Part I Germany
The main values of German business culture include conservatism and strength. Stability was of paramount importance, and for four decades Germany's economy has thrived on it. A clearly regulated business environment and a stable political system have allowed long-term planning and have made Germany a reliable trading partner. In an economic climate of globalization and rapid technological development this stability may, however, hinder quick adaptation to changing circumstances. In Germany the workforce is expensive but well qualified, and the standard of work is high. The system of labor relations may be felt to be a strait-jacket, but it has guaranteed social peace. Environmental protection adds cost, but is an investment in the future. High taxes and social contributions increase costs, but provide a high standard of living. Germany is still among the most competitive countries in the world. Its geographical position at the centre of Europe, reinforced by Unification, and its excellent infrastructure both remain stable positive Standort-factors, but there is rising unemployment, more frequent signs of social unrest and the possibility that Germany may not meet the criteria for European Monetary UnionAll these indicate that the country has entered a new, more unsettled phase in which the economic miracle has lost its magic. The immense costs of unification, recession or slackening economic growth in many export countries and increasing globalization of economies have plunged the state into deficit. The economy which up to the late 1980s had gone from strength to strength now faces a serious crisis. Economic growth has remained below that predicted, unemployment has been rising, and public debt has increased to such an extent that Germany may be in danger of not meeting the criteria for the European Single Currency While some experts warn of structural problems and others point to the ever-increasing involvement of the state in the economic process, both groups agree that far-reaching reforms in the public and the private sectors are the prerequisite for a successful way out of the crisis. Fears about Germany's future as an attractive location for investment are caused partly by increasing economic globalization, by the opening of Eastern Europe, and by the Single European Market, which offer firms, especially those with an international clientele, more options as to where to invest. Factors which determine their decision include not only labor costs but also productivity, general economic performance, efficiency of management, capital costs, political and social stability, a skilled workforce, tax levels and state intervention
Germany is still among the top locations for industry, but decreasing foreign investment, high unemployment and cheaper imports are causes for concern. This concern is reinforced by the growing trend of German firms to expand or even relocate their production abroad Germany is a federal parliamentary republic of 16 states. Germany is a member of the European Union, it has a promising economy and business climate but due to different situations and its past experiences Acme may have difficulty in investing in that region.
Australia
Modern Australia was characterized by a feeling of certainty about what Australia stood for and wanted to achieve in the world. Australia was a nation composed of honest, decent people seeking to create a better way of life for themselves. There was an Australian way of life which embodied the desires of the Australian people. Contemporary Australia is characterized by the breakdown of these old certainties about nation, race, empire and the Australian way of life The earlier drive towards homogeneity and unity has slackened considerably. Quite simply the old Australian ideal of a just society founded on a homogeneous people sharing a single culture has lost much of its plausibility. For many Australians living in an increasingly internationalized world it has become more of an embarrassment than a source of pride. It might be true to say that the homogeneous and egalitarian strands in Modern Australia tended to become stronger over time and led to an increasingly conformist social order
Australia in the first third of the twentieth century introduced pervasive regulation of economic activity and isolated its markets from the international economy. It did this in pursuit of equity in income distribution and national development. It maintained this system but operated it more moderately through the second third of the century. Australia's economic performance was abysmal relative to other countries that are now rich in the period of strongest commitment to regulatory isolation Most Australians live in communities that value the expansion of amenities and opportunities associated with increasing population. It seems that only a comprehensive failure of leadership and management affecting provision of services in the great city of Sydney would cause a retreat from support for national population growth at least at something like the current level of about one and a quarter per cent per annum. This rate is lower than the average for the twentieth century, but would be still the highest of the developed countries
The economy of Australia continues to improve as the years develop after some stagnancy over the past few years. The country made economic adjustments for the economy to develop. Taxes provides additional source of income for the government of Australia, It is used for the state to initiate projects and improve the services they offer to their citizens. Taxes also are used by the government of Australia to attract more businesses to invest in the country and help the country improve economically. Registration and regulation of tax agents in Australia is one change that the government is putting its focus on. Reforms will always be a part of how a country operates. Reforms can bring good or bad things; it can create changes that not all may necessarily want. The government of Australia saw the need for reforms in the tax agency of the country. These reforms affect the way registration and regulation of tax agents is done in the country. The government thinks that the use of the proposed regulations can ensure that the tax agent will perform his/her duties accordingly and they will create problems with the client that will hamper delivery of services
Which country should be used for the new facility?
