Culture as a Basis of Global Impact of Euro Crisis on Business - Case Study Example

SThe Euro zone crisis and Australia Name: Lecturer: Course name: Course code: Date: Culture as a basis of global impact of Euro crisis on business Culture is defined as a way of life that depicts the nature and regulations of individual’s behavior within the society. Culture can be adopted and altered according to external influences between states. The differences and similarities of culture among borders aids in determining the states regulations and economic performances. The Euro zone has different cultures and norms that define the societal behaviors towards the Euro crisis. Culture is possesses a major challenges for global business since different cultures call for different values and regulations that creates attitudes and influences behaviors. The sovereign Euro crisis inflicting the Euro zone nations have both internal integration significance and international cultures (Malcolm Edey, 2011). It rarely truncated the internal integration of economic crisis but also accentuate effects to immediate distant nations including Australia and South Korea. The Euro zone member states culture and cultural dimensions has played a great role towards the sovereign debt crisis which largely affected international economic and European integration. Regional economic and cultural relations have an immediate and clear effect on the nation’s context of interaction (Prideaux, 2000). The sovereign debt crisis emanated from Euro zone governments facing bond market rates and unsustainable to repayments is defined by the states culture and cultural dimensions. Australia and South Korea are culminated in low resolution measures and high public debt facilitated by the cultural requirements. This meant that the cultural performances call for potential effect in the GDP and the levels of exports between the sovereign states. The European Union summit evenhanded with cultural values supersedes the hope to a resolution of the European crisis but the agreement by the European leaders from different cultures lacked focus on resolving the immediate issues. Its great attention culture guarantees the survival of the Euro zone crisis in its current form. Australia has over the last four years resisted the impending decline of economic recession of the Euro crisis impeechment due to its culture and cultural dimesnsions that boost the degrading crisis from partnering Euro zone (Parkinson, 2011). Following the US sub-prime aggravated the global financial crisis as it defiantly causes an economic recession in most of the developed world countries. Australia being a constituent affected by Euro crisis has unveils the cultural imminence to the adjacent predictions of economic redress since it shows continual economic growth. Despite the fact that Australia cultural differences conceptualize in redressing the Euro crisis, it has not reveals its efficiency in replicating a more than 3 percent growth of the 2007 prior decade (Kim, 2011). Australia cultural practices unveils a clear line of maintaining growth with more than 2 percent as compared with the few western developed economies registering a lesser adverse social and cultural differences. The Australia minimal cultural differences reveal a higher degree towards of describing the positive economic indicators in comparison with other developed nations whose cultures differs. According to Rick Battellino, the deputy in Australian Reserve bank defiantly describes his certainty on the Australia cultural contribution towards the Euro zone crisis. The Australian anticipated consequent cultural affluence towards Euro zone crisis heightens its contribution with Euro business and other global business. Australian reveals determine cultural and social practices comparatively enhancing government direct trade, healthy banking sector with financial exposures to Europe. Australia is also simultaneously privileged to be subjective political and legal resources that supersede it resistance to Euro crisis by ensuing from exceptional business investment that consequently enhance and sustain the country’s economic activity as compared to South Korea with differs legal and cultural directives (Battellino 2011). The consequences of European downturn are evident in the country still suffering from a slowdown in Euro economies and higher borrowing costs for Australian banks (Ric Battellino, 2011). The different of cultural practices between Australian and other global countries in lining to the euro zone crisis accentuates the significant role in European Union business along the global cross-border banking system thus describing an inevitable spillovers economic redress in the Australia economy. According to deputy governor Ric Battellino, the Reserve Bank of Australia, Australian has a resilient banking system that well pace the country in withstanding the impacts of Euro crisis. Culture as a basis of Australia’s specific economic, social, political and cultural characteristics The multi-dimensional cultural, political, economic, legal, and technological, globalization process enhances perspective business performances along the Euro zone Australian and global business. The essence of having strong political, political, and cultural performance tied to Europe, Australia is considered both economically and geographically rooted in Asia. As a multi-cultural society among the small and mounting Asian born population, Australia state defines it stature in uniquely appearing to adapt to the globalization forces as compared to other countries. The Asian Studies Association of Australia commission accounts to entitled maximization of Australia’s and Euro zone cultural aspect in repositioning and renewal of the national impairment due to Euro crisis. The report essentially accounts that the essence of repositioning different cultural dimension to enhance a significant growth surpassed by sovereign cultural performances. The Euro zone culture, political, economic and social implications conceptualizes the effects of redenomination between Euro firms and Australia businesses. According to the