Modern Business in Comparative Perspective - Coursework Example

Modern business in comparative perspective By [Presented to] of QUESTION INTRODUCTION National business systems are often affected and influenced by early and late industrialisation especially while analysing the present and past growth in the business systems. In addition national business systems vary a great deal in different business environments mainly because of the diversified nature and performance of the business. Thus, the concept of early and late industrialisation continues to explain the key differences in the nature and performance of the national business systems from early and late industrialisation point of view and this part of the discussion aims to underpin that in a critical manner by citing relevant examples. Key Differences in the Performance of national business system (Early) This part of the discussion presents an analysis of key differences in the nature and performance of the national business systems from early industrialisation point of view. Early industrialisation defines the introduction of industrial practices happening quite early mainly between the period 17th and 19th century. The United Kingdom was the first country to embrace industrial revolution that was followed by the United States. It needs to be mentioned that early industrialised countries favoured invention and innovation. Innovation being used by the US and UK were creatively used in the textile and automotive industry with adequate support of the financial institutions that started taking shape in the 17th and 18th century. A number of manufacturing industries were set in these countries that marked the growth in the market share along with offering competitive benefits. Key differences in terms of early industrialisation can be in the form of invention and early rise of financial institutions that helped in facilitating the industrial needs in a systematic manner. However, it is important to state that the first industrial revolution started in the 17th century especially in the UK that was based on using invention as the key factor. It was centred on textile, agriculture, and iron and steel. The national business systems of these nations revolved around the mentioned industries. Key Differences in the Performance of national business system (Late) This part of the discussion presents an analysis of key differences in the nature and performance of the national business systems from late industrialisation point of view. In this regard, it is important to analyse the impact of late development theory. Late development theory is marked with the concept of growth influenced by the industrialisations. If the UK laid the foundation for inventions; countries like the Japan, China, and India laid the foundation on innovation and learning with effective use of financial sources and integrated market system. The second industrialisation that happened in Germany and Japan was based on innovation in the field of steel, petroleum, railroads, and electricity. Late development theory also suggested that countries may succeed even though late development has affected them in the past mainly on the notion of innovation and learning paving the way further. The late industrialisation happened in countries like China and India but today the iron and steel industry along with electricity and other industries operating in these countries are competing with the early industries nations like the UK and US in a significant manner. In countries like the US and UK, the concept of capitalist industrialisation prevailed all the time. At the same time, the same thing was missing in the context of China and Germany where capitalists did not retain much of power of the state. It can also be said that late industrialisation offered much of a learning platform to countries like China and Japan in terms of using effective innovation and technologies to deal with the issues faced by early industrialised countries. Conclusion There are many economies and businesses that at one point of time were very successful and suffered a lot in recent years. Early industrialisation offered new source of income along with strengthening the economies but this does not mean that late industrialisation was a curse. In fact it opened new doors of opportunities based on innovation and learning. It can be said that late development theory is just a mirage while countries tend to develop based on the effective utilisation of innovation and technology. QUESTION-2: INTRODUCTION This part of the discussion presents an analysis over the differences in the institutional and organisational characteristics along with analysing the long term performance of national business systems as the result of early or late industrialisations. Institutional and Organisational Characteristics (Early Industrialisation) In terms of the institutional and organisational characteristics especially in early industrialisation period, there has been segregation in terms of early, late, and latest in terms of industrialisation. In the early industrialisation period, only two countries; the US and UK have been involved. The concept of Initial Public Offering in the form of offering shares was started in the US followed by the UK while the role of the government and other institutions was minimal. At the same time the banking industry was in place during the 17th century but the UK banking industry lacked intermediation while the US banking industry had all the ingredients of modern banking system that supported many industries along with introducing the stock markets. The market system in that era was based on mercantilism where the government regulation augmented the state power. In terms of the organisational features, the organisational structure was driven by hierarchies with little focus on research and development. Additionally, there were not many plant and machinery being used in the US and UK. Though, these countries heavily relied on textile industries but the focus was on enhancing the profit rather than maximising the shareholders’ wealth. The education level was low and concepts related to training and development was missing. In the early industrialisation process the Great Britain has distinctive advantage in the manufacturing industry especially in the textile industry while the European countries and the US gained same appeal in later years but there was no institutional setup or support. Institutional and Organisational Characteristics (late Industrialisation) In terms of the institutional and organisational characteristics especially in late industrialisation period, there has been an inclusion of three countries; Germany and Japan in late category and China in the latest category. In terms of the institutional features, there was an introduction of banks and financial institutions in these countries. Industrial policies were derived at the national and international level. Banks in these countries especially in Germany supported the industrialisation process by supporting the small, medium, and large industries. In Japan, there was rapid growth in the 18th and 19th century mainly because of the technological growth and managerial autonomy. In china, export oriented industrialisation helped the country to grow at a rapid pace. In addition, FDI also helped in bringing liquidity in the financial and industrial markets. In terms of the organisational features, there was higher management education, stake holding, higher production, and efficient plant and machinery in the context of Japan and Germany while China faced management weakness, skill gaps, and sectoral variation. Overall, it can be said that late industrialization was mainly supported by the rise of financial institutions and better innovation and technological techniques. In the context of Belgium; the country followed the UK in 1830s in terms of industrialisation and two banks played an important role in financing the industry needs. Germany experienced industrialisation in 1830-50 and investment and credit banks facilitated the funding and investment for industries. Italy experienced industrialisation in 1890s and private industrial credit banks were responsible for it. It can be said that Institutions and organisational characteristics were more on developing new skills while a key governing body shaped the organisational characteristics. Performance of National Business Systems (Early Industrialisation) National business system can be defined as configurations of hierarchy-market relations that later become institutionalized mainly as a successful way of organizing economic activities in wide arrays of different institutional environments. When the US and UK started the process of industrialisation in early 17th and 18th century, not many developed countries were even near to them in terms of the industrialisation. The US gained substantial benefit in exporting textile during the early industrialisation period while the UK followed the steps in later years. At one point of time majority of the silk and textile products were exported only by the US and UK. These were the benefits of early industrialisation. This happened through the financial support being offered by their banks. Performance of National Business Systems (Late Industrialisation) Countries like India, China, and Japan were no were in the picture of industrialisation when the US and UK were having competitive edge in the textile and automotive industry. These countries were under developed that time and industrialisation took place in the 19th century. However, these countries industrialisation process was based on learning from other countries. Late industrialisation in these countries did not affect their economic growth and development. Today Asian countries like India, China, Indonesia, Malaysia, Taiwan, and Thailand along with Latin American countries like Argentina, Brazil, Chile, and Mexico have achieved great manufacturing experiences in the production of silk, cotton, and food items making them a developing and developed nations. The long term performance of national business system is not dependent on early or late industrialisation but on effective learning and outcomes in the long run. Conclusion As per the institutional characteristics; organisational strategies and characteristics need to be altered and changed to gain substantial benefits and advantages. At the same time, late development theory does not account to late development of countries as early industrialised countries like the US and UK faced severe challenges in managing the economy based on the failure of financial institutions while countries like China, Japan, and India continued on the path of growth and development based on effective national business systems and robust network of institutions. It can be said that the early and late industrialisation does not affect the end result of nations in terms of performance. In terms of the present situation, countries with better learning platforms and robust institutional framework embedded with strengthened financial institutions tend to be more successful and growing compared to countries lacking these factors. Read More