Impacts of Brexit on Business Environment

Running head: IMPACTS OF BREXIT ON BUSINESS ENVIRONMENT
Impacts of Brexit on Business Environment
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1IMPACTS OF BREXIT ON BUSINESS ENVIRONMENT
Introduction
The global business environment has changed drastically over the decades and has
experienced substantial dynamics much of which can be attributed to the international factors
like that of Globalization, trade liberalization in different part of the world as well as
technological and infrastructural innovations which in turn have cumulatively contributed in
making the global commercial frameworks more integrated, interconnected as well as inclusive
(Holland 2018).
With the global business environment becoming more integrated and interconnected, the
economic, political, business and other aspects of the different countries across the globe can be
seen to be becoming heavily influenced by the phenomena occurring in different countries and
across the globe. One such phenomenon of immense significance in the contemporary period, is
that of the phenomenon of Brexit (Hobolt 2016). The term, “Brexit”, referring to the expected
exit of the United Kingdom for the European Union, was triggered on March 29, 2017 and the
same is expected to come into operation on March 29, 2019.
Keeping this into consideration, the concerned essay tries to discuss and analyze the
consequences (both present as well as potential ones) which are about to happen given the Brexit
materializes in the coming years, specifically concentrating on the economic, political and
cultural aspects in the business environments of the United Kingdom as well as the European
Union.
Brexit: Overview and Reasons behind Announcement
As discussed above, the term “Brexit”, refers to the potential exit of Britain from the
European Union, which was decided by a referendum, in 2016, signed by nearly thirty million

2IMPACTS OF BREXIT ON BUSINESS ENVIRONMENT
people, where the leave-decision won by 52% over 48% of the votes against it. The official
departure date of the UK from the EU is March 29, 2019. In this context, it is of immense
significance to know about the European Union and its implication to understand the reasons
behind the potential exit of Britain from the same (Goodwin and Heath 2016).
The European Union is one of the most prominent economic and political partnership and
conglomeration of 28 contemporary European countries, including that of the United Kingdom
and also consists of a common currency zone, with 19-member countries, using Euro as the
common currency, although the other members use their own domestic currencies (Pollack
2015). The primary reason behind the establishment of the European Union was that of building
a common business zone, thereby facilitating commercial transactions between the member
countries, by unifying the trade and transaction regulations among them and also by reducing the
trade hurdles and barriers among the member nations, thereby contributing to the prosperity and
long term economic growth and political stability as well as cultural amalgamation among the
same (Cini 2016).
The United Kingdom has been one of the most significant members of this European
Union, over the last few decades since its initiation, along with its stance as one of the most
significant contributor to the budget of the EU, as can be seen from the following figure:

3IMPACTS OF BREXIT ON BUSINESS ENVIRONMENT
Figure 1: Contribution of the different member counties in the budget of the European Union
(Source: Geostata.com 2018)
As is evident from the above figure, the United Kingdom is one of the primary members
and contributors in the economy dynamics and budget of the European Union (Smith 2013).
Apart from that the country also is one of the primary exporter as well as importer in the
European Union over the decades, with both the UK as well as the other countries being hugely
benefitted by the multi-lateral trade connections in the European Union.
However, in the recent period, several issues can be seen to be arising in the domain of
operations of the European Union, which can be seen to have compelled a considerable section
of the population of the United Kingdom to opt out of this economic and political
conglomeration and trade agreement.
Reasons behind the potential exit of the United Kingdom
There have been several reasons put forward in favor of the potential exit of the United
Kingdom from the European Union, of which the primary one can be seen to be related to trade