Global Business Environment


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Global business environment is the set of external and internal factors that may affect the operational efficiency of a company. It is very important for the organisations to formulate effective strategies so that all the factors may dealt effectively. Virgin Atlantic is an airline company which is currently operating its business in UK. It is very important for the business entity to analyse its external environment which is possible with the help of PESTLE analysis. It is the set of five different factors that are political that are mainly related to government's rules regulations and policies. It may affect organisational operations as it is not easy to implement governmental strategies frequently. Economical factors are related to the purchasing power of customers and inflation and deflation rates that affect the market rates and buying capacity of customers. Social factors depends upon the taste, preferences, age, paying capacity and education level of customers that are continuously affecting business of Virgin Atlantic as their taste and preferences changes with time. Technological forces like emerging market trends and introduction of new technologies in the market also affect the business activities because all the customers are becoming technology friendly and they are willing to be the part of such companies who are adopting new and innovative techniques in their business operations (Ferraro and Briody, 2013). Legal factors are related to the interference of government or legal authorities in the business operations as Virgin Atlantic is an airline company hence it is very important for the organisation to keep idea of such type of forces so that business can be operated smoothly. Environmental factors are the part of environment related laws in which Virgin Atlantic is directed to follow all of them as it is essential to execute the business. All these factors are affecting business of Virgin Atlantic directly and indirectly.

Government policies, rules and regulations affect the organisational structure and operations as if the government impose any new rule related to the employee size in which government have decided a specific employee limit than organisation have to change the structure according to the policy. For example if organisation is having 100 employees and following line structure and government implement a policy in which organisations have to keep at least 200 employees than it will affect organisational structure as now organisation will use another structure. The changes in the number of employees will affect the organisational operations and cost for the training will also get increased.

Changes in Business environment of Virgin Atlantic have also affected the operations and its activities because all the external and internal factors affect the operations. Changes in the environment has impacted the operational efficiency of Virgin Atlantic because now the organisation have to change the policies according to the environment and the forces that are affecting business from outside as well as inside. Operational activities of the company also get affected due to the changes because external factors like customers preferences, inflation rate and purchasing power will also get affected due to the changes (Popescu, 2013).


Books and Journals:

  • Ferraro, G. P. and Briody, E. K., 2013. The cultural dimension of global business. Upper Saddle River: Pearson.
  • Popescu, G. H., 2013. Macroeconomics, effective leadership, and the global business environment. Contemporary Readings in Law and Social Justice. 5(2). p.170.
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