Global Business Environment Report

This report explores the global business environment, focusing on the challenges faced by social media platforms from government regulations, the opportunities presented by emerging economies for global expansion, and the role of fiscal and monetary policies in shaping economic growth. It provides examples and insights into how businesses can navigate these complex factors.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................3
Main Body ......................................................................................................................................3
A. Rising risk for social media platforms from government regulations....................................3
B How emerging economies are presenting opportunities for global expansion.......................4
C Fiscal and monitory policy used by government.....................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Global business environment defined as different worldwide factors like economic policy
of different countries, technological factors etc which would affect company performance in
different circumstances (Sassen, 2016). This report will cover three topics namely; Different
types of risk which emerges from social media platforms, How different economies are
changing their strategy for expansion will be elaborated and distinct policies and its impact on
economic growth would be discussed.
Main Body
A. Rising risk for social media platforms from government regulations
Environment is explained as external forces which can not be controlled by an
organisation and fully depends on different factors like pricing, vendors demands, raw material
pricing etc. Government makes rules and regulation so as to maintain peace and harmony in the
country as their aim is to reduce any kind of rumours which could affect their country in a
negative way. Nowadays, social media has changed the face of the economy as most of the
information is disseminate through it only. Rising risk which has been faced by company is
penalised for sharing fake news and rumours, degrade in goodwill of companies, users are
decreasing due to negative impact of social media on their life etc. Different impact of
government regulations on social media platform like Facebook, Instagram and twitter will be
explained below,
 Recently due to Telegraph campaign, government is now planning to make some strict
changes on the fake news and adultery content which is been spread on the social media.
Their main focus is to make protections on different types of content which could affect
the mentality of children. It will create a negative impact on firm and their profitability
as there goodwill in the market would be hampered. Apart from that parents won't allow
their children to use these social media platform which would decrease other company's
advertisement on these platform. This situation is not in favour of company.
 After the Cambridge Analytics scan, government promotes their citizens to not share
their personal information on these platforms which highlights them as unsafe. After this
scandal, users of Facebook or twitter has decreased to a great extent which affects their
brand equity and goodwill in a negative way.

 UK government is planning to make a cap on the social media users as their data will be
limited for these platforms and customers have crossed it then strict actions would be
taken against them. It would decrease the usage and addictiveness of social media
platform which is bad for their balance sheet.
 Government is planning to imposed safe harbour agreements which states that sharing of
personal data will be scrutinized by the authority and would be limited to a certain level.
This will affect company as then they could not be able to sell personal data of users to
other organisation resulting in decrease of profits earn within a financial year.
 Government plans to implement IPSO editors code of practice so that platform would be
held liable for any type of fake news, breach of copyright which is done on their site.
Social media firms have to scrutinized every content they are publishing on the behalf of
any company or user. Company have to invest in latest technology which will attract
more cost to companies.
All the regulations which is proposed or existing will create a bad impact on social media
platform and besides this other companies which are giving advertisement on these platforms
have to change their strategies so to attract customers (Botha, Kourie and Snyman, 2014).
B How emerging economies are presenting opportunities for global expansion
Emerging economies refers to developing market which has potential of giving some
profits to business which are entering into them. There are different elements which differers
emerging market to emerged market which is explained below:
 Less per capita income as compare to standard set the UN.
 Growth in the economy due to increase in FDI.
 Market of country has not reach maturity level.
 More returns to investors.
Companies opt expansion techniques so to increase their customer and market share
which would assist them to increase their sales and profitability to a certain level. Chances of
getting success in the emerging economies are high as they do not have that much existing
product which would satisfy their needs and wants (Wood and et. al., 2015). Moreover countries
are promoting their resources to companies so that it would attract foreign direct investment to
country which will leads to more jobs and increase in per capita income of citizens which is a
positive sign for company other than that they are providing different taxation policies,

