Management in Global Business Environment. Management Research Paper

Management in Global Business Environment
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Management in Global Business Environment
Undoubtedly, globalization has brought significant changes in the way companies do business. Unlike some years ago, it is now easier to do business abroad and most organizations are increasingly seeking to set shop in other countries. The major push factors for the new development include access to cheaper labor, raw materials, and new market opportunities. Factors such as flexible tariffs, business-friendly government regulations, and the high population of the host country drive the impetus (Whittle, 2017). In other words, companies that move to other countries hope to exploit the opportunities and generate more profits by significantly reducing the cost of doing business
Problem Statement
Nike is a manufacturer of sports apparel and is based in Oregon, United States. Sometime in the 1980s, the management of the company saw a need to set a production line in China, Asia buoyed by globalization (Whittle, 2017). Like other countries that source production overseas, Nike was looking for cheaper labor and shipping costs as it was expensive to do business in the United States. Besides, China’s central and strategic location would help the company to quickly ship its products. While Nike succeeded with its business model of outsourcing production in China, human activists and industry regulators heavily criticized the unfavorable working conditions. Independent reports by Nike later revealed that managers in China had falsified documents, employed underage workers and did not pay suppliers, which critically hurt the company’s reputation and profits (Bies & Greenberg, 2017). In light of these challenges, this paper uses PEST analysis to review China’s market environment and suggests alternative solutions that Nike could use to resolve the issue.
Review of China’s Market Environment
China has a relatively stable political environment that encourages investment. The government imposes cheaper and flexible tariffs for foreign companies, which sways investors. As an emerging economy, China provides numerous market opportunities (Hamilton &Webster, 2018). Besides, the population means a ready market. Perhaps its socio-cultural aspects affect its constant demographic variations. For example, China has a fluctuating population distribution, which can negatively impact the consumer trends as size of a household and social behaviors influence decision making (Wang, 2019). Additional social factors include education, consumer lifestyles, emigration, and religion. Based on Hofstede’s value aspect, China’s culture is collectivist. About 90% of China’s population is literate. With an active 420 million internet users, most Chinese citizens shop online (Hamilton &Webster, 2018). The trend promotes e-commerce.
A primary technological problem in China is that the Business-to-Consumer (B2C) industry is unsafe and often lacks a predictable online payment platform. The problem gets even worse since Chinese buyers have a more excellent Long-Term Orientation and Uncertainty Avoidance Level (Wang, 2019). Chinese buyers do not prefer to use credit...