StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Global Managerial Economics - Essay Example

Comments (0) Cite this document
Summary
Free trade zones such as the North American Free Trade Association (NAFTA) and international trade agreements like the General Agreement of Tariffs and Trade (GATT) is a manifestation of…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER93.3% of users find it useful
Global Managerial Economics
Read TextPreview

Extract of sample "Global Managerial Economics"

Global Managerial Economics When is international trade an opportunity for workers? When is it a threat to workers? The advent of globalization has drastically changed the landscape of international trade. Free trade zones such as the North American Free Trade Association (NAFTA) and international trade agreements like the General Agreement of Tariffs and Trade (GATT) is a manifestation of the general liberalization, which according to Anthony Bende-Nabende, allowed foreign participation in previously domestically oriented economies. (Shannon, p. 1) Buoyed by the advances in technology and communication, the cost, time and distance involved in trade is significantly reduced.
The increase in the economic activity becomes an opportunity for workers because of the increase in the demand of a new integrated global market as well as the dynamism of the flow of capital. When a company goes global in its business strategy, for instance, it could invest in an overseas country to take advantage of the cheap labor, hence, generating jobs for the work force in that particular locale. This is especially helpful for workers in the Third World countries which lack financial capital to support enterprise that would lead to employment opportunities. Ideally, it is hoped that the growth generated by these trade breakthroughs would close the income gap of workers in developing and industrial countries.
On the other hand, the current trend in international trade becomes disadvantageous to workers when the increase in competition among enterprises causes local firms to fold-up, leaving a trail of unemployed or underpaid workers behind. The entry of multinational companies in a particular market - with the advantage of its resources - swallow small and medium sized companies in mergers or drive them out of business because it could afford to lower its products prices. We see the most adverse impact of globalization in the agriculture industry of smaller countries and those whose governments are barred to subsidize their industries. 1
Another disadvantage, which is technically not a consequence of globalization per se but the lack of state policies and regulation on this new economic phenomenon, is the bad labor standards of the multinational companies.
2. What are some of the major challenges confronting the international trading system?
The current international trading system follows the trade liberalization and deregulation terms dictated by the World Trade Organization. There are already several milestones achieved by the world body mainly in the lowering of tariffs as well as in the cooperation of its member-states in legislating policies in line with deregulation. However, one of the most serious challenges in achieving the success of this system is the requirement for governments to surrender some of its sovereignty. The problem comes in when states, especially those who are economically powerful, insist on protectionist policies which stall important trade measures and result in unfair trade.
Finally, another challenge comes with the vulnerability of the system itself. There was no previous experience of globalization of this magnitude in the past so lessons are learned as economies struggle. An example was the financial crisis that hit Asia in 1997. As explained by Shannon (p. 5), the growth experienced by the region is mostly derived from international trade and capital flows. Hence, while it served as the engine of success for the region it also became a source of weakness. The negative movement of international trade and capital flows could have an immediate and far reaching impact due the integrated business environment.
Work Cited
Lechner. Globalization Reader. 2nd ed. Blackwell Publishing. 2003.
Shannon, Vaughn. International Trade. Capital Flows and Economic Development in East Asia. Ashgate Publishing Ltd. 2003 Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Global Managerial Economics Essay Example | Topics and Well Written Essays - 500 words - 2”, n.d.)
Global Managerial Economics Essay Example | Topics and Well Written Essays - 500 words - 2. Retrieved from https://studentshare.org/miscellaneous/1537908-global-managerial-economics
(Global Managerial Economics Essay Example | Topics and Well Written Essays - 500 Words - 2)
Global Managerial Economics Essay Example | Topics and Well Written Essays - 500 Words - 2. https://studentshare.org/miscellaneous/1537908-global-managerial-economics.
“Global Managerial Economics Essay Example | Topics and Well Written Essays - 500 Words - 2”, n.d. https://studentshare.org/miscellaneous/1537908-global-managerial-economics.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Global Managerial Economics