subsidiaries so that less burden would be bear by company. For example, Walmart is one of the
largest supermarket chain in the world and recently enter into India which is the most attracting
countries for expansing business operations. They have acquired India biggest E-commerce
companies Flipkart through which they can sell their products online and offline respectively. It
will assist company to increase their customer share and profitability as India has more than 10
billion people living there. Main aim of globalisation is to provide different types of products in
all over world so that it would enhance quality of living (Kasemsap, 2014). As Walmart will
increase jobs in India which will persuade to decrease in employment rate, increase in GDP of
country, better resources to live their life, improvement in per-capita income etc.
One more example is of Global giant Diageo, they have acquire Chinese brand Shui Jing
fang so to to increase their market share in China. Main aim behind this deal is to increase
company's customer and market share so to increase company's profitability.
Apart from acquiring or entering into new market by investing huge amount of money,
company can also use different types of techniques like licensing, mergers, joint ventures etc so
to increase their sales. Business can also start exporting their products to other countries with the
help of agents as it assist them to avoid any legal issues which could be faced by them if they are
entering into market.
C Fiscal and monitory policy used by government
Fiscal and monitory policies play A very crucial role in shaping country's economy.
Fiscal policy is the attempt to influence the level of economic activity through changing taxation
and government spending. Main tool of these policies are tax and government spending, which
directly affects the budget deficit. Monitory policy on the other hand aims to control inflation
and also contributes to the growth. Main tool of these policies are interest rates which have a
direct effect on cost of borrowings. Following are the points describing the impact :-
Fiscal policy
In this government changes the level of taxation in order to influence the economic
activity. The purpose of fiscal policy is to maximise growth during recession, keeps inflation
low and aims to stabilise the economy by avoiding boom (Compact, 2014). For instance, an
important stabilising function of this policy operates through the so called automatic fiscal
stabilisers. These work through the economic waver on the government budget and do not need
any short term decision by policy maker. The size of tax collection and transfer payments for

example are directly linked to the alternate point of the economy and set in a way that helps
stabilising aggregate demand and income of private sector. By using fiscal policy, UK
government can increase tax rates and cut spending of people to face inflation problem. This will
help to reduce budget deficit and and this will further reduces the aggregate demand and lowers
inflationary pressure as well. But in recession period, government will increase aggregate
demand which will increase government spendings and tax will be cut. Reduction in taxes leads
to increase in disposable income which maximises economic growth and minimises
unemployment.
Monitory policy
It involves interest rate and other monetary tools to influence the level of consumer
spending and aggregate demand. Its aims are low inflation and stable economic growth. UK
monitory policy is set by the Monitory Policy Committee (MPC) of the Bank of England.
Stabilisation policies can be implemented can be implemented in this (Cavusgil and Knight,
2015). Lets take an example of UK, there are lot of problems like unemployment, inflation,
exchange rate, etc. the main purpose of this is to control money supply in the economy, cost of
money, interest rates, etc. When UK faces rescission then government will try to cut interest
rates. This is because lower interest rate will maximise growth in economy as this reduces
borrowing cost. And further increases the disposable income of consumers, leading to enhancing
spendings (Perry-Kessaris, 2016). On the other hand if bank feels that economy is growing at
faster rate and inflation is predicted then they can increase interest rate which will help in
reducing the growth rate and inflationary pressure.
Fiscal and monitory policies will be used by government to increase growth :-
 Fiscal policy affects the overall spending and taxation of the business. In general
legislation, it will focus on tax and spending programs to increase growth which will
have direct impact on organisation. While in targetted legislation, like energy,
infrastructure, etc. are taken into consideration to benefit the firms.
 Techniques of contraction and expansion can be used by the government to adjust
balance in the economy as they are helpful in providing accurate records and data which
will increase the growth of the organisation.

 Monitory policies will be used by government to increase the growth by reducing the
interest rate during the recession period and in inflation period government will raise the
interest rate to main economic balance.
CONCLUSION
It can be concluded from the above report that social media platforms have some pros but
these are also equipped with different cons. Government set different types of boundaries to
different countries so to avoid any factor which could affect smooth running of country. Fake
news and rumours have been spread on social media which creates negativity around the
country. Globalisation helps company to increase their customer share but companies should be
well prepared with all the resources like market research, technology etc which is required at the
time of entering into market. Main function of government is to modify there fiscal and monetary
policy so that they support their economy to grow high.

REFERENCES
Books and Journals
Sassen, S., 2016. The Global City: Strategic Site, New Frontier. InManaging Urban Futures(pp.
89-104). Routledge.
Botha, A., Kourie, D. and Snyman, R., 2014.Coping with continuous change in the business
environment: Knowledge management and knowledge management technology.
Elsevier.
Wood and et. al., 2015. Global Business Citizenship: A Transformative Framework for Ethics
and Sustainable Capitalism: A Transformative Framework for Ethics and Sustainable
Capitalism. Routledge.
Kasemsap, K., 2014. The role of social networking in global business environments. In Impact of
emerging digital technologies on leadership in global business(pp. 183-201). IGI
Global.
Compact, U.G., 2014. Overview of the UN Global Compact.Recuperado de https://www.
unglobalcompact. org/ParticipantsAndStakeholders/business _associations.
Cavusgil, S.T. and Knight, G., 2015. The born global firm: An entrepreneurial and capabilities
perspective on early and rapid internationalization.Journal of International Business
Studies.46(1). pp.3-16.
Perry-Kessaris, A., 2016. Global Business, Local Law: the Indian legal system as a communal
resource in foreign investment relations. Routledge.