Case Scenarios based on Management inGlobal Business Environment Assignment
Task: Global Business Environment Assignment Part A – Resource Summary This task requires you to summarise “Navigating a world of disruption by Bughin, J. &Woetzel, J:
Your summary needs to:
- Introduce the author/speaker, their topics/themes and the context of the paper/presentation; • identify the key argument or perspective being presented;
- State the key findings/points of the paper/presentation (may use dot points for emphasis);
- Briefly discuss the relevance or contribution of this paper/presentation to global business management;
- Accurately reflect what is in the report/article/website/presentation.
Part B – Short Answer Questions
You are required to provide written responses to questions below:
Question 1 – At the beginning of this course, we considered some of the major trends that have impacted the global business environment. Discuss the extent to which advances in information and communication technologies could help and hinder progress towards the UN Sustainable Development Goals.
Question 2 – Using the Hofstede Insights Country Comparison Tool, compare the cultural dimensions of Poland and Indonesia. Identify the three dimensions with the greatest difference between these countries and:
- Briefly describe each of these dimensions;
- Outline some practical strategies a manager of a global business from Poland could implement to accommodate these differences when engaging with a management team at a subsidiary organisation in Indonesia.
Question 3 – Corporate Social Responsibility (CSR) has become a critical consideration for global businesses. This course discussed two main approaches to CSR:
- identify and describe the approach to CSR that best represents the approach taken by some of the world’s leading companies, in terms of their CSR performance;
- Select one of these companies (that has been identified as a global leader in CSR performance) and outline some of the activities and business approaches that have contributed to its reputation as a responsible global business.
Part C - Global Business Case Study
You are required to read the Global Business Case Study – SAP and respond to the questions below:
Question 2: There were two strategies critical to SAP’s global success – Internationalisation and Research & Development. Describe each of these strategies in terms of how these supported SAP’s growth into international markets. Question 3: ‘Recently, rumours have surfaced suggesting a possible relocation of SAP’s main operation from Germany to the United States.’ Identify and discuss the pros and cons of such a move and how this applies to SAP’s global business strategy.
The chosen resource for summarizing in this part of global business environment assignment is “Navigating a world of disruption” by Jonathan Woetzel and Jacques Bughin. The theme of this paper is based on the era of several disruptions in which the world is being drastically changed by powerful global forces. This paper aims to emphasize the use of digital technologies that has reinvented the way we organize, work and live. Overall, the adoption of AI and automation has brought transitions that require changes in new skills and occupations.
This paper argues about the positive economic impact of automation and AI along with its societal concerns. In today's business world automation and AI have boosted the global economy's productivity and this has been major support after the 2008 global financial crisis (Bughin&Woetzel, 2019). However, there are certain areas of concern regarding the misuse of AI that can significantly hamper data privacy and the use of personal information.
The key findings of this paper reflect that emerging countries such as India and China account for almost two-thirds of global GDP growth. It has also been observed that there has been a reduction in China’s exposure to the world whereas;there has been an increasing exposure of the world to China(Bughin&Woetzel, 2019). In addition to that, the aspect of technology adoption seemed to be uneven across various sectors and companies along with increasing environmental stress based on the increasing levels of economic activity.
This paper contributes to global business management by analyzing China’s relationship with the world based on China’s global exposure. In addition to that, this paper also acknowledges that global value chains have become more reliant and knowledge-intensive on the aspect of high-skilled labor.
This research paper reflects on the opportunities that are created by the value chain based on the intense societal and competitive challenges. Lastly, various factors related to global disruption and the economic effects have been analyzed in this paper.
