Global Business Environment Report: Buckinghamshire New University

This report provides a comprehensive analysis of the global business environment, focusing on several key aspects. It begins by examining the impact of President Trump's economic policies on foreign economies like the UK, EU, and China, analyzing trade negotiations and their consequences. The report then explores the opportunities emerging economies present for global business expansion, discussing the significance of demographic and economic changes, and the importance of stakeholder theory. Further, it delves into how governments use fiscal and monetary policies to stimulate economic activity and growth, using the UK as a case study. The analysis covers the roles of the Monetary Policy Committee of the Bank of England, fiscal policy, and the interplay between the two. The report concludes by highlighting the major shifts in UK economic policy and emphasizing the opportunities available in emerging markets. The report includes references from various academic sources.

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Introduction
Regardless of the existing global economic disorder along with unique economic
challenges at present encountered by Europe, the UK business environment maintains its
positivity, progressiveness for business. Leigh and Li (2015) have noted that the UK government
has been showing immense commitment in creating the supportive business setting which
intends to persuade a private-sector-led monetary resurgence. The paper will focus on impact of
government on the structure and operation of a business organisation and evaluate the
understanding of the impact of changes in the business environment on business organisation and
activity.
Describe and explain how President Trump’s approach to economic policy impacts upon
foreign economies such as the UK or EU or China.
The focal point of Donald Trump’s election campaign has been considered as bad trade
negotiations which the US President has been responsible for spoiling manufacturing jobs at
home and discouraging the earnings of the US workforce. According to Christina et al. (2014),
mainstream economic theory primarily preserves that while losses emerging from employment
liberalization in the form of job dislodgment along with lesser wages have been determined in
certain sectors of the financial system and geographical areas, the profits have been spread
extensively. Several economists and policymakers essentially in communal discussion have shed
light on the profits getting produced from trade (Rodrik 2018). Christina et al. (2014), while
drawing relevance from economic theory have mentioned that traders gaining from trade would
not mutually acknowledge the liberalization as the profits have been greatly diffused across the
populace while individuals unfavourably impacted tend to have greater amount of incentive in
order to react against more liberalization as the detrimental aspects show higher level of

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consideration. These factors, according to the reports of McNair (2017), justifies why majority of
leading contenders in 2016 presidential election requested to the ones affected by trade despite
the significant section of US citizens still considered constructiveness in trade. Furthermore, the
rise of China in global financial system along with its admission in 2001 significantly added up
to job losses in the U.S. Additionally, authors have established that that the increase in imports
from China between years 1999 and 2011 charge the US up to an approx of 3.4 million jobs
(Leigh and Li 2015). Baylis, Smith and Owens (2017) further mentioned that around 987,000 of
labourers who lost jobs have been engaged in manufacturing, financial sectors and around 19.5%
of the 5.9 million manufacturing jobs have been recorded to have lost during that period (Rodrik
2018).
Reports of Manikandan and Ramachandran (2015) have stated that Trump administration
has exhibited certain propensity to be invoked and further to self-initiate enquiries under less
universally used US laws with the aim of executing unilateral actions. According to Christina et
al. (2014), Trump administration self-initiated two distinct investigations under Section 232 of
the Trade Expansion Act of 1962, on the basis that imports of steel and aluminium tends to pose
threats to national security. It has been noted that considering the current Republican majorities
in the Senate and the House of Representatives, the Trump administration should in supposition
find it undemanding to attain congressional acknowledgement for his trade policy in evaluation
to the trade policy executed by Trump in his concluding years in office. Thus, as per the opinion
of Christina et al. (2014), there can be observed a certain system of balance which could be
transformed following the mid-term elections in 2019. Moreover, in the view of Manikandan and
Ramachandran (2015), even though Trump may likely to target the anti-trade sentiment within
his election base by employing this to reinforce Republicans in Congress to fall in line,

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Republicans exhibit a propensity to prioritize constituency interests over those of the President.
Discuss and interpret how emerging economies are presenting opportunities for
global expansion for businesses
In recent times, there has been observed an increased awareness among multinationals,
intergovernmental agencies, foreign trade investments (FDI) along with other stakeholders on
emerging markets. According to Shenkar, Luo and Chi (2014), majority of emerging markets at
the forefront of demographic as well as economic change, thus have been turning into immensely
thriving markets for investments. These markets however have been undergoing fundamental
changes in their macroeconomic setting. Park and Ghauri (2015) have stated that one of the
primary aspects of such developments has served as a significant global population growth
accounted to rise to around 9.2 billion people by 2030 whereas Nigeria along with other
developing nations account for major proportion of the growth. As per study of Young et al.
(2014), emerging markets have been offering substantial market avenues not only for few
affluent in budding nations but further the immeasurable number of the aspirant economically
deprived joining the market for the foremost time. For example, Innocent Drinks, leading
Smoothie Company in the UK as expanded its business in around 13 countries across Europe.
Furthermore, regardless of the company’s extensive reach, Innocent Drink’s unique brand
strategies have been consistent across the board (Innocent - little tasty drinks 2019). Reports of
Park and Ghauri (2015) have revealed that while emerging markets with rapid growth have the
propensity to distract a company from consistent branding, Innocent drinks on the other hand has
successfully managed to maintain its stability to itself. Thus, by strategically ensuring brand’s
voice at every target area, Innocent Drinks Company has been competent enough to create a
highly recognizable brand (Innocent - little tasty drinks 2019).

