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International Business Environment - Term Paper Example

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Additionally, issues raised by globalisation might differ in the industrial contexts with few industries presenting a more apparent picture of…
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International Business Environment 0. Executive Summary Undoubtedly, the study of effects caused by globalisation on the various industry sectors indicates a vast paradigm of research. Additionally, issues raised by globalisation might differ in the industrial contexts with few industries presenting a more apparent picture of globalisation effects, i.e. either positive or negative. Correspondingly, to narrow the study objectives and to gain a better in-depth knowledge about the issues raised by globalisation in the current business environment, focus has been delivered to the UK healthcare sector in this paper. Outlining the most apparent issues of globalisation and it relevance in the present day business environment of the UK healthcare industry, the discussion in the report will proceed with the critical evaluation of the external and internal environmental factors observable in the UK healthcare sector. Based on the key findings obtained from this study, recommendations will also be drawn in the conclusion of this report. It is worth mentioning in this context that only secondary sources have been used for this study offering both statistical and theoretical information as relevant to the stated issue. Table of Contents 1.0. Executive Summary 2 2.0. Introduction 4 3.0. Critically Outlining a Contemporary, Global Business Environment Issue and Its Relevance to the World of Work Today 4 4.0. Critical Identification of the UK Healthcare Sector and Its Relevance to Exploring the Issue Above 7 5.0. Critically Analyse the External Environment for UK Healthcare Sector In Relation To Globalisation Issue 10 6.0. Critical Analysis of the Internal Environment for the UK Healthcare Sector 14 7.0. Conclusion 17 8.0. References 19 9.0. Bibliography 23 2.0. Introduction Globalisation has gained increased emphasis in the present day business scenario as it has helped in creating new business opportunities and cooperation between nations, offering enhanced access to scare resources and thereafter, accelerating industrial capacity to serve a larger volume of customers. However, critics have also argued against globalisation effects at various instances, raising issues in the global business environment disrupting sustainability in the national industrial fields along with bringing transparency in specific industry sector under question. These issues are mostly related to trade liberalisation affecting governmental interventions and governance control, motivating capitalist investment, unequal transmission of technology and other aspects (Panayotou, 2000). 3.0. Critically Outlining a Contemporary, Global Business Environment Issue and Its Relevance to the World of Work Today As argued in Adam & et. al. (2012) and Takahashi & et. al. (2011), one of the foremost issues caused due to incessant and unobstructed globalisation can be observed in the trends of capital mobility. The above-mentioned changes have also been argued as shaped by globalisation trends in various national markets and the extent of capital mobility induced by such trends. Due to globalisation, workplace has been subjected to frequent changes and it has increased the intensity of pressure among workers to serve a larger volume of customers with minimum facilitated resources, owing to a greater but shy prevalence of capitalist structure. To be noted in this regard, with the governance structure widening in the global platform, one of the major issues presented by globalisation in the 21st century world today, is the hindered level of governmental control, boosting capital markets on private funds and stealthily building on a capitalist structure (European Agency for Safety and Health at Work, 2000). Drawing inferences from the modern economists, resources have been unequally distributed in the world of work, which had promoted privatisation trends, forming the base of a capitalist structure (Svallfors, 1997). Subsequently, with globalisation abolishing international barriers and encouraging bi-party collaboration amid two or more private investors on the global front, transformations have become more apparent in the world of work today. In fact, nations that have an equal level of technology and economic factors face the problem of globalisation owing to increasing threat of international acquisition and investment grounded on the 21st century ideology of ‘welfare capitalism’ (Ward & et. al., 2011; European Agency for Safety and Health at Work, 2000). As mentioned above, due to the intensity of market competition posed by globalisation, workers in industries have been subjected to increased amount of pressure, which in turn has triggered various issues related to employees’ interests and transparency in management operations. There has been a huge technological change in the work place as well, which can be argued as another prominent effect of globalisation in the present world of work, which in turn has increased intensity of competition in the global market today. In this regard, it is often perceived that in the coming future, knowledge and innovativeness of human resource will be the main factor for determining market success for various industries. This has forced industries to develop skilled labours and in turn, raising the issue of scarcity in unskilled manpower resources to suffice the demand for labour intensive industries. Consequently, these industries are forced to outsource services, widening the scope for private investments in the sector and