Global Environment: Global environment is the most vital component of macro environment. It refers to operating in more than one country in the world & gain its R & D, production, marketing & financial advantages in terms of cost & reputations that are not available to domestic competitors. Globalization of markets refers to the process of integrating & merging of world markets into a single market. This process involves the identification of some common norm, value, taste, preference & cultural shift towards the use of common product or services. The Example of products having global acceptance are: Coca-Cola, Pepsi, Mc Donald’s, Citicorp Credit cards etc. Characteristics of Global Environment: Global Environment treats the whole world as a common village focuses on how organizations are related to each other. It consists of a set of fresh beliefs, working methods, economic, political and socio-cultural relatives in business. It integrates the world economy & opens scope for new potential of huge market. It intends to remove all global barriers among countries. Global Company: Global company is a firm which having multiple units that are located in different parts of the world, but all are being linked by common ownership of umbrella. Global multiple units draw a common pool of resources like: money, credit, information, patent, trade name & control system. Its shareholders & human capital are of different nations. The company follows common strategy to sell its products in most of the countries. Reasons For Globalization: The large scale industries have mass production. So they focus on foreign market. They try to reduce the risk of diversity of portfolio of countries. Companies globalize markets in order to increase their profits & achieve goals. The adverse business environment in the home country pushes the companies to globalize their market. The failure of domestic companies in catering the needs of their customers pulled the foreign countries to market their products. It is particularly important to industries which are directly depending on imports & exports. Advantages Of Globalization: Free flow of capital & increase in the total capital employed. Free flow of technology from developed countries to developing countries. Increase in industrialization. Spread production facilities throughout the globe. Balanced development of world economies. Increased in production & consumption of outputs. Commodities available at lower price with high quality. Cultural exchange & demand for a variety of products in foreign market. Increase in job opportunities & income for the country along with welfare & prosperity. Disadvantage Of Globalization: Globalization kills domestic small business firms. It exploits human resources in global firms. It leads to unemployment & underemployment in developing countries. It declines income & standard of living due to unemployment & increases high gap between rich & poor.

1. Global Environment In
Corporate Strategy
By: Dr. Debajani Palai

2. Global Environment
• Global environment is the most vital component of macro
environment.
• It refers to operating in more than one country in the world & gain its
R & D, production, marketing & financial advantages in terms of cost
& reputations that are not available to domestic competitors.
• Globalization of markets refers to the process of integrating &
merging of world markets into a single market. This process involves
the identification of some common norm, value, taste, preference &
cultural shift towards the use of common product or services.
• The Example of products having global acceptance are: Coca-Cola,
Pepsi, Mc Donald’s, Citicorp Credit cards etc.

3. Characteristics of Global Environment
• Global Environment treats the whole world as a common village
focuses on how organizations are related to each other.
• It consists of a set of fresh beliefs, working methods, economic,
political and socio-cultural relatives in business.
• It integrates the world economy & opens scope for new potential of
huge market.
• It intends to remove all global barriers among countries.

4. Global Company
• Global company is a firm which having multiple units that are located
in different parts of the world, but all are being linked by common
ownership of umbrella.
• Global multiple units draw a common pool of resources like: money,
credit, information, patent, trade name & control system.
• Its shareholders & human capital are of different nations. The
company follows common strategy to sell its products in most of the
countries.

5. Reasons For Globalization
• The large scale industries have mass production. So they focus on foreign
market.
• They try to reduce the risk of diversity of portfolio of countries.
• Companies globalize markets in order to increase their profits & achieve
goals.
• The adverse business environment in the home country pushes the
companies to globalize their market.
• The failure of domestic companies in catering the needs of their customers
pulled the foreign countries to market their products.
• It is particularly important to industries which are directly depending on
imports & exports.

6. Cont…
• To gain access to new customers
• To achieve lower cost to enhance the firm’s competitiveness.
• To capitalize core competencies
• To spread its business risk across a wider market base.
• Speed & faster communication network
• Interlinked independent economies
• Lowering trade & tariff barriers
• Increasing trends towards privatization
• Mobilization of skilled resources
• Formulation of regional trade blocks like: NAFTA (North American Free Trade
Area), European Union, SAARC (South Asian Assoiation for Regional Co-
operation).

7. Advantages Of Globalization
• Free flow of capital & increase in the total capital employed.
• Free flow of technology from developed countries to developing countries.
• Increase in industrialization.
• Spread production facilities throughout the globe.
• Balanced development of world economies.
• Increased in production & consumption of outputs.
• Commodities available at lower price with high quality.
• Cultural exchange & demand for a variety of products in foreign market.
• Increase in job opportunities & income for the country along with welfare
& prosperity.

8. Disadvantage Of Globalization
• Globalization kills domestic small business firms.
• It exploits human resources in global firms.
• It leads to unemployment & underemployment in developing
countries.
• It declines income & standard of living due to unemployment &
increases high gap between rich & poor.
• It leads to commercial & potential colonialism to poor countries.
• The customer demand declines for own domestic products.

9. Strategic Response to Global Environment
• Different strategic approaches are connected with global environment.
These are: Least resistance, Proceed with caution & Dynamic response.
• Least Resistance strategy is followed by the business which involves to
manage for their survival by the way of coping & adjusting with dynamic
external environment. It is passive behavior & is solely guided by signals of
environment.
• Proceed with Caution is the next level of strategic response to the volatile
environment. It focuses on survival, stability & strength. It takes corrective
& adaptive steps.
• Dynamic Response is highly sophisticated level. In this level strategist
efficiently manage & control the actions of the company to face changing
environment.