Project for global business environment

As a software firm, Wave Financial is the company chosen for this project. Wave offers a variety of financial services and tools to small businesses. Leslieville, Toronto, is home to the Wave headquarters. Two countries (the U.K and Japan) are compared based on different factors for expanding this business. Based on PESTLE analysis, eight factors are examined, which are (political stability, tax rate, economic freedom, internet freedom, cybercrime, availability of talented H.R., technological advancement, and ERP implementation). Decisions are made while focusing on four primary criteria (economic freedom, digital freedom, tax rate, and availability of talented H.R.). Wave Financial's company should be expanded in the United Kingdom, not Japan, as suggested.

Table of Contents Executive Summary 2 Introduction 4 Criteria Centric Analysis 5 Criterion #1 (Political Stability) 5 Criterion #2 (Tax Rate) 5 Criterion #3 (Economic Freedom) 6 Criterion #4 (Availability of H.R. talent domestically) 7 Criterion #5 (Cyber Crime Rate) 7 Criterion #6 (Technological Advancement) 8 Criterion #7 (Level of ERP Implementation) 9 Criterion #8 (Digital Freedom) 10 Discussion Matrix 11 Recommendation 12 Appendices 13 Bibliography 20

Revised Assignment 1 Fall 2021

The organization that has been selected for this assignment is Wave Financial which is a software company. For small enterprises, Wave offers a range of financial services and software. Wave's headquarters are located in Toronto's Leslieville district. Free online accounting software for small businesses with 1-9 employees was the company's first offering, followed by products for invoicing, personal finance, and receipt scanning (OCR). With the launch of Payments by Wave (credit card processing) and Payroll by Wave in 2012, the company expanded into financial services. In February 2017, Lending by Wave was introduced, but it has since been terminated (Antonizzi & Smuts, 2020).

When it comes to supporting the communities, Wave believes that small businesses are the lifeblood. Small business owners should be able to manage their finances without fear in the future, and that is what we aim to do. Its goal is to become the all-in-one financial management solution that small business owners can't do without to reach that future state. In the following assignment, two counties (the U.K. and Japan) will be selected to expand this organization’s business. Eight criteria based on PESTLE analysis will be discussed, and a decision will be made while focusing on four main criteria.

Businesses like Wave financial may be more reluctant to invest in fresh capital or enter new markets if political uncertainty occurs. It may even induce business owners to move their operations to a more secure and predictable location. If confidence in investors and consumers drops, this has a ripple effect across the economy. As outlined in the world Software Industry: the industry wants the main political parties to commit to several broad policy measures in their respective manifestos. According to DCMS's most recent data, the world. I.T., software, and computer services sector are some of the fastest-growing job-creation industries from 2017 to 2020. If one compares the data for U.K. and Japan from 1996 through 2020 for the political stability indicator, Japanese values ranged from a low of 0.88 points in 2010 to an all-time high of 1.25 points in 1998. The most recent figure, released in 2020, is 1.04 percentage points. Whereas there was an average of 0.48 points for the United Kingdom over that period, with the lowest value in 2018 being 0.08 points and the highest value in 2000 being 1.04 points. The most recent figure, released in 2020, is 0.47 points (Bennett, 2021).

To fund budgetary needs, governments levy fees and taxes on their residents and enterprises. Government and public projects must be supported while the business climate in the country must be improved to promote economic growth. Finding out the effective tax rate will help the Wave financial company figure out how much money they will be forking over to the government each year. It may be beneficial in the event company makes financial plans. It provides it with an idea of the future tax obligations if it receives any new income. It can assist the company in strategizing and planning your tax deductions, thus saving you money.

According to Trading Economics global macro models and analysts' estimates, Japan's corporate tax rate has reached 30.62 percent in 2020 and will continue to rise in the upcoming years. Whereas if one talks about the U.K. standard corporate tax rate, it had also increased by 19 percent in 2020. A lower effective tax rate applies when taxable profits can be traced back to the exploitation of patents (Buil-Gil et al., 2021).

