...COHORT GLOBAL ECONOMICS FOR MANAGERS Wade C. Roberts, Ph.D. Peng Chapter 2 Understanding Formal Institutions: Politics, Laws, and Economics Wade C. Roberts, Ph.D. Education: Economics Doctorate, University of Utah Expert Fields: Development, Labor, Public, Health, Gender, Forensic Economics Current Research: Microfinance, Poverty & Socioeconomics in Cambodia “The Success and failure of firms around the globe are determined by firms’ ability to understand and take advantage of the different rules of the game”. Understanding Institutions… • What is an institution? • “The humanly devised constraints that structure human interaction” • Douglass North (Nobel Laureate) Understanding Institutions… • Institutional Framework • Formal and informal institutions governing individual/firm behavior. • Supported by three pillars: • Regulatory • Normative • Cognitive Understanding Institutions… • Regulatory Pillar (formal) • Coercive power of governments • Laws, regulations, rules • Normative Pillar (informal) • The values, beliefs and actions of a group (emotions) • Cognitive Pillar (informal) • Internalized values and beliefs that guide behavior • Culture & Ethics (logic) • How do these pillars shape behavior? Understanding Institutions… • What is the KEY ROLE of an institution? • Reduce Uncertainty! • Institutions constrain the range of acceptable actions. • Uncertainty surrounding economic transactions can...
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...Socialism Vs. Capitalism & Everything In-Between. We have all grown up seeing that we live in a world that divides our planet into territories. These territories are bordered by imaginary lines that divide us from them. The borders in which we live play a major role in developing each of our identities, our customs or traditions, the way we conduct ourselves in business and personal endeavors. Some of us have grown up with an expectation of freedom to choose, while others depend on their government to act in their best interest. Depending on what country you call home, you either participant in a free market economy, a controlled economy, or a mixture of both. In this report we are going to look at what creates each type of economy and where we can find examples of each within the world. First we are going to analysis the characteristic of a Free Market Economy. In a free market, the government’s role is to “make sure that the market is stable enough to, properly, conduct business” (Freidman). In purity, the system hopes to “eliminate subsidies for industries, the pre determination of prices, and the amount of regulation controlling certain industry sectors”(Freidman). The implementation of a free market introduced individual property rights, which allows citizens to voluntarily exchange property/resources at a price arranged solely by the mutual consent of the buyer and seller. The seller is free to choose if the price being offered is worth their property; without threat...
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...CAPITALISM VS. COMMUNISM Capitalism and communism are very different in their political and economic views. The two are economic systems that attempt to solve the social and economic problems faced by many people. They are the two most compared and contrasted of all economic systems, and are compared on many different levels. There are many social problems faced by people in many different countries around the globe some of these are poverty, crime, unemployment, war, and low education. The problem of meeting the needs of the people requires an economic system that can solve these social problems. Finding which one works the best can be an issue. A communist country would be controlled by the government, which is a command economy. A capitalist country would be controlled by the people, who elect representatives. Communism was first written about by Karl Marx and Frederick Engles. A communism, states that all people, regardless of race, gender, or occupation deserves the same rights and social placement. The community owns the resources and production of the country or area. It is said that in communist countries the profit of an enterprise is equally shared by all people, and that all means of production are controlled by the society. The society comes before any individuals in this type of economy, so individual freedoms are not focused on. Since communism is completely run by the government, the government decides the prices on all goods and the price structure of the...
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...Business Individual Assignment Country | Economic Freedom Ranking | Economic Freedom Score | Property Rights Score | Freedom From Corruption Score | GDP per capita (PPP) | Switzerland | 4 | 81.6 | 90.0 | 88.1 | $45,418 | New Zealand | 5 | 81.2 | 95.0 | 94.0 | $29,730 | Estonia | 11 | 75.9 | 90.0 | 64.2 | $21,713 | Eritrea | Last | 38.5 | 10.0 | 22.9 | $777 | Venezuela | 175 | 36.3 | 5.0 | 16.5 | $13,616 | 1. 2. Country | Economic System | Switzerland | Market | New Zealand | Market | Estonia | Market | Eritrea | Command | Venezuela | Communist | The free market economic system is bashed at home and abroad for greed, oppressing the poor, etc. Yet it is in the world’s countries that lack this free market economic system where the poor are the poorest and greatly oppressed and to which the world businesses are wary of investing. Read the following: http://www.forfreedomssake.com/blog/2009/03/economic-freedom-is-a-necessary-but-not-sufficient-condition-for-political-freedom-a-note-from-my-capitalism-socialism-democracy-course/ http://ashbrook.org/publications/onprin-v1n3-thompson/ http://www.forbes.com/sites/deanzarras/2011/07/24/idealistic-capitalism-vs-idealistic-socialism/3/ Based on the assignment materials, write a one to two page essay that explains why socialism is not moral and why there is so much corruption and poverty in countries that lack a free market system? A pure opinion piece not based on the assigned...
