Jamaica Money Market Brokers was founded by Joan Duncan in 1992 in Jamaica.
JMMB is a company that specializes in money management and financial planning. The company is a licensed by the Securities Broker and Dealer, and it offers investments in different currencies. JMMB offers services in Jamaica (to over 155.000 clients) Trinidad & Tobago, and Dominican Republic (over 167.000 clients).
JMMB provides services such as Corporate Finance, Equities, Pensions and Assets Management, Insurance, Financial Advisory Services, Bonds, Loans. (Source
a)The mission statement of the company shows the purpose of the company’s existence and what results are expected to be achieved at the end. The mission statement contains the company’s objectives, goals, values, and its vision. The relationship between JMMB’s objectives, mission and its values is that these objectives are helping to achieve the company’s mission, and they would be achieved according to the JMMBs’ values of honesty, integrity, and team work.
For example, the mission of JMMB shows what they intend to achieve or where they would like to be, and it follows with the objectives that are the goals of JMMB and these objective are helping to fulfill the stated mission. Therefore without objectives the mission will not be fulfilled.
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At the beginning JMMB was founded for the purpose of providing financial investment opportunities to people in Jamaica and it used its objectives to fulfill the mission. At present the mission of JMMB is to maximize client satisfaction with the good customer relationships, financial services, building customer relationships based on solidity, ethnics, credibility, and openness. They also wish to be an international and dynamic group with a loving environment. (JMMB website)
Objectives of the JMMB are to maximize opportunities, to create sustainable growth, to continue its profitability, to strengthen its relationship with the stakeholders, to be able to operate efficiently in the future, to be able to achieve balance between growth and return goals, efficiently allocate resources”, to continue expanding financial services in Caribbean, and to strengthen local and regional presence. (JMMB report). Therefore JMMB uses these objectives to achieve the mission.
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“As a part of their strategic vision they are planning to trade on the Caribbean Exchanges, NASDAQ, the Jamaican Stock Exchange, and expand into North America.” “Their goal is to be a market leader internationally and to have it listed among the Fortune 500 companies.” (Jamaican-Gleaner.com)
The company operates with the values of love, honesty and mutual respect. With the vision and values of love, a healthy environment was created where everyone works in order to achieve the clients’ and company’s goals. JMMB has expanded into regional markets and has a presence in Trinidad & Tobago as well as Jamaica.
b) Businesses operate in different environments, and each of them have external or internal stakeholders that have an interest in the operation of the organization, and may have some power or influence on the business too. Power would be personal, political, expert, or legitimate. Organizations should make sure that the stakeholder’s expectations are met by providing healthy and safe work environment with fair pay and without discrimination.
The three main stakeholders of JMMB are the Jamaican government, investors, and clients.
Investors invest their money in JMMB and hope that they will get their money back with the required rate of return for the appropriate level of risk..
Clients (companies or individuals) apply for loans, bonds, insurance, or for the best pension plan, and as a result bring money to the company.
The investors’ and clients’ money contribute to JMMB’s profits. They have expectations from JMMB, for example: stakeholders want to ensure that JMMB is profitable, ethical, and open in its approach; regulated by appropriate authorities, and work within financial regulations and the audit commission. They want to see the company’s annual report and financial statements that indicate the company’s profitability or financial situation. The stakeholders expect to have a long-lasting and profitable relationship with the JMMB. The stakeholders’ expectations are also include getting loans at reasonable and affordable interest rates, having interest rates on investments linked to the risk profiles of such investments, and having a safe return of the capital invested, as well as dividends from equities.
If the company for example will not comply with stakeholders wishes, then they can take their investments and go elsewhere. This threat is very effective. To avoid this and to comply with clients and investors expectations, JMMB produces an annual report and financial statement that indicates all JMMB’s financial activities for a certain period of time, and it runs its business according to the financial regulations of the Jamaican government. JMMB provides the best advice customer service, and they help the investors or clients select the best investment options or pension plans. They also emphasize the importance of feedback from the stakeholders. They are offering customer service one-on-one, organize forums in which the stakeholders can ask questions or let them know what they expect from the company.
