Introduction Convergent United Kingdom Business Essay

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Introduction

In this chapter, regional imperatives that have an influence on the United Kingdom are discussed. They include key socio-cultural factors, ideological orientation, unique values, beliefs and assumptions, institutional legacy, and factors in economic micro-environment. They are discussed below.

Key socio-cultural factors

Key socio-cultural factors are larger scale forces within cultures and societies that affect the thoughts, feelings, behaviors of individuals. They include factors of national identity and social class system and they are discussed below (Europe Innova, 2010).

National identity

The UK is a multicultural country with mixed ethnic groups, in which this growth of the mixed population was a result of the large migration from other Commonwealth countries from 1950 onwards (Home Office UK, 2010).

The 2001 Census of the UK National Statistics shows two-thirds of a million (677,000) people reported having a mixed ethnic identity. Among this number, the White and Black Caribbean group was the largest mixed-group (237,000). The White and Asian and Other Mixed groups were broadly similar in size (189,000 and 156,000 respectively). The White and Black African was the smallest mixed group (79,000). (UK National Statistics, 2010)

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This mixed ethnic group culture is an effect of the implementation of the Treaty of Rome which guaranteed "Free Movement of Workers" to EU Nationals. This rule which is also regulated by Regulation no. 1612/68, carry rights to remain and of residence provided that citizens of the Member States do not become a burden on the finances of the host country (Europa, 2009).

To assist the implementation of the rule of free movement of workers, the EU passed legislation to recognize the professional qualifications of member states citizens in 2005 by Council Directives 2005/36/EC. Member States were also obliged to transpose these rights into "National Law" before 20 October 2007 (Europa, 2009). This Directive entitled the EU citizens with the right to pursue a profession in self employed or employed capacity in a Member States other than one in which they have obtained their professional qualifications (Eurofound, 2009).

Social class system

The multicultural society and a change in the economy have eroded the class ridden society of the UK (Project Britain, 2010). The grouping by occupations is one of the ways to define the class system where professionals including lawyers and doctors have a higher class status than people unskilled. The different levels of the class system symbolize the different levels of cash, power and influence. In the past, your class could interfere with your probability in getting a job or education and with whom to marry or hang around with. Today the class system has no such importance with the exception of the Royal Family (The Royal Household, 2010).

The class system of the UK society can be divided into three main classes. They include the upper class, usually of the oldest family with a huge amount of wealth and often given high status. The middle class include professionals, businessmen, industrialists, professionals, and owners of shops. And the lower or working class is the unskilled workers of factory, agricultural and coal mine. (Project Britain, 2010).

Ideological orientation

Since joining the European Union in 1973, the United Kingdom has developed major changes in laws, culture and business activities. The European Union being an economic union and by a standardized system of laws that apply to all Member States has developed a single market (Europa, 2009).

The European Union has a significant impact on UK employment law and employee rights, sometimes prompting major changes in the UK (Rubery, 2010); areas regulated by the EU laws include collective redundancies, data protection, discrimination, employee rights, equal pay, health and safety, protection of pregnant workers, protection of young workers, working time and rights of workers transferred within the UK. (CIPD, 2010)

The UK is obliged to transpose these European Laws into National Laws for better application of the laws and to maintain standardization of laws among all Member States (Europa, 2009). In facing these changes of law, other related national laws i.e. The UK's Companies Act has to be reformed to stay in line with the regional standards; for example, the latest reform of the said Act has made changes in 2006 to implement the EU's Takeover and Transparency Obligations Directives (Companies House, 2010). As a consequence, the local companies are obliged to make changes in its management styles to meet the legal requirements fixed for them in law.

Unique values, beliefs and assumptions

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The former Prime Minister Tony Blair has tried to define "British Values" in a speech in 2000, in which he commented:

"Standing up for our country means standing up for the core British Values of fair play, creativity, tolerance and an outwards looking approach to the world." (BBC News, 2001)

The qualities of the "British Values" have been shaped through centuries by a number of influences. They include, the rule law, where no one is above the law and everyone abide the same rules; personal freedom, where everyone has the right of life and right of expression; the sovereignty of the Crown in Parliament; the pluralist state; private property; institutions, in which British freedom and British character are immanent in British institutions; the family, where civic society depends on values being passed from generation to generation and stable families are the essential ingredient of a stable society; history; the English speaking world and finally the British character (Telegraph Media Group Limited, 2010).

