Comparative Issues in Contemporary Management Format Essay (Introduction, Body & Conclusion/ Recommendations) Length 3,000 words (excluding appendices) Topic International Project; This will involve...

Comparative Issues in Contemporary Management
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Contents
Introduction ................................................................................................................................. 2
Background of the country .......................................................................................................... 3
Political, Economic, Legal and Technological Factor Analysis ................................................. 5
Examples of MNCs and the influence of environmental factors on these companies ................ 8
Conclusion and recommendations ............................................................................................ 12
References ................................................................................................................................. 13
Introduction
With faster transportation and communication, the world is shrinking day by day. With
globalisation companies are spreading their customer base and penetrating through the untapped
markets. To succeed in setting up international business, the companies conduct country analysis
and develop several global marketing strategies to suit their business needs and respond to the
environmental factors prevailing in the particular country. The companies can strategize to
diversify to newer markets and geographies where it can enhance sales and gain cost advantage
because of cheap labor. To increase sales the company can diversify to a country where retail
industry is booming and people have purchasing power. This will help in meeting the sales
numbers. If it diversifies to a location where it gets pricing flexibility, it will help meet the
revenue target. This in turn would meet the human resources recruitment goals at lower overhead
costs.
The country chosen for the purpose of this assignment is India. There is no doubt in the
fact that India offers great business opportunities to corporations and business owners. The
country has made good progress in several sectors taking in retail, IT, textile, cosmetics,
automobiles, food and beverages and many others. The country has shown great progress in
terms of revenue and growth (Panagariya, 2008). The high growth and profitability prospects
have attracted the attention of several companies and individuals to enter the business world in
India. Further, taking the above discussion into consideration this particular paper attempts to
throw light on how political, legal, technological and economic environment pose an opportunity
or a threat to MNCs planning to enter India. Examples from retail industry, consumer durables
industry and IT industry are used to explain how these factors on influence the MNCs seeking to
enter India.
Background of the country
India has faced a sound GDP growth rate of about 8 percent in the past five years. The
economy of sub-continent is anticipated to carry on its growth drive in the coming years as well.
Powerful domestic demand as well as a burgeoning middle class is anticipated to continue
advancing the Indian economy to new levels in the forecast time period of 2012-2017
(Deshpande, 2013). India is considered as the second-most populous nation within the world and
its huge reserve of human resources is important to the country’s economic growth. Its
augmenting, technically capable work force attracts international players to position facilities
there (Panagariya, 2008). Moreover, the service segment is the chief contributor to the Indian
GDP as well as the prevailing driver for economic development. Industries operating within the
service segment, taking in information technology (IT), telecommunication, apparel and retail
are chief segments which contribute to economic expansion of India (Kalathur, 2009).
However, rate of inflation as well as unemployment that are both greater than planned
continue to remain the chief challenges for the Indian economy. The growing middle class within
urban area of India is likely to aid fuel India’s upcoming economic growth. Economic reform
program and Political cohesion through successive governments like the introduction of FDI
(Foreign Direct Investment) to more sectors, are expected to provide higher growth prospects
(Deshpande, 2013). One chief threat faced by the Indian economy is the political instability. The
Indian economy has high potential however a particular degree of political uncertainty negatively
affects the growth (Panagariya, 2008). So a foreign market that the companies look forward to
enter is India. The reasons for choosing India is manifold. Presently Indian economy is booming
and so the people will be willing and has disposable income to buy quality products. With cheap
labor, price can be lowered. The attractiveness of India as a chosen market to diversify can be
explained by an environmental analysis.
Political, Economic, Legal and Technological Factor Analysis
PESTEL (Political, Economic, Social, Technology, Environmental and Legal) analysis
tool is normally adopted by the management researchers particularly in the sphere of strategic
management (Pearce & Robinson, 2005). PESTEL approach is utilized to analyze the range of
macro-environmental forces which have an impact on the marketplace conditions. This concept
is an effective tool for preliminary analysis (Thompson, 2002). Further, the below sections make
use of PESTEL paradigm to recognize the political, economic, legal, and technological factors
which can have an impact on the development and progress of the Indian economy and Walmart,
in specific.
 Political factors
The political environment of a country is evaluated by analysing the nature and
competence of the government. The level of government intervention and the political factors
shape the business climate in a country. Management needs to identify, assess the political
factors and manage these potential risks for better decision making and strategizing and
operating successfully in the country. There are a number of political factors affecting the Indian
economy. First of all, the coalition government within India holds its own benefits and
drawbacks (Panagariya, 2008). At times the level of drawbacks is higher as compared to its
benefits if not appropriately managed. Within India it is time and again viewed that the
government could not take powerful economic policy decisions due to conflict amongst the
allies. Again, at times the regional parties work as an obstruction for enacting any approach...