Table of Contents
Title Q1: Impact of the external world on business decision-making.
1.1 Impact of the external world on business decision-making.
Political (Brexit) challenges and their impact on UK business.
Technological challenges and their impact on UK businesses.
Title Q4: Planning Your Career
2.1 Internal and external factors that affect the career as HR manager
Title Q1: Impact of the external world on business decision-making
According to Nickels and McHugh (2017), understanding business helps to determine the business opportunities and threats, build brand image, give direction for business growth and deal with the competition. In terms of business, the external world means the macro-environmental factors of a business. According to Campbell (2015), the macro-environmental factors of a business organization can be evaluated by the PESTLE analysis tool where PESTLE stands for political, economic, social, technological, legal and environmental factors. The UK businesses are facing a tough time currently from the political and economic uncertainties and the ever-changing technologies.
1.1 Impact of the external world on business decision-making
The UK businesses face different challenges from mainly the political and technological challenges which are described as follows:
Political (Brexit) challenges and their impact on UK business
Brexit has become the crucial source of uncertainty for UK businesses. Brexit is the political challenge that is faced by the UK business and thus reduces the future productivity and economy of the UK by half a percentage (Growth Business, 2018). The UK businesses expect that Brexit will ultimately reduce business sales as well as increase business costs. According to the Decision Maker Panel survey, there are four key reasons how Brexit affect UK businesses which are discussed as follows:
Brexit is the significant and growing source of uncertainty for UK businesses: UK businesses continuously place Brexit at a high on the list of uncertainty sources. It is indicated that the increase in the UK business uncertainty mainly arising from Brexit. A number of UK businesses responded that Brexit is one of the top three drivers of business uncertainty that rose from 36% in August 2016 to 54% between November 2018 and January 2019 (Bloom et al., 2019). This Brexit issue has not only a negative impact on UK businesses but also on the overall economy of the UK.
UK businesses expect that Brexit leads to lower domestic and foreign sales and to higher costs: The UK businesses expected that Brexit has a great impact on their business costs, sales and exports. Generally, UK businesses expected Brexit to reduce sales by 3%. In addition, the effect on the exports of UK businesses also expected to be negative (Bloom et al., 2019). On the other hand, the financing costs, labor costs and unit costs of the UK businesses were expected to be increased that also affect the UK economy day by day.
Brexit has reduced the investment and employment growth: Brexit is the key source of uncertainty of the UK businesses that reduce the investment and employment growth and this also affects the UK economy negatively because employment growth has become low. According to Bloom et al. (2019), it is estimated that Brexit uncertainty connected with a 6% low investment of UK businesses in the first year after the Brexit referendum between July 2016 and June 2017.
Brexit is to low the UK productivity growth in future: Businesses in UK economy export different products and services to EU, import different materials from EU and also employ labor from EU were uncertain because of Brexit that has a contrary effect on the sales of those businesses. Brexit issue minimizes the output of high productive UK businesses than the low productive UK businesses which will lead to low productivity (Bloom et al., 2019). It is estimated that the UK economy has had low growth in the last few decades (about 1%) which affects the UK economy negatively.
Technological challenges and their impact on UK businesses
Technology is the key factor that drives UK businesses in different ways. Most of the UK businesses focus on the advanced technologies in their businesses that help them to make better production lines, create smart communication systems, to improve the remote capabilities with the manufactures and others. It is estimated that the UK is at forefront of the digital transformation of Europe. A recent study by the innovation charity named Nesta stated that the digital UK businesses are growing 32% faster compared to the rest of the UK’s economy (The Economist Intelligence Unit, 2018). On the other hand, Prime Minister David Cameron said that UK’s world-leading technology sector provides not only a competitive edge but also a transformation of the UK economy………………..