The Role of Social Media in Global Business Environments

Global Business
Environment

TABLE OF CONTENTS
INTRODUCTION................................................................................................................................3
TASKS..................................................................................................................................................3
A) Summarising the rising risk which global social media organisation such as Facebook, Twitter
and Instagram face from actual government regulations. ...............................................................3
C) Analysing the way emerging economies are presenting opportunities for global expansion for
businesses ........................................................................................................................................4
D) Analysing the way government utilises fiscal and monetary policies for stimulating economic
activity and growth..........................................................................................................................5
CONCLUSION ...................................................................................................................................6
REFERENCES.....................................................................................................................................7

INTRODUCTION
Global business environment can be referred to as environment in different sovereign
countries in which an organisation operates. There are several factors such as social, legal,
environmental, political which effects business operations. It is very much important fort
companies to develop the understanding about the market or environment in which it is planning to
expand business.
The report have focus on identifying the risks which global social media organisation such
as Twitter, Instagram and face have to face from actual government regulation. It will emphasize on
analysing the way emerging economies presents opportunities for global expansion.
TASKS
A) Summarising the rising risk which global social media organisation such as Facebook, Twitter
and Instagram face from actual government regulations.
Social Media organisations such as Facebook, Instagram and twitter are highly threatened by
the new laws and regulation enforced by government in the country. Business entities are facing the
high regulatory risks due to enforcement of new laws by the government in the nation. There are
many laws such general data protection regulations which are required to be followed by the global
social media companies. If in an organisation fails to comply with such norms them they have to
face legal issues and pay higher penalties. New laws implemented by the government in the nation
has direct as well as significant effect on the business operations of global social media enterprises.
General data protection regulation is the legislation which provides citizens of EU with more
control over their personal information (Brown and Peters, 2018). The law of general data
protection regulation provides the clear picture of roles as well as responsibilities for online services
by users in EU. General data protection regulation has established a new standard for data
protection which has direct as well as significant effect on the business operations of the social
media companies such as Facebook, twitter and Instagram.
Many large as well as global social media firms have to update their privacy policies as well
as terms of services in order to prepare themselves for the new laws. General data protection
regulation requires social media organisation especially those enterprises which have lost control
over customer information. An global organisation need to notify user within seventy-two hours
about the hacking of their account. This is the important rule in General data protection regulation
which consists of maximum penalty (Yar, 2018). In context of the Facebook privacy issue. For
instance, if Instagram fails to comply with the norm an enterprise is liable to pay $1.6 billio

emerges as a major business risk. Facebook faces substantial business risks from new European
Union privacy rules set to take effect in May, The major threat faced by Facebook is two fold that is
Complying with the regulation means letting European users opt out of the highly targeted online
ads which have helped company in increasing profitability. Other danger is that if an organisation
violates the norm then an enterprise have to pay penalty that is four percent of their annual revenue
(Turban, Outland and Turban, 2018). In addition to this, if social media companies such as
Facebook, Instagram and twitter fails to comply with laws this factor can have negative effect on
their sustainability. In context of social media companies such as Facebook, twitter and Instagram
these organisations have to face regulatory risks as these firm does not have focus on their products
and user. The new legislation that is honest ad act has been enforced by the law makers. Hones ad
act requires online platforms with at least 50 million monthly viewers to keep a public log of ads
bought by individuals or groups that spend more than $500 over one year. In context of Facebook,
an organisation is facing new regulatory scrutiny after the data share allegations. Business entity is
facing increased calls for regulation imposed by the government.
C) Analysing the way emerging economies are presenting opportunities for global expansion for
businesses
Emerging economies accounts for almost two third of total world GDP growth. An
organisation can gain first mover advantage by expanding business in emerging markets. If a
company can set up shop in an emerging economy and build early success, it can become the
recognized brand in its industry. In addition to this, easy access to capital is the another derive
which encourage an organisation to take risk of expanding business in emerging market. In
addition to this emerging economies drives global innovation. Organisations by expanding business
in emerging economies or market can easily facilitate innovation at low cost. By expanding
business in emerging economies business entities can grow rapidly by taking advantage of emerging
market opportunities that can be beneficial in context of expansion of business. Innovation is also
important with regard to the successfully entering into global market. Companies by expanding
business in emerging economies can increase their sales and profitability (Reid, 2018). The
opportunities of global investment can be captured by organisation by expanding business in
emerging economies (Ahmad, Abu Bakar and Ahmad, 2019). The Biggest advantage of expanding
business in emerging economies is that brand loyalty is far stronger. Other opportunity which
companies can avail by expanding business into emerging economies includes lower tax advantage,
rebates etc. For instance, Starbucks company has enjoyed the various advantages by expanding
business in emerging economies. Starbucks has able to achieve success in China and business entity
has foster growth. Company has developed the skills to use social media platform which further has

