Impact of Global Recession and Nationalism on UK Business Operations

This essay provides a comprehensive analysis of the evolving global business environment, with a specific focus on the challenges and opportunities faced by businesses in the United Kingdom. It begins by examining the shifts in the international landscape following the end of the Cold War and the subsequent impact of the 2008 global recession. The essay explores the rise of nationalism and protectionism and their effects on international trade, investment, and business operations. It delves into specific issues, such as the impact of Brexit on UK businesses, the challenges of rising operational costs, and the increasing uncertainty in the European market. Furthermore, the essay investigates how companies are adapting to these changes by focusing on cost-cutting strategies, supply chain management, and the management of human resources in a culturally diverse environment. The analysis highlights the importance of understanding these shifts for businesses operating in the UK and offers insights into how they can navigate the complex and dynamic global business environment.

BUSINESS AND GOVERNMENT
IN
GLOBAL CONTEXT

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Executive Summary
After the end of the World War 2, the world started to converge into a more connected
village. This report analyses the issues that companies faced after the recession of 2008. It
highlights the changes that have occurred at the international level after end of Cold War in
1990 and the changes that occurred in the business environment post global recession of
2008. It shows the impact of this business environment on the business operations of the
companies in the UK. It was found that due to the recession of 2008, not only the economy of
UK stumbled but its impact can be noticed on the whole European Union. Various types of
initiatives has been taken by the companies in UK in order to make its growth stable in this
highly uncertain and flexible business environment. The impact of decisions such as Brexit
has been has elaborated in the report.

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Contents
Executive Summary...............................................................................................................................1
Introduction...........................................................................................................................................2
BODY.....................................................................................................................................................2
Issue 1................................................................................................................................................4
Issue 2................................................................................................................................................6
Recommendation..................................................................................................................................6
Conclusion.............................................................................................................................................7
REFERENCES......................................................................................................................................8

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Introduction
Globalisation is considered to be the process in which companies are expanding their
business and starts operating at international level. It is crucial that companies finds better
strategies in their expansion process. With the heavy use of technology in various industries,
the process of globalisation fastened. The global environment for business has changed after
the end of Cold War. It was also an era where the all the countries have opened the market for
external companies to come into their country. Bipolar world have now changed into an open
market. It was reason that some of the Big economies in the world have emerged especially
like India which became a brilliant service market (Kõlves, Milner and Värnik, 2013). There
were many companies which started to expand into the regions that were previously
considered to be as the untouchable for investment. Due to economic recession after 2008,
the business environment further changed all across the globe. This change in the global
environment has derailed the process of globalisation to some extent. European and
American market was highly influenced by this recession and the effect of it could be easily
seen on the countries like U.K. Many countries of Europe have not been able to recover from
this recession even till today (Meardi, 2012). This research highlights the change in the
globalisation after the end of the cold war and the end of recession of 2008.
BODY
The cold war was a phase where the world was divided into bipolar fragments. In this most of
the countries have chosen sides. This bipolar world has imposed many kinds of trade
restrictions on each other. It did not allow the companies to expand in the economically
beneficial markets. UK was one of such market where many new companies wanted to come
but due to pressure from the other sides it was not easy to expand. After the cold war got over
in the 1990, the world started to disintegrate and it provided huge amount of opportunities to
the companies to move to the other nation (Sťahel, 2013). One of the first and primary
reasons was that government of many countries have started to make bonds with each other.
This relationship fostered better political environment for the companies to expand. Internet
mediums were the key to success in the overseas market. Companies started to have more
control over their business units in other parts of the country. Companies found deep routes
into the market through the process of internationalisation. Managers of the companies could
monitor their operation from different parts of the world sitting in their headquarters. With
the advancements in the technology that are interconnected companies became more

