2. Overview
2
• Discuss the notion of the free market and concepts of the
invisible hand; critically evaluating the role of business from
shareholder value to stakeholder value and sustainability
• Illustrate how organisations are founded and the role of
having a purpose and vision in a number of the most
impactful and successful businesses e.g Apple, Microsoft and
Facebook
• Evaluating the multiple environments in which business
operate
• Discuss major trends in globalisation including KPIs of
different fast growing countries
• Determine how organisations can do business across borders
• Highlight the major challenges; political, cultural, social and
logistical of doing business globally
3. Learning Outcomes
3
• Critically evaluate the changing nature and role of
business
• Determine the role of corporate purpose and
vision
• Articulate the multiple environments a business
operates in
• Critically evaluate the challenges and
opportunities for businesses operating on a global
scale
4. Role of the free market
It is not from the
benevolence of the
butcher, the brewer or the
baker, that we expect our
dinner, but from their
regard to their own self
interest. We address
ourselves, not to their
humanity but to their self-
love, and never talk to
them of our own
necessities but of their
advantages.
Adam Smith
5. Characteristics of a free-market; the
invisible hand
According to the invisible hand
theory, each of us, acting in our
own self-interests, generates a
demand for goods and services
that compels others to deliver
those goods and services in the
most efficient manner so that
they may be able to receive
compensation from others and
make a profit in doing so. In this
process, resources are allocated
in the most efficient manner, in
contrast to a process that relies
on a centrally planned system.
6. An explanation in 60 seconds
View Video: https://www.youtube.com/watch?v=ulyVXa-u4wE
13. Why have a Corporate Mission or Vision?
“Data from a 10 year growth study of
more than 50,000 brands showed
companies with a purpose at the
centre of all they do, outperform the
market by 400 percent.”
Jim Stengal,
Ex-CMO
Procter & Gamble
A Vision Drives
65% to go
the extra
mile
2nd most
important
hiring
reason
64%
would be
more
loyal
Source: Calling Brands’ survey, You Gov, 2013
14. The Ashridge Mission Model
Why the company exists
Policies and behaviour patterns
CompetitivePosition&
Competencies
Whatthecompanybelievesin
Success Factors
Source: Ranchhod and Gurau, 2007:16
15. Market Defined Mission Statement
According to Kotler et al (2013), a mission statement is “a
statement of the organisation’s purpose – what it wants to
accomplish in the larger environment”
Why
How
What
“Model of Purpose” by Simon Sinek
View video: http://www.ted.com/talks/simon_sinek_how_great_leaders_inspire_action
19. PE(D)ST Analysis
Economics
Technology
Social
Political
Demographics
EVIDENCE BASED
REGULATION
INCREASE IN
REGULATOR
ENFORCEMENT
GLOBAL REGULATION
& PRIVACY
ASSET PRICES INCREASEUK RECOVERY
ROLE OF SOCIAL
FINANCE
60% LIVING IN
URBAN AREAS (50%
NOW)
5M MORE OVER 65’S
>SINGLE PERSON
HOMES AND <30S
LIVING W PARENTS
ASSET PRICES INCREASEUK RECOVERY
ROLE OF SOCIAL
FINANCE
Open vs Closed Mobile & Tablet Digitisation
21. Increase in and
application of
technology
Liberalization of
cross-border trade
and resource
movements
Forces Driving Globalization
Development of services
that support international
business
26. Various ways of doing business internationally
Source: Bovee et al, 2013
27. Challenges in doing business globally
• The external environment affects a company’s international
operations
• Managers must understand social science disciplines and
how they affect functional business fields
• Consider:
Physical
Factors
Social
Factors
Competitive
Factors
28. Physical and Social Factors
• Geographic influences
– natural conditions influence business locations
• Political policies
– countries determine where and how business occurs
within their borders
• Legal policies
– influence how a company operates
• Behavioral factors
– may require adaptation in to local conditions
• Economic forces
– explain differences in costs, currency values, market size
29. The Competitive Environment
• Competitive strategy for products
– Cost strategy
– Differentiation strategy
– Focus strategy
• Company resources and experience
– market leaders have more resources for international
operations
• Competitors faced in each market
– local or international
30. Essential work for next week
• Please consult the OLE for details of:
– Essential readings*
– Seminar/workshop preparation work*
– Recommended further readings
– Any additional learning
* Essential readings and preparation work must always be completed in time
for the next session
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