Business Environment: US vs. UK in Regard to Differences in Political Systems - Essay Example

College: 293489 Business Environment: US vs. UK Political Systems. The US politics happens to be in the framework of a presidential, federal republic in a way that the president who is the head of the state as well as head of the government, the Congress and the Judiciary share federal powers while the federal government of the United States shares sovereignty with the state governments. Election of the federal and the states happens to be in lines of two major political parties: the Republican and the Democrats although it is not laid down like so in the US constitution. The President is the head of the executive arms of the government, which is an independent branch of the legislative arm. Legislative authority is restored in the chambers of congress, the Senate and the House of Representatives. The Judiciary which includes the Supreme Court and the federal courts is vested with the judicial power. Their job includes interpreting the constitution of the US and federal laws and regulations. This comprises of settling disputes between the legislative and the executive branches of the government. The federal government was created by the constitution. The most distinctive feature of the US politics are the Senate powers as the upper house of the legislative branch, large scope of the Supreme Court power and the separation of powers between the executive and the legislature as well as the of two major political parties. The British political system on the other hand takes a different shape. It takes the framework of a constitutional monarchy, where the head of the state is the Monarch, currently Queen Elizabeth II, who is also the nominal source of judicial, executive and the legislative authority in England while the Prime Minister is the government head. The British government is vested with the most executive powers while the legislative power is exercised by both the government and the two parliament chambers which comprises of the House of Commons and the House of Lords. There is independency of the judiciary from the other arms of the government despite some judge being members of the House of the Lords, the highest court of the United Kingdom. Britain is a multi party state since the year 1920 with two biggest political parties; the Conservative Party and the Labour party. Mainly the parliamentary politics have been dictated by coalitions and minority governments. The Prime minister is vested with the powers of appointing the ministers who creates the government and performs as political heads of different government sections. Most of the senior government officials are in the cabinet and are either Members of the Parliament or the House of Lords peers. The executive which is basically the government is supervised by the parliament. It can be forced to resign or asked to dissolve and go for a general election through a successful vote of no confidence by the parliament. Labour Markets There have been some significant changes in the US structure of wages over the last fifteen years. There is much inequality between the divergent trends in the lower-wage tail and the upper-wage tail. Wage inequality in the upper half has indicated some unchecked smooth raise since 1980 while in the bottom half it has shown a rapid growth in the late 1970’s but a slow growth of late. Growth in occupational employment has changed from increasing wages in the earlier years to a structure of more rapid growth for most employment opportunities in the top wage trends. Thus there is much polarization of the labour market in the US with more impacts being felt in the high-wage and low-wage jobs than in the middle level class. Technological changes especially computer advancements have had impact to the non-routine cognitive tasks of the most jobs in the high-wage class. They have become a substitute for most routine jobs in the middle wage jobs and impacted some little effect to non-routine manual jobs that are in the low-wage jobs (Balling 253). The current situation of global crisis has led to much lay off to a level that has never been experienced before in the history of the United States. Some 2,933 employees have been reported to be sent home following the worsening situation.Labour markets talks about work done for financial compensation and includes all the ways in which workers get jobs and the way employers give workers jobs to run their organizations. In the US the labour market includes people above the age of sixteen years, working actively, waiting for recalling from a layoff or searching for a job. By the end of 2006, the labour force in the US was 157 million persons in which the majorities were in full time jobs or part time wage employment. Wages and salaries for several people in the US are paid for the services done by them to the employers. These wages and salaries are influenced by the market forces. The wages changes from one occupation or profession to the other across different geographic zones as per the employee’s education level, training, skills as well as experience. The labour is exchanged in the markets just like goods and services are bought by consumers. For professions where the labor is rare, the higher wages and salaries offered to the workers. In other cases, employee’s demand greatly depends on their ability to make contribution to the organization. Employee creating more products or services for the company will have much more worth than the ones producing few products and services. Employees supply in any organization is affected by effort and time needed to be in that profession as compared to other obligations the workers might be doing. High wages for employees comes with learned skills. Thus the employee’s human capital is based on ones knowledge, skills as well as experience. Training and education adds to workers productivity and human capital but this does not imply that higher level of education automatically guarantees higher salaries for workers. The US labour market has been significantly affected by mass immigration in to the country. Most US workers trace their background to immigrants from other countries. British labour market does not have national laws which regulate overtime hour assignment and compensation rates. Payments depends more on standard wage rates for jobs done per hour, the earnings per every hour which also comprise of overtime and the premiums of overtime in addition to hour lengths for the specific job done by the worker. In accounting for overtime, normal earnings per hour are the same in most companies for particular industrial sector. Companies that pay below-market-level salaries and wages gives below market level premiums for overtime. There has been some significant effect of the immigrant societies to the outcome and performance of the British economy for the last twenty years. The British immigrants’ composition has changed over the years including their social-economic features, industry allocation as well as the outcomes of the labor markets. Most immigrants to British have greatly changed in terms of origin composition hence not much different from the British born citizens. But the white Britons are the ones who mostly success in the labour market and are in the high scale of wage classes. In Britain, height is also associated with wage increase. Increase in height has some