This article explores how the environment affects and creates conditions for the success or failure of a business organization, and how it works to require decision makers to think effectively if they want to survive and thrive.
Taking the typical example of Mark & Spencer PLC as an example, the company began selling all items in 1894 as a single high street store owned by two men, which is said to cost customers no more than a penny. Over the years, it has conquered the retail industry, with branches in prime locations across the UK and overseas, with a total of more than 885 stores. Not only does Marks&Spencer meet the growing needs of more and more affluent consumers by better reading environmental changes, it has become a big company today, and it has also affected customers' shopping habits. A business company is not a faceless entity; at best, it can be a symbol of social and economic progress, and the worst case is defeated by the inability to read the environment. Woolworths and MFI are two recent examples of such failure.
In the current global economic downturn, how the environment affects the wealth of commercial companies is more pronounced than the collapse of many commercial enterprises, including financial institutions such as banks. To make matters worse, the effects of severe weather, whether flooding or snow, can affect the viability of various UK companies. If the environment represented by the British government does not provide lifeline for some major banks in the form of taxpayer subsidies or acquisitions, then they cannot survive. Different political ideologies in different periods influence enterprises in different ways. The collapse of communism in 1989 and the collapse of the Berlin Wall and the Internet phenomenon led to the abolition of legislation that hindered global communications and industrialization. Since then, there have been a large number of international mergers, acquisitions and alliances, and the size and economic strength of multinational corporations [multinational corporations] has never increased as it is now. Denning [1993] has identified the interaction between the ownership advantage [OA] brought by a multinational company and the location advantage [LA] of the country in which the multinational company seeks to invest. Researchera identifies the synergies sought by multinational companies in foreign direct investment [FDI], which depend on their reading of the business environment, market seeking [MA], efficiency seeking [ES] and knowledge seeking [KS]. Strategy is the driving force.
Before delving into the research, it is necessary to assess the meaning of the business company, what is the goal, and then analyze the process and effect of this rapid globalization. A business company is a legal entity. Unlike a single trader or partnership, it needs to be combined with the rules and objectives of the record. It can be capitalized by borrowing or by shareholders. Although shareholders own companies and claim to share profits, they can be managed daily by paid employees. The company's goal is to "maximize its shareholder value" [Van Horne, 1974]. Historically, "profit maximization is seen as the company's right goal, but it is not as inclusive as maximizing shareholder wealth" [ibid.]. Even in this conceptualization, there are difficulties, in which "maximizing the price per share" is regarded by some as "maximum earnings per share" [ibid.].
One of the current commercial companies in the news is Blacks Leisure, whose current bad weather conditions have improved its wealth by providing a market for its hot-grinding products, and the company is about to go bankrupt. Now it plans to expand further. At the same time, the unfavourable economic environment encouraged Poundland to provide cheap goods to fill the gap left by the demise of Woolworth. Ineos Enterprises, the UK salt manufacturing company, chose to cancel the shipment of 12,000 tons of industrial salt promised to Germany, transferring the stock to local authorities in the UK, and urgently needed to supply it to snow-covered roads. This is a good example of an environment that affects private business decision makers in a socially responsible manner. This supports Van Horne's [1974] assertion that even if there is a risk of not maximizing shareholder wealth in the short term, the management of a commercial company should not neglect the need for "social responsibility", which brings long-term Benefits, although they may not be immediately apparent.
Related to commercial companies, social responsibility involves such things as protecting consumers, paying fair wages to employees, maintaining fair recruitment practices, supporting education, and actively participating in environmental issues such as clean air and water... However, the standard is social responsibility. Clear definition makes it difficult to develop a consistent objective function [ibid.].
It is now widely believed that companies will not and cannot operate in a vacuum. It must respond to events that occur outside the factory and office walls. The first thing to focus on is the close attention to the strengths and weaknesses of competitors' products and services. In addition, most analysts need to understand the environment in terms of the political, social, economic, and technological factors that influence commercial companies.
Other analysts have extended this to: Politics - How changes in government policy affect company decisions. For example, the UK government's focus on clean energy led to the decision to invite foreign companies to bid for the supply of offshore windmills in the next few years. Windmill suppliers and many companies that need to provide complementary products and services can not only take advantage of this decision. Social - How consumers' beliefs and interests change over time. One example is the demographic changes in the population of older people and the concerns about their health. Economy - How taxes [such as tax holidays], interest rates, exchange rates, and "credit crunch" affect individual companies. Technology - Product innovation and new technologies such as mobile phones [iPad] can change consumer preferences. Law - Changes in the law, how the implementation of the minimum wage and the adjustment of working hours affect the business. Last but not least is the ethical issue of supporting social responsibility issues. An example is the refusal to trade with regimes that are known to violate human rights legislation. All of these factors affect the markets that companies need to consider and respond to if they do not lose market share and endanger their long-term viability.
Although a commercial company is legally established as an entity, it is by no means a single one. In addition to shareholders, it has other stakeholders with different and even competitive goals and interests within its scope. Starting with managers, there are other employees who may or may not be dealing with union members, and the communities in which they operate and the communities they serve must take into account local authorities' restrictions on waste disposal and other similar regulations.
In discussing foreign direct investment [FDI] of multinational corporations, Robert Pierce defines the global business environment as "the environment of different sovereign states, which includes exogenous factors that organize the family environment, decisions that affect resource use and capacity. This includes society, Politics, economics, regulation, taxation, culture, legal and technological environment. Pearce acknowledges that commercial companies do not have any direct control over this environment, but their success depends on their suitability for this environment. Just as before at Blacks Leisure and As seen in the Poundland case, the company's ability to "design and adjust its internal variables to take advantage of the opportunities provided by the external environment and its ability to control the threat posed by the same environment has determined its success" [ibid.].
The company also uses the savings provided by outsourcing. The variables of the communication network, cultural compatibility and reliability need to be carefully considered. The Offshore Development Center provides call center offerings and other network-specific, customized professional services and provides appropriate infrastructure support.
Daniel Workman [2008] discusses how an American company adapts to the cultural diversity of France. He said that since its opening in April 1992, the "Transplantation of American Theme Parks" near Paris, Europe Disneyland has lost $34 million in the first six months. Even before it opened up, there was a strong local opposition, which threatened the cultural sensitivity of France. The strict staff dress code and the ban on wine in the park angered the Parisians. Esner, CEO of the Florida parent company, commented: "We created a large private investment in a foreign company in France. It will pay off." The staff believes that "Eisner has learned to recognize French cultural traditions and quality of life, rather than focusing on American business interests, income and income and sacrificing potential French culture" [ibid.].
Disney found that the first US CEO of Disneyland Europe, even with the ability to speak fluent French, with French wife, and the French government, still can't make it a sustainable problem. Only after Disney replaced him and 23 US-born senior managers and local employees, Euro Disneyland began to make a profit.
In a country that believes that "a meal without wine is like a day without sunshine", it is made into a wine...
Orignal From: International business challenges
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