likewise, encouraging a capitalist structure and subsequently, leading to severe affects in the world of work (Schuler & et. al., 2012). Globalisation has also resulted in intensified use of Information Technology (IT), inducing the notion of productivity related growth in various sectors. This in turn has intended to realign the human and social values within the industry context, contributing further towards transformations in today’s world of work. Globalisation has changed the entire nature work wherein the work place has changed from an industrial perspective to service perspective and then to information technology perspective. It has also shifted the traditional approach of work to a modernised approach wherein there has been a rise the number of private investors, further depicting the exposure of workers to a capitalist structure often contrasting their sustainability and transparency interests (European Agency for Safety and Health at Work, 2000). From a critical perspective, it can further be asserted that globalisation has raised issues concerning the change in employment patterns, which provides a clear understanding regarding the present world of work that has been subjected to extreme competition and frequent changes in terms of industrial structure and operational patterns (Academic, 2008). Notably, globalisation has played a huge role in boosting economic growth in various countries and their correspondingly industry sectors. Nevertheless, these influences have also triggered environmental issues. Globalisation has helped in transmission of capital and resources in the business environment. It is owing to this reason that huge possibility is projected that environmental balance may either enhance or deteriorate causing another challenge of intensive environmental focus among industrialists. Likewise, globalisation trends have also been observed to have diffused and expanded market catastrophes along with causing distortion of policies that may aggravate environmental damage (Esty & Ivanova, 2003). Globalisation has caused marginalisation of economies due to which, poverty has been induced unequally in different nations, with resources getting continuously depleted along with a rise in environmental degradation. It can thus be argued that globalisation has certainly increased the standards of products and services manufactured globally, but it has also raised concerns regarding the “loss of competitiveness” and a capitalist structure. This can apparently identified because of unfair trade practices, due to which race to the bottom in relation to wages and employment practices has instigated, often contrasting the sustainability interests of the global workforce (Sewell, 1998). 4.0. Critical Identification of the UK Healthcare Sector and Its Relevance to Exploring the Issue Above Studying the various dimensions of the UK healthcare sector, in the recent times, there has been a huge level of global recruitment of nurses being carried out in the UK indicating the rising trends of outsourcing in this sector. This in turn triggers globalisation issues within the UK healthcare labour market. Fundamentally, it is because there has been an outflow of human resources from the developing nations to the UK to meet its human resource shortages within the nation. Globalisation has reduced the possibility for the UK healthcare organisations to generate skilled nurses to meet its healthcare industry requirements, as they rely on other nations to meet to shortages of skilled labour. This in turn has created huge concerns in the UK as their capability to generate skilled labours has further reduced due to globalisation where easy availability of human resources through outsourcing have perhaps diluted the intention of national organisations to enhance skills within the national workforce (Vaitilingam, 2006). Globalisation issue in the healthcare sector of UK has gained increased emphasis as most of the overseas nurses recruited in the UK are provided with employment under expatriate staff provisioning, which reduces the possibility of UK citizens to get employment opportunities in the healthcare sector indicating unequal distribution of resources. Moreover, due to the rise in the international recruitment trends for nurses there has been a growth in the number of recruiting agencies within the industry. Notably, as most of these agencies operate on the basis of a capitalist structure rather than on the basis of value proposition to the supporting industry, the players are often not capable of providing quality personnel to the healthcare sector of the UK. Thus, it can be inferred that globalisation has been partially responsible in hindering the quality levels in the industry structure, as the personal recruited lack proficiencies in meeting the actual standards or competency level required in the sector (Packer & et. al., 2007). It can further be noted in this context that globalisation has transformed the healthcare service delivery system in the UK healthcare sector when considering the 21st century operations of the industry. As often argued, with gradual abolition of the industry barriers, an increasing number of capitalist partners can be witnessed to penetrate the healthcare delivery system, hindering its transparent and quality services. These issues include organ trafficking and the enhancement in health tourism of the European Union (EU), resulting in limited capacity of the national healthcare organisations to suffice the demands of the customers within the country. A greater in-depth assessment of the aspect reveals that one of the prime reasons for such illegal conducts have been encouraged due to lowered degree of government interventions in the industry sector and augmented biparty alliances in the international paradigm (Buchan & O’May, n.d.). In this context, critics