Managerial economics

...? Managerial Economics Introduction In the paper two basic concepts of micro economics is represented with the illustration of easy diagrams and short mathematical exercises. The first one is the theory of demand and theory of supply along with market equilibrium and the other one is the production possibility frontier of two countries. In the demand and supply framework a detailed explanation of the demand and supply is given with the notion of market equilibrium and also how disturbances in the market self adjusts and return back to its initial equilibrium state. In the production possibility frontier paradigm, its construction is given for two countries and how the countries with comparative advantage can benefit from trade is exhibited...
5 Pages(1250 words)Essay

Managerial Economics - Traded Firm and the Global Competition

...? Topic: Managerial Economics - Traded Firm and the Global Competition The airlines industry is a large and booming industry which facilitates growth, international trade, international investment, accelerates tourism. It can be considered as an apex tool of globalization occurring in several other industries and developing them as well. In the past decade the percentage of air travel has enhanced by almost 7% per annum. All over the world travelling in business and leisure purposes have increased manifold. In the last year the scheduled airlines carried approximately 1.5 billion passengers. In the leisure market due to the availability of large aircraft like Boeing 747 has made it very convenient and affordable for the common people...
12 Pages(3000 words)Research Paper

Managerial Economics

...?Managerial Economics The term oligopoly has its origin from the combination of two Greek words. They are ‘Oleg’s’ and ‘Pollen’. The former means ‘a few’ and the latter means ‘to sell’. Thus, the term ‘oligopoly’ in business means a situation when the number of companies selling a particular product or service in the market is very few. In other words, oligopoly can be termed as ‘competition among the few’. Admittedly, oligopoly has a large number of specific characteristics which encourage the companies to exhibit collusive behaviour (Fershtman & Pakes 2000). The first important characteristic of oligopoly is interdependence. It happens because when the number of firms is few, any change in the price or quality of the products by one...
4 Pages(1000 words)Essay

Managerial Economics

...Managerial Economics Introduction The drastic decline in the prices of the US housing investments was the reason that led to the financial crisis that affected the entire world. Housing is that asset which is endowed with services flow. An asset like housing can either provide for consumption or for letting out which would in turn supply with cash which can be used for buying other consumption good (Varian,2010 , p.203). Thus the housing would provide an implicit rental return which in turn could also generate money that could rent a house of the same value. There are several factors that contribute to the pricing of houses in a free market. The Basic Principle of demand and supply This basic principle of demand and supply would chiefly...
4 Pages(1000 words)Essay

Global Managerial Economics in Mexico

...-ranging global debate." Free trade limits states to operate domestically and protect their domestic welfare. These generous welfare states become less competitive. Culture is also lost. Global norms and practices take over what was originally known as local and authentic. For example, western influence (such as America's way of doing things) becomes a global spread of what is popular and cultural homogeneity results. Some other losses include increased materialism and environmental problems. Global Managerial Economics 2 The gains that Mexico experiences include reduced material and labor costs, people empowerment, improved quality of life, new product availability, global market share, and unity of the world. The gross domestic...
2 Pages(500 words)Research Paper

Global Managerial Economics

...Global Managerial Economics IMF (International Monetary Fund) s that it "provides low-income countries with policy advice, technical assistance, and financial support" and that "low-income countries receive more than half of the technical assistance provided by the Fund, and financial support is extended at low interest rates and over relatively long time horizons" (How the IMF Helps Poor Countries 2006). IMF does all this by employing three key functions-lending, technical assistance, and surveillance. The organization is engaged in the provision of financial assistance to low income countries that are undergoing a balance of payment deficit. The Exogenous Shocks Facility helps distressed countries in temporarily addressing their short...
2 Pages(500 words)Essay

