Contemporary Business Environmentt IntroductionInternational organisations and bodies such as the World Trade Organisation (WTO) and the European Union (EU) play important role in the continued development of global business opportunities. This paper would therefore crucially appraise the role played by multilateral bodies such as the EU and the WTO in creating a more globalised economic environment. Further, it has also been seen that marketing managers in transnational corporations also play a major role in the development of the organisation and are often faced with various constrains while operating in the contemporary business environment.
The paper would also examine and analyse the role of foreign direct investment (FDI) and multi-national corporations (MNCs) within the context of international business growth. It would also reflect upon and analyse the key issues associated with the continuing process of European Union (EU) economic and political integration. Also, the paper would critically evaluate the main opportunities and threats evident within the global business environment, and examine how organisations may respond strategically to such challenges. Multilateral bodies and globalised economic environmentMultilateral bodies such as the WTO and EU play important roles in today’s globalised economic environment.
These organisations are seen as the watchdog of the economic scenario, especially post the recent economic recession. These organisations ensure that free and fair trade and commerce is being undertaken between the countries in the world, without the interest of any one country suffering due to local policies and biasness by the local government. With the establishment of multilateral bodies like WTO and EU, countries have been able to find a common platform wherein they can raise their concerns and help in formulating policies that would be beneficial for all.
Before the formulation of such a body, mostly trade used to be conducted on mutual cooperation between the two countries, which often resulted in the weaker country being manipulated by the stronger one. However, with the formation of WTO such concerns could be easily mitigated as a common policy could be formulated to safeguard the interest of one and all. Similar to that of WTO, many regional organisations are also formulated to safeguard and promote trade and commerce in the selected region. Some of the examples of such regional organisations are the EU and the ASEAN, which looks after the trade interest in the European and Asian regions, respectively (Bello 2003).
The US has been playing a major role in the promotion of free trade since the mid-1930s. In order to achieve greater success in terms of globalising the trade practices, the US led 23 nations to enter into a General Agreement on Tariffs and Trade (GATT) in 1948, wherein the signatories committed that they would reduce trade barriers among them to facilitate smooth business transactions.
Further rounds of trade talks resulted in reduction of tariff levels and with the eighth round of talk, also known as the Uruguay round, countries started paying attention to the policy of NTB or reduction of non-tariff barriers. Most NTBs generally focus on various government policies which impede imports, while promoting exports from the country. Some of the instances of NTBs are health safety and environmental regulations imposed by government, quotas and policies related to procurement that favours domestic industries. Most of these trade barriers are often intentionally placed for restricting trade and putting more burdens on the foreign companies, and helping to promote the domestic industries.
Therefore, by the end of the Uruguay round of trade negotiations, an important achievement was accomplished, with the formation of the World Trade Organisation or WTO in 1995, which was seen as a successor to the GATT. WTO was seen as an organisation that would strengthen the GATT, while preventing the creation of national standards that eventually result in putting barriers to international trade (Chang 2003).