Global Forces Shaping Business and Society Future - Term Paper Example

Global Forces Shaping Business and Society Future Name: Course: Tutor: Institution: Date: Table of Contents Table of Contents 2 1.0 Introduction 3 2.0 Discussion 3 2.1 Political Factors 4 2.2 Economic Factors 6 2.3 Social Factors 8 2.4 Technological Factors 9 3.0 Conclusion 11 4.0 Research Gaps 11 References 13 1.0 Introduction International businesses have grown and exerted their increased influence and control in the market. In this regard, the organisations have established their control through increased expansion of operations from the traditional domestic market to an increased global market. However, in the development and growth into these markets, the organisations have faced differing market conditions thus forcing them to develop alternative market expansion strategies (Kaila, 2006, p.194). This research paper delves into an evaluation of the global forces factors that influence business operations, strategies as well as the societies. In this regard, the research paper will focus on evaluating the various macro-economic effects implicating on overall business and society operations in the market. As such, the review will strategically focus on identifying current trends in each of the forces as well as identifying any expected future change on the same. Moreover, the paper will evaluate key among the challenges posed by each of the discussed factors to efficiency and success in overall decision making process. Subsequently, the evaluation research will develop alternative recommendations approaches through which organisations can develop strategic measures and approaches to manage and incorporate the expected forces changes into the future. A key rationale of the research will be its applicability for use by the existing multinational organisations but most importantly by organisations wishing to venture onto the global market into the future. 2.0 Discussion The global market is gradually changing. In this regard, multiple factors changes in the global contexts have necessitated business operations and society changes in the long run to ensure and enhance increased adaptability. In order to develop an appropriate evaluation of global factors implicating business and societal operations, the research paper developed the political, economic, social and technological (PEST) analysis approach. The adoption of this approach as Lin (2006, p.193) argued, enhances a rational and in-depth audit and evaluation of the macro economic factors. This research section offers a critical research evaluation on each of the forces influencing respective global business operations. 2.1 Political Factors Political forces in the global context involve a range of factors including regulations development, governments’ involvement in business operations as the development of strategic political alliances across the globe. On one hand is the regulations development. Prior to the emergence of the 2008 global financial crisis, a majority of the global governments such as USA and the UK governments were distanced and exerted minimal control. This was especially through the development of neoclassical macro economic theories that advocated for increased market liberalism and the interplay of the forces of demand and supply to establish market equilibriums. However, in the post financial crisis period, governments have exerted their increased control on the global markets in a bid to both regulate and protect important market industries. As such, the global businesses are faced with increased business regulations and industries entry protection and control (Das, 2003, p.201). Therefore, in order to succeed on the global market, such multinational organisations must change and adapt their management needs to the existing and changing global political regulatory frameworks. An additional strategic approach through which political forces are influencing business management operations is through political alliances. This is especially through the development of regional and bloc alliances in the market. For instance, the American nation formed alliance with its Canadian neighbours and Mexico under the North Atlantic Free Trade Agreement (NAFTA), the development of the European market, Common wealth, Brazil, Russia, India, China and South Africa (BRICS) alliance among others. Through the establishment of these regional trading blocs, there are collective political agreements on the tariffs and taxes levied for particular industries and markets. Therefore, through such developments, the approach has a direct implication on business growth and expansion. In this case, it has emerged impeccably difficult for organisations to venture into such protected global market industries especially if such market and industries are especially reserved for individual organisations and stakeholders under such political agreements (Frankel, 1998, P.64). In this regard, the research paper establishes that one strategic approach through which global organisations can increase their overall market influence besides the developing trends on political blocs that are expected to project into the future is through strategic alliances and joint ventures. In this case, most of the alliances and trade blocs seek to empower local investors and organizations to take charge and control the economy. Thus, through the establishment of joint ventures, the global organisations would acquire enormous opportunities through which to venture into the protected markets. As such, although the profit gains would be shared with the local investors, it would earn the organisations increased consumer reach base. Moreover, this research argues that the development of regional subsidiaries is an additional internationalization strategy to counter the growing political influence across the globe. The establishment of subsidiaries involves the process in which the respective organisational branches would be established as autonomous profit centres with their own share of strategic management objectives. Through such an approach, the subsidiaries are respectively developed to suit the regional political orientations in a bid to localize and domesticate both products and business model operations in the market. The application of the above two strategies will allow organizations venturing into the global market the ability and potential to mitigate the global political changes. Therefore, into the future and with increased political blocs’ development, most of the international ventures will result to the adoption of both joint ventures and independent subsidiaries as the preferred globalization strategies. 