Impact of Current Affairs on Business Environment

Subject: Impact of Business Issues
Pages: 6
Words: 1650
Reading time:
6 min
Study level: Bachelor

Introduction

The modern world passes through a difficult period characterized by the strong influence of several factors. First, the Covid-19 pandemic affects all spheres of human lives and activities. People have to adapt to new conditions and follow guidelines to avoid further deterioration of the problem. Second, global intercourse is also complicated by political relations and other factors that affect companies. For this reason, the existing business environment also enters a phase characterized by significant changes and the need to adapt to new conditions. Thus, the given paper is focused on the analysis of how the current affairs influence the business environment and precondition the emergence of new strategies and methods of how to survive and avoid critical deterioration of the situation. The analysis will be performed from the social, economic, and health perspectives and theories. The influence of these factors on populations and the business environment will be discussed to outline the most significant changes that can be observed today.

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Background

The scope of the idea of business environment is evidenced by the fact that it presupposes several factors. In general, it can be determined as all factors affecting the work of a particular company at the moment (Panetta, 2020). It includes customers, competitors, social, political, and cultural conditions, the nature, and the state of communities. For this reason, the business environment can be viewed as a changeable factor that depends on the current state of the world and dominant forces. Today, the global challenges impact all aspects mentioned above and precondition the radical changes in the business environment, meaning that companies have to elaborate new strategies to survive and consider all stressors. At the same time, firms should also engage in activities affecting the business environment and cultivating the positive changes needed to generate a competitive advantage.

Pandemic

The Covid-19 pandemic is the most important current affair influencing the business environment and preconditioning the emergence of radical changes in the functioning of companies. The major problem is that the pandemic affects most factors associated with the business environment, such as customers, employees, partners, governments, and communities (Donthu and Gustafsson, 2020). The need to stop the further spread of the virus preconditions the introduction and acceptance of severe measures and limits on the functioning of appropriate types of business (Donthu and Gustafsson, 2020). The government regulations and specific measures to support businesses that suffer from the pandemic most of all should also be viewed as an issue impacting the business environment and changing the work of companies. Under these conditions, the existing conditions continue to alter, which preconditions the emergence and increased popularity of new types of business, technologies, and new ways to generate a competitive advantage.

Distancing

The demand to avoid direct contact and observe social distancing is one of the major changes affecting business, especially companies working in the service sphere. The current recommendations state that the virus’s spread can be stopped by avoiding mass meetings and contacts (Donthu and Gustafsson, 2020). For companies, it means that employees and clients should be coordinated in new ways, minimizing the threat. For this reason, the modern business environment is characterized by strict measures used to ensure the needed space and enhanced security measures regarding infection control (Donthu and Gustafsson, 2020). Organizations employ new strategies to continue their functioning and generate revenues in terms of lockdowns and the reduction in the number of clients (Donthu and Gustafsson, 2020). The given change in the conditions also means that firms devote more attention to online cooperation and using technologies. That is why the existing business environment becomes more digitalized, which can also be viewed as the result of existing issues.

Employees

Employees are another critical aspect that impacts the functioning of every company. Effective management, delegation, and organization of the work process are central to generating a competitive advantage. Today, the impact of the pandemic, diversification of workers’ needs, and the demand to provide equal opportunities to all specialists influence the work of all companies regardless of the industry. For this reason, the existing business environment is characterized by the focus on the creation of chances for distance working to avoid contacts and with opportunities for the following career growth (Donthu and Gustafsson, 2020). Moreover, it is expected that with the end of pandemics, online forms of working will remain relevant, and companies will benefit from it as it helps to reduce costs of office rent and attain higher performance levels from employees (COVID-19: implications for business, 2021). In such a way, the current affairs promote the short and long-term effects on factors forming the business environment.

