A Critical Analysis of Global Challenges in Responsible Business

This report provides a critical analysis of the global challenges faced by responsible businesses, drawing on various literature reviews. It explores key areas such as ethics, environmental and corporate social responsibility (CSR), and the impact of globalization on multinational corporations in developi...Read More

Running head: GLOBAL CHALLENGES IN RESPONSIBLE BUSINESS
Global Challenges in Responsible Business
Name of the Student:
Name of the University:
Author Note:

1
GLOBAL CHALLENGES IN RESPONSIBLE BUSINESS
Contents
Introduction......................................................................................................................................2
Critical analysis of the Literature Review.......................................................................................2
Importance and justification of the topic.........................................................................................8
Conclusion.......................................................................................................................................8

2
GLOBAL CHALLENGES IN RESPONSIBLE BUSINESS
Introduction
Globalization has increased the presence of multinational corporate in developing
countries. Corporate responsibility is an important global issue which has become popular in thus
era. The business leaders argue that business plays an important and constructive role in
addressing the challenges faced by the businesses. Moreover, the businesses also had to pass
through several crisis and it responsible for various approaches which are related to cost
reduction and lay-offs technique. The business leaders have shown various kinds of
responsibilities and leadership qualities which are closely associated with cost compensation.
The managers are responsible for responsible for cost reduction and laying off employees. The
global challenges of the responsible businesses will disappear if financial crisis and recession in
the business are taken care of. This paper will critically highlight different literature reviews on
global challenges in businesses. There are certain areas which are to be taken care of in highlight
the global challenges such as ethics, environmental CSR and corporate social responsibility
(Pfitzer et al. 2014).
Critical analysis of the Literature Review
According to Kolk (2016), there is a need for more international corporate social
responsibility on the developing and emerging countries. The stakeholders must also identify the
different changes which are necessary for improving the business activities. The author has cited
the example of Ghana which has attracted many international businesses and it is planning to
extend it more in various sectors of the economy. Carne et al (2013) has also highlighted that
there must be laws and regulations which will help to know and get a comprehensive
understanding of the targeted market. The tax implications and the trading laws are the key

3
GLOBAL CHALLENGES IN RESPONSIBLE BUSINESS
functions of any international business. Moreover, there must be potential tariffs and legal costs
which are associated with entering the new market. The employment and the labor requirements
differ in various countries. Tax compliance is most crucial and it is one of the legal area which is
to be considered in businesses. Accounting is a challenge to global business and they may be
liable for corporation tax. Different tax system, compliance requirements and rates can make the
accounting function of a global business very difficult and challenging. Accounting strategy is
also important for maximization of revenue.
According to Ferraro and Briody (2017), the success and the failure of any business also
depends on how efficiently and effectively the company manages the marketing and
management activities. The employees must also be able to exercise their skills in new location.
This will depend on the job related experience, sensitivity and responsiveness of the individual to
adapt to the new cultural environment. The insensitiveness of the workers can lead to undesirable
results in the business. Ruggie (2014) has opined that there must be integrity in business. The
businesses face moral challenges in the global economy. If this practice is adopted, it will erode
the trust which exists between the employees and employers, executives, business partners and
shareholders. It is difficult to compete effectively with the businesses and thus it will eventually
fail. Moreover, the businesses also face challenges in selection and competition. The ease of
starting a business also increases competition. There will also help the businesses to retain their
customers. The business owners can also easily master the elements and thus provide great
customer experience. Challenges are also faced in marketing and consumer loyalty to effectively
retain the customers. Social media, smart phone and various other modes of communication
channels has made it easier for the businessmen to mitigate the challenges. It is also important to
figure and find out the correct marketing channel which will help the businesses to be successful.

4
GLOBAL CHALLENGES IN RESPONSIBLE BUSINESS
It is important to identify the customers need and thus it will help in delivering better service.
The business leaders also find challenges and great discomfort in uncertainty.
According to Duina et al (2014), the businesses face uncertainty about the future. It is
also difficult to predict and analyze the market trend and the customer trend which is rapidly
changing in different business ventures. The small and the medium businesses must employ
financial consultants so as to manage the cash flow and profit margins of the company. It is also
important to use a meaningful set of performance indicators that will provide the businesses with
different insights about its performance level. Some businessmen do not have proper knowledge
of the different knowledge process indicators and thus they also do not know how to avoid
different pitfalls. There must be proper communication metrics so they it becomes easier for the
businessmen to take important decisions. With the shift of technologies and markets, the rules
and regulations also shift and thus the businesses should appoint different consultants so that it
becomes easier to understand the complexities. Hill (2013) also opined that transparency,
collaboration, innovation, productivity and agility are the main challenges which are faced by
global businesses. As the business environment is rapidly changing, the businesses must be able
to keep up the change and take the right decision which requires proper collaboration. The
collaboration will help the teams within the business venture to reach proper solutions.
Innovation is an important area where the global firms have failed to capitalize their ideas. The
employees are not encouraged to take critical risks and thus find out new areas where they can
apply their ideas. The organizations also face risk in research and development. There are also
certain businesses which operate in perpetual crisis mode. These bring new challenges and thus it
is the need of the management to resolve and spend more time in troubleshooting. As the
business expands, it is necessary to pay more attention to the new priorities and problems in the

