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The biggest challenges facing managers in the current economic climate

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The current economic climate is undoubtedly a very challenging one – not only for new managers, but for experienced and veteran managers in almost every industry. As a result of ‘the Great Lockdown,’ a Covid-19 recession began in February 2020 and has been touted as the worst global financial crises since the Great Depression. This was characterised by the contraction of the global economy by 3.5% and resulted in high inflations, high unemployment rates, depreciation of major as well as minor currencies, low GDPs and per capita incomes all over the world. The downturn impact of this, evidently brought trying moments for virtually all industries around the world particularly with the onset of the stock market crash.  

The exigencies of the time implied that the strongest of managerial skills was required for organizations to maintain economic activity and navigate the doldrums of the pandemic. The finest of business acumen is a necessity although daunting for managers. Despite the challenges in almost every industry of all economies, there are several opportunities that managers can capitalise on to overcome these challenges and significantly improve their managerial competencies.

Demonstrating leadership through effective use of power and influence, is necessary during the recession. The scale of the pandemic and unpredictability remains challenging as managers deal with disrupted business models and managing the psychological impact of the pandemic on employees. The first fundamental principle for a manager to be successful is for him or her to assume that leadership position rather than just see himself or herself as a manager. As author John Maxwell states, the main difference between the two is that leadership is about influencing people to follow, while management focuses on maintaining systems and processes. Managers must therefore rely on their influence to re-organise the work processes and policies for a positive work environment. One of such qualities is ‘compassion leadership’, which encourages staff to regard a manager as reliable and keeps them focused on productivity rather than speculation and anxiety which are detrimental to productivity under challenging circumstances. 

Managers have also been saddled with the burden of making tough decision such as protecting employee health and safety, re-structuring policies or work processes, re-delegating tasks and even for worst hit industries, laying off employees or reducing salaries to keep businesses afloat and maintain productivity. The absence from work by highly skilled staff due to infections and identifying temporary replacements were inevitable. This was more aggravated in situations where managers were also prone to infections which meant that their roles may have also required interim support. Instead of making data-driven decisions, managers had to make unplanned – but reasonable – decisions. This required strategy and innovation; most of which challenged the status quo to sustain businesses. Apple for instance, was among the first large retailers to close most of its stores globally in response to the pandemic. Such a decision was critical to controlling the spread of the virus although not part of the company’s initial strategies for the business. Most organisations were compelled to adopt a more digital approach to their business processes, thus such decisions saw them cut their future digitalisation plans from taking years to weeks. 

As the current economic environment is not favourable for businesses, another challenge for new mangers is addressing the skills gap by upskilling themselves and subordinates to develop skills and competencies necessary to keep them effective, re-organise their business models and improve on performance. Even before the current crisis, changing technologies and new ways of working were disrupting jobs and the skills employees needed to do them. As most businesses switched to online, this implied an investment in people, technologies and systems to enable employees develop the required skill for managing e-commerce businesses. According to a report by McKinsey & Co., the focus of CFOs has shifted toward crisis management and away from longer-term responsibilities such as strategic leadership, organizational change, and finance capabilities. High display of competence was therefore required in performance, to keep up with the keen competition in the market. As Linda A Hill stated in her book: Becoming a Manager: How New Managers Master the Challenges of Leadership “new managers find it challenging to develop the myriad of technical, human and conceptual competences necessary to be effective managers. But the vast majority are more surprised and unnerved by the unexpected necessity of developing new attitudes, mind-set, and values consistent with their new positions.”

The urgency of lockdowns compelled managers to implement short-term ideas under challenging circumstances. Despite all these challenges and more in an economic trying moment like we have, there are many opportunities out there for new managers in all industries. The paradigm shift from the traditional ways of doing things, to a new, more innovative, and highly advanced way of working presents new managers with great opportunities in their industries of operation. The global economy is poised for a post-recession recovery,  and it is appropriate to re-structure business models for the medium to long term. For managers, the necessity for reinforcement of concrete business continuity plans cannot be over-emphasised. The practical experience learned from the impact of the pandemic, should be a learning curve toward implementing feasible strategies to mitigate the impact of uncontrollable threats such as a pandemic to a businesses’ operations. 

