The involvement of IMF in the Economic development of Nigeria

The involvement of IMF in the Economic development of Nigeria Has the economic integration and trade liberalisation of Nigeria by IMF enhanced its economic development? Research Issue: This question has contested several evoking and vigorous answers- following the ambiguities and contradictions of the IMF concepts that have riddled its purpose, and has therefore, created an enormous uncertainty and complexity which evidently is raising new anxieties and threats to human security and development especially in underdeveloped economies. Method: My main source of information will be from secondary data such as: Google books, articles, books and journals. I will apply a qualitative method approach. Purpose: The objective of this term paper is to analyse some economic indictors such as GDP, inflation and other economic variables from these secondary data to see if the integration and trade liberalisation of Nigeria by IMF has enhance the economic development of Nigeria or rather distorted its development. Keywords: Globalisation, Economic Development, IMF, Nigeria, GDP, Economic growth, Inflation, dependent theory, Liberal Theory, Abbreviations GDP: Gross Domestic Product SAP: Structural Adjustment Programme OECD: Organisation for Economic Co-operation and Development GATT: General Agreement on Tariffs and Trade WTO: World Trade Organisation IMF: International Monetary Fund CBN: Central Bank of Nigeria NEEDS: National Economic Empowerment and Development Strategy MNCs: Multi National Companies LDCs: Least Developed Countries PRSP: Poverty Reduction Strategy Programme FDI: Foreign Direct Investment OAU: Organisation of African Union MAN: Manufacturing Association of Nigeria NEITI: Nigerian Extractive Industries Transparency Initiative NACCIMA: Nigeria Association of Chambers of Commerce. Industry, Mines and Agriculture NIEC: National Economic Intelligence Committee NASSI: Nigeria Association of Small Scale Industrial 1. INTRODUCTION The economic of Nigeria and as other British colonies has been under great influence dating back to 1846 when the protective barriers or duties on agricultural imports were abolished. By 1860, all trace of restriction on trade and tariff restrictions were removed and an era of free trade imperialism treaties begun .The imposition of the Free Trade by the British on its colonies and informal empire to obligatory maintain low tariffs by treaties with the chief aim of reducing their sovereignty in commercial matter and giving extraterritorial right to foreigners (Angus Maddison, World Economy, April 2001). The two world wars shattered this liberal order and caused the collapse of capital flows and the beggar-your-neighbour trade system. However, by 1950 to 1973 a significant fast growth in the world economy was recorded and that era was referred to as the golden age. This growth was due to several reasons but mainly because of the creation of a liberal international order by advanced capitalist countries with explicit and rational codes of behaviour and institutions for co-operation (OEEC, OECD, IMF, World Bank and the GATT) in order to avoid the incur of the beggar-your-neighbour behaviour of the pre war years(Angus Maddison). However, Nigeria and the rest of the 168 countries of the world were considered falter in their economic development because of the alarming deterioration in economic performance of these countries after the golden age. This liberal international order is known as globalisation today. The issue of the faltering economies of this heterogeneous group of 168 countries has brought questions, opinions and views of pros and cons of globalisation. Some believe that globalisation has made the world healthier while other believes the contrary. Theodore Leavitt(1983) to explain globalisation market state that We live in a rapid globalising world and certain national identifiers like taste, technology, market and finance are no longer constrained by national boundaries. They operate on a global basis. The defining features of globalisation are interdependence and connectedness of the economics, politics and culture of nations and not uniformity of markets and taste of a single country (Yong M, 1989). The more these economies integrate, on the one hand; the more new ideas about politics, education, entertainment and services and expansion of local culture perimeters are reinforced and diffused. On the other hand, the international network becomes increasingly complex and unpredictable. Beside, as is known fact that, virtually all humans are opportunistic; hardly would nations work together and not want to outwit one another either to gain an economic, social or military advantage. While considering the complexity of economic growth through integration. The question will be, is it possible for underdeveloped economies to transform into vibrant economies for growth and development amidst this complexity? Well, base on the complexity and competitiveness of the developed economies over those of the underdeveloped economies and the implicit backing of these developed economies by international global institutions such as the OECD, WTO, GATT, IMF, and World Bank, a sustainable economic growth of these underdeveloped economies is slim. This has aroused great criticisms and close examination of the impact of globalisation on the development process of these underdeveloped economies because of the continual retardation of these economies. This persistent situation has resulted to the debt crisis of many of these economies and had led to sheer poverty, squalor, deprivation, frustration and worst political instability. 