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macroeconomic and microeconomic concepts

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Scenario:

Acme Automotive is one of the major US producers of automobiles in Mexico. You have been sent to the Acme automotive plant in Nuevo Laredo, Tamaulipas, Mexico as the new Operations Manager to respond to recent declines in employee morale, productivity, and cost effectiveness at the Nuevo Laredo plant in the past 12 months.

Talk of union organizing is of utmost concern to your supervisor in terms of short run and long run costs of production. Your job is to investigate the productivity/cost effectiveness problem and make recommendations to top management for goals and strategies in line with the Acme Vision. Your first day at the job, you receive the following letter from a disgruntled employee:

(Note- the 'Maquiladoras' to which the writer refers, is the word for companies that process Mexico-imported components, then export them.)

Dear Sir:

I've been working in Maquiladoras since I was 20 years old, and now I'm 27. I've gotten more and more worried, because my job is ruining my health and I have no way out.

Now I work at Acme, where I've been for about a month and a half. "You could say it's forced labor, considering how the foremen talk to the workers and how much psychological pressure they put on people. We work an average of 14-15 hours a day. There's no transport service to and from work, and we get off the shift at 4 o'clock in the morning. Usually we have to wait until 7 AM before we can catch a public bus. And when a bus does come, getting home costs 20 pesos. That makes a very big dent in your take-home pay - 380 to 400 pesos a week ($40-43).

My job is bending steel cables...which are about a centimeter thick, and I have to bend about 3500 a day. Because of what's passing through my hands every day, I can hardly sleep at night - the pain is so bad. Then I have to get up in the morning to do it again. In the future, I know that I can get carpal tunnel problems, which is a very scary idea. I've asked to change to another position, but no one wants to change because whoever works in this job gets a lot of pain in his wrists.

I feel that in three or four years my hands are going to be useless. I've been thinking that I'll have to get another job. What else can I do? They say work in the Maquiladoras is the best paid work here in the city. But there's not much difference from one factory to another.

This is all just normal - the standard. Really, I'm living my whole life in the factory. Because of the time and money pressure, I have no ability to develop myself even as a worker, much less as a human being."

After I had been working in Acme for a month, I went to my supervisor with my concerns about health and safety problems at the plant. He told me that I was putting the Maquiladora workers in danger by making waves. I know that the company's goal is to cut production costs and increase the profits from the engines we produce, but I am hoping you will consider the plight of the poor Mexican workers. I am hoping you will see through our eyes as well as from the eyes of the company officials.

Yours truly,

Enrique Santiago:

Quotes and idea taken from:

Bacon, David. "The Story of a Maquiladora Worker." Metro Detroit Greens. 10 Dec. 2000. Retrieved 20 Jan 2004 from http://detagreens.tripod.com/maquiladora.htm

Problem
You are laying the groundwork for Acme's deployment of key lead operations managers and top level personnel to international manufacturing plants. As such, one expectation the company has for you is that you will research and write relevant economic white papers for the pre-orientation of future deployed employees.

Write a 2-3 page white paper which will help employees understand the economic experience of Mexico since NAFTA. Issues you may want to cover include, but are not limited to, trade liberalization, national sovereignty, worker rights, World Trade Organization and committees, relationship with World Bank and IMF, types of economic development.

Please submit your assignment.

Following are sites you will find helpful.

References:

World Bank Group. Global development finance 2001. Retrieved January 7, 2004, from http://www.worldbank.org/prospects/gdf2001/vol1.htm
World Bank Group. (2001). Mexico - A comprehensive development agenda for the new era. Retrieved January 7, 2004, from http://wbln0018.worldbank.org/External/lac/lac.nsf/Publications/9364AB8A25BABD6085256A4C004B3963?OpenDocument

Explain macroeconomic and microeconomic concepts and how they relate to the management of a global organization.

Need help with understanding what I am trying to do with this assignment. Don't understand.

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Solution Preview

Macroeconomics is the economics sub-field of study that considers aggregate behavior, i.e. the study of the sum of individual economic decisions. This is in contrast to microeconomics which is the study of the economic behaviour of individual consumers, firms, and industries. Microeconomics (literally, very small economics) is a social science which involves study of the economic distribution of production and income among individual consumers, firms, and industries. (Contrast macroeconomics.) It considers individuals both as suppliers of labour and capital and as the ultimate consumers of the final product. It analyzes firms both as suppliers of products and as consumers of labour and capital. It is the study of the behavior of individuals and firms that are using scarce resources. Scarcity refers to the situtation that none of us as individuals or companies, can have it all - unlimited land, capital, labour, etc.

One of the goals of the field of microeconomics is to analyze mechanisms such as market forces that establish relative prices amongst goods and services and/or allocates society's resources amongst their many alternative uses.

Macroeconomics can be used to analyze how best to influence government policy goals such as economic growth, price stability, full employment and the attainment of a sustainable balance of payments.

Until the 1930s most economic analysis did not separate out individual economics behavior from aggregate behavior. With the Great Depression of the 1930s, suffered throughout the developed world at the time, and the development of the concept of national income and product statistics, the field of macroeconomics began to expand. Particularly influential were the ideas of John Maynard Keynes, who formulated theories to try to explain the Great Depression.

One of the challenges of economics has been a struggle to reconcile macroeconomic and microeconomic models. Starting in the 1950s, macroeconomists developed micro-based models of macroeconomic behavior (such as the consumption function). Dutch ...

Solution Summary

Explain macroeconomic and microeconomic concepts

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