have been arguing that as most of the healthcare specialists have been recruited from developing nations, there is a huge possibility that the capability of UK labour market to generate healthcare specialists would decline in the coming future. Due to the huge migration of nurses in the UK, it has been observed that the employment opportunities of local personnel have also diminished, hindering the overall economic growth in the industry context. Moreover, due to commercialisation of healthcare sector, it has been observed that most of the healthcare facilities have become profit centred due to which the service quality has declined in the UK in the recent phenomenon (Larsen & et. al., n.d.). Notably, with the augmentation in the types of alien diseases transmitted from different nation owing to the trend of migration, again as a result of enhanced globalisation, the UK healthcare sector have been facing various issues in managing these contemporary challenges, which further demands for continuous investments in training and developing the available human resources. Maintaining diversity within the workforce has also become quite important for the UK healthcare sector to mitigate these challenges and empower better quality services. Likewise, globalisation has also resulted in hindered transparency in the UK healthcare sector, again due to the inclusion of a large number of private bodies and lowered degree of intervention from the government. Due to this reason too, the healthcare system in the UK has been adversely impacted (Bertucci & Alberti, 2003). Moreover, due to globalisation, there has been a hike in the price of services provided to the customers in the healthcare facilities. This in turn has negatively impacted the customers availing the service as the quality of services is declining and the price for availing the services is rising on a continuous basis over the past few years. In addition, due to globalisation, government intervention has reduced in the healthcare sector of the UK leading to instability in the entire structure of healthcare industry (Dursi, 2008). 5.0. Critically Analyse the External Environment for UK Healthcare Sector In Relation To Globalisation Issue Political factors: In relation to the political factors, it has been observed that the healthcare industry in the UK has been globalising continually throughout the recent few years, having a direct impression on the degree of government intervention in the governance structure of the sector. This in turn has made the ethical practices of the sector face immense scrutiny in the national context. Moreover, the rise in outsourcing trends and increasing participation of private investors in this sector, price of healthcare related products and services in the UK market has accelerated gradually. This has negatively impacted the welfare notion deemed to be followed by the industry participants. Additionally, with the increasing momentum in the volume of international customer growth, services for national customers have become costlier as well as inadequate, creating disparity in equal distribution of healthcare assistance with the country. Likewise, the global policies of healthcare industry have been continuously subjected to changes due to which new rules in the sector have been established, further affecting the stability of the UK healthcare sector at large (Arab British Academy for Higher Education, n.d.). Economic factors: In the year 2012, there was a major change observed in the global healthcare industry, which had a direct implication on the UK healthcare sector. This change was mainly related to the decline in the healthcare deals wherein mega deals in the industry completely declined. Accordingly, as per the statistics, there was a 30% decrease of the overall deals in the healthcare sector that amounted to 21 Billion USD in the year 2012. This global change had a direct impact on the healthcare sector of the UK wherein the overall healthcare related deals declined in the year 2012. In relation to the buyout deals of private equity, it has been witnessed that there were two megadeals for the UK in the year 2012, which included acquisition of Four Seasons Healthcare by Terra Firma that amounted to 1.3 billion USD and acquisition of Mercury Pharma by Cinven that amounted to 0.7 billion USD. However, these global deals merely met the economic requirements of the UK, further indicating the global issues persisting within the industry (Bain & Company, Inc., 2013). Thus, it can be asserted that decline in mega deals has been a globalisation issue with significant impacts on the healthcare sector of the UK. Likewise, it is estimated that the global healthcare market would grow by 7% in the year 2017, wherein the market value will increase up to 56.7 billion USD by 2017 as compared to 40.4 billion USD in the year 2012. This is owing to the fact that there has been a rise in demand for clinical information along with healthcare service and solution. However, the global rise in demand might not suffice the actual market demand of the UK healthcare sector due to which it can be regarded as a globalisation issue (Business Wire, 2013). Social factors: Examining the social factors as prevalent in the UK healthcare sector it has been observed that due to the globalisation of healthcare industry, there has been an increased extent of service preferences among different genders, which has further resulted in adverse impacts on the healthcare sector of the UK. This is fundamentally because the healthcare facilities are quite likely to develop different services as suitable for different sets of customers, but owing to the huge possibility that the service developed might not meet the expectations of the ageing population. Hence, it can be inferred that the global issues faced by the UK healthcare