1.1 Globalisation The term globalisation is frequently used but seldom defined because of the vast interpretation of its phenomenon and perhaps its multiple manifestations of its prevailing trend. It has become a buzzword of the century often use to describe everything that is happening in the world today. Since its advent, a once thought big world is made into a much smaller place where the interaction between different countries and economies of the world are increasingly integrated by factors like internet, TV, radio and mobile phones and the creation of institution like World Trade Organisation (WTO), World Bank and International Financial Institutions (IFIs) has expanded international trade and also portfolio of investment such as foreign loans, international policies Brittan (1998:2) viewed globalisation as a whirlwind of relentless and disruptive change which leaves governments helpless and leaves a trail of economic, social, cultural and environmental problem in its wakes. My own interpretation of globalisation is that: Globalisation is the marginalisation of the underdeveloped economies by the developed economies for their self sustainability purposes. 1.2 Research Question Has the economic integration and trade liberalisation of Nigeria by IMF enhanced its economic development? 1.3 Research Issue This question has contested several evoking and vigorous answers- following the ambiguities and contradictions of the IMF concepts that have riddled its purpose, and has therefore, created an enormous uncertainty and complexity which evidently is raising new anxieties and threats to human security and development especially in underdeveloped economies. 1.4 Research Objective The objective of this term paper is to analyse some economic indictors such as GDP, inflation and other economic variables from these secondary data to see if the integration and trade liberalisation of Nigeria by IMF has enhance the economic development of Nigeria or rather distorted its development. 1.5 Paper Design There are about six different research designs (Philosophical, Literature review, and Case study, Survey, Evaluation and Experiment) but I will be choosing two among these six research designs. Philosophical: its often used to examine a research issue from another perspective because it is based on existing literature. Literature review: this design aim at summering data already collected for a particular topic. When data are qualitative, the analysis of this data can create new knowledge and perspectives on the matter previously put forward. 2. PROBLEM STATEMENT Nigeria, a country located at the trigger point of Africa and the envy of all African states was forecasted by economists to transcend ahead of most of the African states in her economic development to become the giant of Africa and the international economic trade centre such as Dubai, central Asia and China of today. These believe and forecasts were not just based on mere passive ideas but on concrete facts of the availability of natural resources, human resources and huge market base in Nigeria. With the boost in agriculture and earning top dollar from the exportation of black gold, Nigeria discovered oil; the money spinner, at Oloibiri in present Bayelsa state in 1956. Nigeria got her independence in 1960 and was seen as nature goes perfect blessed with good climate and vast fertile agricultural land almost twice the size of England with high human resource index and huge market base. With the abundant untapped natural resources, it was logical for anyone and not only economist to have thought that the involvement of economics experts such as the IMF and the World Bank in the running of Nigeria economy will accelerate its transition to attained socio-economic stability being that these institutions main goals and objectives are to provide avenues for proper allocation of resources, monitoring of balance of payment, evaluating and rendering technical assistance through economic Structural Adjustment Program (SAP). However, as the saying goes à ¢Ã¢â€š ¬Ã‚ ¦with great wealth comes greater problems. Today, the oil-rich Nigerian economy suffers from long hobbled political instability, corruption, inadequate infrastructure, and poor macroeconomic management. There is an acute growth in income poverty and worse of all, human poverty- this implies, the denial of choices and opportunities to live a tolerable life (United Nations, 1997) and the fundamental freedom of action and choice to influence key decision affecting their lives. Apart from oil, the strength of Nigeria economy lies in its rich agricultural resource base. From the 1980s agricultural productivity was recorded to be on constant declination due to abandonment for oil and that gave raise to rampant rural poverty. This has rendered the economy vulnerable to external shocks which emanates from the fluctuations in world oil prices and the rising of imports prices, therefore creating an external and internal imbalances. These