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Impact of Global Forces on UK Business Organisations

Posted on December 11, 2013 by John Dudovskiy

Global forces impacting UK businesses include, but not


limited to increasing scale of international trade, increasing levels of
multiculturalism in UK organisations, increasing levels of inter-dependency of
national economies and others.

Political Economical

Impacts of intensifying economic globalisation


The level of global political stability
Global economic crisis
The level of bureaucracy in international affairs
Sock market fluctuations
The extent of freedom of media
Cost advantages possessed by emerging superpowers such as China,
Global trade control initiatives
Threat of international terrorism India etc.
Impact of The World Bank and The World Trade Organisation
Tariffs between the UK and other countries
Increasing importance of outsourcing and offshoring initiatives
Global copyright, patent and intellectual property disputes

Social Technological

Changes in family values in global scale Level of global technological infrastructure


Industry-specific technological breakthroughs
Changes in family patterns (same-sex marriages, single parents etc.)
Increasing popularity of immigration and migration practices Regular emergence of innovative communication technologies
Increasing mobility between social classes Adoption of technology as competitive edge by increasing numbers
Greater concern for minorities in society of businesses

Ecological Legal

Impacts of global warming tendencies Laws and regulations related to data protection
Increasing levels of air and pollution Global data protection rules and regulations
Increasing level of sensitivity towards green problems among Increasing levels of legal globalisation
business stakeholders Changes in cross-country employment and health and safety laws
Activities and initiatives of global environmental organisations

The impact of global forces on UK Business Organisations can be effectively


analysed using PESTEL analysis where the abbreviation stands for political,
economical, social, technological, ecological, and legal factors impacting
businesses. The following table contains the application of PESTEL analysis in
relation to businesses operating in the UK.

The case studies of Martin Lishman and Aquaco mentioned above represent a
few cases where UK businesses benefit from international trade. However, in
total UK businesses are becoming disadvantaged in international trade with the
volume of imports to the UK constantly suppressing the levels of exports from the
UK for a numbers of years (Jones and Evans, 2013). The main reasons for this
tendency relate to competitive advantage possessed by importers to the UK such
as China and India and this competitive advantage is primarily associated with
low labour costs.

The impact of increasing level of multiculturalism in workforce as another global


force on UK businesses in not straightforward. On one hand, multiculturalism
can benefit businesses in the UK through offering fresh and varying perspectives
to traditional business problems.

On the other hand, high levels of multiculturalism in the workplace can generate
misunderstandings due to cross-cultural differences and this can have negative
impact on the performance of UK businesses.

Due to the UK membership of the EU local businesses in the UK are directly


impacted by EU policies and legislations. For example the EU Liberalisation
Policy introduced in 1993 requires businesses in UK, as well as, in any other EU
member country are faced with competition within the EU in equal terms with
local businesses. In simple terms, while imported goods to the UK are usually
subjected to customs tariffs by the government in order to protect local
producers, no such tariffs can be imposed to goods that are being imported from
within the EU.

Moreover, according to EU policies, businesses in the UK aiming to merge need


to seek the approval of the EU if the combined turnover of businesses does
exceed specific threshold of sales that has been specified by the EU. Additional
EU policies that impact businesses in the UK relate to cartels, intitrust, state aid
and others.

References

Jones, P. & Evans, J. (2013) Urban Regeneration in the UK: Boom, Bust and
Recovery SAGE Publications

DUDOVSKIY, J.
Impact of Global Forces on UK Business Organisations - Research Methodology
In-text: (Dudovskiy, 2013)
Your Bibliography: Dudovskiy, J. (2013). Impact of Global Forces on UK Business Organisations -
Research Methodology. [online] Research Methodology. Available at: http://research-
methodology.net/impact-of-global-forces-on-uk-business-organisations/ [Accessed 18 Aug. 2017].