In 2006, the then Chancellor of the Exchequer Gordon Brown also made a speech to promote Britishness. In the Fabian Society's Britishness Conference, Mr. Brown expressed the demand of a new constitutional settlement and symbols to represent a modern nationalism and also fixing a 'British Day' to promote "British values" (BBC News, 2006). Also in the same year, an attempt was made by the UK government to introduce "British Values Classes" as a mandatory part of the academic education for students aged 11 to 16. This attempt was a response to the terrorist bombing attack in London in 2005 with the aim to make the society more unified. However, this was never taken into effect (BBC News, 2006).

Institutional legacy

Institutional legacy consists of accumulated common experiences during time that shape the minds of social actors and produce common structural patterns (Business Dictionary, 2010). A legacy is based on institution (formal and informal) or ideology. It is reflected in mentalities, knowledge, orientations or political and economic culture (Business Dictionary, 2010).

The UK government has a positive attitude towards turning to Europe as Tony Blair expressed in a speech in 2001 (BBC News, 2001):

"A constructive engaged attitude to Europe reflects the best of British values of openness and leadership in the world"

Mr. Blair also stressed his belief in the Union saying: "The United Kingdom is stronger together than apart."

There are a numbers of benefits instigated by the membership of the European Union and these benefits have been massive. The standardized system has helped member states to develop stable and prosperous democracies. No one member states are in a best position than the other and each are considered equal (Europa, 2009). The United Kingdom has enjoyed rising benefits from the open markets and fair trade and competition. Many poorer European countries have received assistance from the European Union in order to grow and to develop further. (The Independant UK, 2001)

Factors in economic micro-environment

The UK has a population amounting to 61m and with a GDP per capita of US$37.4k, which made the UK ranked 30 in the list of the world's richest country. The UK economy ranked the 5th largest in the world and 2nd largest in Europe with GDP of US$2.279 trillion. (Economy Watch, 2010).

The UK economy is service orientated with low unemployment rate, high spending power and expanding productivity. Moreover, UK is well-known for a developed financial system which resulted with the banking and financial sectors sharing the biggest proportion of the country's GDP. The UK is also the biggest trading partner of the EU where the UK produces and exports the largest amount of natural gas to Europe. Furthermore, more than half of the import and export activities of the UK are transact with the EU (Forex Trading Gurus, 2010).

The UK government has issued the latest White Paper published on 28 October 2010 in which set out the role of government to promote business growth in a local context, promote economic development and to encourage business investment (HM Treasury, 2010). The main works for the government to sustain economic growth includes creating a framework of powerful incentives for local authorities to deliver sustainable economic development, including considering options to enable councils to retain locally-raised business rates in the Local Government Resource Review. Also to open a £1.4 billion Regional Growth Fund for business to support the creation of private sector jobs and to support communities currently dependent on the public sector, helping them make the transition to private sector-led growth and prosperity (HM Treasury, 2010).

Summary remarks

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In this chapter, I have covered that the European Union has a major impact on the United Kingdom, where it has developed a single market through a standardized system of laws. Since joining the EU, the UK is obliged to implement and to reform the national laws in conformity with the European Law, and one major implementation of the Treaty of Rome, which regulates the rights of workers, has resulted to major changes to the management styles in the country. UK has transformed to a culturally mixed country and the class ridden society has been eroded. All thanks to the law which safeguarded them with better human rights, anti-discrimination and equal pay in the workplace.

Most importantly, the UK Government has a positive attitude towards turning to Europe and at the same time safeguarding the "British Values" in not losing the uniqueness and identity. The Government believes the country is stronger together with the EU than apart as the EU is the biggest trading partner of the UK.

United Kingdom and contemporary societal context

Introduction

In this Chapter, the contemporary societal context in United Kingdom is discussed. This includes "economic, legal and educational infrastructure", "role of government", "level of government linkages", "system of corporate governance", and "relative dominance of national, regional or global values" in United Kingdom.

