Business across borders: The importance of international business law

International business is an essential part of a growing global economy. The integration of national economies into a global economic system – otherwise known as globalisation – has been one of the most important developments over the last century, prompting an extraordinary swell in international trade, commerce and production. 

This connectedness of markets and peoples has produced global value chains that account for a sizable share of trade growth, global gross domestic product and employment in both developed and developing countries. 

As such, international business has become a vital condition for economic and social development – especially for low-income countries. However, the ways in which this business is conducted can have a significant impact on the fortunes and futures of a nation.

Why do we need international business laws?

International business law comprises the various legal aspects of conducting business across borders, including business transactions, entity formation and funding, intellectual property protection, regulatory compliance, dispute resolution and international trade policy. They are put in place to regulate the business operations of a company and their supply chain across different nations. 

Upholding international laws is meant to protect against exploitation of a thriving economy or the oppression of a more vulnerable nation. Consequently, the impact of law-making must be carefully considered; the recent political crisis sparked by the Prime Minister’s proposed changes to the negotiated Northern Ireland Protocol is a prime example of this.

Trade or commerce is often at the centrepoint of these considerations, as the economic impact of a certain policy or transaction can be widespread. Multiple jurisdictions must be consulted. Trade agreements provide rules that assimilate and support fair and lawful trade between respective countries, and – ultimately – make business transactions easier.

International commercial law consists of a body of legal rules, conventions, treaties, domestic legislation and commercial customs that governs international business transactions. These laws facilitate mutually beneficial cooperation between respective countries, spanning economics, licensing, tariffs and taxes, and many other elements of business.

Why is international trade so important?

On a business scale, international trade is essential for increasing revenue, broadening a customer base and ensuring a longer product lifespan. Companies can also benefit from currency exchange fluctuations and gain access to a wider pool of potential employees. The majority of Fortune 500 corporations operate locations overseas, while all boast an international client list. 

The impact of the Covid-19 crisis has highlighted the importance of globalisation. Following the pandemic, businesses (both big and small) are increasingly relying on international trade to improve commercial viability, with 34% citing a desire to expand internationally and 51% of business leaders influenced to change their view on the value of exports.

Going global: Things to consider

For any company contemplating global expansion, the following are legal questions it will need to consider.

  • Labour and employment law: If a business hires or subcontracts overseas, it is subject to the respective country’s labour and employment laws. Consulting legal counsel is essential in helping companies with compliance and risk mitigation.
  • International trade compliance: Whenever a business transaction crosses borders, it invokes the national security and economic interests of the respective countries. This area of business law spans the navigation of imports, exports and sanctions. It’s also of great importance to have an understanding of corrupt nations and which countries are off limits (such as the trade sanctions taken against Russia during the Ukrainian crisis).
  • Corporate structure: If a business is setting up a branch or subsidiary overseas, where and how it chooses to establish a new business carries costs, capital requirements and tax consequences.
  • Taxes: Before going global, a corporation will want to carefully examine whether the foreign country has a tax treaty with their domestic nation, and the particular tax consequences of conducting business there.
  • Intellectual property: Spanning patents, copyrights, trademarks or trade secrets, intellectual property is a valuable asset. Securing and enforcing these rights can be costly. However, contractual arrangements including licences and employment agreements can be established before venturing overseas to mitigate risks and lower the expense.
  • Finances: The movement of money carries risk and complexity. An organisation must adhere to any applicable foreign currency exchange controls. The employment of a legal advisor can assist in keeping payments secure.
  • Termination of a business: Before setting up shop overseas, it’s best to consider an exit strategy if all goes wrong. It can be a complicated and expensive process to close an international venture. Government approval may be needed and there can be significant tax consequences as well as employee rights compliance.

The role of international business lawyers

International business lawyers advise, advocate for, or represent a client’s business interests regarding global transactions. They typically have a specialised education. 

These legal advisors can offer cross-border counsel on compliance with international trade rules. For example, they can assist corporations in obtaining the correct exporting licensing and advise on customs classifications. They will also conduct internal investigations and represent organisations through international disputes or when action is taken against any violations. 

To be a successful international business lawyer, you must have a strong grasp of economics and well-developed negotiation skills. The demand for international business lawyers and advisors is certain to spike as UK companies navigate the consequences of Brexit and aim to boost commercial viability following the coronavirus pandemic.

Why should I study international business?

Business success requires a global perspective. As companies continue to increase conduct on a global scale, anyone looking to enter an area of business management should have a good understanding of global governance, international agreements, foreign policy, various international business practices and the strategic decision-making of multinational enterprises. 

Become an international business leader

Whether you’re a budding entrepreneur looking to launch their own business, an aspiring global brand ambassador or fancy yourself a future Fortune 500 business leader, you can brush up on key learnings as part of University of York’s 100% online MSc in International Business Leadership and Management.

This postgraduate programme places particular emphasis on the challenges associated with business management and global trade, marketing and sales, and provides an excellent overview of relevant management disciplines. 

Obtain skills vital for professional adaptability and employability across industries, functions and roles, preparing you for a potential career within a world-leading economy.

What are business ethics, and why do they matter?

It’s no exaggeration that the Covid-19 pandemic transformed the business world. With millions of workers furloughed and redundancies rife, companies – both big and small – faced extraordinary challenges.

For those who remained in business, mass adaptations had to be made – from remote working to social distancing. Fostering a collaborative, communicative and sensitive company culture became essential.

In our post-pandemic reality, corporate responsibility continues to be tested. Our societal lens has shifted, with staff welfare a centre point of discussion, labour demand being questioned and misconduct reports on the rise. The very nature of the coronavirus has forced companies to consider wider health and safety implications, while other businesses have had to adapt, modify and change to meet ever-evolving consumer needs too.

Meanwhile, wider societal fears are on the increase. Amongst other telling statistics, the 2022 Edelman Trust Barometer reports a 6% global increase in public fear of experiencing prejudice or racism, a 3% increase in concern over climate change, and a notable anxiety regarding job security. And, with government distrust at a disarming high point, in the wake of the pandemic, the public have turned to NGOs and businesses to solve these escalating ethical concerns.

This is nothing new. In the 1960s, rising consumer-awareness and discourse on increased corporate responsibility underpinned the decade – and markedly, the concept of business ethics was first conceived. In times of global crisis, it’s been proven that they matter more than ever.

What are business ethics?

Business ethics refer to an essential system of policies and practices that uphold a corporation’s legal and moral responsibilities. At their core, they determine what is ‘right and wrong’ for a company and its employees and inform a wider code of conduct.

These ethical standards are reflective of various contributing factors to a safe and functioning workforce. Many are embedded in law, others are influenced by social and ethical dilemmas, while additional business practices may be adopted as part of a more ‘individualised’ company culture.

While organisations vary in nature, business ethics should typically address the following principles:

Personal responsibility
Workers strive to be reliable employees and complete the duties assigned to them to their best ability.

Corporate responsibility
Businesses uphold contractual and legal obligations to employees, stakeholders and clients – such as determining safe working conditions, meeting minimum wage requirements and upholding manufacturing standards.

Loyalty and respect
Addresses the ways in which a company, their stakeholders, employees and clients should interact with integrity to maintain positive business relations. 

Trust
Businesses should cultivate trust, with employees trusting that terms of their employment will be kept, while clients can trust the business with their money and confidential information, for example.

Fairness
A company commits to holding all employees to the same standard, regardless of rank, and employs an equal treatment of customers.  

Community and environmental responsibility
Businesses will consider their impact on wider society and adhere to environmental regulations.

Examples of ethical standards in action

General expressions of ethical behaviour within the workplace include maintaining data protection, prioritising workplace diversity, putting customer needs first, and operating fairly and transparently as a business. Other ethical practices are more sector-specific, such as food and cosmetic producers adhering to lawful product labelling; and, financiers protecting against bribery and insider trading.

