Effective And Micro Economic Environment †Myassignmenthelp.Com

Question: Discuss About The Effective And Micro Economic Environment? Answer: Introduction Strategy and policy is important for an effective macro and micro economic environment in Sudan. The Sudanese government has had enough time to check the business community especially the Small and Medium Enterprises (SME) due to the impact of Multinational corporations and Corporate Parent Organization. Due to the rapid increase of multinationals in the country the following has been the effect to the economy; firstly, there were very many small business enterprises that were closing down. To put it into perspective, the small business employ millions of youths from tertiary institutions and universities who are now facing the realities of joblessness due to closure of businesses (Aaker, 2001). Secondly due to increased closure of businesses, the country is witnessing a surge in imports and a decrease in exports that is really hurting the economy and the GDP of the country. If imports rise, the country turns to be more of a net importer leading to more money going outside the country than the foreign exchange money coming in the country. A country which exports more benefits due to increase in its foreign exchange results to an increase in gross domestic output. Thirdly, the rate of unemployment is increasing. Sudan has one of the leading GDPs in the sub Saharan Africa. It is ranked seventh in the biggest economies in Africa behind the giants like Nigeria, South Africa, Angola, and Egypt among others (Brown and Clinton, 2010). Its population is also increasing meaning that lack of creation of industries will only lead to increased unemployment especially among the youths. When SMEs close the shops, it means that formal and informal will not be created and therefore the government must do a lot in ensuring that SME are not crowded by multinationals. The process is known as crowding out effect where private companies are forced out of operation due to government operations and multinationals intrusion. The fourth issue is the tenure of MNCs in the country was decreasing gradually and this was attributed to non- renewal of trading and operating licenses. Although MNCs are not as many as locally founded companies, they form a major part of the economic ecosystem in Sudan (Dunning, 2013). The measures that will be put in place is to ensure that the MNCs life is prolonged and creating a good operating condition for the multinationals. Multinationals are mostly affected by the government policies towards their operations. These include government taxation on profits of multinationals, ease of operations and macro and micro economic conditions. Measures and policies Surge in imports can be remedied internally by the government. The government should create tax incentive measures so that it may encourage more manufacturing of internal products to spur exports. Similarly, imports should be levied with high import duties and taxes to prevent them from importing the unnecessary goods (Dunning, 2013). In the case of the SMEs closing down there are various policies that can be put forth by the government in order to sustain the business. Firstly, the government should reduce charges on startups to encourage many Sudanese to open locally owned businesses. Secondly, the government should minimize the taxes levied on SMEs to spur growth and to sustain it (Lee-Ross and Lashley, 2011). The government should also give incentives and loans to the SMEs in order for them to survive the turbulent economic climate and the coy financial institutions. On unemployment, the government should formulate a plan to work with the youth. For example, 50% of the government contracts should be given to the youths who are mostly unemployed. This will reduce the unemployment as people will start to reap benefits from the government. Creating a youth and womens fund to help the unemployed to set up businesses with government concessionary loans is also a good government policy (Liu et al., 2007). Lastly the policy on MNCs gradual demise should be dealt with in this ways; These figures highlight the many difficulties faced by small entrepreneurs in facing insolvency, generally due to the lack of resources and legal disregard that even leads them to risk their personal assets in order to save "In the desperate" business. To prevent these potential closures, Russell Bedford has developed a decalogue with the most important steps that these small businesses must follow to interpret their financial situation and thus avoid giving the final goodbye to their businesses. Ordering accounts is more than paying taxes. One of the most common problems of companies is the neglect of their accounts. It is very important that the company knows at all times in what state are their finances (equity, profitability, treasury, etc.). Make a complete scanner of the situation of the company. This will allow several months to be anticipated to a possible insolvency, enough time to take the necessar y measures. Prune before cutting the trunk. The reduction of costs ranges from the elimination of unnecessary running expenses until the regulation of employment, through closure of offices. Less structure and more efficient. For its correct operation, a company needs to have the departments that are essential and that best adapt to its activity (Onida and Viesti, n.d.). An attractive business always attracts partners. The lack of financing has led a large number of companies to seek investors interested in participating in capital. The backing of one or several partners is always a guarantee when negotiating