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Business management and their critical issues directly affects the business performance and the growth rate of the firm. In the business management, critical issues states that shortage of skilled workforces, the problem is related organizations functions, globalisation, activity overload, demand of the customers, supply chain customers, pressure of reducing the operation cost and product cost, shifting of the service providers or more. These type of issues directly affects the performance of the organization as well as the growth rate. This following report states that, the effects of Brexit on the small and large business as well as  identify the main cause of the UK's Brexit decision. Furthermore, this report includes the strategic crisis of the management theory and the effects of this theory on the business. In addition to this, it will discuss the challenges of leadership which is faced by the senior management of the business management. Brexit is a major change and challenge in the business environment and affect the business performance as well. In this particular case of the Brexit, Entire business and growth of small and large enterprise affected by the rules and regulations of the European union as well as abide by them.

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1. Analyse the causes of UK's Brexit decision

There are several reasons in case of why UK leaves European union and their all policies rules and regulations. UK's Brexit decision based on the various reasons but the main 3 reasons that forced UK to take that step are; Economic condition, sovereignty, Political elitism. These are the major factor why UK takes the Brexit decision. British voted for leave the European union and move from their policies and rules and regulations. Brief discussion about these factors is given below:

Economics: Economy is the main factor that directly affect the business of each and every organization. In this particular case, British people felt that European union(EU) fails to address all the economical issues and not able to provide best solutions for these particular issue. The main effect of the economical condition is on unemployment in several states of Britain. Before the Brexit, UK's economy was pretty well and their GDP growth is also strongest among all the major countries like Europe, US and more. Unemployment rate is also under control by UK's economy standards  and maintain the rate of unemployment. After this UK takes the decision to leave the EU, so there are several possible reasons like; Inequality, stagnant earnings, In-work poverty, disastrous anger vote or more.

Sovereignty: It is the major reason for Brexit and it is rise from nationalism across the world. This is mainly cause due to the multinational financial uncertainty, trade and defence of organizations. British people thinks that EU does not understand the power of nationalism and because of that it attempts to retain the nationality. This is the most important issue faced by the country and because of that they want to leave EU on immediate basis. Basically sovereignty is the principle of UK constitution and in this, it is responsible for create and end any law, policy or rules. It is the issue that dominating the EU campaign or EU limits their ability to make the own decisions and choices.

Political elitism: Political conditions are the main reason behind taking Brexit and faced profound loss problem. A political system of UK majorly based on the limited principles, representation and rules and regulations as well. In addition to this, Brexit frightened by the financial market conditions and economic falls. Most of the Brexit supporters believes that financial industry's incompetence create the disaster and there is no benefit for them in any success in the business or financial industry. This is the contradiction between both the people one who want to remain with the EU and another one who don't want to remain with EU's rules and regulations. This is the vital process which is to be understood by the British people is that Brexit was the vote against elite.

2. Evaluate the effects of Brexit on business

There are several types of mix effects of Brexit on businesses either in positive way or negative way. UK's businesses majorly says that Brexit has negative impact on the business and directly affect the performance of the business. According to a survey in Britain, it results damaged in the several businesses in many ways. Decision of moving from EU, has an impact on the business in the way of earning hits, headquarters move, cost cuts and many more. The effects of Brexit on business which is given below:

The major impact of the Brexit is on the market and market shares of the UK's economy. This results in falling value of the British currency and increased in the uncertainty of the future trading relationships. The main and major impact of Brexit is on the other countries like apart from Europe and Britain and affect the business in the case of buying and selling is only done in that different countries. Many businesses in Britain wondering that impact of  Brexit on their sales and business. Growth of the business and their development affected by the Brexit and has an impact by weak pounds. It has an impact on the processing of the business and further affected on revenues and net profits of the business.

In addition to this, Brexit has a positive impact on the British economy in the way of providing new opportunities in the current business and which could be added a different value in the business. After leaving the EU, the British people are not abide by their rules and regulations and then they has their own rights and opportunities for moving forward and reach the success at great extent. This process also offers a great opportunities for all the industries stated in UK is that they found new talent and attract towards the new business as well. This type of opportunities helps to gain the market reputation at an extent level and help to develop the working experience and performance as well. Moreover, it is the process of examine the current production method and the ways where the business would be start and increase the profits and gains. Supply chain plays a vital role in enhancing the business at national or international level. Because of that issue rising in the cost money and production money affect the growth rate of the firm. But in this particular case, this process offer a chance to review the process and make an effective decision and change the way of working which gives the benefits in the business.

The early effects of Brexit is much better and also the economy is going far better in compare with the previous prediction as well. In UK businesses the exports will take a great hit in compare with other economy trends. This has an impact on employment and labour in the way of people look for setting up a new business and search the jobs outside from UK and for that UK's unemployment rise due to the recession. Apart from this, several type of industries affected such as engineering, IT and construction sectors whereas the shortage of the skilled and high talented workers in UK's population.

Brexit is a very critical issue that affects the business on immediate basis. But yet on the basis of foreign investment the Brexit has an impact on  tariffs and trade cost. After applying Brexit it is in result of higher trade cost and tariffs would be decrease investments in UK. According to the different analysis Brexit would results in negative impact like FDI inflows decreased and the economy is also affected.

