Effect of the Recession on Multinational Enterprises

Effect of the Recession on Multinational Enterprises Economic recession Is general slowdown of economic activity over a period of time that measured by Gross Product Domestic (GDP),recession is highly characterized by falling of investment spending, business decline, slow growth of new business high rate of unemployment.  [i]   Economic recession can be caused by widespread of drop in spending and investments, poor micro-economic policies, such as poor control of financial institutions such as banks, and other lender institutions as well as other economic variables During economic recession, many business profitability declines and other bankrupt due to lack markets for their products and services, many customers have inadequate money to buy these products and services. Economic recession also affect stock markets, where by share of the companies drops sharply and reduce confidence to investors Government revenues decline due to economic recession, hence government fails to provide social services and other future plans. Economic recession in one country can also affect others, in sense that recession has magnitude, many multinational companies operate more than one country, and hence impact in one county can have multiplier effects in other countries, many FDIs also will be affected E.g. economic recession which was hit USA in 2008/2009 which was contributed to united states housing bubble and subprime mortgage crisis, was affected not only in America but almost all over the world, many business affected with this recession, stock markets such as NYSE,LSTE, and other banks were bankrupted such as warner brothers.  [ii]   Impact of Economic Recession High rate of unemployment, recession can contribute to high rate of unemployment in sense that may company reduce number of staff in order to strive; in recession it leads to other problems, such as people who lack jobs may engage in criminals in order to survive. Recession may lead people to lack disposable income; and other fails to repay their loans hence many families are affected. Decline in productivity, where by many business profits falls, other firmà ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¾Ã‚ ¢s bankruptcy, hence and affect the whole financial system. Recession has negative impact due to decline of growth domestic produces (GDP) where by its affect economic as well social life. Many new businesses collapse, and hence fails to repay their loans banks. Recession can led to decline in living standard due to the fact people depend on wage and salaries, this can have negative impact on stability of families and individuals health and well-being Multinational Corporation (MNC) or transnational corporation, is an enterprise that manages production or delivered service in more than one country, multination cooperation has been achieved due to advancement in information technologies as well globalization, British is one of country which have many multination companies such British petroleum Vodafone, Virgin, Rynair as which operate within and outside the country, they are interested to operate in emerging economies such as India, china, Africa and Brazil British companies usually engaged in international business Acquire new markets, British multinational usually going international in order to search new markets for their products and services, many large firms flock to china, India, brazil and Africa due to growing of consumer purchasing power. Increasing sales, firms expand international so as to increase its market share hence being able to compete. Acquiring resources, large firms decided to go globally because to find resources so as to continue producing and ensure production cost can be controlled hence to able to pass benefit to customers. Cheap labor, due to growing of stiff competition in the markets, large firms fight to reduce production cost in order to earn profit, this led companies looking overseas areas where cheap labor is available. Global Strategies, many firms consider engaged in international business as strategies in order to survive in a stiff competition Growing consumer pressure, tastes and preferences of consumer has changed dynamic, income increase; consumer can be able to purchase luxurious products and services, growing income to emerging economies influence many firms to set their operation and respond to these markets The external environment is an essential element for the business to operate international due to the fact business do depend on external environment because and changes can have multiplier effect toward business, if the country policies towards economy are good and there is peace and security business will prosper as well as economy PESLTEL for British Multinational Enterprises are; Political British MNE they are highly interested to operate in where there high democracy and freedom of speech, and where there is a less government intervention towards business unless ità ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¾Ã‚ ¢s breaking the abiding laws. Multinational Enterprise, interested operates in a country which there is peace and security, and that countries have diplomatic relation with other countries. Tax policy is well structured and can be predicted, this give opportunity for business to incorporate into their business, in a country where taxation policy is highly uncertainty many British MNE are not interested to invest in these countries Multinational enterprises interested to know all regulatory bodies governing trade, local and international business such competition laws, employment laws, Business ownership laws, health and safety laws, foreign and local trade regulatory, fair competition bodies as well as environment protection laws main objectives is to make sure the business running smooth. Economic British Multination enterprises are interested in invest in a country where a GDP is heading toward good direction, this is good conducive environment for growth of business Also British MNE prefer to engage in international business in a countries which their economies are growing and their citizen has disposable income in sense that this will provide market as well as access to raw material. British MNE prefer to invest in countries which have national comparative advantage, such as huge population as well as huge market, good climatically condition availability of natural resources such gas, oil and minerals. British MNE also interested to invest in a country which has efficient money supply low interest rate British MNE are highly consider types of economic system, preferred capitalism where by supply