Impact of Globalisation on Corporate Taxation Policy: British Airways

This research project examines the impact of globalisation on the corporate taxation policy, using British Airways as a case study. The study explores the relationship between globalisation and corporate taxation, and how this affects the financial performance of British Airways. The objectives include understanding the impact of globalisation on the taxation policy adopted by British Airways, evaluating the correlation between globalisation and corporate taxation in the context of pricing strategies, and recommending measures for British Airways to gain competitive advantages. The methodology includes a literature review, research methodology, data analysis, and interpretation. The research questions address the measures to analyze the relationship between globalisation and corporate taxation, the impacts of globalisation on taxation policy, and the evaluation of globalisation's impact on pricing strategies. The literature review covers globalisation, taxation policy, and their interplay, with references to how globalisation affects the financial performance and corporate tax of companies. The research also considers the rationale behind the project and its significance in understanding the effects of globalisation on corporate tax policies, as well as the implications for British Airways' business strategies.

RESEARCH PROJECT

Table of Contents
CHAPTER 1: INTRODUCTION....................................................................................................3
Research Background.............................................................................................................3
Aims and Objectives...............................................................................................................3
Research Questions................................................................................................................4
Rationale.................................................................................................................................4
CHAPTER 2: LITERATURE REVIEW.........................................................................................4
The impact of globalisation on corporate tax. policy of British airways.........................5
The relationship between globalization and corporate taxation affect the financial
performance of British airways...........................................................................................6
The effects of relation between globalization and taxation policy on pricing.................8
CHAPTER 3: RESEARCH METHODOLOGY...........................................................................10
Introduction:.........................................................................................................................10
Research Methodology.........................................................................................................10
Research Philosophy............................................................................................................11
Research Approach...............................................................................................................12
Research choice....................................................................................................................13
Data Collection.....................................................................................................................13
Sampling...............................................................................................................................14
Data Analysis........................................................................................................................14
Research ethics.....................................................................................................................15
CHAPTER 4: DATA ANALYSIS AND INTERPRETATION....................................................15
CHAPTER 5: CONCLUSION......................................................................................................25
RECOMMENDATIONS...............................................................................................................26
REFERENCES..............................................................................................................................27

Topic: To analyse impact of globalisation on the Corporate Taxation policy- A case study on
British Airways
CHAPTER 1: INTRODUCTION
Research Background
Globalisation has assisted most of the business organisation in conducting their business
operations at the global scale. It is a process which is related with the interaction as well as
integration of all the business and human resources, thus making use of it in improving overall
business operational efficiency and performance level. Globalization has resulted in boosting the
level of corporate tax which has directly affected the revenue margin of most of the companies
thereby increasing their business operational efficiency level. With the ease in the availability
and mobility factor of labour as well as capital resources, it has resulted in increased in the
international tax competition and its rate. With the help of this research, one can understand that
how most of the individual and business firms are having freedom of gaining low tax rate
advantages in the foreign market. It will evaluate that because of globalisation and globalised
business economy, it has become almost impossible for most of the countries to charge tax at
high rates as it will result in to out flow of both the people and capital as well.
It is very much important for every business organisation to formulate effective as well as
sound business plans and strategies in line with the aims and objectives of the business. It will
assist many business firms in improving their business performance along with operational
efficiency. By bringing in such improvement, it also affects the level of company’s profitability
and productivity to a great extent. Also, it has provided base for companies for gaining benefits
by sharing if strong as well as effective business ideas, plans, processes, skills and technologies
across the national boundaries of countries. With the help of globalisation, it has enhanced
capital growth rate along with improvement in the per capita income of many countries. Increase
in the level of globalisation because of competitive pressure has assisted in making improvement
in the context of governance and better labour protection.
Aims and Objectives
Aim
To evaluate overall impact which globalisation has created on the corporate taxation
policy in the context of British Airways

