Executive Pay: The Curious Case of Carlos Ghosn’s Arrest
February 12, 2025
Supply Chain Management is concerned not only with the flow of raw materials and finished goods, but scope extends beyond this to include reverse flow of unsold finished goods, parts and packaging materials from the point of consumption at customer’s end back to the organization or to rework/refurbishing vendors. Today reverse logistics has been adopted […]
The Perils of 24/7 Interconnectedness We live in a world that is not only integrated and interconnected largely but which also depends on complex supply chains across the world to deliver the goods and services that we need as part of our everyday existence. With globalization, the movement of goods, services, and people has reached […]
Introduction The role of information technology and systems is to improve productivity of organization. Information systems are deployed across functional department of organization. The Marketing Function In broader terms, marketing is defined as a process through which organizations are able to deliver products and services as per the need of the customers. Organizations conduct market […]
Introduction Information systems can be defined as set of co-ordinated network of components, which act together towards producing, distributing and or processing information. Information systems in conjunction with information technology have various applications in today’s business environment. Communication System The process of transmitting information from one place to another is called communication. The transfer of […]
What is De-Risking ? Outsourcing is a process that involves selection of vendors who would then do the necessary work for their clients regarding handling such work that the clients deem can be done by Third Party Vendors. What this means is that the clients first narrow down the list of outsourcers that can be […]
In previous modules, we have alluded to the global economic crisis and the impact it had on the various sectors in the financial and manufacturing industries. This article introduces readers to the global economic crisis and subsequent articles deal with the various dimensions to the crisis and the causal factors that were responsible for the crisis.
The global economic crisis started in summer 2007, though the full impact was not felt till the bankruptcy of the investment bank, Lehmann Brothers in September 2008. The next couple of years witnessed heavy job losses and contraction in the GDP (Gross Domestic Product) of many countries in the West as well as in the developing world.
What started off with the subprime mortgage crisis quickly morphed into a full-fledged crisis of historic proportions prompting many commentators to draw parallels with the Great Depression of the 1930’s.
The global economic crisis was caused by the coming together of several structural as well as business cycle factors that conspired to produce a “perfect storm” of epic proportions. These factors ranged from the collapse of the housing market in the United States, imbalances between the West and the East in terms of trade deficits, reckless and risky speculation and finally, the sovereign debt crisis that was a culmination of years of fiscal profligacy and loose monetary policies.
The point about the global economic crisis or the Great Recession as it is also called is that the crisis exposed the chinks in the armor of the global economy and highlighted the pitfalls of too much integration and interconnectedness. Nowhere was this more apparent than in the aftermath of the collapse of Lehmann Brothers when the entire credit system froze and the global financial system came perilously close to collapse.
The global economic crisis basically originated in the West but had its effects on all economies of the world. Of course, the US and the Europe were the primary victims of the crisis and it can be said that countries like India and China were relatively unscathed in the wake of the crisis. However, this is not to say that these countries have successfully “decoupled” from the west since the tightly knit global economy and the dependence of China on exports to the US for goods and India for services means that these countries have a fair amount of work to do before they can be called safe.
The point here is that the United States and Europe were badly bruised by the crisis and it is still not clear when these countries and their economies would be out of the woods, if at all they would.
Finally, the global economic crisis has undone the many gains that have been made by globalization and hence there are renewed calls for protectionism and for erecting trade barriers in the West as well as in the East. This means that the global economic crisis has dealt a body blow to the global economy which might take years to regain its earlier prosperity.
Your email address will not be published. Required fields are marked *