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Meanwhile in the view of Baker, Bloom and Davis (2016) in an emerging economy
similar to China, regulating shareholders tend to have much concentrated ownership and control
authority which permits them to potentially expropriate other stakeholders. De Agostini, Hills
and Sutherland (2014) have argued that stakeholder theory essentially unpacked into a number of
stakeholder theories each of which comprises in normative code and is associated with the way
businesses should be regulated and responses of managers. Stakeholder theory essentially
suggests that expanding in the emerging market should primarily cater for the interests of
stakeholders in order to maximize corporate capital and mutual benefits for all stakeholders
(Park and Ghauri 2015). Furthermore with the expansion of stakeholder theory several
researchers have initiated to successfully explore a broader stakeholder orientation which
involves orientation of any business towards its primary stakeholders groups such as consumers,
shareholders distributors, rivalries and employee base. It has also been noted that drawing
relevance to the importance of stakeholder groups it can be suggested that businesses with an
amplified level of stakeholder orientation tends to perform in a more efficient manner. Moreover
in accordance to the stakeholder theory it has been stated that for a business to succeed in the
emerging market and enterprise should appropriately handle all stakeholder interest and realise
the way it influences and function mechanisms of all stakeholders which has the propensity to
impact the competence and efficiency level of any organisation (Young et al. 2014). Park and
Ghauri (2015) further have noted that stakeholder orientation along with its elements comprise
constructive effects on the performance level of any business. As a result, managers should not
only put effort in developing and sustaining stakeholder orientation in their organisations to
succeed in the emerging market but also realised the diverse impacts of the components of
stakeholder orientation to enhance the performance level of the business.

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How Governments use both fiscal and monetary policies to stimulate economic
activity and growth using trickledown economics.
In the UK, Monetary policy has been offered to the Monetary Policy Committee of the
Bank of England. Reports of authors have stated that interest rates used in order to be set by the
chancellor, however in 1997, it has been witnessed that the Bank of England received
independence in order to successfully set interest rates. Thus, the government only set the
inflation target of around 2% inflation. According to De Agostini, Hills and Sutherland (2014),
the Fiscal policy typically is not utilized. Furthermore, in theoretical concept, the government
could utilize fiscal policy in order to restrain economic succession. However, certain biased
concerns regarding changing rates of levy duties have been witnessed to specifically reduce the
inflationary pressures. These factors however have thus resulted to the government leave
economic regulation to monetary policy and the bank of England (Palley 2015). Moreover,
authors have stated that routine fiscal stabilisers serve decisive function in stabilizing the
economic series during decline whereby the government repeatedly attains lesser tax revenue and
expends substantially on job redundancy profits.

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Fiscal Policy in UK
Source: (Baker, Bloom and Davis 2016)
Studies of Kiley (2016) have mentioned that New Keynesian theory contradictory to New
Classical economic theory has stated that the fiscal standpoint tends to have real impacts.
Moreover, in the view of authors, the New Keynesian backing of economic stipulation
management primarily relies on the evaluation related to the processes related to profitable
policy-making. As the flexible or restricted fiscal policy has been viewed as deliberate to modify
due to gaps in the finances process, monetary policy has been attuned at rapid pace. According to
Palley (2015), fiscal policy has been decided yearly whereas monetary policy is made on a
monthly basis in order to develop monetary policy into ‘trump’ fiscal policy.
Conclusion
Hence to conclude, it has been suggested that major shifts in the UK economic policy
usually tends to occur as the effect of primary and subsequent order transformations, further
involving modification of policy mechanisms and situations instead of essential reorganization of

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economic objectives. Additionally, several business opportunities exist while operating in
emerging markets. Thus, businesses in the emerging markets simultaneously follow goals
through successfully generating revenues whilst concurrently justifying social issues.

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References
Baker, S.R., Bloom, N. and Davis, S.J., 2016. Measuring economic policy uncertainty. The
Quarterly Journal of Economics, 131(4), pp.1593-1636.
Baylis, J., Smith, S. and Owens, P. eds., 2017. The globalization of world politics: an
introduction to international relations. Oxford University Press.
Christina, S., Dainty, A., Daniels, K. and Waterson, P., 2014. How organisational behaviour and
attitudes can impact building energy use in the UK retail environment: a theoretical
framework. Architectural Engineering and Design Management, 10(1-2), pp.164-179.
De Agostini, P., Hills, J. and Sutherland, H., 2014. Were we really all in it together? The
distributional effects of the UK Coalition government’s tax-benefit policy changes. Social Policy
in a cold climate Working Paper, 10.
Innocent - little tasty drinks., 2019. Innocent - little tasty drinks. [online] innocent - little tasty
drinks. Available at: https://www.innocentdrinks.co.uk/ [Accessed 21 Jan. 2019].
Kiley, M.T., 2016. Policy paradoxes in the New Keynesian model. Review of Economic
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Leigh, M. and Li, X., 2015. Industrial ecology, industrial symbiosis and supply chain
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Manikandan, K.S. and Ramachandran, J., 2015. Beyond institutional voids: Business groups,
incomplete markets, and organizational form. Strategic Management Journal, 36(4), pp.598-617.

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Marquis, C. and Raynard, M., 2015. Institutional strategies in emerging markets. The Academy of
Management Annals, 9(1), pp.291-335.
McNair, B., 2017. An introduction to political communication. Routledge.
Palley, T.I., 2015. Money, fiscal policy, and interest rates: A critique of Modern Monetary
Theory. Review of Political Economy, 27(1), pp.1-23.
Park, B.I. and Ghauri, P.N., 2015. Determinants influencing CSR practices in small and medium
sized MNE subsidiaries: A stakeholder perspective. Journal of World Business, 50(1), pp.192-
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Rodrik, D., 2018. Populism and the Economics of Globalization. Journal of International
Business Policy, pp.1-22.
Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.
Young, M.N., Tsai, T., Wang, X., Liu, S. and Ahlstrom, D., 2014. Strategy in emerging
economies and the theory of the firm. Asia Pacific Journal of Management, 31(2), pp.331-354.