November 22, 2019

1.Introduction: are normally voted in by the public. In

 

1.Introduction:

 

The purpose of the following
report is to examine and outline the interconnecting factors of the global
business environment, with direct reference to a chosen country, which in this
case is The United Kingdom. These interconnecting factors are as follows;
Financial Direct investment involved with The United Kingdom, current country
context (key industries, demographic data and environmental conditions that may
affect the United Kingdom’s international business affairs). As well as this,
the report will outline the United Kingdom’s economic, political and legal
position in today’s international climate. To maintain relevancy, I will be
using data primarily from the last 5 years However in some cases I will be
recalling data from the last a 10years.

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2. Current country context:

 

 

3i. ii. Political, Economic and Legal systems.

 

3i. The Political System:

 

There are two predominant forms
of political system. These being, a democracy and a totalitarian government. A
democracy is a group of electorates whom govern a country or state, which are
normally voted in by the public. In contrast, a Totalitarian regime is based
upon a singular vision of one person or group which have a total control. Today
however, the Democracy approach is the preferred method of Governance due to
its fair approach to swearing in power, as it is the populist opinion of the
people. This in comparison to a totalitarian regime which is only used in several
repressed countries like North Korea. A totalitarian government is done by,
however, not limited to; media censorship, fear, police or army enforcement and
propaganda.  (Hill, 2014)

 

3ii. The Political System in The United Kingdom:

 

The United Kingdom’s Political
system is based off a parliamentary representative democracy with a constitutional
monarch. There is a monarch who’s head of state, and a Prime Minister Whom Is
head of government. The People vote in members of parliament via an election to
be their representatives.(LawTeacher, 2013) In the United Kingdom, we follow rules
set by our government but also by the European Union, however, as of 2016 we no
longer are part of the European union, therefore, we can assume there will be
major Parliamentary changes, as the United Kingdom gain more independence from
Europe in the next 5 years.

 

 

3i. Economic:

 

There are three Economic models: The
Market economy, Command economy and Mixed economy. A market economy is an
individualist model of the economic system where the market is judged upon the
trends of the consumer, this determines the quantities, quality of products or the
services’ a country needs. This type of economy promotes fair trade and a
healthy competition between private companies which allows for innovation in a
countries Service and products. if we compare it to a Command Economy which is
a government owned economy, where they determine the level of quality and
quantity of service or product a country is given. Due to the Economy being
State ran, it prevents private corporations from breaking into the market, this
is because there is no incentive to compete. This is down to the efficiency of
the company, if the state can do the service at half the cost, there is no need
for competition.

 

3ii. The Economic system in The United Kingdom

 

the United Kingdom is known as a Mixed Economy, this is because
they give private sector business’ a free market, therefore allowing the buying
and usage trends of the Great British population to determine the supply and
quality of goods and services. As mentioned earlier, the United Kingdom is a
mixed economy, this is because it has a command economy on services such as
Defence, Welfare, and education and as a result the population pays tax to pay
for said services. The British Government also pays for public, free
Healthcare, known as the national health service, accredited for being one of
the best health service’ in the world. (Amandeo, 2016) During the
conservative parties’ tenure lead by Margaret Thatcher (1975-1990), many of The
United Kingdom’s public services were privatized, examples of this are; British
railway and other means of public transport, energy suppliers and telecommunications.

 

3i. Legal:

(Hill, 2014, pp. 46-47) Finally, we are
going to outline the Legal system which regulates and governs the country or
territory we live in. Laws are a set of Maxims, that a state enforces to create
order and perimeters around business, criminal and societal scenarios. There
two main types of legal system. There are many variations of legal systems,
today we shall be outlining three main systems. Common law is the system based off
tradition, social precedence and customs. Societal norms are what causes these
laws to have such Precedence. Civil law is a code based legal system, which
follow detailed and analytical rules, specific to the scenario. Finally, there
is theocratic law, which is based off Religious teachings, Islamic law cannot
be changed for instance, therefore it is integrated into certain Muslim countries
legal systems, like Pakistan.

 

3ii. Legal system in The United Kingdom:

 

(Rab, 2017) The United Kingdom doesn’t
have one set of governing rules (otherwise known as a constitution) it is
compounded through statute law, Case law and international treaties such as those
formed in the United nations and in the European Union. The United Kingdom is
the Oldest Constitutional Monarchy in existence followed by Belgium, Monaco and
Spain. (LawTeacher, 2013)

 

However, in 2016 the United Kingdom held a European Union
Referendum, this meant that the public could vote to see whether the United
Kingdom would remain, or leave the European Union. This therefore means, that
our political system is in time of turmoil, the uncertainty of how it will
affect everyone is still to be determined. Many believe it will allow the United
Kingdom to great laws that do not comply with the European Union, however, if
we do not comply with European laws, we cannot trade with them and this will
potentially affect our economic growth.

 

4i. Economic growth, what it drives and how economic growth is
measured:

 

(The Business Dictionary, 2015) “Increase in a
country’s productive capacity, as measured by comparing gross national product
(GNP) in a year with the GNP in the previous year”. Robert Solow, known as one
of the pioneers of the Neoclassical approach to economic growth and the founder
of the Solow economic growth model, stated that there were variable factors
that drive economic growth. These include; a capital and Labour input, as well
as innovation and technological advances. (Solow, 1956)

 

Economic Growth Is measured through many factors, for
example: Gross domestic product

 

4ii. Economic growth in the United Kingdom in the last five years.

 

 

5i. Foreign direct investment:

 

Foreign direct investment is a
transaction of financial resources, from a Home Country Business to a host
country where said business wishes to set up, this is so that the company from
the home company can assume majority management power. There are two predominant
types of Foreign direct investment, the first being greenfield FDI, this is
where the company builds new facilities and provides jobs such as contractors
therefore contributing to the local economy further than merely their companies’
main economic contribution, they also have total control of the business.  The second being Brownfield FDI, this is
where a company acquires a facility in the host country and gain majority or
total control over the business.

 

5ii. Foreign Direct Investment in The United Kingdom:

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