IMF Problem Solving.

According to Polak and Boughton (2016), IMF is a global firm whose headquarter is at Washington D.C. The organization comprises of 189 nations working to raise international monetary cooperation, promote employment, facilitate global trade, enhance economic development, and secure financial stability and reducing poverty around the globe. The study shows that IMF got formed in the year 1944 (Horsefield & De Vries, 1969). However, it came it existence in the year 1945 formally with about 29 member states. The initial responsibility of IMF was to restructure the system of international payment. However today, the role of the International Monetary Fund is to manage global financial crises and difficulties in the balance of payments around the world. 

The member countries always contribute through a quota system to a pool so that the nations that are undergoing difficulties regarding the balance of payments can borrow. Polak and Boughton (2016) connote that in the year 2016, the firm had about $ 666 billion. According to the study, the company has been successful in offering financial assistance to nations experiencing fiscal deficit so that they can be able to attain temporary disequilibrium in their balance of payment (Polak & Boughton, 2016). This paper aims in discussing the appropriate steps for problem-solving in an organization. 

However, apart from being successful, the organization have experienced some failures that cannot get ignored. The primary challenge is that the organization have failed to use the fund in addressing the central concern. Vreeland (2006) shows that the IMF fund imposes conditions to developing nations while approving loans. However, on many occasions, it has neglected balance of payment difficulties and exchange rate management which is the central concern. The Vreeland (2006) claims that IMF has recently focused on campaigning for market principle issue. The principle states that the developing states should reduce expenditure-borrowing-subsidy, privatize enterprises owned by the government, increases prices of the enterprises owned by the state. This policy is likely to lead to the third world debt crisis.

Nevertheless, the organization has failed to solve the problem, because its leaders have been unable to recognize the primary issue. The reason the world is likely to experience their world debt is that of the policies introduced by the International Monetary Fund. According to Elliot (2016), when a company recognizes that there is a problem always enhances progress. Despite IMF verifying the presence of this challenge, they failed to identify the primary cause of this specific problem. Instead, the company had a view that the gap between the poor and the rich is what was holding the world economy back (Elliot, 2016). Thus, they decided to twist growth, to ensure that every country had its growth skewed towards forty percent. Given that the management of the organization had already skipped the first three steps, it could not have succeeded in solving the problem. The first step is to identify the problem, search for alternatives and then weigh the other options. However, the company ended up choosing without complying with the levels of problem-solving. 

As a leader, one would need to adhere to the six steps of problem-solving to come up with an appropriate decision. For instance, in this case, the IMF management required to first identify the problem (Thornton & Dumke, 2005). They needed not to assume they know what exactly the problem was. Instead, they could have checked out the actual issue. The firm should have checked on what could have caused the rise in the third world debts crisis by emphasizing on the symptoms. To come up with an appropriate answer, the leader of the IMF should have considered what he or she and others have seen, what he or she got involved when the problem was happening, the information needed and the strategies that the company has tried to help in solving the challenge. 

The second step is to seek alternatives. As a leader of the IMF organization, one needs to be able to recognize the feasible options (Thornton & Dumke, 2005). One should involve the management and a staff representative to brainstorm so that they can identify an appropriate choice. Third, is to weigh the other options. After generating the ideas through brainstorming, a leader would need to examine all the opinion to determine which one would appropriate in solving the present concern. Some of the elements that a leader would consider in this case are the effects of the solution to the organization, cost, and impact on public relations. 

The fourth step is to make a choice. In controlling the situation, a leader should be able to make an appropriate decision based on the existing alternatives (Thornton & Dumke, 2005). Thus, the leader of the IMF should consider the other options suggested by the team during brainstorming that would help in preventing the third world debt crisis from happening. After making a choice, then the leader needed to implement the decision. The leader should have informed all the member countries of IMF organization regarding the new changes.

Given that the policies were the primary problem, thus, the leader should consider informing the member states and the management on the new changes in the policies of the firm. The final stage is to evaluate the outcome (Thornton & Dumke, 2005). After changing the procedures, a leader needed to examine the results. The findings would help in providing guidance on the process of decision making, the suitability, and the implementation process. The advice could help the IMF organization in case a similar issue rises within its operations. 

In summary, the above premises shows that International Monetary Fund organization is a firm whose responsibility is to help in solving the balance of payment difficulties and exchange rate. The text indicates that the company has succeeded in providing financial assistance to countries experiencing fiscal deficits so that they can maintain their balance of payment. Despite this success, the above arguments show that the company has failed in attaining its objectives, which is likely to cause a third world debt crisis due to its policies. Even though IMF management have tried to solve the problem, they have failed because they did not follow the required steps. The text indicates that the company chose to solve the problem without identifying what the issue, alternatives was and it also did not weigh these alternatives. Thus, it is advisable that a leader should ensure that the organization follows all the steps to solve the existing problem. Therefore, IMF leaders should consider following the six steps mentioned above, so that they could be able to solve problems that may arise within the organization. 

References

Elliot, L. (2016). The World Bank and IMF won’t admit their policies are the problem. The Guardian.

Horsefield, J. K., & De Vries, M. G. (Eds.). (1969). The International Monetary Fund, 1945- 1965: Twenty years of international monetary cooperation (Vol. 1). International Monetary Fund.

Polak, J. J., & Boughton, J. M. (2016). The World Bank and the International Monetary Fund: A Changing Relationship. In Economic Theory and Financial Policy (pp. 92- 146). Routledge.

Thornton, W. J., & Dumke, H. A. (2005). Age differences in everyday problem-solving and decision-making effectiveness: A meta-analytic review. Psychology and aging, 20(1), 85.

Vreeland, J. R. (2006). The International Monetary Fund (IMF): politics of conditional lending. Routledge.