International Business: Political Hazardous Situation Essay

Question:

Describe about the International Business for Political Hazardous Situation.

Answer:

Background of the selected organization:

Recent political hazardous situation has influenced one of the powerful economies of the world UK to leave the European Union. As a result, it has created a major hara-kiri in overall business procedures of all the major organizations dealing in different sectors. It has also influenced organizations to implement several strategic changes in order to maintain their business at the optimum level. In this study, the focus will be on the business processes of British Petroleum (BP) after UK leaving European Union. It has been assessed that oil and gas is among the prime sectors that are facing major challenges in the proper execution of the operational process for fulfilling the requirements of the market. Now, British Petroleum is the prime organization in UK dealing in the oil and gas sector (bp.com 2016). Therefore, it is expected that the evaluation of the strategies implemented by British Petroleum for countering present political hazardous situation will provide a guideline for other organizations dealing in the same sector for handling their business procedure in an appropriate manner. Furthermore, many recent news reports has highlighted the fact that Brexit has induced BP to make major changes in the operational procedure in order to achieve sustainable growth in the market.

Impact of UK exit from European Union on the international business perspective of British Petroleum:

As highlighted by Kar, Bansal and Mishra (2016.) UK has been separated from the European Union based on public opinion of the British people. However, the exit of UK from European Union has created major impact on the overall economic condition of the country. Firstly, Brexit has increased the level of uncertainty that UK has to face on the economic growth perspectives. As per the article by Coles (2016), Brexit has created major impact on several factors that play critical role on maintaining the economic condition of the economy. It has been assessed that Brexit has enhanced the friction between international trading partners and UK. As a result, it has increased the level of uncertainty that prime organizations have to face for the future access of the European market. Therefore, it has influenced organizations to hold their planned investment structure for specific time period. Now, global businesses are hugely interconnected with each other that have created major impact on the overall economic growth process to slow down in a major way. As a result, BP also has restricted some major investments for specific time period, which is expected to damage the growth rate of the organization in UK and European market.

As Brexit has induced unexpected slowdown in the economic activity of UK, it has also created major adverse impact on the value of British Pound. As highlighted by Mitchell (2016) decreasing value of British pound induces major organizations like British Petroleum to investment more on the effective fulfilment of all the requirements of the operational process. Therefore, it has created adverse impact on the overall revenue level of the organization. For that reason, BP has tried to reduce the amount of benefits provided to all level of employees in order to maintain the profit level at the expected rate. As a result, it has also created huge amount adverse impact on the overall internal environment of the organization. However, Lea (2016) have highlighted that the impact of Brexit is not only restricted between the geographical boundaries of UK. It has also created major impact on the investment pattern of the foreign investors in UK market. It has been evaluated that the foreign investment rate has been dropped to 5% after UK has been separated from European Union. Therefore, it has also created adverse impact on the operational processes of BP for fulfilling all the requirements in an appropriate way.

Identification of strategies implemented by British Petroleum in response to economic slowdown:

As per the article by Busch and Matthes (2016), proper utilization of strategic decisions is necessary for achieving sustainable growth in the market. Specifically, in the politically complex situation significance of organization strategy is huge for fulfilling all the requirements in an appropriate way. Now, in order to counter the economic slowdown process BP has tried to utilize systematic procedure so that it can able to create maximum impact on the business perspective. Firstly, BP has focuses on to developing business strategies for convincing the foreign investors to invest continuously on the operational process. Therefore, British Petroleum has tried to utilized goodwill of the organization for inducing investors from different parts of the world to invest more on the operational process (Parkes 2016). BP has also tried to develop face-to-face meetings with the potential investors for providing them the idea regarding the kind of benefit they will receive by investing in the operational process of the organization.

As mentioned earlier, Brexit has reduced the value of British pound, which eventually created adverse impact on the overall revenue of the organization. Therefore, BP has focused developing strategies so that it can create positive impact on the overall effectiveness of the operational process (Lang and Schoen 2016). For instance, BP will try to reduce cost associated with international market strategies. Several studies have highlighted that BP tries to utilize effective market survey technique in order to create maximum amount of impact on the market. However, it has increased the overall cost associated with the marketing procedure that eventually reduces the profit level of the organization. Therefore, BP has focuses on the effective utilization of promotional campaign so that it can able to fulfil all the objectives. Implemented strategies of BP focused more on utilizing social media platforms to reach to the potential customers. Several studies have mentioned that social media is probably the most cost effective promotional tool that organization can choose utilize for achieving sustainable growth in the market. It also has tried to utilize direct marketing campaign for reaching to the target customers in an appropriate way (Lea 2016). Furthermore, BP has to invest huge amount of the effective logistic and transport department so that the products of the organization reach to the desired destination. However, the present situation has induced BP to consider different alternative strategies so that the cost associated with the logistic operational process can be recovered in an appropriate manner. Therefore, BP has tried to reduce the maintenance cost associated with logistics and operational process in an appropriate manner.

