Example of Soscolo, a place in Italy which has developed into a centre of excellence in the manufacturing of the world’s best ceramic tiles in last 700 years to explain the concept of impact on businesses of the international environment is very handy. While Soscolo accounts for 20% of the world production of ceramic tiles and around 50% of the world exports of the commodity, it is interesting to note that most of its hegemony on the product developed after World War II when most of Europe was devastated in the war. The rebuilding efforts of the aftermath of the war created tremendous demand for the ceramic tiles from Soscolo since it was one of the most suitable places to source this material due to its location, availability of skilled labor for this product and technology availability there. Manufacturers in Soscolo took advantage of this opportunity and refined the technology to make it more efficient requiring less labor. At the same time production capacities increased. Related industries developed and today we have the world’s most excellent centre for this product. Above example of Soscolo of Italy demonstrate how political peace in the region after the war, & Italy being part of the US block, technological changes in the business environment as well as social transformation of the time made a long lasting impact on the foture of the businesses in the city.
Due to this TRIAD effect, all the demand for ceramic tiles went to this place which was strategically located.
The changing political and economic systems is the order of the present international environment where businesses have to adjust and allign with opporutinities and threats resulting from such global changes. One example of this change explained to the students related to increasing democratization of political systems of the world. Notable examples given were of Nicaragua, Chile, Eastern Europe and more recently the Gulf Region where purple revolution is taking place on the medium of Face book led campaigns in favor of democracy and more powers to the common people. Scores of countries are likely to be affect by these changes which may drastically change the political and economic models of countries which are still not ready to accept these Geopolitical Change of Global weather.
It is argued that even China may not remain unaffected by these environment changes and may see eruption of popular sentiments in favor of more power to its subjects and right to choose the people who must govern Chinese economy and its people. India is facing its biggest poltical turmoil where common man is aspring for true democracy and cleaner poltics, against corruption and graft. Led by Anna Hazare, purple revolution seems to have swept India which is as strong as many places in the world.
These changes may continue in foreseeable future. New understanding of global environment changes must be understood well by globetrotting business executives to help themselves take difficult business decisions, and are important. Some of the other changes relate to technological, financial and cultrual changes. Emergence of a geo culture, geo finance and democratic technological paradigm can bring serious influence the way global business is done. Increasing strengths of ethics groups, environment groups are some of the important changes in world geopolitical environment, which businesses must learn to comply with and manage.