Part B –
Information and communication technologies (ICTs) refer to all the components of communication technologies such as cell phones, wireless networks, internet, software, video conferencing, computers, etc(AIMS, 2020). Advances in ICTs can tremendously help and hinder the progress of all the 17 United Nations Sustainable Development Goals. Affordable and efficient ICT services and infrastructure will allow the nations to effectively take part in the digital economy that can significantly enhance the competitiveness and overall well-being of the economy. Advanced ICTs will help in achieving results at a scale, accuracy, quality, speed, and cost that can deliver quality services and goods in various areas of human requirements. Hunger and poverty can be reduced along with boosting health, creation of new jobs, mitigating climate change, improving energy efficiency by making communities and cities more sustainable. ICTs have tremendous potential to accelerate the progress of SDGs based on the framework of 4 I's that are Infrastructure, Innovation, Investment, and Inclusivity. ICT devices can be used anywhere in the world based on the same frequency bands that ensure smooth services of radiocommunications without any interference from other radiocommunications services (ITU, 2018). Various countries in the world are promoting strategies for the development of renewable energy technologies and ICTs can tremendously support such SDGs.
Rapid technological changes based on advancement in ICTs are contributing heavily to the success of SDGs of UN through several mechanisms of reduced cost, increased productivity, etc. The SDGs (Sustainable Development goals) were built on the efforts of MDGs (Millennium Development Goals). Despite none of the 17 SDGs specifically referring to ICTs, there is still enough evidence that proves the substantial acceleration of the development process by ICTs.
Figure 1: ICTs role in achieving United Nations SDGs
Source: (Diana, 2019)
Overall, it is evident that digital technologies can tremendously accelerate the progression towards sustainable development by increasing access to information through innovation and highly efficient processes. It is quite challenging to achieve all the aspects of various SDGs but ICTs have made it relatively easier by hindering the progress towards a sustainable future. Therefore, ICT infrastructure has coupled with the availability of various devices such as computers, tablets, and smartphones that have allowed organizations and individuals to gain the desired access to information and communication services (Diana, 2019). All these factors have allowed both the under-developed and developed countries to achieve significant progress on the SDGs.
Figure 2: Cultural dimensions of Poland and Indonesia
Source: (Hofstede Insights, 2020)
As per the comparison of the cultural dimensions of Poland and Indonesia, it is observed that the three of them consistsmaximum difference between both the countries are Long Term Orientation, Uncertainty Avoidance and Individualism. Individualism addresses the issue based on the degree of interdependence that is followed by a society based on its members(Hofstede Insights, 2020). This refers to the aspect of people’s self-image being defined by “We” or “I”. Individualist societies comprises of people who tend to look after their family and themselves only whereas, people in collectivist societies belong in groups that goes for loyalty exchange in return of taking care.
Uncertainty avoidance is related to the aspects of society dealing with the fact that the future is unpredictable (Hofstede Insights, 2020). This ambiguity brings anxiety in different cultures and it thus becomes mandatory to deal with anxieties in various ways. It also refers to the extent that a particular culture’s members feel comfortable or uncomfortable in various unstructured situations.
Long-term orientation refers to the links that every society has to maintain related to its past while dealing with the future and present challenges (Hofstede Insights, 2020). Different societies prioritize these existential goals differently and those societies that scoreless on this dimension tend to maintain time-honored traditions whereas, the society that scores high prefers a more pragmatic approach.
A manager from a global business based in Poland can implement certain practical strategies to accommodate the existing differences during the engagement with an Indonesian organization’s management team. For overcoming the individualism differences, the manager from Poland can begin initiating terms based on offering medical support and other facilities to the parents of the employees so that the individualism differences can be managed. To overcome the differences in uncertainty avoidance, the manager can effectively establish specific rules and regulations regarding the company’s policy that will reflect the company’s approach towards the employees’ well-being. Any change in the subsidiary organization must be carefully implemented as sometimes even minimal cause significant worries. Lastly, the difference in long-term orientation, where Indonesia drastically exceeds Poland as Indonesia has a pragmatic culture can be mitigated by the manager from Poland through adaptation of the Indonesian traditions in its business activities. The desired business objectives of the company must display a strong propensity to invest and save the Indonesian culture, which can potentially lead to sustainable business.
