How managers in international companies have been affected by recent, Essay

How managers in international companies have been affected by recent, radical changes in the economic situation - Essay Example Multinational companies in order to survive in the foreign market developed several strategies during the crisis situation. Multinational companies which operate in emerging economy of developing nations took certain steps in order to handle the situation. A drastic change in economic situation in a worldwide basis has created an impact on various business sectors around the countries. The boom in economy may result in growth and benefit in business and slump down of economy may lead to loss in business. When the economic situation is favourable, i.e. in low interest rate and in rising demand, there is a huge growth in economy (The Times 100, 2011). There were two current issues of economic crisis: one was financial crises and the other was related to production and employment. The financial crisis emerged from the US and it had an impact on almost all of the developed nations. The government performed the fiscal stimulus package to fill the gap of demand slowdown of public sector (W ray, 2009). Lehman Brothers Investment Bank had led to huge loss of several billions of dollars in the mortgage market of the US. The stock market of the US fell down due to collapse of Lehman Brothers and the banking shares were hardly hit. The failure of Lehman Brothers had adversely affected the stability of global financial system (BBC, 2008). The policy makers are failing to address the structural reforms as well as regulatory changes which are essential in order to make certain that a repeat of the crisis does not take place and international policy coordination is proving to be insufficient to the task. German, French along with British banks hold the debt of the bordering countries. By the end of 2011, it is predicted that there will be European banking crisis due to sovereign debt defaults (Carnegei Endowment, 2010). The economic along with financial crisis will be affecting the global business time-to-time. The US has been under the threat of pressure of economic downturn. The growth of the country has turned to be negative again from the end of 2010. The unemployment rate is also rising as 2 millions of American workers were laid off within six months (Global Europe Anticipation Bulletin, 2010). In this paper, various economic crises that had cropped up in the global market will be described by analysing the worldwide financial crises. The crises which have occurred in relation to economy and finance have greatly affected the multinational companies. The paper will also highlight different difficulties faced by managers while handling issues related to different people during financial crisis. 2.0 Impact of Economic Changes on Managers The financial crisis in the US from the period 2007 to 2010 had resulted in liquidity shortfall. It has led to ‘collapse of large financial institution’ and also ‘bailout of bank’ by means of national government along with downturn in the stock market worldwide. This crisis can be considered as one of the major economic crisis after the Great Depression which occurred in the year 1930. The managers associated with such organisations were in great hardship. The economic deficits had become a challenging factor for them. The economic downturn had also affected both developed multinational com