What is the impact of global environment on business environment?

Answer 1

The Impact of Globalization influences businesses at varying degrees. It depends on what business you are talking about, for example if the business sector you are talking about is subsidized by its government, globalization can only be labelled as a cause. No globalization, no need for government subsidies on its businesses.

The Global Economy is in a constant state of change and is influenced by variations in the demand for services and products worldwide, for example the need for raw materials to manufacture products and the necessity to move produce/products to global consumers.

The breaking up of states can affect the Global Economy for instance the former Soviet Union which became several smaller quasi-independent economies and West and East Germany becoming one state.

The rise and fall in prices of raw materials for example the price of oil in the Middle East which has a knock on effect around the world. Weather is another element which effects the periodic growth of crops worldwide and again this affects the price of the raw material rice and maize for examples, making the consumer pay more.

Variations in the price and supply of labour the rise of cheaper workforce in the Far East has lead some businesses to moving their manufacturing abroad, cutting their overall costs. The improved levels in communication for example the Internet globally; this has allowed a lot of companies to outsource telesales and administration, reducing their cost.

Answer 2

The global environment makes the business environment more competitive. Competition is good for business because it forces businesses to offer better products.