Global Managerial Economics: Mexican Experience with Globalization

... 15 years. It speaks of a lost decade and a lost generation. Conclusion Surprisingly, the gloomy scenario has not thwarted free market ideology from taking over public cultural space. Economic liberalism, principally and aggressively pushed by the elite, many of whom were educated in US business schools and the onslaught of global/US cultural products has altered the public cultural space away from conventional concepts of Mexican identity leaning towards a more westernized, or Americanized, cultural space, starving for profit and consumption. While a lot still work to shield and protect the nation's identity and culture, more influential and dominant forces have affirmed that a free market identity is what will propel Mexico...
4 Pages(1000 words)Research Paper

Global Managerial Economics

...Global Managerial Economics Explain why the U.S. would subsidize the short run costs of production for tobacco farmers in foreign countries. Do these practices guarantee the tobacco farmers a profit in the short run? Long run? Explain. Subsidizing the short run costs of production for tobacco farmers in foreign countries is essential for US since it allows these farmers to grow tobacco (and not other domestic crops) profitably, without incurring losses. Direct subsidies pay suppliers for any cost that has not been recovered so they could keep on producing cheap tobacco for the US producers. Instability or changes in production in these foreign countries is crucial for these suppliers may opt to increase or decrease output or simply shut...
4 Pages(1000 words)Essay

Managerial Economics

The firm would be worse off, if it produced in the short run because the total loss that the firm will incur in this case is 380 AED (120-500). It is prudent if the firm shuts down and saves 200 AED rather than losing 380 AED in the short run. At the point where the firm produces 30 units and sells each unit at 4 AED, MRC (marginal revenue cost) is less than AVC (average variable cost).
Assuming that Coke has already attained the monopoly status such that Coke is a monopolist, Coke actively engages itself in price discrimination because it has price setting power (Carbaugh). Given that there is a difference in price elasticity of demand for Coke in various regions, the company varies its price and extracts consumer surplus, wh...
9 Pages(2250 words)Assignment

Global Environment Change

A number of fields are involved in the study of environmental change, such as chemistry, physics, biology, oceanography, etc. In this paper, some of the major global environmental changes will be studied and explored and implications will be provided for the sustainability of the global environment.

Responses to the global environmental challenges have become one of the heated debatable matters around the world, as a number of organizations, researchers, and nations are endeavoring to sustain the continuity of the global environment, where is harmed by different natural and manmade causes. In order to come up with an effective solution, it is very important to understand and go into the core of the global problem. In th...
7 Pages(1750 words)Coursework

Global Culture on Fast Track

Lifestyles are changing fast to invite international practices. Youths in large numbers are instrumental to change to live in a free environment. They are resisting ‘no change’ attitude and fighting for the new environment where they can express freely what think right to make a modern culture. The change is undergoing automatically and being accepted by most of the resistant quarters.

Globalization does not create a common culture, values, attitude or beliefs as mentioned above. It gives way to a single arena in which people of different cultures interact and present their values for comparisons, analysis, acceptance or rejection on certain standard yardsticks. This is the internationalist version of global...
6 Pages(1500 words)Essay

Economics or Ethics

Several CEOs in America have in coalition with top managers deviated from the norms of corporate governance and caused immeasurable woes to the stakeholders. Using their power and ego they chased the wealth for personal gains without any concern for the shareholders or other stakeholders of the company. Enron, the world’s largest energy trader at one time, had to file bankruptcy under Chapter 11 when about 5000 workers lost their job (Bhattacharya, 2004). Arthur Anderson, one of the big five auditing firms was charged to have colluded with the management to misappropriate funds and project a picture different from the reality. Income was inflated and then all concerned papers were destroyed. The leadership at Enron was conce...
6 Pages(1500 words)Assignment

Contemporary Managerial Issues in Accounts and Finance

Political theorists like Veblen argued that the separation of corporate ownership from control generates a transfer of power from a minority of stockholders to a group of decisive owners who have the control over the way of access to credit and finance (Roe, 1994, p. 5).
However, contemporary analysts of corporate power contested that dominance and ownership in modern corporations have shifted to a property-less group of managers. Consequently, this current shift of power and control in large modern corporations could usher in ultimate preoccupation over profit rather than non-financial motives. Furthermore, the separation of power and ownership will lead to the destruction of the traditional legal theory of property which en...
23 Pages(5750 words)Literature review