After the exit of UK from European Union, BP has faced huge amount of challenges in providing products to all parts of the Europe. As the separation of UK from the European Union has created different types of legislative rules and regulations for the organizations for conducting the business, BP has tried to develop strategies in such a way so that it can able to fulfil all the requirements in an appropriate manner (Dhingra 2016). For instance, BP’s strategy focuses on to include several legislative guidelines regarding both internal and external environment of the business in an effective way. BP’s internal strategy focuses on to reducing the dissatisfaction level of the employees so that they can able to give their best at the workplace. The implemented strategy of BP has tried to provide certain level of benefits to the employees regardless of the present profit level (Cauwels and Sornette 2015). For instance, the organization has made conscious effort in maintaining the provided health benefits to all the employees so that positive work environment can be maintained in future as well. BP has also tried to implemented effective leadership style for encouraging employees to give their best at the workplace (SERBIA 2016). For instance, the management of BP has consciously tried to utilize opinion of the employees at the time of implementing any changes in the operational procedure. BP has also focuses on to provide effective training facilities to the employees so that they can able to adjust with the changing operational procedure in an effective manner.

Evaluation of the implemented strategies by BP in response to economic slowdown:

The above-mentioned strategies of BP have provided specific assistance in countering the economic slowdown situation in an appropriate manner. For instance, implemented strategies of BP for convincing foreign stakeholders have helped to handle all the requirements of the operational process in an appropriate manner. However, in order to induce foreign investors, BP has to utilize different strategies like face-to-face conversation, utilization brand value in an effective manner (Colantone and Stanig 2016). As a result, BP has to develop a separate team so that they can able to convince all the prime foreign investors to invest continuously in the operational process of the organization. Economic slowdown has induced organizations to provide more benefits to the foreign investors for inducing them to make effective investment in the operational procedure (Zangana 2016). As a result, it has reduced profit level of the organization in a major way. Thus, it highlighted the fact that investor management strategy of BP has created mixed impact on the business level of the organization.

Secondly, BP has tried to implement effective marketing campaign so that it can able to provide effective support to the organization. Therefore, the implemented marketing strategy of BP is more focused towards the cost effectiveness. However, cost effective marketing strategy of BP might not able to create desired amount of impact on reaching to the target market in an appropriate way (Gifford 2016). For instance, BP has tried to utilize social media platform for enhancing the popularity level in the market. However, business pattern of BP needs to target prime industrialize organizations to create maximum impact on the business process. Therefore, it can be easily assessed that the marketing campaign of BP also needs to utilize other marketing tools like direct marketing, television advertisements for creating desired impact on the market. Thus, it can be mentioned that BP’s strategy of implementing cost effective marketing technique has not able to create expected impact level on the market, which eventually will create adverse impact on the business processes.

The above discussion has highlighted the fact that the implemented strategies of BP is focused towards reducing the benefit level of the employees for keeping the profit level of the organization at the optimum level. However, BP also has made a conscious effort to make very limited changes in the provided benefit level of the employees so that the healthy working atmosphere of the organization can be mentioned in future as well (Marriott 2014). However, as the organization is looking to reduce the benefit level, it will create adverse impact on the motivation of the employees. Therefore, BP has to handle the entire situation in such a way so that the work culture of the organization remains intact. Therefore, it has increased the significance of the implemented leadership style within the organization structure. Now, BP also has tried to utilize collaborative decision-making strategy for maintaining the entire work environment in an appropriate way. However, Benjamin (2016) has highlighted the fact that utilization of collaborative leadership strategy often reduces the speed of decision-making process in an appropriate manner. Therefore, the implemented leadership style of BP also has to consider the risk of slow decision-making process on the operational sector. In fact, it actually increases the level of expected risk that organization has to face in order to counter the economic slowdown process in an appropriate manner.

Furthermore, implemented strategies of BP also include minimization of costs associated with logistics and operational process. Now, several studies have highlighted effective maintenance of logistics and supply chain management is necessary for the oil and gas sector. Otherwise, it can create major ethical and social challenges for the company to run the business in an appropriate manner (Marquand 2014). Now, reducing cost in the logistic and transport sector can increase health safety risk for the employees working in the respective department. Therefore, if any major accident occurs in the transport process, it will create direct adverse impact on the overall image of the organization. Therefore, the focus organization will face major challenges in maintaining the revenue level of the organization at the expected rate. Furthermore, reducing cost in the logistics process might also create difficulties for the organization to provide products at the desired destination within the limited timeframe (Johnson 2016). Thus, the implemented strategies of BP can have both positive as well as negative impact on the business process of the organization.

