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External Environmental Factors Impacting Lithuanian Businesses

1461 words - 6 pages

2010 m. December 3 d.

External Environmental Factors Impacting Lithuanian Businesses

Introduction
First of all, it is very important to mention that every business has its own external factors, that indicate whether the business is going to succeed or not. Then, it is up to the business if they try to study carefully or not these external factors. By doing so, they will try to understand what the social, legal, political, technological factors are, and how they impact the market and their products. These factors have significant impacts into the challenges of the businesses in any country in the world. In fact, forces in the external environment are so dynamic and interactive that ...view middle of the document...

The first set of indicators measures how much firms invest for getting international certificates upon the technology they use, and the accounting practices. Obtaining the international certificate in here means that they use the high technology and the graphs show that almost 20 % of the firms in Lithuania have a high technology usage in their environments. Another factor within the technology is also internet. The Enterprise Survey shows that at least 63 % of the firms use their own websites, and about 92 % of firms use e-mails to communicate with their clients/suppliers. This data is only for 2009, but I assume that 2010 date would show a higher rate of the firms using the internet and communicating through different sources of connection such as via: Yahoo, MSN, Skype etc.
Thus technological development gives better premises to the businesses in Lithuania as everything is much easier now to product, and better technology means also higher rate of competitiveness. Moreover, InfoBalt is an association in Lithuania that gives information on the technological development in the country. According to InfoBalt (2009), Lithuanian ICT (Change Control Gear) industry is the biggest in the Baltic States. In 2008 where 1777 companies in ICT sector and the number of the companies on the ICT sector increased by 9 % compare to 2007 and this means that technology is an important factor right now for firms.
According to European Bank for Reconstruction and Development (EBRD), Lithuanian Business Environment is one of the best in the region, and competition in business is high which creates favorable conditions for trade, and foreign direct investment in Lithuania which are protected by the national legislation in the country. But the only problem that companies are facing currently is that competition is followed by a high corruption rate, meaning that if you have money, than you can bring even the officials sometimes and thus competition won’t be as fierce as companies would want to. Therefore, corruption is a struggle for firms since is part of the unofficial economy, but still has strong impact on the GDP of the country, but this is not what the competition should be like because it means that small companies cannot compete into the market economy because they don’t know the “right” people or have “power” with other companies. Moreover these companies would go bankruptcy or more likely at least out of the business. Thus conditions are not so favorable for that, and strengthening administrative capacity and intensifying measures to fight corruption should thus remain government priorities. This would help the country for better business environments as they compete in the market. Another problem that stands though is also that Lithuanian organizations should cope with the problems of globalization markets. This simply means that better technology favorites the environment, higher competition, but meanwhile the social preferences as an external factor...

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