Economic, legal and educational infrastructure

In this section, the United Kingdom's infrastructures on economic, legal and education shall be discussed separately.

Economic infrastructure

In order to sustain economic growth and increase employment rate, the government has invested in major infrastructure which includes airports and reservoirs. This provides an enormous benefit to the country when examining the return on investment. The benefits include increasing the country's competitiveness and attracting business investments. Furthermore, the benefits also include increasing revenue from taxation and creating more employment opportunities (Department for Environmental Food and Rural Affairs, 2010).

The Chancellor of Exchequer shall submit to the parliament and the nation, a Budget every year which is a major financial and economic statement (HM Treasury, 2010). The Budget shall set out the current state and a forecast of the economy, also to provide an overview of the public finances and forecast expenses for the coming year. Furthermore, it shall set out the economic and fiscal objectives of the government, what they have done to achieve and what are they going to do further in order to achieve these. (HM Revenue & Customs, 2010).

The HM Treasury has established "the Infrastructure UK unit" which gives advises to government relating to the long-term economic infrastructure requirements of the UK and provides financial advises for supporting major projects and programs (HM Treasury, 2010). Their role includes analyzing key infrastructure networks on both the public and the private sectors with the objective to identify and deal with key cross-cutting issues.  Their role also includes identifying and attracting new investment from the private sector in infrastructure; and assisting the government to build stronger infrastructure (Infrastructure UK, 2010).

Legal infrastructure

The English Legal System is based on common law tradition with early Roman and modern continental influences. The sources of English Law are developed from the customs of the country, common law, equity, judicial precedent and legislation (Jacqueline Martin, 2005, pp 13-39). Another source of law, which is the European Law, came into being since United Kingdom joined the European Union on 1 January 1973 (Jacqueline Martin, 2005, p 68). The United Kingdom also accepts compulsory International Court of Justice's jurisdiction but with reservations (International Court of Justice, 2009).

The courts of the United Kingdom are structured with superior and inferior authority and they are the Court of Appeal, the High Court, the Crown Court, the Magistrates' Courts, the County Courts and the Probate Service; and Her Majesty's Courts Service carries out the administrative and support for these courts (Her Majesty's Court Service, 2007).

Educational infrastructure

The education system in the UK consisted of four stages and they are the primary education, secondary education, further education and higher education. Children aged 5 to 16 in the UK are obliged to legally attend primary and secondary education (UK.Internationalstudent.com, 2010).

The education system in the UK is also divided into "4 key stages" which breaks down from stages 1 to 4. Key stages 1 and 2 are taken in primary school and key stages 3 and 4 are taken in secondary school. Students are examined at the end of each stage in which the most crucial examination is the General Certificate of Secondary Education (GCSE) to be taken at 16 years old. Once students completed the GCSE's level they have the choice to go onto further education to take the A-levels and then potential higher education in the university, or finish school to start work (Education UK, 2010).

The UK has a variety of degree courses offered by over 100 universities for local students and students around the world. The undergraduate degree programs normally take 3 years to finish in the UK and 1 year for master degree should student require postgraduate education (UCAS, 2010)

Role of government

The United Kingdom is a parliamentary democratic country constituted with the queen as the head of country. The prime minister is the head of government and citizens vote in elections every four years for Members of Parliament (also known as MPs) to represent them.

The system of government of the UK is unified in the centre where powers are all located there with an exception that some powers are delegated to Scotland, Wales and Northern Ireland (Directgov, 2010).

The government is responsible for the country in developing and implementing policy and for drafting laws. The UK follows the system of separation of powers where the government's power is also known as the executive (Parliament UK, 2010).

Level of government linkages

Parliament and government

Both the parliament and government have an important role in constructing the laws of the United Kingdom and they closely together even though being separate institutions. As discussed in the previous section that the government is responsible to develop and implement policy and to draft laws. The Parliament conversely has the highest legislative power in the UK and is responsible to check works of government and to examine, debate and approve new regulations. In the system of separation of powers, this is known as the Legislature (Directgov, 2010).