5
GLOBAL CHALLENGES IN RESPONSIBLE BUSINESS
businesses. There are many businesses which find established management standards as one of
the best and the important ways of introduction of best practices. There must be effective quality
control system in the organization which will help the businesses to be successful. Certain
challenges are also faced in quality control systems which are an important area of convincing
the customers and driving improvements in businesses.
Bond and O'Byrne (2014) argued that communication and cultural differences are the
main challenges which are faced by any global business ventures. Successful communication is
the key and the important factor which is posing a challenge in everyday life. These will help the
transaction to go smooth and it will also help to overcome the different obstacles which have to
be experienced due to cultural differences. The transaction will not go smooth if there is no
proper communication among the different countries. The relationships between the people of
different countries such as power structures, religious beliefs, communication styles and attitudes
towards their particular work will also help in understanding the cultural differences. There are
also certain challenges which are faced by the businesses in case of payment method and
currency rates. The businesses must accept the various issues before accepting global orders.
Different countries may have different payment methods that may not be popular within their
nation but they are accepted internationally in order to secure the business. It is also important
for the businesses to be aware of the currency exchange rate of different countries. If there is any
drastic change, it may affect the business badly. Choosing the right and the proper shipping
method will also help in timely, cost effective and safe delivery of the cargo. The businessmen
must have the knowledge of logistics which will help them to avoid the challenges faced in
shipping. Each country also has their own laws and regulations and thus it is vital for the
importers and the exporters to have proper knowledge of the international laws. Research is the

6
GLOBAL CHALLENGES IN RESPONSIBLE BUSINESS
first and the vital thing which will help the businesses to go global from small and medium
enterprises.
Collings(2014) opined that human resources are regarded as the biggest challenge in
business. The employees must bear responsibilities and also have flexible lines of responsibility
in businesses. These differences can also lead to tensions among the managers and the
employees who use their own initiatives in different businesses. The company must have a clear
set of procedures for incentives in their work. According to the size of the company, the
employees must be divided in small teams and they must also have a leader who will oversee the
reports. It is also necessary to motivate the employees and encourage them to be creative and
also take different risks. The challenges which are faced by these businesses have realistic
approaches in different countries. As every person plays a critical role in the operation of a
business venture, so one poor employer can affect the entire business. A sudden resignation of
the employees can also contribute to slow growth of production of goods and services.
Moreover,it is also important to find new talents which will help in the growth of the business
venture. According to Peng (2016) a key element which leads to success in business is the needs
of the customers. The customers must have a compelling need and their problems must be solved
accordingly. The product or the solution must solve their problem in such a way that its benefits
are not difficult to communicate or convey to the customers. It is also important to identify the
true needs of the customers in the foreign countries because their cultural experiences differ
everyday. For example, the American marketing companies can predict or assume the demand of
their customers. They also check whether the needs or wants of their local customers matches
with the other countries. Certain companies also face challenges in their brand names. In this era
of globalization, due to the rapid use of internet and other means of communication, brand names

7
GLOBAL CHALLENGES IN RESPONSIBLE BUSINESS
have become a symbol status across the globe. It can also take several years for a company to
gain the trust of the customers or even few months. This does not depend on the cost of the
products i.e. the products may be expensive or cheap. For example, the American companies can
be perceived to take several attempts to take over the position of other companies.
According to Hoskinson and Kuratko (2015), the consumers are influenced to purchase
the products by different marketing messages which are delivered through media channels. This
also plays an important role in the success of business organizations. Sometimes, certain
advertisements may seem to be extremely funny or confusing or insulting other cultures. Thus, it
is necessary for the businessmen to have a deep understanding of the morals, customs, culture
and religious beliefs which predominates the countries. It is difficult for the businessmen to
predict what motivates the customers and it varies from country to country. The business
executives also face several barriers which are associated with communication. This is due to
language differences in different countries, Moreover, there may also be difference in the
traditional pace of negotiation. For example, the Americans are always in a rush or hurry to
negotiate in different businesses than the people of other countries. The executives of other
countries pay more attention to the facial expression rather than communication. The executives
of different countries may also try to establish personal relationship with the people of other
countries. This may be possible through video conferencing for which the companies had to
make certain investments. It is also vital to co-ordinate with the time zones of different countries
when the business in operating globally. This requires collaboration among the employees so that
it is possible to complete the project successfully.
Nilsson (2017) opined that there are certain compliances and regulations which have to
be followed in different businesses and it is important to understand them thoroughly. The

