Contemporary Business Issues: Globalization's Impact on the UK Economy

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Contemporary Business Issues in a Globalized Environment

Table of Contents
Introduction......................................................................................................................................3
Analysis...........................................................................................................................................4
Conclusion.....................................................................................................................................10
Reference List................................................................................................................................11
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Introduction
In contemporary business situation, Globalisation is acting as new phenomenon. Different
factors of globalisation are becoming more intense and its power to influence daily lives is
increasing rapidly. Information Communication Technology (ICT) is the main factor that is
changing modern business approach rapidly. This has influenced global trade practices by a huge
margin as companies are gaining pace regarding their market expansion. This essay highlights
different aspects of globalisation and its positive and negative impact on business. On the other
hand, influence of different external factors on global business is also mentioned along with
appropriate examples. Influence of globalisation on personal life is also described properly.
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Analysis
Globalisation helps a business to break through barriers of countries and it helps a company to
acquire new markets according to their choice. Different aspects of globalisation generally refer
to certain changes through which self- contained countries are becoming more integrated
countries and they are welcoming companies to do business to enrich their economic condition.
Global economic trends provide a vivid picture regarding globalisation as it shows preferable
global market for global companies in contemporary time. In a recent report, it is mentioned that
the USA is ranked with highest remarks regarding both import and export business market
(Wirtz et al., 2015). On the other hand, countries such as China, Germany, Japan and UK have
invited companies across the globe over the year. This has created huge influence on economic
condition of such companies.
Globalisation in business is making the world a market without any border and this is helping
companies to acquire a better economic condition. Companies do not have to depend on a single
market and they can support markets that are affected by different issues. Along with these
benefits, there are several negative aspects of globalisation as it affects environment hugely.
Globalisation means transportation that cost huge capital and natural energy that affects
environment hugely (Agarwal, 2015). On the other hand, globalisation affects local markets,
which are flourished with global products, are reluctant to introduce local products. On the other
hand, globalisation introduces issues such as global recession as condition of each market affects
another one.
UK economy is hugely influenced by globalisation in business. The most influencing factor is
the increased rate of trade through which UK based firms are gaining competitive advantages in
global markets (Taylor-Gooby, 2017). Different aspects such as financial market, nuclear power
industries and video gaming industries are availing appropriate position in global market. UK
firms are greatly affected by globalisation as UK firms got huge benefits and gained competitive
advantage in the global economy. On the other hand, financial accounting services and
‘information technology consultancy' firms are acquiring new heights in context of UK. This
improved environment has created new demand among consumers as globalisation has positive
impact regarding the improvement of choice of consumers and both rates of import and export
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has been improved in recent years (Hasrati and Tavakoli, 2015). High street companies in UK
such as retail giants as Marks & Spencer and car manufacturing companies such as Rolls Royce
are facing huge challenges from global companies as demand of consumers is increased because
of unique product and service line of these companies.
Increased competition has introduced huge impact on UK economy as companies were
compelled to introduce new pricing strategies and consumers are enjoying quality products in
lesser price (Ferrera et al., 2017). UK is known for, clothing, technology and food imports and
export companies started to increase their export amount. On the other hand, McCann (2016)
mentioned that factors such as global migration and economic condition have changed UK's
economic sector. Recent events such as Brexit introduced threats regarding workforce among
UK based companies as apart from UK based employees, most of employees are from different
countries from European Union. On the other hand, outsourcing is also a huge issue for UK
based companies as it hampers quality of different services. According to Coyle (2016), there is
both positive and negative impact of globalisation and in most of the cases, firms which
generally have competitive advantage and have improved technological application gained huge
profits. For example, software firms gained huge boost and expand their business to different
markets such as India and China.
Along with these high street companies, local and unskilled labour-based firms faced huge issues
because of globalisation. Economic structure has changed because of globalisation as automation
in the UK is hampering unskilled labour firms by which issues regarding unemployment started
to introduce in the period of globalisation (Gunn, 2017). On the other hand, new taxation and
environmental laws are started to introduce in the market through which different local
companies and small overseas companies failed to create impacts because of improper business
structure and capital.