Government changes policies, has an impact on taxes, inflation rates, currency exchange rates, and also holds political power that may have an influence on the operations of the JMMB in the Caribbean. If, for example, local legislation requires that 50% of all pension investments in Jamaica be invested in Jamaican companies, then that affects the potential pensions investments. If this policy changes, then JMMB can then invest pension plan monies in a wider geographic location, thereby diversifying risk for the investment portfolio and increasing the possibility of pension investments returns.
The government may expect the JMMB to fully meet the expectations of the other stakeholders, and run the business according to the government’s financial policies or regulations, and pay taxes. The government’s expectations are very effective; they force JMMB to function according to government’s financial regulations and policies. . “JMMB is a licensed security dealer.” For example, if JMMB refuse to pay taxes, then the government may not extend the license that gives them permission to operate in Jamaica.
In December 2009, the government of Jamaica introduced a new tax package to increase revenues.
The basic problem in Jamaica was that the government was seeking financing from the World Bank, however, due to interest payments on bonds and other government securities; the government of Jamaica requested that all investors agree to a reduction in interest rates on government securities to assist the country as a whole.
Keith Duncan stated, “JMMB stands ready to share the burden in closing the fiscal gap by supporting creative solutions that would lead to the reduction of Government interest expense in the short term and improve Jamaica’s fiscal profile over the long-term.”
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Stakeholders
c) JMMB has a social corporate responsibility to the environment, people, and society. JMMB is involved in activities that will benefit people in need, such as charities, sporting events, sponsorships, and providing a healthy and safe work environment for the workers. Some organizations may try to use less harmful products in their manufacture that will not harm the environment or the people. Society’s expectations of JMMB would include a safe working environment, reliable and safe investments, and contributions to society and the country that would improve the lives of the people.
According to JMMB, their social responsibilities efforts are delivered through the Joan Duncan Foundation and localized community initiatives.
Some of the methods include financial contributions and taking part in social activities such as sporting activities, voluntary and charitable work, donations, social intervention and help relief.
Examples of their social activities: JMMB donated 1 million to Haiti relief efforts and also donated computers to the Franklin Town Basic School for students. In Dominican Republic the JMMB sponsored the Stock Market Challenge competition that was taken by high school students. They helped the Mandeville Regional Hospital to purchase equipment for maternity unit. JMMB is sponsoring the Best Feature Film Award in Trinidad. They make donations to various community projects such as the
Benevolent Society, the Clarendon Association for Street People and Elizabeth Care Foundation. They also supported Community Counseling and Restorative Justice centre by empowering the members of the community.(JMMB report)
“Task 2 – The economic, social and global environment”
a) Most organizations operate in three types of economies: local, international, and regional. For example, Angostura products such as alcohol lemon bitters are distributed locally, regionally (i.e. within the Caribbean region), and internationally (Europe, Australia and Americas).
Organizations often face different environments such as economic environment, political, social-cultural and an ever-changing international picture.
A country’s economic system is its method of planning and organizing resources, services, and production and distribution of the products. There are three major types of economic systems, namely the free market economy, command economy and the mixed economy.(RDI)
The free market economy is a system where products or services are offered and bought. The government does not normally play a major role in this type of market and the market forces are the major decision makers. Prices fluctuate depending on demand. The free market system is generally used in United States, Canada, India, and many other countries. However, I would point out that the economic crisis affecting the USA and many Western European countries, these countries have adopted a less free market system by direct intervention into the economy to assist with the stabilization of the financial system.
Advantages of free market for businesses are that market forces tend to decide
- the cost and the quantity of the products or services offered
- what to produce or offer to the market
The customers or consumers make purchasing decisions based on the variety and selection of products.
There are also disadvantages of the free market, in that no provision is made for unprofitable segments. For example, postal services to a remote town may not be profitable under the free market system, thereby denying a service (possibly an essential service) to certain segments of the population. Free market forces do not provide public goods such as street lights, merit goods, education, and housing (RDI).A free market system may encourage the production of many items, however, many poor people may not be able to afford many of these, leading to possible social injustice.
