Comparative Business Systems - Essay Example

German’s economic condition entails a service sector, which offers a contribution of 70% of GDP and industry sector that offers 29.1% contribution, while the agricultural sector offers 0.9% (Mundi, 2010, 3). Brazil’s Gross Domestic Product has grown from 7.5% in 2010 to 2.7% 2011, and despite to the global hold back, the domestic market in Brazil have become strong, hence reducing vulnerability to the external crisis (The World Bank Group, 2012, 1). Conversely, Germany attracts foreign investors by providing an open market without restrictions to operate any business (Pugh and Hickson, 2007, 20).

Therefore, the citizens of Germany and Brazil are benefiting from the stability of their economic growth, with relatively low inflation rate and improved social well-being (Chandler, 1984, 473). This paper will focus on comparing the business systems in Brazil and Germany. On the other hand, in Brazil there are limits of potential growth and significant advances in the economy, which are attributed to institutional reforms, noninflationary growth that is derailed by barriers, regulation and insufficiency in infrastructure and poor business climate (Jimenez, Gomez Sabaini and Podesta, 2010, 38).

However, the condition is better in Germany, since the government has established necessary reforms to improve their economic conditions (Hall and Soskice, 2001, 36). Quality of Brazilian government services concerning the expenditure is relatively lower than other middle-income countries, and country launched a growth acceleration plan in 2007, which focused on increasing investment in infrastructure, and offering tax incentives to facilitate economic growth (Whitley, 2007, 30). In Germany, people are taxed on their income, especially individual residents; in fact, income tax rate have a range of 15% to 45% during the year 2010.

Furthermore, Germany presented an initial general tax-free amount of 8,004 Euros during the year 2010 and 16,008 Euros for people, who are not married; thus, Germany has subjected corporation to 15% corporate income tax and a solidarity surcharge of 5.5% and it results to an entire rate of 15.8% (Mundi, 2010, 5). In Brazil, the plan led to a 7.5 % growth in 2010, and resilience to the crisis experienced in 2009, and insignificant recession among developed and emerging economies in 2011 (OECD, 2011, 4).

Role of the National State in the Economy German’s economic condition has contributed significantly to production based on engineering; for instance, there is production of automobiles, machinery, metals and chemical products. Moreover, Germany has been renowned manufactures of wind turbines and solar power technologies (Mundi, 2010, 7). In fact, this country offers the largest international trade fairs every year; in fact, this congress has been held severally in cities such as Hanover, Frankfurt, and Berlin.

On the other hand, the growth in Brazil has facilitated challenges, whereby the country is anticipating hosting the World Cup in 2014 and Olympics Games, in 2016, hence this is requiring significant investment in urban and social development, and transport infrastructure. Moreover, Brazil has experienced substantial regional differences in the social indicators like health, infant mortality and nutrition (Morgan, Campbell, Crouch, Pedersen and