Global Warming and Food Production

The carbon fertilization effect of increased carbon dioxide concentration in the atmosphere has an impact on plant growth, which benefits plant growth by facilitating photosynthesis, cannot balance the complex impact of increased temperatures around the world. Thus, although some regions will benefit from global warming, a total reduction in global agricultural production will result. This essay presents a discussion about the impact of global warming on agriculture and food production around the world.
Although the history of the planet earth suggests that for the last million years ice ages have been interspersed with warmer periods, evidence suggests that the average rate of global warming within the recent past has accele...
14 Pages(3500 words)Assignment

The Importance of Employee Empowerment in the Global World

Empowerment is the authority to make decisions within one’s area of operation without having to get approval; from anyone else. Here the operatives are encouraged to use their initiative to do things the way they like. To this end, the employees are given not just authority but resources as well so that they not only take decisions but implement them quickly. This empowerment means giving the employees the authority to make decisions and providing them with financial resources to implement these decisions (Koch & Godden, 1997 11).
Employee participation and empowerment participation means sharing the decision making power with the lower ranks of an organization in an appropriate manner (Lashley & McGoldrick, 199...
9 Pages(2250 words)Assignment

Managerial Economics and Business Environment

Once the above said subject matter is clearly sorted out, the next emphasis would be on the concepts like the opportunity costing, incremental principle, marginal principle, discounting principle, the principle of time perspective, and calculation of economic profit as the guidelines to the scope of managerial economics. (Surender. V, 2008).
To start with, we consider a firm for which different processes have to be carried to achieve its objectives of profit maximization (assuming that all the organizations work with the view to maximize profits). If firms from different sectors are identified simultaneously, then the working of the economy as a whole could also be analyzed which in turn is useful in the decision-making proce...
15 Pages(3750 words)Assignment

Global Challenges for Business Management and Leadership

This section aims at understanding the challenges faced by the United Nations due to political conflicts. In the summer of 2007, an issue in the Politically Speaking, the DPA had highlighted the increased focus on the conflict meditation. This report had also highlighted the interview with the Under-Secretary-General for political affairs. In the interview, he defended the UN against all the criticism and he also highlighted the need for finding political solutions for issues around the world. The interview also highlighted the importance of results to show the effective working of the UN. This interview also highlighted and urged critics to look at the positive along with the negatives of the UN. “The UN has knowledgeable a...
7 Pages(1750 words)Research Proposal

Global Employee Information and Consultation: Replicating the European Model

A significant step to enhancing the employees’ right to information and consultation is the establishment of the European Works Council (EWC). The EWC Directive (94/45/EC) aims to improve cooperation in transnational companies and to allow trade unions to influence, at least indirectly, the decision-making of corporations (Lockwood and Williams). It requires community-scale undertakings and community-scale groups of undertaking to create this mechanism for regular consultation of the workforce. A ‘community-scale undertaking’ is one with at least 1,000 employees within the Member States and at least 150 employees in each of at least two Member States (Lewis and Sargeant).

An EWC is a forum that would a...
9 Pages(2250 words)Coursework

Introductory Economics and Finance: Why Governments Regulate Firms and Markets

By government regulation, it is meant by the rules administered by a government or government agency to influence any economic activity which determines the price, types, and standards of products, and most importantly the conditions under which the entry and exit of the firms are possible.

Like death, it is impossible to keep away from regulation in about every aspect of daily life. The business regulation may be classified into two- economic and social (Litan). The economic regulation deals with price controls and the entry limits of the firms into markets. The second type regulation mostly deals with externalities (the outside influences of the company or firm which may or may not be decided by them)

Examp...
6 Pages(1500 words)Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Global Managerial Economics for FREE!

Contact Us