The Purposes Organization Should Fulfill Ethical Stance Economics Essay
Stakeholders is a aspect that I found interesting :
A company can operate only thanks to the interaction of various actors who affect its operation by various actions. These actors are called stakeholders, Freeman defined a stakeholder as “an individuals or group of individuals who can affect or be affected by the performance of an organization “(Freeman 1983). There are two categories to divide: Internal stakeholders are consisted by the owners, the managers and the employees. They are the internal actors in the company. A second group exists, the external stakeholder is made of the shareholders, of the customers, the government and any other group having an impact or being able to be affected. They made up by the actors presenting a direct link or indirect with the company. Each stakeholder has an influence on a company which is represented in various forms and importance. Indeed several stakeholders will not have equally important on the operations of a company and it was reflected through stakeholders mapping.
Figure 1: Power/ Interest Grid for Stakeholder Prioritization (source: Mind Tools)
We can use this map in the managed business:
- Step 1: Identify stakeholders
- Step 2: Determine the strength, power, influence, and their concerns. Thus we can know who we should focus on.
- Step 3: Knowing full of the most important subjects, so we can know how to win support from them.
Its relevance to insurance company:
Stakeholder management in insurance has rapidly gained in importance due to seismic changes to the sector’s business environment
Effective stakeholder management can enhance corporate value drivers
Stakeholder management and the corporate strategy should be fully aligned
Wheeler, D. and Sillanpaa, M. (1998), ‘Including the stakeholders: the business case’, Long Range Planning, 31:2, pp.201-210.
1/ Power/ Interest Grid For Stakeholder Prioritization . Retrieved from http://www.mindtools.com/pages/article/newPPM_07.htm
Chapter 2: GLOBAL ORGANISATIONAL ENVIRONMENT - PESTEL ANALYSIS
The key new ideals in this session:
The organization is as an open system.
Assessing the environment:
The environment by applying the PEST ( PESTEL ) framework
The organization as an open system is a aspect that I found interesting :
The organization is an open system. They influence and are influenced by the environment in which they operate. This leads to a state of balance between the organization and its environment.
Information about the balance between the two systems is called feedback.
There may be dangerous to an organization if it reacts too slowly or too quickly to change. For example an organization under huge external pressure to change may almost go into melt down and have change initiative after reflecting initiative but not allow any of these to bed in and take effect.
We have done with an insurance company reflect this, where we have seen parts of their personnel under extreme pressure to improve its performance through five major reorganization of the structure 18 months.
Characteristics of open systems
• They are made up of interrelated parts – subsystem
• The system as a whole and its performance should be considered as a system related to each other. This is a problem to implement the reorganization as more individuals to performance parts.
• All systems convert inputs into outputs. They received feedback from operating environment and then respond to this
• Open system is a target on which it sought to organize itself
• Entropy - Unless the maintenance system will eventually fall apart because it has energy and resources to keep its form.
• The system searches a dynamic equilibrium
• Feedback provides information about dynamic equilibrium - for example:
decrease in sales because companies have not invested enough of the new product line
Louis r. Pondy , Ian I.Mitroff (1979 ) Beyond Open System Models Of Organization .Retrieved from : http://glennschool.osu.edu/faculty/brown/home/Org%20Theory/Readings/Beyond%20Open%20System%20Models%20of%20Organization1.pdf
CHAPTER 3: MACRO-ECONOMIC INFLUENCES ON ORGANISATIONS
The key new ideals in this session
Economic growth: The trade cycle: Slump, Recession, Recovery, And Boom.
Too much demand
To much credit
Balance Of Payment : Balance Of Trade – Visible / Invisibles , Current Balance , Capital Account
Inflation is a aspect that I found interesting:
1/ Positive effects:
Inflation was described as “lubrication". Inflation has been done for the actual cost that producers must bear to buy inputs of labor decreases. This encourages producers to expand production. Create more jobs. The unemployment rate will decrease.
2 / Negative effects:
In the case of inflation can be expected before the entities involved in the economy can actively respond to it. However, it is still causing losses to the society:
• Inflation as a secondary tax on the money and keep the nominal interest rate equal to the actual interest rate plus the inflation rate to inflation makes people hold less money or reduce demand money. Then they need to withdraw money at the bank.
• Inflation often leads to higher prices; enterprises will be additional cost for printing and distribution of the product price.
• In the case of inflation this business by increasing prices also other enterprises not to increase prices, the prices kept the price of the business will become cheaper relative to the price increase business. Market economy by allocating resources based on relative price inflation has lead to inefficiencies at the micro perspective.
• Inflation can alter the tax obligation of the individual against the will of the people make laws because some tax law excludes the impact of inflation.
• Inflation has caused confusion, inconvenience: the money is used to calculate a measure of economic transactions, the size of inflation when there is an elastic and therefore more difficult individual in their decisions.
* With regard to inflation is not expected to be:
This type of inflation caused the most damage because it redistribution of wealth among individuals in an arbitrary way. Contracts and credit commitments are often made on the nominal interest rate when inflation is higher than the borrower expected to benefit the lender also suffered, as expected lower inflation would benefit lenders also suffered damage.
