International Business Environment and the UK Banking Industry
Table of Contents
Tendencies in the British Global Economy
Key Factors within the International Business Environment
Political and Legal Factors
Economic Factors
Social Factors
Technological Factors
Conclusion
Tendencies in the British Global Economy
International business activity is an integral part of the modern global economy. Numerous industries are venturing abroad in today’s world in response to the process of globalization, including the banking industry (Harrison, 2011). It includes assessing the alternative entry modes, evaluating the degree of risks and defining the overall suitability of the business environment in the potential locations (Harrison, 2011). This essay includes the most recent tendencies in the global economy and regards political, economic, social, technological, and legal factors that have a significant influence on the British banking industry in the international business environment.
The UK banking sector is constantly developing to meet the expectations of the changing business environment and strengthen the country’s economy. There are several motives which affect the industry’s decision to overtake a leading role in the international business environment. They include business growth, profit-making opportunities, competitive advantage, and international reputation, according to Harrison (2011). The most prominent tendencies of the international business environment are to reduce trade barriers, introduce technological developments into business, achieve and maintain peace and stability, support emerging regions and streamline the economic growth across countries (Harrison, 2011). The UK banks reported total cross-border lending which was worth $4.5 trillion by the end of Q1 2016 (Koch, 2016). They ranked first among all other banks that are situated in BIS reporting countries, followed by the Japanese banks ($3.4 trillion) and the US banks ($3.1 trillion) (Koch, 2016). At the same time, Great Britain was the second largest recipient of cross-border bank credit with a total of $3.8 trillion (Koch, 2016). Only the United States achieved higher results ($4.8 trillion) (Koch, 2016). Among all cross-border claims on Great Britain, the interbank claims made up almost two thirds, and the claims on related banks accounting made up approximately one third of the interbank positions (Koch, 2016). The UK banking industry is rapidly developing and has opportunities to strengthen its leader positions in the international business environment.
Key Factors within the International Business Environment
The British banking sector is influenced by five major key factors, such as political, economic, social, technological, environmental and legal factors within the international business environment.
Political and Legal Factors
To assess the general political situation in the United Kingdom that has a major impact on its banking industry, its political system and institutions should be analyzed, as well as major legal policies. This data is constantly changing, so it is crucial to obtain the latest information, investigating the long-run trends to state how the sector is progressing over time (Harrison, 2011). The UK banking sector is challenged by a constant political interference, limiting structural power to the automatic adjustment of …
