Introduction The global economic environment has become more interlinked in the 21st century than ever before because more business enterprises have realized the importance of having trade relations within and outside their countries. Several prevailing factors that have a direct impact on the global economy influence greatly how the world business environment is likely to be at any given time (Harrison, 2010). This paper will examine the influence of factors on world economy. It will also examine how these factors shape global economic environment. Transnational Business and its Role in Contemporary Society Multinational business enterprises have had a big impact on the global economy over the years because of their operations in many countries. This has meant that these businesses have had a major influence on investment patterns and economic activities globally because of their wide branches of networks that defy geographical and political boundaries (Meteer, 2004). The multinationals have been forced to improve their business processes within the locations they operate in collaboration with their employees at designated locations. Meteer (2004), argues that such organizations have been forced to allocate resources for improvement of processes through effective structures in which employees and management teams can collaborate to facilitate improvement of procedures. These initiatives help Multinational Corporations to evaluate their participation in formulation of policies across their branches globally. The multinationals can afterwards assess the impacts of structural improvements on business through regular meetings with staff t. Business Environment PESTEL Business environment has a key influence on... ... middle of paper ... ... 29(1). Evans, C. & Richardson, M. (2007). Strategy in Action; Assessing the Environment . Student Advisor, 3(1). Grube, B. & Samanta, K. (2003). Effects of Foreign Exchange Rate Uncertainty on Mexican Foreign Trade. The Multinational Business Review, 11(2). Harrison, A. (2010). Business Environment in a global context. Oxford: Oxford University Press. Hogevold, N. & Svensson, G. (2012). A business sutainability model: a European case study . Journal of Business and Industrial Marketing, 27(2). Khan, A. & Roy, P. (2011). Globalization and the Determinants of Innovation in BRICS versus OECD Economies: A Macroeconomic Study. Journal of Emerging Knowledge on Emeging Markets, 3(1). Meteer, J. (2004). Global Improvement Initiatives .The Multinational Business Review, 12(1). Porter, M. (1980). How competitive forces shape strategy. The McKinsey Quarterly, 3(1).
Wheelen, T. L., & Hunger, J. D. (2010). In Concepts in Strategic Management and Business Policy Achieving Sustainability, Twelfth Edition. Pearson Education.
Hennart, J-F (2001) Theories of the Multinational Enterprise, In Rugman A. M. and T. L. Brewer (eds.) (2001) The Oxford Handbook of International Business, OUP, Oxford
A country's economic environment plays a significant role in the success of businesses operating within that country. Countries with struggling or shrinking economies were not included in the top ten ranking. Economic indicators and trends selected for this analysis:
Multinational enterprises date back to the era of merchant-adventurers, when the Dutch East India Company and the Massachusetts Bay Company traversed the world to extract resources and agricultural products from colonies (Gilpin 278-79). While contemporary multinational corporations (MNCs) do not command the armies and territories their colonial counterparts did, they are nevertheless highly influential actors in today’s increasingly globalized world.
Multinational enterprise (MNE) is “a company that is headquartered in one country but has operations in one or more other countries” (Rugman and Collinson 2012, p.38) that has at least one office in different countries but centralised home office. These offices coordinate global management in the context of international business. MNEs have increasingly essential influence on the development of the global economy and coordinate with other companies in different business environments. However, there are many issues involved with how MNEs operate well overseas, especially in emerging markets (EMs) (Cavusgil et al., 2013, p.5).
Our economic development will forever be defined as our ability to succeed internationally. PwC forecasts India’s real annual GDP growth until 2050 at 8.9 percent, Vietnam’s at 8.8 percent, and China’s at 5.9 percent. The list of fast-growing emerging markets goes on and on. The U.S. forecast is a meager 2.4 percent, comparable with most Western economies. The domestic companies that are likely to see incremental growth in the coming decades are those that are not only doing business internationally, but that are developing the strategic skill set to master doing business across cultures. Cross-cultural core competence is at the crux of today’s sustainable competitive advantage. For example, political environment will tell us, as to how and why political leaders control, whether and how of international business. Legal environment, both national and international will tell us about many kinds of laws by which business firms must work. The cultural environment will tell us about attitudes, beliefs and opinions important to business people. Economic environment will tell us about the economic system being followed by the host country, which may or may not be different from home country. It will also explain the variables such as level of development, human resources, Gross Domestic Per Capita and consumption patterns that determine a firm’s ability to do business. Geography will tell us about location, quantity, and quality of the world’s resources.
Therivel, R. (2010). Strategic Environmental Assessment in Action. 2nd ed. London, UK & Washington, USA: Earthscan.