Embracing e-commerce and e-purchasing are also great opportunities available to new managers in most industries. Through trade liberalization and globalization, managers can take their businesses outside of the geographical boundaries. E-commerce and the recently added M-commerce are important opportunities available to managers to facilitate trades of such nature. Instead of the traditional hustle of carrying products around the world to advertise, new managers can now reach bigger target groups while stationed in one geographical area. 

The economic climate might not be the very best now.  But what new managers must realise is that the confrontation of challenges in any industry is inevitable. However, these challenges if addressed comprehensively, can become opportunities to derive competitive edge over other managers and help their businesses to thrive in industry. 

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

Business

Elon Musk Acquires Twitter for $40 Billion

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Elon Musk’s offer to buy Twitter has been accepted by the company this Monday for over $40 billion. “The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing. The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders,” representative Bret Taylor of the Independent Board Chair released in a statement. Stockholders of Twitter will now receive $54.50 for each stake in the company. 

Musk had previously stated a $46.5 billion set aside to acquire Twitter, prompting the company to look into his offer. Twitter’s board has already accepted the deal, which is expected to become concrete by the end of the year following approval from Twitter stockholders and regulators. 

As a frequent user with over 84 million followers on the social media site, the CEO of Tesla Motors holds a controversial platform, ranging from discussing business to criticizing politics and making insulting remarks. He has already been under investigation from the SEC in 2018 for fraudulent claims. Some users fear a rise of dissent following the transition of power.

In response to this, Musk stated: “Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated.” He also stated his hope to “make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential.”

The drive for free speech comes with its own concerns, however, as critics fear it may allow for hateful speech, misinformation, and other harmful content which Twitter has been working to silence.  Musk had also previously commented on preferring the company enforce “time-outs” over permanent bans, indicating future decisions which may allow the return of users such as Donald Trump. Decisions such as these could greatly affect politics and future elections. 

If the deal is fully approved, one of the world’s wealthiest individuals will be owning the company. The future is unclear for current CEO Parag Aragwal, who was appointed just last year in place of Jack Dorsey in a slew of CEOs over the years. With the news, Aragwal stated that he was “Deeply proud of our teams” and “inspired by the work that has never been more important.” 

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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Russia Looks to Brazil for Support to Prevent Expulsion from IMF

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The Kremlin has requested Brazil’s support in the International Monetary Fund, G20 group, and World Bank to help it counter crippling sanctions from invading Ukraine. Russian Finance Minister Anton Siluanov wrote to Brazil’s Economy Minister Paulo Guedes claiming that, “behind the scenes work is underway in the IMF and World Bank to limit or even expel Russia from the decision-making process”. Siluanov then went on to request support from Brazil “to prevent political accusations and discrimination attempts in international financial institutions”.

Russia is facing immense backlash for its actions against Ukraine, especially from the US and its allies. According to Siluanov, Russia is facing financial difficulties and economic turbulence due to international sanctions which have frozen almost half of the Kremlin’s international reserves and foreign trade transactions. The Russian minister added that the US is attempting to isolate Moscow from the international community. 

US Treasury Secretary Janet Yellen stated last week that the US will not participate in any G20 meetings in which Russia is present, citing the Ukraine wa as the reason. Brazilian Foreign Minister Carlos Franca has previously stated that Brazil opposes the expulsion of Russia from the G20 group. Franca further explained that, “The most important thing at this time is to have all international forums, the G20, WTO, FAO, functioning fully, and for that all countries need to be present, including Russia”.

As reports of Russian war crimes make headlines and the economic consequences of the Ukraine War begin to pile up, more countries appear to be standing against the Kremlin’s involvement in international affairs. The US is the main proponent for Russia’s expulsion, however this could partly be due to the personal benefit the White House would receive from the removal of Moscow’s influence from global politics and economics. Russia’s actions in Ukraine warrant severe consequences and Moscow’s removal from international financial groups could serve as a warning for other countries against initiating offensive military action.

