Entry 5 (IY1 Introduction to Business and Management)

Entry 5

In this entry, I will talk about the international business.

The definition of international business

International business refers to negotiated trade and investment that join nations and cross state barriers, as performed by firms operating and interacting at various personal, organisational, product, project, function, network, industry, global and other levels (Tsang et al., 2013). 

                    These days, we can easily see international business all over the world.

The three pictures below represent the situation of international business in Apple, Tesco and Samsung.

 

 

On the other hand, it was difficult for people to see international business. However, people did international business through The Silk Road. The "Silk Road" is a network of ancient overland trade routes that extended across the Asian continent and connected China to the Mediterranean Sea. For centuries, the "Silk Road" also enabled the transmission of knowledge and ideas between the Eastern and Western worlds. The Silk Road was important because it helped to generate trade and commerce between a number of different kingdoms and empires.

                            



 

Now, let's move on to how to go international

 

1) Outsource - not just manufacturing. For example, American and British companies built their companies abroad in order to get more profit.

2) Exporting and importing - exchange rate is an important element in exporting and importing.

3) Franchising - for example, Subway, Kfc and Burgerking.

   

 

 

4) Joint venture -  In Dubai, joint venture is an indispensable element. Sometimes, it could cause conflits between two senior managers.

 

The next topic I would like to focus on is the context of international trade.

This is composed of four elements: Political, Economic, Socio-cultural, Technological and Legal.

 

Political - It is safe to say that we should be aware of political stability and level of corruption.

Economic - Theory of absolute advantage.

Cultural - We can experience a lot of cultures regardless of long distances. 

Technological - It is necessary for country to has a good infrastructure in order to do international trade.

Legal - Trade agreement is an indispensible element to own legal binding. 

 

Lastly, I am going to mention World Trade Organisation (WTO) that is a symbol of international trade. The WTO was formed in 1995 and has 157 member countries working together to supervise and liberalise international trade. In addition, the WTO provides a framework for negotiating and formalising trade agreements, and a dispute resolution process aimed at enforcing participants' adherence to WTO agreements signed by representatives of member governments.

 

             

  

 

In conclusion, I discussed the definition of international business  and then how to go international in more detail by using a variety of examples (such as Burgerking, The Silk Road, Apple, WTO, Tesco ,Samsung). Therefore, businesspeople should know a wide range of perspectives from differnet sections to be successful.

 

                                 

 





Entry 4 (IY1 Introduction to Business and Management)

Entry 4

In this entry, I am going to discuss macro environment, PESTEL analysis and stakeholders. 

The definition of macro environment

The macro environment is defined by Jones and George (2008) as " the wide-ranging global, economic, technological, sociocultural, demographic, political, and legal forces that affect an orgnaisation and its task environment.

The defintion and importance of PESTEL analysis  

A PESTEL is an acronym that stands for Political, Economic, Social, Technological, Environmental and Legal factors of the external macro-environment. Such external factors usually are beyond the firm's control and sometimes present themselves and as threats. For this reason, some say that PESTEL is an appropriate term for these factors (Nejati et al., 2008).

The examples of PESTEL factors 

1) Political : Taxation policy, Privatisation and deregulation policies, Environmental legislation, Health & safety regulations, Public expenditure controls, European Union directives and Government stability.   

2) Economic : Interest and inflation rates, Consumer confidence, The business cycle, Economic growth prospects, Unemployment rates and Disposable incomes.

3) Socio-cultural : Values in society, Changing consumer preferences, Levels of education and Changing lifestyles. 

4) Technological : Alternative means of providing services, Scientific discoveries, Changing communications technology, New production technology and State of infrastructure. 

5) Environmental : Climate change, Water resources and Energy Supplies. 

6) Legal : Employment law, Company law and Business regulation.  

                                  
                                               

 

 

The definition of stakeholders

 

Freeman and Reed (1983), for instance, suggest one broad and one narrow interpretation of the term stakeholder. The wider definition embraces "any identifiable group or individual who can affect the achievement of organisation's objectives or who is affected by the achievement of an organisation's objectives" (Freeman and Reed, 1983: 91). In a narrow sense, the authors define a stakeholder as "any identifiable group or individual on which the organisation is dependent for its continued survival" (Freeman and Reed, 1989: 91).

 

 

                                                           

In the light of my own experience in an English academy, we had the problem related to the number of students when Korea was in a robust economy. In other words, enonomical factor that is one of the PESTEL analysis's factors had a major influence on our English academy. On top of that, increased tax plus recession caused decrease of investing private education from millions of parents.

In conclusion, I examined the defintion of macro environment, PESTEL analysis and stakeholders. In addition, I described the economical factor of  influence on my former English academy with my own experience. Consequently, companies should take into consideration a lot of factors in order to survive in a fast-changing business.

 



Entry 3 (IY1 Introduction to Business and Management)

Entry 3

In this entry, I am going to illustrate internal environment and micro environment.

The definition of business environment

!) According to Arthur M. Weimer, " Business environment is the climate or set of conditions - economic, social, political or institutional in which business operations are conducted."

!!) According to Bayard O.Wheeler, " Business environment is the total of all things external to business firms and industries which affect their organisations and operations.

Business environment has two components:

(1) Internal environment : people, finance, technology, power, culture, objectives and structure.

(2) External environment (Micro/Macro) : micro environment includes suppliers, customers, competitors, potential entrants and substitutes.

Examples of change in each element of the organisation( internal environment)

# Objectives   1) Developing a new product or service.
                    2) Changing the overall mission or direction.

# Technology  1) Building a new factory.
                    2) Creating a website on the Internet.
# People - 1) Design a training programme to enhance skills.
             2) Changing the tasks of staff to offer a new service.
# Structure - 1) Reallocating functions & responsibilities between department.
                 2) Redesigning work to improve communication and efficiency.

The definition of micro environment

!) According to Philip Kotler, "The micro environment consists of factors in the company's immediate environment which affect the performance of the business unit.

!!) According to Hill and Jones, "The micro environment of a company consists of elements that directly affect the company.

Porter's five forces are widely used to assess the structure of any industry.

Porter's five forces are the:
1) Bargaining power of suppliers
2) Bargaining power of buyers
3) Threat of new entrants
4) Threat of substitutes
5) Rivalry among existing firms

                                                  

 

 

 

Given my experience in an English academy, there were a great number of business environments regardless of internal and external environments. First of all, internally, the president of academy executed a plan to redesign work in order to improve efficiency and communication.

In addition,  an institute owner sent his staffs a certain seminar so as to enhance employee's skills. Secondly, externally, there were a lof of competitors that teach English. As a result, our academy tried to attract a great many students, providing discount coupons and employing teachers who were much in demand from a lot of parents.

 

 

To conclude, I mentioned definition of business environment, internal environment and external environment in more details based on my personal experiences. In the business world, business environment is unavoidable situation. Therefore, organisations should deal with a variety of environmental factors well.