Changes in the International Economic Order after the Global Financial Crisis - Essay Example

Global financial crisis research paper Introduction The year 2007 and 2008 experienced what is considered as the worst financial crisis since the financial depression of 1929 to 1930. Drop in profit led to a sharp decline in the fall of New York stock exchange as a result of profit drop in the Citigroup banking. A spectacular fall in prices of shares affected all major world markets. This was also followed by a succession of collapses. Later months in the same year witnessed Lehman’s bankruptcy. The investment bank at the Wall Street also experienced the crisis (Lee, 4). The infusions of billion of US dollars as well as equal intervention in Europe starved off the entire crash of the financial market of the world. This paper will analyze the actions taken by Samsung’s leadership following the world financial crisis of the year 2007-2008. Actions taken by Samsung Company’s management following the 2007-2008 global financial crises The experience of Samsung Company in the year 2008 was quite different from the Asia financial crisis of 1997. The pre-global crisis of the year 2007 to 2008 offered varying opportunities from the one that was experienced ten years before. The company was at a different level compared to 1977 and 1987 when the company was at its infancy. As it was realized later, even before the crisis of 2007 the company faced varying tension as it role in the Korean market continued to change. The company had not yet learned from the previous crisis and was unprepared when the global crisis struck. The company’s leadership was divided though dialogues, disagreement and arguments as a result of one group wanting the company to remain as original as possible while the other group wanted to challenge everything that was being experienced in the company. Both sides were however shaken by the global financial crisis of 2007-2008 (Lee, 4). Political issues led to the chairman of the company resigning in 2008, a slowdown in the drivers of business was registered 2007 and the triumph of the Korean voice that led to the resignation of Yun as well as the onset of the global economic crisis that hit the country at around October 2008 were among the challenges that were faced by the company. Since the world economic crisis that was experienced by the company in 2008, Samsung Company has proceeded on the path of becoming one of the globe’s leading organizations in terms of progressive entrepreneurship and creative innovations (Necker and Ziegelmeyer, 20). As the United States financial crisis deepened the world’s economic downturn in 2008, the leadership of the company experienced challenges that were quite different from the ones that they had faced ten years before in the Asian financial crisis. The difficult situation was further increased by inflation as a result of increase in the price of oil around the world, falling values of asset values and increased exchange rates increased in volatility. Despite the business environment that could be described as extremely challenging, effective action and systematic oversight enabled the management to post growth that was continues in their as they delivered solid financial performance that was rated at around KRW 5.5 trillion. The company’s mobile phone, core semiconductor, and television business enjoyed continuous growth. While NAND and DRAW memory prices declined sharply in 2008, the company’s ongoing cost reduction efforts and technical leadership enabled the company to further extend their lead over other rivals. The company’s non memory semiconductors business registered increased performance even though the market demands had been weakened. The mobile phone business too registered better results as the company focused on bolstering building market share and lining up new smart phones in the emerging markets (Park and Eichengreen, 13). The approach enabled the company to ship almost two hundred million phones in a year as well as competing effectively in the market. The company’s LCD business was able to overcome tougher competition as well as slowing demand in the 2nd half of the year and maintained a leading net profit in the industry. The TV business increased its shipment by fifty four percent solidifying their position in the industry as they marked the 3rd third consecutive year at the top of flat-panel, overall TV market and LCD. The company’s leadership utilized creativity to foster and strengthen their foundation in the global market. The ambitions and creativity of company led to continuous improvement in almost all organizational areas thanks to their success and hard work by attracting the brightest and best people, building a distinctive and strong brand and pursuing innovative R& D. The company continued to enhance customer and market focused marketing programs including their role as the official communication gadget partners of the Olympic and Paralympics games in Beijing 2008 (Mertzanis, 320). The company’s management worked to promote sustainability and build the shareholder values. The company was pushing ahead with their investor relations despite the negative impact of volatility on the global economic downturn. While the majority of the world technology and bourses stock lost more of their values in the crisis period, the company’s share faired comparatively better (Conti, 38). In addition, the management launched various initiatives with an intention of improving the safety, workplace environment, reduction of energy consumption as well as health as part of the increased company’s commitment to sustainability. The company’s efforts aimed at improving product recycling and reducing toxic chemicals had improved and recognized globally. The company prepared for the future by growing new business and driving creative innovation. While passion and sheer determination was sufficient in making the organization a world class manufacturer of electronics, being among the leading companies in the world required initiation of various changes in the values of the organization. The company’s management was able promote continuous innovation and growth that was driven by entrepreneurial spirits with the employees utilizing the best creative tools and methods that could not be imitated easily by the competitors (Conti, 38). The foundation enabled the company to continue to develop and identify tomorrow’s business opportunities and technologies. The various actions taken by the company’s management enabled them to increased sales and improve performance leading to Samsung Company being placed among the top companies in the world. Despite the world financial crisis of 2008, Samsung Company was able to generate continued growth and financial performance by taking appropriate actions that was able to redirect the company towards achievements. Conclusion Samsung Company’s strategic plan took the company through various phases such as acquiring and modification of the technologies that had been imported to designing and developing new products. The company was able to acquire best engineers with innovative minds that spurred it to be a global electronic manufacturer. The global financial crisis did not divert the companies’ attention from fulfilling the strategic objectives and goals. The company focused beyond the crisis and realized the potential to develop a leading position in the new industry, where communication services, smart phones and digital media would merge together. the management therefore restructured the company’s various consumer businesses into a new digital communication and media to both facilitate synergies and cut costs while at the same time combining the various business components into a device solutions divisions (Conti, 38). So far, the strategic planning approach of the company since the global financial crisis has been instrumental in developing long term investments, coordinating the various businesses and sustaining the commitment to key technologies. Work cited Conti, J.P. Samsung Where Are You Going? [Consumer Electronics]. Communications Engineer 4.1 (2010): 38-43. Web. Lee, Kun-Ho. Risk Management In Korean Financial Institutions: Ten Years After The Financial Crisis. SSRN Journal 4.0 (2012): 3-5. Web. Mertzanis, Charilaos. Risk Management Challenges After The Financial Crisis. Economic Notes 42.3 (2013): 285-320. Web. Necker, Sarah, and Michael Ziegelmeyer. Household Risk Taking After The Financial Crisis. SSRN Journal 6.0 (2012): 20-22. Web. Park, Bokyeong, and Barry Eichengreen. Changes In The International Economic Order After The Global Financial Crisis. SSRN Journal 1.0(2013): 12-15. Web. Read More