Impact of Global Factors on UK Business Organizations Essay Sample


Global factors that impact the businesses in the UK are not only limited to an increase in the scale of international trade, levels of multiculturalism in UK organizations, or inter-dependency of national economics but should be analyzed by using PESTEL analysis.

Pestle analysis stands for political, economical, social, technological, ecological, and legal factors that have a great influence on businesses. So, this essay sample will talk about how different global factors or national factors affect the practices and operations within the businesses with a brief discussion of how European Union policies impact the businesses in UK.

Activities of business organizations get largely affected by the global environment. Apart from only getting affected by the competitors globally in various ways, there are some global factors that organizations in the UK are facing including political, ecological, legal, social, technological, and economic.

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Political Factors that affect UK business organizations 

  • The level of Global political stability: Political changes can have a great impact on the performance of the business even when the country is considered to be politically stable. So, may due to changes in the legal framework or any governmental changes result in changes in business taxation or company’s marketing strategies. Thus, political changes affect UK businesses by creating less business-friendly policies. For example, a government may modify and set the policies related to minimum wages which increases the costs and reduces flexibility and international competitiveness.
  • The level of bureaucracy in international affairs: The level of the bureaucracy of the international countries may affect the business organizations in UK. The bureaucracies can minimize the transparency of the business policies, reduce freedom, makes the sources inefficient, and can also tend to extend the rules and policies of the business which finds difficult to maintain.
  • Global trade controls: Initiatives related to global trade control can affect the business organization in UK and around the world. Global trade controls are responsible to create, implement and maintain the export and import strategies effectively. It ensures that seamless execution of the business plans must happen.
  • Threat of international terrorism: Terrorism is a major problem for all businesses around the world. Terrorism affects the choices of the consumer and hinders the performance of the company which eventually raises the cost due to higher wages and expenditure on security.
  • Tariffs between the UK and other countries: Tariffs are a tax imposed by the government. Thus, raised taxes of the countries may affect the business global trades.
  • Global copyright, patent, and intellectual property disputes: Global copyright and intellectual property also affect business organizations in a big way.

Social factors that influence the business organization in UK

Business organizations in the UK that operate globally have a vital role to make their business strategies according to the social differentiation and cultural values which might differ from place to place. Thus, social factors have a major influence on businesses in the UK, this includes

  • Changes in family values in a global scale: There is much change that has been seen in family values due to globalization. Therefore, due to the difference and changes in family values every business can be affected on a global scale.
  • Changes in family patterns: marriages in the same gender or having single parents can also have an influence on businesses in UK.
  • The increasing popularity of immigration and migration practices: Due huge globalization and immigration of the families in the UK, the choices of the services may vary. Therefore, businesses have to make sure that their service also lies with the needs of the immigrants.
  • Increasing social mobility: It negatively impacts the business worldwide due to a lack of diverse commercial representation. A diverse workforce is the only way to reduce the impact of social mobility on organizations in UK.

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Economical factors that influence UK business organizations

  • Impacts of intensifying economic globalization:  Due to globalization, the companies in UK need to internationalize their products and services. Also, with an increase in the exports of goods, globalization leads to the high distribution of products, resources, and technology except for their origin.
  • Global economic crisis: The global economic crisis majorly affects small-scale businesses. Recession drops the prices of the products of the business which leads to high competition in the market.
  • Stock market fluctuations: Lower in stock prices directly decreases the wealth for the businesses.
  • Impact of The World Bank and The World Trade Organisation: The impact of world trade organizations on the business organization in UK is huge.
  • The increasing importance of outsourcing and offshoring initiatives: Increase in the Outsourcing and off-shoring operations of the companies and organizations in the UK can have a huge impact on the performance of the company.

Technological Factors that have an influence on business organizations in UK

These may affect the business strategies extremely as they give the chance for the organizations to do invention or adopt new resources. To stand out in the competitive market, organizations need to implement the relevant technological advancement in their business. It’s a major drive for globalization. This includes

  • Level of global technological infrastructure: The level of the technological infrastructure of a particular can also affect the business organization by increasing productivity at the workplace. Any changes in the infrastructure may create sales loss and oppose timely business activities.
  • Industry-specific technological breakthroughs
  • Regular emergence of innovative communication technologies
  • Adoption of technology as a competitive edge by increasing numbers of businesses

Other factors that affect the business organizations in the UK include

Ecological factors

  • Impacts of global warming tendencies
  • Increasing levels of air and pollution
  • The increasing level of sensitivity towards “green” problems among business stakeholders
  • Activities and initiatives of global environmental organizations
  • Laws and regulations related to data protection
  • Global data protection rules and regulations
  • Increasing levels of “legal globalization”
  • Changes in cross-country employment and health and safety laws

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