Alternatively, cultivating a hostile workplace, ignoring conflicts of interest, favouritism or discrimination of employees and misusing company time would be examples of unethical behaviours.

Business ethics: the bigger picture

Business ethics also bleed into a wider framework of corporate social responsibility, which refers to the way in which a company works to achieve or support larger societal goals. Not governed by law, corporate social responsibility is largely a self-regulated practice, where a business independently and voluntarily decides how it can contribute positive action of a philanthropic, activist or charitable nature.

This could include a commitment to the reduction of a company’s carbon footprint, improving their labour policies, making charitable donations, strengthening diversity, equality and inclusion, and making socially conscious investments.

Some key real-world examples include Coca Cola’s commitment to sustainability and Ford Motor Company’s investment in electric vehicles. Starbucks, meanwhile, in a move to tackle racial and social equity, aims to represent black, indigenous, and people of colour (BIPOC) at 30% in corporate roles and 40% in retail and manufacturing by 2025. 

Why are business ethics important?

Business ethics are important for a number of reasons. They ensure that a company operates lawfully, safeguarding both employees and the general public. They keep trade honest and fair, uphold manufacturing standards, and prevent false or bogus product claims. Plus, a strong ethical corporate culture fosters, amongst other things, improved performance and prevents employee burnout.

It works both ways, too. Any successful relationship is built on trust, and adhering to an evolved code of ethics can really benefit a business in terms of brand awareness and customer loyalty.

As Edelman states in its 2022 report: “Lasting trust is the strongest insurance against competitive disruption, the antidote to consumer indifference, and the best path to continued growth. Without trust, credibility is lost and reputation can be threatened.”

With regard to social responsibility, a values statement that addresses, challenges and attempts to solve both social and environmental issues paves the way to a business having real-world impact. With both millennials and Gen Z taking an amplified interest in brand activism and positive action, socially conscious companies are more likely to capitalise on reach, engagement and public investment.

Do business ethics make economic sense?

As we’ve seen, ethical decision-making breeds trust – and, in business, trust is currency. 

A company that upholds ethical standards that reflect real-world concerns and plays to a rising consumer consciousness is more likely to attract monetary investment, loyal staff (reducing recruitment costs) and consistent clientele. A good reputation is valuable and ultimately results in stronger financial health, from share price to increased sales.

Getting caught for unethical behaviours, on the other hand, could cost a company custom and fines, lead to less competitive hires and drive down its share price. For example, when Reuters reported a Johnson & Johnson company cover-up involving asbestos-contaminated talcum powder, the accusation triggered a 10% drop in the company’s stock price. 

Ultimately, leveraging business ethics wisely can result in increased brand equity overall.

Want to build an ethical business?

Business ethics are one of many modules built into the University of York’s 100% online MSc in International Business Leadership and Management

The course places particular emphasis on the challenges associated with business management and global trade, marketing and sales, and provides an excellent overview of relevant management disciplines. Enrol now to obtain vital skills for professional adaptability and employability across industries, functions and roles.

What are flexible work arrangements?

Flexible work arrangements are working hours, work locations, or working patterns that are altered to suit an employee’s individual circumstances. They are an increasingly popular way for employees to balance their personal and professional lives, and for employers to attract and retain talented people.

Types of flexible working arrangements include:

Remote working

This is one of the most common and well-known forms of flexible working. With the coronavirus pandemic necessitating a work-from-home mandate for the majority of workplaces, businesses and employees had to quickly adapt to this flexible working arrangement. Telecommuting and telework – an employee completing their work from outside their traditional office using tools such as email, phones, and video apps like Zoom or Teams – swiftly became the norm. Now, even as the working world begins to return to offices and other workplaces, many are opting to work remotely, either on a full-time basis, or some of the time, which is known as hybrid working. Many remote workers have found that they save time and money on their commutes, have fewer distractions while working, and have increased their productivity.

Staggered hours

Staggered hours are when an employee has a start time, finish time, or break time that differs from their colleagues’ hours at the organisation. For example, someone may request to work from 12:00 until 20:00 every day, even though the typical working hours at the business are 09:00 until 17:00, to accommodate their personal circumstances.

Compressed hours

If a person works full-time hours over fewer days, this is known as compressed hours. For example, an employee might choose to work what’s called a nine-day fortnight – the employee works a little later than other employees every day in order to have every other Friday off work.

Job sharing

Job sharing is when one role is split between two people. For example, one employee may work Monday and Tuesday, while the second employee has a Wednesday-to-Friday work week, but both do the same job when at work.

Part-time hours

Part-time work is often requested when an employee wants to work reduced hours during the day, or work fewer days a week. For example, a parent or guardian may request a working day of 9am until 3pm every day so that they can be home for their children or dependants before and after school during term-time. This can also reduce the likelihood of a parent needing to take parental leave.

Flexitime hours

Not to be confused with staggered hours, flexitime, or flextime, allows an employee to choose their working start and finish times, but always works the organisation’s “core hours” – for example, between 10am and 2pm every day.

Annualised hours

Annualised hours mean that an employee works a certain number of hours during a year, but their schedule is a bit more flexible. For example, agency workers may work certain core hours, and then complete the rest of their hours when needed for projects or by clients, and so on.

The increasing popularity of flexible work arrangements has prompted the UK government to complete a consultation on ‘Making flexible working the default’. While the results of the consultation are still pending, the government has noted that flexible working can be particularly useful for people who need to balance their personal and working lives. For example, people with carer responsibilities may be better able to access the labour market, or stay in work, with flexible working options. The government has also noted that flexible working arrangements can help employers by attracting more applicants to new roles, as well as by increasing productivity and motivation levels within workplaces.

How does flexible working affect a business?

The impact of flexible working on businesses is overwhelmingly positive for both employers and employees. The UK government’s consultation document for changes to flexible working states that by “removing the invisible restrictions to jobs, flexible working fosters a more diverse workforce – and the evidence shows that this leads to improved financial returns for businesses.”

Meanwhile, the Chartered Institute of Personnel and Development (CIPD), the UK’s association for human resources professionals, says that quality flexible arrangements and flexible work schedules can also help businesses to:

  • improve employee work-life balance, job satisfaction, loyalty, and well-being
  • increase staff retention
  • reduce absenteeism
  • become more responsive to change

However, it’s worth noting that research conducted by the CIPD suggests that not all employers offer flexible working practices. In fact, 46% of employees say they do not have flexible working arrangements in their current roles.

The CIPD also notes that while working from home, or remote work, has increased during the COVID-19 pandemic, 44% of people did not work from home at all during the past two years. So while remote working is a popular flexible working arrangement, it’s just one of the options available – and 75% of employees say it’s important that people who can’t work from home have choices to work flexibly in other ways.

How to implement flexible work arrangements

All employees are entitled to request flexible working in the UK, as long as they have 26 weeks of service with their employer. Requests can be made once every 12 months and must be submitted in writing.

The Advisory, Conciliation and Arbitration Service (ACAS), which offers advice and support on flexible working arrangements, recommends that employers:

  • offer clear guidance about what information is needed when an employee submits their flexible working request
  • talk to the employee requesting flexible working as soon as possible after receiving the request. This conversation should be in a private place, and determine how the request might benefit the employee and the business
  • allow an employee to be accompanied by a work colleague for any discussions, and make sure the employee knows they have this option
  • let the employee know the decision about their request as soon as possible, in writing
  • allow the employee to appeal the decision if their request is denied

It’s also worth noting that a request for flexible working can only be rejected for one of the following reasons:

  • the burden of additional costs
  • an inability to reorganise work among existing staff
  • an inability to recruit additional staff
  • a detrimental impact on quality
  • a detrimental impact on performance
  • a detrimental effect on ability to meet customer demand
  • insufficient work for the periods the employee proposes to work
  • a planned structural change to the business

Become a business leader

When leading people within a business, it’s clear that flexible working initiatives can be a fantastic motivator – but they’re just one of the ways that talented people managers and leaders can create high-performing work environments.

