International business and Globalisation

Globalisation is the process by which the world is becoming increasingly interconnected as a result of massively increased trade and cultural exchange. Globalisation has increased the production of goods and services. Big companies have now turned into multinationals with productions facilities and subsidiaries all around the world. Globalisation has resulted in increased international trade giving birth to multinationals which operate in more than one country, with some even setting up production facilities in different parts of the world, mainly where they can find relaxed laws and cheap labour.

There are though, some problems with globalisation. The major problem is that because of increased globalisation, world economies have become interconnected. This is dangerous because if one major economy faces and economic meltdown, it will affect countries around the world. Trade agreements have been signed to mainly benefit Western countries and this is causing the rich to get richer and poor to get poorer.

Organisational strategy

Strategy is defined as "the long term direction of an organisation" Johnson and Scholes (2011). There are three different levels of strategy; corporate, business and operational level. The corporate level defines the overall scope of the organisation. The business level looks at how individuals business units compete in their particular market and the operational level looks at how organisations actually deliver in terms of resources, people, and processes. SWOT analysis is way of analysing an organisations position in the market and this helps the organisations to come up with a strategy for the future. SWOT stands for strengths, weaknesses, opportunities and threats. Strengths and weaknesses will look at the organisation itself whereas the opportunities and threats are of the external environment. Ansoff matrix is a tool used by a business to determine its product and market growth strategy. It suggests that growth of a business relies on whether the business markets new or existing products in new or exiting markets.

Oragnisational context

The term organisational context refers to the organisations environment. There are 3 layers of environment, internal, competitive and external. Some of the aspects of the internal environment are the organisations structure, objectives and culture. To measure the competitive or micro environment there are some tools. Porters 5 forces helps us analyse the micro environment.

This tools helps us analyse the competition and the industry as a whole. All the 5 forces determine the profitability of an industry. To measure the external environment a tool called PESTLE is used. It stands for political, economical, sociocultural, technological, legal and environmental factors. This tool is used because organisations are influenced by external factors and to survive and grown the organisations must respond to any changes in the external environment. PESTLE allows organisations to look at the most influential external environmental factors and this allows businesses to predict what the future of their industry will be so they can plan accordingly. Here is an example of a PESTLE analysis

Management theories

Management is the process of co-ordinating people and other resources to achieve the goals of an organisation. There are many management theories but the most popular ones are from Frederick Winslow Taylor, Henri Fayol, Henry Ford and Elton Mayo with his Hawthorne effect. Taylor's theory is know an scientific management. According to Taylor there would be an increased in productivity if workers worked like machines. His theory is based on efficiency and productivity. His theory suggests that the best way of doing a job should be defined and only the right person should undertake this task, thus eliminating time wastage. He also suggested that motivation is purely on financial incentives and the more the reward if for doing a job, more effort will be put into the job by the worker. Fayol on the other hand suggested that division of labour should be achieved as this will give more authority and responsibility to the workers hence improving their motivation and productivity. Also according to his theory management should be centralised, which means that all decision making should rest with the higher management as this will increase efficiency. Henry Ford is famous for creating the moving assembly line which is nowadays use by almost all manufacturing companies around the world. He is also the founder of the Ford Motor Company. The ver first car produced by this company was the Ford Model - T which was also the very first mass produced car. Here's a short video on Ford, and the Model T car. Fordism, named after Henry Ford, is a notion of a modern economic and social system based on an industrialized and standardized form of mass production for maximum efficiency