Credit Suisse, legislation governing redenomination should be prescribed to control the risk involve in currency changes (Malcolm Edey, 2011). The Australian company’s needs to minimize the culture, political, economic and social differences to reduce redenomination risk in entering into contracts with counterparties with different culture and economic difference between companies in Euro zone to define the possibility of quantitative easing with respect of the Euro business therefore regulate appreciation between Australian dollar against the Euro. Most significantly Euro zone cultures astonish many responded by enhancing impudently and with higher pace in providing stronger stimulus packages that keeps more of the production process to tick along. The Intense overview of literal economic, cultural, political profile of Euro zone, Australia and global countries accentuate the rationale at which the economy never distorted by the global recession and depression while registering the modest economic growth (Malcolm Edey, 2011). The rationale that which the Australia enhances and maintains excellent economic growths are many but at the same time they are coupled with factors which might be dissimilar with the Euro zone crisis (Lim Guay C. et al, 2012). Australian cultural practices have dwell in enhancing corporate financial base structured providence with an ideal regulatory environmental policies redress the level of risk subjected through sufficient planning. Moreover the essence of Australian cultural rudiment being partially implicated with the sub-prime sufficient understanding scenario reinstates the substantial liquidity free where the Australian government through strategic performances that ensures business profile is compliantly adopted by government experts. According to economists overview, the Australia’s cultural domain is defiantly withstood the Euro crisis as the speculated country’s business crisis in Europe will predictably depict the impact availability of Australia credit transactions such as mortgages this will consequently affect the housing market which is identical to Australia’s central performance. The essence of defining the cultural state profile describes the Australia’s stability to withstand the Euro crisis, with its major four banks rebelliously received alongside the Euro and global degrading performances The ideal cultural, political and economic sources describes that the Australia's major big four banks have been with a ratings AA as downgrade to AA- with sufficient amendment described to emphasize on defining of risk in subsequent to the collapse Euro business (Malcolm Edey, 2011). Subsequently the Euro zone, Australia and global incise the ratings of over fifteen business institutions within Europe and the United States as a result of the revised cultural and economic norms. These describes economic downgrades had been ensign but it is more substantiation that banks pensively operating in a very risky and uncertain global business as compared to Australia and the Euro zone environment. The economic and cultural norms of European Union described Euro crisis has insinuated a significant discomfort on the bank’s interest rates that has ultimately distorts the financial community (Parkinson, 2011). The Australia’s ANZ bank recently acknowledge that it economic profile was no longer regarding the central directives for the factors upsetting Australian banking system such as the Euro debt crisis since the central directives from the Australian Reserve Bank didn’t consider to have an impact of the country’s cultural system. Also as a result poor directive from the central Australian reserved bank a considerable debasing of major banks on the attributive mechanism towards a stable business system. Globalization of cultures enhances sustainability of economic performances and cross-border connections as well as interdependencies of transcending the Euro zone business benefits to limit the Euro crisis. The economic and financial globalization along the Euro zone shows a lesser rapid rate as compared to the zone’s political globalization. The financial integration has no any political integration along the Euro zone regional basis thus internal tensions of adverse economic crisis within the European Union. The international political system intensively operates on an international basis among powerful national sovereigns alliances towards meeting resolution to adverse crisis. The main concern in the European Union cultural norms on Euro crisis is the existence of relation among the banking sector and the sovereign debt (Fowler, 2007). According to the preceding decades, the European state economic, political and cultural significance conceptualize on offering finances to the developed countries that currently are in line of servicing their financial burdens. Possible cultural implication and contingency planning for Australian business The Australian cultural system had rarely being involved in the contingency and planning business with the European governments, thus the consequently direct fallout on Australia business of the European government due to non-payment of their obligation was significant results. According to the Assistant Governor (AG) of the Reserve Bank of Australia Malcolm Edey, the Australian banks have only limited undeviating business exposures to the sovereign debt in the Euro countries. The potential redress accentuated by the Euro crisis partially had intense effects on Australian banks’ and the overall state assets. Moreover the central Reserve Bank of Australia, describes $87.2 billion as the total Europe exposure on Australian banks in 2012 with 2.7% of their assets (Ric Battellino, 2011). However, the ascertained risk exposure of $87.2 billion overemphasize the risk from Euro public crisis but the point of reference depict that the majority the investment was in the healthier core business of Europe including France, Germany, and Netherlands,) The $74.6 billion was loaned mostly offered to the banking sector in these countries. Australia’s business loaning the Euro zone may not face an ultimate severe direct impact