Understanding Neoliberalism Regimes and the Operations of Global Corporations

Introduction

The present-day political and economic ideology constitutes a veritable challenge - due to its complexity – for managers in charge of global corporations, especially when it comes to crafting global strategies. Therefore, an understanding of the neoliberalism system and the circumstances which led to the global dominance of corporations are crucial. The chapter evaluates the political and economic circumstances which led to the emergence of the new world order coined as neoliberalism. That means that the external environment of current global businesses will be discussed. Also highlighted is the new world order and how this is conducive to the free operations of global corporations. The chapter ends with a critical assessment of the entire neoliberal project and the corporate governance.

Successful and efficient global corporate and business strategic planning is nowadays unfeasible, unthinkable without a good understanding and a serious audit of both, the immediate operating environment and the macro in which the activities of a global corporation take place. The immediate operating and the macro environments in strategic management are referred to as the external stakeholders and the political, economic, socio-cultural, and technical, legal and environmental factors. These factors are beyond any control of businesses. The operating environment is understood as the micro environment or the specific business industry in which companies are competing, rivals, buyers, suppliers, community, media, intermediaries, pressure groups etc. The micro and macro environments constitute the external environment in opposition to the internal environment of a business. The internal environment is basically all the resources or the core competencies and capabilities of a company. The kind of appraisal required here is the scanning of the strengths, weaknesses, against the opportunities and threats of a company. This is generally known as SWOT analysis. Altogether, PEST and SWOT analyses are the analytical tools that help to understand the position of a company. These tools and the environmental assessment are used in all industry sectors from the travel and tourism sector to the hospitality etc (Thompson & Martin, 2005; Sadler, 2003).

An assessment of the international and the business environment in the layout of a global business strategy is therefore critical, since the business world has become more complex than ever before. This is in fact only relevant if one understands how the corporations have become bigger, and dominate the entire world in different aspects: institutions, societies and culture…They are becoming oligopolistic, that means a small number of organisations interact with each other and control the whole business by dictating the prices. Not only are the global corporations, as we shall see, powerful in terms of economics, but also politically speaking too.

The aim of this paper is first and foremost to evaluate the political and economic circumstances which led to the emergence of the new world order coined as Neoliberalism. That means this paper is particularly about the external environment of current global businesses. Secondly, a particular focus will be on the new world order and how this is conducive to the free operations of global corporations. Finally, a critical assessment of the entire neoliberal project and the corporate governance will follow. To understand the concept of neoliberalism it is paramount to briefly explain its theoretical background and how it has emerged to become the current dominant ideology in the economic and political spheres (Chang 2003, 3).