Gain all of the skills and qualifications you need to become a business leader with the MSc in International Business, Leadership and Management at the University of York. This flexible master’s degree is offered 100% online, so you can fit your studies around your full-time work and personal commitments.

Intellectual capital: driving business growth and innovation

How can a business maximise its growth and development? What can be done to increase competitive advantage? Are businesses making the best possible use of all their assets?

In an increasingly crowded global economy, all businesses must work hard to remain relevant, competitive and profitable. Innovation is key to maximising business growth and, for many businesses, they already possess the means to achieve it. Alongside this, developing customer-focused, personalised experiences – and adding value through the customer journey – is key. An organisation’s intellectual capital has the potential to achieve both aims, and add significant economic benefit – but what is it, and how is it best utilised?

What is intellectual capital?

Intellectual capital (IC) refers to the value of an organisation’s collective knowledge and resources that can provide it with some form of economic benefit. It encompasses employee knowledge, skill sets and professional training, as well as information and data.

In this way, IC identifies intangible assets, separating them into distinct, meaningful categories. Although not accounted for on a balance sheet, these non-monetary assets remain central to decision making and can have a profound impact on a company’s bottom line. More than ever, IC is recognised as one of most critical strategic assets for businesses.

Broadly speaking, there are three main categories:

  • Human capital: the ‘engine’ and ‘brain’ of a company is its workforce. Human capital is an umbrella term, referring to the skills, expertise, education and knowledge of an organisation’s staff – including how effectively such resources are used by those in management and leadership positions. A pool of talented employees, with a wealth of both professional and personal skills, adds significant value to a workplace. Companies who prioritise investing in the training, development and wellbeing of their teams are actively investing in their human capital. It can bring a host of benefits, including increased productivity and profitability.
  • Relational capital: this category refers to any useful relationships an organisation maintains – for example, with suppliers, customers, business partners and other stakeholders – as well as brand, reputation and trademarks. Customer capital is adjacent to this, and refers to current and future revenues from customer relationships.
  • Structural capital: structural capital relates to system functionality. It encompasses the processes, organisation and operations by which human and relational capital are supported. This may include intellectual property and innovation capital, data and databases, culture, hierarchy, non-physical infrastructure and more.

Each area offers the means for value creation – which is integral to increasing competitiveness. As such, business leaders should prioritise intellectual capital, and its role within operational strategy, in both short-term and long-term planning.

How is intellectual capital measured?

As stated, while IC is counted among a company’s assets, it is not included in its balance sheet. While there are various ways to measure intellectual capital, there isn’t one widely agreed, consistent method for doing so. Together, these aspects mean that quantifying it can be challenging.

Three main methods are generally used to measure IC:

  • The balanced scorecard method examines four key areas of a business to identify whether they are ‘balanced’. They are:
    1. customer perspective – how customers view the business; 
    2. internal perspective – how a company perceives its own strengths; 
    3. innovation and learning perspective – examining growth, development and shortfalls;
    4. financial perspective – whether shareholder commitments are being met. 

A visual tool which communicates organisational structure and strategic metrics, the scorecard provides a detailed overview without overwhelming leaders with information.

  • The Skandia Navigator method uses a series of markers to develop a well-rounded overview of organisational performance. It focuses on five key areas: 
    1. financial focus – referring to overall financial health; 
    2. customer focus – including aspects such as returning customers and satisfaction scores; 
    3. process focus – how efficient and fit-for-purpose businesses processes are; 
    4. renewal and development focus – which looks at long-term business strategy and sustainability;
    5. human focus – sitting at the centre of the others, human focus encompasses employee wellbeing, experience, expertise and skills.
  • Market value-to-book value ratio is calculated by comparing a company’s book value with its market value, and aims to identify both undervalued and overvalued assets. A ratio above one indicates that there may be undervalued assets which are not being utilised; a ratio below one indicates there may be overvalued assets which action could be taken to strengthen.

How can a business increase its intellectual capital?

Intellectual capital acts as a value-driver in our twenty-first-century economy. As such, it’s no surprise that many businesses are pivoting to focus on human, relational and structural assets over others. Given both its relative importance and the returns an organisation can expect, finding ways to increase IC could be key to achieving key business goals.

For Forbes, efforts to increase IC mean adopting either a solution-focused or perspective-focused approach. The first refers to the methods by which specific results can be achieved – the what, when, why and where. The second refers to how IC can utilise industry and marketplace trends, forecasts and insights to seize opportunities. Whichever approach a business opts for, there are a number of ways in which to boost intellectual capital efforts. These include:

  • Improving employee satisfaction to increase retention rates
  • Recruiting individuals with specific knowledge, competencies and skill sets that are currently lacking among the existing workforce
  • Auditing and enhancing systems and processes
  • Gathering research and data to inform decision making
  • Investing in training and development opportunities for employees
  • Improving employer branding to both attract and retain the best talent
  • Creating new products, services and initiatives through innovation

Influential contributors and further reading

Early and current proponents and authors of intellectual capital thinking include:

  • Patrick H Sullivan who wrote ‘A Brief History of the Intellectual Capital Movement’. He presented a concise overview of the beginnings of the discipline in which he traced it back to three origins. These were: Hiroyuki Hami, who studied invisible assets pertaining to Japanese operational management; the work of various economists (Penrose, Rumelt, Wernerfelt et al) which was included in Dr David J. Teece’s 1986 article relating to technical commercialisation; and Karl Erik-Sveiby, who focused on human capital in terms of employee competences and knowledge base. His model of intellectual capital, published in 1997, was a seminal contribution in the field.
  • Dr David J Teece published ‘Managing Intellectual Capital’ in 2002, and further publications by him are available on Google Scholar.
  • Leif Edvinsson’s 2002 book, ‘Corporate Longitude’, concerned itself with the measurement, valuation and economic impact of the knowledge economy.
  • Thomas A Stewart, a pioneer in the field, authored ‘The New Wealth of Organizations’ in 1997. He delved into areas such as unlocking potential hidden assets, spotting and mentoring talented employees, and investigating methods to identify and retain customer and brand loyalty.

The field of intellectual capital continues to expand and evolve globally. Many well-known international figures such as Johan Roos and Nick Bontis continue to explore both its ramifications and applications.

Develop the specialist skills to succeed in fast-paced, global business environments

Become adept at the management of intellectual capital – alongside a wide variety of other business and leadership skills – with the University of York’s 100% online MSc International Business Leadership and Management programme.

You’ll gain in-depth, real-world know-how and tools to navigate the global business marketplace, exploring the challenges and opportunities associated with leadership and business management. Supported by our experts, you’ll further your knowledge in marketing, operations, strategy, project management, finance, people management and more. 

As well as providing a broad overview of management disciplines, this flexible programme will develop vital decision-making, critical-thinking, problem-solving and communication skills.

The importance of innovation management in business

In a constantly changing commercial world, the challenge is to not be left behind. Gaining and sustaining a competitive edge is key to thriving in today’s global marketplace. Innovation management has become an essential component in navigating this increasingly complex and international business environment.

What is innovation management?

Applied to business, innovation is all about generating new ways of solving problems, using different models, theories and frameworks. It is a creative process which uses techniques such as brainstorming and prototyping, and plays a critical role in the design thinking process. 

There are as many ways to innovate as there are problems to solve. The goal is either to introduce new or improved products or services to gain competitive advantage. By developing a sustainable and ongoing innovation process, a company’s brand image and advancement is set on an upward trajectory.

How innovation management happens

Coming up with innovative ideas, products and services is directly down to the pool of talent available in the workforce. Traditionally, companies would generate ideas in-house, but many are now turning to  open innovation. This refers to companies and organisations working with external agencies such as academic and research institutions, suppliers and clients. It fosters a working model very different from the traditional one, but is advantageous to all parties. 

