (pinball) game in Japan – are unique to one society and their globalisation is
nearly impossible, although one can argue that with innovative marketing it may be possible to
do so.
Commercial factors: distribution, customisation and responsiveness In some sectors,
distribution networks and practices differ from country to country and as a consequence the ways
of managing the network, motivating dealers and distributors, pricing, and negotiation are hardly
amenable to global co-ordination.
Technical factors: standards, spatial presence, transportation and languages Technical standards
in electrical, civil, chemical or mechanical engineering can create a burden for global companies.
Scale economies and cost benefits of global integration and standardisation cannot be exploited
fully when technical standards vary greatly.
Technical factors: standards, spatial presence, transportation and languages Technical standards
in electrical, civil, chemical or mechanical engineering can create a burden for global companies.
Scale economies and cost benefits of global integration and standardisation cannot be exploited
fully when technical standards vary greatly.
3. Globalization and strategic management
The term "strategic management" refers to a systematic approach of planning and
executing a company's path to success. Large numbers of businesses struggle to gain
market share in finite marketplaces, where there is only so much money to go around.
This requires competitiveness. Globalization refers to the quickening pace of
international trade and the steadily increasing reliance of individual economies on each
other. Competitiveness and globalization are linked with strategic management, and
understanding how these concepts tie in to each other is required to form a successful
long-term strategy for your business.

Globalization

Advances in communications technology and global travel have changed the way
business is done all over the globe. A face-to-face meeting that would have once
required a three-month voyage now only requires an eight-hour flight. In the 21st
century, even cross-continental flights are being replaced by instantaneous video chat
over the Internet. News travels instantly from one side of the globe to the other, and
business transactions occur just as quickly. Competitors on opposite sides of the globe
can find themselves with distinct advantages or weaknesses stemming from their local
 geography, legal climate, national labor pool and a host of other factors, adding layers
of complexity to competitive strategies.

 Define Globalization? What are the factors that push Globalization?

Answer:- A global strategy is a strategy that a company develops to expand into the
global market. The purpose of developing a global strategy is to increase sales across the
world. The term "global strategy" includes standardization, and international and
multinational strategies. For some people, globalisation means to expand the company’s
presence abroad, for others it means standardising a product and selling it to the world,
for yet others it denotes an approach to management in which decision-making is
centralised at corporate headquarters. There are many reasons for this confusion; one is
due to the fact that the concept of globalisation is relatively new. Before the 1970s almost
no one talked about globalisation; the most frequently used terminology, when referring
to companies operating in various part of the world, was ‘multinational’ or occasionally
‘transnational’. Multinational companies have been around for many years. Even if we
ignore the East India Company, which started in the early seventeenth century, modern
corporations like Unilever, Nestlé, and Procter & Gamble were operating all over the
world at the end of the nineteenth century. They are known as multinational companies,
but nobody would have called them global.

Globalization refers to any activity that brings the people, cultures and economies of
different countries closer together. In business, "globalization" refers to practices by
which organizations become better connected to their customers around the world. This
includes any aspect of operating in different national markets, from product design to
marketing.
• Importance of developing a global strategy
1) Generating new sales
2) Accessing new resources
3) Fostering global brand awareness
4) Lowering labor costs
5) Creating economies of scale
6) Diversifying risks
7) Increasing operational flexibility
 Factors that Push Globalization
 The digital revolution-A good example is Amazon which has an online store for books
and other products. Potential customers can search for titles, check for prices, make
orders and pay online
 International economic integration- For example, some countries still encourage the
population to buy homemade products instead of encouraging them to buy regional
products from members of the trade bloc(NAFTA for the US, Mexico and Canada; and
EAC for East African countries).
 Socio-cultural convergence-Due to access to information through online newspapers and
social media, people are losing ‘cultural identity’. For example, what used to look
‘unAfrican’ is now looking normal such as wearing mini-skirts. This is due to exposure
 to cultures in which wearing mini-skirts is not seen as a taboo. As a result, producers of
mini-skirts have a global clientele due to convergence of cultural values, traditions and
beliefs.
 Global education providers. With the popularity of online learning increasing, there are
institutions which offer education courses to a global audience. We have seen universities
and colleges offering a blend of on-campus, distance, and purely online programmes.
 Cross-border political influence. Governments have formulated polices that facilitate
cross-border trade and influence. For example, there is growing influence of China
especially in Africa where China is offering long-term loans to countries. Zambia is a key
example where China virtually took over operations at the international airport. This
shows that developed countries are positioning themselves to influence political and
economic developments in developing countries.
 Financial liberalization. There is increasing interconnection of countries due to
deregulation of financial markets. It is now easy to exchange money to ‘global
currencies’ such as the US dollar and British Pound
 Intense competition. With intense competition among firms, firms are looking for new
markets across borders. In some sectors such as news media, there is competition from
any corner of the world.
 Increased international business and trade. Some firms are involved in importing and
exporting goods and services across national borders. Other firms are using joint
ventures, licensing and franchising as alternatives to importing and exporting while
making their products reach a global clientele.
 Need for economies of scale. As competition intensifies, firms are looking for ways of
obtaining and enjoying cost savings. This can be achieved through economies of scales
when firms produce the same product for a huge market.