In command markets, demand and supply is regulated by the government and the prices may be predetermined or set between fixed price ranges (RDI). For example, the gasoline in Trinidad is subsidized by the government (USD 0.45 per liter), thus it is not expensive and the price is always stays same.
In a command market, the government or planning authority
calculates what the people need and then makes decisions about the production of the products the quantity and price. In this type of market, planning is centralized and is mostly associated with communism and socialism. The countries that are using this type of system at present include Cuba, North Korea and The Republic of China.
Advantages of a command market include: environmental resources are not wasted, unemployment rates are not as high as in free markets, production is planned, social needs are met, and public goods are provided. For example, the government in Cuba fixes the roads, creates parks, provides free housing and health service. Please note, however, that in non command economies, these services are supplied sometimes too.
Disadvantages of command economies include
- narrow choice of products
- loss of individual freedom
- shortage of necessary products
- less motivation of production, and no competition.
I grew up in Azerbaijan that was a part of USSR, and Azerbaijan had a command economy. At that time the government was providing coupons for purchasing meat, rice, and other foods. With coupons, one could get these products only from a particular shop and this was really big disadvantage for us. We didn’t have a variety of products and people couldn’t travel freely overseas. When Azerbaijan became an independent country, the economy changed to a free market economy. Now people can move freely, the marketplace is full of different products, and the economy is thriving.
Both kinds of economies have pros and cons, but by combining their good points, they can be very practical and helpful.
b) According to tutor 2, the main purpose of a government macroeconomic policy is to stabilize the economy by achieving low inflation, sustained economic growth, high level of employment, improving the living standards and controlling the government’s borrowing.
Governments deal with the economy by managing the aggregate demand in the economy such as export expenditure, consumer’s expenditure, government expenditure, and investments expenditure. (RDI) The level of demand can be increased by Fiscal and Monetary Policy. Fiscal policy regulates how much the government spends, borrowing and the taxes that imposed on the businesses and individuals. Monetary policy controls interest rates and the money supply. (RDI) For example, one role of a Central Bank may be to regulate interest rates. This regulation of interest rates will have an impact on both savings and borrowings within an economy.
The government’s intervention in an economy may have a big impact on the employment. The government can control the level of employment by increasing government’s expenditures, exports, supply side solutions, and by reducing taxes on operating business or consumers’ incomes. When governments increase expenditure such as road building and other governmental construction expenditure, it sometimes acts as a stimulus to the economy, giving local contractors the opportunity to employ workers to assist in these construction projects. Sometimes however this may not necessarily be the case if the funding source is an external government; these external governments often stipulate that contractors from the funding country be employed. Numerous examples exist when funding is provided in the Caribbean and Africa in DIFID and EU funding.
When governments reduce corporation taxes and or provide tax incentives on the purchase of new plant & equipment, this may allow businesses to pursue increased investment also allowing increased employment. A reduction in certain direct taxes such as value added taxes may increase consumer demand, and this may have the effect of increasing employment
The government in Trinidad recently increased expenditures to maintain roads, hospitals and buildings. During this process, local workers were hired and this had the impact of an increase in the level of employment.
With side supply solutions the government can assist the small business with the grants or advice and this business may thrive and be able to employ more people. In Trinidad & Tobago, there is the Small Business Development Company .This organization assists small business by offering seminars on a wide variety of business issues. The Agricultural Development Bank of Trinidad provides both financial assistance (soft loans to farmers) as well as advice on agricultural crops and export needs.
In addition, the government of Trinidad offers free short educational programs such as electrical installation, baking, automotive mechanical and plumbing courses. The government’s plan is that with these skills people will become marketable and therefore become employable or be able to start a small business enterprise. The Government of Trinidad also creates favorable conditions for private sector investments that promote new investments.