The political party that gains the majority of the seats in election will form the new government. The party leader will become the Prime Minister who will then appoint ministers, including the Cabinet, who works in government departments with the responsibility to develop and run public services and policies. Government ministers are chosen from MPs and Lords in Parliament where the MP may be a member of the leading political party. Ministers must frequently answer to oral and written inquiries from MPs and Lords (Number10, 2010).

The parliament will examine the works of the government on behalf of UK citizens by forming investigative committees and submit the ministers for a hearing. Government's proposals on taxation and expenditure must be approved by the House of Commons before implementation (Parliament UK, 2010).

The government must retain confidence by the majority in the House of Commons and by the citizens. If the House or the citizens lost confidence in them, a general election would be called, in order to vote for a new government (Directgov, 2010). Each year new legislations plan will be brought to the parliament. The new legislation will be introduced as Bills and will be debated in the Parliament for approval, once approved it will become an Act of Parliament (Parliament UK, 2010).

The queen and the government

The queen, being the Head of State has to remain politically impartial and is unable to vote or stand for election. However, she has a special relationship with the Prime Minister, where she has a right to appoint and to meet with him on a regular basis. The queen also has important ceremonial and formal roles in government of the country. Moreover, the Queen has the obligation to open new sessions in parliament, to dissolve parliament before general election, and to give royal assent to orders and proclamations through the Privy Council (HM Government, 2010). Apart from her specific role in the parliament based in London, she also has formal roles to devolve assemblies in Scotland and Wales and in Ireland (The Royal Household, 2010).

The central and the local government

The main connection between the central government and local authorities is the Communities and Local Government department in which they are responsible for executing national policies enacted by the central government (Directgov, 2010). The local authorities have various powers and duties in which their county councils have the responsibilities for the day-to-day services and local matters. Their funding comes from government grants, Council Taxes and business rates. Their powers were delegated by various Acts of Parliament. Some of their functions are mandatory as set out by the laws and others are discretionary (Parliament UK, 2010). If they have exceeded the powers given, they can be challenged in court.

System of corporate governance

The United Kingdom's approach on corporate governance comes from the concept that good corporate governance is an analytic tool to improve the Board's ability to manage the company efficiently and to provide accountability to shareholders. To quote from the Cadbury Report (The Financial Reporting Council, 2006):

"The effectiveness with which boards discharge their responsibilities determines Britain's competitive position. They must be free to drive their Companies forward, but exercise that freedom within a framework of good corporate governance".

The Financial Reporting Council (FRC) is responsible to promote high standards of corporate governance in the United Kingdom. The Council has formulated a "Corporate Governance Code" (formerly the Combined Code) which sets out standards of good practice in relation to board leadership and effectiveness, remuneration, accountability and relations with shareholders. In accordance to the Listing Rules, companies incorporated in the UK and being listed in the UK stock exchange are required to report on how the Combined Code have been applied, also the annual reports and accounts must be released to the public (Business Link, 2010). Corporate governance factors are discussed in more detail in the following sub-sections.

The essential features of United Kingdom corporate governance

As discussed, the Corporate Governance Code includes broad principles and specific provisions. Listed companies are obliged to report on how they have complied with the Code or to provide an explanation in case the code is or being complied (The Financial Reporting Council, 2009). In May 2010 the FRC has issued a new edition of the Corporate Governance Code which applied to financial years beginning on or after 29 June 2010. Hence For financial years beginning before 29 June 2010 the 2008 edition of the Code will continue to apply (The Financial Reporting Council, 2009). The 2010 Code has five sections identified as Section A, B, C, D and E: which regulates issues on leadership, effectiveness, accountability, remuneration and relations with shareholders. In addition, there is also a Schedule C in the Code which regulates the engagement principles for institutional shareholders. There are three principles which include dialogue with companies, evaluation of governance disclosures, and shareholder voting (Corporate Governance, 2010).

The 2010 Code has been strengthened with the intention to improve accountability to shareholders, to improve board's performance and risk management. Furthermore, to ensure the boards are balanced (Corporate Governance, 2010).

Relative dominance of national, regional or global values

Among the national, regional and global values being discussed, it is hard to say which value dominated the United Kingdom the most. All three values are inter-related and are important in structuring the country. As discussed, the European Union has a major impact on United Kingdom.