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...Most notably, while communism is a political system, socialism is primarily an economic system that can exist in various forms under a wide range of political systems. Comparison chart | |Communism |Socialism | |Philosophy |From each according to his ability, to each according to |From each according to his ability, to each according to| | |his needs. Free-access to the articles of consumption is |his contribution. Emphasis on profit being distributed | | |made possible by advances in technology that allow for |among the society or workforce to complement individual | | |super-abundance. |wages/salaries. | |Economic System |The means of production are held in common, negating the |The means of production are owned by public enterprises | | |concept of ownership in capital goods. Production is |or cooperatives, and individuals are compensated based | | |organized to provide for human needs directly without any |on the principle of individual contribution. Production | | |use for money. Communism is predicated upon a condition of|may variously be coordinated through either economic | |...
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...law, environmental standard, tax codes, terrorism and others. 3. Transfer risk in which government interferes with a firms ability to shift funds into and out of the country. Economic Environment and International Business Economic System is the way a society decides to use and distribute its resources. 1. Who can own property in this system? 2. Who controls and distributes the resources in this system? 2 10/27/2015 Types of Economic Systems 1. Market Economy In pure market economy, all productive activities are privately owned , as opposed to being owned by the state. Price and production are determined by the interaction of demand and supply. 2. Command Economy or Planned Economy In pure command economy, all productive activities are state owned , as opposed to being owned by the individual. In pure command economy, the government plans the goods and services that a country produces, the quantity, and prices at which they are sold. 3. Mixed Economy Capitalism/Free Enterprise/Free Market Private Ownership Profit Motive Competition 3 10/27/2015 Legal Environment and International Business Legal Environment A legal system is the mechanism for creating, interpreting and enforcing the law in a specific jurisdiction. Country’s legal system affects business by - regulating how companies conduct business transactions, -specifying the rights and obligations of...
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...Chapter 2 1. Political Economy: The political, economic and legal system of a country 2. Political system: he system of government in a nation 3. Political systems can be assessed according to two dimensions. The first is the degree to which they emphasize collectivism as opposed to individualism. The second is the degree to which they are democratic or totalitarian. (collectivismtotalitarian; individualismdemocratic) 4. Collectivism: Collectivism refers to a political system that stresses the primacy of collective goals over individual goals. (socialism, communism, social democracy) 1. Socialist: Someone who believes in public ownership of the means of production for the common good of society. 2. Communist: The communists believed that socialism could be achieved only through violent revolution and totalitarian dictatorship. (eg: china, cuba, north korea) 3. Social democrats: committed themselves to achieving socialism by democratic means, turning their backs on violent revolution and dictatorship. 5. Individualism: individualism refers to a philosophy that an individual should have freedom in his or her economic and political pursuits.(freedom of expressions, economic self-interest) 6. Democracy vs Totalitarianism (communist, theocratic, tribal, right-wing) 1. Democracy: Political system in which government is by the people, exercised either directly or through elected representatives. 2. Totalitarianism: Form of government in which one person...
