Business Policy in different economic systems

7/28/2019 Business Policy in different economic systems

1/45

University of Madras

Chennai, Tamilnadu, India

Skylark College

Kathmandu, Nepal


2/45


3/45


4/45


5/45


6/45


7/45


8/45


9/45


10/45


11/45


12/45


13/45


14/45


15/45

aaaaaaaaaaaaaaaa


16/45


17/45

In years 10001820 world economy grew six-fold, in years18201998 world economy grew 50-fold

Provides Choice to customers Provides valuable goods and services Capitalism actively rewards positive traits like hard work Similarly, it punishes negative traits such as laziness and theft Narrows the gap between common person and wealthy

Provides opportunity to realize dreams and desires Capitalist societies usually do not have large black markets Build on democracy Social Good


18/45

Downfall of work ethics Free Market + Self Interest Accumulation of wealth Encourages inequality in a society Business lobbying with government Monopolistic tendency Human resource exploitation Results in great disparities between income of

people owning the capital resources and others


19/45


20/45


21/45


22/45


23/45


24/45


25/45


26/45


27/45


28/45


29/45


30/45


31/45


32/45


33/45


34/45


35/45


36/45

BASIS OF

DIFFERENCE

CAPITALIST ECONOMY SOCIALIST ECONOMY

Resources Ownership Privately owned State owned

Foundation belief competition brings out the best inpeople

cooperation is the best wayfor people to coexist

Earning of wealth everyone works for his own wealth everyone works for wealthwhich is distributed equally to

everyoneMarket Scenario Level playing field Protection to PSUs, Private

enterprises are permitted infew businesses only

Govt. interference Only in situations where laws havebeen broken

Fully involved

Employees motivation Highly motivated on account ofproportional benefits Rarely motivated asperformance is not rewarded

Merit Perception of better economicgrowth because of competition

Equal distribution of incomeresults in welfare of all

Demerit Few individuals/groups attainpowers, rest are exploited

Hard work is not rewarded,lazy employees also enjoyequal level of benefits


37/45

MIXED ECONOMY is an economy that includes a variety of privateand public control, reflecting characteristics of both capitalism andsocialism.

All so called capitalist countries are in fact mixed economies.

The USA is a good example of this since it has always beenconsidered capitalist but in fact has been a mixed economy since atleast Frederick Roosevelts time. Why?... Well it has had big govt.public ownership of education, security, public funding of the privatesector, etc.

China is another good example of mixed economy as it is often

considered either communist or capitalist. But like USA, China is alsoa mixed economy.

It is also necessary to know that capitalism and socialism havecollapsed and failed in the first and second worlds and only exist inthird world countries.


38/45


39/45


40/45


41/45


42/45


43/45


44/45


45/45

Business Policy in different economic systems

Documents

Transcript of Business Policy in different economic systems