THE POLITICAL ENVIRONMENT: The critical concern Political environment has a very important impact on every business operation no matter what its size, its area of operation. Whether the company is domestic, national, international, large or small political factors of the country it is located in will have an impact on it. And the most crucial & unavoidable realities of international business are that both host and home governments are integral partners. Reflected in its policies and attitudes toward business are a governments idea of how best to promote the national interest, considering its own resources and political philosophy. A government control's and restricts a company's activities by encouraging and offering support or by discouraging and banning or restricting its activities depending on the government. Here steps in international law. International law recognizes the right of nations to grant or withhold permission to do business within its political boundaries and control its citizens when it comes to conducting business. Thus, political environment of countries is a critical concern for the international marketer and he should examine the salient features of political features of global markets they plan to enter. THE SOVEREIGNITY OF NATIONS From the international laws point of view a sovereign state is independent and free from external control; enjoys full legal equality; governs its own territory; selects its own political, social, economic systems; and has the power to enter into agreements with other nations. It is extension of national laws beyond a country's borders that much of the conflict in international business arises. Nations can and do abridge s...
Globalization refers to the absence of barriers that every country had. Yes, it has helped to demolish the walls that separated us .Globalization, which is the process of growing interdependence among every country in this planet, can be seen as a sign of hopeful and better future by some, but for others it represents a huge disaster for the whole world. That’s why we are going to see the negative effect that globalization has on culture then focus on the ethical disadvantage it brought, to finally talk about the damage it did to skilled workers.
Introduction The Analysis Machines (2004) defined Multinational Corporation as an enterprise operating in two or more countries with headquarters in one country. In today’s world, most of the businesses are getting globalized by setting up there business operations abroad. There are various forces which facilitates globalization like liberalization of international trade, international integration of production, Research and marketing by major MNC’s and emergence of economic regions like European Union enabled companies to invest overseas to gain and maintain competitive advantage. With an MNC having foreign subsidiaries comes the responsibility to transfer the organisational practices of the home country i.e. the headquarters to transfer its
Just imagine waking up in squalor, a once prominent society, now a desolate wasteland. All because foreign interest has raped your land of its natural resources and you seen not a cent in profit. Although, globalization is unifying the worlds developed nations and is bringing commerce to nations that have struggle in past years. True, globalization has many positive effects but do the pros outweigh the cons. In this essay I will discuss Globalization ruining the integrity of many countries and also is forcing many undeveloped nations into a bind, and is causing economic distress on some developed nations. Also, due to economic globalization the nations of the world are diluting their culture, sovereignty, natural resources, safety and political system. My goal is not to change your way of thought, but only to enlighten you of the negatives of global economic expansion.
Using 1997 financial crisis and other examples, discuss how globalization is important to the modern business journalism. Introduction
The progression and evolution of international business has played an integral role in the overall development and progress of the world economy, culture, and politics. The multinational corporation was an essential part of this process and has roots as far back as the 15th and 16th centuries in Western Europe, specifically in the nations of England and Holland, during a period known as mercantilism. This was a time of unprecedented global exploration, colonization, and other imperialist ventures. Organizations such as the British East India Trading Company, promoted both global trade and the acquisition of natural resources, primarily for their home countries in areas including Africa, East Asia, and the Americas. Global trade was the primary factor in the growth of the world economy during this time. However the modern MNC, as it is known today, did not appear until the 19th century. These new entities provided a new level of inter-firm connectedness, a wider division of labor, and a higher level of product integration across countries in which MNCs are growing. Studies have shown that modern MNCs are characterized by a high degree of complexity, and have not followed a linear pattern in their development. In addition, it is crucial to understand the geographical context in which these MNCs were founded. This paper will analyze the development of the multinational corporation (MNC) from the 1870s to the modern day and examine it what ways, and to what degree it has changed over time.
Nowadays, business is set in a global environment. Companies not only regard their locations or primary market bases, but also consider the rest of the world. In this context, more and more companies start to run multinational business in various parts of the world. In this essay, companies which run multinational business are to be characterized as multinational companies'. By following the globalization campaign, multinational companies' supply chains can be enriched, high costs work force can be transformed and potential markets can be expanded. Consequentially, competitive advantages of companies can be strengthened in a global market. Otherwise, some problems are met in the changed environments in foreign countries at the same time. The changed environments can be divided into four main aspects, namely, cultural environment, legal environment, economic environment and political system problems. All the changed environments make problems to multinational companies. In particular, problems which are caused by changed culture environment are the most serious aspect of running a multinational business. This essay will discuss these problems and give some suggestions to solve them.
Stonehouse, G., Campbell, D., Hamill, J. & Purdie, T. (2004). Global and Transnational Business (2nd ed.). Chichester: John Wiley & Sons.