Initiatives are carried out by an organisation, with the aim to identify and create new business openings through:

  • generating ideas
  • exploring future areas of growth
  • modelling products and services
  • experimenting and testing new concepts.

Not everything needs to start from scratch. Many existing products or services may already work well, and simply need to be approached differently – for example, through adaptation and modification.

Successful innovation in business relies on certain criteria, including:

  • Business models. Your company must be flexible enough to rethink the business and find new revenue streams. Companies may resist looking at new ways of managing existing systems and operations. However, actively challenging current and long-held assumptions is important in order to discover potential opportunities. 
  • Employee engagement. The human resources element available to businesses is invaluable. By tapping innovative ideas directly from the workforce, and engaging employees in showcasing skills and knowledge, ideation and innovation can be disseminated to everyone’s benefit.
  • Use of technology. Most of us have accepted the seamless integration of technological innovation in our professional lives. Although not every innovative idea will involve costly technological input and outlay, in today’s global, fast-moving market many will. Much of the world’s commercial thrust is reliant on the acquisition of data and knowledge. Google, for example, invests heavily in managing the innovation process.
  • Marketing. Brand awareness and visibility is a vital part of a company’s profile. There is no point in developing or producing a product or service if people are unaware of it. Marketing is one of the major factors in driving international sales and profitability.

Key aspects of innovation management

Different types of innovation have been identified within the innovation management process:

  • Incremental innovation. As its name suggests, in this strategy an existing product or service is subject to continual improvement and updates. Although such changes may be small or large, they still require defined methodologies and strategies to ensure continuous improvement. Starting out with its prototype in the early twentieth-century, Gillette is a high-profile brand which continually upgrades its razors with new features while retaining its core design. Likewise, in the current mobile phone market, innovation is delivered through frequent small updates to software.
  • Disruptive innovation. This occurs when product development results in a paradigm shift which has a radical impact on a business market. It can take a long time to get to the creation stage – often months and years in planning and execution. A great deal of project management, research, testing and evaluation is required. A classic example of disruptive innovation is demonstrated by Apple. When the iPhone was introduced in June 2007, it was an instant global success. It wasn’t the first mobile phone, but it overtook the existing competition and effectively launched the smartphone revolution.  
  • Architectural innovation. Introduced by Professor Rebecca Henderson and Dean Kim Clark of Harvard Business School in 1990, architectural innovation involves reconfiguring components of in-use products or services. Whether seeking a new target audience, or adding value to the existing market, it makes changes without radically altering either technologies or parts. As with the other innovation strategies, alterations must be questioned, evaluated and tested to determine whether clients and customers would value any changes.
  • Major innovation. This business process is arguably the ultimate in achievement: it seeks to introduce a brand new sector or industry. Inventions such as the printing press, the telephone and the internal combustion engine have literally changed the world. Forbes has listed some of the top innovation companies in recent times. All are focused on attaining the pinnacle in terms of product and service procurement.

Ways of participating in innovation management

Opportunities in innovation culture are limitless; global trade, marketing and sales continue to grow exponentially. The sector is populated not only with more ‘traditional’ business models – small or large organisations with employees – but also attracts those who are motivated by entrepreneurship and prefer to set up start-ups.

Global commerce both fosters and demands cross-cultural management and organisation. Awareness and servicing of contemporary issues in international business requires professionals with the knowledge and skill set to tackle any and all situations. Areas of interest may include:

  • Providing consultancy services
  • Sourcing new business and sales
  • Forming partnerships with external organisations using open innovation
  • Working with stakeholders, including shareholders, customers, suppliers and employees
  • Dealing with legal matters such as intellectual property and ethical concerns
  • Portfolio management

Choosing the right course for you

Gain the qualifications to help you succeed in the international business sector with the University of York’s online MSc International Business Leadership and Management programme. All practical information regarding the MSc programme – such as modules, topics, entry requirements, tuition fees and English language qualifications – can be found on our course page.

What is a franchise?

Franchises are a good option for people who want to be their own boss and run their own business, but are lacking the knowledge or resources to launch a new product or service on their own. Franchising is also a fairly financially-safe way of being your own boss, as there is a much higher rate of survival than in new businesses and startups.

At its core, a franchise is a partnership between an individual (the franchisee) and an existing organisation (the franchisor).

There are three types of franchise systems:

  • Product: This is when a franchisor gives a franchisee permission to sell a product using their logo, trademark, and brand name.
  • Manufacturing: This is when a franchisor partners with a franchisee to manufacture and sell their products using their logo, trademark, and brand name.
  • Business: This is when a franchisor licences their brand to a franchisee and provides regulations around how the business operates and is managed.

How franchises work

A franchisor grants a franchisee the right to market and/or trade their products and services. When a franchisee purchases a franchise, there is an initial fee to the corporation they’re going into partnership with, and they will usually also pay regular royalties to cover the cost of initial and/or ongoing training, business support and marketing. 

By paying for the organisation to manage these areas of the business, the franchisee can concentrate on the day-to-day running of their business. They also avoid the cost of organising these services in-house.

The franchisee agreement is a contract which governs the partnership between franchisee and franchisor. Within this, the partnership is tied in for a set period of time – generally between five and twenty years. Once the period of time is up, the contract tends to be renewable.

The history of franchises

The franchising model was created in the 1800s, by Isaac Singer – inventor of the widely-used Singer sewing machine. After the US Civil War in the 1860s, he was mass-producing his famous machines, but needed a system in place that would enable repairs and maintenance to cover the whole country. Initially, local merchants across the US were sold licences that permitted them to service the machines. This then grew to enable the merchants to sell the machines, too. The contract used was the earliest form of franchise agreement.

During the Second World War, companies like Coca-Cola and Pepsi looked to expand quickly and began franchising. As the 1950s and 1960s saw growth in population, economic output and social change, franchising grew in popularity in the UK, especially amongst food retailers such as the fast-food chains Wimpy, McDonald’s and KFC, and ice cream brands Lyons Maid and Mr Softee.

Today, franchising is a function of many established brands across multiple sectors, with franchise opportunities in food, pet grooming, homecare agencies, beauty salons, recruitment companies and many more.

How popular are franchises?

The British Franchise Association’s 2018 bfa NatWest Franchise Survey found that the franchise industry is growing more than ever before. At the time of survey, there were 48,600 franchise units in the UK, and 935 business format franchise systems – around double of what existed twenty years prior.

It’s been widely reported that Millennials are turning to self-employment at a faster rate than any previous generations, and so it is no surprise the results of the franchise survey show this as an attractive option to this group. 18% of franchisees were found to be under the age of 30 – a significant rise in recent years. 

With 4 in 10 franchise systems operational from a home office, following the work from home orders issued throughout the recent Covid-19 pandemic, is it possible that this way of working could continue to thrive?

Are franchises a good investment?

The cost of owning a franchise can vary wildly, with the initial fee ranging from £1,000 to £500,000. On top of this, you also need to have budgeted for start-up costs, working capital, monthly rent, salaries, inventory, software and utilities.

The franchise industry contributes £17.2 billion per annum to UK GDP, and employs 710,000 people. The 2018 bfa NatWest Franchise Survey also found that franchises are a largely successful business model, with 93% of franchisees claiming profit. 60% have an annual turnover of more than £250,000.

To ensure franchise business success, a franchisee must first do their due diligence by making sure there is room for expansion in the territory they’ll be working in, understanding how much training and ongoing support will be offered, researching the success of other franchisees, and budgeting and planning for fee payments. With this knowledge, a successful business plan can be written, and a successful future awaits them.

Prepare for success in business

If you have been considering starting your own franchise and are looking to increase your business acumen, the University of York’s 100% online MSc International Business Leadership and Management could equip you with the skills and knowledge you need to succeed. 

This online master’s degree will give you a thorough grounding of multiple areas of business, so you will be prepared to take your career to the next level – whether your ambitions lie in opening a franchise or progressing at an existing company.

