Fiscal & Monetary Policy in Emerging Markets

This assignment delves into the crucial relationship between fiscal and monetary policies within the context of emerging market economies. It examines the unique institutional environments and challenges faced by these markets, analyzing how governments navigate policy tools to stimulate growth, manage inflation, and ensure macroeconomic stability. The discussion also incorporates the broader impact of emerging market policies on the global economic landscape.

GLOBAL BUSINESS
ENVIRONMENT

Contents
INTRODUCTION..............................................................................................................3
MAIN BODY.....................................................................................................................3
TASK 1.............................................................................................................................3
Impact on social media site due to change in government policy.................................3
TASK 2.............................................................................................................................4
Opportunity offer for a business to grow in emerging market.......................................4
TASK 3.............................................................................................................................5
Fiscal policies and Monetary policies used by government..........................................5
CONCLUSION................................................................................................................. 6
REFERENCES.................................................................................................................7

INTRODUCTION
The global business environment can be defined as the environment in different
sovereign countries, with factors exogenous to the home environment of the
organization, influencing decision making on resource use and capabilities. The report
explains the impact of government policy on the social media firm. Study also explains
the opportunity served by emerging market to the business trying to expand globally.
Reports also highlights the Fiscal and monetary policy used by government to stimulate
and evaluate the economic activity.
MAIN BODY
TASK 1
Impact on social media site due to change in government policy
Social media is an interactive technique that help people to share information,
idea, career interests and other form of idea. It is a form of expression via virtual
community or network. Social media platforms like Facebook, Twitter has been
affected tremendously by government rules and regulations. In today’s world one of
the most important factor which is affecting businesses is Political factor that
includes government rules and regulation. As nowadays Social media has become
the best platform to promote anything across the globe. People also make use of
Facebook and Twitter to promote abusive content also which has forced
government to regulate new rules for the social media platforms. (Ainin and et.al.,
2015). UK government in 2018 has proposed to implement fines on the social
media companies which are involved in promotion of abusive contents. As these
firm are the one which contain good amount of data about the users and many
government has taken help of social media firm to secure data of the general
election conducted in the country but some of these firm were questioned for
leaking the data which force government to implant new rules and regulation on
social media firm (Hudson and et.al., 2016). The newly-published Online Harms
White Paper sets out guidelines to tackle the spread of violent content, suicide
encouragement, disinformation, and cyber bullying as well as requirements for
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companies to take action to prevent terrorist content, child sexual exploitation and
abusive content
New rules and regulation implicated by the UK government has strictly
informed the social media firm to work under the data privacy laws and anti-
competition rules which has forced company to change their policy regarding
content uploading on a portal. Firm like Facebook is facing a quite a lot controversy
after being found guilty in breaking the data privacy law and anti-competition rules
by the committee investigating Facebook (Guillamón and et.al., 2016). Due to these
uncontrollable circumstances company has faced the issue of trust among the user,
as many users have already stopped using that social media portal which has
eventually result in decrease in the profitability of the firm. (Oliveira, 2013). Firm like
Instagram and Twitter are also affected by the new rules and regulation of UK
government as it has forced them to change their policy of uploading the content on
portal like for example easy access to damaging material particularly among young
people has caused growing concern worldwide. A 14 year old girl in Britain did
suicide after seeing online material on depression. but on the other hand new rules
and regulation has also helped the many social media firms in increasing their
customer base as now days people are trusting the social media sites content as
no site can upload the abusive content and can hinder the privacy of an individual.
(Panagiotopoulos, 2013).
After going through the report it has been analysed that new government policy
has affected the social media site in both positive and negative manner. But the new
regulation have been helpful in enhancing security and privacy of data which has been
uploaded to these social media platforms (Chittoor, 2015).
To overcome the effect of government regulation on social media Kotter’s
change management theory can be applied for managing external changes. In this they
first need to identify threat and after this develop a vision for it. Also the vision needs to
be communicated to team members.
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TASK 2
Opportunity offer for a business to grow in emerging market
Emerging market means a rapidly growing market which offers a wider scope for
business to grow along with a few challenges in the process of growth.