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...Leadership is both a research area and a practical skill, regarding the ability of an individual or organization to "lead" or guide other individuals, teams, or entire organizations. Controversial viewpoints are present in the literature, among Eastern and Western approaches to leadership, and also within the West, on US vs. European approaches. In US academic environments leadership is defined as "a process of social influence in which a person can enlist the aid and support of others in the accomplishment of a common task".[1][2] Leadership seen from a European and non-academic perspective encompasses a view of a leader who can be moved both by communitarian goals but also by the search for personal power. As the European researcher Daniele Trevisani states: Different types of leadership styles exist in work environments. Advantages and disadvantages exist within each leadership style. The culture and goals of an organization determine which leadership style fits the firm best. Some companies offer several leadership styles within the organization, dependent upon the necessary tasks to complete and departmental needs. Laissez-Faire A laissez-faire leader lacks direct supervision of employees and fails to provide regular feedback to those under his supervision. Highly experienced and trained employees requiring little supervision fall under the laissez-faire leadership style. However, not all employees possess those characteristics. This leadership style hinders the production...
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...Intro to Economic Concepts Definition of Scarcity A situation in which human wants are greater than the capacity of available resources to provide those wants. 3 Parts: 1. People want it 2. There is a limited amount of it 3. It has more than one productive use Scarcity Scarcity vs. Abundance – people see many signs of abundance (e.g. cell phones, iPods) and also see resources wasted daily (e.g. water and food). However, as long as resources are limited and people’s wants are unlimited, scarcity (in the economic sense) will exist. Scarcity In economic reasoning, scarcity is a relative concept, not an absolute one. Scarcity does not mean “not plentiful.” In economics, something is scarce when it has more than one valuable use. = & Opportunity Cost Opportunity cost is what you give up to obtain something else, the second-best alternative. However, what you must give up is not money – it is whatever good or service you would have spent the money on as your next favorite choice. Goods v. Services Good – something that is tangible; it can be seen and felt. It requires scarce resources to produce and it satisfies human wants Goods v. Services Service – something that is intangible; yet it too requires scarce resources to produce and satisfies human wants Is it a good or service? Productive Resources L – land (and stuff from land) L – labor (physical and mental) C – capital (human-made...
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...What are Business Ethics? Meaning Ethics is a branch of social science. It deals with moral principles and social values. It helps us to classify, what is good and what is bad? It tells us to do good things and avoid doing bad things. So, ethics separate, good and bad, right and wrong, fair and unfair, moral and immoral and proper and improper human action. In short, ethics means a code of conduct. So, the businessmen must give a regular supply of good quality goods and services at reasonable prices to their consumers. They must avoid indulging in unfair trade practices like adulteration, promoting misleading advertisements, cheating in weights and measures, black marketing, etc. They must give fair wages and provide good working conditions to their workers. They must not exploit the workers. They must encourage competition in the market. They must protect the interest of small businessmen. They must avoid unfair competition. They must avoid monopolies. They must pay all their taxes regularly to the government. In short, business ethics means to conduct business with a human touch in order to give welfare to the society. Need or Importance of Business Ethics Stop business malpractices : Some unscrupulous businessmen do business malpractices by indulging in unfair trade practices like black-marketing, artificial high pricing, adulteration, cheating in weights and measures, selling of duplicate and harmful products, hoarding, etc. These business malpractices are harmful to...
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...Capitalism is an economic system based on the private ownership of the means of production, with the goal of making a profit.[1][2][3] Central elements of capitalism include capital accumulation, competitive markets, and a price system.[4] There are, however, multiple variants of capitalism, including laissez-faire, welfare capitalism, and state capitalism. Capitalism is considered to have been applied in a variety of historical cases, varying in time, geography, politics, and culture. Discussing the impact of capitalism on culture can be difficult. In what way is “capitalism” responsible for a given aspect of culture, indeed can any aspect of culture be said to be a product of “capitalism”? Yes, certain aspects of culture and society can be said to be a product of “capitalism”, but defining how and why something is said to be a product of capitalism is very important. Some of the key concepts relating to an analysis of the effects of capitalism on culture are profit motive, commodity, human desire, and the market economy. The capitalist system is based on private ownership and consolidation of the means of production, where the production of commodities is guided by profit motive to satisfy human desires Definition: Materialism is the importance placed on material possessions. Someone with a high level of materialism, described as "materialistic," considers material possessions to be central to their life and their identity, and focuses a good deal of their energy on acquiring...