and demand is controlled by markets Multinational Enterprises interested to operate in countries which are not prone to recession and depression, due to the fact these affect companies profitability.. Technological factor Advancement in Information and telecommunication technologies (ICT) and innovation contribute for multination enterprises to participate in international business, technologies such as internet, teleconferencing, where company headquarters can have two ways communication with scattered branches around the world. Transport Innovation, development of maritime technology and existence of many airline companies, contribute MNE to engage in international business Transportation innovation, Development of maritime technology and existence of many airline companies in transportation system lead easier to fly around the world at competitive fares and conduct business. Many international companies inject huge sum of capital in research and development to come up with a newer, better and innovative products due to increase of competition among international companies as well growing of consumer pressure due to increase in of income Social factors Multinational enterprises interested to operate in country which there is large population, hence be a market of the products and services provided by these multinational companies, many multinational companies interested to operate in china, India and most of African countries due to large population. Due to powerful economies of western countries and globalization, social culture and life style affects other societies, such as Africans and Asian societies adopt a western culture, and hence create opportunity for MNE to engage in international business Ansoff Matrix Model Source; tuitor2u.net Ansoff Matrix Model is one strategic tools objectives, and most well-known framework for deciding upon strategies for growth, the firms which attempts to grow depend on wither its market to a new or existing products or in a new or existing markets Market Penetration is when a firm decides to market existing products to its customer, the aim is to maintain or increase market share to the existing products to customers and increase usage of existing customers Strategies such as, competitive pricing strategy, advertising, sales promotion and also personal selling as well as aggressive promotional campaign and led market to be unattractive for competitors. Market Development, Is when firm decide to sell its existing product into new market, firm can implement this strategy by, by moving into new geographical areas such as exporting to a new country, new product dimension or packaging, new distribution channel or different pricing strategies which can attract new customer. Products Development, is the growth strategy where by firm introduce new products into existing markets, strategies such as upgrading which can appeal to existing markets Diversification, is the growth strategy where by firms decide to market new products to a new markets, diversification can relate or unrelated depending with company policies. Strategies to execute in recession period In period of Economic Recession many multinational enterprises should review their growth strategies, due recession which affect the prosperity their business, By using Ansoff Matrix Model as strategic tools for growth, Multinational Enterprise can adopt this in survive. The first strategy should be execute for multinational companies in a recession period is cut operation cost and reaming with core business in order to survive The appropriate strategy, which Multinational Enterprise can execute, is by market development strategy, where by firm can decide to shut down their operations in countries which affected with recession due to the fact recession affect purchasing power, hence people fails to buys products and services, firms can decide to operate in countries which economy is growing. Other Strategies which can be adopted by the Multinational enterprises is diversification strategy where by firms can decide to market new products to a new markets, a Multination company can decide to diversity their business and start new business e.g. electricity firm can decide to enter into hotel business but there is lot of risk to be considered before making decision to diversify Multinational Enterprises can decide to diversify their operation into new emerging market, and which are not affected with recession, countries such as china, India and Brazil. Globalization is the broadening set of interdependent relationships among people from different parts of a worlds thatà ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒ ¢Ã¢â‚¬Å¾Ã‚ ¢s to be divided into nations, the growth of globalization has accelerated due to advancement in information and telecommunication technologies such as internet, teleconferencing, Enterprise resource planning (ERPs),Knowledge management (KM), Customer relationship Management (CRM). I do agree that the benefit of new technologies will off-set the in investment in RD. in one perspective but in other circumstances new technologies might increase investment in RD, this can argued as follows. New technologies help multinational companies; to reduce cost as well as time which were previously invested in RD due to the fact the time taken to come up with the new product is essential due to competition among multinational companies Development of new application software, such has designing and drawings software, CAD, 3Ds helps companies to design a products which meets customers taste and preferences to customer across the world. Internet technologies help multinational companies to advertise and sell their products and services on line around where it can reach many customers at a low cost. Internet technologies also helps RD departments in multinational companies to get instant review about their products, such as how customer perceive that products, their weaknesses. This feedback helps companies to come with the newer and innovative products in the market. In other circumstances new technologies in RD contribute to increasing competition to multinational companies, due to the fact barriers for entry become low, companies now days can but these technologies on shelves and entering into business. Despite of new technology, in RD, the competition become stiff, due to emerging economies such as china, India have decide to engaged in international business. New technologies helps to reduce investment in RD but also create new challenges due to the fact many small emerging companies used technology as strategy to engage in international business, and create stiff competition.