2.2 Economic Factors An additional influential global force implicating on the future of business and the society is changing economic trends in the market. These changing trends can be traced back onto the famous 2008 global financial crisis. Although finances declined between the year 2008 and 2009, most of the economies are experiencing growing GDP values since the year 2010. This is an implication of the gradually but steadily growing. Lindh (2004, p.19) conducted a study evaluating the implications of growing economies and GDP values in the market. In this case, the study established a series of significant terms and their implications. One of the most dominant ones was per capita values and disposable incomes. On one hand, a per capita value implies on the average earnings per person in an economy. In this regard, increasing GDP values are expected to increase the overall per capita values across the globe. In turn, this implies that the overall disposable incomes held by the public will increase. Therefore, this implies that the overall demand on organisational products will increase into the future. Therefore, based on this development, the organisations will be required to develop strategies and operational models to allow for increased mass production of goods and services in order to meet the expected rise in demands. An additional future economic development bound to change business operations is the rise of the emerging markets. Currently, a majority of the organisations are focused on serving the Australian, European and USA markets. In this regard, the markets are considered as the largest and most profitable. However, as evidenced by the changing economic dynamics in the global economic performance currently, the trend is expected to change into the future. In this regard, among the developing and emerging markets across the globe include the Middle East, Asian and Africa. As such, Mathur (2007, p.26) argued that the economic outlook forecasts developed by the IMF illustrate that most of the nation are developing towards middle level income economies a tend bound to project into the future. Therefore, based on these developments, it is expected that into the future demand in these societies will increase with increased earnings and revenue gains. Moreover, the national governments are expected to develop and improve the existing infrastructures. Therefore, global multinational organisations are bound to increase their presence in these respective nations across the market. In order to enhance business success in these future markets, this research paper argues that organisations should develop proactive strategies in the market. As such, the research argues that organisations should base their strategies on the economic outlook statistics. Consequently, they should set regional centres in the respective markets to allow for strategic primary market surveys to establish the unique consumer needs. An early entry into the market will offer the organisations a greater influence and brand image prior to the expected future competition as the respective markets grow. Thus, this evaluation research reveals that the emergence of new economies in the Middle East, Asia and Africa will strategically influence the current business focus that is highly cantered and concentrated in the developed world markets, subsequently enhancing diffused competition in the already saturated developed markets. 2.3 Social Factors Social factors can be described as the practices, beliefs and cultural practices exhibited by a given society over a specific period of time. In this regard, the soil aspects and culture can be segregated into core and secondary values. On one hand, the core values are those that cannot be changed while on the other hand, the secondary values are those that change overtime. This research evaluation focuses on the secondary values that are changing and event expected to change further into the future. One of the expected changes into the future is changed population dynamics. The baby boomers generation was a characteristic high population generation. However, since then, the successive generations namely the X and Y generations have experienced reduced population sizes. In this regard, the Baby boomers generation is gradually being faced out of the productive labour market and forming the large chunk of the elderly in the society. As such, the global population structure is bound to change into the future with a high elderly population against a low young population. Therefore, this will invariably affect the society and business alike. On one hand, the society will be tasked with the mandate of catering and proving for the aged population, thus reducing their overall productivity hours in respective organisations. On the other hand, the social changes will implicate on organisations operations. In this regard, the organisations will be required to develop relevant retirement packages as well as increased internal corporate social responsibility (CSR) programs. In this regard, this would include the setting up of organisational social avenues through which the elderly care centres could be established in order to relieve their employees of the burden of caring for them. Therefore, it is expected that into the future organisational CSR practices will evolve and change from the current external focus on the society orientation to include additional internal CSR practices as a measure of increasing their attractiveness as global employers and as a means of empowering their employee value proposition (EVP) programs. Fundamentally, employee attraction and retention EVP elements are bound to change from the current preference. Currently earnings and growth opportunities serve as key among preference elements among young employees. However, into the future, the preference will change in the society to internal CSR programs for the employees’ families. Therefore, organisations will be forced to change their management and operational practices to allow for the preference changes incorporations. 