Understanding the financial challenges faced by the millennial generation

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Millennials – the term used for anyone born between 1981 and 1996 – have come of age during a period of vast technological change, economic disruption and evolving societal norms. These transformations have uniquely shaped their financial perspectives and experiences.

In fact, it’s fair to say that the millennial generation has been hit by some of the most significant economic events of the past century – from the Great Recession of the late ‘00s to the recent pandemic – all of which has impacted their ability to build wealth and find financial stability.

An overview of the millennial generation

Millennials are so called because they’re the first generation to enter adulthood in the new millennium, and this has set them apart from previous generations in several ways. 

For example, millennials will remember a time without the internet and advanced digital technology like smartphones, but are also considered digital natives. 

Millennials are also noteworthy for being the most well-educated generation as well as the most racially diverse, and for buying their own homes, getting married, and having children later than those in the Gen X or baby boomer generations – a characteristic tied to the financial challenges that the generation has faced.

Economic challenges for millennials

Many millennials have struggled with financial challenges that were less pronounced for baby boomers and Generation X at similar stages of life. 

Their attitudes towards money are markedly different, too, now focusing more on financial wellness and the balance between quality of life and fiscal responsibility. This can largely be attributed to the economic climates they have grown up and matured in, and the economic challenges they’ve experienced. 

Economic turbulence

Economic instability has been a consistent theme in the lives of many millennials. The Great Recession (2007 to 2009) coincided with the formative years of many young adults in this group, altering their perspectives on money and significantly affecting their career trajectories.

In the UK, the aftermath of this financial crisis was felt through austerity measures, impacting public services and employment opportunities. All of this was followed by the coronavirus pandemic, which sent shockwaves through the economy, plus further recessions in 2020 and 2023.

Like the UK, the Federal Reserve in America and other central banks worldwide have similarly grappled with recessions and policies that have seen interest rates plummet, affecting savings rates and overall economic recovery.

The ongoing repercussions of these economic downturns, coupled with recent inflation surges, continue to challenge millennials’ financial security, making it difficult to create everything from a financial safety net to a retirement plan. Because of this, many in the millennial demographic have struggled with the cost of living, amassing significant credit card debt to make ends meet and further adding to their financial stress. This is even worse in the US, where many American millennials face huge healthcare costs or health insurance fees.

Student debt

Many millennials were taught that higher education was a crucial path to securing well-paying jobs, leading many millennials to pursue degrees.

However, this has often come at the cost of accumulating substantial student loan debt. Data shows that the promise of higher income has been dampened by the reality of paying down large debts, a burden that previous generations did not face to the same extent. And this debt has far-reaching consequences on other financial decisions and milestones, such as homeownership and retirement savings.

Housing and homeownership

Homeownership rates among millennials lag significantly behind those of previous generations at similar ages.

In the fiercely competitive housing markets of major cities like New York and London, soaring home prices and stagnant wages have made down payments and mortgages less attainable. And rising mortgage rates aren’t helping anyone, no matter where they live.

The rental market isn’t much relief either, with high rents consuming a large portion of monthly income, making it challenging for young people to save enough money for a home or otherwise invest in their future.

A 2024 House of Lords report on the housing needs of young people highlights some of the data specific to the UK:

  • 35% of 25- to 34-year-olds in 2017 were homeowners, a decrease from 55% in 1997.
  • Average property prices in England had risen by 173% (after adjusting for inflation) and 253% in London since 1997.
  • The proportion of young adults who would need to spend more than six months’ income on a 10% deposit for the median property in their area had increased from 33% in 1997 to 78% in 2017.

Salaries and employment

While millennials are the most educated generation to date, this has not necessarily translated into financial success or full-time employment. Many millennials left education to find themselves in a job market characterised by job scarcity, underemployment, and salary stagnation. 

 

“In the wake of the 2008 global financial crisis, unemployment was elevated in many countries, and reached a high of 11.8 percent in the UK in 2011,” Statista explains. “With young workers generally being the most impacted by such high unemployment, millennials bore the brunt of this crisis, and in 2012, there were 1.39 million millennials unemployed.”

However, this picture is slowly changing shape, with lower levels of unemployment coupled with millennials’ adaptable nature.

“In more recent times, millennials were the generation most associated with career advancement, with 26 percent of people in the UK believing millennials would value this over a work-life balance, the most of any generation,” says Statista. “Other traits people associated with millennials were being financially insecure, open to different lifestyles, and a willingness to make lifestyle changes for the environment.”

What comes next: financial challenges for the Gen Z and Alpha generations

As millennials continue to navigate their financial realities, the upcoming generations, Gen Z and Generation Alpha, are on the brink of facing their own economic challenges. These younger generations are set to inherit many of the systemic issues that have not yet been resolved such as high educational costs, uncertain job markets and unaffordable housing. But the experiences of millennials offer valuable economic lessons that can help future generations achieve financial stability and well-being for themselves – and for the wider global economy.

Join a new generation of financial leaders

Develop the knowledge and skills to respond rapidly and effectively to changing business and financial environments with the 100% online MSc Finance, Leadership and Management degree from the University of York.

