Managing in a Global Economy

Joe RicciardiRobert McAuliffe

Where You Have Been…

Industry

Company

Accounting Economics Entrepreneurship Finance Marketing Operations Org. Behavior Strategy

EconomicsMarketingStrategy

Modules I, II & IIIModules I, II & III

Micro

Industry

Company

Cash Flow Stmt

Income StmtBalance Sheet

Modules I, II & IIIModules I, II & III

Global

Country

Industry

Company

MGE --- NBS

MGE --- NBS

Macro

Business Environment:Economic & Political Volatility

Managing Volatility

Navigating Troubled Waters

Exogenous Factors Influencing Firms

Pure Pure CompetitionCompetition

MonopolyMonopolyOther Market Other Market StructuresStructures

Market VolatilityMarket Volatility Inflation Inflation Labor Market RestructuringLabor Market Restructuring Currency CrisesCurrency Crises Interest RateInterest Rate

Market LiberalizationMarket Liberalization

Global

Country

Industry

Company

MGE

MGE

Balance SheetIncome Statement

Cash Flow Statement

GDP Growth RateUnemployment Rate: Wages

Interest RatesInflation Rate

Exchange Rates

Links Between MGE & NBS

Short RunShort Run Focus on factors that increase Focus on factors that increase

demand demand – Relative to capacityRelative to capacity

Long RunLong Run Sources of Economic Growth Sources of Economic Growth

(supply) (supply)

Long runLong run Focus on factors that Focus on factors that

increase supply increase supply (capacity(capacity))– Corporate governance Corporate governance

– Labor/Management relationsLabor/Management relations

– Human capital developmentHuman capital development

– Industrial policyIndustrial policy

– Technology policiesTechnology policies

MGE FocusMGE Focus NBS FocusNBS Focus

Context Legacy of Currency Crises & ContagionLegacy of Currency Crises & Contagion

– Tequila in MexicoTequila in Mexico– Tigers in AsiaTigers in Asia– Vodka Meltdown in Russia Vodka Meltdown in Russia – Caipirinha in BrazilCaipirinha in Brazil– Argentina’s Last Tango with the IMFArgentina’s Last Tango with the IMF

Japan’s Debt-DeflationJapan’s Debt-Deflation China, US Trade Deficits, and the EuroChina, US Trade Deficits, and the Euro Sources or Failures of US GrowthSources or Failures of US Growth Global Outlook?Global Outlook?

Real Goods Market

Labor Market

ForeignExchange

Market

MoneyMarket

The Macro ModelThe Macro Model

Ground Rules

Read, Think, Ask questions, ...Read, Think, Ask questions, ... GoalsGoals

– De-mystify the Business & Financial PressDe-mystify the Business & Financial Press– Use and Apply the Macro ModelUse and Apply the Macro Model– Develop a Framework for Interpreting the Develop a Framework for Interpreting the

Business EnvironmentBusiness Environment Cold CallCold Call