sector has also affected social parameters causing negative influence on the national operations of the industry. Furthermore, in the present day context, people have been more inclined towards service quality instead of price, which has also increased the requirement of quality control among healthcare facilities. This particular factor has been useful for the UK healthcare sector in the general contest, but has also given rise to clashes between various social classes in the UK wherein people have different preferences and expectations towards the service quality (Pang & Guindon, 2004). Thus, it can be considered that these aspects have been the core of globalisation issue in the healthcare sector. Technological factors: Critical observation in the reforms and transformations observed within the UK healthcare industry reveals that globalisation of this sector has resulted in inducing rapid technological advancements as a most preferred means of competitive advantages. Contrasting this viewpoint, experts have argued that technological advancements have been beneficial in enhancing the effectiveness of the UK healthcare sector; while on the other hand, critics were of the view that such transformations, although meant for quality enrichment, have been disadvantageous. It is particularly owing to the fact that most of the healthcare providers rely on these technologies for providing services to their customers becoming increasingly dependent on global outsourcing and losing national reliance therefore. These aspects can also be argued as issues caused by globalisation with relation to the technology field of the UK healthcare sector (Riccentre, 2012). Environmental factors: Globalisation has also resulted to environmental degradation as the global healthcare sector has been deciphering a trend to concentrate on one particular market periphery to manufacture products that degrade the environment in that particular nation. Likewise, the global consumption of healthcare products has increased due to globalisation, which in turn increases the possibility of natural resources getting depleted. It is considered that globalisation creates opportunities for various companies to exploit the resources within a nation further forcing the government to impose strict policies to preserve environmental sustainability. This further result in imbalances in the procurement of resources for delivering quality services to the customers in the healthcare industry, which is also prominent in the UK healthcare sector (Slideshare, 2009). Legal factors: Similarly, globalisation of healthcare industry has also resulted in the violation of various laws wherein international companies, even those based in UK but functioning globally or those penetrating the UK market may face conflicts of interests when complying with the international and the national laws framed by a nation. As mentioned earlier, reducing control of governmental bodies, accelerated investments from the private capitalist sector and fluctuations along with various loopholes observable in the governance structure of the industry has further been accounted as few of the global issues observable in the legal paradigm of the UK healthcare sector (Slideshare, 2009). 6.0. Critical Analysis of the Internal Environment for the UK Healthcare Sector To analyse the internal environment of the UK healthcare sector, it can be apparently observed that globalisation effects critically evaluated in the above discussion also has its effects in the national operations of the industry participants. To be noted in this context, in the year 2013, the UK healthcare sector was observed to have performed tremendously. In fact, it was observed that health and social care sector, which is considered as a subsector in the UK healthcare industry system, was one of the best performing sectors globally. However, in the later phase of the year, this particular trend was observed to attract, investors from various nations, increasing the pace of globalisation in the industry and leading to the constant deployment of the investment in this sector to provide assistance to the new healthcare model in order to meet the prevailing challenges in the competitive market. In addition, 2013 was witnessed as a year wherein large scale of mergers and acquisitions had been carried out in the UK healthcare sector. To be precise, there were a total of 81 deals finalised in the health and social care subsector and 64% of mergers and acquisitions were undertaken. This led to a stronger flow of capital in various areas of the healthcare sector, which provided evidence that the UK market was attracting huge number of private investors from the global field, increasing its risks with regards to a capitalist structure system. Even though there has been a rise in the UK healthcare market due to globalisation, quality has remained a main concern for the customers. As noticeable in this context, analysis of the current trends has been revealed that due to increased extent of privatisation and globalisation, high quality service delivery has not been given much consideration within the UK healthcare sector raising issues within the industry. Moreover, privatisation of healthcare sector in the UK has also reduced the extent of government intervention, due to which, healthcare facilities have been more inclined towards profit instead of better service delivery to the patients (Jassal, 2014). Furthermore, it has also been observed that with the ageing population in the UK, increase in the demand for quality healthcare services has also been witnessed. However, due to privatisation of the healthcare sector, innovative services for old age people at a relatively lower price have not been developed, as most of the healthcare facilities focus towards gaining competitive advantages through service