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UK Withdrawal from the European Union: Theories Essay

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Updated: Jul 21st, 2020

Currently, the European Union (EU) has seen powerful anti-globalization trends due to the peculiarities of political and economic conjuncture in the region. The UK is the country where decentralization moods continue to spread among the representatives of broad social layers. Analytics have begun to count the probable economic losses that can be caused by the UK exit from the Eurozone. It is estimated that the harm may exceed USD 100 billion.

Moreover, the outcomes of these developments could be highly negative for the employment situation and business climate in general. In such conditions, managers should mind these political changes in their strategic planning concepts for the future decades. The following paper aims to observe the article under consideration in detail to derive important information to implement in the strategic planning approaches development for the coming decades.

Serious Economic Shock Can Be Caused by the UK Withdrawal from the EU

The anti-globalization trends currently observed in a row of countries in the EU begin to have a more serious nature. The trend emerged in the south of the EU economic formation from such countries as Greece and Spain. The leaders of these countries have expressed their concerns that the economic rules imposed by the EU violate their interests and cause economic downfall. Moreover, they feel that huge contributions obligatory for all the EU members are another cause of their economic hardships.

Similar concerns have affected the British leaders who are confident that the country is paying too much for too few benefits, and Europe is too inward-looking to be able to offer any attractive conditions to Britain (Martinez-Brawley & Zorita 2015). Thinking about the considerable financial losses the country budget suffers from due to membership in the EU, the UK leaders began to develop the anti-globalization strategy.

An important factor was also the refugee problem since according to the EU regulations the UK was obliged to accept hundreds of thousands of refugees from the mainly Arabian origin. This tendency began to be a serious concern for the UK government due to a social and ethnic shift in the population demographic background. Moreover, the British have long been impacted by the concept of their exceptionalism, both political and ethnic (Martinez-Brawley & Zorita 2015). With all these complexities in mind, the growing number of UK politicians began to develop the plan to withdraw the EU in the nearest time. However, they have faced another problem.

The key problem associated with the UK exit from the Eurozone is associated with huge business losses because the country’s economy was developed as an integral part of the EU from the year 2000. According to the CBI quoted in EU referendum (2016), “a UK exit from the EU would cause a “serious economic shock”, potentially costing the country £100bn and nearly one million jobs” (para. 1). The representatives from the country’s business community express their concerns that the decision to leave would cost the UK economy negative outcomes for many years. The BBC article under consideration provides one of the opinions that the estimated harm can amount to as much as “5% of GDP and 950,000 jobs by 2020” (EU referendum 2016, para. 4).

In addition, the article mentions concerns of those experts who predict the decline in economic growth rates in case the UK leaves the Eurozone. Another problem that the proponents of the country’s stay in the EU mention is the possibility of uncertainty that would stop the economic processes in Great Britain for at least two years. They explain that after the possible withdrawal from the EU, the UK will need to facilitate the new format of economic relations with the EU, and WTO and for the reasons associated with uncertainty this task completion may take from one to two years.

The outcomes of all these development for the UK common citizens would be the decrease of income per head. According to The Centre for Economic Performance cited in EU referendum (2016), economic analysis suggests that the exit from the EU will lead to the decline in the rate of income per capita at the rate between 1.3% and 2.7%. Generally, a considerable part of the country’s economic elite is concerned about the negative endpoints of the UK withdrawal for the business and economics. However, not all experts support such position. Below, the position of opponents of this opinion will be addressed based on the BBC data.

The Opponents’ Position

The BBC article has overviewed the position of experts who argue that the UK exit from the Eurozone is not only non-problematic for the economy and business, but, on the contrary, it will lead to the boost of growth, quality of life promotion, and general economic and financial upsurge in the country. According to EU referendum (2016), Matthew Elliott, who is a Vote Leave chief executive, is confident that the UK withdrawal would only serve a boost for the new jobs creation and continuous economic growth. Cited in EU referendum (2016) Elliott commented that “even in the CBI’s skewed choice of scenarios for exit it was forced to admit that would happen” (para. 7).

Carolyn Fairbairn, CBI director general, supports Elliott’s position by stating that “EU exit following the referendum on 23 June would be a real blow for living standards, jobs and growth” (EU referendum 2016, para. 8). Explaining her position, Fairbairn commented that “the savings from reduced EU budget contributions and regulation are greatly outweighed by the negative impact on trade and investment” (EU referendum 2016, para. 8). Refuting the apprehensions of those who fear that the EU exit would cost the country the economic growth slowdown, Vote Leave’s Mr. Elliott has stated that “average annual economic growth in both exit scenarios between 2020 and 2030 would equal – and in some cases beat – GDP forecasts for the UK remaining in the EU” (EU referendum 2016, para. 11).

The Implications of the Article to Strategic Planning Approaches

Evaluating the data on the possible recession in the UK economy due to exit from the Eurozone, business players from both the UK and partnering countries need to be aware of the anti-globalization tendencies spreading in Europe to make updates in their strategic planning approaches (Hitt, Ireland & Hoskisson, 2012). According to Frynas and Mellahi (2015), political developments are an important variable that should be always taken into consideration by the senior managers engaged in the firm’s strategic planning activities.