The United Kingdom works closely with the European Union with an objective to boost economic growth; to work with other Member States to increase competitiveness globally (Foreign and Commonwealth Office, 2010). Policies are implemented and have influenced business activities in the United Kingdom. Taking employment issues as an example, funds are made available to support poor regions of high unemployment and social deprivation (The Times 100, 2010).

In a national perspective, the United Kingdom government plays a major part in trying to stimulate employment. For example, the present government is keen to encourage business efficiency so that United Kingdom businesses are competitive in international markets and therefore create employment opportunities. For those who have difficulties finding work, the government has created a policy known as 'The New Deal', with an intention to offer people training opportunities and work experiences (The Times 100, 2010).

Summary remarks

The United Kingdom is a country of parliamentary democracy with a constitutional monarch. The Queen is the head of State and the Prime Minister is the head of government. The doctrine of separation of powers plays an important role in the country. United Kingdom has good economic, legal and educational infrastructures, each year; the Chancellor of Exchequer will submit a budget for the government's approval for major infrastructures. The English Legal System is based on common law tradition with the Court of Last Appeal having the highest authority. Education is mandatory from ages five to sixteen in the country.

Incorporation of companies are dealt by the Companies House of the United Kingdom, all companies incorporated in the United Kingdom must perform a high standard of corporate governance. The Financial Report Council is responsible for promoting high standards of corporate governance and they have formulated a "Corporate Governance Code" which sets out the standards of good practices for the companies.

United Kingdom and managerial culture

Introduction

In this chapter, the managerial culture in the United Kingdom is discussed, with examples of local companies. They include Tesco PLC, HSBC Holdings PLC and Allen & Overy LLP. I am also going to study the managerial culture in the United Kingdom under the contexts of adjustment of global and local imperatives, human skills and knowledge base, influence of other managerial system, entrepreneurial development and finally social responsibility and ethical sustainability.

Adjustment of global and local imperatives

Globalization is one of the ways for companies to become and to sustain being a world class competitor; companies are also faced with pressures to go global (Allexperts, 2007). Companies adjust its strategies accordingly when operating in its home country as compared to operating in other countries. This is of extreme importance since every country is different, with different background, legal system and culture (Business Link, 2010). When fixing their global strategies, they consider factors including currency, infrastructure, human resource, local government, market information and customer value (Allexperts, 2007).

When operating in another country, companies develop ability to generate hard currency and to protect against hyperinflation and currency fluctuations. They are aware of limitations imposed by government especially on taking profits out of the country. They also ensure the country has reliable infrastructures including efficient roads, railroads, reliable power supply and communications and data transmission networks and dependable transportation services (Department for Business Innovation and Skills, 2010). Moreover, local marketing and management talent may not understand Western business concepts and global operations. Skilled labor may not be available or not have the level of skills required. Therefore companies have to consider providing training and development courses for their local staffs. (Allexperts, 2007)

Companies also surmount to the barriers and pressure local government may exert on foreign commercial business. They obtain reliable market information for example size of market, local and foreign competitor, transportation costs and demographic trends in order to make effective decisions. (Business Link, 2010)

In the example of Tesco PLC [1] , we can see the different approaches practiced by the company when operating in different countries. Tesco has a well established and consistent strategy for growth, which has allowed Tesco to strengthen the core UK business and drive expansion into new markets. Their local strategy to obtain growth is to get new space, extensions to existing stores and a multi-format approach. The rational of this strategy is to widen the scope of business to enable it to deliver strong sustainable long-term growth by meeting the demand of customers by expanding markets like financial, non-food and telecoms services. Under a global perspective, they have evolved a strategy, differently to that of the UK, based on six elements: flexibility, as each market is unique and requires different approaches. E.g. in Japan, customers like to shop daily for small amounts of extremely fresh food. The existing hypermarket formats do not meet the demands of local customers; therefore Tesco has acquired as a discount supermarket operator for its entry into the Japanese market. Secondly, Act local with a good understanding of the local customers, cultures, supply chains, regulations and local staff. E.g. in Thailand, customers are used to shop in traditional wet markets with interactions with vendors. Instead of adopting Western approach of neatly packaged, convenient portions. Tesco has adopted an approach that met local customers' demands. Thirdly, to maintain focus as customers want great service, great choice and great value. Fourth is to use multi-strategies as no single strategy can reach the whole of the market. Fifth is to develop capability through knowledge-based management (Tesco PLC, 2010).

