Strategic Management Discussion 5

1 HOW ECONOMIC DOWNTURN WOULD uphold THE STRATEGIC trading operations OF GENERAL ELECTRICEconomic depression within a state has a severe extend to on the operations of big and multinational company such as General Electric (GE ) keep company Economic depression entails that there is recession and lessening in economic activities resulting from inflations , and low sales , low revenue generations , reduction in monetary value , increase cost of drudgery and low output for ecesiss operating in such frugality This usually leads to reduction in the volume of turnover for an organization and low profit maximization . According to Dalsgaard , et al (2005 , pg 36 ) Economic downturn may be caused by a mix of factors such as monetary or pecuniary tightening , increased risk relating to long-term interest grade or loss of competitiveness for countries following a situated exchange consider policy . Strategic management entails the employment of available organization resources to achieve effectively the objectives and goals of the organizationEconomy downturn impact on multinational companies , like GE , leads to greater impact on their operations . For GE its strategic mission is to hold open the leadership in the different market in which it operates then , with this objective it becomes challenging for company like GE to shine and maintain such market leadership during economic downturn During such period , the resources to operate effectively in brush the organization s strategic plan would be deficient , thereby resulting in the organization adopting a cost reduction strategy , instead of maintain its original strategic thrust . such(prenominal) cost reduction strategy as workforce curtailment , sourcing for cheaper supply of raw materials , reduction in research and discipline activities . All this factors brought in by economic depression tends to repress the sales volume and profit maximization of the organization .

moreover , economic downturn affecting multinational organization as GE entails that its market linkages and operations within other countries go out be affected in terms of supplies and the cost of its operate and finished goods to these marketsHOW DIFFERENTLY ECONOMIC DOWNTURN WILL AFFECT A SMALLER LESS DIVERSIFIED FIRMThe impact on economy downturn on smaller and less diversify company compared to GE , will be greatly impact on the operations of such organization . Smaller unanimous mostly operate domestically . All the infrastructure and resources for their operations are usually sourced locally . In period of economic downturn in a country where these small firms operates , the extensive brunt of the economic depression will be felt by this category of firms . There will be sharp devolve in turnover lower profit maximization , and increasing cost of production in recourse to the galloping inflationary rate experienced in the depressed economy For a more diversified organization , they do not only enchant advantages inherent in economies of scale , but can communicate on proceeds from their subsidiary and foreign operations and byplay units . This will make them not to feel the impact gratingly , as the less diversified firm would be do to pass through . Furthermore , a much-diversified organization as GE has the capacity to relay on backward linkage in its production process , thereby producing on a cost effectiveness...If you want to get a full essay, cast it on our website: Ordercustompaper.com

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