Business Management Report: Brexit's Impact on UK Firms

This report delves into the critical issues of business management, specifically focusing on the impact of Brexit on UK businesses. It begins by analyzing the causes of the UK's decision to leave the European Union, citing economic conditions, sovereignty concerns, and political elitism as key drivers. The report then evaluates the multifaceted effects of Brexit on businesses, including market fluctuations, supply chain disruptions, and the challenges of adapting to new trade regulations. Furthermore, it explores strategic crisis management theories essential for business survival, emphasizing the importance of diagnosis, planning, and adaptation to changes. The report also discusses the leadership challenges that arise in a changing business environment, highlighting the need for leaders to navigate uncertainty, manage financial crises, and capitalize on emerging opportunities. The report concludes by summarizing the key findings and implications of Brexit on business management.

CRITICAL ISSUES IN BUSINESS
MANAGEMENT
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Table of Contents
INTRODUCTION................................................................................................................................3
TASK 1.................................................................................................................................................3
1. Analyse the causes of UK's Brexit decision.................................................................................3
2. Evaluate the effects of Brexit on business...................................................................................4
3. Strategic crisis management theory for surviving in business.....................................................5
4. Discuss the leadership challenges in case of change in business environment...........................7
CONCLUSION....................................................................................................................................8
References............................................................................................................................................9
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INTRODUCTION
Business management and their critical issues directly affects the business performance and
the growth rate of the firm. In the business management, critical issues states that shortage of skilled
workforces, the problem is related organizations functions, globalisation, activity overload, demand
of the customers, supply chain customers, pressure of reducing the operation cost and product cost,
shifting of the service providers or more. These type of issues directly affects the performance of
the organization as well as the growth rate. This following report states that, the effects of Brexit on
the small and large business as well as identify the main cause of the UK's Brexit decision.
Furthermore, this report includes the strategic crisis of the management theory and the effects of
this theory on the business. In addition to this, it will discuss the challenges of leadership which is
faced by the senior management of the business management. Brexit is a major change and
challenge in the business environment and affect the business performance as well. In this particular
case of the Brexit, Entire business and growth of small and large enterprise affected by the rules and
regulations of the European union as well as abide by them.
TASK 1
1. Analyse the causes of UK's Brexit decision
There are several reasons in case of why UK leaves European union and their all policies
rules and regulations. UK's Brexit decision based on the various reasons but the main 3 reasons that
forced UK to take that step are; Economic condition, sovereignty, Political elitism. These are the
major factor why UK takes the Brexit decision. British voted for leave the European union and
move from their policies and rules and regulations. Brief discussion about these factors is given
below: Economics: Economy is the main factor that directly affect the business of each and every
organization. In this particular case, British people felt that European union(EU) fails to
address all the economical issues and not able to provide best solutions for these particular
issue. The main effect of the economical condition is on unemployment in several states of
Britain. Before the Brexit, UK's economy was pretty well and their GDP growth is also
strongest among all the major countries like Europe, US and more. Unemployment rate is
also under control by UK's economy standards and maintain the rate of unemployment.
After this UK takes the decision to leave the EU, so there are several possible reasons like;
Inequality, stagnant earnings, In-work poverty, disastrous anger vote or more. Sovereignty: It is the major reason for Brexit and it is rise from nationalism across the
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world. This is mainly cause due to the multinational financial uncertainty, trade and defence
of organizations. British people thinks that EU does not understand the power of nationalism
and because of that it attempts to retain the nationality. This is the most important issue
faced by the country and because of that they want to leave EU on immediate basis.
Basically sovereignty is the principle of UK constitution and in this, it is responsible for
create and end any law, policy or rules. It is the issue that dominating the EU campaign or
EU limits their ability to make the own decisions and choices.