Objectives
 To understand relationship in between globalization and corporate taxation policy
affecting the financial performance of British airways.
 To analyse impact of globalisation on the taxation policy adopted by the British Airways.
 To evaluate impact of correlation of globalization with the corporate taxation policy in
the context pricing strategies.
 To recommend measures to be adopted by the British Airways for gaining competitive
advantages from the changing corporate taxation policies.
Research Questions
Ques. 1. What measures to be undertaken to analyse relationship between globalization and
corporate taxation policy affecting financial performance of British airways?
Ques. 2. What are the impacts of globalisation on the taxation policy adopted by the British
Airways?
Ques. 3. How to evaluate impact of globalization & corporate taxation policy correlation in
the context pricing strategies adopted?
Ques. 4. Any recommendations to the British Airways for making improvements in its
corporate taxation policy for gaining competitive edge.
Rationale
With the help of this research project, the researcher has been able to evaluate impact of
globalisation on the corporate taxation policy. Globalisation has become one of the most
important aspects for many business organisations in increasing their customer base across the
global level. Because of globalised business economy, it has resulted in making most of the
business firms in becoming independent and improving base of their performance. By
undertaking this research study, it will help many other scholars as well as researcher in
completing their own research project in effectually manner. Also, this research project defines
about core impact which has been made by globalisation on the corporate taxation policies of
many companies and measures as undertaken by them for coping up with such aspects.
CHAPTER 2: LITERATURE REVIEW
Globalisation: It is a process of spread of information, technology and goods across the
world. In business contexts, globalisation is a procedure under which a business develops an
international influence by its operation and start operating in the global market under

international trade and commerce. This bring both positive and negative outcomes on the
businesses (Globalisation and its implication on tax policy, 2019).
When businesses globalise their operations, it affects international trade, relations &
economy. Along with which, aspects such as technology, social & cultural dimensions and
corporate world also gets influenced.
Taxation policy: the tax policy is the choice by a government as to what taxes to levy, in
what amounts, and on whom. It has both microeconomic and macroeconomic aspects. For
organisations which globalise their operations has to follow taxation policies of various nations
in which they operate which affects their activities.
The impact of globalisation on corporate tax. policy of British airways.
As per the view point of Crane and et.el., (2019), Globalisation has been defined as a
process of interacting and integrating the economy, business processes and operations of
company of one country with the economy of another company operating in the world. Due to
globalisation, it has benefited several business firm by providing assistance in form of
conducting of business operations at the global level. It has provided ease in making interaction
of people, companies and government across the world enabling them to perform and increase
their market interaction across the boundary. By making use of Globalization concept, British
Airways has been able to increase its trade and commercial activities thereby leading to
acquisition of large market share and profitability ratio. It has provided number of choices for
consumers related to the sourcing of products and services in virtual manner across the world.
On the other hand, Brejning, (2016), argued that with the introduction of Globalization
concept, it has made it difficult for many countries to levy tax at high rate for its services and
products. By charging high percentage of tax amount, it will result in flow of resources including
human, capital and technological one. Every business organization has to make proper and
timely compliance of applicable taxation policies, rules and regulations for remaining
competitive in the global market and economy. Due to globalization, Taxation policy followed
by the British airways has got affected. Earlier before introduction of Globalization, charging of
tax at high rate is feasible for both the company and economy as there is no other option
available for its consumers to sources resources in form of products and services at low rate from
any place in the world. British airways have to make compliance of different business as well as

corporate related taxation policy as per the business operations conducted across the world, non-
compliance of which can make them penalized and charging of high cost.
According to the Evertsson, (2016) globalization increases the trade between two
countries. It provides global platform to perform the activities and explore the business. It helps
the companies to increase their profit by selling their goods and services to the global customer
which ultimately increase their income by charging higher corporate tax on their services.
Globalization increases the business of company because it provides global market to expand the
business. At the same time, it also provides the variety of customer with different interest and
income level. As per the facts and figure due to globalization the business of organization is
increased by 30% which indirectly increases the profit of the company. According to the author
there are little evidence that globalization force to the downward movement of corporate tax and
revenue. Globalization boosts the corporate tax and revenue of the company by increasing the
business.
But Whait and et.al., (2018) argued that globalization decrease the income of the
company because due to the globalization government force the companies to reduce their tax
rate on corporate profit which ultimately affect the profitability of the company. As per the
government they force the companies to minimize the tax rate by two ways. Firstly, they force
the company to reduce the statutory tax rate on the corporate profit and secondly the government
force the companies to reduce the incentives on corporate investment. The both activities of
government ultimately reduces the profit of the company. As per the views of author the impact
of globalization on corporate tax policy is negative for the company because it reduces the
productivity and profitability of organization. They explain that globalization reduces the
corporate tax by 30% in UK market, 35% to 40% in Japan and 16.5% in Canada by 2011.
The relationship between globalization and corporate taxation affect the financial
performance of British airways
As per the thoughts of Morrell, (2018), concept of Globalization and corporate tax are
interrelated as both creates significant impact on the working and operations of business
organization taking place at the global level. Also, the financial performance and position of
company gets influenced by the adopting concepts and ideas related to globalization. With
increase in functioning of globalization and competitions in the taxation policy, it has provided