For example, in Trinidad , to reduce the unemployment rate the government created the Community Environment Protection and Enhancement Program (CEPEP). The CEPEP program allows people to get temporary jobs for a specific period (14 days). When those days expire, they are laid off for a two-week period to allow other people the opportunity to benefit of being hired.
To boost the economy and improve the employment rate, the Government of Trinidad & Tobago has also developed oil, downstream gas, manufacturing, tourism, and agricultural sectors. By the government’s direct investments in large downstream gas industries (Methanol, Ammonia, Urea, LPG production etc), it allowed the country to develop a large petrochemical industrial base. Once these plants were developed, the government then divested them to major international private sector organizations. The sale of these assets to international investors allow for a long term commitment to the local economy.
c) The government of Trinidad uses its Social Welfare policy to provide free education, free health care, an unemployment relieve program CEPEP, a school lunch program for school children, and a national pension grant for all persons 65 years old and older.
For example, CEPEP workers and doctors working in hospitals are paid by the government. There are also maintenance expenses that are covered by the government. The government also pays for school meals. The government tries to balance its social welfare policy by developing oil and gas industries, tourism industry, and the agriculture industry, where the farmers are given grants to be able to plant the crops. The government also tries to strengthen the trade policies by developing strong ties with other countries such as India and Russia
For example, Russians are allowed to come to Trinidad and stay for 90 days without a visa, and this improves Trinidad’s relationship with the Russia. Trinidad & Tobago is a member of CARICOM Caribbean single market and Economy that concentrates on the development of trade liberalization policy and free laborers movement.
According to the most recent Budget Statement, the government of Trinidad has four main objectives: (1) financial recovery,(2) creating conditions for financial sector stability, (3) expand economy, and (4) “to build and bridge the gap between entrepreneurship and development.”
According to fiscal policies for 2011, the government’s expenditure would be $49.15 billion with the total revenue of $41 billion (that will cause fiscal deficit). To reduce this fiscal deficit the government decided to attract new investments from domestic and foreign sectors and encourage the investments of about 20billion (Budget Statement 2010). The government’s policy for the energy sector concentrated on the improvement of the oil and gas industries and providing the new attractive tax regime that will attract investors. The policy for agriculture sector concentrated on the increasing the growth of the agriculture and encouraged the development by making this business more attractive with the reduced interest rate from 8 to 3 or 5 percent. (Budget Statement 2010). Knowing the risk of reducing the interest rate, the government reduced the interest rate to boost the economy, and it hopes to keep the inflation low with increasing production of agriculture sector.
These measures are very good in that they will help the development of industries, may reduce the fiscal deficit, and will keep inflation rate down and balance the economy
“Task 3 – The behavior of organizations and the market environment”
a) According to the article “The footwear sector is a diverse industry which covers a wide variety of materials (plastics, leather, textile and rubber )”. It specializes in different type of shoes such as athletic shoes, casual shoes, formal shoes, boots, and safety boots, and it is very competitive. The footwear industry includes well known manufactures such as Nike, Adidas, Reebok, Converse, and New Balance.
According to the Porters model, there are five competitive forces that shape the market and industries: new entrants, suppliers, rivalry, substitutes, and buyers. These five forces can indicate how competitive and profitable the industries are.
The buying power of customers can have some influence on the success of the footwear industry. The buyers’ power is stronger when there a lot of customers, differentiated products, low cost of switching between suppliers, and production costs. The buyers are aware of alternatives and price sensitive.
Barriers to entry are examples of the obstacles that new comers may have in the market.(RDI) New comers may end up competing with the strong brands such as Nike or Adidas, and it will be difficult for them to attract customers at first.
For example, Nike sells products internationally, and a major barrier for Nike could be government regulations, policies, and problems with the distribution if it decides to enter a new market.
The threat of substitute products can have repercussions. For example, sneakers could be replaced with the slippers or sandals, especially when there are varieties of products in a free market and the buyer can switch from one brand to another. If the prices are too high and the brand name is not strong, then these products may end up being substituted for other products. For Nike, prices are high but the quality of the athletic shoes is good, and the brand is well known. Customers may not want to substitute these products with another.