Human skills and knowledge base

In order to enhance competitiveness, companies in the UK are required to have the knowledge; skills and creativity. These are the characteristic of a knowledge driven economy and the essentials for knowledge based management. These are essential for making quality products and services and to improve process in the companies (The National Archive, 2010).

In 1998, the then Prime Minister has stressed the importance of building a knowledge driven economy in the "United Kingdom Competitiveness White Paper 1998" where he stated the United Kingdom will only compete successfully in future if they create an economy that is genuinely knowledge driven (Department for Business Innovation and Skills, 2010). Companies in the United Kingdom have also acknowledged the importance of knowledge management in order to be competitive. In the example of Allen & Overy [2] , they have launched a knowledge management strategy in 2005 with focus on capturing existing knowledge and creating innovative content. They capture existing knowledge by gathering and sharing core knowledge to ensure lawyers can navigate quickly to key transactional tools and they create innovative content with the aim to strengthen and deepen client relationships (Insight Knowledge, 2006).

Since 2001, the United Kingdom has also imposed new policies to drive and strengthen the country into a knowledge based economy and has developed the Regional Development Agencies for this purpose. In the government's Pre-Budget Report 2001, they have clearly identified their view point of the importance of human capital has on the knowledge economy (Department for Business Innovation and Skills, 2010), where they stated:

"In an increasingly knowledge-based economy, there is a strong link between productivity and the quantity and quality of skilled labor. A more highly skilled workforce can generate greater innovation, increase flexibility in the workplace and enable better adaption to new technologies."

In order to achieve this purpose, the government has in 2002 imposed an immigration program known as the "Highly Skilled Migrant Program" to attract skilled labor to immigrate to the country (Home Office UK, 2010). On 30 June 2008, this program is replaced by a new immigration program known as "Tier 1 Visa", which gives applicants bigger chances to be approved but required a higher level of English language proficiency. Under this scheme, highly skilled workers include doctors, scientists, engineers, MBAs and other educated workers are welcome (Work Permit UK, 2010).

We can see in the example of Tesco PLC, they recruit internationally for an international business as they believe local managers understand the local culture and business and make precious leaders. Training and development are provided for its staff with an intention to increase their feeling of commitment and as a result, Tesco has retained a skilled workforce. Furthermore, Tesco has developed strategies to create good careers for its staff, respectively team work, trust and respect, listen and support and be polite, and share knowledge and experience (Tesco PLC, 2010).

In another example of HSBC Holdings [3] , they recruit the right people regardless of nationality, age, gender, disability or ethnicity with the objective to attract long-term committed staff working for the group. They offer competitive reward packages and career development opportunities for staff and to develop and maintain a diverse and inclusive culture as they acknowledge a diversity workforce will bring business benefits (HSBC Holdings PLC, 2010).

Influence of other managerial systems

The United Kingdom's managerial system has been highly influenced by the USA. One of the examples includes training in workplace. At early 20th century, training was seen as a practice based around apprenticeship and training was seen as finished once the apprenticeship finished. Unstructured on-the-job training also existed but was simply a session or two to show new staff how to deal with their work. It was not until the mid 1920s that theories about management on training and education arrived from the USA to UK. Ever since then, the UK has quickly adopted these management styles from the USA (Charted Institute of Personnel and Development, 2009).

Another example includes personnel management. In the mid-1960s, personnel techniques were developed from limited theories derived from social sciences in relation to motivation and organizational behavior. Later, management techniques for the improvement of performance arrived from USA academics such as McGregor and Herzberg and were applied by the local company's personnel departments. Around the mid-80s, the concept of human resource management also arrived from the USA and since then human resource management has been extremely important and has a major impact on the management styles of the UK (Chartered Institute of Personnel and Development, 2007).

