Global business environment has the exposure to various threats because of its being open to all the borders. It actually comprises of all global markets of goods and services. There is a free entry and exit of all the buyers and sellers from all the countries for all kinds of transactions here. The free entry doesn’t mean the practical presence of the traders. All can have the access in its deals and transactions through internet and through various automated trading systems.
Types of threats to global business environment
For global business environment there are two types of threats. One is the internal threat that sprouts from within its various sectors and the procedural mechanism. Other one is the external threat that pertains to its external factors. Both are controllable because every kind of environment has certain threats. If someone dreams to survive without threats it means he/she doesn’t want risk. We all know without risk means no hope of huge gains. In business environment risk must be there if it is really meant for the profit.
One of the main internal threats to the business environment is any unusual development inside it. If there is a migration of huge number of workforce from it to any specific country it would entirely disturb the manpower composition of the global business environment. As a result, there may be a crisis-like situation in the global labor markets. Wages would move higher. Ultimately cost of production would rise. Eventually the cost of goods sold would move up. The end result of this development would be global inflation.
Another internal threat to the global business environment is supply shock. What is supply shock? If there is an abnormal fluctuation in the supply line of the goods and services in the international markets it is called the supply crisis. It may be owing to the disturbance in supply routes. Mostly supply routes are sea routes. Because of erratic weather these routes may not work for quite a long time. As a result supply would remain under pressure during these days.
War in a region
In external threats a lengthy war in a region can be called the biggest threat. In oil producing region if a war conflict persists for a longer period of time it would directly hit the global oil markets. Supply would remain below its normal level during this period. As a result consumer-countries have to adjust with the limited supply. Obviously demand would rise and buyers would be ready to buy at higher prices than the normal ones. Here again the oil prices would move up at the local level in the non-oil producing countries. Oil is the main raw material of every manufacturing process so there would be a general inflation in every country.
So these are a few of main threats to global business environment. Do you think these are enough or I have missed any important of them? If I did, I would love to know about it in your comments given below.Do You Like This Post?