What can you do with a business management degree?

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A business management degree is a versatile qualification that opens up a myriad of opportunities in the professional world, and can equip you with a diverse skill set that is applicable across various industries. 

On top of this, according to the Bureau of Labor Statistics (BLS), business management graduates have competitive earning potential. The average salary varies based on factors such as experience, industry and job role, but the median wage of workers with a business degree in 2021 was listed as $69,000, slightly higher than the median wage of all work fields at $63,000. As professionals gain experience and climb the corporate ladder, their earning potential increases significantly.

In this post, we outline the vast array of career paths a business management degree can take you down while exploring job opportunities and the valuable skills you canacquire along the way.

What is a typical career path with a business management degree?

A degree in business management offers a broad understanding of organisational structures, strategies and operations. From human resource management to financial data analysis, the coursework covers a wide range of subjects, making graduates well-rounded professionals.

Business management degree students gain a broad oversight of the work that goes into all areas of a company, so there is no typical career path for graduates. This means you can choose the path that most appeals to you, with the freedom to choose opportunities that align with your personal and professional goals. Once you have a Bachelors degree, you can then specialise further in your chosen field with a Masters degree to further your career.

Below are some of the paths you could take.

Business administration: A gateway to leadership

With experience and further education, business management graduates often progress to leadership roles in business administration. These positions involve overseeing the entire organisation or specific departments, making strategic decisions and driving the overall success of the business.

Human resources: Nurturing talent and building teams

One of the most common career paths for business management graduates is in human resources (HR). With a solid foundation in organisational behaviour and interpersonal skills, these graduates are well-equipped to become HR specialists or managers. These roles play a crucial role in recruitment, employee development and ensuring there is a positive work environment.

Project manager: Mastering the art of coordination

Effective project management is vital for the success of any business endeavour, and a business management degree provides the skills necessary for individuals to excel as a project manager. They oversee tasks, manage budgets and ensure projects are completed on time, showcasing their exceptional organisational and problem-solving abilities. 

Marketing manager: Shaping brand identities

Business management graduates with a flair for creativity often find their niche in marketing. Whether developing social media campaigns or conducting market research, their understanding of business strategies and communication skills make them well-suited for roles in marketing.

Business analyst: Decoding data for informed decisions

Analysing trends, interpreting financial data and making data-driven decisions are integral aspects of business analysis. A business management degree equips students with the analytical skills necessary to become successful business analysts, aiding companies in making informed choices that drive growth.

Management consultant: Advising for success

For those with an eye for identifying inefficiencies and proposing solutions, a career as a management consultant may be the perfect fit. Business management graduates often enter this field, offering valuable insights to organisations seeking to optimise their operations and strategies.

Sales manager: Driving revenue and building relationships

Sales is the lifeblood of any business, and business management graduates with strong interpersonal and communication skills often excel in sales management roles. They build and lead sales teams, develop strategies to sell products and services, and drive revenue growth.

Entrepreneurship: Carving your own path

Armed with the knowledge of how to create and run business strategies and with precisely honed decision-making skills, some business management graduates choose the path of entrepreneurship. Starting your own business allows you to apply your skills in real-world scenarios and employ the knowledge you’ve gained to help bring a new business idea to life.

International business management: Navigating global markets

The global nature of business today requires professionals with a deep understanding of international markets. A specialisation in international business management allows graduates to navigate the complexities of global trade, cultural differences and diverse business practices. 

Risk management: Mitigating challenges for success

Every business faces risks, and effective risk management is crucial for long-term success. Business management graduates with a focus on risk management contribute to identifying potential pitfalls and developing strategies to mitigate them, ensuring the stability and growth of the organisation.

Transferable skills: The key to versatility

One of the greatest advantages of having business management skills is the acquisition of highly-sought after transferable skills.

Skills such as good communication, teamwork, problem-solving, and efficient decision-making are applicable across various industries and valued by employers across many fields, making business management graduates adaptable in the ever-evolving job market.

Gain a competitive edge

In the digital age, networking is key for career advancement. Platforms like LinkedIn provide an invaluable space for business management graduates to connect with professionals in their field, discover job opportunities and stay updated on industry trends.

Employers also value practical experience, and internships or work placements during postgraduate and undergraduate studies provide valuable insights into the real-world application of business management concepts. Internships and entry-level positions will also enhance a graduate’s work experience and marketability.

Further study for specialisation

While a Bachelors degree opens doors to entry-level positions, pursuing a Masters degree in business management or a related specialised field can enhance your career prospects and open a gateway to a multitude of career opportunities. Further study provides a deeper understanding of business theories, advanced management concepts and the opportunity to expand knowledge into a preferred niche.

At the University of York, we offer an entirely online MSc in Finance, Leadership and Management programme, equipping you with the specialised skills to master the opportunities and risks in financial management. Taught part-time, this degree allows you to continue progressing your business management career by working around your studies. Plus, with six start dates a year, you can begin your higher education journey within weeks.

