Global Business Environmental Forces Essay Example

Global Business Environmental Forces Essay Example Global Business Environmental Forces Paper Global Business Environmental Forces Paper The analysis and interpretation of the report is solely based on the small survey, questionnaire limited to few aspects of B and interviews with the manager of the organizations. The major content of this report is based on the analysis of the impact of biographical characteristics on employee output, ability job fit, personality and organization fit, comparison of motivational practices, desirable and non desirable behavior Of employee at work. Regarding our analysis, we have tried to compare our results with general view. In some cases, it showed similarity and in some cases there were contrasting results. Because of the time factor, employees biases and small sample size survey, our results could not be generalized and compared with any empirical evidence, so we may have had contrasting results. To motivate employees, both the organizations use the practices of giving bonuses, fringe benefits, festival leaves and allowances, regular job rotation, trainings, appraisal system and others. The desirable behavior in both the organizations can be numerated as time and efficiency concern, commitment to duty, initiative and resourceful, dependability, willingness and readiness to perform, interpersonal skills, arsenal effectiveness where some of the undesirable behaviors were indiscipline, unreliability, job incompetence, unethical behaviors, unsystematic and unrecognized approach to job. Buddha Air and Yeti Airlines concentrates on modern technological advances to design a systematic communication channel, participatory management, more training programs and workshops, rewards system to effectively manage its employees. : Global Business Environment Forces Business environment is the total situation of all the factors or forces surrounding and influencing operation and development of a business firm r company. The CIFS center for management research state that the global business environment can be defined as the environment in different sovereign countries, with factors exogenous to the home environment of the organization, influencing decision making on resource use and capabilities. Forces outside the firms traditional boundaries are increasingly important in determining the firms success. These forces in the environment of business differ among nations and over time, continually confronting the firm with new issues that require modifications in strategies and management practices. Global business and marketing strategies are highly influenced and determined by the findings an analysis of foreign and international environmental forces. Simply knowing the demand situation, customers behaviors and operational forces in market is inadequate. In the case of international business or marketing a detailed analysis of environmental forces must be done. The environmental forces that play an important role are as follows: 1 Political forces 2. Legal forces 3. Socio-culture forces 4. Economic and socio-economic forces 5. Financial forces 6. Labor forces These factors and changes in them present both threats and opportunities that require shifts in marketing plans. To spot trends and other signals that conditions may be in flux, marketers must continually monitor the environment in which their companies operate. To get a better idea of how they affect a firms marketing activities, lets look at each of the areas of the external environment. . Political forces: The political environment in a country influences the political climate, stability and security, types of government and philosophies, nationalism, political kiss, international and diplomatic relations, etc. 2. Legal forces: The legal environment includes legal system, international laws and institutions, all legal provisions on trade and investment that affect the operation and development of foreign business firms and companies, and enforcement mechanism. 3. Socio-culture environment forces: It includes attitudes, beliefs, customs, religions, etc. Of the people. . Economic and socio-economic environment forces: It includes income and distribution of income, production costs, consumption expenditures, demographic features and distribution, etc. 5. Financial forces: Financial forces include inflation, monetary situation, foreign exchange market, policies and reserves, etc. 6. Labor forces: Labor forces includes composition, skills, attributes union, strikes, etc. Economic and Socio-economic Forces The economic and socioeconomic forces of a country stand to be most important in gearing the growth and the development Of the country. It is needless to mention that these economic and socio economic forces are variable and keep changing from one country to another. While the economic forces become accountable for the great changes and movements in many entries, the socioeconomic forces collectively lead to changes in many societies. The impact of the forces is ever changing and depends on numbers of factors ranging from the social, political and economical externalities. Many economic policies together may make upheavals in many societies. Again, there are many societies where social values, beliefs and philosophies lead to considerable alterations of the economic system of the society. Moreover, there are many societies, where the impact of the economic and socioeconomic forces has been immense with all their effects on the society n the whole. Hence, the impacts of these forces are variable and are controlled by numbers of additional factors. Below there is discussion on the economic and social forces that lead to changes in the societies. Economic forces correspond to the nature and course of the economy within which the business operates. Economic factors always have their tremendous impacts on the business for organizations. The common state of the economy for instance, depression, recovery, or prosperity, recession, interest rate, stage of the economic cycle, fiscal policy, balance of payments, monetary policy, are mom of the key variables In corporate employments, investment, and the pricing