Susan Griffins Our Secret and Are You My Mother? by Alison Bechdel Ess

â€Å"Our Secret† by Susan Griffin and â€Å"Are You My Mother?† by Alison Bechdel both present the issues of how control over all aspects of childhood continues to affect the victim much beyond childhood. Childhood is a time where children definitely need guidance, but it is also a time where the child should make some of their own choices. Children are naà ¯ve and see life in a more creative way than adults do. The dreams of a child may be far-fetched, such as becoming an astronaut or becoming the doctor who cures cancer, but these dreams should never be terminated by their parents. The childhood curiosity is what makes children better learners, and ultimately see the world without all of the dangers and flaws that adults see. Both parents in each of these novels deprived their children of the creativity that comes from being a child. A former U.S. lady once expressed her thoughts on parenting children by stating, "Children are likely to live up to what you be lieve of them." In â€Å"Our Secret† Heinrich Himmler is named after a prince, whom his father believes he can be like one day, as long as he makes the right decisions. Heinrich’s father controls what he writes in his journal, making Heinrich leave out emotions. Gebhard’s intimidating demeanor is exposed through the line, â€Å"He has the face of one who looks for mistakes. He is vigilant† (242). Growing up in a household where the only thing Heinrich’s father did was search for his mistakes must have been unsettling and stres...

Egg Flotation

Egg flotation Objective/Question/Problem My objective is to see which egg will float. The question is how much salt is needed to be added to make the egg float. The problem is that I do not know how much salt is needed to make an egg float. Hypothesis If I add salt to the water then the egg will float because the egg has a density that is lower that the density of the fluid it displaces. Background Information If the object has a density that is higher than the density of the fluid it displaces, it will sink.If the object has a density that is lower than the density of the fluid it displaces, it will float. Some objects that sink in fresh water will float in salt water. This is because saltwater has a higher density than freshwater. Websites that I used for this project are the ones below. ‘ www. ehow. com †º Education ‘ www. sciencehound. com/science_project_community/node/7206 ‘ www. blurtit. com/q729307. html ‘ answers. askkids. com †º How Stuff W orks ‘ www. thegeminigeek. com/why-an-egg-floats-in-salty-water/ VariablesThe manipulated variable is that the water will be changed one is salt water and the other is not. The Responding variable is that I will measure how much salt is needed to make the egg float. The controlled variable is that I will be the one doing everything and recording the project, and I will have the same type of eggs. Materials ‘ 2 eggs ‘ tab water ‘ Two Beakers ‘ salt ‘ stirring stick ‘ Measuring cups Experimental Procedures Step 1 : Put the water in cup halfway upStep 2 : Put 6 tsp of salt into the water. Step 3 : Mix the water and salt with stirring stick until you cant see the salt at the bottom. Step 4 : Gently Put in the egg and record what happens. Data Analysis As you can see in the first tbsp the egg floated about 200mL. After putting the second tbsp it floated up to 350mL. The third and fourth tbsp stayed the same at 500mL. After putting in the fifth tb sp it raised up to 600mL. The last tbsp did not make the egg rise all the way to 800mL it only raised up to 750mL. DataMy observations are that eggs could float because as the density of the water increased then the heavier objects could float. After each tablespoon the egg would rise little by little to get all the way to the top. After I put the egg in with all 6 tablespoon in the beaker I put the egg in and it sinked all the way to the bottom. After 1 minute passed it floated all the way up. Conclusion Eggs could float because the density of the water increased which it made the egg float. The more salt you put the more the egg will float.

Microeconomy Homework - 1744 Words

Microeconomics - Homework 1 - due 28th January Choose the one alternative that best completes the statement or answers the question Tick off your answer in the table on page 7 – do not forget to write your name Economic concepts and reasoning 1) When the government chooses to increase public spending on domestic security, its choice ________. A) involves a tradeoff with other public services such as education, to allow more domestic security B) illustrates that scarcity does not always exist C) involves no tradeoff because domestic security is necessary D) primarily affects who gets the goods and services produced 2) Laura is a manager for HP. When Laura must decide whether to produce a few additional printers, she is choosing†¦show more content†¦Based on the table above, for country B, the opportunity cost of producing an additional unit of X is A) 4 units of Y per unit of X B) 2 units of Y per unit of X C) 3/2 units of Y per unit of X D) 1 unit of Y per unit of X 14) In the table above, country B is producing 4 units of X and 6 units of Y. For country B, the opportunity cost of producing an additional unit of Y is A) 1/2 unit of X per unit of Y B) 2/3 unit of X per unit of Y C) 2 units of X per unit of Y D) 3 units of X per unit of Y 15) Country A is producing 4 units of X and 8 units of Y; country B is producing 4 units of X and 6 units of Y. Based on the table above, the opportunity cost of producing more of A) good X is lower in country A B) good Y is lower in country A C) good X is the same for both countries D) good Y is the same for both countries Production Possibilities Frontier Questions 16 to 18