 What Is Market Intelligence? Explain Drivers and Benefits, Key Success Factors of
World Class Market Intelligence?
Market intelligence is defined as the information or data that is derived by an
organization from the market it operates in or wants to operate in, to help determine
market segmentation, market penetration, market opportunity, and existing market
metrics. Market intelligence is a vital aspect to understand the state of the market, as well
as helps collect competitor intelligence which in turn aids towards becoming profitable.
For example, A company wants to understand who is the right target audience for a
mobile phone they are launching soon. A profile survey can help the company to shortlist
its target audience based on the type of mobile device they are launching. For instance, if
the colors of the phone are bold and its features are set in a manner to market it as a
gaming mobile device, a survey will shortlist participants who prefer gaming, are in a
younger age group and people who fall in a specific income range. Such information
helps the company to focus its efforts on the right people thus saving costs and efforts.
Market intelligence, however, is not the same as business intelligence. Whilst business
intelligence focuses on mostly internal factors such as billing rates, headcount, processes
etc., market intelligence gathers data externally providing you a holistic view of the entire
market and not just your organization. However, incorporating market intelligence with
 business intelligence processes will enable a company to have a holistic view of the
ongoing corporate performance in specific market conditions.
Types of Market Intelligence
1.Competitior Intelligence
2.Product Intelligence
3.Market Understanding

 What is Market Entry Strategies? Explain the entry strategy for companies?

Answer:- Market entry strategies provide businesses with a roadmap to enter into international
markets. Since there are many methods companies can use to sell their goods globally, they will
choose the best approach based on their goals and target market. Understanding market entry
strategies and their differences can help you decide which strategy offers the most benefits to
your company. Market entry strategies are methods companies use to plan, distribute and deliver
goods to international markets.

Here are 10 market entry strategies you can use to sell your product internationally:

1. Exporting

Exporting involves marketing the products you produce in the countries in which you intend to
sell them. Some companies use direct exporting, in which they sell the product they manufacture
in international markets without third-party involvement. Companies that sell luxury products or
have sold their goods in global markets in the past often choose this method.

Alternatively, a company may export indirectly by using the services of agents, such as
international distributors. Businesses often choose indirect exporting if they're just beginning to
distribute internationally. While companies pay agents for their services, indirect exporting often
results in a return on investment (ROI) because the agents know what it takes to succeed in the
markets in which they work.

2. Piggybacking

If your company has contacts who work for organizations that currently sell products overseas,
you may want to consider piggybacking. This market entry strategy involves asking other
businesses whether you can add your product to their overseas inventory. If your company and
an international company agree to this arrangement, both parties share the profit for each sale.
Your company can also manage the risk of selling overseas by allowing its partner to handle
international marketing while your company focuses on domestic retail.

3. Countertrade

Countertrade is a common form of indirect international marketing. Countertrading functions as

a barter system in which companies trade each other's goods instead of offering their products for
purchase. While legal, the system does not have specific legal regulations like other forms of
market entry do. This means companies may solve problems like ensuring other companies
understand the value of their products and attempting to acquire goods at a similar level of
quality. Countertrading is a cost-effective choice for many businesses because the practice may
exempt them from import quotas.

4. Licensing

Licensing occurs when one company transfers the right to use or sell a product to another
company. A company may choose this method if it has a product that's in demand and the
company to which it plans to license the product has a large market. For example, a movie
production company may sell a school supply company the right to use images of movie
characters on backpacks, lunchboxes and notebooks.

5. Joint ventures

Some companies attempt to minimize the risk of entering an international market by creating
joint ventures with other companies that plan to sell in the global marketplace. Since joint
ventures often function like large, independent companies rather than a combination of two
smaller companies, they have the potential to earn more revenue than individual companies. This
market entry strategy carries the risk of an imbalance in company involvement, but both parties
can work together to establish fair processes and help prevent this issue.