The restriction of aid to plants could be seen as a kind of commitment device enabling the host government credibly to insist on paying once and only once for the external benefits yielded by the plant’s initial location (The costs of such a restriction would be twofold: first, the inability of the aid policy to respond with adequate flexibility to changes in the external costs and benefits of a firm’s production and location; and second, it would tend to distort investment decisions in favour of Greenfield investment and away from development of existing plants. This second cost in particular might be severe. Of course, one conclusion might be that aid to Greenfield investment should be similarly restricted, but this would return to the problem of preventing governments from acting to internalize the external benefits of the original location decision Both Germany and Australia have good economies that can be used as a place where Acme can start the planning stages of establishing a Greenfield production facility. But Germany has higher tax barricades that can affect operations and profitability of the business. The countries’ currencies, trade policies and cultural variables have fewer problems in Australia than in Germany. Germany is still in the process of rebuilding and changing some of its economic and financial factors. Engaging the project in Australia would be less difficult not only because of financial and policy constraints but language constraints as well. Australian citizens would be much easier to understand and train since English is widely spoken there. Miscommunication would be a lesser issue in that area.
Part 2 Belonging to the European Union
One of the main attributes of the nation state is the ability to make authoritative allocations for society. In practice this means an ability to formulate and implement public policy programs governing the operation of society. The European Union (EU) did not spring from a single founding moment; it is the product of nearly fifty years of muddling through. In practice, the institutions of the EU have been created to achieve discrete, diverse, contested and contingent goals. At each stage, the final destination of the European Union has been fudged by the member states Nevertheless, the integration process has continued, driven by national governments, self-interested individuals and groups, European institutions such as the Parliament, the Commission and the Court, and exogenous pressures. Since the 1980s, the Union has been in a constant state of constitutional and institutional flux. Successive reforms of the founding Treaties have incrementally brought about significant deepening of the EU, reflected in the creation of the Euro land currency Union, the setting up of Europol, and the progressive Europeanization of new policy areas such as defense and immigration. Moreover, recent reforms have constitutionalized citizenship issues such as fundamental rights, sex equality and anti-discrimination
The pressures for integration are unlikely to cease and indeed may even increase. It would, however, be wrong to assume that European integration will lead inevitably to some form of federal European state. There is no agreement between the member states on the fundamental issue of the meaning and purpose of European integration. The endorsement of flexibility in the Amsterdam Treaty is a pragmatic acknowledgement of this fact. Flexibility opens up new opportunities for institutional pluralism within the EU, which in future years may result in more uneven and shallower levels of co-operation, especially in an enlarged Union Whether or not this proves to be the case will depend not only upon the actions of national political and socio-economic elites, but also upon the attitudes and inclinations of European publics. The increasing political salience of European integration since 1990 has rendered obsolete the elitist method of integration
There is now widespread acknowledgement on the part of national and EU politicians and administrative elites that integration cannot be agreed ‘behind the backs of people. Democratization of the European integration process, though politically necessary, is likely to make further European integration more difficult to achieve, both because of widespread Euro-skepticism and because people are beginning to debate the final destination of the European Union The European Union is composed of various states that aim to be united in setting up a single market that has standardized system of laws. Acme should focus on engaging business with JEL Industries it is in a country that is part of the European Union (EU), and uses the Euro, Both the euro and the firm’s membership in the union can help Acme enter the foreign market without much difficulty. The union can help Acme be known to its member states.
Part 3 Emerging economy
From an economic point of view, the most significant developing countries are those whose economies are 'emerging' both in terms of market opportunity and in the sense that they are coming out from the constraints of state administration and restrictions on foreign trade. These economies are now seeking to modernize rapidly with the assistance of foreign governments and companies The faster rate of growth in emerging countries starts from a less-developed economic base, which means that they manifest a high level of demand for both consumer and industrial products and services. Their economies therefore offer the most significant opportunities for companies from the developed countries to expand their markets
While acquisitions are generally the favored mode of expansion into developed-country markets, cooperative forms such as joint ventures tend to be the most prevalent in emerging economies. This is partly a result of host government preferences for local firms to share in the ownership of foreign funded ventures in the expectation that such participation will increase their opportunities to acquire new technology, management skills, and other expertise. It also reflects a frequently found preference among foreign investing companies, at least in the early years, to reduce their exposure to risk, and to co-opt the assistance of a local partner in navigating through an unfamiliar environment. The cultural and institutional features of the emerging economy are normally quite different from those of the foreign partner's home country and this creates additional complexity for that partner Secondly, the nature of partner objectives and the achievement of complementarity between them differ from those applying to most alliances between partners from developed countries. Thirdly, the differences between emerging and developed countries in culture and environment, together with the fact that in some cases the emerging economy has a colonial legacy with the sensitivities attaching to this, can give rise to special difficulties in the process of managing alliances When one country is said to be an emerging economy it means that it has passed the different economic challenges that they have encountered. The emerging economies have come back from problems in their economies and they find ways to conquer such problem. Major emergent economies are on the fast track to economic growth but yet beset by critical challenges to the sustainability of their business environment. When a country is an emerging economy it has faced different kinds of economic problems over the years but it is continuously finding solutions for it. The blockages for the continuous growth of a certain countries ‘economy includes the corruption happening in a country, its lack of drive to live up to the things expected of them and the different debts the country has incurred over the years. The different blockages should not be a problem for the country; it is supposed to be a challenge to them so that in the future the country will be economically mature.