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Figure 1: UK GDP Growth
(Source: Crawford and Wang, 2016)
This graph shows the impact of globalisation in business and its effect on economic advancement
of UK. The growth measurement started from the year of 1970 when first e-mailing started.
Since 2000, the whole scenario of business changed and UK started to acquire huge GDP growth
until recent incidents such as global economic recession and Brexit. Therefore, it can be said that
companies have more opportunities than threats in situation of globalisation if they properly
monitor and manage the contemporary needs regarding maintenance of new regulations
regarding global environment.
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External environment often creates huge impact on business processes through which companies
acquire a better business process. On the other hand, it is seen that there are several companies
on which external factors creates negative impact and their position on the economic ladder often
started to decline. Most important external factors are mainly related to politics, legal aspect of
the economic, environment condition, and social condition of the country. Lampadarios (2016)
opine it, through the period, it is seen that these external factors have enriched UK based
companies through which they became one of the global leaders based on their economic
condition.
In recent years, Brexit is the main talking point that has huge impact on UK’s general business
condition. It is mentioned by Sun et al. (2016), economists have identified that impact of Brexit
can hamper business environment of UK through several unforeseen ways by which future of
UK’s economy can be hampered severely. It is opined by Taylor (2017), because of the event,
Theresa May had introduced different rules and regulation regarding inclusion of foreign money
in UK, foreign workforce in UK and import and export services. This uncertain political turmoil
caused huge issues for both foreign and local companies to open their business in new markets.
On the other hand, in previous years, UK was one of the favourable destinations regarding
foreign direct investment from EU based companies, which has significantly fallen down from
previous situations. It introduces opportunities for companies from other countries such as the
USA to use the void in the market of UK and introduce their business in the context of UK.
From the time of Second World War, US, based technology companies started to expand their
business in the UK because of political facilities applied between both these countries in order to
improve their political condition after the Great War. This practice is still in use and in
contemporary situation, US-based technology companies can avail huge profit because of
preferable condition in the context of UK. The UK is known for its clothing and food retail
industries and companies from the USA are availing a better ground in the UK and providing a
huge competition to existing retail companies such as Marks & Spencer. These are main issues
and opportunities in contemporary context by which foreign companies are availing better
grounds and local companies such as Marks & Spencer and other retail companies are
introducing employment reduction strategies and shutting down different stores.
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Technology is one of the main contributing factors that created positive influence on global
business process and UK economy is flourished because of technological advancement. In
context of globalisation, there are mainly three kinds of technological aspects through which
advancement in contemporary global business is seen. First, Information technology has faced
the most growth as the whole world became smaller because of improved communication.
Modern day information technology is being improved through global IT firms which are
providing high-tech services to different firms in order to improve their communication in their
business processes. On the other hand, function of information technology firms is increasing
because of dependence on data science of modern lives (Lampadarios, 2016). This is creating
more opportunities for IT companies in order to expand its business global context.
On the other hand, technology is also changing the transportation industry as technologies
such as GPS and long-range communication system has changed the transportation industry in
contemporary context. It is mentioned in a recent report, that concept of conventional taxi
services are becoming obsolete as companies such as Uber are introducing cab share facility, a
technology based transportation industry which is alluring modern day tech-savvy consumers
mostly. On the other hand, modern day transformation is very fast because technological
advancement in long distance services by which companies are acquiring huge growth by
acquiring better import export facilities.
Improved Communication network is one of the most important aspect regarding global
technological advancement. According to Sun et al. (2016), communication network is one of
the most important aspect in a business environment as better communication among different
organisation functions improves productivity rate and flow of communication also improves the
flow of issue among different layers of an organisation. It helps an organisation to identify and
mitigate challenges in quick time. In context of globalisation, it is seen that companies are
monitoring and choreographing global business activities by active and efficient networks
through which different industries are being connected and availing pinnacle position in their
respective industries.