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competent in their international operations (Apsite, 2011). It was a time when most of the big
multinational firms emerged.
This continued till 2008, when the economic recession came. It has affected the global
business scenario where the investors became more reluctant towards the investments in new
regions. It was found that companies which were having more capital were the only ones
which actually thought of expansion. In this recession, there were many countries that got
affected and hence companies started to find the market that are stable and may not lose their
strength in the coming years (Hutchinson, 2018).
After this recession companies became more watchful towards the emerging markets. It was
not easy for the developing nations to attract investment especially when it comes to long
term sustainability of the companies (Basu, 2016). Due to intense competition, it was
necessary that companies do not make any bad decisions. This was due to the fact that any
mistake from the side of the companies in the investment plans could lead to long term loss
for the firm in terms of name in the market.
Most severe effect of the competition was on the European countries as no big organisations
wanted to expand into these nations. With the bankruptcy of Greece, the story became more
complicated. The banks were not ready to give loans to the countries that were falling short
of paying their debts. UK is a developed nation still faces challenges in terms of the attracting
new investors (James, 2013). The global crisis for UK become more significant when the
companies started to find countries that is having lower operational income. The most severe
impact was on the small scale business units as they did not have enough of resources to fight
this recession. Since the countries like UK have large amount of companies that are of
smaller scale and it provides job to huge number of people.
Government started to focus on nationalism and did not allow companies to invest in new
countries rather they started forcing their local firms to invest in their country only. Internal
investment was promoted by the countries. Apart from this companies also generated the
feelings of nationalism and protectionism (De Vogli, 2011). This protectionism did not
allowed companies also to make huge investments outside the country. This has brought
scepticism towards the globalisation. Due to the burden on the economy of UK, government
took many reforms so as to stabilise the economy. One of the biggest decisions that
government of UK took in this regards was Brexit. This allowed them to free them from
European Union and hence their policies could be made as per their choice. Since England

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has to pay a huge amount of money for the development of the counties that were not
performing so well in the union (Nolan, 2015).
European Union was a borderless area in terms of trade. This allowed the companies to do
trade without any restrictions. With the decision like Brexit companies will face challenges in
doing trade. The new tax barriers will be imposed in the area. The terms of negotiation with
the European unions will decide the future of the companies. It might be possible the
companies will have to look for the new trade routes (McCann, 2016).
Issue 1
These days companies are trying to invest in the market that is having lower operational cost.
This is a serious challenge for the economies like UK which is having higher operational
cost. Companies are also trying to exempt the new tax barriers among different countries.
Social changes can also be noticed in terms of the fact that people are also looking for the
products that are made inside the country (Daugbjerg and Swinbank, 2011). This over
protectionism towards the products that are made in the country have demoralised the
companies at international level to invest in UK. Government is also focusing towards the
growth of the small scale firms.
Apart from this UK is a technologically advanced nation but are not working towards the
innovation which has created a disruption in the market. This demotivates the companies to
invest in this market. On the other hand smaller countries have developed many types of new
technologies that attract the companies towards investment. In the process of cost cutting,
companies find the countries that are having low labour cost, high amount of resource, low
operational expenditure, higher market growth possibility, huge target section. Since UK does
not have the lower operational cost and neither the lower labour cost hence companies
become reluctant to come for investment (Blockmans, 2016). The case of Tata acquiring
Corus is a perfect example of the fact that investments in UK market could be a challenge for
the companies in financial terms.
The feelings of nationalism have also led the firm to hire people from the source country. On
the other hand there is severe increase in the unemployment in various parts of the world. The
governments are forcing the firms to make policies that support employment in the same
country. Governments are also providing some kind of tax benefits to the companies that are
doing so. UK government has made many policies that restrict companies from bringing
external talents (Jones and Evans, 2013). It resembles with the current policies of the USA