There are many benefits for business to expand in emerging market as it always
result in increase of demand of the population to consume luxury product which was not
available to them before but now as market is emerging business can touch that type of
population and offer them that product (Rottig, 2016). If the firms globally expand their
business in the emerging market than the business has a chance to establish business
name at global level and it gives opportunity to business to develop a good goodwill in
the market and to rule market in coming future year (Gupta, 2017). Expanding business
globally in emerging market always help business to get assess to new capital which
help business to establish in global market as huge amount of capital is require to
expand business. (Marquis, 2015).
There are many company who have established their name by expanding in
emerging market as Airband is one the company who has gain a name in hospitality
market but setup by two friend on the basis of assessing the opportunity that there is
need of offering cheaper bed and breakfast at minimal rate as there are to many people
who are looking to have it and now it has become one of the best hospitality providing
firm (Kotabe, 2016). As there is a Progress in emerging market company can expect a
rapid income growth they set out to create. Emerging markets creates opportunities for
new business, as firms can get benefit of social values and economic conditions.
Development opportunities in these palaces are very high which helps the firms in
gaining high revenues in these countries.
Applying of Ansoff Matrix in order to grow:
Market penetration- In an emerging economy, company can penetrate the market by
bringing unusual products to the existing consumers which can help them in growing.
Market development- Company in order to grow in emerging economy can also sale
its products in new market segments. Market development helps in raising profit of
business and raising its global band image.
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Product development- Firms can also produce new products or bring change in the
existing products. This can help them in establishing their market share. If companies
adopt this strategy then it would be beneficial in gaining attention of mass audience, as
by this way firm will be able to meet the needs of wide range of consumers which will
give positive results to companies.
Diversification- Company can also diversify their products in new range or different
segments
After going through report it has been analysed that emerging market is the best
opportunity to expand the business globally as it offers a variety of offers to business to
established in the market (Gaur, 2015). As more people within a country rise out of
poverty, a consumer class develops that leads to a marketplace full of consumers who
are hungry for new products and services.
TASK 3
Fiscal policies and Monetary policies used by government
Fiscal policy
Fiscal policy is the use of government revenue collection (mainly taxes)
and expenditure (spending) to monitor and influence a nation's economy. fiscal policy
means by which government adjust its tax rates to monitor and influence nation’s
economy. Fiscal policy implemented by government can help in reducing the spending
of public and increasing rates of tax to raise more revenue and ultimately lower deficit of
budget. Monetary policy is associated with interest rates and credit availability ( Bode,
2016). Fiscal policy helps in managing the economy as this policy can affect total
amount of output produced that is gross domestic product.
Fiscal Policy and Monetary Policy Affect the Economy.
The government uses both fiscal and monetary policy. (Fiscal and monetary policy,
2013). It helps in raising demand of goods and services. Greater demand of goods and
services increase in both output and prices.
Fiscal policy is said to be tight or contractionary when revenue in any country is
higher than spending.This will increase demand and production automatically will
increase growth cycle. they may get more money spend on product. government needs
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to speed up economic growth. Fiscal policy in long run affects the countries saving rate.
It helps in enhancing the economic condition of country.
The other side it depends on tax .if tax is decrease it leads to economic growth. It
will affect economic growth. It increases demand and business has to produce more.
They have to hire more and more people. They have more money to save and spend
(Jawadi, 2016).
Monetary policy is affected by central banks by money supply in economy.
It will influence interest rate and inflation .it will increase money supply and lead to lower
interest will impact aggregate demand. become relatively cheaper for consumer in other
economy. Monetary policy helps in economic development (Sims, 2016). Has different
tools changing requirement for bank. Helps in changing the discounting rate. They are
carried out on daily basis . Monetary policy that establish the rate and growth. It helps
in modifying the amount of interest rate. Buying and selling of government security or
identifying the amount of reserve. Fiscal policy is the means by which a government
adjusts its spending levels and tax rates to monitor and influence a nation's economy.
It is the sister strategy to monetary policy through which a central bank influences a
nation's money supply. Fiscal policy assists in maintaining the economy of nation.
