Business Environment

Business Environment        ​        ​8

Abstract

This essay considers the case of Samsung Electronics, the digital technology leader in the world to explain relationship between external business environment and technological development in the business. It also attempts to explain that later the technological development has an impact on the business environment, with or without the direct impact on the factors that contributed in its development.

This essay finds the incredible digital development technology at Samsung as the consequences of political and economic factors that were influential during 1990s. Later the globalization merged geographies and enabled Samsung to leverage its technological competence in global market. The development later impacted social, political and economic structure in the globalized business environment, where Samsung’s own business practices helped in determining the extent of negative and positive impacts.

Introduction

During January 2017 Samsung announced the massive accreditation it received in 2017 Consumer Electronics Show by bagging 120 awards (Samsung Newsroom, 2017). As part of the news that was published on Samsung’s official Newsroom site for its online readership, this was latest of the remarkable innovations which have contributed to Samsung’s growth. Seldom criticized for copying the technologies from global rivals and tweaking those to present to the customers, Samsung has however managed to continue its growth spree. Especially in the area of screen technology Samsung leads the consumer electronics industry worldwide (Shaughnessy, 2016). Samsung screens which make its products look sleek, trendy and extremely attractive are backed by the robust battery and chip technologies which the global competitors like Apple and Google have been trying hard to beat (Wang and Wang, 2007). This extremely impressive screen development technology of Samsung is however the outcome of the Russian business environment into which Samsung fortunately got an early entry during 1990s. The former Soviet Union as the part of a pact between Korean company Samsung and Russian Academy of Science offered the business organization commendably cheap access to its scientific resources (Shaughnessy, 2016). Samsung not only used the Russian brain to its own benefit but also made sure that it worked in close co-ordination with the Academy to

keep its rivals comfortably off from ruining this partnership. While this pact has continued to be the backbone of Samsung’s success, there are environmental factors responsible for this event.

This essay discusses the role of business environment in driving technological development by discussing the case of Samsung. Further the essay looks into the impact that the specific technological development has on the business environment.

Business Environment and Technological Development

Business Environment: What makes it powerful? According to Huang (2011) the ‘business environment’ comprises of the forces that tend to have an impact on the business organization directly or indirectly and are beyond the organization’s control. In other words the sum total of external factors that has an influence, positive or negative, on the functioning of business organizations connotates to the business environment for that organization.

Hills, Lam and Welford (2004) in their work mentioned that it is extremely important to understand the impact of business environment before creating business strategies. The co-authors (Hills, Lam and Welford, 2004) explained that it is due to 2 inherent features of the business environment: (i) unpredictability and (ii) region exclusivity. The fact that business environment is unpredictable and the changes within this environment are beyond the organization’s control makes it necessary for the businesses to understand its impact (Hills, Lam and Welford, 2004). Region exclusivity refers to the different nature of this environment changing with geographical, psychic and cultural distance (Wang and Wang, 2007). Wang and Wang (2007) in their example of Swedish firm IKEA illustrated the 5-year massive failure of the global home furnishing conglomerate IKEA in China owing to a completely different business environment; this environment bore no resemblance to the usual business environment in which IKEA operated in the European countries. Finally the firm booked its first profit in 1999 in China.

How does Business Environment Impact and get Impacted? Radulovic (2004) in his study on knowledge based transition economies found varying manners in which external and internal business environments impact the businesses. Even in the confined context of external business environment Radulovic (2004) observed that there were certain forces that were more influential than the others; at the same time redundant forces became active in reversing the effect of impact. Radulovic’s study helped in establishing that the effect that business environment creates on the business firms therefore has certain degree of impact reversed back on the environment as well.

Perez and Rojas (2012) opined similar views in their study on technological competencies in various economies, both developed and developing. The co-authors (Perez and Rojas, 2012) found technological factors originating as the outcome of various factors like political, economic and social factors and eventually becoming strong enough to become the independent forces shaping industry conditions. This study was valuable in making clear an important relationship between external business environment and the technological development. It was the bi-directional nature of technology which was not only impacted by the surrounding business environment but was also influential in impacting it back.

The role of technology becomes much more prominent in a globalized world. This is because the process of globalization tends to amalgamate the goods and services, people as well as the cultures. The difference between business environments in a globalized world connected by technology is therefore lesser than it used to be during late 20th century. It can therefore be assumed true that changes in global business environment is potential enough to drive a technological development forward and then analyze the after effects of that technological development on the globalized business environment back.