In recent years, the majority of the organizations have embraced CSR (corporate social responsibility) that delivers a clear message to the people in terms of being reliable, fair priced, and employee-centric along with caring for the environment by acting on various environmental or social concerns (Rangan et al., 2015). CSR enables managers to focus on the demonstration of social good based on a company's new endeavors or products. Several organizations have firmly committed to making socially responsible business practices in the areas of environmental, social, and corporate governance. The CSR approach emphasizes making a difference in the community in which they operate by changing the lives of the local people (?elazna et al., 2020). In addition to that, various initiatives have been initiated as well in terms of planting more trees and fighting poverty. In various parts of the world, there are places where people still lack basic amenities, and the CSR approach taken by some of the world's reputed companies has been continuously making lives better. Lastly, reputed companies make their corporate governance structure better through the CSR approach as keeping the employees and stakeholders satisfied holds tremendous importance given the transparency that exists in today’s business environment. Some of the top-rated companies in terms of CSR activities are Lego, Natura, Google, Microsoft, Bosch, Disney, Intel, Lavazza(Gonçalves, 2019).
Lego, which is at the top of the CSR reputation list thrives to improve three pillars of CSR efforts that are local communities, environment, and children. The company continuously works towards building a better world for children by developing a vital tool for learning. Lego pays attention to everything and has strategic activities and investments in terms of creating a foundation that helps and inspires a better future. Lego has several positive values that thrive to reduce the impact on the environment through lesser emissions of harmful gases along with responsible use of resources. The company has improved energy efficiency in its supply chain and has chosen sustainable packaging since 2014 (Lemaitre &Leorat, 2019). In terms of employee protection, the company prioritizes the quality of life at work by preventing accidents and risks along with providing regular motivation at work. Lastly, the company launched a local community engagement program in the countries of its business operation, and based on this engagement program Lego benefits the children by developing their learning capacity. All these factors have tremendously contributed to enhancing Lego's reputation as a responsible global business operator.
The growth strategy of SAP is mainly based on two key areas that are internationalization and research & development. The internationalization strategy of SAP is a great way to expand its business overseas. Through the internationalization strategy, the company focused more on developing adequate software solutions that allow the customers to work with fewer worries. The suitable software solution is a part of SAP's international expansion, and it allows customers to address various areas of business. The internationalization strategy of SAP is divided into three core areas that are internationalization, translation, and localization. Localization helps the software users to get knowledge about local business practices and can adjust the business operations according to the market demand. Translation helps to convert information into the local language, which is necessary to reach out to new customers.
Another growth strategy of SAP is its immense R & D activities. The development centers and labs of SAP are located worldwide. The key centers are located in Germany, the USA, and India. The research centers are collocated with either a development center or with a partner university. The locations that are selected for R&D are based on severe reasons. One of the main reasons is close contact with potential customers (support.sap.com, 2021). As the R&D locations possess a great customer base of SAP, so it will be easier for the company to gain knowledge about the special needs of the customers. The presence of the R&D centershelps the business able to be close to the customers and excel in their competitive edge.
Both the strategies above enable the business to gain a competitive advantage in the global market. Business expansion via internationalization is a great way to gain a rapid speed of growth. The key leading factor behind the implementation of the growth strategies is SAP's confidence in its ability to progress in the existing product line and introducing new products in the market. Expanding the business via an internationalization strategy brought huge success for the business (support.sap.com, 2021). It enables the business to closely connect with the customers and expanding the customer base in new markets. SAP has a global customer base that is located in more than 180 countries. The company uses international expansion to achieve a great competitive advantage. In the case of internationalization strategy, the business also able to standardized their products to meet the expectancy of customers. While expanding the business overseas, the company came up with global solutions that allow the customers to work with a connected network.
On the other hand, the R&D strategy of the business helps the company to come up with new software solutions to meet extended market demand. As per dynamic market needs, the requirements of the customers are also changing. Hence, collaborating with the development centers and Partner University for research and development activities helps the business to add more value to the existing product line and to come up with new solutions. The locations that are selected for the R&D activities are not only because the locations are suitable for R&D activities or the partners with whom the business collaborated. Another motive behind selecting the locations in the presence of a major customer base. While working in the locations, it is easy for the business to maintain close contact with the customer base, which allows knowing about their preference in detail (Quint, 2020). While working on the R&D on the selected locations, the business also expanded its operations in those locations. For example, SAP has a very strong presence in India, and almost 4000 employees are working in Bangalore. India is an attractive market for SAP because it is a growing technological hub. High-skilled workers are another reason to expand operations in India. Expanding the operation in India is a profitable option for the business because it gets the availability of highly skilled workers within the limited expenditure. Hence, the business saves lots of money with the help of shifting the production and development facilities in the R&D location like India.