increase in wages. There is the association between education and height in many Britons. Most tall guys are known by their desire for getting higher paying jobs since they are perceived to have higher cognitive function that has manifests in attaining bigger educational goals as well as good labor market chances. Educational System United States of America has its education being catered for by the government. It is mandatory to attend school at both primary and secondary school level which are usually referred to as elementary and high school. The schools at this level are ran by set elected school boards with approval of school districts. The state government is responsible for setting the educational standards and tests in their respective states. Starting at age five, the necessary ages for compulsory education changes from state to state with most states demanding a start of age five a and end of age fourteen to eighteen. For compulsory education, pupils are classified according to grades from kindergarten, first grade for the most junior children up to grade twelve, of final year in high school. Post-education education in the US usually referred to as college or university comprises of four years at institution of higher learning. These colleges admit students from high schools with competitiveness depending on the grades attained in high school. For one to get enrolled for an undergraduate degree course, he or she must meet the criteria points required fro these courses. Professional degree courses are not taught at the level of undergraduate but after getting a three years undergraduate schooling or a bachelor’s degree in that respective field. Education in Britain lies in the hands of the government; Secretary of State for children, School and families as well as Secretary of state for innovation, Universities are responsible for the running of the educational system in the country. The Local education Authority is responsible for the day to day management of the schools. Both primary and secondary education is compulsory. Higher education comprises of University and vocational training for mature people. There is also a two years course of university preparation. University education includes four years degree courses. Finance and Corporate Governance The structures of corporate governance are crucial in dictating the behavior of the organization especially in changing the corporation to match with the growing pressure and new inventions as well as growth opportunities. Corporate governance involves processes, policies, rules, customs as well as organizations influencing the running of a corporation through directing, administering and controlling. It also encompasses the relationship between the involved stakeholders. In both the US and the UK, the running of the corporate is almost the same. The shareholders are the main stakeholders. Other major stakeholders include the members, management and the board of directors while laborers, customers, creditors and suppliers form a group of other minor stakeholders. Corporate governance is usually seen as a multi-faceted notion. Its significant theme is ensuring accountability of the organizational running. The Board of directors is the main organ responsible for making major corporate decisions including; endorsing business strategies put forward by the management; giving consent to yearly funding, operation and capital plans designed by the managers; monitoring the process of carrying out the strategy by the company managers and examining shareholders concerns. Structural changes pose significant effects to financial systems on channels of financial governance. Growth of organizational sector has influenced structural changes in corporate governance. Financial landscape is affected by growth and expansion of operations of capital market. There is much relationship between government financial management and corporate financial regulation. This applies mainly to public debts markets and global finance where government debts markets measure the financial and economic situation of the country. Industrial Organizations Both US and UK firms have the same experiences as far as Industrial organization is concerned. Industrial organization is concerned with the interaction between firms’ strategic behavior and market structure. Its study encompasses the competition prototype actual-world frictions such as transaction cost, prices adjusting costs, limited information, barriers of new companies to market entry and some actions of the government. The performance of a company relies on the conduct of the other related organizations which also rely on the structure that determines the market competitiveness. When the production expenses for a technological company falls and out put prices goes up, the industry will have few firms. The structure, performance and model performance of an industrial organization is composed of basic condition which includes; demands, production, demand elasticity and technology substitutes; structure, conduct, performance, and policies of the government. Product Specialization in the International Market. Being industrialized countries, the main exporters of both countries’ products are manufactured goods. Most of these goods are in line with the changing technology. The products’ availability depends on the consumers’ wants and the market forces of demand and supply. The specialization of these companies product is unlimited. They produce goods and services according to the market situations. The unlimited level of specialization has opened chances for more competition amongst the competition producers. There is the impact of preference plans touching trade in products as well as giving liberalization chance to foreign venture. Specialization of products in international trade increases wages for the country which is importing and exporting products. This has also raised the out put of these companies as well as the employment opportunities in both countries. Conclusion Comparative political economy has been the major focus here on analyzing the impacts of an economy regulated regarding the variants of capitalism. It concentrates on the role of economic and political organizations in coordination of several economic growth and structures. The varieties of capitalism framework bring companies into the focus of analysis of capitalism. It is founded on the basis that companies mingle with other organizations via mix of market and non-market interactions. These firms in a particular political economy get a comparative organizational merit regarding their ways for dealing with coordination challenge in five different live spheres including industrial relations, vocational training, corporate governance, inter-firm relationship and workers relationship. Both the US and the UK companies operate under liberal market economies where firms depend mainly on market forces to fight their challenges and coordinate relationship with actors of the economy as well as organizations of their counties. They depict less coordination of relations in the market and less intervention in the country’s economy (Hall 540). Work Cited Balling, M. Corporate Governance: Financial Markets and Global Convergence. London: Kluwer Academic Publishers. 1998. Hall, Peter. Variety of Capitalism: The Institutional Foundation of Comparative Advantage. Oxford: Oxford University Press. 2001. Read More