feature diversification rather than reducing their operational costs (Buro Happold, n.d.). Correspondingly, it can be observed that due to globalisation of healthcare industries, the gap among the customers availing the services has widened in the current scenario of the UK healthcare sector. This is because there has been a rise in the degree of inequalities to the access of services in the healthcare facilities delivered within the UK (Lee & et. al., 2002). In addition, there has been a huge change in the healthcare sector of the UK due to the globalisation issues being faced by the nation. However, the sector remains an attractive option for the investors due to which the trend of large scale of mergers and acquisitions has been augmenting in the recent phenomenon. Moreover, the UK government has been observed as quite open to various investors wherein they are willing to allocate more parts of the NHS to the private bodies. This particular initiative has raised noteworthy questions in the national realm concerning changes likely to be observed in the governance structure of the sector, which might turn out to be a major globalisation issue. To be mentioned in this context, the private investors might bring in skills and professionalism along with some extent of risk to the healthcare system in the UK lowing governmental control and ethical transparency in the industry practices. In relation to the internal environment and the key market trends of the UK healthcare sector it has been witnessed that the government is focusing to provide special education for health and social care, so as to enhance the labour market of UK as capable enough to procure skilled healthcare professionals (Jassal, 2013). Likewise, financial investors have been continuously investing in the healthcare sector due to which, a large proportion of the healthcare market is owned by private bodies. These investors have been taking huge advantage of the market through outsourcing opportunities. It has also been observed that due to the limitation of the UK banks to provide funds in the healthcare sector, new kind of capital procurement scheme, such as Real Estate Investment Trusts (REITs) has been introduced to meet the fund requirements in the sector. In addition, Facilities Management (FM) service providers like Mitie and Interserve have penetrated into the healthcare market of the UK with the aim of enduring dynamics in the sector and rewarding greater profit margins. Overall, these changes can increase capitalism trends within the sector, further inhibiting its sustainability to a substantial extent (Jassal, 2013). Globalisation of healthcare industry has also triggered various cultural issues due to which the industry players in the UK have been facing huge problems. This cultural issue has been exposed because most of the healthcare specialists in the UK are recruited from overseas countries, which belong to different cultural backgrounds. Moreover, globalisation of the healthcare sector has resulted in changes within the working hours of healthcare staff, along with their roles in the healthcare facilities. Correspondingly, it has been revealed that globalisation has increased the pressure on healthcare providers to enhance their service quality, which has however, negatively influenced the efficiency of the service providers (Jassal, 2013). This was fundamentally because of the pressure that is created on the nurses in the work place that actually reduces their ability to be creative and provide a better service quality. Due to globalisation, the healthcare sector of the UK has been subjected to end number of complexities as introduction of new policies in the system has created complications for the service providers. Furthermore, globalisation has also resulted in the reformation of the healthcare policies that has turned out to be unfavourable for the people availing the services and henceforth, for the UK healthcare industry overall (The Economist Intelligence Unit Limited, 2013). 7.0. Conclusion The key findings of the study revealed that presently, there has been huge change in the world of work, not only in the logistics and competitive mechanisms but also in the paradigm of ideologies and notions related to a more responsible and sustainable approach. Where on one hand it was observed that there are various positive effects of globalisation, observable in the healthcare sector of the UK, while on the other hand, numerous negative effects was witnessed when assessing the globalisation trend in the healthcare industry. Drawing inferences from the study it can be identified that the influence of globalisation issue has changed the entire work place scenario for the healthcare sector within the UK, wherein the interests of the wide-ranging stakeholder groups have been largely affected by these transformations. From a critical point of view, it was observed that changes in various dimensions of world of work in the 21st century context have increased pace in technological advancements along with encouraging the mergers and acquisitions within the industry context. This has further increased risks from capitalist structure changes in the sector, wherein outsourcing of required resources have emerged as a preferred trend in the UK healthcare sector, currently facing shortages of nurses and inadequate availability of resources to suffice the growing demand of the ageing population within the nation. Analysing the external and internal environment of the UK healthcare sector also revealed that globalisation issue have imposed direct implications on the factors of both external and internal environmental paradigms, wherein privatisation has gained pace and governmental control on the industry governance structure has reduced gradually. 8.0. 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