on the crisis. The brunt of Australian Banks in ascertaining direct losses from the Euro assets can be realized on the collapse of Europe’s business system but the impact will not be more material since the total sums involved in loaning is not substantially material and hence it can be dealt with by Australia’s banks. Table one (1) above describes relative effect of the Australian business exposures in the euro crisis. The evenhanded contingent planning concern on the Australia’s business sector and economic stability as depicted above is apprehended to ransom by the Euro debt crisis has define the optimistic sight on the Australian economic rudiments that has pinpoint its relief. The recent survey accentuates the leading companies in Australia CEOs presented an overview concerned describing that the government should conceptualize on playing a more leading role than having redress over the Euro crisis (Hartwich, 2010). This profile as maintain the Australia strongest economies from other developed nation despite the fallout from the global economic instability. However full advantage of Australian competitive advantage should be budge beyond both long term policy short-term issues to enhance national significance. The planning structure of Australian economy describing a relatively well performance as compared to other developed nations guarantees its persistence of capital hunger. Australia’s aptitude in maintaining the positive redress to its current economy will be hard if the other PIIGs states face a significant economic decline. Moreover the government has conceptualized its political commitment in providing a surplus budget surplus by 2013 that infers the spending of a potential. The series of economic global downturns will despair the Australian economic resistance hence it eventually be worn down. However as depicted in the table below, the economies in the PIIGS nations will show’s a reduction the rate consumption as well as experiencing even recession. Company operating in European Union and impacts of Euro crisis European Central Bank determined the European governments business of lending profile then this cannot fully evade the Australian financial sector from being resistant from the Euro crisis. Since the concept of Euro lending it only restricted to Euro businesSs but banks being directly involved on borrowing on international capital markets that is affected by the Euro crisis (Parkinson, 2011). The Australia is ever dependent on importing capital. The descriptive overview from central Reserved Bank of Australia accentuates that Australian financial business institutions posses an offshore borrowings of $40 billion in, $123.5 billion 2000, and outstanding increase to $314 billion in 2012. The Euro Crisis context accentuates that Australia reliability on international capital is considered a weakness that prompt the defined condition against the Euro crisis. Impact on Australian companies is significant given that the prolonged credit crunch will negatively affect borrowers (Fowler, 2007). Australian lenders encountered wholesale funding issues hence Australian trusts and corporate such as REITS and securitization vehicles may find it hard to not only raise debt for new projects but refinance existing debt. Borrowers with huge refinancing extending to12-18 months rush early to meet refinancing schedules. Prior to maturity dates many borrowers could not obtain adequate time to refinance. Conclusion In conclusion the cultural dimension within the Euro zone has creates a global downturn whose impact differs between different countries based on their cultural impressions. The context of the AU cultures indicates a decreasing trend of the world economy due to the different culture believe in the Euro zone. Australia being the constituent of the Euro definitive depression, its own uniqueness and peculiar motives has insinuated a firewall towards the higher degree of subjection of downturn effects from the sovereign Euro crisis. The Australian credit sector to the Euro economies accentuates the effects on borrowing and accessibility of credit thus indicating poor measure to call on cushioning the immediate effects of Euro financial crisis. Australia thus expects some form of economic downturn as a result of sovereign Euro crisis since the redress of the country’s vast capital investments. Australian business lending respective relative practices with the Euro countries indicate respective cultural and economic impacts including decline in levels of investment, poor cultural practices, and lower levels of exports and potentially decline the Australia’s Gross Domestic Product (GDP). However despite Australia cultural dimension having such a positive outlook of current Euro zone crisis challenges, persistence of Euro crisis may have a relative serious of long term economic challenges and declines in the market demand due to its industrial and trade structure with domino effects in the business global markets. Reference List Durie J., 2011. John Durie’s 2011 Chief executives survey questions,. In 2011, B.C.S., ed. The Weekend Australia., 2011. Fowler, S.J..a.C.H., 2007. A critical review of sustainable business indices and their impact. Journal of Business Ethics, 76, pp.243-52. Hartwich, O.M., 2010. The next fall of Rome, Business Spectator. 15 April. Kim, C.O., 2011. New Developments in EU’s External Trade Policy and Implications for Asia-Europe Relations. Journal of East Asian Economic Integration, 15, pp.3-19. Lim Guay C. et al, 2012. Review of the Australian economy 2011–12: A case of déjà vu. Australian Economic Review, 45, pp.1-13. Malcolm Edey, Sydney. The Challenge of Central Clearing in OTC Derivatives Markets. In Address to the ISDA Annual Australia Conference., Sydney. Parkinson, M., 2011. Sustainable wellbeing-an economic future for Australia. Economic Round-up 3, p.57. Prideaux, B.a.S.F.W., 2000. The impact of the Asian financial crisis on Australian tourism. Asia Pacific Journal of Tourism Research, pp.1-7. Ric Battellino, 2011. European Financial Developments. In Address to Australasian Finance and Banking Conference. Sydney, 2011. Read More