Inflation affects customer’s behavior about insurance products. Understand the effects of inflation help the insurance company has forecast about the business strategies
Inflation .http://en.wikipedia.org/wiki/Inflation (accessed by 3 April 2011)
Chapter 4: GLOBAL ORGANIZATIONAL ENVIRONMENT: Globalization
The key new ideals in this session:
Globalization as a process
Driver of Globalization
Globalization and the changing world order
The impact of Globalization
Global Sourcing is a aspect that I found interesting:
Global sourcing in helping businesses thrives worldwide. All businesses are focusing on these aspects and advantages are achieved differently, providing global sourcing both advantages and disadvantages to the service and manufacturing organizations. In a service organization, internal strategies are used, while, in the organization of production, external strategies were used. The basic advantage of global sourcing is that it offers cost advantages for companies are adapting outsourcing. It is considered a strategic plan for the company is focusing for alternative business partners, which will help them in reducing overall production costs. Some of the areas of global outsourcing are the web site, web design, software development, etc. In addition, production costs also reduce costs, the companies with production services and the help of global sourcing. Products and services of the company are sold worldwide. Moreover, global sourcing helps companies market to know its potential. Power supply abroad will help organizations to reduce labor costs, as many qualified professionals will work for processed products or services to foreign countries. Thus, productivity will be increased to the organization and operation of foreign enterprises will be expanded.
On the other hand, the disadvantage of outsourcing is that the management has to be skilled and talented, so that the business can be handled globally. If the managers are not talent enough to handle the business in the best possible manner, it will loss, which will affect its growth in the global market. The outsourcing of the business affect by the cultural environment and framing of government policies. Therefore, there is a need that the management should manage the complexities properly, so that the costs decrease, in the long run (Boddewyn, 2008).
The insurance company outsourced application development and maintenance, thus lowering operational costs, providing predictable deliverable quality, and improving customer serving.
Jones, J. (2010). Global Sourcing and Their Advantages. Retrieved from http://ezinearticles.com/?Global-Sourcing-and-Their-Advantages&id=1470313
Midwood, J. (2010). The Benefits of Outsourcing Technical and Operational Support Services. Retrieved from http://ezinearticles.com/?The-Benefits-of-Outsourcing-Technical-and-Operational-Support-Services&id=3800744
Chapter 5: GLOBAL ORGANIZATIONAL ENVIRONMENT: The European Environment
The key new ideals in this session:
The European Union
EMU (European Monetary Union)
Towards A New Europe
European Union is a aspect that I found interesting:
European Union (EU) is an economic and political union of 27 members, which is located mainly in Europe. It is derived from the European Coal and Steel Community (ECSC) and European Economic Community (EEC) was formed by six countries in the 1950s. In recent years, the EU has grown in size of the accession of new member countries, and in the power of the addition of the policy areas of its transfer. Maastricht Treaty established the European Union under its current name in 1993. The last amendment to the constitutional basis of the EU, Lisbon Treaty, entered into force in 2009.
EU operates through a system of supranational organizations and independent intergovernmental decisions negotiated by the member states of the EU's key institutions including the European Commission, EU Council, European Council, Court of Justice of the European Union, and European Central Bank. EU citizens elect the European Parliament every five years.
EU has developed a single market through a standardized system of law applicable in all Member States, including the abolition of passport control in the Schengen area. It ensures the free movement of people, goods, services, and capital, the law in matters of justice, and maintains common policies on trade, agriculture, fisheries and development zones area. A monetary union, the euro zone, was established in 1999 and is a member of seventeen states. Through the Common Foreign and Security Policy of the EU has developed a limited role in foreign relations and national defense. Diplomatic missions were set up standing around the world and the European Union was represented at the UN, WTO, G8 and the G-20.
Chapter 13 ‘Towards a new Europe’, in: Harrison, A. (2010). Business Environment in a global context, Oxford University Press.
Chapter 6: GLOBAL ORGANIZATIONAL ENVIRONMENT: Emerging Economies in Three Continent
The key new ideals in this session:
Emerging Economies in Three Continent: Africa, Latin America, Asia
Characteristics of emerging economies
Challenges for emerging economies
BRIC is a aspect that I found interesting:
A grouping acronym referring to the countries of Brazil, Russia, India, and China.
These countries are not a political alliance – they have the potential to form a powerful economic bloc.
These four countries are among the biggest and fastest growing emerging market
Already BRIC accounts for :
- 40 % of the world’s population.
- 25.9 per cent of its total geographic area
- 40 per cent of global GDP
Dreaming with BRICs : the path to 2050
BRICs’ currencies could appreciate by 300%, providing a big tailwind for investors in BRIC assets.
By 2050 , BRIC countries to account for the world’s of global GDP
Taken together, the BRICs could be larger than the United States and the developed economies of Europe 40 years.
1.15 billion people
The second largest labor force : 516.3 m peole
Nearly 2.5 million college graduates per year
Graduate degree from 20.5 million in 1991 to 48.7 million in 2004.
Challenge to improving for the future:
Basic educational achievement
Challenges for the future:
WTO membership and long – term growth of the manufacturing sector.
Broad expansion of educational achievement.
Rapid economic growth
Resilience to global economic downturn.
Challenges for the Future:
Adherence to international norm
Demographic shifts threaten sustained growth.
Relationship with US and world
The uneasy emergence of Brazil economic
Brazilian economy becoming less dependent on exports
A global leader in renewable fuels
Significant poverty reduction has from focusing on equitable development
Challenges for the Future:
Overburdened and ineffective judicial system
1/ Goldman Sachs Global Paper No .99, ‘Dreaming with BRICs: The path to 2050 ‘, 2003
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