3. Strategic crisis management theory for surviving in business

Crisis management is an effective approach to survive in the business and maintain the performance of an organization. In this particular procedure, organization deal with the unexpected risks and the events which harm the organization and their performance as well. Majorly the three elements that affect the organization such as threat, surprise, short of time. In the particular case of survival the crisis management theory plays a vital role to maintain and sustain the performance of an organization and has a great impact on industry's procedures. Crisis mainly refers to the unplanned events like Brexit which cause harm to the organization in the way of unrest and uncertainty among employees. Crisis gives rise to fear and the responsibilities for that each individual lost their interest and trust in that particular organization. Strategic analysis of crisis management theory include mainly 3 stages such as:

Diagnosis of crisis: This is the first stage of crisis management model and this process includes the detection of the crisis and this is mainly for the leaders and the managers of the firm. Mangers and leaders must review the performance of the each individual who works with the team. The role of manager is to monitoring the performance of the people and then analyse the strengths and weakness so that they apply the effective strategy to improve the performance of them. In addition to this, manager should take the initiative to apply the strategies and effective planning to improve the performance of each individual.

Planning: First of all, crisis is being detected then planning would be done and management takes immediate and effective actions. When Brexit is applied at that time organization and their management must have to take the effective actions to manage the performance and the brand value in the current market trend.

Adjusting to changes: After Brexit applied in UK, Employees try to adjust with the new economy trend and try to adjust the functioning of the organization in near future. Management has to be make sure that what are the effective strategies applied to adjust the new environment and make sure that there is no repetition of previous mistakes.

Structural functions system theory:

In this particular system theory, communication plays a vital role in the crisis management model. In which information sharing and flow of communication that affect the performance of an organization. This theory is mainly states that leaders and mangers must take the responsibilities to encourage their employees to give their best.

Diffusion of innovation theory: This theory is used for supporting the sharing information in case of emergency situations. Innovation as the name implies, each individual should think out of the box and come out with the different ideas and thoughts. So this process helps to improve the performance of organization as well as each individual employee of that organization.

Unequal human capital theory: This theory affect the work of the employees who leads to crisis at the workplace and responsible for that particular reason. Discrimination on the basis of age, sex, nationality, profile and salary these are the factor which lead to frustrate employees and then play with the reputation and brand name of the firm at the end it results in  bad name for the organization.

4. Discuss the leadership challenges in case of change in business environment

There are several types of leadership challenges faced by the managers and leaders in case of Brexit and that affect the performance of organization as well as employees. Employees wants that their leader and manager encourage them at very great extent and plan the effective strategy to improve the performance of them. After Brexit, Leaders and managers now ready to deal with uncertainty and financial crisis and also deal with the opportunities which is generate and build up by Brexit. Some of the challenges faced by the leaders which are given below:

Challenge of change: This term states that, each and every organization faced the change after such type of event is arises such as Brexit. In this particular case, managers and leaders faced the challenge like maintain the reputation of an organization, manage financial conditions, trade cost and tariff of the firm or many more.

Gearing up the team: This is the big challenge faced by the firm and their management in the way of managing the team task and restore the stability of the organization. Major challenge is faced by the leaders and the managers is creating the effective environment and making the effective strategies so that they provide the clarity to their employees in case of complexity. This is the major challenge to maintain the performance of the employees and encourage them.

Managing internal and external stakeholders: Management is the big issue after Brexit, in such case managers and leaders should have plan according to the current conditions and risks faced by the organization. In addition to this, it is the case of gaining the managerial support and maintaining the relationships between the internal and external stakeholders as well.

Guiding change: This includes the challenge of managing the team members and their work or to maintain the processing of their work. This particular factor includes the impact of change on an organization and dealing with the demand of the employees as well as the organizational demand. In this particular case, employee faced the economical issues and funding issue so that manager and leaders have to manage the crisis and make an effective strategy for survival of the business.

Leading a team: This is the main factor that affect the performance of an organization as well as the performance of an employee. Leader faced the challenge to manage the task and their team or also responsible for the possible outcomes as well. Before lead a particular team it is most important to know the major target goals of the firm and then manage the team and improve the performance of the employees accordingly. In this particular case, leader faced big challenge to manage the team and lead in proper way as well. This process include several challenges in managing a single team of the workers in a particular case of Brexit. Inspiration and development or leadership is the big part of the organization and has an effective impact on the process of the leading a team.

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As per the above report it is conclude that, Brexit has an impact on the performance of the organization as well as  the growth rate of the firm. Critical issues in business are directly affect the performance of the organization and the brand reputation as well. In addition to this, This report include the several effects of Brexit such as uncertainty, financial funds, tariffs and trade cost or more. At the end of the report it is concluded that Brexit has both the effects on the business either in positive or negative ways.


Books and journals

  • Allan, M., 2011. The leadership challenge. Destination brands: Managing place reputation, pp.81-90.
  • Boulanger, P. and Philippidis, G., 2015. The End of a Romance? A Note on the Quantitative Impacts of a ‘Brexit’from the EU. Journal of Agricultural Economics. 66(3). pp.832-842.
  • Cavalcante, S., Kesting, P. and Ulhøi, J., 2011. Business model dynamics and innovation:(re) establishing the missing linkages. Management Decision. 49(8). pp.1327-1342.
  • Dedrick, J., 2010. Green IS: concepts and issues for information systems research. Communications of the Association for Information Systems. 27(1). pp.11-18.
  • Llewellyn, C. and Cram, L., 2016, March. Brexit? Analyzing Opinion on the UK-EU Referendum within Twitter. In ICWSM (pp. 760-761).
  • McKee, M. and Galsworthy, M.J., 2016. Brexit: a confused concept that threatens public health. Journal of Public Health. 38(1). pp.3-5.
  • Oliver, T. and Williams, M.J., 2016. Special relationships in flux: Brexit and the future of the US–EU and US–UK relationships. International Affairs. 92(3). pp.547-567.
  • Spenceley, A., 2012. Responsible tourism: Critical issues for conservation and development. Routledge.
  • Trkman, P., 2010. The critical success factors of business process management. International journal of information management. 30(2). pp.125-134.
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