The economy of more economically free countries is more robust, having a higher per-capita GDP. Economic freedom relies heavily on free trade. More prosperous nations have embraced free trade, which can significantly assist new businesses in entering their market. The United Kingdom is the 7th freest economy in the 2020 Index, with a score of 78.4. As a whole, it has lost 0.9 points due to a fall in judicial effectiveness. The United Kingdom comes in third place out of 45 countries in Europe, with a score that exceeds both the regions and the global norms. The British economy shrank this year, despite being essentially free. However, in the post-Brexit U.K. economy, there will be numerous prospects for more economic liberty. By removing the shackles of E.U. bureaucracy, the economy might see significant gains in the Index indicator ratings for tax burden, government spending, labor liberties, and free trade (Calder, 2021).

Japan has the 23rd freest economy in the 2020 Index, with a score of 74.1. Its overall rating has risen by 0.8 points as a result of better financial health. There are 40 countries in the Asia–Pacific area, and Japan comes in sixth place, with a score above average for the region and above average for the entire world. The economy of Japan is once again positioned in the middle of the primary open range. As it has been since the Index's establishment in 1995, government spending is the primary factor preventing the country from achieving more economic freedom. The 2020 budget included an increase in spending of over one percent, which was disappointing (Candela & Geloso, 2021).

As a result, employees are among the most valuable customers since they have unique insights into how customers interact with the brand. Most firms do not see them as essential assets because they do not provide insights into the customer experience or act as brand ambassadors. Yet, they are often forgotten and neglected as a result. Human resources (H.R.) play a critical role in shaping, reinforcing, and changing an organization's culture. H.R. is responsible for several important aspects of business culture, including compensation, performance management, training and development, recruitment and onboarding, and reinforcing the company's values. Compared to the last year, the number of talented human resources has increased by 8% in the North West of England and by 4% nationwide. Jobs in London have also increased gradually throughout the year, with a 4% increase in job numbers. If one talks about Japan, then the talented human resources have increased by 6% in the Tokyo capital of Japan and by 3% nationwide (Dahéron, et al., 2021).

Cybercrime, often known as computer crime, uses a computer as a tool for conducting criminal acts, such as fraud, the trafficking of child pornography and intellectual property, identity theft, or privacy violations. It is critical to have a solid cyber security system to guard against data breaches and theft. Information systems used by government and industry include sensitive data, such as personally identifying information (PII), protected health information (PHI), and personal information.

According to the latest data, online crime accounted for 0.8% of all crimes reported to the police in England and Wales in 2020. According to this data, the frequency of cybercrimes has increased dramatically in recent years. Globally, more than half of internet users have been a victim of cybercrime at some point. Many sorts of cybercrime include malicious malware on digital devices and unauthorized access to social media and email accounts. Global internet users who have ever experienced cybercrime in Japan is 42%, and the U.K. is 55%. Attack origin rank for Britain is 3whereas for Japan is 11 (Lertpiromsuk, et al., 2021).

Because of the constant changes in today's industry, organizations must grow, adjust, and adapt to remain competitive. From a trade-based economy to a knowledge-based economy, the business climate shifted. Employees' brains were highly prized in this new corporate model, especially in the world's software industry. According to Tech Nation's 2020, the technology sector is growing at a rate of 2.6 times that of the rest of the U.K. economy. Whereas if one talks about Japan, around half of the country's economy depends upon technological advancements. No one (government) can compete with Japan in technology. The U.K. economy now has a digital technology sector worth approximately £184 billion, up from £170 billion just two years ago. According to the International Telecommunication Union's rating, the United Kingdom has an overall score of 8.75. That of Japan is 8.47%, which considers various characteristics, including broadband speeds and the percentage of people who use the internet, and the number of broadband subscriptions available. The technological expertise ranking of Japan is 1st, whereas that of U.K. is 7th (Lu, et al., 2020).

Businesses must have a clear vision of new system requirements to ensure alignment across the entire organization before implementing an ERP. The likelihood of a project's success rises when the suitable vendor is selected, and an internal implementation team is assigned. Statistics show that many organizations outperform and often surpass their own goals for ERP adoption efficiency, despite the challenges. So there is a significant change for Wave Financial as a software developer to earn more profit.