Masters research projects: what to expect and how to prepare

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Embarking on a Masters degree is an academic journey that often ends with a research project. This in-depth exploration into a specific topic or area of interest is a rite of passage for many postgraduate students, and can be both a challenging and rewarding endeavour. 

Unlike Masters coursework, which imparts foundational knowledge and develops or expands skill sets, an academic research project or dissertation is an opportunity for students to delve deeply into a specific area within their field of study. It involves original research and the application of theoretical concepts to address specific research questions. But good research isn’t just about finding answers – it’s about asking the right questions and pushing the boundaries of knowledge.

What is the purpose of a Masters research project?

The purpose of a Masters research project is multifaceted. It showcases understanding of the subject matter and also demonstrates an ability to conduct independent research. This process hones critical thinking skills, cultivates a deep understanding of research methodologies and contributes valuable insights to the academic community. 

Understanding the difference between a research project and a thesis

In the United Kingdom, a research project or dissertation is typically undertaken at the end of a Masters degree, while a thesis is typically undertaken during PhD studies. But both offer an opportunity to conduct extensive, in-depth exploration of a research question.

A step-by-step guide to developing a research project

Beginning a research project can be daunting. The task ahead requires extensive planning and exhaustive research before the writing even begins. Breaking the project down into smaller pieces can help to make it more manageable. 

Step 1: Choose a research topic

Identify an area of interest within your field of study for the research proposal. This might be a current issue in the field or perhaps a more theoretical problem. 

 

At this stage, it helps to explore existing literature to understand gaps in knowledge and research, and to identify potential research ideas. Then, narrow down the focus based on personal interest as well as feasibility. 

Step 2: Formulate a research question 

Develop a clear and concise research question that encapsulates the essence of the project and the research aims.

Ensure the question is researchable, relevant, and will contribute to the existing body of knowledge in the field. 

Step 3: Conduct a literature review

Explore relevant journal articles, books and other scholarly sources, and analyse existing literature to identify key theories, methodologies and any gaps in knowledge.

Step 4: Develop a research plan

Outline the scope, objectives and timeline for the research project. This step also includes specifying the research design, methodology and data collection techniques such as focus groups or questionnaires.

Step 5: Data collection

Implement the research plan by collecting data and conducting research using appropriate methods. Ensure ethical considerations are adhered to throughout the data collection process.

Step 6: Data analysis

Use qualitative research and/or quantitative research methods based on the project’s specifications, and then interpret the findings to address the research hypotheses or questions.

Step 7: Write the research paper

Structure the paper with clear sections such as an introduction, literature review, methodology, results, discussion and conclusion. Remember to ensure proper citation of sources and adherence to academic writing conventions and styles.

Advice on preparing and researching for a Masters research project

There are a number of ways to ease the pressure during the pre-writing stages of a research project:

  • Start early. Begin as early as possible to allow ample time for each stage. Early planning minimises stress and allows for thoughtful consideration of research ideas.
  • Seek guidance. Consult with any dedicated academic advisors regularly. Seek feedback on the research question, the methodology and overall progress.
  • Use resources wisely. Leverage the university’s libraries, databases and online resources for comprehensive literature reviews, and attend workshops and seminars to enhance research skills.
  • Stay organised. Implement effective project management techniques. Keep meticulous records of the research process including data collection and analysis.

Tips for writing a Masters research project

After all the preparation, planning and research are underway, it’s time to start thinking about writing. This process can be time-consuming but can be made more straightforward by:

  • Crafting a compelling introduction. Clearly outline the significance of the research through introducing the research question and justifying its relevance.
  • Ensuring a thorough literature review. Synthesise existing literature to provide a solid foundation for the research. Highlight gaps and justify the need for the study.
  • Establishing and maintaining methodological rigour. Clearly articulate research design and methodology. Justify the choice of methods and demonstrate their appropriateness.
  • Creating a clear results section. Present findings with clarity and precision. Use tables, charts and graphs to enhance data visualisation.
  • Building a coherent discussion section. Interpret results in the context of existing literature in order to discuss the implications of the findings and propose avenues for further research.
  • Planning for a solid conclusion. Summarise the key contributions of the research and emphasise the significance of the findings in the broader field of study on the topic.

Conduct a Masters research project in finance, leadership, and management

Develop leadership skills and professional adaptability with the University of York’s 100% online MSc Finance, Leadership and Management programme. This flexible Masters programme will give you valuable insight into your own professional development while building your problem-solving and communication skills.

Your studies will prepare you to respond rapidly and effectively to changing business and financial environments, and upon graduation you will receive affiliate CMI membership and be awarded a Level 7 certificate in Strategic Management and Leadership Practice.

As part of your postgraduate programme, you’ll also conduct a longer sustained research project that you can use to demonstrate your critical analytical skills, your ability to gather and synthesise data and literature from a range of sources, and your subject-specific knowledge. You’ll work under the guidance of a personal supervisor with expertise in the subject you’re studying, and they’ll help you develop research questions and identify methods and theories to investigate and analyse your topic.

Mastering the clock: the necessity of time management skills

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Mastering the art of time management has become more critical than ever before in our fast-paced world.