The growth strategies of SAP are not implemented based on one motive. Each growth strategy of SAP carries severe motives, which reflects that the company implements its strategies tactically. The adequate implementation of growth strategies and continuous monitoring of the activities shows the business develops its strategies based on current market needs and its environmental analysis. Hence, it can be said that SAP is tactically implementing its growth strategies, which leads the business towards ultimate success.
SAP is planning to relocate its main operation to the US, which is currently in Germany. The main reason behind the relocation is indicated as the strong presence of potential customers in the location, which will benefit the business. The core area, which is targeted, is Silicon Valley, which is expected to be a profitable option of relocation for SAP. Silicon Valley will work as an inspiring factor for SAP, as per its expectancy, it will get better outcomes. However, the strategy of relocation will bring potential influence on the business, as both opportunities and risks are involved in it. The pros and cons of the relocation strategy of SAP are discussed below:
Improved operations: The key benefit that the relocation strategy will provide to the business is improved operations. Relocating the main operations in the US is a great option because; it will help the business to collaborate with research centers and with other technological organizations to enhance productivity (business2community.com, 2015). Along with that, the business has already had a presence in the US as in 2011, SAP was working on a project. In the new complex that is developed by SAP, a mix of new employees and experienced developers from German headquarters are allocated. An effective team will help the business to speed up productivity. In the US, Silicon Valley is an inspiring place that can help the business to come up with new ideas.
Advancement in innovation:Along with the current offerings of SAP, the business needs to work continuously on its product development to address the dynamic market needs. Along with the increasing competency in the market, the demand of the customers is also changing rapidly (AMADEO, 2020). The customers are expecting more updated forms of technological solutions to meet the regular business needs. Silicon Valley is known as a center for innovation organizations (AMADEO, 2020). The main reason the companies want to do business there are high profits. It is the comparative advantage of the US compared to other countries. The advance of innovation can be ensured by working in the US, which will provide great success to the business.
Increasing Professional Networks: Silicon Valley is known as the center of innovation companies, so there is a chance for SAP to expand its business operations by collaborating with other businesses (Milano, 2020). Increasing the professional networks is another growth strategy for the business, which will help SAP to expand its customer base and come up with more profitable solutions.
Moving costs: As SAP is planning to relocate its headquarter from Germany to the US, it means developing the complex and set up planning adds more cost to the business. Developing the relocated place just like the old one requires huge costs that will influence the business (Smith, 2017).
Adapting new place: Adapting the relocated place takes time, which cannot ensure the ultimate success of the relocation strategy until it is fully settled. While working in the US there are severe factors that the business has to take care such as the external environment and industry norms (Smith, 2017). Molding the operations as per the norms of the country will require time, which is a major challenge for the company. Along with that, there are already many technological companies are existing in the US, which the competition is stiff.
Disruption in production: Most of the production is based on the workforce, which leads the business to ultimate success. While adapting the change for the business, SAP also has to find out potential employees who can manage the operations as per the expectancy of the business (Smith, 2017). While working in the US, the business has to hire employees from the host country also that many cause cultural conflict among employees during their work.
Based on the analysis above, it can be said that the relocation strategy of SAP is going to be very challenging for the business, but the potential benefits it, will provide the business a long-term success. The relocation strategy will work as a part of SAP's global business strategy as it will help the business to expand its presence in a new market, and will allow contacting closely to the target customers. The relocation strategy will allow the business to achieve ultimate profitability and will help SAP to increase its professional network. Analyzing the pros and cons of the relocation strategy of SAP, it can be said that the businesscanget an excellent opportunity to enhance its product range and to develop new features on its existing product line. The cons that are related to the relocation strategy can be mitigated by potential strategy implementation.
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