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government where they changed their Visa policies so as to restrict the number of external
talents coming into the country. It is seen that companies of UK hires a lot of talent from the
Indian sub-continent which is increasing the unemployment of the local people. There is
increase in the conflicts among the people from two different cultural backgrounds. The
feeling of nationalism plays a very crucial role in it. This is a serious challenge for the
company since they have to manage the internal environment at the workplace. Managing the
cultural diversity along with managing the talent pool could be a challenge for the company.
All this has created a negative environment within UK economy which is having a direct
effect on the operations of the firm and hence effecting the investments within the country.
The problem is even bigger in the public sector firms which are directly under the control of
the government. This is because the policies that are made by the government get
implemented in the organisation in an appropriate manner and they are following it harshly
(Lane, 2013). This is the reason why in the last few years the numbers of people that are from
the other countries have decreased in the public sector firm in U.K.
Companies within UK are trying hard to find the ways to overcome the challenges related to
this change in the business environment. The first thing that they are watchful about is the
trade negotiations between UK and European Union. They are working on strengthening of
the supply chain management so that they may not face challenges like gap in the demand
and supply. At the same time they need to add on the numbers of suppliers from within the
country. This is necessary for maintaining the regularity in the supply of essential products
(Wills and Linneker, 2014). Since this will also provide UK with an opportunity to gain
advantage over the other countries. It is crucial that companies examine the impact of Brexit
on the supply chain routes. UK will be able to take their decisions independently which will
help them in making of new political ties with other countries. This will enlarge the reach of
the firms to new investors and suppliers from the countries that is having raw materials at
lower cost.
Issue 2
Increasing uncertainty in the European market is a matter of challenge for the company. In
such an environment, the biggest strain is on the resources of the company. It is crucial that
company maintains the quality of the resources along with the quantity of the resources. In
this nationalism there is also effect on the human resource management of the organisation.
The recession also forced them to reduce their expenditure in terms of the management of

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resources (Porter, 2014). Companies also need to acquire the resources that can be used for
the longer time period. In order to manage the operations in the changing global business
environment, companies are taking use of the highly advanced technology in an appropriate
manner. This not only helps in bringing effectiveness in the work process at the same time
provide the flexibility in the business operations.
For example the technology such as predictive analytics would help the company in
understanding the market condition of UK in the future. This is based on the trends in the UK
market. Strategic planning would be crucial for the company in the long run as it would
ensure the long term success of the firm. Since the future is going to become more uncertain
hence the firms must have the stock of the resources for the coming few decades. In UK, the
crude prices are going to be high and in future companies will have to find some other form
of energy sources so as to meet their future energy demands. This is more crucial for the
companies that are highly dependent on the conventional fuels (Independent, 2018). The most
important thing that a company should do is that it must focus on financial planning as it is
the most essential part of the firms operations. Profits that a firm generates are somehow
dependent on the financial planning that a company does for its long term.
With the use of systems such as supply chain management, it is easier for the companies to
manage the business process in an effective manner. There must be addition of new suppliers
to the company’s stakeholders. Firms should add more and more stakeholders to the firm so
as to lower down the impact of the business environment on the operations of the company
(Sharma, 2018). For example if the company aims to add more numbers of investors in the
pool, it will help the firm in the time of economic hiccups especially in the future
investments.
Recommendation
It is crucial that company redefines their goals so as to make it achievable for the firm in the
changing global business environment. Company also needs to make changes in the
organisational structure so as to streamline the business operations. It will be beneficial if the
companies include government as their essential stakeholder. This would help them in
making policies as per their requirement to some extent. In order to reduce the difficulties in
the business operations companies need to find more partners in the market (James, 2013).
More partners will help them in gaining new competencies so as to do business in an
appropriate manner. This will provide stability to the firm’s business as well as it will give

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competitive advantage to the companies over the other competitors. The feeling of
nationalism can be countered by the organisation with the help of culture that is present in the
country. Managers could build an organisational culture that incorporates a culture that is
present in the country.
The companies that are from the local market needs to invest a lot of money on the national
markets. Firm should hire people that are from UK that too of different age groups and
different ethnicity. Since UK has a highly diverse society hence companies will not face any
challenges in hiring these people. Companies should specifically define their target markets
so as to ensure their success from the products. All the strategies specially the ones that are
related to marketing needs to be defined focusing on these target segments only (Nolan,
2015). Companies these days are also using the nation based marketing so as to portray them
as the local firm. Many companies that are operating in UK even do not show their
nationality at the time of marketing itself. The tag lines or the positioning statement or are
also made according to the customers in the local market.
Conclusion
On concluding this research it can be said that with the increasing effect of global
interdependence of the country on each other, the challenges for the companies is also going
to enhance. In this changing global business environment companies had to rethink about the
challenges that are confronting their business. They must build strong relation with the
governments in many parts of the world. Company should also look for the new partners
which can provide them with new kinds of possibilities in UK itself (Daugbjerg and
Swinbank, 2011). The government of UK will have to make their market as more open
market that could attract more investors in the country. The post-recession period will be a
challenge for UK in the coming years also and hence a more strategic planning is required by
the firm especially in terms of financial resources.

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