ease and assistance to large number of individual consumers and businessmen related to freedom
and selection of business as well as human resources, capital and technology which are charging
taxes at very low or minimal rate across the world market. This has resulted in increase in the
productivity level thereby minimizing cost of capital and maximizing the value of firm. Also, it
supports British airways in increasing its profitability level and improving customer satisfaction
level by rendering better improved and quality services to its customer at large level. It thus
brings improvement in the financial performance of the company providing them large customer
base.
However, on the critical note, it has been argued by Waltenberger and Ruff - Stahl,
(2018), that by implementing the concept of Globalization in the business operations, though it
has assisted in facility of conducting business operations at the global level, but it has created
some adverse impact on the financial performance of British airways as well. Companies which
are having monopoly businesses before introduction of globalization, are capable of charging
high tax rate for their products and services which in turn has to be purchased by other business
firms as there are no options available for them to source out resources at reasonable and
affordable prices. This provides huge benefits to all the monopoly business firms thereby
increasing their production, profitability and performance level. But with globalized business
economy, it is very easy to source out all the required resources from abroad having low tax
margin which affects the financial performance of the monopoly company.
As per the views of Crane and et.al., (2019) the globalization and corporate tax are
interrelated. The performance of one factor affect the performance of other factor. Globalization
increases the productivity of the company which improve the financial performance in the
market by attracting more and more customer towards the company. Due to globalization global
customer attracts towards the different services of companies and contributes in the financial
performance. Interrelation of globalization and corporate tax make a positive impact on the
financial services.
The interrelation of corporate tax and globalization influence the companies to innovate
their services to retain in the market and gain the competitive advantages. It differentiates their
product and services from the other companies and provide a different way to improve the
financial performance. It also encourages them to offer variety of services to attract customer and
investor to invest or participate in the financial performance of the organization. Global

communication makes possible the international trade and financial transaction by understand
the global requirement. Globalization mobilizes the investment of different investors. The
innovative services attract the investors to invest in the company which perform better in the
market which ultimately affect their financial performance.
But the same time author Jones and Temouri, (2016) criticize that due to globalization the
government force the companies to reduce the corporate tax on their services which ultimately
decreases the profit of the company. Globalization reduces affect the financial performance of
the company by reducing their corporate profit. Globalization also increase the competition in
market and due to cut-throat competition organization has to reduces their prices to sustain in the
market and provide their goods and services to the customer at lower profit margin rate. The
relation of globalization and corporate tax influence the companies to provide their best services
to the customer at lower profit margin rate, so the customer can enjoy the best services but it
affects the financial performance of company.
Globalization increases the mobility of the investment that means the due to the
globalization investor easily mobilize their investment. So to retain the investor investment in the
company, government has to provide tax regime which reduces the corporate tax arise from the
personal income tax and consumption tax ultimately it affects the financial performance of the
company. It forces the organization to reduce their price to retain customer and investors.
The effects of relation between globalization and taxation policy on pricing.
Bozyk, (2019), has stated that, Globalization has provided more options and choices for
conducting business at the international level by making compliance of applicable business and
corporate related rules, laws, taxation polices. It has resulted in the increase in the level of
employment by creating more job opportunities by providing required and relevant business
resources, capital, manpower and technological aspects at reasonable and affordable prices. It
has help the British Airways in setting their price for products and services as per the
convenience of both the company and its customers. By using benefits of increasing
interconnectivity of trade, culture and techniques related to business operations it has been able
to increase its business production level and able to satisfy its customer needs. As a result, the
overall business performance and profitability has been increased along with high customer
retention base. Strategies related to pricing can be made in relation with used of better improved

business processes and globalized features, assisting in charging fair and reasonable prices for its
business products and services.
On this statement Van Hoa and Harvie, (2016), disagree by stating that, by using the
resources, business processes, technologies, capital and other business aspects of other countries
it will result in increase in the cost of business operations including production, manufacturing
etc. Also, it will result in increase in the dependency level of the company on other countries
related to acquisition of business resources, techniques and capital which will hamper the
productivity and performance level of the company at a large extent. It is better to use available
business resources and other requisite essential of its own economy for carrying on business
operations of production and manufacturing. For making profit, it is better to make use of
available business and financial resources in proper and effective manner by framing sound and
accurate business policies and strategies for attaining the set defined business goals as well as the
objectives in cost effective manner.
As per the views of Avdjie and et.al., (2018) the relation between the globalization and
taxation policy affect the pricing policy of company. It encourages company to create innovative
services and product in the market by providing effective tools and techniques to differentiate
their products from the other company. It increases the price of the product and services to get
the benefits of globalization. But the same time Aalbers, (2018) criticize that globalization
increase competition in the market which force the companies to reduce their prices to sustain
the market and retain the customer towards the company.