With us you’ll develop an understanding of business strategy, operations management, finance, leading and managing people, marketing and sales. As you study part-time, you can continue to earn while you learn, applying the knowledge you gain to your existing role. You’ll connect with a global network of peers as you study alongside professionals from all over the world.

What is the difference between leadership and management?

In the past couple of decades, leadership skills have been under the magnifying glass as society and people’s expectations of work have changed. Even in April 2019, less than a year before Covid-19 impacted the world, Deloitte was highlighting the new challenges that leadership faced. Those at the top need to be inspiring leaders who can guide the business, while their management teams are hands-on in facilitating the processes that direct the business towards its organisational goals. The difference between leadership and management is that leaders tend to be big picture thinkers, while managers  implement their leader’s vision in realistic and practical ways that result in measurable success.

Traditionally, leadership teams may have had very little interaction with employees, leaving that to line managers. However, as hierarchies have flattened, senior leaders have had to become more visible and available to teams in the working environment. While our expectations of leaders may be greater, there is still a gap between that expectation and the reality in most organisations. How leaders engage with stakeholders and progress with their leadership development is a hot topic that continues to evolve.

Deloitte’s 2019 Global Human Capital Trends report lists perennial leadership skills including the ability to manage operations, supervise teams, make decisions, prioritise investments, and manage the bottom line. It also recognises vital new management skills such as leading through ambiguity, managing increasing complexity, being tech-savvy, managing changing customer and talent demographics, and handling national and cultural differences. Some of these competencies can be taught, but others come only from experience.

The age of the outspoken CEO

As CEOs have felt the need to be more demonstrably involved with the day-to-day lives of team members, they have also felt the pressures of taking a stance on political, environmental, and cultural issues. 

Previously, there was a feeling that getting involved in current affairs could be detrimental to the reputation (and the share price) of companies. However, those companies and brands that have taken strong stances which authentically reflect their core values have increased their reach and traction with key audiences. An example of this was Oreo’s rainbow cookie image which was posted on Facebook to support Pride. At the time, this was one of the most overt demonstrations of support for the LBTGQ+ community from a global corporation. Responses were both positive and negative with a lot of debate erupting on social media. Despite the controversy, parent company Kraft set a precedent, and many other brands followed suit.

Patagonia is an American outdoor clothing company renowned for its environmental and political activism. The company has also led on family-friendly human resources policies, including paternity and maternity leave, as well as providing on-site childcare for parents. 

While many companies rely heavily on their social media teams to plan and strategise their messaging, some CEOs are becoming bolder in voicing their beliefs and goals. This includes Ryan Gellert, CEO of Patagonia, who has stated that there is “a special place in hell” for those corporations that claim to be going ”all in” on climate change and yet do not back this up with their actions.

What is a servant leader?

Servant leadership has been popularised through agile working methods in which scrum masters support teams in organising themselves rather than telling them what to do. 

The servant leader is different to a traditional leader in senior management; they are seen to put their teams first and themselves second. It is a democratic leadership style that has similarities with transformational leadership. Leading by serving is a mentality that can be effectively adopted at all management levels.  

The circle of influence

With so much on the to-do list of today’s inspiring leaders, how do they manage to stay focused? Many issues that are important to CEOs straddle the line between personal development and professional development, and so learning resources such as podcasts or books on topics such as emotional intelligence are all legitimate continued professional development (CPD). Great leaders are usually life-long learners who are interested in constantly upping their game and remaining relevant

The 1989 book The 7 Habits of Highly Effective People by Stephen Covey is still much read, quoted, and referenced by leaders. It seems that people’s appetite for understanding what makes someone effective and therefore successful has also influenced many articles on the habits of CEOs. Morning routines provided a particularly popular point of discussion on LinkedIn with high achievers and their waking times cited. Tim Cook (CEO of Apple) apparently rises at 3:45am, Anna Wintour (Vogue editor) plays tennis at 5:45am and Howard Schultz (former Starbucks CEO) reportedly gets up at 4:30am.

Whether you wake before 6am or not, Stephen Covey’s Circle of Influence is almost certainly a contributing factor to the high productivity of many successful CEOs. Covey states that proactive people focus on what they can do and who they can influence in any given situation. This focus on their immediate circle of influence actually causes the circle to increase. Those who are reactive focus their energy on things which are beyond their control, which only acts to shrink their circle of influence.

Putting your energy into the things you can change is undoubtedly a route to productivity. It results in a sense of satisfaction in what you can achieve, rather than frustration in what you can’t. This seemingly simple approach can be applied to everything from problem-solving and decision-making to mentoring and staffing.

Learn how to be a leader, not just a manager

The landscape of international business is rapidly changing with new developments and challenges emerging every day. 

Whether you’re already in a management role or have set your sights on moving up through the ranks, the 100% online MSc International Business, Leadership and Management from the University of York is a first-class approach to improving both your knowledge and standing.

Corporate culture: the building blocks of a business

It’s not always easy to put a finger on what makes a workplace feel the way it does. Is it rooted in the work that takes place there? The other employees? The work environment itself?

In fact, it’s all of this – and more. The unique culture of a business is the golden thread that runs through every aspect of its operations.

Increasingly, people are seeking to address their work-life balance – acutely evidenced by what has been dubbed “The Great Resignation” witnessed throughout the pandemic. An organisation’s culture is often at the heart of decisions to leave or join an employer. With many now viewing work as more than a paycheck – in a world where going solo is seen as less of a risk – businesses can’t afford to ignore substandard cultures. To retain talented individuals, they need to create environments in which people can thrive.

What is corporate culture?

Corporate culture describes and governs the ways in which a business operates. It refers to its personality and character: shared values, beliefs and assumptions about how people should act; how decisions should be made; and how work activities should be carried out. Culture denotes the particular ideas and customs that make each organisation unique. For example, its leadership, job roles, company values, workspace, pay, initiatives and perks, rewards and recognition. Cumulatively, it should be the foundation upon which people can work to the best of their ability.

The core elements that make up a company’s culture include:

  • Leadership
  • Vision and values
  • Recognition
  • Operations
  • Learning and development
  • Environment
  • Communication
  • Pay and benefits
  • Wellbeing

From small start-ups to established, global brands, all businesses have a workplace culture – and they vary dramatically. The various types include conventional, clan, progressive, market, adhocracy, authority organisation, and more.

Take the retail brand Zappos, a company where creating an inclusive culture is the top priority. Their core value lies in celebrating every employee’s diversity and individuality – and they’re famous for it. However, this approach is starkly different to that taken by countless other businesses.

Why is corporate culture important?

Experts in the company culture space, Liberty Mind, make a compelling case for why improving corporate culture should be prioritised:

  • 88% of employees believe a distinct workplace culture is important to company success
  • Companies with strong cultures saw 4x increase in revenue growth
  • 58% of people say that they trust strangers more than their own boss
  • 78% of executives included culture among the top 5 things that add value to their company
  • Job turnover in organisations with positive cultures is 13.9%, whereas in organisations with poor cultures it’s 48.4%
  • Only 54% of employees recommend their company as a good place to work
  • More than 87% of the global workforce is not engaged, yet engaged workplaces are 21% more profitable

However, it seems many organisations are struggling to get it right; 87% of organisations cite culture and employee engagement as one of their top challenges.

Strengths and weaknesses of culture

Clearly, culture matters to employees – and therefore has a direct impact on a business. Workplaces with poor or non-existent cultures are more likely to encounter low morale, brand reputation issues and decreased productivity. As people leave their roles, poor employee retention necessitates costs associated with recruitment, training and – at least in the short-term – an increased workload for already-beleaguered employees. Worse still, workplaces with toxic cultures breed resentment, fear, frustration and poor mental health among their employees. If staff do not simply leave, as many will, they are likely to take more sick days and be less productive.