2.4 Technological Factors A further global force implicating on the management and operations of business and societies both in the present and into the future is technology developments. Technological developments as Liao (2010, p.102) argued have been a critical component and part of the evolving globalization in the market. It is through technological developments in the transportation and communication aspects that has promoted increased globalization and multinational business growth across the market. These developments in the current global markets are expected to change the society lifestyles as well s business models and operational strategies. One of the key aspects through which technology development will influence future business operations is through increased internet access in the market. Increased internet access will change people’s lifestyles. On one hand, it will facilitate increased information gathering in the consumer decision making process. Therefore, a majority of the consumers will have a wide pool of information to evaluate and draw from when developing their decisions. This implies that society members who serve as the ultimate organisational product consumers (De Souza, 2002, p.327). Therefore, organisations will into the future face a more informed and logical consumer base. Thus, to increase sale, the organisations will need to develop informative rather than stimulative marketing campaigns. In addition, aces to increased IT infrastructure development will lead to the development of increased online trading platforms. Currently, most of the organisations have their core business operations on the physical market platform while those with online platforms serving as additional avenues only. Having increased control by the generation Y consumer base into the future will lead to increased IT and online platforms usage. Therefore, future business will be required to develop relevant and ideal platforms through which to target this population base. As such, this research evaluation forecast the emergence of increased competition in the online business platform into the future, as the society is expected to turn virtual. However, in order to enhance increased market competition, organisations should consider not only developing their own IT infrastructure but also outsourcing the services from existing industry professionals. Therefore, into the future, there is expected to be increased development of professional and expert IT firms that will increase the overall organisational IT infrastructure efficiency in the market. To this effect, the research evaluation argues that expected technology developments with respect to IT efficiency, literacy levels across the globe and access will shape both the society and business operations into the future. In this regard, the society information flow and market knowledge will significantly rise while business organisations investment in technology will similarly increase exponentially. 3.0 Conclusion In summary, this research study focused on the evaluation of global forces influencing business operations and the society both in the present ad into the future. As such, the evaluation agued its analysis through the use of PEST analysis in the market. On one hand, a political analysis establishes that the developing political alliances and regulatory frameworks will influence approaches used by the organisations in their internationalization strategies. Moreover, an economic analysis establishes that emerging economies such as the Asian and Middle East will influence the functioning and the overall operations in the market. Moreover, a social evaluation on the social and cultural practices in the market establishes that the population structure is changing and will lead to an increased elderly population into the future. Moreover, increased social integration will enhance changing conditions that will necessitate the development of organisational subsidiaries. Finally, an evaluation of the review establishes that increased technology developments will lead to increased technology application in the market. 4.0 Research Gaps Based on the above established research study conclusion, this evaluation concludes that although there is enough evaluations on a variety of the factors, it is not entirely apparent on the negative implications that the global forces change on business. Therefore, this evaluation study concludes that further studies should be conducted on the negative implications in order for organisations to develop strategic measures to overcome them. References Das, D.K. 2003, "Emerging market economies: Inevitability of volatility and contagion", Journal of Asset Management, vol. 4, no. 3, pp. 199-216. De Souza, G. 2002, "A study of the influence of promotions on promotion satisfaction and expectations of future promotions among managers", Human Resource Development Quarterly, vol. 13, no. 3, pp. 325-340. Frankel, J. A., 1998, The regionalization of the world economy, University of Chicago Press, Chicago. Kaila, H. L., 2006, Industrial and organizational psychology, Kalpaz Publications, Delhi, India. Liao, K. 2010, "An Exploratory Study the Expectations from Undergraduate Students' Perspectives for the Future Mobile Phone Innovations", Journal of International Management Studies, vol. 5, no. 1, pp. 99-108. Lin, H. 2006, "Ethical Applications of Technology in HRD: A PEST Analysis and Implications", Performance Improvement Quarterly, vol. 19, no. 4, pp. 91-105 Lindh, T. 2004, "Medium-term Forecasts of Potential GDP and Inflation using Age Structure Information", Journal of Forecasting, vol. 23, no. 1, pp. 19-19-25 Mathur, S. K., 2007, Global economic trends and South Asia, ICFAI University Press, Haiderabad. Read More