Monopoly designates a particular distribution of power in and over a particular institution, namely a market. By market we mean a social institution that accomplishes - in the sense of quid-pro-quo exchanges - the passages of products and resources among
| Unit 1: Business Environment | Assignment 2 | | | 5/24/2011 | Investigate the economic, social and global environment in which organisations operate | Introduction In this assignment I will study the different economic systems employed by nations in an effort to overcome the problem of scarcity by making better use of resources such as labour, land and raw materials. I will also examine government involvement in the economy through the use of social and industrial policies and the impact of global economic policy measures on European organisations. Economic Systems An economic system is one nations attempt to meet the demands of society through the production of goods and services. Limited supply results in decisions being made about the allocation of resources among competing claims. A government is tasked with deciding what goods and services are to be produced, how they will be produced and to whom they will be distributed.
Policymakers in the government can respond to the monopoly problem by trying to make industries more competitive, regulating the behavior of monopolies, turning some private monopolies into public enterprises, or do nothing. Price discriminate means the exactly same product could sell to different consumers for different prices, even though the costs of producing for the products are the same. Price discrimination is impossible when product is sold in competitive markets. For a firm to price discriminate, it must have market power. There are three lessons to be learned about price discrimination are price discrimination rational strategy for a profit-maximizing monopolist, price discrimination requires the ability to separate customers according to their willingness to pay, price discrimination can reduce the inefficiency inherent in monopoly.
Perhaps the greatest benefit of offshoring is the cost advantage it produces, which directly affects the company's bottom line. In tight fiscal situations, any savings in operating costs will contribute toward the company's sustenance and growth. Companies in recession segments sustain themselves and grow through innovation. Lower operating costs means they have more money to invest in innovation, resulting in a stabilized domestic workforce. In the service sectors, the cost saving from offshoring enables companies to create new service lines, many of which had been deferred for want of investment.
I was in the socialist group that wanted government control over the issues and we tended to agree with the new dealers group, while the conservative and libertarians sided together. We were thinking that if we give people the money that it would be easier for them to be able to wait out the recession while the conservative group and libertarian group thought that it would be better to give the money to the businesses so they can have something to stimulate their business and then they can be the ones to pay the people. The only problem is whether or not they would share the money or keep it, because we have had problems with monopolies in the country. We ended up changing and rearranging the policies. The second and third resolutions were combined and the fourth one we changed it by having the government regulate instead of take control of labor policies and industries in general.
His concepts of mechanical and organic societies, as well as his fascination with the division of labour and the connections to (social) solidarity and moral, are presented – followed by anomie. Finally, the key ideas of both, Marx and Durkheim, are compared directly. Marx Karl Marx (1818 – 1883) is concerned with the exact development of industrial capitalist society. For him, most social classes or structures in the past have either ended in a revolutionary reconstitution of society at large, or in the common ruin of the contending classes. Therefore, part of his ideology is to minimise the division of labour to an extend which would make it possible to reduce certain negative impacts that industrial capitalism has on the individual.
Privatisation is the selling of public sector assets to the private sector in order to introduce competition and improve market efficiency. One argument for privatisation is that private companies are incentivised by profit by cutting costs and producing more efficiently. If you work for a government run industry, managers do not usually share in any profits. However, in private firms managers will usually receive a share of the profits motivating them to work harder, and as they are interested in making profit they are more likely to cut business costs and aim to be more efficient. Since privatisation, companies such as BT, and British Airways have shown degrees of improved efficiency and higher profitability due to the competitiveness within their respective industries.
Transnational corporations, or TNCs, are corporations that have their headquarters in one country and operate wholly or partially owned subsidiaries in one or more other countries. Some people benefit from the growth of transnational corporations than others. Developed countries benefit as they get cheaper imports from developing countries which benefits the consumers and companies in the developed countries as everyone pays less and companies can compete with others easier. Another benefit is that developed countries lose industry to developing countries, improving the environmental quality in the developed country, reducing CO2 emissions helping to combat climate change. Developing countries also benefit as the population get access to employment and the development of new skills, leading to more money being spent helping the economy to improve infrastructure and services improving the quality of life in the country.
Some of the key assumptions include slight government interference in the economy, consumers are able to make decisions because they are informed about the products they are looking to purchase and the price of the products and banks and laws exist for the sole purpose of easing commerce. The conclusions that can be drawn from the market capitalism model and how the business, government and society relationship are as follows; government regulation needs to be limited, corporate performance is measured in profits and the ethical duty of management is to make sure that the interests of the shareholders are met. In the market capitalism model, each individual has the power to own private property and freely risk these investments. The Dominance model can be described as the model where businesses and the government dominate (or control) the general populace. Within this model, the rich elite are the ones that control businesses at the expense of the average person.
Neoliberalism refers to the concept of restricting government involvement in stimulation of the economy, allowing the ‘invisible hand of the market’ to dominate, believing this will lead to greater economic prosperity and growth. The model stresses the efficiency of private enterprise, liberal trade and free markets and therefore looks to maximise the role of the private sector in leading the economy, rather than the public sector. Of course there is an element of overarching government regulatory control in place however the model is very much capitalism driven. One of the most prominent factors of neoliberalism is the rule of the market. As mentioned previously, Adam Smith, a highly regarded economist, demanded that in order for economic success, the”invisible hand of the market” must be in control, rather than the government.