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...1a) Descriptions of governments can be based on: Economy - what provides the goods and services that are bought, sold, and used? Capitalism-(Russia)--In a capitalist or free-market economy, people own their own businesses and property and must buy services for private use, such as healthcare Socialism (Norway)-- Socialist governments own many of the larger industries and provide education, health and welfare services while allowing citizens some economic choices Communism (Cuba)-- In a communist country, the government owns all businesses and farms and provides its people's healthcare, education and welfare. Politics - how is the government run? Dictatorship (Iraq)-- Rule by a single leader who has not been elected and may use force to keep control. In a military dictatorship, the army is in control. Usually, there is little or no attention to public opinion or individual rights. Totalitarian (China)-- Rule by a single political party. People are forced to do what the government tells them and may also be prevented from leaving the country. Theocracy (Iran)-- A form of government where the rulers claim to be ruling on behalf of a set of religious ideas, or as direct agents of a deity. Monarchy (Jordan)-- A monarchy has a king or queen, who sometimes has absolute power. Power is passed along through the family Parliamentary (Israel)-- A parliamentary system is led by representatives of the people. Each is chosen as a member of a political party and remains in power...
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...Chapter One Canadian Constitution * THE MOST IMPORTANT DOCUMENT IN CANADA!!!!!!!!!!! * Has the roles of ALL levels of the government and describes how they work together * Governor General * Executive * Legislative * Judicial * Also has things like ooooh, the Charter of Rights and Freedoms British Monarch * The governor general is the Queen’s representative here in Canada * They are the formal head of state * So no real power… * Considered part of the executive and legislative branch The Executive Branch * Prime Minister and the Cabinet are part of the executive * To become PM, you have to lead a political party and win the most seats in the HofC * The cabinet is chosen by the PM and they come from his political party * Makes most laws and goes through the process to enact them * Basically runs the government through the days * Cabinet ministers are given portfolios that they are responsible for * They research issues and help to propose laws from their portfolio * Ex. Agriculture, justice, foreign affairs are types of portfolios * Each cabinet runs their own affairs which is the day to day activity of the government. * Each cabinet minister has their own staff to help them Political Parties * Whoever has the most seats leads the government * Candidates run for election, party with most votes form government * Are considered organizations...
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...National Differences in Political Economy Learning objectives • Understand how the political systems of countries differ. • Understand how the economic systems of countries differ. • Understand how the legal systems of countries differ. • Be able to explain what determines the level of economic development of a nation. • Discuss the macro-political and economic changes taking place worldwide. • Describe how transition economies are moving towards market based systems. • Articulate the implications for management practice of national differences in political economy. This chapter discusses differences in national political, economic, and legal systems, highlighting the ways in which managers in global settings need to be sensitive to these differences. Political differences are described along two dimensions: collectivist vs. individualist and democratic vs. totalitarian. Economic systems are explored in terms of market characteristics: market economies, command economies, and mixed economies. Legal systems are discussed in terms of the protections they offer for business: intellectual property, product safety, liability and contracts. The opening case explores the political and economic situation in Venezuela since Hugo Chavez was elected president in 1998. The closing case describes the challenges facing Indonesia, a vast country populated mainly by Muslims that stretches over 17,000 islands. Indonesia...
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...9/22/14 Social Transformation Social Change Hunter Gatherers Symbiosis with “nature” Horticultural: Domesticated plants Pastoral: Domesticated animals H+B= Agricultural Revolution Specialized labor Empire E= Industrial Revolution • Mechanical labor • Surplus goods Present: Post • Information/Economy • Specialized Knowledge Bio-Tech Society • Changing human biology/genome 9/24/14 Social Construction of Reality Thomas Theorem- Definition of the situation Perception are reality: People can occupy the same social space but perceive a different reality Background Assumptions Stereotypes: Cultural assumptions Ethnomethodology Emotional disrupting creativity Dramaturgy Goffman- Life is a con game Impression Management One person’s attempt to control the perceptions of others Front- Social acting Backstage- Preparing Proxemics-Personal Space Proxemic Bubble 4 Rings Intimate Space Personal Zone Social Space Public 9/26/14 Social Groups Two or more people Share like activities and common goals Possesses the spirit of “WE” In-Group (US): Group to which you are a member Out-Group (THEM): People outside or opposed/in competition with your group Typology of Groups Primary (Close Association) Intimate Long-lasting Expressive- emotional connection Secondary (Loose Association) Super revival Short-Duration Instrumental-...
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