Managerial Revolution, Corporations Ownership and Transforming in IT-Related Industries - Assignment Example

Name: Tutor: Course: Date: Section one Question 1 Managerial revolution refers to the control of banks and corporations shifting from capitalists to managerial bureaucrats, technocrats, and specialists. The theory is founded on the transformation from ownership by individual capitalists to ownership that involve joint-stock of corporations and the changing role of the organizational and managerial sciences in the capitalist production. The concept of managerial revolution shows the shift in the modern corporation from owner to a manager who has professional skills. This witnessed the decline family capitalism as well as private property in contemporary capitalism. New ruling class of managerial professionals took over state agencies in order to pursue their own interests. The theory was advanced by an economist in America, J. Burnham as he came up with theories to show the shift to new forms of property and the ruling class. Mass production by use of production lines and conveyors was established in the United States of America from 1914 to 1950 and in Japan and Western Europe from 1950 to 1970. This change was occasioned by advancement in engineering-organizational and managerial sciences like decision-making theory, operation analysis, biotechnology, supplies management, quality control, and human engineering and their subsequent conversion into a productive force that is direct. In the economy of America, managerial capitalism replaced financial or family capitalism. A good example of this change in America is illustrated by the way the National Security Agency (NSA) has used American Telephone and Telegraph (AT & T). Companies such as Pullman Company (railroad cars) and Singer Sewing Machine Company were multifunctional and integrated as well as multinational corporations that went beyond the railroads not just in size but also in diversity and complexity of operations. In the United States, the multi-unit business took the place of traditional enterprise. Section two Question 1 Ownership of corporations in China is very different from that witnessed in Australia, Japan, and the US. After the year 1949 business entities in China Republic were owned and created by the government. Towards the elapse of 1980s the government of China commenced reforming the state-owned enterprise. In the 2000s and 1990s, most small-sized and mid-sized enterprises owned by the state were privatized and subsequently went public. There are many corporations which are a mixture of both private and public capital. Enterprises that are state-owned are usually governed by both local governments and the central government. China did not go for the course of transition economies of Eastern and Central Europe which promoted rapid and complete liberalization, democratization, and privatization. The agenda has been to enhance performance through corporatizing the firms that were formerly state-owned, listing them on state exchange of China while selling shares to non-state owners for the reason of facilitating corporate governance that is tougher. Some of these corporations include China Construction Bank, China National Petroleum, and China Mobile Communications. Most successful and largest of these business enterprises depended on form of state sponsorship. Reform in corporate governance was introduced China in 1990s as the Chinese Communist Party (CCP) realized that good governance system for enterprises in China was crucial in living to the objective of economic growth that is sustainable. In the United States, an analogous system is maintained in widely-help enterprises whereby management is separated from ownership. Corporate efficiency is enhanced while agency costs are reduced. In Japan corporate governance is characterized by cross-shareholding, long-term committed shareholders, and large concentrated share ownership. The major bank and inter-corporate shareholders in a Keiretsu assume the role monitoring the firm. Section three Question 4 The advent of the internet and new products like iPhones has transformed the operations of multinational corporations in IT-related industries. The expectations of the customers and needs the business world has been changing to demand for faster exchange of information and rapid data transfer. The discovery of iPhones has increased convenience and portability of IT gadgets which has enhanced the connectivity among international business. Multinational corporations have increased their efficiency since they are able to monitor performance and suggest way of improvement faster through improved technology. iPhones and other products like cloud computing have increased office space by compressing data that could had been otherwise stored in huge cabinets and files. Communication has enhanced the manner in which international managers can relate to each other and increase chances of consultation. Advancement in technology has been a key driver of globalization. Technological change in information processing, transportation, and communication technologies have contributed to greater interconnectivity and globalization. The internet particular has enhanced faster decision making since people can convene a meeting without attending in person. Videoconferencing has led to reduction in costs of organizing urgent meeting which hitherto meant that one had to travel hence increasing risk and costs. Online marketing, ordering and selling has become the order of the day and hence making it convenient for many people. Processing and dissemination of information has been rapid. Online multinational like Amazon and Google Inc have increased their business due to advancement in technology and the discovery of new products. Section four Question one The period from 2000 to 2007 prepared the way for the global financial crisis that was felt allover the world from the 2008. Substantial increase in savings available for purposes of investment encouraged high risk borrowing and lending, real-estate bubbles, and international trade imbalances. Fixed income securities surged upwards from &36 trillion in the year 2000 to $70 trillion by the year 2007. The huge pool of money enhanced savings from high-growth developing nations. Investors looking for more yields than that delivered by US Treasury bonds looked for alternatives globally. The reduced interest rate lending led to many people to get loans for mortgages. Many people dream about having their own homes. When the price of mortgages plummeted, people who had taken loans to build these houses were unable to pay back their loans. The banks could not even sale the houses since they fetched dismal prices in the market. Many banks made huge losses which occasioned some of them collapsing. Lenders became scarce as bank feared that the money will not be paid back. The Federal Reserve responded through Open Market Operations whereby it bought huge amounts of government bonds and hence channeling cash into the banking system while at the same time reducing interest rates. The Federal Reserve intervened to the problem of decline of interbank lending by efficiently playing its role as a last resort lender. Banks feared that discount loans from the Federal Reserve could backfire and preferred auctions. The solution of lending by the Federal Reserve could not do anything to salvage the banks which were on the verge of collapsing. The reduction of interest rate was retrospective since it encouraged high risk borrowing which led to unanticipated credit crunch. Read More