In contrast, companies with nurturing, strong cultures can expect to reap the rewards. They are likely to feature good teamwork: teams working towards shared goals are more driven and productive, with the ability to resolve issues more quickly. Brand reputation will soar as employees – who have belief in company leaders and their shared values – spread the word, acting as brand ambassadors. These businesses are in a better position to weather change, attract and retain high quality applicants, and to take risks and make decisions. Together, these positive, culture-building aspects are likely to improve a company’s bottom line.

Improving company culture: more than a mission statement

By first assessing the current cultural status, a company is in a stronger position to identify – and design a roadmap to achieve – its desired culture. With input from stakeholders, leaders should examine the current culture, including core values, strengths, and organisational impact. Harvard Business Review designed a tool to understand an organisation’s cultural profile, supporting this investigative work. It guides leaders to examine cultural styles and types of cultures, the prominence of company culture, and demographic aspects of how culture operates.

Next, leaders must understand how strategy and business environment impact the culture. Are there any current or future external conditions or strategic decisions that will influence cultural styles? If so, how can the styles respond? Any robust culture target will need to support, or respond to, future changes.

It’s critical to ground the target in business realities. Leaders should frame any culture targets in response to real-world problems and value-adding solutions – far more practical and effective than selling them as shiny, culture change initiatives.

Leaders must be prepared to drive cultural change through every area of the business. Indeed suggest further actions to support a company-wide cultural improvement:

  • Hire the right people
  • Appoint a cultural ambassador
  • Set specific, achievable goals with clear metrics
  • Encourage open communication
  • Reward success and offer incentives
  • Organise meaningful team-building and social events

Boosting employee engagement through company culture is not about making people happy. Instead, leaders should focus on making them feel connected to the business and motivated to help achieve its goals, even during times of adversity.

Master the international business environment

How strong is your company’s organisational culture? Is a culture change overdue?

Advance your practical knowledge and gain a solid theoretical understanding of the global business environment with the University of York’s online MSc International Business Leadership and Management programme. As well as the challenges associated with global trade, your studies will encompass marketing, sales, and a detailed overview of relevant management disciplines, including human resource management. Develop the skills to succeed in the fast-paced world of business and learn in a flexible way that suits you, supported by experts.

Workplace diversity and why it matters

Diversity in the workplace is at the forefront of creating healthier, more inclusive environments. The office or space in which we work should be leading on equality and providing a work environment where all people are welcome and feel comfortable, regardless of ethnicity, race, sexual orientation, age, sex, or gender. Diversity also includes diversity of thought, education, skill sets, experiences, beliefs, and personalities. 

Unfortunately, it is usually cases of discrimination which bring these issues into sharp focus and motivate organisations to improve their Diversity, Equity and Inclusion (DEI) Initiatives. The Black Lives Matter movement has catalysed many organisations to implement unconscious bias training. Structural, institutional change is required, without which diversity training may simply be a box-ticking exercise. Unconscious biases are just one aspect of how discrimination and prejudice can play out; strong policies, strategies and practices should be enforced company-wide to support any diversity training.

Alice Thompson, a working mother, recently won a landmark sex discrimination court case because her employer wouldn’t allow her to work part-time and leave work early to pick up her child from nursery. Working parents expect employers to be flexible and reasonable in consideration of family commitments. Historically, it has been women who must balance these commitments with their work, but no parent should feel discriminated against if they have family commitments or request parental leave. In male-dominated sectors which still lack gender diversity, women can feel particularly isolated when making these decisions, so it is imperative that HR teams are also diverse.

Why is workplace diversity important?

Job seekers are increasingly looking for roles within diverse companies that promote an inclusive culture. Whether or not a company truly has a diverse workforce can be key in the decision-making of potential candidates going through the recruitment process. This is particularly true for Millennials who expect employers to be progressive and proactive in this area. 

Prospective employees look to see a reflection of themselves in diverse teams. Organisations can draw skilled candidates to their talent pool and improve employee engagement by offering a genuinely diverse workplace. Talented candidates may have many job offers but money may not be the deciding factor for them. Seeing a team of people from different backgrounds with different perspectives can help them feel confident that an employer really does champion equal opportunity.

The benefits of diversity in the workplace also extend to profitability as demonstrated in a 2019 McKinsey analysis. Companies in the top quartile for gender diversity on executive teams were 25% more likely to have above-average profitability than companies in the fourth quartile. A more recent report from McKinsey, Diversity Wins, stated that companies in the top quartile for ethnic and racial diversity in management were 36% more likely to have financial returns above the industry mean. These statistics present a strong business case for diversity, showing that it is in the interests of both the employer and the employee.   

A sense of belonging was at the top of Deloitte’s 2020 Global Human Capital Trends survey as one of the most important human capital issues alongside well-being. 93% of survey respondents agreed that belonging drives organisational performance. This is one of the highest rates of consensus seen in a decade of Global Human Capital Trends reports, pointing to a societal shift that demands the attention of corporations. 

As we continue to live through a time of challenge and change, individuals must be seen for their skills and talents regardless of race, neurodiversity, physical abilities, sexuality, gender, or age. The ethnic diversity of young British people is also in stark contrast with the demographics of the past. Inclusivity for them is less of a concept and more of a natural way of doing and being.   

Encouraging diversity in the workplace

Just as unconscious bias training needs the support of strong policies, DEI initiatives must be well-considered, dynamic and responsive. Many organisations may communicate their DEI initiative through social media, but this can be perceived as performative and potential new employees will scrutinise the company culture and diversity goals for authenticity. For this reason, how workplace culture is communicated both externally and internally is of key importance.

Diversity is a continuous process so updates should be exactly that, updates on an ongoing path to diversity goals. The hiring process should introduce candidates to the company’s efforts in DEI and be transparent about whether it is an inclusive workplace in practice. A workplace can appear to be diverse, but inclusivity usually shows in how relaxed current employees feel in being their authentic selves.

Diversity also needs to be led from the top so hiring managers and leaders who are fully on-board with the DEI initiative and who are confident communicators is crucial to keeping momentum. How leaders behave and communicate trickles down through the organisation. This doesn’t mean that everyone has to agree on everything, it means cultivating an environment where people feel safe having open discussions and debates where their viewpoints are accepted even if they aren’t agreed with. Conversely, those who desire confidentiality or minority groups who do not feel safe speaking in an open-plan office, should be offered respect and discretion.

Diverse companies attract diverse talent

A strong diversity and inclusion initiative is becoming a given for leading corporations and organisations worldwide, especially if they want to attract talented and skilled individuals from all backgrounds. DEI is not something that can simply be mentioned in job descriptions to capture the attention of applicants, it is evident in how relaxed employees are in the workplace and how the workplace accommodates the needs of its employees.

Can you be an ambassador for diversity and inclusion in your organisation? Are you keen to learn more about what this means in an international business setting? Find out how you can with the University of York’s MSc International Business Leadership and Management online degree.

A guide to corporate social responsibility

Responsible business practices and a commitment to global social citizenship are needed to safeguard our shared future – and pave the way for a better world.

Some of the biggest issues facing our planet – including climate change, poverty, social inequality, food insecurity and human rights abuses – are ones that cannot be tackled without critical change within the world of business.

Businesses must play an integral part in shaping what happens next. From their environmental impact, to their work within local communities, to who’s involved in their decision making, any business model should be examined to identify where and how sustainability efforts could be supported.

What is corporate social responsibility?

Corporate social responsibility (CSR) is the idea that a business has a responsibility to the wider world. It’s a management concept whereby companies integrate social and environmental concerns in both their business operations and their interactions with stakeholders, offering a way for companies to achieve a balance of environmental, philanthropic, ethical and economic practices.

The triple bottom line (TBL) is the idea that businesses should prepare three distinct bottom-line measurements, also known as the three Ps: people, planet and profit. The TBL highlights the relationship between business and a ‘green mindset’; it attempts to align organisations with the goal of sustainable development, and positive impact, on a global scale. Ultimately, it offers a more rounded, comprehensive set of working objectives than simply profit-above-all.

