Political Factor

Discuss about the Effectiveness in the Business World for Political Development.

Political Factor:

Political aspects have many significant influences on the petroleum industry. This industry is one of the key players around the globe. Control of hydrocarbons allows the government to provide concessions to different companies. This aspect provides exclusive rights to production and exploration of oil within a certain geographical area at a specific time space. Only because of this aspect the government provides facility to the national oil companies rather than the foreign oil companies. Geopolitical and internal political risks may block the upstream investment within many countries (Binder and La Palombara, 2015). This kind of instability changes the environment. This environment is following a set of regulatory aspects: nationalization of property, civil conflicts and strikes or acts of war. These aspects are very common for the oil enriched company. All of these political aspects possess negative effect to the value creation of all oil companies. The Middle East has always discouraged the foreign investments (McChesney, 2015). No major oil companies are interested to invest their money to Iraq due to political disturbances.

Technological Factors:

Technological aspect is one of the external factors which drive the oil and gas industry, because the research and technological aspect plays vital role for addressing the energy needs and challenges of the world. An innovative and improving aspect of the technology provides the way of recovering oil and gas by providing new machineries and processes (Taddei et al., 2014). This aspect also provides the ways for omitting the exhausted processes for extracting oil. This aspect increases the profitability and gains the existing oilfields. Technological improvements has have made the exploration possible for making ultra-deep water reservoir. Brazilian shore is one of the examples of oil fields. Except this, Petro Bras was nominated for developing the new technologies. Development of advanced technologies becomes the competitive advantage of oil and gas field (Titus et al,. 2013).

Title of News: FTSE loses 30 billion dollar in value on Brexit fears

Date Published: Thursday 16 June 2016

Industry:

Source: https://news.sky.com/story/ftse-loses-16330bn-in-value-on-brexit-fears-10313933

Concept/ Model Applied: Internal and External Influences

Discussion:

Internal Influences:

Perceptions: The issue related to Brexit causes significant losses in the European Stock market. The government of Britain hadn’t any particular desire to leave EU but Britain faced many problems between prosperity and stability (Lee and Burton, 2015). EU analyzed that, there will be losses in the sector of pensions, and savings, jobs, and share market as well. After Britain exited from the association there were introduced some clashes of thoughts between the left out countries of EU and Britain.

Technological Factors

Attitudes: According to the continuing research it is found that, UK was dominating the entire job market of the EU, this created so many problems within EU such as unemployment problem. In another way, UK can make itself high trading country by establishing the rules and regulation according to their needs. Statistical survey shows that, most of the goods are exported to non-EU countries an earned 147.9 billion dollar, which is hampered for leaving UK form EU (Jóhannsdóttir and Jónasson, 2014).

Learning: Learning is another important internal influence while measuring the situation. It is noted that, conservative voters are divided for the issues for Brexit, Liberal, and labour, whereas the SNP voters are strongly pro-Europe (Henriques and Richardson, 2013). The minority of voters wanted to stay in the EU. This aspect t delivered a majority of votes for separation.

External influence:

Culture and subculture: This is one of the external influencing factors which determine the condition of any business environment. After the Britain segregates itself from the association majority of voters decided to change their country and leave EU. The social, political, economic and environmental condition attracts people for leaving the EU. Most of the people were voting against the ruling class of the EU (Gold et al., 2013). This aspect increased the nationalism, which were not the accurate demands of the people.

Social class: The death of social mobility happens due to the decision of UK to vote for leaving the UK referendum. Several issues like immigration, governance; bureaucracy was introduced due to the class war between the residents of EU referendums.

Title of News: FTSE loses 30 billion dollar in value on Brexit fears

Date Published: Thursday 16 June 2016

Industry:

Source: https://news.sky.com/story/ftse-loses-16330bn-in-value-on-brexit-fears-10313933

Concept/ Model Applied: Supplier power and Competitive Rivalry

Discussion:

Porter’s Five Forces:

Supplier power: Brexit made the business practices more difficult in UK. Europe is one of the best synchronized countries, which helps EU to face more challenges in the global market. No other country can really solve these problems like UK. All the countries of EU have to renegotiate the contracts for this event of Brexit. This aspects leads to the removal of the customers from the business market of EU (Dobbs, 2014). This aspect made huge amount of loss for the EU. Considering the manpower UK also provides it most of the time to the EU. So in this case the supplier power is high for the countries of EU.

Week: 3

Competitive rivalry: In the case of Britain their competitive rivalry is reduced with respect to the evolving market situation. The country is not only economically stable but also technologically developed. UK has signed one agreement with Iceland, Norway and Lichtenstein, which establishes homogeneous and dynamic European economic area for it. This shows that two separate regulatory bodies will applied to these countries parallel with EEA (Magretta, 2013). Another aspect which shows the competitive rivalry between UK and EU were the series of bilateral trade agreements that was allowing the partial access to the single market (Mavimbela and Dube, 2016).Another competitive advantage of the country is that Britain is already aware of the weak and strong situations with EU referendums, so it is too much easy for the country to capture the market.