Time management skills can empower people to take control of their lives, enhance their productivity, and achieve better work-life balance. Developing good time management skills can therefore be thought of as an investment in your personal and professional success. And, importantly, understanding effective time management is not just about doing more, but instead doing what matters most with the time you have.

What are time management skills?

Time management skills refer to your ability to plan, organise, and prioritise tasks efficiently to make the most of the time you have available. It’s a soft skill focused on allocating time wisely and prioritising the activities that most contribute to both personal and professional goals. 

These skills encompass a range of abilities, from setting realistic goals and knowing how to say no to people, to avoiding procrastination and multitasking effectively to prioritising getting things done.

Examples of time management skills

Goal-setting

Setting goals is a fundamental time management skill. By defining clear, achievable objectives, you can create a clear roadmap for your actions and give yourself enough time to complete tasks. This includes setting both short and long-term goals which provide a sense of direction and purpose and can guide daily activities with greater intention.

Prioritisation

Prioritising tasks involves identifying and focusing on the most important activities or the actions that will have the most impact. This might include categorising tasks based on urgency and importance to determine which are the best areas to dedicate time and energy to.

Task-list management

Creating a to-do list is a classic and effective time management technique. It can help you to visualise yourworkloads, break them down into manageable tasks, and then track progress. Regularly reviewing and updating your to-do list ensures priorities remain aligned with overarching goals.

Overcoming procrastination

Procrastination is a common obstacle to effective time management, whether it’s putting off a big task with lots of little, unimportant ones that eat into your workday, or just scrolling on social media for a lengthy amount of time. Overcoming this challenge typically involves recognising and then addressing the factors that contribute to delaying tasks. It also helps to break down large tasks into smaller, more manageable steps, which can make them less daunting and therefore feel more achievable.

Multitasking

Multitasking can be a valuable skill, but it requires careful consideration because juggling multiple tasks simultaneously can be counterproductive if not done efficiently. The key is to identify tasks that complement each other. Grouping related or similar tasks often means they can be performed simultaneously without compromising quality.

The advantages of developing time management skills

Time management skills bring a number of benefits:

  • Better work-life balance. Better time management enables youto strike a balance between your professional and personal life. By allocating time strategically, you can fulfil your work responsibilities without neglecting personal wellbeing, family or hobbies.
  • Reduced stress levels. Poor time management often leads to increased stress levels and even burnout. By organising tasks, setting realistic goals, and avoiding last-minute rushes, you can minimise stress and maintain a healthier mental and emotional balance.
  • Increased productivity. Good time management skills are associated with heightened productivity. This is because focusing on the most important tasks and avoiding time-wasting activities means you can accomplish more in less time, leaving room for additional projects or leisure time.
  • Achieving goals and objectives. Setting and prioritising goals are integral components of time management, and having a structured and intentional approach to your daily tasks can help you achieve your objectives, both in and outside of work.

How to develop time management skills

Set SMART goals

SMART goals are Specific, Measurable, Achievable, Relevant, and Time-bound objectives. By adopting this framework, you can set goals that are well-defined and realistic, and enable effective planning and execution in your work.

Prioritise tasks

Prioritising tasks requires assessing both the urgency and the importance of each task. The Eisenhower Matrix, which categorises tasks into four quadrants (Do, Decide, Delegate and Delete), is a helpful guide for allocating time to the urgent tasks and important activities that best align with your goals.

Use time management techniques

There are various time management strategies to explore and experiment with, including the Pomodoro technique, which involves working in short, focused bursts with breaks in between. 

It’s helpful to try different approaches to find the ones that best support individual preferences, workflows, and specific tasks. 

Delegate tasks

A top time management tip is to recognise the importance of delegation. Delegating tasks to other team members or colleagues can free up time for more crucial responsibilities. It also helps to foster collaboration with peers and can help enable more efficient project management.

Tools for time management

The number of tools available for time management increases all the time, but most fall into one of a few broad categories:

  • Task list apps. Use task list apps to create, organise, and manage to-do lists efficiently. These apps often come with features like due dates, reminder notifications and prioritisation options.
  • Project management tools. For larger tasks or projects involving multiple team members, project management tools like Trello, Asana, or Monday.com can be invaluable. They provide a centralised platform for task allocation, progress tracking and collaboration.
  • Time-tracking software. Time-tracking software helps people monitor how they spend their time. This awareness can be crucial for identifying time-wasting activities and optimising daily routines.
  • Calendar apps. Calendar apps help people to schedule and plan their days, weeks and months effectively. They often come with features such as reminders and the ability to block out specific time frames for focused work. Some of these tools can also remind you to take regular breaks in order to stay alert and reduce stress or strain. They may even be helpful in determining the time of day when you’re most productive so you can schedule specific activities in optimal time slots.
  • Boost your time management skills while advancing your career

Develop your professional adaptability alongside leadership skills with the 100% online MSc Finance, Leadership and Management programme from the University of York. This flexible Masters programme will give you valuable insight into your own professional development while building your problem-solving and communication skills alongside self-management and time management skills.