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

Saira Shah
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Saira is a Muslim American with a passion for writing, economics, and justice.  With a background as a UC Berkeley graduate with a bachelors in economics allows her to quantitatively analyze critical developments from around the globe as well as their long term impacts on financial systems and social welfare. She is dedicated to reporting in an investigative, honest and compassionate manner to give voice to those who need it most.

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Could the Covid-19 Pandemic Bring an End to Supply Chain Capitalism?

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The global economy has long depended on supply chains to fuel profits through low prices, fast service, and cross-country inequality. These chains of production have extended across borders and seas to unify the global economy. However if supply chains are meant to lower prices and connect production across the globe, why are we now seeing some of the worst shipping backlogs, product shortages and inflation rates in decades?

Several reports place the blame for these economic shocks on the coronavirus pandemic or war in the East, however the true culprit is the supply chain itself. The White House Council of Economic Advisers released a report on Thursday supporting this view. The report argues that recent shocks have not created supply chain failures rather they have exposed the overall frailty of the current production process. 

In essence, supply chains separate product manufacturing into distinct steps which are then outsourced to the regions that can complete the steps at the lowest price. Outsourcing allows firms to shift work to companies in different countries and thereby lower labor costs. Companies in the chain have their own legal autonomy, however they work together as a whole to lower production costs and maximize profits. In exchange for decreased production costs, the supply chain sacrifices security. Crises in any region of the world can halt the entire chain and cause backlogs which lead to product shortages and inflation. 

The coronavirus pandemic sent ripples through the global supply chain as several companies struggled to manufacture and sell under strict government lockdowns. Factories and docks also suffered from labor shortages brought on by high death tolls, social distancing practices and union strikes demanding better compensation and benefits for working through the pandemic. While these may seem like temporary shocks to the system, they will likely influence future rhetoric concerning global manufacturing and trade. Now that the global economy has experienced extreme supply chain failures, individual countries will likely look for methods that will protect them from such economic vulnerability in the future. Even the United States has warned that frailty in the supply chain will not go away once the pandemic has ended. The world’s largest capitalist economy admitting such a critical flaw in the commodity manufacturing system definitely begs the question, will the Covid-19 pandemic bring an end to the era of global supply chain capitalism?

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

Saira Shah
+ posts

Saira is a Muslim American with a passion for writing, economics, and justice.  With a background as a UC Berkeley graduate with a bachelors in economics allows her to quantitatively analyze critical developments from around the globe as well as their long term impacts on financial systems and social welfare. She is dedicated to reporting in an investigative, honest and compassionate manner to give voice to those who need it most.

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Multinational Gas and Oil Company Shell to Face $5 Billion Writedown of Assets as They Leave Russia

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  • Shell is expected to announce their earnings report on May 5th, and they promise that post-tax impairments will not impact their earnings.
  • Russia’s invasion of Ukraine pushed gas and oil companies out of Moscow causing the opening of the 2022 trading year to be one of the most turbulent ever seen.
  • Fear of what will become of Shell and other gas companies as they exit a major financial support like Russia has left many in doubt.

Despite oil and gas prices skyrocketing during the first quarter of trading activities, Shell is still expected to write down up to $5 billion due to its decision to exit Russia. Shell is expected to announce its earnings report on May 5th, and they promise that post-tax impairments will not impact its earnings. Shell’s initial $3.4 billion write-down was driven up by credit losses in Russia, writedowns of receivables, and other factors. 

Oil prices hit an average of $100 a barrel, the most since 2014. The United Kingdom also hit record numbers for gas prices following Russia’s aggression and the consequential sanctions. 

Shell’s shares have been down nearly 2% since the start of London trading. Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, stated “Despite the eye-watering costs, the share price should continue to stay reasonably resilient given the divestment far outweighs the reputational damage which could be caused had it not pulled out.”