Delivery Services

Another aspect that should be mentioned is the change in supply chains and the delivery of products to clients. The previous forms become replaced with new ones presupposing the minimal contact between a seller and a customer (COVID-19: implications for business, 2021). One of the factors promoting this change is the Covid-19 pandemic and World Health Organization recommendation (COVID-19: implications for business, 2021). However, the increasing demands to the comfort peculiar to clients increased the speed of this shift and made it one of the major features of the current business environment. Delivery companies benefit from about a 90% increase in purchases presupposing the transportation of products to clients’ homes (COVID-19: implications for business, 2021). Additionally, about 60% of businesses introduced new delivery services to meet clients’ needs and avoid critical deterioration in their functioning (Panetta, 2020). This change becomes one of the major factors shaping the existing working environment and the functioning of companies belonging to various industries.

Technology

As stated previously, the modern business environment can also be described as digitalized one. First of all, it is achieved by the high speed of technological development that can be seen today. The spread of the Internet and devices guaranteeing access to it change most companies and make them increase their online presence (Panetta, 2020). At the same time, the pandemic also promotes higher levels of digitalization and computerization as many employees work from home and demand various devices to boost their performance (COVID-19: implications for business, 2021). Under these conditions, the combination of social, health, and technological issues cultivates the radical change in the existing business environment as it becomes more focused on the extensive employment of devices benefits associated with them. Today, multiple companies survive mainly due to online options available to them.

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Communities

The change in communities is another factor shaping the business world and environment. The social theory states that the alteration in people’s demands and interests preconditions the change in all spheres, meaning that the companies also adapt to these new conditions (Panetta, 2020). Thus, the pandemic and the focus on tolerance trigger new forms of cooperation with clients and specialists. Communities offer new demands to companies’ work and make them devote more attention to sustainability and support of populations during the hard times. For this reason, the modern business environment is characterized by the increased importance of the community factor and the need to cultivate positive relations with representatives of groups affected by the work of a particular firm (Panetta, 2020). Moreover, in the majority of cases, the requirements peculiar to a local community impact the work of the company, the choice of strategies, and the choice of goods. For this reason, the given issue critically affects the business environment.

Global Economy

The global economy is another critically important factor influencing the work of companies and their business environment. Today a crisis can be observed because of the new conditions affecting the firms. The pandemic changed all industries and preconditioned the decrease in the level of income. For instance, the civil aviation sphere became one of the spheres that suffered most of all because of the reduction in the level of flights, passengers and the need to establish protective measures (Panetta, 2020). Other global industries also suffered from the pandemic and entered a period of crisis. Under these conditions, the business environment is characterized by the need to consider the reduction in income and decreased buying capacity of clients (Panetta, 2020). The scope of the given change is significant and demands specific attention.

Environmental Concerns

Finally, the list of modern affairs influencing the business environment includes climate and environmental concerns. The gradually deteriorating conditions and the constantly growing pollution levels demand companies to alter their work to minimize the harm done to the environment and engage in recycling and green practices (Panetta, 2020). Today, some regulations and limits affect the work of organizations to ensure that they promote the improvement of the general conditions. The companies have in-depth sustainability strategies and are focused on cooperation with communities to cultivate green practices and ensure they are practical enough to stop the further deterioration of the situation. The collaborative effort of multiple companies and the involvement of various stakeholders is a trend affecting the work of organizations and their plans for the future (Panetta, 2020). At the same time, some business, become less profitable because of communities focus on green technologies, while other grow as they meet people’s demands. For this reason, the business environment alters to meet the new requirements and needs.

Conclusion

Altogether, it is possible to state that the business environment is extremely sensitive to changes in existing affairs and issues. The modern complex conditions, such as the pandemic, affect the communities, employees, customers, governments, and other factors critical for the work of companies. For this reason, companies have to adapt to new conditions and consider the new forces affecting them and their customers. The existing business environment demonstrates some critical changes triggered by the global forces impacting various organizations. However, it should be viewed as a normal process as conditions always change, and the ability to predict these alterations can help to generate a competitive advantage. The existing stage is preconditioned by the strong effect of various issues and their resolution will precondition new alterations.

References

COVID-19: implications for business (2021). Web.

Donthu, N. and Gustafsson, A. (2020) ‘Effects of COVID-19 on business and research’, Journal of Business Research, 117, pp. 284-289. Web.

Panetta, K. (2020) 7 macro factors that will shape the 2020s. Web.

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