Supplier power can pressure the shoe industry since they are supplying the raw materials such as cotton and rubber foam. In the athletic footwear industry, the supplier power is low because these materials can be located easily and the supplies can be replaced. For example, Nike selects the supplier and the supplier and dictates the working conditions which should be met in the factories. The main performers in the footwear industry are using suppliers or manufacturing from developing countries that provides the cheap labor.
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Companies in the footwear industry are hoping to have a competitive advantage over their rivals. Some of them are trying to get a competitive advantage by lowering the cost of production, strengthening brand name recognition, being able to use effective advertisements, globalization, product differentiation, and better distribution channels.
In this industry there are always competitions in the market where the stronger companies survive and keep loyal customers, but the weaker ones end up leaving the market or not making any profits. To continue progressing and making profits the companies should continue evaluating the five Porters forces in the marketplace and make necessary adjustments to those forces.
b) A market is the place where products are sold by suppliers or producers, and bought by the customers or consumers. Business organizations compete in four types of markets: Monopolistic, Oligopoly, Monopoly, and Perfect Competition.
The market type for athletic footwear industry is Imperfect Competition. According to RDI Imperfect competition has characteristics of both monopoly and perfect competition. The products offered are similar, but they are differentiated and it is not easy to enter the market. For example, Nike and Adidas are both selling the running shoes but with different brand, packaging, and style.
In perfect competition, the products are similar. All products in the eyes of customers are homogeneous, so they will select those that are cheaper. In this type of market, there are plenty of firms and suppliers that are price takers, and many buyers that dictate the prices.
There are no barriers to entry or transactions costs, so the competing companies can easily enter or leave the market. The information of products is easily available, therefore the customers have an adequate knowledge of the products and their prices. If firm will decide to sell their products higher than products of other firms then customers will not buy from them. In a perfect competition, firms try to increase revenue from the sales that exceed the total cost of production. Demand and supply determines the price of the product. In perfect competition the size of the companies are almost the same (there are lots of small companies that are competing).Companies have an equal access to resources such as technology, transport or equipments that are used in production.
Source: Google
c) There are different types of regulators in the industry. For example, there are standard quality regulators, consumer pressure groups and competition regulators.
Consumer pressure groups do not have a political power, but they can have some influence on the decisions of businesses and consumers. Consumers’ association groups represent consumers and try to protect their rights. For example, if the product is not of good quality, the consumer pressure groups can boycott the business, and cause bad publicity for the business that may cause the business to lose the customers.
“The American Apparel & Footwear Association is a national trade association that represents apparel, footwear, and sewn products companies, competing in the global marketplace”. According to AAFT,”they are trying to create an environment where the U.S. apparel industry would operate profitably and competitively globally” (source AAFT).For example AAFT created regulation list that indicates what chemical components should not be used in the textile and footwear production. They make sure that the government’s product safety regulations and standards for the production are followed, documented and certified.( source AFFT)
“International Organization for Standardization is the world's largest developer and publisher of International Standard with 163 members.” It produces standards and regulations for product specifications, services, conformity assessment, test methods management, and organizational practice. Standard means that the products are of good quality and safe to use.
Businesses that apply for an ISO quality assurance are regularly inspected and checked. Once they have achieved a required standard, they get an assurance code of practice ISO 9000 (source: business studies book).
The compliance of the businesses to ISO standards are monitored in various ways. One way is for the organization to audit itself: test the materials, use good quality materials equipments, monitor and improve the process of production. The whole process of production, the procedures, quality of the product should be documented and presented when is necessary. (ISO)
Another way of monitoring of standards is through other regulators such as BEAB and BTHA. The British Electro- technical Approvals Board inspects, tests the electrical equipment and if the equipment passes all the required perquisites then the companies getting certified by BEAB.(Business studies 4 edition)
The British and Hobby Association grants a license to toy manufactures to confirm the safety of toys. (Business studies 4 edition)
“Task 4 – The significance of international trade and the European dimension for UK businesses”
a) Regional blocks were created for the purpose of creating a free market, boosting economy and may be to strengthen the political relationships between countries.