Your studies will prepare you to respond rapidly and effectively to changing business and financial environments, and upon graduation you will receive affiliate CMI membership and be awarded a Level 7 certificate in Strategic Management and Leadership Practice.

Modules on this programme cover topics such as:

  • Operations Management
  • Business Finance 
  • Leading and Managing People
  • Marketing and Ethics in Global Business
  • Corporate Financial Strategy
  • Investment Management
  • Asset Pricing.

The benefits of learning about international business management at Masters level

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Our era is one marked by globalisation and interconnected economies, so it’s no surprise that a solid understanding of international business management has become increasingly important for anyone looking to succeed in business, finance or leadership. 

Pursuing a Masters degree that builds this knowledge not only equips students with a comprehensive understanding of global business practices but also opens doors to a myriad of opportunities. And as businesses continue to expand across borders, the demand for professionals with this knowledge is set to soar, making it a strategic investment in your academic and professional future.

What topics are covered under international business management?

The term international business management covers a broad spectrum of subjects and sub-topics that help put the global business environment into context. 

Areas of study can include:

  • international marketing
  • business strategy
  • marketing management
  • operations management
  • decision-making in an international context
  • sustainability
  • entrepreneurship
  • human resource management
  • project management
  • financial management
  • supply chain management

In the context of Masters-level study on the topic, coursework typically aims to prepare students for the multifaceted challenges of managing business on a global scale. It may involve case studies, seminars, and research projects that employ real-world simulations and help to explore the international business landscape, as well as honing practical skills essential for success in the globalised job market.

Advantages of studying international business and management as part of a Masters degree

Enhanced employability

An in-depth understanding of international business management can be a powerful catalyst for career advancement. Employers worldwide recognise the value of specialised knowledge in navigating the intricacies of global business, so graduates with this understanding often find themselves in high demand across various industries, from multinational corporations to government agencies and international consultancies.

“In a nutshell, students need to develop a global perspective to be successful in business,” Prospects explains. “Studying international business allows you to see how globalisation has brought about an increasing ‘connectedness’ of businesses, markets, people and information across countries.”

“Studying global business can enable you to navigate the challenging, ever-changing business world while capitalising on opportunities for expansion and connection,” adds Harvard Business School. “As the world becomes more interconnected than ever before, employers are increasingly regarding international business as a desired skill for future hires.”

Practical skills for the real world

Unlike undergraduate studies, postgraduate programmes often emphasise hands-on, practical research methods and learning. Students are frequently exposed to real-world scenarios through projects, internships or work placements. Those who are employed may even relate their learnings directly to their existing professional roles and work experience, allowing them to apply theoretical concepts to actual business challenges. This practical approach cultivates enhanced problem-solving skills and equips graduates with an ability to make informed decisions in a global business context.

Specialised expertise

In addition to building expertise in the fundamentals, international business management studies at Masters level offer the opportunity to delve deeply into specialised areas, enabling students to carve out a niche in their chosen field through optional modules or independent study. Whether focusing on strategic management or supply chain logistics, this specialisation enhances their expertise and makes them valuable assets in the job market.

How to apply international business management studies to a career

There are several ways to apply any knowledge gained in international business management to a career. 

For example, make use of any available networking opportunities. Masters degrees in business often facilitate networking through industry partnerships, seminars, and open days, providing students with the chance to connect with other students – including UK and international students, professionals, potential employers, and alumni, creating a bridge between academic knowledge and real-world applications. These connections can lead to mentorships or even job opportunities.

It’s also worth noting that the diversity of the subject area – and the diverse perspectives and cultural insights that it brings – creates graduates with well-rounded skill sets suitable for any international or business environment.

Current trends and challenges in international business management

Examples of some of the conversations happening in international business management right now include:

  • Globalisation and technology. As businesses continue to expand globally and technology continues to rapidly evolve, the integration of both is increasingly important. The rise of e-commerce, digital marketing, and virtual collaboration tools have already reshaped how businesses operate, but technology is also being leveraged for international business expansion and transformation. 
  • Sustainable business practices. Sustainability has become a central concern for businesses worldwide, so topics such as corporate social responsibility, ethical considerations in international trade, and green supply chain management are all becoming increasingly important.
  • Evolving regulatory landscapes. The international business arena is subject to an ever-evolving regulatory landscape, so it’s useful to have the necessary knowledge to navigate complex legal frameworks and trade agreements, and to understand current geopolitical considerations. 

These conversations largely align with the Five Forces Driving the Future of Business Education, as described by the Association to Advance Collegiate Schools of Business (AACSB) – a global nonprofit that works with business schools and other institutions in higher education, so international business students learn the key themes of importance to the sector today.  

Develop your knowledge and skills in international business and management

Build leadership skills with an international lens with the 100% online MSc Finance, Leadership and Management programme from the University of York. This flexible Masters programme will give you valuable insight into your own professional development while building your problem-solving and communication skills.

Your studies will prepare you to respond rapidly and effectively to changing business and financial environments, and upon graduation you will receive affiliate CMI membership and be awarded a Level 7 certificate in Strategic Management and Leadership Practice accreditation.