 Political elitism: Political conditions are the main reason behind taking Brexit and faced
profound loss problem. A political system of UK majorly based on the limited principles,
representation and rules and regulations as well. In addition to this, Brexit frightened by the
financial market conditions and economic falls. Most of the Brexit supporters believes that
financial industry's incompetence create the disaster and there is no benefit for them in any
success in the business or financial industry. This is the contradiction between both the
people one who want to remain with the EU and another one who don't want to remain with
EU's rules and regulations. This is the vital process which is to be understood by the British
people is that Brexit was the vote against elite.
2. Evaluate the effects of Brexit on business
There are several types of mix effects of Brexit on businesses either in positive way or
negative way. UK's businesses majorly says that Brexit has negative impact on the business and
directly affect the performance of the business. According to a survey in Britain, it results damaged
in the several businesses in many ways. Decision of moving from EU, has an impact on the
business in the way of earning hits, headquarters move, cost cuts and many more. The effects of
Brexit on business which is given below:
 The major impact of the Brexit is on the market and market shares of the UK's economy.
This results in falling value of the British currency and increased in the uncertainty of the
future trading relationships. The main and major impact of Brexit is on the other countries
like apart from Europe and Britain and affect the business in the case of buying and selling
is only done in that different countries. Many businesses in Britain wondering that impact of
Brexit on their sales and business. Growth of the business and their development affected by
the Brexit and has an impact by weak pounds. It has an impact on the processing of the
business and further affected on revenues and net profits of the business.
 In addition to this, Brexit has a positive impact on the British economy in the way of
providing new opportunities in the current business and which could be added a different
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value in the business. After leaving the EU, the British people are not abide by their rules
and regulations and then they has their own rights and opportunities for moving forward and
reach the success at great extent. This process also offers a great opportunities for all the
industries stated in UK is that they found new talent and attract towards the new business as
well. This type of opportunities helps to gain the market reputation at an extent level and
help to develop the working experience and performance as well. Moreover, it is the process
of examine the current production method and the ways where the business would be start
and increase the profits and gains. Supply chain plays a vital role in enhancing the business
at national or international level. Because of that issue rising in the cost money and
production money affect the growth rate of the firm. But in this particular case, this process
offer a chance to review the process and make an effective decision and change the way of
working which gives the benefits in the business.
 The early effects of Brexit is much better and also the economy is going far better in
compare with the previous prediction as well. In UK businesses the exports will take a great
hit in compare with other economy trends. This has an impact on employment and labour in
the way of people look for setting up a new business and search the jobs outside from UK
and for that UK's unemployment rise due to the recession. Apart from this, several type of
industries affected such as engineering, IT and construction sectors whereas the shortage of
the skilled and high talented workers in UK's population.
 Brexit is a very critical issue that affects the business on immediate basis. But yet on the
basis of foreign investment the Brexit has an impact on tariffs and trade cost. After applying
Brexit it is in result of higher trade cost and tariffs would be decrease investments in UK.
According to the different analysis Brexit would results in negative impact like FDI inflows
decreased and the economy is also affected.
3. Strategic crisis management theory for surviving in business
Crisis management is an effective approach to survive in the business and maintain the
performance of an organization. In this particular procedure, organization deal with the unexpected
risks and the events which harm the organization and their performance as well. Majorly the three
elements that affect the organization such as threat, surprise, short of time. In the particular case of
survival the crisis management theory plays a vital role to maintain and sustain the performance of
an organization and has a great impact on industry's procedures. Crisis mainly refers to the
unplanned events like Brexit which cause harm to the organization in the way of unrest and
uncertainty among employees. Crisis gives rise to fear and the responsibilities for that each
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individual lost their interest and trust in that particular organization. Strategic analysis of crisis
management theory include mainly 3 stages such as:
 Diagnosis of crisis: This is the first stage of crisis management model and this process
includes the detection of the crisis and this is mainly for the leaders and the managers of the
firm. Mangers and leaders must review the performance of the each individual who works
with the team. The role of manager is to monitoring the performance of the people and then
analyse the strengths and weakness so that they apply the effective strategy to improve the
performance of them. In addition to this, manager should take the initiative to apply the
strategies and effective planning to improve the performance of each individual.
