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In this year's exercise, terrorists sprayed unseen germs over Chicago airports, infecting thousands with a lethal pneumonia. She also notes that 23 percent of corporate respondents had a risk management plan to deal with potential disruptions created by SARS but only 4 percent had made this plan known to their staff. Benefits of a fast response can be seen in the fast reaction of the Canadian health authorities dealing with SARS preventing the outbreak from reaching unmanageable numbers.

The Toronto SARS experience is a warning that even a giant thriving city can be laid low by a nasty and highly contagious disease Vogel, Since emerging markets are increasingly important to the world economy and are at the same time susceptible to outbreaks of infectious diseases, we need to understand how we are linked together on an interdependent global level.

That interdependency is highlighted in the following section. National economies are merging into an interdependent global economic system and, consequently, the rich industrial countries are dominating the world economy relatively less than they used to. The developed world, however, currently represents more than 60 percent of total world output, while the developing nations represent less than 40 percent.

This proportion is poised to change in the near future though, with conservative projections indicating that by the situation could be reversed, with the developing world representing well over 60 percent of total world output Belous et al. The 25 developing countries that have been the frontrunners in economic advancement have been designated as emerging economies by The Economist. This classification is based on both the gross domestic product of each nation and the capitalization of their stock markets.

These 25 countries have historically played an unparalleled role in the global economy — a role that is well positioned to steadily expand in international importance. The emerging economies are home to approximately 75 percent of the world's population and the population growth rates of these economies are the highest of all countries. The five largest developing nations, home to 2. The populations of China and India alone, 1. Many of the world's developed countries now have birth rates below those that are required to maintain their present population levels.

Furthermore, individuals in the developed world are living progressively longer and leaving the work force earlier. With fewer workers generating output, and with more of the population dependent on those who do, income growth, savings levels, and economic growth will all be lower.

In contrast, the populations of emerging countries are comparatively young. The size of the consumer markets in the emerging countries now rivals those of the developed markets in many cases. According to the International Monetary Fund IMF , developing countries will achieve a growth rate of more than 6 percent per year over the next two decades, whereas industrialized countries are likely to average 2.

Given these trends, multinational corporations MNCs face profound changes in the economic landscape. Over the next 10 to 15 years, most of the total world growth in consumption of consumer goods will likely be concentrated within the emerging economies.

The emerging markets have also become major suppliers of many of the natural resources that the industrialized world relies on. For example, Mexico, Venezuela, and Indonesia, in addition to several Middle Eastern countries, are major sources of oil — still the most vital energy source for developed countries. Similarly, Brazil, Russia, and China, along with developing countries Papua New Guinea and Jamaica, supply half of the world's bauxite aluminum ore Day, , p.

Looking to the future, the supplier role of the emerging countries will expand since the exploitation of natural resources in many of the wealthy countries has reached its limit. Either the oil fields, mines, or forests have been tapped out, or environmental regulations reduce new exploration and development.

Industrialized nations are therefore becoming increasingly dependent on emerging markets to ensure that sufficient levels of natural resources are available. Overall, development in the emerging markets has been steady, but none of these countries have been fortunate enough to avoid certain growing pains along the way. One historical trend of many emerging markets is the inability of their currencies to hold value.

Rather than attack the principal causes of currency depreciation, many governments opt instead for a short term, cosmetic solution. In , for example, Mexico initiated the new peso that was worth 1, old pesos. These superficial actions diminish investor confidence. Additionally, widespread corruption exists in virtually all emerging markets, with Hong Kong and Singapore being the most notable exceptions.

Many politicians view a government career as similar to a private sector job, with one primary goal in mind: making money. Since public sector jobs, as compared to a private sector position, have low salaries and no stock options, the difference is often made up through bribes and insider deals. Public employees and elected officials accept these prerequisites in exchange for government contracts, licenses, and privileges Hooke, , p. Environmental issues in the emerging world often run unchecked.