with banks and creditors. Do not grow with the money of others. This was possible before the crisis thanks to the low cost and abundance of credit, but the current situation has shown that many entrepreneurs lived beyond their means. If the business is viable, it must be communicated. To do this, advise on develop a feasibility plan for those companies that have foreseen financial difficulties in the coming months and to expose that plan to their creditors with total transparency. Face the creditors. Only by giving face to the creditors will be possible to reach agr eements that allow the survival, since none is interested in losing customers. Do not live drowned. Once the payment priority between creditors has been established, the next step is to set the terms. If the company cannot pay immediately, it must negotiate with the creditors a calendar (Onida and Viesti, n.d.). Strategy adopted by any Multinational Corporation (MNC) and Corporate Parent organization This paper presents a theoretical exercise on the topic of coordination mechanisms in multinational companies, with emphasis on the structure of the relationships between the parent company and the corresponding subsidiaries of those multinationals that are located in markets with volatile macroeconomic environments. In this sense, a volatile environment is found in those countries whose economic and political conditions, far from being stable and favorable, offer a business environment to the subsidiaries installed in their territory in which they must face political and economic instability, legal insecurity , Administrative barriers, economic policy swings, and a variety of state controls and regulations (Price, 2015). This type of environment is common to find in developing countries, as in the case of Sudan and other Sub-Saharan nations The coordination mechanisms that are addressed in this study are specific to the following organizational design variables: centralization, for malization and socialization, which are those whose reference is more frequent in the literature on multinational companies. The expression design variables will also be used to refer to them. Also, the typology of), constructed on the basis of the aforementioned coordination mechanisms and categorizing the matrix-filial relationships that can be presented according to the complexity of the environment and the level of resources that the Subsidiaries. From the literature review, some theoretical arguments are presented on how a volatile environment influences matrix-subsidiary relations and discusses the type of matrix-subsidiary structures that could be found according to the classification. Coordination Mechanisms Coordination mechanisms in multinational corporations have been studied as a branch of international strategic management because they focus on managerial and strategic issues faced by the top managers of these companies, in particular, they are looking for ways to take advantage of several activities at the same time. Strategic implications of both in your countrys economic growth and development Integrating different subsidiaries within a multinational is one of the main problems to solve within the structure of a corporation, by virtue of the different markets where they are present and the communication difficulties that can arise; This depends fundamentally on two interacting organizational processes: the coordination of activities and their control. The use of these mechanisms allows the multinational to reduce the levels of uncertainty and certify that the behaviors originated in the different subsidiaries. The structure and strategy of a Multinational is very lean and does not support a lot of staff. In southern Sudan, multinationals form a big range for scrutiny. In the case of Sudan, the many multinationals and their parent organizations work in together. They create employment opportunities to the locals especially the youth. However, it is not all rosy. Many of the multinationals threaten the country and get their ways easily. They threaten the country that they will leave if they are not treated with special considerations (Pinstrup-Andersen and Watson, 2011). This makes it hard for the government of Sudan to argue with theme they will terminate the countries. It is so selfish to boycott the process. The strategic implications of these actions are that although the multinationals remain in the country, they repatriate profits to their own countries, they do not employ locals as expected and they act with impunity. Due to this the government of Sudan should focus on making sure that local companies like SMEs are the ones given priority as they employ more than the multinationals. References Aaker, D. (2001). Developing business strategies. New York: J. Wiley. Brown, J. and Clinton, M. (2010). Horse Business Management: Managing a Successful Yard, 4th Edition. John Wiley Sons. Business and management practices in greece. (2014). [Place of publication not identified]: Palgrave Macmillan. Dunning, J. (2013). Multinationals. Routledge. Lee-Ross, D. and Lashley, C. (2011). Entrepreneurship and small business management in the hospitality industry. New York: Routledge. Liu, D., Jiang, W., Ma, W. and Chong, A. (2007). Chinese business strategies. Singapore: Asiapac. Nelson, W. (2012). Advances in business and management. New York: Nova Science Publishers, Inc. Onida, F. and Viesti, G. (n.d.). The Italian multinationals. Pinstrup-Andersen, P. and Watson, D. (2011). Food Policy for Developing Countries. Ithaca, N.Y.: Cornell University Press. Price, A. (2015). Human resource management in a business context. [Mason]: South-Western Cengage Learnin