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Entrepreneurial development

The measurement of entrepreneurial attitudes and activities in the United Kingdom has been monitored by the Global Entrepreneurship Monitor Research Program. In 2009, a total number of 30,003 adults from age 16-80 have participated in the UK survey of entrepreneurial attitudes. The results show a percentage of 3.2 of the UK working age adult population were owner-manager of a business that was 3 - 42 months old (identified as new business owner-managers), a slight rise of 10% as compared to the 2008 results which only counted 2.9%. Female entrepreneurship levels have remained at 47% of male entrepreneurial activity (London Business School, 2010). Even though the 2009 results show a slight rise in the number of new business owner-managers, however there was also a double increased in the number of new entrepreneurs who tried to get the required funding from family or friends but were unsuccessful, and also failed to secure bank loans and overdrafts due to the economic downturn in 2009 (Global Entrepreneurship Monitor, 2010).

Social responsibility and ethical sustainability

Social responsibility can be defined as acting with concern and sensitivity, aware of the impact of your actions on others, particularly the disadvantaged. On the other hand, ethics can be defined as written and unwritten codes of principles and values that govern decisions and actions within a company (Entrepreneur, 2010).

These two concepts are important in today's world because customer are increasingly demanding than before, and are quick in receiving information of questionable practices of companies. Furthermore, the truth is damages done by unethical or questionable social practices can be extremely disturbing to a business of any size, and more companies in the UK are adopting ethical policies and social responsibility practices in order to sustain competitiveness and to adhere to the demands of the community (Vower, 2010).

In a 1999 Millennium Poll on Corporate Social Responsibility, sponsored by PricewaterhouseCoopers, 60% of participant expressed that they formulate impression of a company based on its social responsibility to people, communities, and the environment. Whereas 40% of the participant expressed they talked negatively about companies that they alleged to be not socially responsible (UK Law Society, 2002).

Furthermore, there is a corporate responsibility ranking for businesses operating in the UK, known as "Corporate Responsibility Index" (also known as CSI). CSI is an important corporate responsibility management tool that examines the extent to which responsible business practices are entrenched with corporate strategy and operations (Business in the Community, 2009).

Tesco is one of the companies that have retained a platinum ranking in the Corporate Responsibility Index. Retained platinum in this context is an award for companies that have achieved platinum award in the previous two years and have illustrated continued board level commitment to corporate responsibility (Business in the Community, 2009).

Another example is the HSBC Holdings. HSBC has corporate sustainability teams working at all levels to shape the bank's approach to sustainable business opportunities and risks. They pay a lot of concerns with its stakeholders and are focused on protecting the environment, investing in the local communities (HSBC Holdings PLC, 2010).

The same approach is also taken by Allen & Overy, a law firm founded in the United Kingdom. They place heavy concerns in social and ethical responsibilities and they believe they owe wide responsibilities to its staff, environment, marketplace, and the community. They have also introduced a Code of Ethics for their staff to follow in order to achieve this purpose (Allen & Overy, 2010).

Summary remarks

In this chapter, we have examined the United Kingdom's acknowledgement on the importance of knowledge, skills and creativity in order to build a knowledge driven economy for the country to stay competitive. Since then, the government has imposed immigration policies to attract skilled labor from overseas. Companies in the United Kingdom are taking advantage from this policy as discussed in the examples of Tesco, HSBC and Allen & Overy.

Training and development is seen as an important commitment for companies in the United Kingdom, in order to retain a skilled workforce. The United Kingdom has been highly influenced by the USA in its managerial system, especially in training and personnel management.

Social responsibility and ethical sustainability is a must for companies operating in the United Kingdom. Customers are rapidly becoming more demanding, and are rapidly informed of any companies' questionable practices. Mostly importantly, the damage done by unethical or questionable practices can be extremely devastating to a business of any size. There is a corporate responsibility ranking for companies operating in the country and the companies' practices will be examined and the ranking will reviewed every year.

Competitive pressures are creating the need for most companies to become global and globalization is one means for becoming and remaining a world class competitor. Companies have to apply different approaches in management when operating in the home country and when expanding to worldwide. The need for such adjustment is to meet the cultural differences of the countries.