Recommendations:

From the above discussion, it can be assessed that the implemented strategies of BP has not able to create desired amount of impact on the operational process of the organization. Therefore, BP needs to re-consider the implemented strategies for enhancing the level of impact on the business processes. The recommended strategies for BP in order to counter impact of Brexit are provided as follows:

Establishment of structured investment pattern for the operational process:

As per the article by Lea (2016) development proper investment structure is necessary for fulfilling all the requirements of the operational process in an appropriate manner. Structured investment pattern not only help organization to provided effective fund at all level of the operational process but also allows organization to segregate the entire profit level in an appropriate way. Now, structured investment pattern requires strong relationship with the investors, as it allows organization to handle difficult situation in an appropriate way. Thus, BP also needs to implement strategies for developing effective and long-term relationship with the investors so that the organization does not have to face crisis of fund at the difficult situations.

Evaluation of future political context and its impact on the oil and gas industry:

As highlighted by Gowland (2016) political issue is the prime cause for the separation of UK from the European Union. Therefore, it is necessary for BP to analyze the present political situations and its expected impact on the business perspective in a continuous manner. Proper evaluation of the political context will help the organization to judge the possible factors that can have impact on the overall effectiveness of the business procedure. For instance, oil and and gas industry is among the prime sector where political environment plays a critical role in fulfilling all the requirements in an appropriate manner. Several political rules regarding crude oil transportation, health benefits of the employees and service security level of the employees has been implemented on the organization. Therefore, it does create direct impact on the overall revenue level of the organization.

Development of supporting model at the workplace:

As highlighted by Radu and Radu (2016) business model plays a significant role in effective management of political and social barriers in an effective manner. Now, the above discussion has highlighted the fact that BP is primarily using collaborative business model for fulfilling all the requirements in an appropriate way. However, the implemented business model has slowed down the decision-making process for the organization. Therefore, it has become necessary for BP to utilize combined business model for fulfilling all the requirements of the operational process. For instance, BP needs to utilize autocratic business model in some situation for increasing the rate of decision-making process. Furthermore, the supportive business model has to be implemented in such a way so that it can reduce the pessimistic approach of the employees in an effective way. Therefore, it will eventually increase effectiveness of the operational process of the organization.

Proper analysis of expected impact of Brexit on the employees:

British Petroleum also needs to have in-depth analysis regarding the impact the Brexit can able to have on the employees. For instance, Brexit often induces organizations to implement changes in the operational procedure. Therefore, employees have to face challenges in order to fulfil the provided responsibilities of the organization. As per the article by Davies and Kirsey (2016) too much changes in the operational procedure reduces the motivational level of the employees that eventually reduces the effectiveness of the operational process. Furthermore, many employees become rigid when organizations focus on to implement too many changes in the operational procedure, which affects the revenue level of the organization. Therefore, proper evaluation of the expected impact of Brexit on the employees will help BP to develop counter strategies in an appropriate way.

Reducing the cost associated with the R&D sector:

As per the article by Radu and Radu (2016), British Petroleum has invested huge amount on the R&D department so that it can able to fulfil the demand of the market. Furthermore, it also utilizes R&D department for enhancing the quality of final products so that it can able to satisfy the customers in an appropriate way. Now, in the present situation BP needs to cuts the cost associated with the operational process, as it will help to maintain the profit level at the expected rate. However, the cost cutting in the R&D sector will have to be implemented in such a way so that it cannot able to create any type of negative impact on the operational process. Furthermore, BP needs to ensure that all the activities in the R&D department has maintained the ethical and environmental guidelines so that it can create positive impact on the goodwill of the organization.

Conclusion:

The study has highlighted the fact that Brexit has created major impact on the overall business procedure of the organization. It not only created number political restrictions but also legislative restrictions as well that organizations need to consider for effective utilization of the business procedure. The study has highlighted that the implemented strategies of British Petroleum and its possible impact on the operational procedure. The study has highlighted both positive and negative aspect of the implemented strategies of British Petroleum for providing effective recommendations to enhance the revenue level in an appropriate way. The study has also provided the best possible way for BP to handle present hazardous political environment in the European Union. The study has recommended that British Petroleum needs to focus on both internal as well as external factors of the businesses in order to handle the challenges of Brexit on the operational processes in an effective way so that it can able to achieve sustainable growth in the European market.

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