Multi-Billion dollar businesses are now watched as closely as ever before, with the accessibility provided by social media and online news agencies. Reputation and activism are heavily scrutinized, pushing companies to act in the most ‘humanitarian’ ways possible. Economic powerhouses such as gas companies are likely to continue down the most ‘politically correct’ way until profits show otherwise. 

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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Skin-lightening & anti-ageing creams sold online may contain dangerous levels of mercury

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The Zero Mercury Working Group (ZMWG), an international coalition of non-governmental organisations from over 55 countries, working to eliminate mercury exposure, has found extremely high mercury levels in skin-lightening and anti-ageing products sold on platforms including Amazon, Ebay and Flipkart amongst others.

With the legal limit of mercury concentration in the US being 1 part per million (ppm), levels as high as 65,000ppm were detected in about half of the 271 online products that were purchased and tested from 40 e-commerce sites.

Michael Bender, director and co-founder of the Mercury Policy Project and co-coordinator of the ZMWG, said: “We’re not finding 1 ppm – we’re finding products that are hundreds or thousands or tens of thousands of times above [1 ppm]. These levels are astronomical.”

Although this is the third report by the ZMWG to reveal the global availability of skin products containing high and toxic levels of mercury, this most recent analysis is the first to solely focus on the online sale of these products.

“Despite being illegal, our findings show the same high mercury skin lighteners continued to be offered for sale on the internet,” Bender elaborated. “What’s illegal domestically should be illegal online. E-Commerce must be held to the same standards.”

Products tested were mostly manufactured by brands from Pakistan, Thailand, China and Taiwan.

“These hazardous and illegal products pose a serious mercury exposure risk, especially to repeat users and their children,” said Dr. Shahriar Hossein, a member of the ZMWG. “We welcome the opportunity to work collaboratively with the authorities to stop the toxic trade in high mercury skin lightening creams.”

Mercury is classified by the World Health Organization (WHO) as one of the top ten chemicals of major public health concern. This metal element is known to result in lighter skin as it inhibits melanin pigment production. Above safe levels, mercury is highly toxic to humans, particularly to the nervous system. The developing nervous system before birth is especially susceptible to mercury poisoning, and this makes its exposure a hazardous threat to the developing child in pregnancy. Compounds of mercury are also possibly carcinogenic according to the International Agency for Research on Cancer. Mercury poisoning can lead to tremors, memory loss, neuromuscular changes, insomnia and headaches, as well as adverse effects on the kidneys and lungs which can be fatal. Some mercury compounds are also corrosive to the skin, eyes and the digestive system.

Following a lawsuit against Amazon, the California Court of Appeals ruled the company must warn consumers when selling mercury-contaminated products or other toxin-containing products.

Michael Bender noted that the ruling only affects products sold in California and that there is a need for global strategies. He therefore welcomed the Minamata Convention – a recent global treaty to ban the manufacture and trade of cosmetics containing more than 1 ppm of mercury.

“We really need international cooperation,” he said. 137 countries have committed to ‘phase out and limit mercury’ under the treaty, perhaps paving a potential pathway to progress in this specific mission of the ZMWG – ‘to eliminate where feasible, and otherwise minimise, the global supply and trade of mercury.’



All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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Business

First Union Forms at Online Retail Giant Amazon

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  • Multinational tech giant Amazon Inc reached another milestone today when workers at its New York warehouse formed the company’s first ever union.
  • 2,654 workers voted in favor of unionization, and 2,131 opposed the action.
  • Amazon is considering various legal options to challenge the results, priding itself on direct communication between the company and employees, versus negotiating through a bargaining unit.
  • Meanwhile, labor advocates celebrated Friday’s vote, excited for what it may portend for other aspects of operations at Amazon.
  • Amazon Inc is the country’s second largest private employer.

All views expressed in this editorial are solely that of the author, and are not expressed on behalf of The Analyst, its affiliates, or staff.

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