 

Modules on this programme cover topics such as:

  • Operations Management
  • Business Finance 
  • Leading and Managing People
  • Marketing and Ethics in Global Business
  • Corporate Financial Strategy
  • Investment Management
  • Asset Pricing

Find out more about our MSc Finance, Leadership and Management including entry requirements, tuition fees, English language requirements (including IELTS), academic year start dates, course content and the online learning environment.

How do cultural attitudes to work affect international business?

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Operating in the global marketplace requires an understanding of the nuances related to business attitudes, approaches, and ways of working that exist between different countries and cultures.

Cultivating the ability to adapt in cross-cultural situations is key for interconnected, multinational, global businesses where teams, business partners, customers and markets are spread across the world. Even for organisations without geographically disparate teams, bridging divides within multicultural teams is critically important. After all, cultural backgrounds, values, and expectations relating to workplace etiquette, experiences, and communication styles may be richly diverse.

Why is it important to understand cultural attitudes to business?

Global human resource experts Multiplier identify cultural variation as one of the top challenges in international business.

If an international company fails to take into account the nuances of different cultures – including how they relate to work and business – the number of obstacles to business success, profits and growth is likely to increase. As international business  contexts are likely to become more complex, communication breakdowns may occur and employees and customers alike may feel alienated.

Where cultural differences and attitudes are recognised, understood and managed effectively, cultural barriers to business dealings can be greatly reduced. Cultural awareness and sensitivity – reinforced by high emotional intelligence – bolsters cross-cultural communication, fosters a positive shared business environment, and enables strengths from each culture to contribute to overall business success.

It’s important to learn about the different cultures of countries where you’ll be doing business, so let’s take a closer look at how attitudes can impact different aspects of the workplace.

How does national culture affect international business?

Cultural variations between different countries – and how they intersect with attitudes to work and business – have the potential to impact business relationships and activities in a number of ways. In order to mitigate the business impact of cultural variations, it’s important to firstly understand how different countries engage in business practices and etiquette. 

Here are three examples of how culture can impact business expectations and attitudes.

  • Organisational culture and hierarchy. There are four main types of structure that affect an organisation’s culture: market, clan, hierarchy, and adhocracy. Some cultures feature formal organisational structures that depend on top-down control and rigid levels of authority, where decision-making and business negotiations are the purview of senior management and everyone else is expected to coordinate their activities accordingly. Others favour looser hierarchical structures, with shared, democratic decision-making processes, a more relaxed approach to authority, and less rules governing how team members complete their work.
  • Leadership styles. Different leadership and negotiation styles, and management behaviours can be seen as weaknesses or assets depending on the cultural context. Harvard Business Review shares research indicating that leadership styles are heavily influenced by geographical regions. Findings show leaders who: self-initiate and demonstrate flexibility tend to be more desirable in Scandinavian countries, as well as Western countries on which the UK has substantial influence, and Asian countries that base their governing and economic institutions on the British model. Alternatively, diplomatic leaders who prioritise ‘getting along over getting ahead’ are preferred in Latin America, New Zealand and Sweden. Finally, straight-shooting leaders who favour directness are expected in Northeast Asia and countries like the Netherlands.
  • Business practices. Differences in business practices and ways of working can range from the profound to the minor. For example, the working day typically starts at 9am and finishes at 5pm (and often extends earlier or later) for a North American office worker. However, in Spain and other Mediterranean countries, working hours are often 9am to 1:30pm – with a rest after lunch known as a siesta – and 4:30pm to 8pm.

Other aspects include communication styles, meeting etiquette, level of formality, dress codes, punctuality, as well as gestures and body language.

What is the difference between high-context culture and low-context culture?

The concept of high-context cultures and low-context cultures, developed by anthropologist Edward T. Hall, refers to the importance of contextual cues and cultural orientations in interpreting meaning and messages.

In low-context cultures:

  • importance is placed on the exact, literal meaning of words
  • communication is direct and explicit
  • individuals prefer being given comprehensive information ahead of a meeting or task (for example, meeting reports, detailed agendas and information packages).

Examples of low-context cultures include Australia, Germany, Canada, the United States, the Netherlands and the United Kingdom.

In high-context cultures:

  • importance is placed on when, where and how people say things, rather than just what is said – or not said
  • information is implicit and embedded in relationships, non-verbal cues/body language and context
  • communication is indirect and implicit
  • individuals prefer face-to-face meetings and long-term, relationship-building opportunities, and mutual understanding is developed via close contact.

Examples of high-context cultures include Japan, South Korea, India, China, Singapore and Indonesia.

No culture is entirely high-context or low-context – and many countries sit somewhere between the two, such as Brazil, Spain, Italy and France. However, the distinction broadly indicates communicative preferences within and across different cultures – and can be invaluable in everything from greeting clients to negotiating deals and partnerships. Leaders should be cognisant of bringing high-context expectations into low-context environments – or vice versa – and be aware of any cultural miscommunications or misunderstanding this may cause. In this way, they can lay the foundations for effective communication.

