Business blog 18-11-2013

This is the last week of learning of our introduction to business and management, and we focus on international business and globalization on this week.

 

International business means that the organizations are trading all around the globe, and breaking the national boundaries.  For more detailed, organizations have their production lines in different countries, cross border sale of their products and services. Also multinational corporation are the organization that operating in more than one country and most of the large organizations are operating in the global market.

 

For globalization, it has so many definitions, so I just simply define globalization as the fusion of the world in multi ways, the most common way is economically, also there are culturally, politically, technologically and environmentally.      

First of all, I would talk about globalization for an economical aspect, as I think this aspect affect the world the most. The economic aspect is made up by the international market of commodity, labour and capital.

And in the 1900s, as technology development, the technology of transportation and communication were improved, it encouraged the international trade and investment.

 

 

Plus, in 1995, there was the formation of the world trade organization (WTO), which it aim to protect the member counties while they are trading internationally, and one of its functions is to set up the international trading policies and principles, etc.:

·         Non-discrimination: The WTO member are required to apply the same conditions on all the trading with other WTO members

·          Promote fair competition

·         Encourage development and economic reform: Provide help to the developing countries

With the continuous development of technology, and the WTO, it leads to encouraged more organisations to start trading internationally.

Take American as an example, its amount for international trade in 2000 is $2522.31 billion, and in 2012, it raised to $4932.22 billion, it almost a double, which also show the trend of the raise of international trading in the recent decades.

Secondly, for the cultural aspect of globalisation, it can be defined as the cross-border transmission of different idea, meaning, belief, value and knowledge.

For example, the American culture brings a large impact to the cultural globalisation, like:

·         Fast food culture: McDonald become the world biggest food service company in the world, and it corporate 34000 chains in 119 countries

·         Popular culture: The Hollywood (American film and  television industries) dominates most of the world media market and its pop music industry is strong too, many American artists are recognized worldwide

 

 

Besides, some theory stated that in some sense, globalisation equal to Americanization and westernization, which the global culture are influenced by the western culture, and I do agree with this, because the living style like fashion, dining culture are in western style. However, I think the situation are slight changing in the recent year, the culture in Asia are influencing the western world too, like:

·         Japanese animation are popular and commercially profitable around the world, which it generate lot of income for Japan from exporting their animation and licensing the animations to the companies around the world

·         K-pop (south Korea’s music industry): The Korean Wave in 21^st century and PSY's Gangnam Style becomes the most viewed video on YouTube, moreover, from the statistic from 2011, the export of cultural and entertainment service in Korea was US$800 million

  

·         The raise of China: the international trade of Chine in 2012 was US$3.87 trillion, while back to 1998; its international trade was only around US$3oo million. Also, China is ranking the Second place in the world GDP ranking

As a conclusion, I think although globalisation will bring some negative influences to some countries or industries, more international trade can still provide more business opportunities to the world and provide more income to the locals to improve their living standard. Therefore, globalisation will be the world trend in the future and I belief that it would make our world a better place.

Business blog 16-11-2013

We forced on the organizational strategy this week, and the general definition for strategy is ‘a pattern in a stream of decisions’, by Mintzberg. And before making any plan of strategy, there always need to be an analysis, like the PESTLE and SWOT analysis

Talking about the SWOT analysis, it contain the below four elements:

·         Strength: what the organisation strong at and which part of their business have advantage over the others

·         Weaknesses: what the organisation weak at and their disadvantage over other organisations

·         Opportunities: New project that the organisation can do base on its strength in the future

·         Threat: the elements that will cause problem to the business from the external environment and the industry

This analysis can help the management of the organisation set a more clear and achievable goal.

Using Microsoft as an example for the SWOT analysis,

·         Strength: The well-known brand name, experiences about the industry, technology of software

·         Weaknesses: haven’t develop any new products for many years, and there are some technological in their software

·         Opportunities: develop new mobile product, enter new market

·         Threat: Privacy problem, competition

Besides of the SWOT analysis, we focus on strategies. And our reading is ‘of strategies, deliberate and emergent’ by Mintzberg and Waters. In that article, it mainly talks about the formation of strategies, it also illustrate that how the Deliberate and emergent can be the two end of a continuum.

Deliberate strategies Emergent strategies

 

·         Clear intentions                              absent of intention

·         Leadership

·         Shared vision

·         Control over organisational action

 

·         External environment

In which, the deliberate strategies are realised as intended strategies, and emergent strategies are patterns of consistencies realised in the absence of intention.

In addition, the article mentions that the umbrella strategies and process strategies are the most common types.

Umbrella strategies:  

·         More relaxed approach of strategies

·         Guidelines and boundaries are set clearly, but people can maneuver it

·         Strategies are allowed to emerge within the boundaries

·         Seem as deliberately emergent

Process strategies:

·         Influence of the leadership is indirect

·         Process are guided

·         Seem as deliberately emergent

Finally, the strategies can help the organisation by the following:

·         Encourages the leadership to assess and articulate a vision

·         May found out new opportunities

·         Guide the structure formation with business grows

·         Provide guidance for decision making

 

In which, the deliberate strategies are realised as intended strategies, and emergent strategies are patterns of consistencies realised in the absence of intention.

In addition, the article mentions that the umbrella strategies and process strategies are the most common types.

 

 

 

Umbrella strategies:  

·         More relaxed approach of strategies

·         Guidelines and boundaries are set clearly, but people can maneuver it

·         Strategies are allowed to emerge within the boundaries

·         Seem as deliberately emergent

 

Process strategies:

·         Influence of the leadership is indirect

·         Process are guided

·         Seem as deliberately emergent

Finally, the strategies can help the organisation by the following:

·         Encourages the leadership to assess and articulate a vision

·         May found out new opportunities

·         Guide the structure formation with business grows

·         Provide guidance for decision making

 

 

 

 

 

business blog 4-11-2013

This week we mostly focus on how to look at the macro environment of an organization, which we will use the tool, called PESTLE. This PESTLE approach can show the different factors that will affect the organization, each are political, economic, social, technological legal, and environment factor.

Political Factor: The factors that mainly focus on the government’s policies and the intervention from the government, the most common one are the tax policy.  This factor is important because the government always have great influence.

Economic Factor: This is the factor that related to money, finance, market, and rates. This would be one of the major factors that influence the process of decision making for most of the organization. For example, if there is an economic growth, the organization may launch more new products and slightly increase the price.

Social Factor: This factor is related about the impact of the society and the culture. For example, population size and age distribution will affect the organization’s decision making about which product or service they should provide. Also, for the culture part, the factor of trend will have a big impact on the design and demand of the product/service. For example, the trend changed the design of mobile phone, from the tradition phone with keyboard to touch screen, also improved from the phone that only used for calling to a smart phone that you can do everything on it.  

Technological Factor: This is the factor that how the technology influence the organization. Like the research and development activity and the technology advancement. A better technology level can improve the quality of the product; lower the cost of production and leading to more innovation.

Legal Factor: I personally thing this factor is overlapped with the political factor, one of the tiny difference is that the legal factor focus more on how the laws affect the industry. Like the employment law and the consumer law.

Environmental factor: This is the factor that related to the environmental and ecological aspect. For example, climate change and global warming is the most important environmental factor for most of the industries.  

In addition, although the PESTLE analysis is commonly used in the world, I think there is are better approach of analysis, which is the DESTEP analysis (Demographic, economic, social-cultural, technology, ecological and political). I think this is better because the DESTEP is more specific on each factor, and it describe the industry in a wider range.