Business in the Global Scope of Management, Essay Example

Policy Issue number 1

How the Changes of Management of De Beers affected the Growth of Botswana as a Nation

Every business organization has the responsibility to make a considerable contribution the growth of the community that it intends to operate in. Relatively, this responsibility is a condition that defines the reputation of the organization not only as a business but as a civil citizen that is able to contend with the role it has sworn upon towards the growth of the community that it is enjoined with. This is the story behind the cooperative correlation that exists between the administrators of Botswana and that of De Beers. The relationship between the said parties began in 1967 when De Beers found a great reserve of diamonds in Orapa, Botswana. Prior to this discovery though, the organization has already been successfully operating in Canada and Africa as they mine diamonds from the said areas. Manufacturing and distributing operations of the business are directed towards other countries around the globe. Relatively, the operations then were already profitable for the organization. Nevertheless, finding the diamond source in Botswana proved to be a large source of development for the business as they engage in larger conditions of international trading. This fact is further defined by the fact that the said area in Botswana has larger amount of diamond reserves compared to that of the African and Canadian locations that De Beers was already exploring during the time.

To make sure that the organization is ready to provide Botswana the kind of expectation that they are placing upon the operation of the business in their nation. To respond to this need, De Beer Company offered the government administrators of the nation with a 50-50 divisible utilization of the resources and the profit that is to be taken from the developmental operation that the company is to take into consideration in relation with the resources available in the area. The business offered to share at least 15% of the company’s overall share with the government hence directly impacting the nation’s economic standing and the budget increase of the nation’s federal earnings. As the government agrees to the matter, they themselves have committed to an agreement of letting the company explore their diamond resources as well as control the said area where the said materials are to be taken from.

In relation to this, Gareth Penny mentions that that the company has been making great contributions to the society that lives in Botswana as they are increasing the capacity of the nation to hold strong and stable position in the face of international economic development (Diamonds, 8/9/2008). Relatively, this comment from the company’s CEO basically shows how important it was for the organization to make a great impact on the development of the nations they are engaging with. The $33 million production and development amount that De Beers used to make sure that the diamond reserves in Orapa would be put to proper use have provided a great source of economic confidence to the country.

However, the path towards success was not that easy to contend with. The people of Botswana had their own sense of defying the existence of the company within their territories. Some actually thought that the company wanted nothing but to exploit their resources hence making extensive changes on their environment. Not all believed that the company meant good for the nation. A lot of local organizations proceeded to see the supposedly wrong results of the decisions that their government has made. This especially became seemingly evident when the company intended to control the release of the diamonds coming from the source and distributing them in high-prices so as to make sure that the distribution of the diamonds are better controlled especially for those that are being released in international export trading points.

This went on for several years. The people, knowing that the resources are abundant, see the matter as a mere presentation of the greed of the company. Nevertheless, it could be analyzed that the company had some plans as to why they have been considering such control over the diamonds. One aspect of developmental condition that came from the organization is the establishment of progress in the country. They have utilized the profit earned from operations of the organization to help the nation build roads, construct connecting bridges that made it easier for the nation’s different locations to be connected for trade which reestablishes the economic standing of the country. The company also stood alongside the government in their campaign towards promoting better health against the growing number of individuals being affected by HIV and AIDS.

When it comes to employment issues, the company made sure that they are able to employ as much local executives as possible. Notably, this means that the organization was able to help in the process by which nation specifically incurred lower rates of unemployment in the year 2006. Relatively, a more refined indication of such success is the fact that the Botswanian economic earnings came from $80 to at least $6000 per year capita. Relatively, it could be realized that De Beers and Botswana was able to get the best benefits from the most refined resources of the nation. With this in consideration, it is evidently true how the company was able to compel with its responsibility of providing the nation with the promises it has specifically given the administrators in the first place, hence resulting to a cooperative camaraderie between the parties involved in the agreement.

References

Nocera, Joe. Diamonds Are Forever in Botswana.

Policy Issue number 2:

Understanding Farm Subsidies and its Impact on Doha’s Development

Global trade is one of the key operations that are utilized by countries at present to make extensive economic connections that are designed to improve each nation’s performance in the field of international competition. Most often than not, the capacity of a nation to enjoin within this particular form of international operation defines their capacity to be labeled as a progressing country. However, competitions in the global trade seem to be tough enough for underdeveloped countries to engage in especially when it comes to developing the process by which they produce their own products to be released in the international trade; not to mention the height of the amount of tarrif fees to be paid just to be able to release and distribute products through the said aspect of international industry.

This is the reason why the Doha Development Round or the Doha Development Agenda most likely known as the DDA have been given way to take control of the situation. This agreement basically tries to increase the capacity of all other nations to engage in the trade even when they are in the middle of processing their progressive state in competition with that of the other nations around the globe.

Relatively, this serves as a bridge between developed and underdeveloped countries to connect with each other through proper trade policies and rules that protects the condition by which both parties would benefit from. One of the process by which DDA tries to establish camaraderie is through imposing industrial balance within the countries involved. This means that through empowering the nations internally, DDA hopes to make each nation more capable of handling international challenges that they face in the middle of trading with other countries. One way of doing so is to create farm subsidiaries that would increase the capacity of agricultural nations to produce more for export qualities. Regarding this, India’s trade minister Kamal Nath mentions that the United States was prepared to offer $17million agricultural subsidies (W.T.O, 6/2/2004) so as to make sure that the nation is able to contend with the increasing demand for agricultural products that the international market is requiring from third world nations like India itself. Nevertheless, there are instances when such a move, when applied directly to American industries also lower their production cost hence making them more sustainable in getting what they need from their own resources at a relatively lower cost hence lessening the capacity of the other nations to provide them with their supposed agricultural needs. This is the reason why some other nations like Mali are reacting negatively to the provisions of DDA especially when it comes to redefining the subsidies given to agricultural industries in third world countries (Cotton 6/2/2004). In a way, the face of global trading industries, the level of camaraderie that DDA wants to establish has not been completely incurred especially that most of its provisions are better controlled by the powerful nations in the agreement, mainly the more developed countries in the international trade like that of the United States. This way the value of the parties involved are not properly given attention hence making the agreement biased.

References

Goodman, Robert. Tax Brakes.

Becker, Elizabeth. W.T.O. Moves to Revive Talks on Farm Subsidies.