Question

Give examples of new theoretical concepts and innovative approaches in business connected with

1) Globalization

2) Political and legal environments

3) Economic environments

4) Informal institutions: cultural, social and ethical

5) International trade

6) Foreign direct investment

Answer 1

1. Globalization – the economy is driving global growth by maintaining connection between different countries. The new theoretical concepts and innovative approaches in the business are related with globalization. In today scenario, markets of different countries use new models and chief sources of growth and promote the main sector like manufacturing, services, industries etc. all over the world.

The innovative changes in globalization policy connect the businesses and traders which lead to regulation of free global market. This also increases the potential of the industries and firms to provide best to the customers. And customers also get large options to make better choice.

2. Political and legal environments - the new innovations in political and legal policies also helps to promote democracy in the economy. It is a combination of a lot of factors such as politicization power, government and legal support of industry and trade, government policies, legal framework etc. which shows the public attitude towards the business.

3. Economic environment – This point refers to the external economic factors which affects the business working. Now a days the major focus of the business in profitability and productivity which contributes in economy GDP. Both large and small firms examine the economic environment like interest rates, tax rate, incomes, etc. for the smooth working of the business.

4. Social and cultural aspects - The informal environment like social and cultural aspects is important to analyses according to the new innovations for business. The socio-cultural context includes the physical and social setting of the society and informal interaction between the businesses and traders. The factors like busing habits, consumption, traditions, tastes and preferences etc. which are the basic strategy for businesses.   

5. International trade – the international trade refers to the trade between different countries for which to rise in living standard of those countries and also provides employment. The customers also get variety of choices and businesses also get various opportunities to start business in different segment. In the recent years, international trade is an important factor for the growth of economy’s exports and imports.

6. Foreign direct investment – foreign direct investment is important for developing and developed countries. New innovations lead to change in investment policies in foreign. The businesses can finance and invest the funds by foreign direct investment. This helps in expanding the businesses and improving infrastructure of the economies.