A Report on Piyola Paper Bags
The report talks about analysis of contextual factors which exert importance on the business conducts and impact the performance excellence of the business. The business concern for which the analysis has been done is Piyola Paper Bag Company which runs its manufacturing of eco-friendly paper bags in Srilanka. The company aims at catering the customer base beyond the domestic border of the country and it wants to serve the international market. In the modern business scenario it is very important for the business enterprises irrespective of the sector to recognize the factors that are responsible for its smooth conducts. The globalization has been one of the most important aspects that enhance the integration among the countries through trade relations (Ahid & Augustine, 2012). There are different economic benefits that the businesses get through operating business in international scenario. At the same time it is very important for the companies like Piyola Paper Bag to be aware of the contextual factors and their impacts on the internal and external business environment (ANDRUSEAC, 2013).
Explanation of theories and concepts:
Globalization is the term that can be used to explain the inclination towards better integration of the resources and interdependence. There are two important concepts related with the concept of globalizations. One is the globalization of the markets and the other one is the globalization of the production. The conducts of business in emerging and new markets across the world is the globalization of the markets. The sourcing of products from different places of the world is the globalizations of the production. The globalization is the scenario where the business is carried on between the nations beyond the national borders. The integration of the resources and the operations of the business is the main theme of the globalization. The barriers or the constraints in the way of trade and investment get declined because of increased globalization of the businesses. The technological changes are also important factors that are considered to be vital in the globalization concept. In the current scenario of the political and financial aspects the rise of Asia and emergence of new geopolitical order are the two main themes of globalization. The national differences in respect to the capital and other resources have compelled the business enterprises to take care of the globalization aspects with huge importance. The business enterprises now either outsource the resources or source them from some different nations for the purpose of business (Akpor-Robaro & Mamuzo, 2012).
The business gets ample amount of benefits from operating business on international ground. The removal of trade barriers has helped the nations to achieve the economies of production and a large customer base. The foreign direct investment has also been increased to high extent because of the globalization. The globalization provides the businesses with the ample benefits of low cost of labour and resources and many other facilities that help them to achieve the competitive advantage to great extent. This is also equally true for the small organizations. The small organizations can also get the opportunities of conducting business operations with excellence (Dobon, 2009).
In order to promote globalizations the organizations like the World Trade organizations, International Monetary Fund, World Bank, United Nations have been established. These organizations help in the effective management, regulation of the policies in the international market place. The promotion of the multinational agreements to control and regulate the international business system has been initiated (Douhan, Norbäck, & Persson, 2013). Thomas Friedman in his write up has mentioned that with the help of globalization the world can be defined as flat. The technological advancement and the use of the e-commerce resources have made the global connection and communication much convenient. The business organizations now can connect with the customers located at any corner of the world because of the internationalization. The businesses can get enhanced economic securities after they conduct business on international level (ANDRUSEAC, 2013). The globalization has reached a different level with the support of smart technology and e-commerce tools and technologies. The theory of Friedman has highlighted some of the flattening factors that have affected the business and assumed to be influencing the future of the business. The factors are mainly the collapse of the Berlin Wall, Netscape, Work Flow Software, Uploading, outsourcing, off-shoring, supply chaining, In-sourcing, informing and the digital devices that is the ‘Steroids’ (Friedman, 2007).
Pankaj Ghemawat has claimed the concept of globalization is popular but there are evidences where it has been revealed that the globalization has not taken the expected shape in reality. There are many areas where the touch of globalization is still left to great extent (Ghemawat, 2011). He has mentioned in his write-up that it is only 10-25% of the globalization has reached.
Major internal and external factors and their impacts on business:
The internal factors including the organizational culture, employees, factors of production, customer related factors and policies and decisions related to business are highly impacted by globalization. The management accounting of global organizations face several challenges (Ahid & Augustine, 2012). The internal factors get influenced by the changes that are inevitable in the course of globalization. There is a close connection between the change management and the concept of globalization (Higgs & Rowland, 2000). The changes take place in the internal environment of the organization due to globalization and cross-cultural diversity affect the employees’ behaviour and that need an effective change management. The globalization also initiates innovation. The entire process of decision making is also affected by the globalization (Susman, 2006). The human resources are required to be managed well in the scenario of globalization. The globalization also impacts the policies that the entrepreneurs of the business formulate for better integration in international business. The conflicts also arise because of cultural differences in the workplace and that also needs to be managed well as the business of Piyola Paper Bag wants to conduct overseas. The customer services and customer relationship management of the company on global platform will have to be managed well (Hashemi & Hajiheydari, 2011).
The political differences in the countries where the business of Piyola Paper Bag wants to emerge have to be understood as political factors are quite significant in influencing the business. The economical factors are also equally important to be understood and evaluated as they are vital for the growth of the business. The social factors impact the business. The standard of living of the population, their education, their lifestyle and their purchasing behaviour will also be affected by the globalization,. The technological factors are very important in this respect as the emergence of e-commerce has made the globalization to be most cost-effective (Hashemi & Hajiheydari, 2011). The smart technology has helped the globalization to reach a different level and to become most convenient. The business enterprise needs to analyse the legal and environmental factors while planning for overseas business. This can enhance its business excellence (Birnleitner, 2013). The legal formalities are different in different nations and while conducting business it is important that these regulations are taken well care of by the business. The Piyola Paper Bag will be serving eco-friendly bags in the international market and hence it has to abide by the norms of the environmental policies for the manufacturing of its deliverables (Ian Brooks & Wilkinson, n.d.).
Feasible recommendations based on the analysis:
Piyola Paper Bag has to be aware of the different contextual factors that are important for the strategies and structure of the business. It should come up with a feasibility analysis of the factors and evaluation of the same to find their workability and suitability to the business of the company context (Olbrich, Pöppelbuß, & Niehaves, 2012 ). The business has to understand the significance of globalization in its expansion and barrier free trade on international platform. It has to ensure better management of the resources in the globalization scenario. It has to come up with various policies and strategies that include the globalization concept on serious note. The change management has to be there as the internationalization sometimes gives rise to changes in the organizational culture and structure. The management of resources for better outcomes from conducting business on international platform is very important. The company has to understand the customers and competitors in the globalization business scenario. The trade free movement of the factors of the production has to be handled with excellence so that competitive advantage and economies of scale can be achieved rationally. The human resources have to be managed well (Fehrenbacher & Helfert, 2012).
The contextual factors are most influential for any business. It is also true to say that many businesses still are not aware of the factors. There they cannot perform well on desired level. The resources of the business can be managed well and the benefits from these factors can be achieved if the context-awareness is ensured by the business. Piyola Paper Bag can get an open platform for conducting business in the international market if it understands the need of and importance of globalization. It is most common in today’s business that even small organizations are also trying to conduct global business to ensure better integration and barrier free trade.
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