 Planning: First of all, crisis is being detected then planning would be done and management
takes immediate and effective actions. When Brexit is applied at that time organization and
their management must have to take the effective actions to manage the performance and the
brand value in the current market trend. Adjusting to changes: After Brexit applied in UK, Employees try to adjust with the new
economy trend and try to adjust the functioning of the organization in near future.
Management has to be make sure that what are the effective strategies applied to adjust the
new environment and make sure that there is no repetition of previous mistakes.
Structural functions system theory:
In this particular system theory, communication plays a vital role in the crisis management
model. In which information sharing and flow of communication that affect the performance of an
organization. This theory is mainly states that leaders and mangers must take the responsibilities to
encourage their employees to give their best. Diffusion of innovation theory: This theory is used for supporting the sharing information in
case of emergency situations. Innovation as the name implies, each individual should think
out of the box and come out with the different ideas and thoughts. So this process helps to
improve the performance of organization as well as each individual employee of that
organization.
 Unequal human capital theory: This theory affect the work of the employees who leads to
crisis at the workplace and responsible for that particular reason. Discrimination on the basis
of age, sex, nationality, profile and salary these are the factor which lead to frustrate
employees and then play with the reputation and brand name of the firm at the end it results
in bad name for the organization.
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4. Discuss the leadership challenges in case of change in business environment
There are several types of leadership challenges faced by the managers and leaders in case
of Brexit and that affect the performance of organization as well as employees. Employees wants
that their leader and manager encourage them at very great extent and plan the effective strategy to
improve the performance of them. After Brexit, Leaders and managers now ready to deal with
uncertainty and financial crisis and also deal with the opportunities which is generate and build up
by Brexit. Some of the challenges faced by the leaders which are given below:
 Challenge of change: This term states that, each and every organization faced the change
after such type of event is arises such as Brexit. In this particular case, managers and leaders
faced the challenge like maintain the reputation of an organization, manage financial
conditions, trade cost and tariff of the firm or many more.
 Gearing up the team: This is the big challenge faced by the firm and their management in
the way of managing the team task and restore the stability of the organization. Major
challenge is faced by the leaders and the managers is creating the effective environment and
making the effective strategies so that they provide the clarity to their employees in case of
complexity. This is the major challenge to maintain the performance of the employees and
encourage them.
 Managing internal and external stakeholders: Management is the big issue after Brexit,
in such case managers and leaders should have plan according to the current conditions and
risks faced by the organization. In addition to this, it is the case of gaining the managerial
support and maintaining the relationships between the internal and external stakeholders as
well.
 Guiding change: This includes the challenge of managing the team members and their work
or to maintain the processing of their work. This particular factor includes the impact of
change on an organization and dealing with the demand of the employees as well as the
organizational demand. In this particular case, employee faced the economical issues and
funding issue so that manager and leaders have to manage the crisis and make an effective
strategy for survival of the business.
 Leading a team: This is the main factor that affect the performance of an organization as
well as the performance of an employee. Leader faced the challenge to manage the task and
their team or also responsible for the possible outcomes as well. Before lead a particular
team it is most important to know the major target goals of the firm and then manage the
team and improve the performance of the employees accordingly. In this particular case,
leader faced big challenge to manage the team and lead in proper way as well. This process
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include several challenges in managing a single team of the workers in a particular case of
Brexit. Inspiration and development or leadership is the big part of the organization and has
an effective impact on the process of the leading a team.
CONCLUSION
As per the above report it is conclude that, Brexit has an impact on the performance of the
organization as well as the growth rate of the firm. Critical issues in business are directly affect the
performance of the organization and the brand reputation as well. In addition to this, This report
include the several effects of Brexit such as uncertainty, financial funds, tariffs and trade cost or
more. At the end of the report it is concluded that Brexit has both the effects on the business either
in positive or negative ways.
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