This is especially the case for the businesses that are intended to employ suppliers and engage in business relations with the partners from various countries around the EU. In the event of the UK exit from the EU, all businesses purchasing resources, constitute parts or vice verse, selling them to other areas around Europe will face the new taxing rules. As a result, business profitability can be significantly reduced. Therefore, it is the high time for such businesses to readdress their strategic planning approach taking into consideration the probability of the UK withdrawal from the EU.

Another aspect of the impact of possible British exit from the EU is the harm that is predicted for the huge amount of unfinished EU business. This complexity of the existing anti-globalization trend in the UK should be also taken into attention by the considerate managers. Evaluating the possibility of the new political developments in the UK, Hill, Jones, and Schilling (2014) have written in their book on strategic management as early as in the year 2014 that clear-sighted business leaders should incorporate alterations into their strategic planning to address possible threats of the British exit from the Eurozone.

These authors are confident that political divisions between the UK and EU are so notorious that even if the country would continue as a part of the economic treaty, the business owners need to be aware of the unique economic climate and political environment that continues to be formed in it (Hill et al., 2014). In addition, these scholars have recommended beginning revaluation of strategic planning approach with readdressing the banking policy since the UK is planning to reshape its financial and banking system to ensure better conditions for the nationally-based businesses.

A yet another point that business owners would need to consider with regards to the possibility of the UK withdrawal from the EU is the perspective of reshaping British standardization systems. Currently, British business public has expressed concerns that the standardization rules imposed by Brussels including the regulations on energy production and transferring, taxation rules, alcohol sales policy, recycling standards, defense regulations, industry organization, and many more contradict the UK national interests.

Therefore, business owners, whose activity depends on using standardization regulations, should obtain information on the planned changes in order to ensure the possibility to shift to the new standardization systems (Hill et al., 2014). A special area of discontent of the British elite is the European quotas system. Managers who rely on the principle of European quota distribution in their business planning need to readdress this aspect in their future business plans.

The References of the Current Political Developments in the UK to Management Theories and Concepts

Management theories and concepts that overview the recent anti-globalization developments in the UK provide a row of new insights into the issue. Goetsch and Davis (2014) have stated that the current political processes in the Great Britain refer to the concept of global colonialism resistance. Facing the negative impact of globalization on the country’s economy, the British leaders have considered an opportunity to restrict the impact of global colonialism in their land through economic regulations (Goetsch & Davis 2014). Another theory explaining today’s political developments in the UK is the theory of strategic management in the face of anti-globalization movement.

This theory states that the negative impacts of globalization such as the intertwinement between transnational companies and political power, and the threat to cultural diversity have caused the rise of anti-globalization movements around the world (Goetsch & Davis 2014). In addition, this theory explains the anti-globalization trends by the wide public dissatisfaction with the national social welfare expenditures cutting, frequent economic crises, worsening working conditions, and exploitation of resources in developing countries (Goetsch & Davis 2014).


In conclusion, it should be pointed out that to the peculiarities of political and economic conjuncture in Europe have caused powerful anti-globalization trends formation. The UK is one of the European countries affected by these tendencies more than others due to the discontentedness with the EU economic policy, significant collections into the European budget, and the country’s own ambition to make an emphasis on its exceptionalism. This paper has observed the article from the BBC website addressing the anti-globalization trends in the UK and their possible impact on the country’s economy with an objective to derive important information to implement in the strategic planning approaches development.

The analysis of the article findings has demonstrated that the probable economic losses that can be caused by the UK exit from the Eurozone are estimated at the level of over $100 USD. In addition, the endpoints of these developments could be highly negative for the employment situation and business climate in general. Of course, not all economic climate analyzing professionals agree on the size of the harm caused to the UK economy by the exit from the Eurozone. Some of the experts are rather positive about the new political situation and its final result of the British exit from the EU. Still, no matter what outcomes will take place in the future, business owners should take these political changes into attention by incorporating them in their strategic planning concepts for the coming decades.

Reference List

2016. Web.

Frynas, J & Mellahi, K 2015, Global strategic management, Oxford University Press, Oxford.

Goetsch, D & Davis, S 2014, Quality management for organizational excellence, Pearson, London.

Hill, C, Jones, G, & Schilling, M 2014, Strategic management: Theory, an integrated approach, Cengage Learning, London.

Hitt, M, Ireland, R & Hoskisson, R 2012, Strategic management cases: competitiveness and globalization, Cengage Learning, London.

Martinez-Brawley, E & Zorita, P 2015, ‘Moving away from globalization and the “flattening” of Social Work: Preserving Context in International Efforts,’ European Journal of Social Work, 1-14.

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IvyPanda. 2020. "UK Withdrawal from the European Union: Theories." July 21, 2020. https://ivypanda.com/essays/uk-withdrawal-from-the-european-union-theories/.


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