CSR issues are wide ranging. They include environmental management, human rights, eco-efficiency, responsible sourcing and production, diversity and inclusion, labour standards and working conditions, social equity, stakeholder engagement, employee and community relations, governance, and anti-corruption policies.

Why is CSR important to businesses?

According to Impact, a leading social value measurement platform, CSR is good for business. They note that:

  • 77% of consumers are more likely to use companies that are committed to making the world a better place
  •  49% of consumers assume that companies who don’t speak on social issues don’t care
  • 25% of consumers and 22% of investors cite a “zero tolerance” policy toward companies that embrace questionable ethical practices
  • Consumers are four times as likely to purchase from a brand with a strong purpose
  • 66% of global consumers are willing to pay more for sustainable goods

On top of this, it’s estimated that CSR initiatives can help companies to avoid losses of roughly 7%. More and more businesses are publishing annual sustainability reports, in a bid for transparency in their efforts and operations and to benefit from its other advantages.

CSR is integral to the development of a more sustainable future. The better question for stakeholders wondering whether they can afford to spend time and energy implementing CSR strategies, is whether they can afford not to.

How can a business demonstrate CSR?

The United Nations Global Compact calls upon organisations to “align their strategies and operations with universal principles on human rights, labour, environment and anti-corruption, and take actions that advance societal goals”.

In addition to supporting businesses to aim for the prescribed United Nations Sustainable Development Goals, it asks them to adhere to ten Principles. The Principles outline measures across each of the key areas listed above. Examples of the measures include: the effective abolition of forced, compulsory and child labour; initiatives to promote greater environmental responsibility; the elimination of discrimination in respect of employment and occupation; and working against corruption in all forms, including extortion and bribery. It offers a framework and starting point for the minimum businesses must do in order to operate responsibly.

Similarly, in 2010, the International Organization for Standardization (ISO) launched new guidance: the ISO 26000. Designed for businesses who are committed to operating in a socially responsible way, it helps organisations to translate social principles into effective actions and shares best practice. Increasingly, a company’s adherence to ISO 26000 is regarded as a commitment to both sustainability and its overall performance.

Where CSR should be implemented in a business strategy depends on where improvement is required. If a business is energy-intensive, could that energy come from renewable sources? Where there’s a lack of diversity and inclusivity among employees, could human resource policies be revised? Could a multinational team of frequent flyers reduce their travel or offset their emissions?

The need for authenticity

Underscoring any CSR efforts is the need for authenticity.

In today’s world, the most respected brands don’t rely on virtue signalling – they live and breathe their values. A brand that is consistent in its actions is more likely to gain loyal followers and cultivate long-term corporate sustainability.

Modern consumers, particularly Millennials and Gen Z, are advocates for positive change. They demand more from brands and companies, increasingly wise to those whose claims ring false. One such example is prominent fast fashion brands who launch ‘sustainable’ or ‘recycled’ clothing lines while, behind the scenes, their predominantly female garment workers receive a less-than-living wage and suffer in deplorable working conditions. To use another example, many businesses also incorporate the rainbow flag in marketing efforts during Pride Month, while failing to support the LGBT+ community in any meaningful way.

Public relations activities fare better when brands are founded on an authentic, purposeful sustainability strategy.

The benefits of CSR

CSR programmes can be a powerful marketing tool. They can help a business to position itself favourably in the eyes of consumers, regulators and investors, boosting brand reputation. By commanding respect in the marketplace and gaining competitive advantage, CSR can result in better financial performance.

By default, business leaders who focus on improving their social impact will scrutinise business practices related to their value chain, consumer offerings, employee relations, and other operational aspects. This can result in new, innovative solutions which may also have cost-saving benefits. A business may reconfigure its manufacturing process to consume less energy and produce less waste; as well as being more environmentally friendly, it may also reduce its overheads.

CSR practices can boost employee engagement and satisfaction. Increasingly, people view their work as an extension of their own identities and convictions. When a brand invites them to share in its objectives, it can drive employee retention and attract quality candidates to roles.

Companies are embracing social responsibility due to moral convictions as well as profit – and reaping the benefits. All these effects of CSR can help to ensure that a company remains profitable and sustainable in the long term.

Champion CSR in your business sector

Are you passionate about environmental sustainability? Want to develop the skills and knowledge to pioneer global corporate citizenship? Interested in learning more about CSR activities?

The University of York’s online MSc International Business, Leadership and Management programme places particular emphasis on the challenges associated with global trade, marketing and sales, together with an overview of relevant management disciplines. You’ll be supported to build your knowledge of practice whilst developing an advanced theoretical understanding of the international business environment.

The importance of branding

The word branding originally came from a time when cattle farmers branded their animals with a hot iron to mark their ownership. Each farm or ranch would have its own brand mark usually made up of initials to identify its animals. Although branding and commerce have both grown significantly since then, the idea of the brand logo has not changed much: a simple, bold image that stays in the mind. But a logo is just part of a wider branding exercise that every company should carefully consider.

What is branding in marketing?

Branding is the way a company communicates itself both visually and verbally so that it becomes instantly recognisable to customers. A brand is an intangible concept and yet it forms a very clear idea of what a company does based on its values and identity. Brand identity comprises all visual communications, from the logo design to the typography and colour palette a brand uses on things like its packaging and website. By creating a cohesive identity, the brand experience becomes seamless, and the customer can identify the brand through cues like colour and style before they have even read the brand name. Although brand name is equally important in creating a memorable brand. For instance, the name Amazon recalls the diversity of the rainforest. Amazon.com wanted to become the number one destination for a wide variety of products. In fact, anything that the customer could possibly want, despite originally selling only books – the desire to expand was always there and evident in the name.

Once a visual identity has been decided, a brand guidelines document is usually created to communicate it across the business. By following these guidelines when designing marketing materials, employees and third parties (like a branding agency) can keep the brand’s aesthetics intact across all touchpoints. As well as the brand’s visual style, tone of voice is also very important, representing how the brand speaks. Tone of voice can either be part of the brand guidelines or a separate keystone document.

Why is branding important?

Branding can be the difference between success and failure, all depending on how well it is executed. It may be an area that isn’t given much thought, particularly if a company is hastily created or because founding members feel that things like graphic design are an unnecessary expense. And yet, without the consistency that branding provides, new products or services can easily get lost among competitors with a stronger brand. A powerful brand can create loyal customers, so it’s vital for a new company to think about how it wants to be seen before it launches.

Apple is often cited as a strong brand. It broke the mould on many fronts, from its name and logo having nothing to do with computers (although originally called Apple Computer Company) to its founder’s attitude and personality having a strong effect on the brand’s identity. Although there were originally three co-founders, Steve Jobs eventually drove the brand to prominence, and it was his desire for precision and minimalism that became inextricably linked with the brand. When he died, these design principles were maintained by Chief Design Officer, Jony Ive. Apple was also a change-maker in that its slogan, “Think Different” was purely inspirational and again, did not refer to the product. Other brands which have managed this successfully include Nike, with their “Just Do It” strapline. Both are short, snappy, and aspirational, so that the customer then connects the brand’s products with the chance to live and make real that philosophy for themselves. This creates brand equity, meaning that the brand’s value increases as people begin to perceive the products as being better and more desirable than other brands because of how they make them feel.

Part of brand management is assessing when a company may need a rebrand. This is not uncommon – it can just be a new logo, or it can be an entire rebranding exercise, changing the look and feel of a brand totally. This can be because the brand feels dated, or because the brand’s values have changed. If for example, a brand promise no longer feels relevant or true, updating that one aspect of the branding requires that all aspects be reviewed.

What are branding strategies?

