Global Environments and the Interconnections Between Business Term Paper

Pages: 3 (1031 words)  ·  Bibliography Sources: 0  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business

¶ … global environments and the interconnections between business, the society and the public economy that a global economy comprises have definitely changed the way business is done in the last 10-20 years. Businesses have become more keen in dealing with and managing their social responsibilities, both because of the pressure from civic groups, but also because many of tem have a global image they need to keep and improve. In the same category are environmental issues and environmental disasters that companies operating in chemical or extracting industries, for example, need to keep in mind. In many ways, the primary responsibility for a company, to produce profits, has diversified, reaching social or environmental areas, with a direct impact on the business itself.

One of the other characteristics of a global business environment is the increased level of competitiveness in industries. Capitals or people can move much easier and faster around which creates a certain flexibility at these levels. This means that many companies can drive costs down and benefit from an increased cost competitive advantage.

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As such, mergers and reorganizations have become the tool many companies use to become more competitive. The explanation for this is quite simple: the synergy effect. The synergy effect refers to the fact that the new company that is form is likely to be more efficient than the sum of the two companies' values. In this sense, we may sense that the synergy effect is best explained by the equation 2+2=5. Examples of mergers have been numerous, especially in the automotive or media industries. In the former, mergers like the ones between Nissan and Renault or Daimler and Chrysler were meant not only to promote a synergy effect, but also to ensure the presence in distant markets through the partner. In my opinion, given the challenges of the business environment in the 21st century, this trend is most likely to continue.

So, in this sense, a company can prepare for environmental instability by increasing its own potential. Increasing employee efficiency and effectiveness, decreasing the costs of production and striving to achieve customer satisfaction will make a company less exposed to negative reactions from the market.

TOPIC: Term Paper on Global Environments and the Interconnections Between Business, Assignment

I can't imagine Jack Welch referring to anything else but General Electrics with this statement, so the explanation should take this path and that of strategic management. In my opinion, his statement is more actual than ever and refers to the forces of the market that can steer your business into bankruptcy or acquisition unless you take control and lead it. This includes having strategic objectives to build on, creating the proper means of reaction to the opportunities and threats that come from the market and the strategic planning that can make sure that the strategic objectives of the company are realized. As a person who was always one step before the market, Jack Welch's advice addresses businessmen to take action rather than sit and wait, to mould the market and their companies' reactions themselves.

The organizational size does not necessarily affect the company's change in one direction, however, in my opinion and taking as… [END OF PREVIEW] . . . READ MORE

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