6. Company ownership

If your company plans to sell a product internationally without managing the shipment and
distribution of the goods you produce, you might consider purchasing an existing company in the
country in which you want to do business. Owning a company established in your international
market gives your organization credibility as a local business, which can help boost sales.
Company ownership costs more than most market entry strategies, but it has the potential to lead
to a high ROI.

7. Franchising

A franchise is a chain retail company in which an individual or group buyer pays for the right to
manage company branches on the company's behalf. Franchises occur most commonly in North
America, but they exist globally and offer businesses the opportunity to expand overseas.
Franchising typically requires strong brand recognition, as consumers in your target market
should know what you offer and have a desire to purchase it. For well-known brands, franchising
offers companies a way to earn a profit while taking an indirect management approach.

8. Outsourcing

Outsourcing involves hiring another company to manage certain aspects of business operations
for your company. As a market entry strategy, it refers to making an agreement with another
company to handle international product sales on your company's behalf. Companies that choose
to outsource may relinquish a certain amount of control over the sale of their products, but they
may justify this risk with the revenue they save on employment costs.

9. Greenfield investments

Greenfield investments are complex market entry strategies that some companies choose to use.
These investments involve buying the land and resources to build a facility internationally and
hiring a staff to run it. Greenfield investments may subject a company to high risks and
significant costs, but they can also help companies comply with government regulations in a new
market. These investments typically benefit large, established organizations as opposed to new
enterprises.

10. Turnkey projects

Turnkey projects apply specifically to companies that plan, develop and construct new buildings
for their clients. The term "turnkey" refers to the idea that the client can simply turn a key in a
lock and enter a fully operational facility. You might consider this market entry strategy if your
clients comprise foreign government agencies. International financial agencies usually manage
arrangements between companies and their overseas clients to ensure the companies provide
high-quality service and the client pays the full amount due.

 What is Global Strategic Alliances?

Answer:- A global strategic alliance is usually established when a company wishes to
edge into a related business or new geographic market, particularly one where the
government prohibits imports in order to protect domestic industry. Alliances are
typically formed between two or more corporations, each based in their home country,
for a specified period of time. Their purpose is to share in the ownership of a newly
formed venture and maximize competitive advantages in their combined territories. The
cost of a global strategic alliance is usually shared equitably among the corporations
involved and is generally the least expensive way for all concerned to form a partnership.
An acquisition, on the other hand, offers a faster start in exploiting an overseas market
but tends to be a much more expensive undertaking for the acquiring company—one that
is likely to be well out of the reach of a solo operator. While a global strategic alliance
works well for core business expansion and utilizing existing geographic markets, an
acquisition works better for immediate penetration to new geographic territories. Hence,
an alliance provides a good solution to global marketers that lack the required distribution
to get into overseas markets. A global strategic alliance is also much more flexible than
an acquisition with respect to the degree of control enjoyed by each party. Depending on
your resources, you can structure an equity or non-equity partnership. Within an equity
partnership, you can hold a minority, majority, or equal stake. In a non-equity
partnership, the host country partner has a greater stake in the deal, and thus holds a
majority interest. Yet whom you choose as your partner is arguably more important than
how the partnership is structured, because you want a partner who will have an active
 contribution to make and who is flexible and able to resolve conflicts as the alliance
evolves. Even more important is that you keep in mind what you are seeking to gain from
the alliance and that you choose a partner whose contribution will enable you to achieve
those goals.
Advantages of Global Strategic Alliance

1. Get instant market access, or at least speed your entry into a new market
2. Exploit new opportunities to strengthen your position in a market where you already have
a foothold
3. Increase sales
4. Gain new skills and technology
5. Develop new products at a profit
6. Share fixed costs and resources
7. Enlarge your distribution channels
8. Broaden your business and political contact base
9. Gain greater knowledge of international customs and culture
10. Enhance your image in the world marketplace

Six Disadvantages of the Global Strategic Alliance

1. Weaker management involvement or less equity stake

2. Fear of market insulation due to the local partner's presence
3. Less efficient communication
4. Poor resource allocation
5. Difficult to keep objectives on target over time
6. Loss of control over important issues such as product quality, operating costs, employees,
etc.

 What is Global Mergers and Acquisitions?

Answer:- The terms mergers and acquisitions are often used interchangeably, however, they
have slightly different meanings When one company takes over another and establishes itself as
the new owner, the purchase is called an acquisition.