Title of News: FTSE loses 30 billion dollar in value on Brexit fears

Date Published: Thursday 16 June 2016

Industry:

Source: https://news.sky.com/story/ftse-loses-16330bn-in-value-on-brexit-fears-10313933

Concept/ Model Applied: Triple bottom line model

Discussion:

Profit: Profit is considered as the net amount gained by any organization after the deduction of input costs involved and adding the capital introduced into the process. This aspect is taken as the fundamental economic benefit. One of the frightening threats to the EU was that trade barriers thrown by UK and Europe could prevent UK while being used as a suitable dramatization post for EU development (Henriques and Richardson, 2013).According to the policies set up by Britain they noted that their wealth is not getting distributed properly within their residents. They took a step to be separate from the EU referendum just to establish their own regulations and policies within the country.

People: Another sustainability factor is people or more elaborately man power and workforce. Workforce has a great impact on the sustainability of any organization or business environment. Previously the EU referendum handles their entire business events in a collaborative way but after the separation of Britain man power was reduced by huge amount. Britain not only provides the financial and technological support to the EU referendum but also helps the association to bring their man power to certain high limit for development of the business activities of the association (Onat et al., 2014).

Planet: The term planet is known as sustainable environmental practices. Sustainable business environment is required for the development of the business practices. Sustainability refers to good positioning aspect. The separation of UK from the EU triggered political confusion between both the major parties of UK. The prime minister resigned. There was a situation for choosing the powerful person who will take over the authority.

Week: 4

Title of News: FTSE loses 30 billion dollar in value on Brexit fears

Date Published: Thursday 16 June 2016

Industry:

Source: https://news.sky.com/story/ftse-loses-16330bn-in-value-on-brexit-fears-10313933

Concept/ Model Applied: Major drivers of globalization

Discussion:

There are several drivers available affecting the business practices. Two crucial drivers affecting the Brexit issue are described below:

Deregulated markets: Deregulated market is described by a market which is disturbed by several internal and external factors. EU referendum was one of the effective and economically stable associations which operates almost huge amount of business practices (Gold et al., 2013). But because of the separation of Britain FTSE faces a loss around 30 billion dollar. This is only due to the deregulated market all over the EU referendum. The value of pounds was lowered by 0.85% against the values of dollar on Tuesday. This aspect continued up to 8 weeks. Most of the investors were running just because of their safety. Most effective example on this issue is: 10 years old German bunds went negative for the first time in history, which shows that the investors are involved with only Germany and finishing their relation with other countries of EU referendum (Binder and La Palombara, 2015).

Market drivers: There are several market drivers for empowering the business environment. The effective market drivers for Brexit issue are: population density, sustainability of mindset, independent lifestyle.

The countries involved in the EU referendum are facing problems due to excessive population, which was causing improper distribution of wealth among the residents (Titus et al., 2013).

Britain had developed a mind set for being separated from the EU referendum. This different mindset was driving the internal situation of the EU referendum.

Independent lifestyle leads the association to be separated, as each country of this referendum wants to develop their own policies.

References

Binder, L. and La Palombara, J. (2015). Crises and Sequences in Political Development.(SPD-7). Princeton University Press.

Dobbs, M. (2014). Guidelines for applying Porter’s five forces framework: a set of industry analysis templates.Competitiveness Review,24(1), pp.32-45.

Gold, S., Hahn, R. and Seuring, S. (2013). Sustainable supply chain management in “Base of the Pyramid” food projects—A path to triple bottom line approaches for multinationals?. International Business Review, 22(5), pp.784-799.

Henriques, A. and Richardson, J. eds. (2013). The triple bottom line: Does it all add up. Routledge.

Jóhannsdóttir, G. and Jónasson, J.T. (2014). External and internal influences on the development of Icelandic higher education. Nordic Studies in Education, (03), pp.153-171.

Lee, J.E. and Burton, D. (2015), January.External and Internal Influences on Human Capital Acquisition Strategy and Implementation.In Academy of Management Proceedings (Vol. 2015, No. 1, p. 18080).Academy of Management.

Magretta, J. (2013). Understanding Michael Porter: The essential guide to competition and strategy. Harvard business press.

Mavimbela, R. and Dube, E. (2016). Can an Internet Adoption Framework be Developed for SMEs in South Africa. Journal of Entrepreneurship and Innovation in Emerging Economies, p.2393957516647250.

McChesney, R.W. (2015). Rich media, poor democracy: Communication politics in dubious times. New Press, The.

Onat, N.C., Kucukvar, M. and Tatari, O. (2014).Integrating triple bottom line input–output analysis into life cycle sustainability assessment framework: the case for US buildings. The International Journal of Life Cycle Assessment, 19(8), pp.1488-1505.

Taddei, F., Bellato, S., Del Frate, V., Gazza, L., Ciccoritti, R. and Sgrulletta, D. (2014). Genetic, environmental and technological factors affecting starch components in rice. In X National Congress of Food Chemistry.6th-10th July 2014 Florence (Italy). (pp. p-88).

Titus, S.W., Mburu, T.K., Korir, J. and Muathe, S. (2013).The Relationship between Technological Factors and Inter-Organizational Information Systems Adoption by Universities in Kenya. Engineering International, 1(1), pp.49-61.