imbalances manifested difficulty in balance of payment, unemployment and low utilisation capacity in all sectors, and deterioration in purchasing power. Between 1982 and 1994, the debt stock of Nigeria rose at an average rate of 17% which means, stock of external debt increased by a factor of 33 in 22 years aside from domestic debt (Iyoha, 1997). Today, Nigerias public debt is more than 75% of its GDP with the effective debt to export ratio being more than 200%. This ironically has shoot up Nigeria to be Africas biggest debtor with about $ 28.5billion to its external creditor and debt service payments of $3.3billion in 2002 alone and that is expected to be on constant rise (Debt Management Office, 2002). The growth rate of Nigeria external and domestic debt was 9.4% in 2002 against the GDP growth rate of 3.3% and the external growth rate of -6.7% with the average GDP per capita annual growth rate of -0.4%(CBN Annual Report, 2002). Figure : Growth Rate of GDP, Income Per Capital and Total Dept Source: CBN Statistical Bulletin 1999 and CBN Annual Reports and Statements of Accounts 2002 During the 1960s, Nigeria never observed double- digit inflation. By 1976, the inflation rate stood at 23%. It decreased to 11.8% in 1979 and gun shoot to 41% and 72.8% by 1989 and 1995 respectively which marked the early period of the IMF Structural Adjustment Programm (SAP). Trend of gross domestic product of Nigeria at market prices Table : Inflation, GDP and Exchange Rate Year Gross Domestic Product US Dollar Exchange Inflation Index (2000=100) Per Capita Income (as  % of USA) 1980 50,849 0.78 Naira 1.30 7.22 1985 98,619 2.83 Naira 3.20 1.87 1990 286,374 8.94 Naira 8.10 1.49 1995 1,928,642 54.36 Naira 56 1.28 2000 4,676,394 102.24 Naira 100 1.11 2005 14,894,454 131.01 Naira 207 1.96 For purchasing power parity comparisons, the US Dollar is exchanged at 150.00 Nigerian Naira only.(IMF) Based on the impact of inflation, the per capita GDP today remains lower than in 1960 when Nigeria declared independence. By 2005, Nigerias inflation rate was estimated to be 15.6 percent and the GDP was composed of the following sectors: agriculture, 26.8 percent; industry, 48.8 percent; and services, 24.4 percent. (NEEDS) It is to be observed in the first graph; the growth in GDP from 1970-1978 was recorded to be 3.1% annually and 1972 to 1973 was the oil boom era; there was a remarkable growth in GDP of approximately 6.2% annually. However, in the 1980s to the 90s, Nigeria started to have negative GDP growth rates. This period constitutes the Structural Adjustment Program and economic liberalisation in Nigeria by the IMF and since then the economic has responded to a 4.0% positive GDP growth rate. The aim of this paper is to analyse the impact of the structural Adjustment Programmes introduced by IFIs (IMF) through globalisation on economic development of the underdeveloped economies (Nigeria as case study). This will be by the application of two economic theories (dependency, liberal) and observation of the three economic development variables. The two economics theories will help to give more light on the analysis of the persistent poverty in the underdeveloped world, Nigeria especially, while the variables to demonstrate economic development. My choice of Nigeria as a case study is due to its idyllic background as a country of immense natural and human resources but 70% of its population live below the poverty line (World Bank). I will concentrate on IMF conditionality and its influence on the economic development of Nigeria. 3. LITERATURE REVIEW 3.1 Economic Development There are numerous definitions for economic development as there are people who practice it. Economic development means different things to different people, which today makes the definition of economic development harder than ever in a more concrete and salient terms. Gonà §alo L Fonsesca at the New School for Social Research defines economic development as the analysis of the economic development of nations. The University of Iowas Centre for International Finance and Development states that: Economic development or development is a term that economists, politicians, and others have used frequently in the 20th century. The concept, however, has been in existence in the West for centuries. Modernization, Westernization, and especially Industrialization are other terms people have used when discussing economic development. Although no one is sure where the concept originated, most people agree that development is closely bound up with the evolution of capitalism and the demise of feudalism. From other perspective, economic development involves the allocation of scarce resources land, labour, capitol and entrepreneurship in ways which has positive effect on the level of business activity, employment, income distribution patterns, and fiscal solvency. 