GLOBAL BUSINESS ENVIRONMENT

Global Business Environment

Global Business Environment

Introduction

The GDP, or Gross Domestic Product, is one of the major economic keys of assessing the dimensions of a country's economy. The general delineation of GDP of a homeland is the total market worth of all last items and services made in a granted time span of time (usually in a calendar year).

Gross Domestic Product (GDP) is characterised by John (1999) as the total market worth of all the last goods and services made inside a nation's borders in a granted time period. Each goods and services made and conveyed in the market has a price. The cost of the total yield is called as GDP. It can be measured by either cumulating all the earnings acquired in the finances or all the spending in the finances and both measures should approximately equate to the same total. Real GDP is the total GDP has been adjusted to eliminate the effects of inflation. This allows one to contrast GDP figures and changes from one homeland to another other time and thus evaluates what a country's finances is really worth in terms of specific year's merchandise prices. (Wolf 2003)

In nowadays, real GDP is broadly used by policymakers, economists, worldwide agencies and the newspapers as the prime scorecard of a nation's financial wellbeing and well-being. People accept as factual that the standard of dwelling is closely joined to the real GDP. This usually signifies that the finances is wealthier and making more, individuals are better off, and that dwelling standards are higher. However, persons more lately contend that real GDP in certain circumstances could not completely represent people's standard of living. In this essay, I am going to analyze the extents in minutia by investigating the real GDP from distinct perspectives. However, the essay will mostly address the limitation of real GDP to show that real GDP could not represent the correct worth of the economy; thus it may not amply measure the standard of living. (Morrison 2000)1.Identify and analyse the key factors driving business toward global operations and the implications for managerial practices and organisational change.

Globalization is the increasing integration of economies around the world, particularly through trade or financial flows. Globalization includes the practice of operating businesses in foreign countries. Over time, this practice has become more common due to technological advances and decreased trade barriers. Globalization permits businesses to reach much larger markets. Globalization allows businesses access to more capital flows, technology, cheaper imports, and larger export markets. While globalization brings about many great opportunities, it also carries the burden of increased financial risk(Wolf:2003).

One of the biggest financial risks of operating in foreign markets is the exchange rate. The foreign exchange rate is the rate of currency exchange, meaning one country's currency is traded for another's. The foreign exchange rate is expressed in two ways. Most commonly, it is expressed in the amount of currency required to buy one U.S. dollar. Or it can be expressed conversely, by how much a ...