(Solution) CIPD 7CO01 Work and working lives in a changing business environment


Question 4

Global economic activity is currently going through a broad-based and sharper-than-projected slowdown with the inflation increasing. However, IMF (2022) argue that this is despite of a projected global growth of 2.7% by year 2023. Nevertheless, OECD (2022) argued that due to the issues in Russia’s war of aggression in Ukraine and linked cost-of-living crisis in majority of the countries, the projected growth is expected to remain low in 2023 to 2024. In the developing economies, Myovella et al. (2020) argue that the society end up becoming highly prosperous. This is in their social and quality of life increasing with their economic development. The economic growth and development is influenced by the demand of improving the overall efficiencies, options, quality and management of the prices. The role of the government entail freeing up the different markets inclusive of the public services for international competition. The outcome of this is development of the monetary and fiscal policies with the capital expenditure and markets in terms of infrastructure, human capital, effective stock and bond market. This is supported by Adil et al. (2021) which evaluates Keynesian and Monetarist theory of monetary policy identifying control of supply of money flowing into the economy. This is while allowing it to fix themselves. This is with Keynesian economists believing that a troubled economy progress in a downward spiral unless a situation the intervention drives consumers in buying more goods and services.

For the purpose of identifying the consequences for a business and management of people, the following trends and factors would need to be put into consideration. These include;

Affluence and inequality (social and economic)- inclusive of polarised workforces– In Aiyar and Ebeke (2020) research by application of Kuznet Curve theory, the impact of affluence and inequality is put into consideration. The basic assumption of this curve is that there is a U-Shaped relationship of inequality and growth. This is with inequality increasing and eventually decreasing the process of economic development. The impact is even evident from what Barros et al. (2021) identify Barro’s Analysis model as reflecting on influencing the scope of per capital incomes but equally on the impact of new technology. For example, technology innovation as part of the economic growth would lead to increased inequality at first when less individuals would be sharing high-level incomes of the advanced sector. For businesses, the impact of this trend would include increased market opportunities
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