On the other hand, a merger describes two firms, of approximately the same size, that join
forces to move forward as a single new entity, rather than remain separately owned and
operated. This action is known as a merger of equals. Case in point: Both Daimler-Benz and
Chrysler ceased to exist when the two firms merged, and a new company, DaimlerChrysler, was
created. Both companies' stocks were surrendered, and new company stock was issued in its
place. In a brand refresh, the company underwent another name and ticker change as the
Mercedes-Benz Group AG (MBG) in February 2022.

A purchase deal will also be called a merger when both CEOs agree that joining together is in
the best interest of both of their companies.
Unfriendly or hostile takeover deals, in which target companies do not wish to be purchased, are
always regarded as acquisitions. A deal can be classified as a merger or an acquisition based on
whether the acquisition is friendly or hostile and how it is announced. In other words, the
difference lies in how the deal is communicated to the target company's board of directors,
employees, and shareholders.

 Explain Designing a Global Organization? Types of Global

Organisation Structure?

Answer:- Organisational design is the process of aligning the structure of an organisation with its
objectives, with the ultimate aim of improving efficiency and effectiveness. Work can be triggered
by the need to improve service delivery or specific business processes, or as a result of a new
mandate. Organisational development is the planned, comprehensive and systematic process aimed
at improving the overall effectiveness of an organisation.
It involves intervening in its processes, structure and culture; there is a strong emphasis on
organisational behaviour, human resource development and organisational change.Organisational
design can be viewed as an organisational development intervention

Expo-documents against acceptance Department:

Exports are often looked after by a company’s marketing or sales department in the initial stages
when the volume of exports sales is low. However, with increase in exports turnover, an
independent exports department is often setup and separated from domestic marketing, as shown

in
Exports activities are controlled by a company’s home-based office through a designated head of
export department, i.e. Vice President, Director, or Manager (Exports). The role of the HR
department is primarily confined to planning and recruiting staff for exports, training and
development, and compensation.
Sometimes, some HR activities, such as recruiting foreign sales or agency personnel are carried
out by the exports or marketing department with or without consultation with the HR
department.
International Organizational Structures
 1. International division structure:
As the foreign operations of a company grow, businesses often realize the overseas growth
opportunities and an independent international division is created which handles all of a
company’s international operations The head of international division, who directly reports to the
chief executive officer, coordinates and monitors all foreign activities.

The in-charge of subsidiaries reports to the head of the international division. Some parallel but
less formal reporting also takes place directly to various functional heads at the corporate
headquarters.
The corporate human resource department coordinates and implements staffing, expatriate
management, and training and development at the corporate level for international assignments.
Further, it also interacts with the HR divisions of individual subsidiaries.
The international structure ensures the attention of the top management towards developing a
holistic and unified approach to international operations. Such a structure facilitates cross-
product and cross-geographic co-ordination, and reduces resource duplication.
Although an international structure provides much greater autonomy in decision-making, it is
often used during the early stages of internationalization with relatively low ratio of foreign to
domestic sales, and limited foreign product and geographic diversity.

Global Organizational Structures:

Rise in a company’s overseas operations necessitates integration of its activities across the world

and building up a worldwide organizational structure.

While conceptualizing organizational structure, the internationalizing firm often has to

resolve the following conflicting issues:

i. Extent or type of control exerted by the parent company headquarters over subsidiaries

ii. Extent of autonomy in making key decisions to be provided by the parent company
headquarters to subsidiaries (centralization vs. decentralization)

It leads to re-organization and amalgamation of hitherto fragmented organizational interests into

a globally integrated organizational structure which may either be based on functional,
geographic, or product divisions. Depending upon the firm strategy and demands of the external
business environment, it may further be graduated to a global matrix or trans-national network
structure.

Global functional division structure:

It aims to focus the attention of key functions of a firm, as shown in Fig. 17.4, wherein each
functional department or division is responsible for its activities around the world. For instance,
the operations department controls and monitors all production and operational activities;
similarly, marketing, finance, and human resource divisions co-ordinate and control their
respective activities across the world.

Such an organizational structure takes advantage of the expertise of each functional division and
facilitates centralized control. MNEs with narrow and integrated product lines, such as
Caterpillar, usually adopt the functional organizational structure.

Such organizational structures were also adopted by automobile MNEs but have now been
replaced by geographic and product structures during recent years due to their global expansion.

Global product structure:

Under global product structure, the corporate product division, as
depicted in Fig. 17.5, is given worldwide responsibility for the product
growth.

The heads of product divisions do receive internal functional support

associated with the product from all other divisions, such as
operations, finance, marketing, and human resources. They also enjoy
considerable autonomy with authority to take important decisions and
operate as profit centres.

The global product structure is effective in managing diversified product lines.

