Brexit the term that stands as the abbreviation of British exit refers the decision of UK during June 2016 to exit the European Union. The election that was conducted for taking decision regarding brexit surprised the pollsters and the international market at the same time and lead to the fall of British pound to the lowest against dollar in last 30 years. This also caused to the resignation of Prime Minister David Cameron in July who campaigned in favour of Britain and influenced for not leaving EU (Cumming and Zahra 2016). As per the outcome of the election 51.9% voter or 17.4 million voters voted for leaving EU and only 48.1% or 16.1 million people voted against leaving EU. Further, the result revealed that 53.4% among the English voters were in favour of Brexit as compared to the Scottish voters that counted as only 38%. The reason behind this was that the majority of population Of UK are from England. People who voted against Brexit gave various reasons. One of the major reason was the risk involved with the the procedure of decision-making regarding leaving the EU, as it is the largest export destination for UK. Another reason was that the societal and economic benefits that were arising from the four freedoms that is the free movements of people, capital, services and goods (Davies 2016).
The decision of UK for leaving EU has changed the business environment and they must prioritise various areas to conduct the functions of business. While it is expected that the role of global social responsibilities can survive the impact of brexit, it is predicted that sustainability is one of the hardest procurement to be achieved. Implementation of successful policies for social responsibilities is a tough job at times and become harder when the situation is combined with the circumstances of uncertainty that is associated with the approaching policies of EU (Miller, 2016). The businesses that are heavily dependent upon the trading of EU will definitely face difficult position as the people will have to guess about the negotiation that will be done by UK government. Moreover, the procurement of fundamental characteristics will more likely to become a challenge. Hiring of employees from EU and ordering goods from EU-based suppliers will create problems. Therefore, the procurement activities required to be taken in detail basis for the dealers and their responsibilities with the supply chain (Oliver 2013).
EU is better known for their wide-range rules and regulations that assure that the common practices are mat all over the member countries. The decision of UK for leaving EU will lead to favouring the new and independent rules by the government, which is a key obstacle for implementing social responsibilities. The environmental policies that were adopted by UK as a part of EU will be at risk of compromise and various environmentalists have raised their concerns with regard to the unfavourable outcome of Brexit that will impact the sustainability progress of the supply chain. Apart from the regulations, economic and political risks also are expected to tightening the conduct of business. Although the sustainability aspects are expected to be at the bottom of all the procurement agenda, it is an important fact that it shall not create burden on other functions. Construction of ethical and sustainable business will definitely take time, however, an ill-advised and drastic decision can ruin is in seconds (Ottaviano et al. 2014).
As per the forecast, the pounds are likely to fall by 30%. Moreover, as stated by the Chief European strategist of the Investment bank of UBS, the threats of leaving European Union are much wider as compared to the imagination. Holidaying in foreign nations will be costlier. British’s dependency on imported foods cost more for the manufacturers and consumers of food. However, the fall in the value of sterling have some benefits too and it will make the exports cheaper. Few analysts believe that the exporters from Britain will gain at least for the short-term period and will experience a boom in their business. However, there may be more barriers related to trade through imposing more tariffs. At this moment Brussels implied high tariff for imports in respect of various foods, particularly the beef that are coming from outside EU. This would be eliminated, if the farmers from South America are allowed to compete with the Irish and Domestic beef farmers. This approach of open market without mutual agreements is too much generous to the competitors of UK and the domestic business would be wiped out by the tariff shield (Pollitt 2017).
Earlier, EU had a liberalised and open approach towards the trade policies, in some parts of EU, owing to the influence of UK. Moreover, UK has top-level political weight as compared to other nations with regard to the trade negotiations. Further, EU will be considered as less attractive partner for the trade agreements if UK leaves EU for further deals. Post brexit, the government of both UK and EU are expected to spend several years to negotiate to create a balance among the social, political and economic conditions. The deals for trades and exit policies will more likely to be unprecedented with regard to the complexities and no clear rules and regulations will be there to be followed. For successful conduct of business in global market, the organization must develop some theories and follow the below mentioned principles:
Develop a robust strategy for various circumstances – Planning for the scenario that involves collection of information and analyzing them for expected outcomes will assist to gain more confidence in preparing the course plan. For this purpose, firstly the possible outcomes must be assessed, then the existing elements for the business like critical program, priorities or the value driver must be assessed and all the possible impacts due to the changes must be analysed (Kreindler, Gilbert and Zimbron 2016).
Rethink about the global footprint – the aftershock of brexit offered an opening for launching the searching approaches to analyse the map of the nations where the organization is planning to carry out their business. These exercises will assist in reconsidering the allocation of cost, adjusting the expenses to balance with the international requirements. Assuring access to the global market where the capabilities can assist to stand out, managing the regulations, searching for appropriate labour source and offering the opportunities for innovation will enable them to focus on the strategic objectives (Alfano, Dustmann and Frattini 2016).