decisions. The effect of growth or turn down in GNP or the gross national product and increases or decreases in the interest rates, inflation, and the price of the dollar are held as the prime instances of considerable impact on the business operations. In order to evaluate the local situation, an organization may seek information relating to the economic base and prospect of the region and in addition, the impacts of this viewpoint on the unemployment, wage rates, non-refundable income, and mostly on the remonstration and commercial bases. The state of the world economy is most critical for organizations working in such regions. The social forces are no less impacting when compared to the economic forces. Social forces comprise societal trends, traditions, consumer psychology, values, and a societys opportunities of business. The subsequent factors are some of the main concerns in the social environments. Ecology, for instance, pollution and global warming, demographics for instance, feeble workforce in developed countries, population growth rates, and the high educational requirements are all important factors. In addition to these factors, quality of life comprising standard of living, safety, education, health care, and many of the uneconomic activities are also main factors. Furthermore, social issues can rapidly become political and even officially permitted issues. Social forces are often become decisive because of their impact on peoples behavior. For an association to survive, the good or service must be required, thus customer behavior is referred as a split environmental behavior. Behavioral factors also make impacts on the organizations from inside, specifically, the employees and the organization. A societys prospects of business present other constraints and opportunities. These expectations originate from miscellaneous groups referred to as the stakeholders. Stakeholders comprise an organizations members of the board of directors, owners or the stockholders, creditors, managers and operating employees, customers, suppliers, distributors, and other interest groups at the broadest level, stakeholders comprise the common public. Levels of Economic Development Developed: A classification for all industrialized nations, which are the most technically developed. A developed country or more developed country (M DC), is a override state that has a highly developed economy and advanced technological infrastructure relative to other less developed nations. Most commonly the criteria for evaluating the degree of economic development are gross domestic product (GAP), the per capita income, level of industrialization, amount of widespread infrastructure and general standard of living. Which combines an economic measure, national income, with other measures, indices for life expectancy and education has become prominent. This criterion would define developed countries as those with a very high (HID) rating. However, many anomalies exist when determining developed status by whichever measure is used Developed countries produce large quantities of goods, services, and in general do a lot of manufacturing. Countries such as these use science to improve technology and generally have good health care and education for their people, as well as adequate food, clothing, and housing. The characteristics of developed countries Developed countries are countries whose lives are patterned industry that has the following characteristics. . Average income per capita of the population is generally high. B. Education level of high average population. C. Life expectancy of the population average height. D. Population grog. VT rate per year is relatively small. E. The death rate per year is relatively small population. F. Life-style market economy. G. His wide and varied field. H. Economic activity in most industry sec tors, as well as export commodities. I. The majority of the population lives in cities. J. Relatively high level of population health. Developing: A classification for lower income nations, which are less technically developed. A developing country, also called a less-developed country OLD),is a nation with a low living standard, underdeveloped industrial base, and low Human Development Index (HID) relative to other countries. There are no universal, agreed-upon criteria for what makes a country developing versus developed, and which countries fit these two categories, although there is general reference points such as the size of a nations GAP compared to other nations. Developing countries practice subsistence farming and often have a poor income, clothing, and housing. Very few people in developing countries receive proper health care or education, and life expectancy is elatedly short. Most developing countries also lack the resources needed for economic growth. The characteristics of developing countries General characteristics of the developing countries are as follows. A. Average income per capita of the population were generally low. B. Education levels low average population. C. Life expectancy lower average population. . Population growth rate per year is quite high. E. The mortality rate is relatively high population per year. F. Livelihoods of the population is generally patterned agrarian. G. Narrow the field work. H. Commodity exports of raw materials, rather than processed ingredients. I. The majority of the population live in rural areas. J. Low levels of population health. K. High unemployment figures. Newly industrialized economies (Nines): The fast-growing upper-middle-income and high income economies of South Korea, Taiwan, Hong Kong, and Singapore. The terms newly industrialization economies (Nines) or newly industrialization countries (Nice) first appeared in the late sass to refer to a small group of developing countries that had been successful not only in industrialization rapidly but in expanding their exports of manufactured products. These countries fell into two groups. Several large countries in Latin America that had industrialized through high levels of tariff protection, particularly Mexico, Brazil, and Argentina, began at various points to promote exports of nontraditional products. The Latin American