A complex influence of globalisation in societies of UK is seen because of globalisation. UK
economic condition has a rich history as the country has established itself as a business hub in
contemporary business. Local communities got huge benefits from proper economic condition
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and issues such as unemployment were not alarmingly large in context of UK. Contemporary
political context of UK has hampered the global business and it created a huge impact on local
communities (Taylor, 2017). It is seen that companies such as Marks & Spencer compelled to
close more than 100 stores in context of UK. These are the main issue of globalisation, as
companies in the UK are not trying to improve their home condition as UK's economic condition
is already hampered. This situation is not improving as a void is being created regarding
workforce of UK based companies.
Globalisation has influenced both my personal and academic life as a citizen of UK. In my
personal life, I have certain opportunities and threats regarding factors of globalisation. As it is
mentioned earlier that globalisation is influenced by technology and because of globalisation,
new technologies are being introduced to local communities and in my daily life, I am enjoying
such technological advancement. My daily life activities have been improved as globalisation not
only improved our connectivity but we can see positive impact of globalisation in medical
science and it has also improved the employability in business context.
My academic life is also influenced by globalisation as new technologies are influencing modern
day learning approach. I am a business student in UK and globalisation is providing me with
opportunities to know the trends of change in global business environment very closely. Recent
UK political incident also affected by academic world as most of the business schools of UK had
huge number of employees from EU, therefore a significant change in the workforce of UK
based business colleges can be seen.
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Conclusion
This essay highlights influence of globalisation in contemporary business and its influence on
modern day business is mentioned along with examples. On the other hand, different impacts of
globalisation on the UK are also given with examples of different organisational contexts. A
brief overview of external impact on globalisation in context of UK is mentioned properly.
Factors such as political factors, social factors and technological factors are being introduced by
which contemporary business condition of UK is vividly introduced. On the other hand, impact
of globalisation on an individual is also given with my personal life experience.
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Reference List
Agarwal, D., 2015, October. Impact of Globalization on Business Environment of Developing
Countries. In National Conference on (p. 78).
Coyle, D., 2016. Brexit and globalisation. Brexit Beckons: Thinking ahead by leading
economists, pp.23-39.
Crawford, I. and Wang, Z., 2016. The impact of placements on the academic performance of UK
and international students in higher education. Studies in Higher Education, 41(4), pp.712-733.
Ferrera, M., Matsaganis, E. and Tortola, P.D., 2017. Globalisation, economic inequality and
political instability: what future for Europe’s welfare?. In Vision Europe Summit(pp. 40-67).
Collegio Carlo Alberto.
Gunn, S., 2017. Globalisation, education and culture shock. Taylor & Francis.
Hasrati, M. and Tavakoli, P., 2015. Globalisation and MATESOL programmes in the
UK. Higher Education, 69(4), pp.547-565.
Lampadarios, E., 2016. Critical success factors for SMEs: an empirical study in the UK chemical
distribution industry. International Journal of Business and Management, 11(7).
McCann, P., 2016. The UK regional–national economic problem: Geography, globalisation and
governance. Routledge.
Smith, D.P., Finney, N. and Walford, N., 2016. Introduction:‘On the Move’in the Twenty-first
Century and Contemporary Internal Migration in the UK. In Internal Migration (pp. 17-30).
Routledge.
Sun, H., Steinkrauss, R., Tendeiro, J. and De Bot, K., 2016. Individual differences in very young
children's English acquisition in China: Internal and external factors. Bilingualism: Language
and Cognition, 19(3), pp.550-566.
Taylor, P., 2017. The Globalization of Service Work: Analysing the 12 Transnational Call
Centre Value Chain. Working life: Renewing labour process analysis, p.244.
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Taylor-Gooby, P., 2017. Re-Doubling the Crises of the Welfare State: The impact of Brexit on
UK welfare politics. Journal of Social Policy, 46(4), pp.815-835.
Wirtz, J., Tuzovic, S. and Ehret, M., 2015. Global business services: Increasing specialization
and integration of the world economy as drivers of economic growth. Journal of Service
Management, 26(4), pp.565-587.
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