Such a structure is extremely effective in carrying out product modifications so as to meet

rapidly changing customer needs in diverse markets. It enables close coordination between the

technological and marketing aspects of various markets in view of the differences in product life

cycles in these markets, for instance, in case of consumer electronics, such as TV, music players,

etc.
However, creating exclusive product divisions tends to replicate various functional activities and

multiplicity of staff. Besides, little attention is paid to worldwide market demand and strategy.

Lack of cooperation among various product lines may also result into sales loss. Product

managers often pursue currently attractive markets neglecting those with better long-term

potential.

Global geographic structure:

Under the global geographic structure, a firm’s global operations are organized on the basis of

geographic regions, as depicted in Fig. 17.6. It is generally used by companies with mature

businesses and narrow product lines. It allows the independent heads of various geographical

subsidiaries to focus on the local market requirements, monitor environmental changes, and

respond quickly and effectively.

The corporate headquarter is responsible for transferring excess resources from one country to

another, as and when required. The corporate human resource division also coordinates and

provides synergy to achieve company’s overall strategic goals between various subsidiaries

based in different countries.

Such structure is effective when the product lines are not too diverse and resources can be

shared. Under such organizational structure, subsidiaries in each country are deeply embedded

with nationalistic biases that prohibit them from cooperating among each other.

Global matrix structure:

It is an integrated organizational structure, which super-imposes on each other more than one

dimension. The global matrix structure might consist of product divisions intersecting with

various geographical areas or functional divisions (Fig. 17.7). Unlike functional, geographical, or

product division structures, the matrix structure shares joint control over firm’s various

functional activities.

Such an integrated organizational structure facilitates greater interaction and flow of information

throughout the organization. Since the matrix structure has an in-built concept of interaction

between intersecting perspectives, it tends to balance the MNE’s prospective, taking cross-

functional aspects into consideration.

It facilitates ease of technology transfer to foreign operations and of new products to different

markets leading to higher economies of scale and better foreign sales performance. Matrix

structure is used successfully by a large number of MNEs, such as Royal Dutch/Shell, Dow

Chemical, etc.

In an effort to bring together divergent perspectives within the organization, the matrix structure

may also lead to conflicting situations. It inhibits a firm’s ability to respond quickly to

environmental changes in case an effective conflict resolution mechanism is not in place.

Since the structure requires most managers to report to two or multiple bosses, Fayol’s basic

principle of unity of command is violated and conflicting directives from multiple authorities

may compel employees to compromise with sub-optimal alternatives so as to avoid conflict

which may not be the most appropriate strategy for an organization as a whole.

Transnational network structure:

Such a globally integrated structure represents the ultimate form of an earth-spanning

organization, which eliminates the meaning of two or three matrix dimensions. It encompasses

elements of function, product, and geographic designs while relying upon a network arrangement

to link worldwide subsidiaries (Fig. 17.8).

This form of organization is not defined by its formal structure but by how its processes are

linked with each other, which may be characterized by an overall integrated system of various

inter-related sub-systems.

The trans-national network structure is designed around ‘nodes’, which are the units responsible

for coordinating with product, functional and geographic aspects of an MNE. Thus, trans-

national network structures build-up multidimensional organizations which are fully networked.

The conceptual framework of a trans-national network structure primarily consists of

three components:

Disperse sub-units:
These are subsidiaries located anywhere in the world where they can benefit the organization

either to take advantage of low-factor costs or provide information on new technologies or

market trends
Specialized operations:
These are the activities carried out by sub-units focusing upon particular product lines, research

areas, and marketing areas design to tap specialized expertise or other resources in the

company’s worldwide subsidiaries.

Inter-dependent relationships:
It is used to share information and resources throughout the dispersed and specialized

subsidiaries.

Organizational structure of N.V. Philips which operates in more than 50 countries with diverse

range of product lines provides a good illustration of a trans-national network structure.

International Organizational Structures:

Evolution of Global Organizational Structures:

Organizational structures often exhibit evolutionary patterns, as shown in Fig. 17.9, depending

upon their strategic globalization. The historical evolution of organizational patterns indicates

that in the early phase of internationalization, most firms separate their exports departments from

domestic marketing or have separate international divisions.

Companies with emphasis on global business strategies move towards global product structures

whereas those with emphasis on location base strategies move towards global geographic

structures.

Subsequently, a large number of companies graduate to a matrix or trans-national network

structure due to dual demands of local adaptations pressures and globalization. In practice, most

companies hardly adopt either pure matrix or trans-national structures; rather they opt for hybrid

structures incorporating both.

