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Impact of Global Business Environment on Modern Businesses

3876Downloads1 I Published: 14 Nov ,2019


Global environment refers to the combination of micro environment and macro environment factors which have a major impact upon the course of modern businesses (Vasilcovschi and Georgescu,2012). The present report explores the micro and macro environmental factors which lead to a change in nature of modern business within global environment. Also, it includes the rationale behind individuals and organisations behaving responsibly, socially and ethically in response to external environment.

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Identification of micro and macro environmental factors that changed nature of modern business in global environment

In today’s rapidly changing and competitive world, modern businesses are affected by a number of factors which prevail within the environment of these entities. This environment consists of those elements which are under the control of management of a company and also those which can not be controlled by the confines of powers and authorities of business. The controllable factors are called micro environmental while the uncontrollable factors are referred to as the macro environmental elements (Warkentin, Sugumaran and Sainsbury, 2012). In global environment, the combination of both these factors together affects modern businesses and may result in a change in operations and functioning of an enterprise. Below mentioned is a detailed description of how these factors have changed the course of modern business working within global environment:-


These factors affect the working of modern businesses on the basis of their size, capabilities, capacity, strategies which may or may not be able to deal with the impact of micro environmental elements. Following are the factors which are covered under micro environmental factors of modern businesses:-

Competitors: In today’s world,the competitive environment of modern businesses comprises of some basic things which companies have to take into consideration. Usually, in corporate world, no company (whether large or small) enjoys monopoly. In ordinary course of business, a company generally encounters competition from a number of firms that have a positive brand image and a high stake in marketplace. For instance: Philips TV faces immense competition from a number of companies in Colour Television market such as Videocon, Samsung, LG etc. Such strong brand rivalry persuades modern businesses to adopt a unique and creative strategy which can give them an edge over rivals within same sector.

Customers: Business entities present in global market environment strive to earn profits by serving the needs, demands and preferences of people. Companies now think of strategies with which they can do profitable sale instead of selling for the sake of increasing the sales volume. Modern organisation such as General Motors, ASDA, ASOS, Marriott International, Samsung functioning in any business sector conduct marketing activities in order to build an effective contact with them and influence them to make a purchase (Vasilcovschi and Georgescu, 2012). Entities focus upon delivering such products and services which can gain maximum consumer satisfaction.

Suppliers: Any business entity which functions as a part of modern economy has to procure materials or services from vendors or suppliers. They can either be individuals or even business houses. They provide companies with the adequate resources that are necessary for modern businesses to carry out its day to day activities in an effective and efficient manner. Now companies search for potential suppliers, identify and analyse the suppliers present within industry and then select those suppliers who have the best mix of delivery reliability, quality, low cost, credit and warranties (Charfeddine, 2016). The constant development within supplier’s environment has a significant impact on the functioning and operations of company.

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These factors have a large scale impact upon the functioning of modern businesses as these are the elements of external environment such as political, legal, social, technological factors. Some of these factors are briefly described below along with their affects upon modern businesses in global environment:-

Political Factors: These factors undertake elements of political conditions of a nation and how they have a direct impact on a business organisation. It is essential for global business organisations to effectively analyse political stability and environment of the nation they plan to operate in. For instance, if a company plans to establish itself in the UK, it must take Brexit as an important aspect as the event has brought quite an instability in the political environment of the country. Another example would be a company willing to set itself in a nation with political stability such as Germany or Australia which brings stability in operations due to effective stable policies (Hacioglu, Dincer and Celik, 2012).

Economical Factors: Another factor affecting the global business environment are the economic elements of a country. It considers the economic performance of a country and how it could favour a company. For instance, countries with stable and favouring economic growth would bring in more opportunities to companies willing to either set up their business or invest in those countries. However, if firms invest in nation in countries which are economically drowning, it would be quite a disfavouring aspect for those organisations (Burayidi, 2013). Thus, it is crucial for these firms to take an in-depth analysis of the economical performances of these nations.

Reasons for individuals and organisations managing responsibly, sustainably and behaving ethically in relation to social, cultural, economic and environmental issues

As business in today's world derive materials and resources from the society, it is essential that enterprises and individuals working in these organisations act in the interest of public. It is the prime responsibility of business personnel as well as companies to consider Corporate Social Responsibily (CSR) as these reflect the initiatives taken by an enterprise for the betterment of environment and society (Anıl and Ficici, 2017). Further, by engaging in ethical and legal conduct, entities ensure least governmental intervention and also make sure that they are not publically held guilty or penalised for any undesirable undertaking of activities.


From the above report, it has been concluded that global business environment comprise of a number of factors which together impact upon the operations and functioning of modern business organisations. Also, it has been analysed that it is of prime significance for individuals and businesses to adopt ethical conduct and act responsibly and sustainably.


Books & Journals

  • Anıl, A. R. and Ficici, A., 2017. The Emerging Market Manufacturing Business Groups (EMBGs) and the Interplay between Innovation in Environmental Sustainability, Digitalization, Internationalization and Corporate Governance Structures: The Case of Turkish Holding Companies. Turkish Economic Review. 4(1). pp.55-65.
  • Burayidi, M. A., 2013. Downtowns: Revitalizing the centers of small urban communities. Routledge.
  • Charfeddine, O. B., 2016. Business environment-aware management of service-based business processes (Doctoral dissertation, Université Paris-Saclay).
  • Hacioglu, U., Dincer, H. and Celik, I. E., 2012. Economic approach to conflict issue: Investment in post-conflict situation for international business. International Journal of Business Administration. 3(5). p.1.
  • Vasilcovschi, N. and Georgescu, S., 2012. TRANSFORMATIONAL LEADERSHIP AND THE ECONOMIC COMPETITIVENESS IN SHIPPING INDUSTRY TODAY. Analele Universitatii Maritime Constanta. 13(17).
  • Warkentin, M., Sugumaran, V. and Sainsbury, R., 2012. The role of intelligent agents and data mining in electronic partnership management. Expert Systems with Applications. 39(18). pp.13277-13288
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