Business Organisations in a Global Context

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The first activity requires analysis of the differences between organisations working in different sectors, industries and contexts on a global scale. Further, the responsibilities of organisations operating on a global scale and strategies employed by those strategies are also discussed in this activity. Keeping the requirements in mind, the activity is broken down into three sections respectively.

Differences between Organisations Working in Different Sectors, Industries and Contexts on a Global Scale

In the view of Ball et al. (2012), the management of an organisation operating on global scale is tough regardless of the sector, industry or context of operations of the organisation. This is due to the fact that major factors in each country including the macroeconomic factors affect the organisational performance. Moreover, the organisational structure and operations of global firms also vary on the basis of sector and industry it is operating in.

One of the differences highlighted among the global organisations operating in services and manufacturing sector is in the terms of recruitment and employment policies. It has been theorised by Griffin and Pustay (2012) that global firms can have one of three strategies for their recruitment. Those include the geocentric (selection of most suitable candidate), polycentric (selection limited to host country) and ethnocentric strategies (selection limited to parent country).

It is found that the recruitment policy of the majority of manufacturing companies is found to be polycentric. The majority of their employees are from the host country as they aim to reduce manufacturing costs by utilisation of cheap labour. On the contrary, the majority of employees at service companies are hired on the basis of selection of most suitable candidate; therefore, the strategy can be termed as geocentric.

Another aspect, in which the global businesses operating in different sectors differ, is the nature of their operations. It has been observed that manufacturing industries rely on physical activities in the host country as they start operations in developing countries in most cases to reduce their manufacturing costs. However, global service companies may not need to operate physically in multiple countries based on the nature of their business.

It is possible that they rely on online mediums to operate internationally while having offices in only one country (Hill, 2008). These are two key and common differences among the global companies operating in different sectors and industries. Further, in the view of Griffin and Pustay (2012), the practices of businesses vary based on nature of their industries as well given that the regulatory requirements and other operational requirements vary significantly among the industries. The differences primary include the nature of operations, the labour and qualified workforce employed, the financial reporting and every other aspect as well.

Responsibilities of Operations on a Global Scale

As theorised in the context of agency theory by Bonazzi and Islam (2007), the ultimate responsibility on management of any corporation is to pursue the interests of its shareholders, who are the actual owners. It is stated that management must act as an agent in order to maximise the shareholders’ return in the long-run.

Moreover, it is argued that the sole focus on shareholders is an outdated approach as the corporate governance focuses on all stakeholders of the company. Keeping this view in mind, the management is responsible to satisfy the needs of all the stakeholders including both internal (employees, management and owners) and external (customers, suppliers and society).

A recent development in the area of corporate social responsibility has raised concern for both the local and global companies regarding their contribution to the society. The global companies are increasingly focusing on social activities that can do something good for the societies as a whole. As these trends have increased recently, the corporate social works are often obliged as a responsibility for businesses and each business is focusing on CSR (Ball et al., 2012).

In the given context, one of the major responsibilities on the global companies is to pursue the activities that can give the returns back to the society as well. With respect to this, the global companies are found practicing activities that can provide financial benefits to the society primarily lower class. Moreover, the global companies are also involved in activities which are better for the environment and the health of the people and animals residing in the country (Kolk and Van Tulder, 2010).

In the view of Hill (2008), another major responsibility for global companies is based on recent deterioration in global environment. Therefore, the global companies are also responsible for the employment of green inputs and machinery in order to help the regulatory authorities improve the environment. These are few of the major responsibilities that must be considered by global businesses as they seek to protect the interests of stakeholders and society as a whole.

Different Strategies Employed by Global Organisations

Global businesses base their international strategy on the basis of the nature of business and the target market needs and wants. Three types of strategies are found to be common among different global organisations; those include the multi-domestic strategy, global strategy and transnational strategy. The multi-domestic strategy is followed by many companies like MTV, which tailor their shows for different nations.

Similarly, if any company provides tailor based services on the basis of geography or country, its strategy is said to be multi-domestic. The strategy is employed by companies which aim to meet the needs of each country’s audience or where the needs of audience cannot be satisfied with same product / service. Such industries include the textile or clothing industry because clothing habits vary significantly across the globe (Tarique, Schuler and Gong, 2006).

In contrast to the multi-domestic strategy, the global strategy is employed by companies which aim to provide similar products or services to all the countries. This strategy is suitable for services sector like financial sector where customers expect similar service from the service provider throughout the world.

The third strategy is middle way between the multi-domestic and global strategies and is referred to as the transnational strategy. The companies following this strategy opt to offer differently packaged or featured product to the different countries. The slight change in features or packaging is made in order to attract the target customers in different countries (Connelly et al., 2007).

In addition to these strategies, the global brands also pursue strategies like mergers, acquisition and alliances to expand their business internationally. It is found that the mergers and acquisitions commonly involve at-least one global brand (Tarique, Schuler and Gong, 2006). The discussion suggests different strategies that can be followed by the global businesses in order to attract potential customers and outperform their competitors.

Activity 2

The second activity focuses on analysis of the impact of national economy on business organisations. It has been performed by analysing the impact of few macroeconomic indicators on the business organisations. The governments take certain measures to promote certain industries or businesses in the economy in general; some of those measures have also been included in this activity.

Impact of Performance of National Economy on Business Organisations

In the view of Gereffi (2005), the performance of national economy refers to the macroeconomic performance of an economy; it is indicated by numerous macroeconomic factors such as the GDP growth rate, GNP growth rate, inflation rate and similar indicators. It is generally agreed that improvement in these indicators affects both the individuals and business organisations.

In this section, the impact of three macroeconomic factors identified above is analysed. According to Stone (2011), the performance of national economy and the financial performance of business organisations is directly…..