How can leaders overcome cultural differences and attitudes to work?

Researching countries and cultures goes a long way in helping to understand how to build cross-cultural relationships, as well as not inadvertently disrespecting the customs and beliefs of others.

Learning about cultural diversity while promoting and respecting it in the workplace is a great place to start. It creates a more inclusive environment for doing business, where team members feel comfortable communicating and the benefits of diverse skills, mindsets and perspectives can drive creativity and progress. Investing in business language and cross-cultural and cultural sensitivity training, encouraging open, clear communication, and empowering leadership and management teams to champion cultural understanding and inclusion will all help overcome barriers to business.

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Why do companies engage in international business and trade?

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International trade and business refers to the exchange of goods and services (imports and exports), knowledge, technology, and capital between at least two different countries. Global transactions can span all manner of business activities, from sales and research to development, manufacturing and distribution.

International business, trade and supply are currently undergoing significant transformation resulting from factors including the ongoing rise and evolution of e-commerce, a shift towards sustainable business practices, new approaches to venture financing, and challenging, unpredictable geo-political and economic environments.

Global trade growth is slowing according to the World Economic Forum. In this context, are there still tangible benefits for businesses seeking to operate internationally? What options are available to them? And what are the upcoming trends business leaders should keep an eye on?

What are the benefits of international business and trade?

Who do companies choose to pursue international expansion?

78% of respondents in FedEx’s Trade Index Report 2021 cited international business as a route to new opportunities and job creation. For those considering whether to expand beyond domestic markets and ‘go international’, it’s worth evaluating what it could mean in terms of increasing business growth, resilience, competitive advantage and the overall bottom line.

Some of the most common reasons behind a move to internationalisation and expansion into foreign markets include:

  • extending the life cycle of a product or technology
  • reducing business costs by outsourcing larger-scale production at lower costs, for example in developing countries (driving economies of scale)
  • seeking resources such as raw materials or technologies unavailable in the home country
  • growing market share by tapping into new markets and customer bases when existing ones are saturated
  • improving brand image, recognition and standing
  • responding to international competition
  • following multinational customers.

American Express lists further advantages to international trade and business.

  • Increased revenues – resulting from entering larger markets and revenue streams.
  • Decreased competition – products and services find a home in markets that aren’t crowded and are warmly received by potential customers in foreign countries.
  • Easier cash flow management – negotiations and payments may work differently, which can lead to money being received upfront.
  • Better risk management – as diversification can reduce dependency on a single market, supply chain or retailer.
  • Access to export financing and foreign direct investment (FDI) – can increase available financing opportunities
  • Disposal of surplus goods – due to additional avenues through which to sell goods and services.
  • Benefitting from currency exchange – currency value fluctuations can work in your favour and allow you to reap the rewards of favourable exchange rates.

Operating in international markets may also open up additional investment opportunities, service and product development incentives, partnerships and collaborations, variations to business models, career and professional development, and cultural differences and exchanges resulting in improved goods or ways of working.

Who are the key stakeholders in international business?

Stakeholders are individuals or organisations whose interests may be affected – either positively or negatively – by what another individual or organisation does. The number of stakeholder groups typically increases when domestic businesses move into global markets. 

Depending on the business, stakeholders typically include employees, competitors, interest groups, governments, non-governmental organisations (NGOs), suppliers, shareholders and investors. Conducting a stakeholder analysis helps to identify and determine the relative importance of key people, groups, and institutions that may have significant influence over your planned projects, activities or wider business ambitions.

What are the different types of international business?

Running a global business – even if you’re a relatively small business – can be incredibly lucrative, offering ways to achieve both short-term and long-term business objectives. For business leaders in the process of developing or refining their international strategy, it’s critical to understand how best to drive growth in overseas markets and shore up success beyond domestic borders. This might involve thinking about how an existing business model might need to adapt in order to drive the most growth.

For example, there are various methods international and multinational companies use when conducting business in different countries and markets. These include importing and exporting, outsourcing, franchising, offshoring, and launching joint ventures with international partners.

What are the latest trends and developments in international trade and business?

HSBC lists some of the key trends in international business including the growth of trade in services, a revolution in supply chains, embedded financing and more. Let’s look at these in more detail.

  • Growth of trade in services. Services account for approximately a fifth of the estimated $32 trillion value of global trade. As a significant proportion of total global trade, services show no signs of slowing – particularly in relation to digitally delivered services. Leaders who can embrace and adapt to changing service dynamics – for example, by harnessing digitally enabled services and developing ancillary services – are likely to be victors in the long-run.
  • Supply chain revolution. Leaders must re-evaluate traditional supply chain models. HSBC points to ‘re-shoring, near-shoring and friend-shoring’ as methods that will become increasingly widespread to increase business resilience. Above all, supply chains must be organised in a way that promotes flexibility, transparency, agility and sustainability, and feature less reliance on outdated modes that leave them exposed to vulnerabilities.
  • Embedded financing. Leaders should consider embedding financing into their business operations, alongside encouraging digitisation and direct-to-consumer models. This new method of boosting revenues could offer lucrative new sources of revenue and support wider international strategy.