Successful ERP installations were attributed to internal organizational aspects such as management support, robust change management programs, and due diligence. The problem that occurs in the implementation process is the poor quality of the software. Inadequate testing and business process reengineering are the two most significant issues encountered during installation. The U.K. has a large market sector compared to Japan; therefore, an ERP implementation survey found that the fastest implementations occurred at the U.K. medium businesses with revenues between $100 million and $250 million. The 12.35-month turnaround time was the longest for huge companies (revenues exceeding $25 billion) (Rawat et al., 2021).

With few significant restrictions on access or content, users in the U.K. enjoy considerable internet freedom. The government has been increasingly interested in regulating online platforms and content hosts, following its European counterparts' footsteps to address misinformation and harmful content. As a result of the Online Harms White Paper, policymakers adopted a duty of care approach to online content monitoring. While peaceful civil disobedience rallies forced the authorities to order the suspension of Wi-Fi service in some London Underground train stations last year, there were no similar limitations reported during the period under consideration (Suzuki, 2021).

Government requests to shut manga piracy sites and increased arrests and prosecutions for copyright-related violations resulted in a decrease in Internet freedom in Japan. There aren't many roadblocks to getting online in Japan, and the penetration rate is well over 90%. Although the Japanese constitution protects all forms of speech and opposes censorship, specific legislation unfairly penalizes certain online activities. In 2017, details concerning the Japanese spy agencies' communications surveillance technology were released. It's unclear if Japan's wiretap framework allows the technology to be used on domestic monitoring targets. However, the announcement came when law enforcement's powers appeared to be expanding for security reasons. If one talks about world ranking concerning internet freedom, then the U.K. has 78th rank, whereas Japan comes on 76th rank (Uzelac et al., 2020).

So from the eight criteria mentioned above, the selected criteria upon which the decision of Wave financial will be based are digital freedom, tax rate, economic freedom, and the availability of talented human resources. The reason behind selecting these criteria among the eight mentioned criteria is that Wave financial is planning to expand its business right now.

From the decision matrix mentioned above, Wave Financial has recommended that it expand its business in the United Kingdom rather than in Japan. The reason behind it is that the United Kingdom has more significant economic freedom as compared to Japan. For any business to get successful, it needs to operate in an economic freedom environment. Secondly, as Wave Financial is a software company, it needs to be in a position or a zone where more users can use its software or any Tech product they develop. The more users will use their software, the more there will be a demand for their product. Third, to run their business process smoothly, they will need adequate human resources. They will be significant assets for the organization in software development. In last, the tax rate for the corporate sector in the United Kingdom is less than that of Japan. If the tax rate is more petite and economic freedom is high, the company would earn more profit. Otherwise, it will be difficult for the organization to maintain its going concern status.

Figure 1: Japan (Political Stability)

Source: (Bennett, 2021)

Figure 2: U.K. (Political Stability)

Source: (Bennett, 2021)

Figure 3: Corporate Tax Rate (Japan)

Source: (Buil-Gil et al., 2021)

Figure 4: Corporate Tax Rate (U.K.)

Source: (Buil-Gil, et al., 2021)

Figure 5: Economic Freedom U.K.

Source: (Candela & Geloso, 2021)

Figure 6: Economic Freedom Japan

Source: (Candela & Geloso, 2021)

Figure 7: Global internet users who have ever experienced a cybercrime

Source: (Lertpiromsuk, et al., 2021)

Figure 8: U.K. (rate of Cyber Crime)

Source: (Lertpiromsuk, et al., 2021)

Figure 9: Japan (rate of Cyber Crime)

Source: (Lertpiromsuk, et al., 2021)

Figure 10: Technology Advancement in Japan

Source: (Lu, et al., 2020)

Figure 11: Technology Advancement in the U.K.

Source: (Lu, et al., 2020)

Figure 12: Best Communication Technology in U.K. and Japan

Source: (Lu, et al., 2020)

Figure 13: Internet freedom in Japan and U.K.

Source: (Suzuki, 2021)

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