Due to their size, their growing industrialization, and the urgency they attach to business expansion and job creation, many emerging markets have barely begun to put in place effective environmental programs. They often lack, or claim to lack, the financing capability to address the environment at this stage of their development, especially in light of competing priorities such as infrastructure.

Accordingly, many private sector and government analysts continue to point to emerging markets as a potential major source of Western economic growth and profit in the coming years Day, , p. Over the past three decades emerging markets have consistently shown growth rates well above those of more mature economies and this trend is expected to continue.

The 25 economies that make up the emerging world will almost undoubtedly have an even greater impact on the overall global economy throughout the foreseeable future. Emerging markets can present tremendous opportunities as well as unforeseen challenges for global organizations. The recent SARS epidemic highlights how a disease centered in countries identified as emerging can create formidable obstacles for managers. The next section provides a brief historical look at the impact of epidemics on communities and organizations.

The inclemency of infectious diseases Despite the advents of modern medical science, infectious diseases such as malaria continue to wreak havoc. More recently, the spread of SARS captured center stage, due as much to the disease's proclivity as to media's desire for the next major headline. Augmented or not, that SARS has been and may continues to be destructive is unequivocal.

Indeed, because most of the inflicted jurisdictions are important developing economies, SARS poses serious implications for businesses around the world. It is important to note, however, that menacing as SARS is, it is but one epidemic in a long series of infectious outbreaks that have plagued human history.

And in spite of its highly vilified image, SARS has caused relatively minor damage compared to past epidemics. So far it is a fleabite compared to previous plagues. A history of plagues is beyond the scope of this paper. However, it is important to offer some background on infectious diseases and their impact on humanity over the centuries. We also wish to point out that, quite aside from SARS, infectious diseases some with much more deadly and rapid effects continue to threaten the world.

Though it is impossible to know with certitude what the disease actually was, it was of such devastation that even vultures refused to touch the corpses of the dead Howard, Fast forward to the s, Black Death swept across Europe. Indeed, within the next 20 years, plagues had killed more than 10 million people worldwide. Lest we thought the plague is a thing of the past, outbreaks of bubonic and pneumonic plagues in killed more than in India King, Recent reports by the Washington Post suggest that rotaviral infections, a virus that causes acute gastroenteritis, are fast becoming an emerging problem in the former Soviet Union.

North America has never been exempt from the devastations of infectious diseases. The advance of European cultures over first people in North America, such as the Mohawks and Algonquin nations, was due to the importing of diseases such as tuberculosis TB that devastated the established cultures killing millions of people.

Yellow fever ravaged Philadelphia in , killing thousands in the then capital of the USA Dalrymple, In and , Spanish influenza killed more than half a million people in the USA alone King, , and many insurance companies saw their profits wiped out and had to reduce dividend payments because of the claims made from the illness Bell, Today, TB is perhaps one of the most lethal infectious diseases. A disease like Ebola, for example, can have mortality rates as high as 90 percent Washington Post, It is informative to note the difference between epidemics and endemic diseases, though with the ease of modern travel and human contacts, the lines are somewhat blurred.

Endemic diseases are those that are localized in certain regions. The disease not only negates current economic growth but also acts as a barrier to future economic growth since investment flows tend to avoid these regions where companies remain concerned about the health of their employees. As business becomes increasingly globalized, companies large and small will encounter infectious diseases of both the epidemic and endemic varieties.

In the latter case, it may well be in business's interest to work with local and global health officials to improve local infrastructures, such as hospitals and health services, not only as a means to generate goodwill and promote good corporate citizenship, but also as a way to help create a more hospitable operational environment. While the disease may be well publicized, its connection with the business community is not often elaborated upon.

In fact, otherwise innocuous actions on the part of businesses have a hand in spreading the disease. Barclay's Bank of Zambia, for example, reported losing more than a quarter of its senior managers to the disease. A mattress company in Zimbabwe hires and trains three people for every position due to attrition by the disease Forstater et al. In a South Africa's Medical Research Council calculated that 40 percent of the deaths of those aged between 15 and 49 in the previous year were due to the AIDS pandemic.