There are several advantages of being a member of a trade block (either regionally or internationally), and these trade blocks exist all over the world. For example, there is a trading block between Iran, Russia and China. There is a trading block between Venezuela and Cuba .There is the European Union, and the Caribbean Community (CARICOM). When one examines a regional trade block of small developing economies (such as in the Caribbean), the major advantage of the trade blocks is such that they can act together and access larger markets more easily. Many times a trading block is a forerunner to a single market and economy where the block allows labor, goods and services to flow from one region of the block to other regions of the block. A regional trading block may allow the capacity building, i.e. development of certain industries with a region via low duties/tariffs within the regional block countries. For example, Trinidad and Tobago, Jamaica and Barbados being larger member states of CARICOM are the major countries in the area of trade negotiation and they seek to establish new and improved trading agreements and seek access to new markets for the CARICOM trading block as a whole. This will be benefit to CARICOM service providers and manufactures.
The major disadvantage of regional trading block is largely one of regulation. A robust regulatory framework must be in place to ensure the trading block stays intact.
The cost of being in a trading block may mean higher prices. For example, in the CARICOM region there is one main cement producer and this producer has free access to all CARICOM territories. Imported cement attracts high duties. In 2009, the Government of Guyana imported cement from Asia claiming that the regional cement company could not meet the cement demand. The regional cement producer took the Government of Guyana to the Regional Court (The Caribbean Court of Justice). For Guyana nationals the imported Asian cement was cheaper than purchased from the regional cement producer, however, due to the trading block, imported cement is restricted.
Another example was the UK’s treatment of bananas and rum imported into the UK from its former colonies in the Caribbean. Up until the early 1990’s the UK consumer paid higher prices for bananas imported from the Caribbean versus much cheaper mass produced bananas from Central and South America.
In 1973, UK became a member of European Union. According to source from the website EU is the world’s biggest trading blog that promote economic prosperity, creates jobs. EU has created a free trade area where the businesses and labor force from member countries can enter the EU markets freely or gain employment.
The advantages of EU or other trade block membership for UK is that it promotes the economic growth and political unity, increases the competition with the international and local businesses, employment, gives access to free market, improves relationship between member countries and improves the living standards of the population. For example with single currency and access to a free market, businesses run profitably. This lets them to higher more labor, increase the wages and make social contribution. This contribution may be used to fix roads or maintain hospitals. With the higher wages the workers will have more money to spend and this will help them to improve the living standards.
Member countries have an access to EU markets and to variety of goods at the good prices since there are no trade barriers such as tariff and no duties for members of countries of the trade blocks. The trade blocks allow the skilled workers move freely and most important they strengthen ties between member countries.
Disadvantages are that there are regulations the countries must adhere such as monetary policies, fiscal policies, trade policies, rules for standardization of the products or work environment.
The advantages for UK businesses are the opportunities to freely enter a common market. More products are produced, and that saves the cost of production and brings about profits, and increased trade. There are no barriers to entering the market.
Each trade block has its own regulations that companies have to abide by. For example, there are work safety regulations and regulations for production. These regulations are good for the UK businesses and employees since they promote a healthy environment and specify the expected standard of products. Therefore, regulations help UK businesses improve the quality of their products and their working environment. Hence products that are good quality are bought regularly. Another advantage is that UK businesses have access to cheap labor, which means that UK businesses have an opportunity to decrease the cost of production. Business can also build or buy a factory for a good price in one of the EU countries and this will reduce the cost of production as well. .
A disadvantage for UK businesses would be an over-estimation of trade benefits since UK is using pound currency and EU members are using Euro, and when businesses decide to sell the products or price them, they have to calculate the value of pounds in Euros and then they will know if they are losing money or making profits.
