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Managment - Essay Example

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Management Management Outline: Introducing the paper Popular uprising Introduction to popular rising in Middle East General effects on economy and businesses Specific effects on three international companies 1. Company # 1 + actual example 2…
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Download file to see previous pages The paper ends with drawing on general and specific lessons out of the case study for management today. The Issue mainly in concern is the importance of political instability in management decision making. Popular uprising Before starting this paper let’s have a look at the word popular uprising. Popular Uprising as defined by the free dictionary has got two meanings: Widely appealed 1. Revolt against a state authority or constituted government or its laws; a rebellion. 2. Act or any instance of rising or of rising up. While the reverso.net dictionary defines it as Popular: An act widely accepted or appealed Uprising: A revolt or a rebellion Introduction to popular uprisings in Middle East Between the late 2010 and the early 2011 a wave of many spontaneous revolts in Tunisia along with Egypt led to the downfall of local regimes. The foreign exporters and the investors in these countries are being affected by the ongoing events, including industrial action, supply chain disruptions, looting, and increased counterparty risk. Furthermore, the success of initial protests ignited new tensions across the Middle East and the North Africa (MENA), threatening the very stability of Bahrain, Iran, Jordan, Algeria, Libya and Yemen. Uprisings in Tunisia and Egypt The catalyst for uprisings in Egypt and Tunisia revolts was the suicide of, Mohamed Bouazizi, in the Tunisian town in December 2010; he set himself on fire to revolt against a decision by local authorities to seize his wares. Within few weeks’ demonstrations spread in whole country, as many Tunisians took to the street for protest against political repression and living conditions. Unrest in Egypt Overthrown President Hosni Mubarak’s regime in February led to an unprecedented uprising that was unable to stop. The aims of the revolt were to topple Ben Ali and replace his authoritarian reign with a multi-party democracy. General effects on economy and businesses The wave of recent uprisings that is sweeping across the Middle East along with the North Africa is set to have a major impact on the risks of doing businesses in such country. As political instability keeps on rising in these regions, companies around the world would need to prepare for thereafter knock on effects on the supply chains and business costs occurring across most sectors. This would in the short term cause political instability and economic breakdown in the affected countries which is likely to impact the supply chains around the world; and the textile companies in Europe and consumer goods producers from China and other Asian economies are the ones most vulnerable to these shocks. The careful monitoring of such political and economic trends, the alternative sourcing and the stockpiling are the strategies that can reduce the impacts of these disruptions. The longer term effects would include heightened political risk that could lead to deteriorating economic conditions and tighter access to credit, raising the payment risks for the companies that are dealing with MENA (other emerging markets). Adequate political and export risk insurance cover and safe trade terms, such as the documentary credit, will be essentials to mitigating counterparty risk. In the wake of the recent crisis in the MENA region, the lenders and insurance companies are likely to upwardly re price the risk premium that is attached to dealing with such ...Download file to see next pagesRead More
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