This will create a vexing problem for investors in Europe and North America as their economies peak and they increasingly turn to the Third World for profits. Inexpensive labor is appealing but what if you cannot find employees to complete an order Jeter, ?

The above discussion seeks not to provide a chronological listing of infectious diseases, but to highlight the dangers the world continues to face. Businesses, indeed the world community, cannot afford to be complacent in the efficacy of modern medicine and assume that SARS is an anomaly. Infectious diseases are a fact of life and will continue to impact human society in the future.

It is imperative that businesses develop coherent strategies to deal with such diseases when necessary. The following section will look at specific impacts of the SARS epidemic on commerce and present suggestions for organizations to protect themselves against similar future spread epidemics. In this section a distinction is made between the impact on large and small organizations.

Suggestions for contingency planning in face of epidemics So far we have attempted to provide a comprehensive discussion of how infectious diseases can gravely impact a firm's ability to function smoothly, unless adequate contingency planning is incorporated into its strategic management function and crisis management plan.

In this section, we attempt to provide suggestions to minimize the impact of operating in an emerging market where contagious diseases are a reality. There are several areas that a contingency plan should address, in order to deal with the kind of epidemics that we have recently witnessed. Further work will be needed to more fully develop the precise parameters of these dimensions, but for our purposes, we offer below some of the key areas that we feel a contingency plan should seek to address.

Certainly we recognize that this adds to the cost of doing business, but we suggest that operationally this merely represents an additional variable in modeling the optimal level of inventory necessary. Furthermore, businesses will need to assess whether it is practicable to secure their supplies from more than one source. Diversification, as we know, spreads the risk.

People management When opportunities arise move employees around global locations. These moves can be for short stints. The objective is to share understanding of competitive advantage. This may help upper management in reestablishing their competitive advantage in an alternative location. It is also important that values central to the business be ingrained in the workers to the extent possible.

We posit that companies would be concerned about how its workers are affected by the epidemic in terms of health, safety, and even emotion. As major epidemics such as SARS could not be foreseen, it is imperative that managers take an emergent approach to plowing through the problem. Companies in the many emerging markets where government regulations and transparency are lacking may particularly need to do more than simply adopt the official government line regarding the effects of the epidemic.

Localize management and adopt open communication To the extent possible, businesses should consider hiring local management talents as well as rotating key personnel to multiple locations of operations so as to build a solid base within the company from which local knowledge and expertise can be tapped. It is critical also that this knowledge is not only the exclusive domain of senior management, but that open communication be instituted throughout the company to enable workers at all level to know what is going on and what to expect.

One of the unfortunate results of secrecy is that it often leads to unfounded rumors that only serve to aggravate a dangerous situation. Health policies Corporations need to revisit their health plan to consider the need to establish health policies for suppliers. Businesses need to not only have in place their own health policies related to epidemics, but should determine whether their suppliers have adopted effective health policies to deal with such crises. Discussion and conclusion Regardless of all that we know, we acknowledge the impossibility of predicting future events.

Consequently, companies should not waste time and resources attempting to plan for patterns that are simply unpredictable. In , Congress passed a law giving certain Amish and Mennonite religious orders the right to opt out of Social Security, Medicaid and a host of other government benefits. Nearly every family contributes monthly to a hospital aid fund, while large bills are also paid with free-will offerings. Some Amish carry benefit cards, which identify them as members of a community but do not bear names or photographs, to help hospitals keep track of those discounts.

One factor that helps keep medical bills down is that farm work and other manual labor keep Amish active for most of their lives, making them less susceptible to chronic conditions like diabetes and heart disease that plague the often-sedentary U. Amish children are more susceptible to recessive genetic disorders, the result of a small and largely insular population.

Most mud sales and benefit auctions benefit specific institutions. The one in Gordonville helped pay bills for the volunteer ambulance company. But a series of five held across the state each year help fund the Clinic for Special Children, a world-class pediatric genetics clinic.

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