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How do changes in the economic environment affect international trade?

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What is the current state of the global economic environment?

According to the International Monetary Fund, the baseline global economic growth rate is set to slow from 3.5% in 2022 to 3% in 2023 and 2.9% in 2024 – sitting well below the historical average of 3.8%. This is in part a result of high interest rates, rising energy prices, geopolitical risks and conflicts, and a slowdown in gross domestic product (GDP) for the world’s two leading economies: the United States and China.

These shifts in economic systems, which play out on a global scale, can have profound knock-on effects on international business activities – effects that are keenly felt by business leaders. Research by J.P. Morgan indicates that less than half of UK business leaders are optimistic about the global, national and regional economies, citing threats such as the Russia-Ukraine war, general market volatility, cost of debt and energy prices.

How does the global economy affect the international business environment?

The reasons why a business might choose to ‘become’ multinational are generally divided into two overarching categories: strategic or operational needs. Strategic needs include factors such as avoiding stagnation, increasing business sales and profitability, and mitigating future changes in external environments. Operational needs include factors such as shifting a surplus of production, and sourcing or providing technology, materials or equipment. However, economic activity – whether national or global – presents both challenges and opportunities for these globalised businesses operating on the international stage.

Economic factors shape the landscape of global business operations in a number of ways:

  • Inflation and interest rates. High inflation and interest impact the cost of borrowing, foreign direct investment, and overall cost of production – all of which slow economic growth and can lead to falling stock prices. Faced with high inflation and interest rates, many businesses are forced to increase their own running costs and reconsider investments. Low interest rates, by contrast, give businesses more money to invest and can lead to high economic growth.
  • Supply chain disruptions. Global crises such as pandemics or financial crises and recessions can severely impact supply chain operations. This can lead to shortages of key goods and raw materials, factory closures, shipping and logistical issues, price inflation (as scarcity fuels higher prices), and negative consequences for economic well-being.
  • Government activity and economic policies. Generally speaking, fiscal policy is designed to nurture a strong economy and reduce poverty, and involves adjusting tax and spending levels to monitor and influence a country’s economy. Governments may choose to focus spending and monetary policy on specific sectors – for example, technology, manufacturing or healthcare – which encourages these industries to increase wages and job roles and support wider economic development.
  • Infrastructure and technology. Businesses that operate in developed countries with access to advanced technologies and infrastructure will find it easier to bring goods and services to global markets. Where this is not the case – such as in some developing countries – leaders face additional challenges in marketing and distributing products to overseas audiences.
  • Consumer and market behaviour. Supply (the total amount of goods and services available) and demand (the number of goods and services customers want to purchase) can significantly influence how items within an economy are priced. If supply exceeds demand, prices are likely to decrease; if demand exceeds supply, prices are likely to increase and lead to inflation. Customer purchasing power and changes in purchasing behaviour play an important role in the economy at every level.
  • Unemployment rates. High unemployment rates mean consumers spend less money, due to reduced disposable income and purchasing power. Low unemployment rates generally mean the opposite, with wages increasing, disposable income rising, and consumers being less risk-averse in their spending habits.
  • Exchange rates. Changes in exchange rates typically affect the price of imported or domestic goods that require imported materials or parts. Keeping an eye on exchange rates enables businesses who rely on imports and exports to identify whether they are operating at a profit or a loss, and to ascertain how much they should pay international suppliers. High exchange rates can also impact inflation, investments, and the job market and employment rates.

Other economic factors can include wages, laws and policies, tariffs and tax rates, environmental sustainability and political environment.

What growth strategies can help to safeguard against economic instability?

Which economic factors post the greatest risk to your business?

It’s not just a wise move to protect your business amid changing economic conditions: it’s vital. Leaders should take proactive steps to build business resilience, setting their organisations up to succeed despite the challenges and obstacles that might get thrown their way.

This involves strategies such as diversifying portfolios, nurturing customer relationships, prioritising adaptability, embracing technology and strengthening finances. Identifying specific threats and vulnerabilities will help leaders in their decision making – and enable them to pivot business models or business activities to increase overall resilience.

For some international businesses, this might look like:

  • expanding into new distribution channels
  • expanding into new domestic or international markets
  • adapting an existing business model
  • diversifying supply chain partners and other business partnerships
  • focusing on the most profitable products and services
  • introducing new product or service lines.

With small businesses often the first to suffer – as witnessed during the COVID-19 pandemic – business leaders must prepare to weather adverse and changeable economic conditions well ahead of time.

Use globalisation to your advantage – and lead businesses to success despite economic uncertainty

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You’ll excel as a capable financial leader with broad oversight of the opportunities, risks and challenges presented by financial markets and industries. Through flexible study that suits you, you’ll learn how to finance long-term strategic ambitions, apply theoretical and fundamental financial tools in the right circumstances, and make decisions that drive business growth and profit. You’ll explore business and leadership topics such as organisational behaviour, operations management, people management and international marketing, alongside specialist financial modules including asset pricing, investment management and corporate financial strategy.