Encourage diversity in viewpoint within the business – It is very crucial to address the challenges of carrying out the business in post-brexit scenario. The employees will have to face large extent of views related to the risks associated with the post-brexit approaches and the strategies that must be undertaken by the organization. This diversity in viewpoint must be taken as strength and not as weakness for the enterprise (Lea, 2016). They must engage wide group of trusted employees and managers for developing the action course for conducting business in UK and EU and encourage them to raise question regarding the assumptions and biases. To make the perception of the decision makers with regard to professional backgrounds, knowledge areas, experiences, interests, it is crucial to include the advisors with strong base of intelligence and having diverse knowledge of political engagement, immigration policies, devolution, customer data, industry trend and economic development (Roy and Goudie 2016).
Develop the organization’s international policies – As the global environment is moving, the multinational organizations will have to adopt all the changing and navigating regulations, preference of the consumers, and the cultural background of the local and regional market. If the post-brexit impact insists to move into the international nations that are aligned with the post –brexit features, the organizations will be required to integrate with the government and local society. If the organization is not yet aligned with these abilities, the organization will be required to construct them (Dhingra et al. 2016). They shall use the experience gained from the local market for collections of on-the ground expertises those can assist in designing strategies with minimization of risk. Institution of well-structured corporate policy is an exceptional way to sustain the localization strategies. One crucial aspect of the organization’s international policy is the thoughtful engagement of problems related to Brexit, globalization and trade barriers. The government of Japan and few from the US officials have encouraged the businesses to express their views publicly regarding Brexit, even if it influence them to come out from their comfort zone. This may direct various organizations to take their positions on geopolitical issues and on Brexit before they implement the diplomatic skills (Murphy 2016).
Preparing for further expressions of public establishment – the leaders of business are required to identify the ongoing resentment of the income inequality of public and the generous high dividend and executive pay. The employees of the organization will be worried about the deficits in pension and the expected impact related to economic uncertainty on their wage and job prospects (Butt 2017). The organization must pay specific attention to the attitude of employees with regard to the immigration. The borders will be harder and shifting the people across the border will be tougher with regard to management of the regulations and navigating the opinion of public. If migration of the labour is the part of the organization’s business model, the organization must consider the issues more comprehensively (Hepburn and Teytelboym 2017).
Conclusion:
From the above discussion it can be concluded that Brexit can create potential risk or opportunities for both EU as well as UK. The opening of Britain is to sharply move towards the direction of sustainability and mention the probable misconception for their economy that led the gross inequalities. Through implementing all the above mentioned steps the organization can maintain the health of their business while taking care of the social and political issues that has been raised by the voters of Brexit. A procedure like this can catalyze growth and innovation even in the middle of commotion. The organization will get new knowledge regarding strength of the business and will be able to identify the capabilities, distinctive identity and the dedication of the employees. The business will be aligned with the power of evolution that is appeared to be taking place in various nations. One of the short-term surprising outcomes of Brexit is the high level of connections among the government, citizens, environment, society and business at large. However, various factors associated with UK’s exit from EU are yet to be implemented. For example, Scotland has major votes in against of leave. And they will hold their own referendum to establish their future place among UK and EU. Further, the case of Northern Ireland also the situation is same like Scotland.
Reference:
Alfano, M., Dustmann, C. and Frattini, T., 2016. Immigration and the UK: Reflections After Brexit. Refugees and Economic Migrants, p.55.
Butt, L., 2017. Cheaponomics: The High Cost of Low Prices Michael Carolan Routledge, Abingdon, UK, 2014. Australian Journal of Environmental Education, 33(1), pp.50-53.
Cumming, D.J. and Zahra, S.A., 2016. International Business and Entrepreneurship Implications of Brexit. British Journal of Management, 27(4), pp.687-692.
Davies, J., 2016. Are business school deans doomed? 2008, Brexit and all that. Journal of Management Development, 35(7), pp.1-16.
Dhingra, S., Ottaviano, G.I., Sampson, T. and Reenen, J.V., 2016. The consequences of Brexit for UK trade and living standards.
Hepburn, C. and Teytelboym, A., 2017. Climate change policy after Brexit. Oxford Review of Economic Policy, 33(suppl_1), pp.S144-S154.
Kreindler, R., Gilbert, P. and Zimbron, R., 2016. Impact of Brexit on UK Competition Litigation and Arbitration. Journal of International Arbitration, 33(4), pp.521-540.
Lea, R., 2016. The UK economy: encouraging signs but treat them cautiously.
Miller, V., 2016. Brexit: impact across policy areas.
Murphy, P., 2016. Public Sector Focus Article The devil in the detail of Brexit starts to emerge Pete Murphy and Russ Glennon Nottingham Business School.
Oliver, T., 2013. Europe without Britain: assessing the Impact on the European Union of a British Withdrawal.
Ottaviano, G.I., Pessoa, J.P., Sampson, T. and Van Reenen, J., 2014. The costs and benefits of leaving the EU.
Pollitt, M.G., 2017. The Economic Consequences of Brexit: Energy.
Roy, G. and Goudie, A., 2016. Brexit-What Next for Scotland’s Strategy.
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