The above figure shows the relationship between gloablisation and coroporate taxation
policy and its impact on price and financial performance.
CHAPTER 3: RESEARCH METHODOLOGY
Introduction:
Research Methodology is one the most essential chapter of the research as it is the one of
the process of systematic and theoretical analysis of the methods which are applied to the field of
study to make business decisions (Kumar, 2019). In this present chapter, researcher has applied
effective research techniques to collet, analyse and interpret the data for generating effective
outcomes.
Research Methodology
Research methods are the techniques, tools, strategies or process used for the collection
of data for analysis to generate new information as well as develop good understanding of the
topic. Researcher has mainly three choices for conducting the research which are qualitative,
quantitative and mixed methods. The type of research technique that is used to planned the study
with the purpose of gaining deep understanding regarding the topic without any statistical and
numerical figures is said to be qualitative methods. Strength of this method is that it provides
advantage to investigator to study each and every aspect of a topic but also limits accuracy of the
investigation as it doesn’t have any support of statistical information and evidence.

Whereas, the research methods which study the research by considering the statistical and
mathematical techniques is called as quantitative methods (Fletcher, Massis and Nordqvist,
2016). This method has a strength which provides advantage to investigate large number of
numeric data effectively. Besides which, it also has a weakness which is, it limits researcher to
getting deep theoretical insight of the research topic.
When research is planned for collecting, analysing by considering both qualitative and
quantitative methods is said to be mixed methods. This method has strength which enable
investigator to get deep insights of a topic and also to get benefitted to support those insights
with numeric evidence. To gain these benefits researcher has applied mixed method by
considering both qualitative and quantitative as it will minimize the bias nature and aids in
giving positive outcomes. Mixed effect is much better as it will aid in evaluating the concern
issues effectually from both theoretical and numerical perspective. Unfortunately, this method
also has a weakness that it requires high analytical skills and evaluating knowledge.
Research Philosophy
Research Philosophies deals with the nature, knowledge and source and it is belief about
the ways in which data about the phenomenon must be collected, analysed and used. Research
Philosophies are essentially divided into two types which are positivism and Interpretivism
philosophy. The type of philosophy that is highly structured and allows large sample to study the
data is called positivism philosophy (Pankaj, Kumar and Kavitha, 2017). This philosophy is
advantageous as it helps in evaluating big numeric data using an appropriate structure. It also has
a weakness which is its inflexibility as all the aspects in an investigation cannot be calculated.
Whereas, the type of philosophy that allows small samples to study in depth is called as
Interpretivism philosophy. This research is beneficial in the cases of investigation which has
small sample size which even becomes its weakness as it doesn’t facilitate in investigating large
number of respondents.
Researcher has applied positivism philosophy as it is most suitable philosophy when
research is based on quantitative and positivism will also allow studying the large sample and it
is highly structured data. Researcher has been using positivism philosophy as it helps in defining
in depth knowledge about a particular phenomenon.

Research Approach
The procedure and plan that comprises the steps of wide assumption over defining the
detailed methods for data collection, its evaluation and interpretation. It is very important to
select the most appropriate research approach it is because after selecting the research methods
researcher have essentially looked for the research approach. Research approaches are essentially
divided into two methods which are inductive and deductive. Deductive approach is mainly
concern with the development of hypothesis which is based on existing concept and the
designing plan of action to trial the hypotheses (Alase, 2017). This approach has various
strengths which are; it helps in time saving, it can apply to variety of examples and it even can be
used for higher level of investigation. On the contrary, complexity is its disadvantage.
The type of approach that begins with the theories and observation proposed towards the
end of research process is called as inductive approach. This approach is good with theoretical
investigation but lacks where researcher requires experimentation. In this present research,
researcher has applied deductive research approach as this method has high possibility to explain
experimental relationship between concept and variables and possibility to measure the concept
of quantitatively. Researcher has made of deductive research approach as it helps in framing of
hypothesis which forms base for making decisions in respect of rejection or confirmation of the
test within the research process.
Research strategy – It is a step by step plan of conducting research in systematic way. It
includes research design and methods. Also, it gives an insight that how methodology will be
implemented. The use of strategy depends on aims and objective of research. Generally, there are
4 types of research strategies available that are case study, qualitative interview, quantitative
survey and action oriented research.
Case study strategy facilitates in investigating different pre reviewed case studies but lacks
in primary research of first hand data. Qualitative interview allows to conduct interviews with
few respondents about their opinion against asked questions. This strategy helps in getting deep
insights from respondents but it also limits the number of respondents as it is a time taking
activity. Third strategy is quantitative survey, in this multiple questions are asked from ample
number of respondents to get their opinion against research topic but its lacks in getting detailed
information from the respondents.