A brand strategy is a document used by all stakeholders in planning the operations of a company. It is a plan that outlines the company’s goals for the brand, one year, three years, five years or further down the line. Activities are planned within the timeline to raise brand awareness among existing and new customers. These tend to be milestone events like new product launches and associated campaigns on social media or through more traditional advertising. Within the brand strategy there will likely be other strategies such as the content strategy, outlining the marketing assets which will be required like blogs, design templates, and copy for social media. The focus of these brand-building activities, especially for marketers, is on creating a brand experience, gaining competitive advantage, and improving financial performance.

As a company expands, it may have multiple products, ranges, and potential sub-brands, all with their own brand strategies. Large, global brands that have expanded over the years sometimes take the decision to unify the brand strategy and simplify communications. This may come after market research shows, for example, that the customer is confused by the differences between the various products, what they offer, and which one is right for them. Coca Cola’s One Brand strategy unites its various products like Diet Coke and Coca Cola Zero Sugar. The products have their own brands and target audiences, but at their core they are all part of the same family.

What is personal branding?

With the rise of social media has emerged the concept of personal branding. Your personal brand is how you present yourself to the world – particularly as a public figure or an expert in your field. 

Increasingly, with social media offering a platform for comment and opinion, many people are public figures whether they intended it or not. Either way, it’s important to think about how you appear to others, what you communicate, and how you communicate it in order to establish a strong personal brand. Someone’s business persona can become a brand in itself or a brand can grow out of a person’s popularity.

What is corporate branding?

Corporate branding is more about pushing the brand as a whole, rather than focusing on products or services. What are a company’s brand values? Does the company have a mission statement that resonates with the times in which we live? These are questions that investors or potential employees may ask. But it also applies to customers who buy into the brand as a whole and are most likely to be early adopters when it comes to any new products the company launches. 

Things that may come under corporate branding that are increasingly important to customers include Corporate Social Responsibility (CSR) and the company’s HR policies. In fact, how a company is perceived by potential employees is down to employer branding, another arm of corporate branding. This includes how the company nurtures its internal culture, how it treats its employees, and how this is communicated.

Learn more about branding in international business

Branding is key to all business and is particularly important to international businesses operating in different territories. Understanding the message that certain logos or words send, as well as the symbolism of particular colours in different cultures, is crucial when operating globally. 

Add to your knowledge and expertise with an MSc International Business, Leadership and Management from University of York.

What you need to know about mergers and acquisitions

Mergers and acquisitions (M&A) is the term used for the business of merging or acquiring limited companies (also known as private companies) and public limited companies (PLCs). It’s considered a specialism of corporate finance.

What is the difference between a merger and an acquisition?

A merger is when two separate entities combine. The most common structures are either a vertical merger or a horizontal merger. A vertical merger is when two or more companies come together, each with a different supply chain but the same end product or service. This kind of merger often results in synergies leading to reduced costs and increased productivity by gaining greater control of the supply chain.

A horizontal merger usually happens between competitors operating in the same space that want to increase their market share by joining forces and becoming one entity. A joint venture is slightly different – it involves two companies creating a new entity in which they both invest and share profit, loss and control. This business is entirely separate from both parties’ other companies.

Acquisition is when a larger acquiring company selects a target company to acquire through a buyout. Usually these are friendly acquisitions, but there can be what is known as a hostile takeover. This is when the acquirer aims to buy controlling interest directly from a  company’s shareholders without the consent of its directors. It is a completely legal M&A process but because of the ‘unfriendly’ nature of it, it can affect morale and damage company culture.

Consolidation can refer specifically to an amalgamation, which is the acquiring – and sometimes merging – of many smaller companies that then become part of a larger holding group. This is often seen in the creative industries or with startups.

Are mergers and acquisitions good for the economy?

Mergers and acquisitions tend to be good for the economy because they stimulate business growth, create new jobs and offer investment opportunities for all. Cross-border transactions can also help brands and businesses grow in new territories. However, if a company is looking to grow with the intention of merging or acquiring, it needs working capital to do this. A way of increasing capital is to offer shares on the stock market via an Initial Public Offering (IPO).

IPOs and the rise of SPACs

Famous IPOs in recent decades include when Facebook became a public company in 2012 and Alibaba’s record-breaking IPO in 2014. Facebook’s IPO was one of the most anticipated in history, with stock price steadily increasing up to the opening-day of May 18, and some investors suggesting a valuation of $40 per share in the build-up. The year before, LinkedIn’s stock had doubled in value on its first day of trading, from $45 to $90. Yet on the day, numerous factors – including computer glitches on the part of the Nasdaq stock exchange – led to Facebook share prices actually dropping considerably. This continued for the next couple of weeks with stock closing at $27.72 on June 1. Other tech companies took a hit and investment firms faced considerable losses. Nasdaq offered reimbursements, which its rival, the New York Stock Exchange called a “harmful precedent”. Despite these issues, the stock set a new record for trading volume of an IPO at 460 million shares.

Increasingly seen in global M&A, particularly in the US, is a Special Purpose Acquisition Company (SPAC). SPACs are created specifically to raise capital through an IPO and merge with another company. They’re not new, they’ve been around since the 90s, but SPACs have gained popularity with blue-chip private equity firms, investment banks like Goldman Sachs, and leading entrepreneurs. In turn, this kind of backing encourages more private companies to consider going public. 2020 saw the highest global IPO activity in a decade for the USA as well as the largest SPAC IPO in history.

The role of private equity

Private equity is capital which is not listed on a public stock exchange. Private equity firms are major players when it comes to M&A deals because they are powerful enough to keep on investing capital over an extended period of time. They have a pool of money accrued from previous M&A transactions, which then feeds into further deals. They also receive private equity from limited partners, pension funds, and capital from other companies. The firm, or fund as it is sometimes known, has good cash flow because of this.

Real estate is a form of private equity. There are private equity firms that specialise solely in the purchase of real estate, and by building a property portfolio they create further investment capital. Property is then improved and rented out, or sold on at a higher price, keeping the fund topped-up. Private investors see a return on their investment, and the money that’s left becomes working capital for the fund’s next venture.

Due diligence and pre-M&A analysis

One of the key steps in any merger or acquisition is the due diligence process. This is when investigations and audits are carried out to verify that all financial information provided by the target company is correct and that the purchase price is justified. Discounted Cash Flow (DCF) analysis is part of due diligence. It’s a method used to estimate the value of investment based on its predicted future cash flows.

Another important tool is Accretion Dilution Analysis. This is a basic test carried out before an offer is even made to determine whether a merger or acquisition will increase (accretion) or decrease (dilution) the Earnings per Share (EPS) once completed.

Intellectual Property (IP) must be taken into account as well. Acquisitions with an interest in gaining IP assets can have transaction values of billions. A thorough understanding of the complexities of such high-stake transactions is needed in order to derive precise valuation numbers when negotiating a deal.

Why work in mergers and acquisitions?

Global M&A is seeing growth in all sectors, even as the pandemic has seen some major companies fold. The way that we do business continues to be reshaped by world events, and the flux means that there are many business opportunities to take advantage of through mergers and acquisitions. Global M&A in financial services is seeing a boom with the start of 2021 being the busiest since 1980. The predominance of SPACs is set to spread outside of North America, and brings with it a demand for experienced managers and management teams.

Diversification acquisition will see larger companies offering size and scale to smaller companies which perhaps do not have the capital or resources to adapt in their offering, but which are otherwise doing well. At the other end of the spectrum, specialism may be needed, for example in healthcare, which is seeing a spike in demand for home healthcare solutions. Either way, business continues to seek a competitive advantage and mergers and acquisitions continue to provide this.

If you’re interested in learning more about the world of mergers and acquisitions, there are numerous finance-focused podcasts which look specifically at global M&A activity.

Learn more about mergers and acquisitions 

Mergers and acquisitions are a cornerstone of international businesses. Find out how you can sharpen your expertise in international business and mergers and acquisitions with the University of York’s MSc International Business Leadership and Management.