Geopolitical Tensions and Environmental Challenges Impacting the World at Large

Posted by Tanya Sharma on October 17th, 2022

Emerging economies have increasingly benefitted in terms of growth, employment, capital formation and promotion of tradeby the forces of globalisation. Despite the benefits of globalisation, competitive pressures faced by businesses have aggravated and with the integration of world economies, most nations are vulnerable to economic, political, and social shocks.

Notably, the interwoven nature of national economies has triggered a series of economic crises, touching USA, European countries, Asian economies, and many other developing countries. The fundamental message to be learnt is that any event in any country, no matter how localised in occurrence, has an impact in not just one nation itself, but somefavourableor unfavourable impact on other nations. So, in a globalised world, firms having significant global presence face the imperative to be watchful of such events and respond to them. Firms should assess the inter-dependency effect while making critical decisions.

From recent times, three events (or a series of them) buttress the idea that globalisation has led to enormous challenges for nations beyond the ones where they originated. The COVID-19 outbreak threw the world order into chaos and evinced a response from not just governments, but players in all industries, whether private or public, in nations beyond the country where the outbreak was first discovered. Secondly, political events like Brexit and Russia-Ukraine Crisis (or the Syrian Crisis, for that matter) have highlighted the intense geo-political tensions that created ripple effects across the world. Consequently, there has been a creation of an unstable and unpredictable world with far-reaching implications leading to enormous challenges and dynamic environments which MNCs must factor in while formulating competitive business strategies. Another classic example is the volatility in the foreign exchange market, where cross-border capital flows and economic fundamentals determine dynamic fluctuations in the capital and currency markets. Again, the consequences are felt across the world.

The above examples are great indicators of how localised or regional developments do not just lead to consequences for a specific group of countries, but the entire world gets meaningfully and substantially impacted.

Teaching pedagogical innovations should incorporate the study of these factors, especially for issues pertaining to fundamentals of management and international business management. There should be a conducive environment where participants are actively encouraged and do in fact, deep-dive, understand the contagion effect and negative repercussions of such events on economies across the world.

We, at the Indian School of Business and Finance (ISBF), offer undergraduate and post graduate courses under the Business and Management Stream where we address these challenges, which MNCs do encounter. This serves as a platform for organisations to design and formulate innovative strategies for countering competitive threats and winning the competitive battle. The overall learning is very holistic, where apart from understanding managerial concepts and principles, students develop a firm grasp on concepts pertaining to market forces, environmental challenges, and format of trade and economic alliances, amongst others. Using these as a reference, students will be equipped to understand the nuances and challenges involved for MNCs to develop innovative strategies for the future. The learning trajectory is interdisciplinary in nature and there is an in depth analysis of contemporary issues related to management of international business operations covering several domains of business functions.