Nice did develop more diversified export structures that included labor-intensive light manufactures and even some intermediate and capital goods, but export-promotion policies were not always vigorously pursued and did not generate adequate foreign exchange to service rising external debt. The term NINES was Often used to refer exclusively to a second group Of East Asian countries: the Republic of Korea (South Korea), Taiwan, Hong Kong, and Singapore. Korea and Taiwan industrialized in the 1 sass through import- substitution, and Singapore and Hong Kong were initially commercial entree ¶TTS. The transition to export-led growth was somewhat different in the four cases, but there are important similarities in their groom paths. All initially exploited their comparative advantage in light, labor-intensive manufactures, gradually diversifying into technology-, skill-, and even capital- intensive goods. All depended heavily on the U. S. Market and attempted to attract export-oriented foreign direct investment. Newly industrialization countries (Nice): The four Asian Tigers and the middle-income economies such as Brazil, Mexico, Malaysia, Chile, and Thailand. The category of newly industrialized country (NICE) is a socioeconomic, classification applied to several countries around the world by political scientists and economists. Nice are countries whose economies have not yet reached developed country status but have, in a macroeconomic sense, outpaced their developing counterparts. Another characterization of Nice is that of nations undergoing rapid economic growth(usually export-oriented). Incipient or ongoing industrialization is an important indicator of a NICE. In many Nice, social upheaval can occur as primarily rural, or agricultural, populations migrate to the cities, where the growth of manufacturing concerns and factories can draw many thousands of laborers. Nice usually share some other common features, including: * Increased social freedoms and civil rights. * Strong political leaders. * A switch from agricultural to industrial economies, especially in he manufacturing sector. * An increasingly open-market economy, allowing free trade with other nations in the world * Large national corporations operating in several continents. * Strong capital investment from foreign countries. Political leadership in their area of influence. Economic Dimensions Important Economic Indicators Gross National Income (IN) The Gross national income (IN) consists o the personal consumption expenditure, the gross private investment, the government consumption expenditures, the net income from assets abroad (net income receipts), and he gross exports of goo ds and services, after deducting two components: the gross imports of goods and services, and the indirect business taxes. The IN is similar to the gross national product (GNP), except that in measuring the GNP one does not deduct the indirect business taxes. For example, if a British-owned company operating in another country sends some of their incomes (profits) back to I-J, Auks IN is enhanced. Similarly, a British production unit of a IIS company sending profit to the LIST will affect the British IN but will not reduce it since it is not included in the first place. An alternative approach to measuring IN at market prices is as the aggregate value of the balances of gross primary incomes for all sectors IN/ capita The GNP (Gross National Product) per capita of a country shows the average value of goods and services produced by each person each year. This is then divided by the total population to get an average earnings per person underground economy: The part of a nations income that, because of unrelenting or underreporting, is not measured by official statistics. Underground economy is undeclared legal production, production of illegal goods and arrives, and concealed income in kind. As a general rule, the higher the level of taxation and the more oppressive the government red tape, the bigger the underground economy will be. Estimates of the underground economy vary widely because of the different methodologies used to compile them; also, people who have undeclared income are not likely to admit it and be liable to prosecution for tax evasion. In addition to reducing the total taxes paid to government, the underground economy can result in distortion of economic data, which managers must take into account when using these data for equines decisions. Currency conversion Another problem with IN estimates is that to compare them the Anis in local currency must be converted to a common currency Conventionally the dollar by using an exchange rate. To overcome this deficiency, the UN international comparison program has developed a method of comparing Anis that is based on purchasing power parity. Purchasing power parity Purchasing power parity (APP) is a theory which states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries. This means that the exchange rate teen two countries should equal the ratio of the two countries price level of a fixed basket of goods and services. When a countrys domestic price level is increasing (I. E a country experiences inflation), that countrys exchange rate must depreciated in order to return to APP. I The relative version of APP is calculated as: Where: S represents exchange rate of currency 1 to currency 2 Pl represents the cost of good x in currency 1 UP represents the cost of good x in currency 2 The simplest way to calculate purchasing power parity between two countries s to compare the price of a standard good that is in fact identical across countries. Every year The Economist magazine publishes a light-hearted version of APP: its Hamburger Index that compares the price of a McDonalds hamburger around the world. More sophisticated versions of APP look at a large number of goods and services. One of the key problems is that people in different countries consumer very different sets of goods and services, making it difficult to compare the purchasing power between The IN per capita; APP (US dollar) in Nepal was last reported at 1 260 in 2011 , according to a World Bank report published in 2012. IN per capita based on purchasing power parity (APP).