QUESTION FOUR [20]Read the following extract and answer the question that follows:According to the International Monetary Fund, the baseline global economic growth rate is set to slow from 3.5% in 2022 to 3% in 2023 and 2.9% in 2024 – sitting well below the historical average of 3.8%. This is in part a result of high interest rates, rising energy prices, geopolitical risks and conflicts, and a slowdown in gross domestic product (GDP) for the world’s two leading economies: the United States and China.These shifts in economic systems, which play out on a global scale, can have profound knock-on effects on international business activities – effects that are keenly felt by business leaders. Research by J.P. Morgan indicates that less than half of UK business leaders are optimistic about the global, national and regional economies, citing threats such as the Russia-Ukraine war, general market volatility, cost of debt and energy prices.The reasons why a business might choose to ‘become’ multinational are generally divided into two overarching categories: strategic or operational needs. Strategic needs include factors such as avoiding stagnation, increasing business sales and profitability, and mitigating future changes in external environments. Operational needs include factors such as shifting a surplus of production, and sourcing or providing technology, materials or equipment. However, economic activity – whether national or global – presents both challenges and opportunities for these globalised businesses operating on the international stage. (Adapted from https://online.york.ac.uk/) Discuss how economic factors impact on global business operations and explain the strategies multinational organisations can implement to safeguard against economic instability.
QUESTION FOUR [20]
Read the following extract and answer the question that follows:
According to the International Monetary Fund, the baseline global
slow from 3.5% in 2022 to 3% in 2023 and 2.9% in 2024 – sitting well below the historical average of
3.8%. This is in part a result of high interest rates, rising energy prices, geopolitical risks and
conflicts, and a slowdown in
the United States and China.
These shifts in economic systems, which play out on a global scale, can have profound knock-on
effects on international business activities – effects that are keenly felt by business leaders.
Research by J.P. Morgan indicates that less than half of UK business leaders are optimistic about
the global, national and regional economies, citing threats such as the Russia-Ukraine war, general
market volatility, cost of debt and energy prices.
The reasons why a business might choose to ‘become’ multinational are generally divided into two
overarching categories: strategic or operational needs. Strategic needs include factors such as
avoiding stagnation, increasing business sales and profitability, and mitigating future changes in
external environments. Operational needs include factors such as shifting a surplus of production,
and sourcing or providing technology, materials or equipment. However, economic activity – whether
national or global – presents both challenges and opportunities for these globalised businesses
operating on the international stage. (Adapted from https://online.york.ac.uk/)
Discuss how economic factors impact on global business operations and explain the strategies
multinational organisations can implement to safeguard against economic instability.
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