helped firm in expansion of business. Emergent economies has played significant role in driving
globalisation. The other example is Schneider Electric, an organisation has utilised different market
entry as well as business expansion strategy in order to built their presence in India.
D) Analysing the way government utilises fiscal and monetary policies for stimulating economic
activity and growth
In every nation, legal authority by developing plan s and policies take high initiatives to
support country in fostering economic growth. Sometimes legal authority in the nation intervene in
an economy for stabilising the business cycle. The two important strategic tools which are utilised
by the government are fiscal as well as monitory policy. Government in the nation decrease the tax
and increases the spending in order to foster economic growth. In context of fiscal policy, legal
authority in the nation uses its spending as well as taxing power for have effect on the economy.
Fiscal policy implemented by the government in the country have direct as well as great effect on
the exchange rate, capital expenditure, interest rate which are directly related to the monetary
policy.
Keynesian theories is based on the belief that fiscal as well as monetary policy designed by
the government is the only way of steering the economy. Changing government spending and
taxation directly influences the aggregate demand. Through monetary policy, the government in the
nation exerts its power to regulate supply of money a well as interest rates. The government plays
significant role in controlling the inflations (Tsay-Vogel, Shanahan and Signorielli, 2018.). Legal
authority increases the tax and decrease spending for regulating the high fluctuation in prices of
goods and services. For instance, under Economic Stimulus act of 2008, government in America has
decrease the tax rate in order to encourage people to increase their spending.
The government applies contradictory fiscal policy for reducing the circulation of money
and amount available with people for spending. Contradictory fiscal policy is applied by
government in situation when economy is booming and growing too rapidly. Expansionary fiscal
policy is implemented by the legal authority in the nation for boosting economic growth. This
expansionary fiscal policy is used by the government for reducing unemployment rate in the nation,
for increasing consumer demand, eliminating recession. For instance, President Trump's recent tax
and budget bill seeks to boost the economy. Fiscal policy is considered to be as a management
strategy which is adopted by the government for guiding the economy through ups and downs of
business cycle.
Trickle down theory can be defined as economical proposition. This hypothesis states that
taxes in the business as well as wealth in the society is required to be reduced. As it could be the

best strategy for stimulating business investment for short term. Trickle down theory has been
utilised by Ronald Reagan who has acted as a former president of California. According to the
Hoovers trickle down theory, legal authority in the nation should get involved in economy by
making investment (Rodrik, 2018). Thus, creating surplus supply of money that would trickle down
onto the rest of society. The fundamental principle of trickle down theory is that economic growth
flows from the top to the bottom. According to this economic theory, the policy which government
should adopt for influencing economic activity include reduction in corporate income taxes, capital
gain taxes and lowering of individual tax brackets.
CONCLUSION
It has been concluded from the report that regulatory risk is faced by the many popular
social media companies. The other fact which has been concluded from the assignment that the new
laws or regulation enforced by the government has direct as well as significant effect on business
operations of social media firms. It has been concluded from the report that companies capture
various opportunities such as innovation at low cost, tax advantage etc. by expanding business into
emerging economies. The other fact which has been found during the study is that government
make changes in tax rate and spending in order to influence economic growth.

REFERENCES
Books and Journals:
Ahmad, S.Z., Abu Bakar, A.R. and Ahmad, N., 2019. Social media adoption and its impact on firm
performance: the case of the UAE. International Journal of Entrepreneurial Behavior &
Research.25(1). pp.84-111.
Brown, N.I. and Peters, J., 2018. Say This, Not That: Government Regulation and Control of Social
Media. Syracuse L. Rev.. 68. pp.521.
Reid, K., 2018. Economic outlook.
Rodrik, D., 2018. Populism and the Economics of Globalization. Journal of International Business
Policy. pp.1-22.
Tsay-Vogel, M., Shanahan, J. and Signorielli, N., 2018. Social media cultivating perceptions of
privacy: A 5-year analysis of privacy attitudes and self-disclosure behaviors among Facebook
users. new media & society. 20(1). pp.141-161.
Turban, E., Outland, J., and Turban, D.C., 2018. E-Commerce: Regulatory, Ethical, and Social
Environments. In Electronic Commerce 2018 (pp. 573-612). Springer. Cham.
Yar, M., 2018. A failure to regulate? The demands and dilemmas of tackling illegal content and
behaviour on social media. International Journal of Cybersecurity Intelligence &
Cybercrime.1(1). pp.5-20.
ONLINE :
Laura.h, What the GDPR means for Facebook, the EU and you. 2015.[Online]. Available
through:<https://www.cnet.com/how-to/what-gdpr-means-for-facebook-google-the-eu-us-and-
you/>.