Global Financing and Exchange Rate Mechanisms - Assignment Example

Global Financing and Exchange Rate Mechanisms - Roles of International Financial s (IFIs In financial economics, a financial acts as an mediator that facilitates while providing financial services for its clients such as being intermediaries of the capital and debt markets. The presence of financial institutions facilitates the flow of money through the economy. Similarly, International Financial Institutions (IFIs) provide financial services for countries, regional and territorial governments while enabling them to carry on with economy-boosting steps. International financial institutions (IFIs) are also increasingly involved in conflict situations in countries in which either violations of international humanitarian law are widespread and devastating to the civilian population and the countries' economic prospects, or the overall economic situation of a country is so weak that it may not hold itself and default anytime. The most prominent international financial institutions are the IMF, the World Bank, ADB and the WTO. International Monetary Fund (IMF): International Monetary Fund (IMF) plays a major role while rebuilding and stabilizing the monetary and pecuniary conditions of its member states. IMF achieves this objective by offering supportive loans while working out counteractive strategies. Apart of it, IMF also supports its defaulter member countries and their funding partners to ease out methodical development for liability streamlining by implementing and taking necessary measures1 (IMF Fact sheet, 2006). Thus, IMF plans to offer financial and monetary services while providing its member states with sufficient opportunities so as to employ regulatory guiding principles and transformation for reinstating environment while guaranteeing to strap and protract economic augmentation and societal venture. These courses of actions show a discrepancy while craving on member's state of affairs together with the source of the monetary related tribulations. Apart from above stated functions of IMF, this monetary institution also supports to develop the obligatory liability reformation method2 while connecting its member states and their classified crediting associates. World Bank: The World Bank is the fundamental resource for providing monetary and technological assistance to the rising nations. It is an organization which is founded by a group of five international organizations. World Bank aids regimes of these nations for shrinking the abundance of general deficiencies while supplying capital funding and methodological proficiency. These developing and rising nations can utilize World Bank's such services for an extensive assortment of planning of developments which can not generally be obtained by the private sector.3 Examples of such developments can be education, health, transportation, communications, restructuring of governmental processes etc. In general and broader terms, World Bank strives to cater two major objectives of poverty reduction, and financial as well as social development. Before lending the resources to the rising nations, World Bank carries out research studies for existing concerns and problems on a broader scale for that very nation from in house research teams and other independent study groups.4 These studies are conducted upon various issues; just like public spending, natural resource protection, tariff reduction, primary schooling, etc. The implications of such research works produce clear guidelines and suggestions for the success of overall project. World Bank then hires independent consultants who make sure that the implications and suggestions of these research works are closely monitored and followed by the money borrowing nations. Thus, World Bank makes sure that the purpose of its funding of resources does not die, rather it helps the poorer nations to develop their social and economic conditions. Conclusion: Although international financial institutions have invested hundreds of billions of dollars in reduction of poverty and stabilizing of world economy, world still faces extreme poverty and financial instability in poor developing countries. Although, claims by researchers for arrival of true globalization have been made public over the last decade, true globalization can not be effectively implemented until the time when there is social and ethical equality among the nations. Perhaps, international financial institutions have yet to play their major role for bringing about the social and ethical equality, which can only be achieved through reduction in the poverty levels below countable boundaries. References: (2006) IMF, How the IMF Promotes Global Economic Stability - Fact sheet. Retrieved on March 03, 2007 from http://www.imf.org/external/np/exr/facts/globstab.htm (2006) IMF, How the IMF Helps to Resolve Economic Crises - Technical Assistance (Online) - Fact sheet. Retrieved on March 03, 2007 from http://www.imf.org/external/np/exr/facts/tech.htm (2006) World Bank, Frequently Asked Questions - About the World Bank. Retrieved on March 03, 2007 from http://web.worldbank.org/WBSITE/EXTERNAL/EXTSITETOOLS/0,,contentMDK:20147466menuPK:344189pagePK:98400piPK:98424theSitePK:95474,00.html (2006) Bretton Woods Project, The World Bank's Knowledge Roles: Dominating Development Debates. Retrieved on March 03, 2007 from http://brettonwoodsproject.org/doc/knowledge/knowledge.pdf Answers of Thee Important Questions: Q1: What are the major staffing policies that Global Organizations should consider How an organization should chose among these staffing policies How do you assess the impact of implementing a specific staffing policy Answer: Creating and maintaining staffing policies is one of the four major tasks of Human Resource Management. There are four types of major staffing policies which Global Organizations must consider; these are Ethnocentric, Polycentric, Geocentric, and Regio-centric staffing policies. An organization can choose any of these staffing policies while depending upon the hierarchy structure of the organization and the general process of organization's decision making. If a Global Organization has various subsidiaries in different cultural and social backgrounds of the world and if the organization is to have a centralized decision making policy then it must adapt ethnographic staffing policy. However, majority of global organizations follow global management approaches while strengthening and giving more autonomy to each part of the organization since their contribution is very highly rated. Regional and cultural basis are not given highest importance in this staffing policy; rather preference is given to those who are the best for the job since the best does not rest. Therefore, a global organization that prefers autonomous individual parts being served with the best talent will have to adapt to Geocentric Staffing Policies. While attempting to implement geocentric staffing policy, its impact can have both good and bad feelings. Good for company overall since it brings best available talent, but bad for finance department since best talent is always expensive. Locals may also feel neglected if such policy is implemented in remote areas e.g. building and developing of Gawadar Port in Pakistan lead to a disastrous impact on locals as they considered themselves being neglected since all of jobs were being given to more talented outsiders. Q2: What are some issues and trends in global socio-cultural issues Why must a company be sensitive to the socio-cultural environment within the host country What impact does socio-cultural sensitivity have on a company's operations or sales within a host country Answer: Global Socio-Cultural issues are those issues which relate and depend upon the creation of difference in social, cultural and ethical values of one region to another region or its preferences. A company needs to be very sensitive while abiding by socio-cultural environment's guidelines of a region. e.g. use of contraceptive in some regions of the world is thought off as illegal, immoral and unethical practice. Certainly, its marketing process may not possible in these areas. However, transition in moods, choices and level of thinking has lead to a change in the trend. These trends can be positive and negative as the same time. Changing moods have witnessed contraceptives being sold out even in the hard-lined Islamic states now. This all has become due to the impact of friendly and healthy socio-cultural sensitivity that contraceptive producing and marketing companies have shown over the years while resulting in huge boost to the sales. Q3: What is the current status of the: telecommunications, energy, and transportation infrastructures of the world's fastest developing countries What impact does importing advanced technology (such as wireless technologies) into a developing country have on that county's telecommunications, energy, and transportation infrastructures How will these changes in infrastructure and technology alter business productivity and impact native family lifestyles Answer: According to many, there are either developed countries or developing countries in the world. However, one can easily create a third category of "Rapidly Developing Countries of the World", e.g. China, India, Brazil etc These countries have been given such status due to huge growth in their telecommunication and transportation structures while leaving themselves energy hungry. While taking India as an example, one can clearly see the huge revolution in its telecommunications sector which has brought millions of mobile phone, landline, internet and wireless phone users contributing heavily in overall GDP. In the past, people used to travel only by train services in India; however, people's lifestyles have changed now. Airlines have become jam-packed with passengers and bullet trains are being introduced across the country while investing hundreds of billions of dollars. This all has certainly changed local's lifestyles with huge impact which is evident with the presence of hundreds of satellite TV channels in remote areas while combining different segments of society into one. Read More