Key Microeconomic`s

Managing Global Company

Globalization ensures new impetus for economic development through the expansion of investment and trade . Globalization promotes growing interdependence among nations consolidating across bs Globalization provides stable currency market , investment and development assistance , liberalization of trade , though it requires reviewing , especially in terms of systematic risk and social impacts . It goes without saying that management of global company differs from management of national one because global business is more affected by climatic , political and economic factors such as customs duties , taxes on corporate income , offset trade and local

content . Managing global company requires not only management skills , but also cultural knowledge and cross-cultural communication skills . Global business has led to creation of new concepts and practices and all leaders of global companies have to understand them (Wagland 2006

Therefore , I think that the concepts of supply and demand , as well as competition are very important for global organization because , firstly global competition is the indicator of company 's performance in the international markets , whereas supply and demand are important microeconomic concepts indicating the internal structure of the business . In microeconomic theory supply and demand are claimed to be the primary concepts of market economy . Demand is defined as the quantity of the products or services desired by the customers . In other words , demand is the quantity of products that people want to consume Supply is defined as the quantity of products or services offered by the market . Supply and demand should be paid attentive as allocation of resources fully depends on them . Nevertheless , supply and demand should remain in equilibrium because the allocation of all resources is the most efficient at this point . For example , if the price increases , less people are able to buy the offered goods . However , the law of supply states that with price increase the number of products supplied is increasing . It means that supplier would gain more profit when selling expensive products or services (Canals 2000

The similar situation with supply and demand is observed in global organization , but the company should be more concerned with supply . The aim of global supply management is to reduce the costs of procurement as well as to limit the risks associated with purchasing activities . The main differences between managing national and global supply is that global supply refers to worldwide suppliers and interest , whereas national supplies management is oriented at local suppliers . In other words , global supply and demand management requires more responsibilities . Furthermore , global supply management should be concerned with new difficulties , such as overall costs , time management weather conditions , customs clearance , outsourcing , selection of trustworthy suppliers , global decision-making and , finally , shipping issues (Canals 2000

Competition in macroeconomic theory is usually defined as abilities of either individuals or companies to struggle for greater market share with the purpose to sell goods and services . Competition is very important for market development because it stimulates innovations decrease prices and encourages efficiency . Actually , competition is the primary source of emerging new services and goods . Global competition exists when competitive conditions across national markets are linked strongly enough to form a true international market and when leading competitors compete head to head in many different countries (Wagland 2006 ) Managing competition in global company is important because ability to compete is the source of economic development , growth and prosperity . Managers should be aware that competition affects efficiency of economy , resources allocation . Furthermore , global competition leads to significant improvements in performance of labor market . Managing global competition is considered to be similar to chess game as it requires reactiveness , attractiveness , and critical thinking (Wagland 2006

References

Wagland , Jeff (2006 . Global Competition . Retrieved September 2 , 2007 from HYPERLINK "http /www .kpmg .com /Press /11 .01 .2006 .htm http /www .kpmg .com /Press /11 .01 .2006 .htm

Canals , Jordi (2000 . Managing Corporate Growth . Oxford , England Oxford University Press

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