Other disadvantage is that it allows EU businesses to enter UK market and this reduce the market share. When there is intense competition, some businesses may end up leaving the market or losing the customers. Another disadvantage is regulations that companies should adhere during production of products. For example the quality of the products or labeling should be changed and that will increase the cost of production.
b) Mergers occur when two companies join together and become one company in order to thrive, access a new market, or have a competitive advantage over the other businesses. According to RDI, mergers can have horizontal integration. Companies are producing the same products, have backward vertical integration joining with the supplier, and have forward integration joining with company that supplies products used at a later stage.
When companies from two different countries join together, the employees may have different values, cultures, different language. This can and often does create cultural clashes. Even within the same country cultural differences can exist. If one examines the merger between RJ Reynolds Tobacco and Nabisco in the mid 1980’s forming RJR Naibisco. The cultural differences (smoking managers at RJ Reynolds versus non smoking biscuit eating managers at Nabisco).
Some mergers, especially the international ones, are not successful. The cultural differences of employees and poor planning may cause mergers to fail. The mergers can also fail if both companies have a different corporate culture, or if one of them is losing skilled employees or having financial problems.
For example Mercedes-Benz and Chrysler automobile manufactures merger failed. These companies are from different countries and both of them have a different corporate cultures, brands and customers. The reason of their merger fail could be that their expectations for future outcomes didn’t come true and also because of cultural differences.
To lessen the possibility of a failure associated with an international acquisition or merger, strategic planning should be employed, the employees should be informed what is happening, and there should be improved communications all around.
The merged company should be able to understand the language spoken in the other country, and should learn about their culture and values of employees and the consumers. Favorable conditions should be created for employees from different cultures so they can cooperate and work together as a team.
In the Caribbean region, Barclays PLC and CIBC bank merged to form First Caribbean international Bank. This is an example of a successful merger, however many difficulties had to be overcome. One major problem was that the merger used the existing CIBC platform (for merging accounting and the banking system). The fact that the CIBC platform was used caused many Barclay’s employees feel like it was a take over and not a merger. Many meetings had to be held to explain the process to the Barclay’s staff. The CIBC staff also had to be mentored since Barclays’ had a larger asset contribution to the merger and they felt this was a take over by Barclays and not a merger.
With international mergers, it is advisable that the merged entity seek professional guidance as soon as the merger is agreed, since many new problems may arise. Once the common goal is identified and made known to employees, the international merger will be more successful that without professional advice.
c) UK became a member of EU in 1973. EMU stands for European Monetary Union, and it was established for the purpose of using a single currency.
There are a many UK businesses that operate globally. With UK businesses that operate globally, they are forced to exchange money daily from one currency to another. One advantage of accepting of EMU policy is that the currency exchange fees would be eliminated, and the companies would be able to compare their prices with the competitors’ from EU easily. Since there no extra fees or expenditures, the products offered on a free market would be at a reasonable price that could attract customers. With the single currency, it will be a lot easier to conduct a business with the companies that are located in EU.
Single currency may boost the tourism industry. For example, British airways could have more customers traveling to Europe. It will be easier for people to travel when using a single currency. Since tourists are consumers, their expenditures bring profits to businesses too. Single currency would increase investments that will be good for UK because the money would be coming into UK and the investments may increase employment rate.
According to Business Studies 4 edition, the disadvantage of accepting a euro as a single UK currency would be that the UK government would not be able to control its main interest rate because during a recession the interest rates could not be lowered. This may have a negative effect on the business since with the higher rates; consumers would not be spending a lot and this may decrease the sales. Accepting EMU means producing products for EU markets according to their regulations. This process may involve changing labels and packaging to the required standards. Businesses could end up spending lots of cash to adhere to those requirements.
Conclusion
A business environment consists of forces that could affect the company’s daily activities, and if companies do not comply with the expectations of those forces, then they will pay the price through reduced revenues. These forces include stakeholders, government, employees, social forces, natural resources, and consumers. For example, consumers expect quality products, and supporters of the environments expect that the environmental resources are used wisely and with less adverse effect. To run a business successfully, companies need to adapt to these realities, and should run their businesses according to the expectations of environmentalists and stakeholders.
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