These policies also help in developing economy of the nation. These policies help a
country in pushing up the demand and also assist the country in increasing employment
opportunities. It helps in the growth of economy.
Using a mix of monetary and fiscal policies, governments can control economic
phenomena.
During the low interest rates increased the flow of economy. Inflation can occur if
economic production and employment increase. Monetary policy is to prevent inflation
focus on economic growth.
It helps to improve the economic growth (Braun, 2018). It helps to slow the
economy in future.
CONCLUSION
From the above report it has been summarised that social media has been affected by
different laws, rules and regulations implemented by government. Report has also
presented that social media firm like Facebook, Twitter and Instagram brain-wash the
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mind of individuals that has resulted into aggressive acts by various individuals. Report
has also explained the opportunities which has been created by emerging economy. It
has supported various organizations in growing.
REFERENCES
Books and Journals
Anin, S. and et.al., 2015. Factors influencing the use of social media by SMEs and its
performance outcomes. Industrial Management & Data Systems. 115(3). pp.570-
588.
Hudson, S. and et.al., 2016. The influence of social media interactions on consumer–
brand relationships: A three-country study of brand perceptions and marketing
behaviors. International Journal of Research in Marketing. 33(1). pp.27-41.
Guillamón, M.D. and et.al., 2016. Factors influencing social media use in local
governments: The case of Italy and Spain. Government Information
Quarterly. 33(3). pp.460-471.
Bode, L., 2016. Political news in the news feed: Learning politics from social
media. Mass Communication and Society. 19(1). pp.24-48.
Oliveira, G.H.M. and Welch, E.W., 2013. Social media use in local government: Linkage
of technology, task, and organizational context. Government Information
Quarterly. 30(4). pp.397-405.
Panagiotopoulos, P., Barnett, J. and Brooks, L., 2013, September. Social media and
government responsiveness: the case of the UK Food Standards Agency.
In International Conference on Electronic Government (pp. 310-321). Springer,
Berlin, Heidelberg.
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Chittoor, R., Kale, P. and Puranam, P., 2015. Business groups in developing capital
markets: Towards a complementarity perspective. Strategic Management
Journal. 36(9). pp.1277-1296.
Rottig, D., 2016. Institutions and emerging markets: effects and implications for
multinational corporations. International Journal of Emerging Markets. 11(1).
pp.2-17.
Gupta, A. and Sohi, R.S., 2017. Business Groups in Emerging Markets: An Abstract.
In Marketing at the Confluence between Entertainment and Analytics (pp. 1089-
1090). Springer, Cham.
Marquis, C. and Raynard, M., 2015. Institutional strategies in emerging markets. The
Academy of Management Annals. 9(1). pp.291-335.
Kotabe, M. and Kothari, T., 2016. Emerging market multinational companies’
evolutionary paths to building a competitive advantage from emerging markets to
developed countries. Journal of World Business. 51(5). pp.729-743.
Gaur, A. and Delios, A., 2015. International diversification of emerging market firms:
The role of ownership structure and group affiliation. Management International
Review. 55(2). pp.235-253.
Kocherlakota, N.R., 2016. Monetary and Fiscal Policy Overview. The New Palgrave
Dictionary of Economics, pp.1-9.
Palley, T.I., 2015. Money, fiscal policy, and interest rates: A critique of Modern Monetary
Theory. Review of Political Economy. 27(1). pp.1-23.
Jawadi, F., Mallick, S.K. and Sousa, R.M., 2016. Fiscal and monetary policies in the
BRICS: A panel VAR approach. Economic Modelling. 58. pp.535-542.
Sims, C.A., 2016, shubham_qualityAugust. Fiscal policy, monetary policy and central
bank independence. In Kansas Citi Fed Jackson Hole Conference.
Braun, D., 2018. Fiscal policies in federal states. Routledge.
Tymoigne, E., 2016. Government monetary and fiscal operations: generalising the
endogenous money approach. Cambridge Journal of Economics. 40(5). pp.1317-
1332.
Online
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Fiscal and monetary policy. 2013. [ONLINE] Available through: <
https://www.thebalance.com/what-is-fiscal-policy-types-objectives-and-tools-3305844>
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