Emerging Markets
Integration with the global markets and institutions tends to speed up the reform process to achieve a resilient financial system. Summing up these arguments, it can be concluded that the emerging market economies have benefited from financial liberalization in two ways. The first was by having an increased access to the global pool of capital, which helped to raise the level of investment and output. The second channel of benefit was improvement in the efficiency of capital allocation. Both of these are known to underpin economic growth This logic in the international economics literature as well as in the capital market literature is based on the view that market failures and distortions pervade capital markets around the world. Although capital account liberalization is subsumed in financial liberalization, it has been an important issue for the emerging market economies, and deserves to be analyzed as a distinct policy move. In the wake of the recent economic and financial crises in several emerging market economies, capital account liberalization has taken on additional importance. Some of the blame for the recent crises has attached to premature or poorly sequenced liberalization of the capital account (Das 2004).
The capital account is liberalized by removing statutory restrictions on cross-border global capital flows, which in turn is an important facet of general financial liberalization. It entails the relaxation or removal of controls on transactions in the capital and financial accounts of the balance-of-payments. One of the most important removals of restriction is on the convertibility of foreign exchange. The financial markets detect an environment of unsound fundamentals; exchange rate inflexibility at an unsustainable level, or other financial and systemic limitations, the impact is generally pernicious. For market perceptions, perception is reality. A change in market sentiment can lead to the drying up of global financial flows, recession, exchange rate depreciation, and interest rate hikes. The decade of the 1990s suffered a spate of speculative attacks on emerging markets as well as matured industrial economies Speculative attacks are squarely based on market perceptions and the presence of imperfections in the global financial markets. The presence of institutional investors in the global financial markets exposed the emerging market economies to further vulnerability. Institutional investors and currency speculators could potentially take substantial short positions in a weak currency. It was observed during the recent emerging market crises that as soon as an inflexible exchange rate and other financial sector weaknesses became apparent in an economy, institutional investors and currency speculators were attracted toward it, making a currency crisis imminent
The well-known herding behavior of investors immediately made this situation worse. The impact of momentum trading, noise trading, and bandwagon effects is the same, and these were typical and endemic market imperfections. Information asymmetry exacerbates this kind of market behavior. In addition, the currency and stock markets tended to over-react because it is the financial agents who manage investment, not the principals. Economies having inflexible exchange rate regimes are considered to be more vulnerable by speculators. However, this is not to say that the flexible exchange rate regimes are completely free of problems In principle, two basic forces tend to drive global investors toward the emerging market economies. The first is the expectation of a high long term rate of return, which is largely based on liberalization and macroeconomic policy reforms undertaken by the emerging market economies. This improves the creditworthiness of this sub-group of economies. Second, by investing in the emerging markets, global investors see that they are exploiting an opportunity for risk diversification. Improvements in the enabling environment over this period, in the emerging markets as well as in the matured industrial economies, further abetted these two factors Capital generated in the industrialized countries is finding its way to the less-developed and emerging markets. The industrialized countries are doing their best to provide assistance to the countries that are only starting to emerge.
Less developed economies or markets are those economies that are yet to show improvements in their economy or financial systems. They have not improved their economic or financial situation due to political or environmental factors. Emerging economies or markets are those countries that show a significant potential and have all the necessary factors to improve their economy or financial systems. Emerging economies also have hindrances that block their goal of having a better standing but they make use of various systems to make sure that they are not affected by the barriers towards achieving growth.
0 comments:
Post a Comment