530 Global Business Environment ASSIGNMENT 2

In this report will examine how operating in the global marketplace affects an organizations structure, culture and functions. More than that, assess the impact of globalization on the organizations decisionmaking and strategy. This will be analyzed and applied in the globalization process of Japanese automaker Honda when participating in the Vietnamese market in the current context.

ASSIGNMENT 2 FRONT SHEET

Unit number and title Unit 18: Global Business Environment (530)

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Contents

I Introduction 4

II Evaluate how operating in a global market influences an organization's structure, culture and functions 5

2.1 McKinsey’s 5

2.2 The most important influence of "S" on Honda automobile industry 9

2.3 Influencing cultural - governance on Honda automobile industry in the context of globalization.9 2.4 Influence of structure / function on Honda automaker in globalization 10

III Evaluate the influences of ethical and sustainable globalization on organizational functions 11

3.1 Child labor 11

3.2 Human Right 11

3.3 Enviroments 12

3.4 Gender Equality 13

IV Evaluate the different ways decision making can work effectively in a global context 13

4.1 Apply the five elements of the strategy to Honda automobiles 14

V Determine and articulate the various routes to internationalization an organization may adopt, including key barriers 15

5.1 Application of PEST framework to Honda 15

VI Critically evaluate global market influences in application to appropriate theories and models relating to organizational structure and culture 17

VII Critically evaluate the key barriers in doing business internationally and make recommendations on how they can be overcome 18

7.1 Economic risks: 18

7.2 Political risks 20

7.3 Legal risks 21 7.4 Competitive risks 21 VIII References 22

I Introduction

In this report will examine how operating in the global marketplace affects an organization'sstructure, culture and functions More than that, assess the impact of globalization on theorganization's decision-making and strategy This will be analyzed and applied in the globalizationprocess of Japanese automaker Honda when participating in the Vietnamese market in the currentcontext

II Evaluate how operating in a global market influences an organization's structure, culture and

• Shared values

Application in Mottor Honda Company

The model is based on the theory that, for an organization to perform well, these seven elementsneed to be aligned and mutually reinforcing So, the model can be used to help identify what needs to

be realigned to improve performance, or to maintain alignment (and performance) during othertypes of change

Whatever the type of change - restructuring, new processes, organizational merger, new systems,change of leadership, and so on - the model can be used to understand how the organizationalelements are interrelated, and so ensure that the wider impact of changes made in one area is takeninto consideration Honda Motor Company has applied this model to increase the effectiveness of itsstrategies to reach out to many markets around the world in the process of globalization

learning are considered for employees

• The company has 5 facilities to carry out training programs outside the company

2 STAFF

Staffing is process of acquaint human resources for the organization and assuring that they have thepotential contribution to the achievement of the organization goals Honda company generallyprefers to have highly qualified and dedicated management professionals in case of staffing process atNarasapura Plant

3 STRATEGY

The strategy deals with the determination of the basic purpose and ten basic long-term goals of theHonda automobile business and the natural acceptance of an enterprise and the course applicationand allocation of necessary resources to Company's goals such as:

4 STRUCTURE

Structure is usually a hierarchical arrangement of the rights, communications, rights, and duties of anorganization The organizational structure defines how the roles, powers and responsibilities are

assigned, controlled, and coordinated, as well as how information flows between the different levels

of management within the Honda automobile company

Structure depends on the goals and strategies of the organization In a centralized structure, the toplayer of management has most of the decision-making power and has strict control over departmentsand divisions In a decentralized structure, decision-making power is allocated and departments anddivisions can have varying degrees of independence A company like Honda that sells multipleproducts can organize their structure so that groups are divided by each of its manufactured productsand by geographic area, to distribute product line trends to places with high demand

5 SYSTEM

Organization is described as a system used to convert input into output At the heart of this transition

is the technical core, at the heart of the organization's production process or service In a Hondaautomobile company today, the technical core includes automobile factories Core technical inputsinclude goods and services provided to customers and customers Operational strategy and feedbackcontrol shape the output quality and efficiency of operations within the technical core of HondaMotor Company with the slogan of providing the best customer experience

In Honda company the following major systems are using :

The following values of Honda automaker are that customer satisfaction is a dear value to HondaMotors, high attention to quality, safety and working environment, and the subsidized servicecafeteria common to all and to maintain an organization of capable and committed employees andprovide growth and growth opportunities

7 STYLE

Style refers to the employee's shared and shared way of thinking and behavior Honda's managementsets goals for wire and functional specialists and provides clear processes and rules for decision-making Managers are the central resource that executes decisions under the guidance of Honda autocompany's headquarters The heads of the departments that make up the management board areheaded by the directors The Commission develops strategic plans and policies to take the business todevelop and evaluate the implementation of Honda automaker's annual plans to compete directlywith other brands in the globalization landscape

2.2 The most important influence of "S" on Honda automobile industry

The McKinsey 7-S model, which can be applied in a variety of situations at Honda, is a great place tounderstand how different parts of the organization work together It can be used as a tool to makefuture corporate strategy decisions But the "S" is the most important in the success and

development of Honda automobile company in the period of new economic integration in the period

of globalization, the "Strategy" plays a very important role in the of this company Because "Strategy"

is a plan implemented by Honda automaker to maintain competitiveness in the industry and themarket of the automobile industry that is increasingly highly competitive today The ideal approach is

to establish a long-term strategy that aligns with the other elements of the model and clearlycommunicates what Honda automaker's long-term and short-term goals are to deliver benefits Great reputation for customers and bring value to the company