 Globalization, Innovation, and Sustainability: Challenges to Strategic Management:

Impact of Globalization, Innovation, Sustainability

Globalization is mechanism of growth and innovation in market. It tends to enhance the

use of resources with every country specializing in the production of goods for which it is
best suited according to natural and human resource intuitions. It leads to an increase in
productivity, competitiveness, growth of nations and reduction of costs but the economic
expansion in the last century had alarming consequences for global environment. The
new economic policies and structural adjustment programme often predict environmental
impact without accuracy because of the complex interplay of various economic, social,
political and ecological factors. This will led a negative impact on the environment. The
overuse of natural resources due to increased demand and also the removal of ecosystems
due to population growth have had a large negative impact on the environment. Hence
the concept of sustainable development originated for the first time, which refers to a
mode of human development in which resource aims to meet human needs while
ensuring the sustainability of natural system and the environment, so that these needs can
be met not only in the present, but also for generations to come, which leads to
Sustainable human development.
 2. Sustainable Development "Development that meets the needs of the present without
compromising the ability of future generations to meet their own needs."— from the
World Commission on Environment and Development’s The term “Sustainable
Development” is well recognized today. Although its meaning and implication are
currently contested in theory and practice, its general meaning is widely understood. The
term became popular after the 1987 publication of Our Common Future, also known as
the Brundtland Report, by the World Commission on Environment and Development
(WCED, 1987). This concept was first given prominence at the United Nations
Conference on Environment and Development (UNCED) in Rio in 1992, Substantially it
widens the scope of the global problem. Sustainable development also highlighted the
links between globalization, planet-wide risks and share responsibilities that created a
need for action by international community. The aim of sustainable development is to
balance our economic, environmental and social needs, allowing prosperity for now and
future generations. It consists of a longterm, integrated approach to developing and
achieving a healthy community by jointly addressing economic, environmental and social
issues. Thus, it is a desired direction of change and provides a framework to decide
developmental actions by nation’s communities and individuals. Conceptually,
sustainable development can be conceived Impact of Globalization and sustainability in
Africa 925 of as integrating three ‘pillars’; namely- International Environmental Law,
International Human Rights Law and International Economic Law. The integrated
structure of sustainable development is such that it requires support from each of the
pillars.

3. Globalization Globalization can be termed as a process in which business decisions,

production processes, and market gradually exhibit more “international” characteristics
and less “national” ones. Globalization implies a wide range of underlying structural
reforms. Globalization is a broader concept which contributes to economic growth.
Population change, natural resource, endowments, and cultural traditions are the other
important drivers of growth. Technology change is also important. Globalization is
considered as an important element in the reform package and has its parameters:
Permitting free flow of goods by reducing or removing trade barriers between the
countries; Creation of an environment for free flow of capital and technology between the
countries; and From the point of view of developing country, creation of an environment
in which free movement of labour can take place in different countries of the world. In
response to trade and foreign investment the opportunity resulting from globalization,
have embarked on the liberalization of a large and growing number of developing
countries including India in their trade and foreign investment regimes, as well as the
adaptation of their domestic economic structures and straightening of their export
capacity. To participate in the global economy, African nations are supposed to open up
barriers to foreign investment, reduce corporate regulations and taxes, as well as other
disincentives to vibrant economic activities.

 What is Organizational Adaptation Theory? Explain with example

Answer:- Organizational adaptation theory states that organizations adjust their

operations and strategies to adapt to changing environments. Look into the definition of
 organizational adaptation theory and learn how it applies to businesses. This is just one
example of organizational adaptation theory, which asserts that businesses will change
how they operate or function in an effort to keep up with changing market conditions or
shifting environment factors. This could all be due to things like new laws that impact an
industry or changing consumer demands, for example. Organizations that adapt,
according to the theory, are more successful long-term.

Example: - Netflix's Adaptation

When Netflix first burst onto the scene in 1997, it presented a new and innovative way
for consumers to watch the latest movies on DVD: by mail. Thanks to a more tech-savvy
consumer base with less time on their hands, Netflix was able to capitalize on the idea of
bypassing the video store on the way home from work. There were other benefits, too. A
large selection of titles and the ability to keep a DVD as long as you wanted, eliminating
those pesky late fees stores like Blockbuster became known for.But when was the last
time you received a DVD from Netflix in the mail? Probably not very recently, right? As
mobile device usage started to soar, internet speeds continued to quicken and smart TVs
started to become a mainstay in American homes. Netflix had to learn to adapt by moving
to a more streaming-based service to appeal to changing market conditions.
Airbnb is a company that allows people traveling across the country (and even the
world) to rent someone else's property, essentially acting as small-scale, unofficial hotel
rooms. Airbnb is another good example of organizational adaptation theory in practice.
Airbnb, for all its successes, has faced challenges. New regulations in many cities are
clamping down on what homeowners of Airbnb can and can't do when listing their
properties. For example, it formed an alliance with the real estate industry's Century 21 to
come up with more rental-friendly leases. At its core, this is a shift in how Airbnb does
business. However, it's a necessary one for the company to continue to survive and thrive.