8
GLOBAL CHALLENGES IN RESPONSIBLE BUSINESS
businesses must abode with the tax laws and regulations of different countries to operate in a
global level. This is necessary for export regulation because some countries may have strict rules
and restrictions than the other countries. Moreover, in a global economy the businesses will face
strict competition and it becomes very difficult for the businesses to sustain in such environment.
There are certain business in which the executives has to face international calls from different
countries. In such organizations, it is necessary to keep the employees updated about the sales so
that they can track the oversees business and find out different ways in navigating language
barriers. Cultural differences thus plays an important role in such case. The religious and the
cultural boundaries must be understood so as to run the business effectively. Recycling is also an
important challenge which is faced by different business. There are several businesses which
have successfully incorporated in the recycling programmes so as to reduce the cost of business.
Transportation, energy, food companies has to face different environmental pressures and thus
utilize the natural resources and offer products with recyclable materials. It is also important to
have access to vital information which may compromise the technological standards when
running different businesses.
Importance and justification of the topic
It is important to analyze and provide proper justification of the challenges which are
faced in businesses. This will help the other startup business to get an idea of the challenges and
thus operate in the global economy. To operate a business in the global world, it is necessary to
understand the export and the import policies, rules and regulations of other countries.
Communication is also important because in a global business, it is necessary for businessmen to
communicate and understand the needs of other customers and accordingly provide service or
product. These challenges will also help the existing businesses which are operating in a global

9
GLOBAL CHALLENGES IN RESPONSIBLE BUSINESS
scale for further improvement. It is also necessary to take a holistic view of the business
environment and examine the elements which will help in profitability of the business venture.
An evaluation of the improvement in business organization is also vital and thus the challenges
must be clearly and properly examined (Al Ariss 2014).
Conclusion
Thus, there must be laws and regulations in the businesses which will help to know and
get a comprehensive understanding of the targeted market. In a global economy the businesses
will face strict competition and it is necessary for the businesses to sustain in such environment.
It is also important for the businessmen to have a deep understanding of the morals, customs,
culture and religious beliefs which predominates the countries. Different countries may have
different payment methods that may not be popular within their nation but they are accepted
internationally in order to secure the business. The businessmen must be aware of the currency
exchange rate of different countries. The entrepreneurs must also have the definite skills and
attitudes which will help in improving the business. Efforts must be made to take special care of
accounting perspectives in the business. Moreover, there must be management authorities who
will help the business organizations to improve and mitigate the challenges. Their contributions
are very vital for the successful working of the business venture. The trust of the management
team is also important to control the employees and improve the business venture (Engel et al.
2016).

10
GLOBAL CHALLENGES IN RESPONSIBLE BUSINESS
References
Al Ariss, A. ed., 2014. Global talent management: Challenges, strategies, and opportunities.
Springer Science & Business.
Bond, C. and J. O'Byrne, D., 2014. Challenges and conceptions of globalization: An
investigation into models of global change and their relationship with business practice. Cross
Cultural Management, 21(1), pp.23-38.
Collings, D.G., 2014. Integrating global mobility and global talent management: Exploring the
challenges and strategic opportunities. Journal of World Business, 49(2), pp.253-261.
Crane, A., Matten, D. and Spence, L.J., 2013. Corporate social responsibility in a global context.
Duina, F., 2014. Mauro F. Guillén and Emilio Ontiveros: Global Turning Points: Understanding
the Challenges for Business in the 21st Century.
Engel, N., Wachter, K., Pai, M., Gallarda, J., Boehme, C., Celentano, I. and Weintraub, R., 2016.
Addressing the challenges of diagnostics demand and supply: insights from an online global
health discussion platform. BMJ global health, 1(4), p.e000132.
Ferraro, G.P. and Briody, E.K., 2017. The cultural dimension of global business. Taylor &
Francis.
Hill, C.W., Cronk, T. and Wickramasekera, R., 2013. Global business today. McGraw-Hill
Education (Australia).
Hoskinson, S. and Kuratko, D.F. eds., 2015. The Challenges of Ethics and Entrepreneurship in
the Global Environment. Emerald Group Publishing.

11
GLOBAL CHALLENGES IN RESPONSIBLE BUSINESS
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business, 51(1), pp.23-34.
Nilsson, A., 2017. Making norms to tackle global challenges: The role of Intergovernmental
Organisations. Research Policy, 46(1), pp.171-181.
Peng, M.W., 2016. Global business. Cengage learning.
Pfitzer, M., Bockstette, V. and Stamp, M., 2013. Innovating for shared value. Harvard Business
Review, 91(9), pp.100-107.
Ruggie, J.G., 2014. Global governance and “new governance theory”: Lessons from business
and human rights. Global Governance, 20(1), pp.5-17.