2.3 Influencing cultural - governance on Honda automobile industry in the context of globalization

Because the influence of global cultural governance has affected many industries In particular, the implementation of McKinsey's models such as "Strategy", "System", "Skills" and "Staff" have had a lot

of influence on Honda carmaker's cultural management Therefore, the expression of corporate culture in Honda Vietnam is changed and reflected in many aspects such as: in Honda Vietnam's products (safe, fuel-saving and eco-protective products high school ), in charitable activities, support, other social activities, in the way of doing business, in the behavior of the company's

employees to customers Apply advanced technology in the security system environmental

protection, products with the ability to protect the environment and save fuel Environmental

protection activities of Honda Vietnam are conducted synchronously and comprehensively in two main aspects: the environment inside the factory and the outside environment With the factory environment, Honda Vietnam focuses on building a green factory and strives to become a leading company in environmental protection With the external environment, Honda Vietnam cares about common social issues to promptly develop and change accordingly

2.4 Influence of structure / function on Honda automaker in globalization

Structure is typically a bureaucratic structure of an organization's rights, correspondence, rights andduties The organizational framework determines how the functions, powers and duties aredelegated, regulated, and organized, as well as how knowledge spreads within the Honda carcompany across the various management levels The arrangement relies on the organization'spriorities and plans The top tier of management holds much of the decision-making authority in a

centralized system and has strict oversight over departments and branches Decision-makingauthority is allocated within a decentralized system and agencies and units may have differentdegrees of freedom A organization such as Honda that offers several products will organise itsframework to segment groups by each of its produced products and by geographic region to dispersedevelopments in the product line to high demand areas

III Evaluate the influences of ethical and sustainable globalization on organizational functions

The Ethical Globalization Initiative that directs seeks to integrate human rights norms and standardsinto a more ethical globalization process and to support local and national human rights capacitybuilding

Sustainable globalization marks a milestone and a profound shift in how people in the 21st centuryview doing business in a global environment It moves from a zero-sum, greedy, win-lose mentality toone that takes full account of the short and long-term effects of people's decisions on the broaderenvironment that people are part of, acknowledges and honors our use of precious natural resources,displays respect for all people on the planet, helps local societies to establish the best possible futurefor themselves.(Axelrod et al., 2008)

3.1 Child labor

In Honda Motor Company Corporate Responsibility Statement, Honda Motor Co., Inc and itssubsidiaries (collectively "Honda") are committed to being the company society wants to survive Animportant part of this commitment is the way the company treats its associates and the way itssuppliers, suppliers, and business partners treat their employees This policy outlines the effortsHonda is making to eliminate human trafficking, slavery, forced labor and child labor from its globalsupply chain This Policy is designed to comply with and support compliance with the requirements ofFederal Acquisition Regulation 52.222-50 and all other applicable laws and regulations

This policy applies to Honda, associates, agents, contractors / suppliers, subcontractors, suppliers(and their employees) when acting within the scope of their job or contract with Honda's motobike Honda will not tolerate and will not tolerate the use of slave labor, forced, involuntary or forced labor,child labor, human trafficking or sex trafficking by any associates any agency, subcontractor orsupplier to operate or support our business or sell and distribute our products

3.2 Human Right

As Honda automobile company in Vietnam propagates and advocates to raise awareness foremployees and employers about the provisions of the labor law and trade union, the role of tradeunions in enterprises; organize movements to bring practical benefits to employees, at the same timecontribute to sustainable business development; direct the building of a contingent of qualitygrassroots trade union officials; renewing the content and form of operation in an effective andpractical direction Accordingly, the Company has built a human resource management policy, based

on Honda's philosophy: "Respect for people - Three joys" with the spirit of autonomy, equality andtrust; At the same time, well implemented policies for employees such as: Labor contracts, insuranceregimes, standardized salary, bonus, etc Trade Union The Company regularly coordinates withexperts The subject creates a harmonious and stable working environment, ensuring benefits foremployees

The company negotiated and signed favorable terms for employees, such as: One working dayreduction per year, housing allowance, human resource development policy, dormitory building, andcenter Sports culture, buying risk insurance for employees, selling motorbikes and cars with longtermpayments, guarantee for bank loans, savings accounts, and allowances (special allowances need,health allowance, child-rearing allowance ); promulgating the regulation of periodic informationexchange

3.3 Enviroments

As a responsible member of important social issues such as environmental protection, Honda,through all manufacturing activities, commits to always actively contribute to the protection of

human health and conservation of the global environment, making strong efforts to achieve the goal

of maintaining the forefront of its operations

In 1992 Honda released the Environment Statement; Accordingly, all members make their best efforts

to make the daily activities achieve the following commitments:

of research, development, sales, service and goods disposal

pollutants generated during each life stage of the goods

to protect human health and the global environment are important and we will actively takeaction to do so

health, the environment and human society on the relevant areas and will endeavor to receiveappreciation from the social side

The Honda Environment Statement provides direction for global Honda employees in implementingenvironmental protection in their operations This statement has now extended worldwide With thatsound statement, Honda actively promotes manufacturing activities that can contribute to theprotection of the global environment, including the human and land is the top priority

In 2010, Honda Vietnam and Honda Auto dealers strengthened environmental protection activities byfollowing ISO 14001 at dealers: Standardizing daily operations; Review, check and evaluate themanagement of each stage, department; And, implement innovative measures to improve productionefficiency while contributing to the protection of the living environment

3.4 Gender Equality

Recognize and respect individual differences in each person and treat each other fairly Honda MotorCompany follows this principle and provides equal opportunity for every individual Individual