Organizational Adaptability
In today's fast-paced culture, businesses can be here one day and gone the next, with very little
wiggle room between the two. Organizational adaptability means how quickly organizations
adjust their business processes and improvise themselves to achieve their goals. In short,
adaptability is essential for competitive advantage.
To stay competitive means that organizational leadership needs to be ready and willing to
embrace change in the form of new products and services, pricing, location, or concept. It also
means that these companies operate in such a way that they anticipate the need to change before
it's too late.
Highly adaptable organizations share some common traits:

 They have well-defined expectations, goals, and corporate culture. Adaptable companies
are forward-thinking and not only recognize the importance of change but anticipate it
and actively seek it out. Adaptability is woven throughout everything they do. It is a part
of how they do business, and every employee from the house-keeping to the CEO
 understands what they're about.

 They value their employees. They understand that their employees are the lifeblood of
successful adaptation, allowing the business to work and innovate in a way that allows
them to seize opportunities as they become available.

 They are creative. Organizations that excel at adaptability encourage creativity from their
employees and model it as a business practice. Creativity is a natural derivative of
adaptability because it requires employees to be open-minded and willing to embrace
new ideas with flexibility.

 They have problem-solving mindsets. Many changes are led by organizations that could
anticipate the solution to a problem before it presented itself.

 What does it mean by Creating a Learning Organization?

Answer:- A learning organization is an organization skilled at creating, acquiring, and

transferring knowledge, and at modifying its behavior to reflect new knowledge and
insights.

This definition begins with a simple truth: new ideas are essential if learning is to take
place. Sometimes they are created de novo, through flashes of insight or creativity; at
other times they arrive from outside the organization or are communicated by
knowledgeable insiders. Whatever their source, these ideas are the trigger for
organizational improvement. But they cannot by themselves create a learning
organization. Without accompanying changes in the way that work gets done, only the
potential for improvement exists.

 How to create Learning Organization

1. Creating Systematic problem solving Organization

2. Experimentation

3. Learning from Past Experience

4. Learning from others

5. Transfering Knowledge

6.Measuring Learning’s.

 What is Environmental Scanning?

Answer:- Environmental scanning is a process of gathering information about the events
and their relationship with the internal and external environment of the organization. The
primary aim of environmental scanning is to find out the future prospects of business
organization. As a significant resource to the management, the Environmental Scanning
Committee enables the management to make decisions from fundamental analysis of
historical events to estimate future events. The committee also helps in creating action
plans to address these upcoming events, analyzing action plans and arranging appropriate
resources for those plans, and putting management in contact with fellow employees with
the knowledge set to provide quality data for decision making.

Environmental Scanning Definition

The process of collecting, evaluating, and delivering information for a strategic purpose
is defined as environmental scanning. The process of environmental scanning requires
both accurate and personalized data on the business environment in which the
organization is operating or considering entering.

What are the Characteristics of Environmental Scanning?

The characteristics of environmental scanning are as follows:

Continuous Process- The analysis of the environment is a continuous process rather than
being sporadic. The rapidly changing environment has to be captured continuously to be
on track.

Exploratory Process- Scanning is an exploratory process that keeps monitoring the

environment to bring out the possibilities and unknown dimensions of the future. It
stresses the fact that “What could happen” and not ”What will happen”.Dynamic Process-
Environmental scanning is not static. It is a dynamic process and depends on changing
situations.Holistic View- Environmental Scanning focuses on the complete view of the
environment rather than viewing it partially.

Components of Environmental Scanning Internal

Environmental Components- The components that lie within the organization are
internal components and changes in these affect the general performance of the
organization. Human resources, capital resources and technological resources are some of
the internal environmental components.

External Environmental Components: The components that fall outside the business
organization are called external environmental components. Although the components lie
outside the organization, they still affect the organizational activities. The external
components can be divided into micro environmental components, and macro
environmental components. Micro environmental components include competitors,
consumers, markets, suppliers, organizations, etc. Macro environmental components
include political, legal, economical, cultural, demographic, and technological factors.
 Techniques of Environmental Scanning

SWOT Analysis- SWOT analysis is an acronym for Strengths, Weaknesses,

opportunities and threats analysis of the environment. Strengths and weaknesses are
considered as internal factors whereas opportunities and threats are external factors.
These factors determine the course of action to ensure the growth of the business.

PEST Analysis- PEST stands for Political, economic, social, and technological analysis
of the environment. It deals with the external macro-environment.

ETOP- ETOP stands for the Environmental Threat Opportunity Profile. It helps an
organization to analyze the impact of the environment based on threats and opportunities.

QUEST- QUEST stands for the Quick Environmental Scanning Technique. This
technique is designed to analyze the environment quickly and inexpensively so that
businesses can focus on critical issues that have to be addressed in a short span.

 Stratergy Formulation and Strategy Implementation

Strategy Formulation Strategy Implementation

Strategy Formulation includes planning and Strategy Implementation involves all those
decision-making involved in developing means related to executing the strategic plans.
organization’s strategic goals and plans.

In short, Strategy Formulation is placing the In short, Strategy Implementation is managing

Forces before the action. forces during the action.

Strategy Formulation is an Entrepreneurial Strategic Implementation is mainly

Activity based on strategic decision-making. an Administrative Task based on strategic and
operational decisions.

Strategy Formulation emphasizes Strategy Implementation emphasizes

on effectiveness. on efficiency.

Strategy Formulation is a rational process. Strategy Implementation is basically

an operational process.

Strategy Formulation requires co-ordination Strategy Implementation requires co-ordination

among few individuals. among many individuals.

Strategy Formulation requires a great deal Strategy Implementation requires

of initiative and logical skills. specific motivational and leadership traits.

Strategic Formulation precedes Strategy STrategy Implementation follows Strategy

Implementation. Formulation.

 Explain Core Competencies

Answer:- A successful business has identified what it can do better than anyone else, and
why. Its core competencies are the "why." Core competencies are also known as core
capabilities or distinctive competencies. Core competencies lead to competitive
advantages.

Core competency is a relatively new management theory that originated in a 1990 Harvard
Business Review article, “The Core Competence of the Corporation.”1

In the article, C.K. Prahalad and Gary Hamel review three conditions a business activity
must meet in order to be a core competency:

 The activity must provide superior value or benefits to the consumer.

 It should be difficult for a competitor to replicate or imitate it.
 It should be rare.

Real-World Examples
A business is not limited to just one core competency, and competencies vary based on
the industry in which the institution operates.

Some of the core competencies of established and successful brands tend to be there for
all to see:

 McDonald's has standardization. It serves nine million pounds of French

fries every day,and every one of them has precisely the same taste and texture.
 Apple has style. The beauty of its devices and their interfaces gives them an edge
over its many competitors.
 Walmart has buying power. The sheer size of its buying operation gives it the
ability to buy cheap and undersell retail competitors.

 Assessing Countries’ Attractiveness: Country attractive Market and industry

opportunities
Answer:- The International business environment includes various factors like social,
political, regulatory, cultural, legal and technological factors that surround a business
entity in various sovereign nations. There are exogenous factors relative to the home
environment of the organization in the international environment. These factors influence
 the decision-making process on the use of resources and capabilities. They also make a
nation either more or less attractive to an international business firm.

Country attractiveness is a measure of a country’s attractiveness to the international

investors. In international business, investment in foreign countries is the most important
aspect and hence firms want to determine how suitable a country is in terms of its
external business environments.
International business firms judge the risks and profitability of doing business in a
particular country before investing and starting a business there. This judgment includes
studying the environmental factors to arrive at a decision.
It is pretty clear that businesses prefer a country that is less costly, more profitable, and
has fewer risks. Cost considerations are related with investment. Profitability is
dependent on resources. Risks are associated with the environment and hence it is of
prime concern.
Risks may be of various types. However, the general consensus is that a country that is
more stable in terms of political, social, legal, and economic conditions is more attractive
for starting a business.
 What is Competitive Strategy?
Answer:- Competitive advantage is a set of qualities that give businesses leverage over
their competition. It allows businesses to offer their target market a product or service
with higher value than industry competitors. In the long term, this boosts the business'
position in their industry and drives a greater number of sales than competitors.
Competitive advantage can come in a variety of forms, ranging from expert branding to
intelligently designed distribution networks. Often there are multiple factors that combine
to create competitive advantage,

such as:

 Product quality
 Strategic pricing
 Customer service
 Market positioning
 Distribution networks
 Innovation and access to new technologies