3.1.1 The Imperative of Economic development Professor Dudley Seers argues development is about outcomes and development occurs with the reduction and elimination of poverty, inequality and unemployment within a growing economy. The 21st century view of development encompasses a countrys consensus to achieve sustainable growth, poverty reduction, gender equality, human development, environmental protection, institutional transformation and human right protection. To put it concisely, development is the ultimate aspiration of modern economies, it is the upward movement of a countrys entire social system. More to the point, development is the removal of any host of undesirable condition that may perpetrate a state of underdevelopment. Economic growth is a prerequisite for economic development. Facilitating increase in the output of major sectors of production of the economy, such as natural resource and manufacturing either by the improvement of the structural system such as technology, will lead to economic growth. (Todaro, 1994) Kuznets (1971) defined economic growth as a long term rise in capacity to supply increasingly diverse economic goods to its population; this growing capacity is based on advancing technology and the institutional and ideological adjustments that it demands The obstacle facing most of these developing countries is the ability to create a more conducive atmosphere for essential use and harnessing of economic resources. The obstacle has increase anxiety by the increase of economic liberalism that promotes free movement of capital that tends to undermine and marginalise indolent economies. This interdependent global economic dispensation has given rise to disparities among countries of the world on the attainment of economic growth. 3.1.2 Growth versus Development However, before I go further, I will like to state that; there is a considerable difference between economic growth and development. I may just frankly state that, economic development is a terminology used to refer to the underdeveloped countries and while economic growth refers to the developed countries. Economists Peter Bearse and Roger Vaughan write that: Development is a qualitative change, which entails changes in the structural system of the economy, including innovations in institutions, behaviours, and technologies which enhance growth, While Growth is a quantitative change in the scale of the economy in terms of investment, output, consumption, and income Amartya Sen state that: Development requires the removal of major sources of poverty as well as tyranny, poor economic opportunities as well as systematic social deprivation neglect of public facilities as well as intolerance or over activity of repressive statesà ¢Ã¢â€š ¬Ã‚ ¦. Hence, on one hand, economic development can not be achieve without growth because it can be conceived as a multi-Dimensional process or phenomena-increase in per capital income, increase in GNP and improve living standard of the population but, on the other hand, growth is possible without development for the mere fact that it is measured as the increase in GNP, it does not have any other parameter. 3.1.3 Historical development of the term To continue it will be necessary to show how this term economic development has evolved over time to include a wider variety of variables and not just focus on economic growth. Economic development is a term conceptualised as a branch of economics in the early 20th century in reverence to growth and industrialisation in the capitalist society by the classical school of economics. However, this school of thought did not put to consideration countries like Africa, Latin America and Asia but rather an opposite reflection of the developed world that will catch up in time. (History of Economic thought, 2008) Economists after the World War II become more concerned about the low standard of living in so many countries, especially due to decolonisation. The aim of the term changed to include not only the Western world but also the less developed which in fact made most of the population of the globe. Therefore, important reservations were made as opposed to the ultimate objective of the study of economics to include other variable rather than only economic growth. With fast change in the political geography of the world, the need for the formation of supranational bodies (IMF, OECD and World Bank) that would oversee the smooth progress of the developing nations became necessary. The responsibilities of these institutions are to work hand-in-hand with the local government of the underdeveloped nations to sustain and accelerate growth speeding up progress of economic development of these nations. Many believed that economic development started as capitalism but as time went by and changes occurred, the term shifted from capital oriented concept to identify human capital endowments developed by Schultz (1951) as the primary obstacle to the realization of the potential economies of scale inherent in the industrialization of developing countries. Singer (1964) contributed further more to this social development by including health and fertility into the picture. Incorporating elimination of poverty, inequality and unemployment in the equation by Dudley Seers (1969) gave a notable change in defining the term economic development By 1977 Seers developed a structuralised theory which included social development and economic growth to the overall definition of economic development. As of this point, reservations were made for the third world countries because of the distinctive characteristic that differentiated them from the western countries. Later on, privatisation was introduced such as foreign MNCs as a factor in the economic development of least developed countries (LDCs) by the Neo-Liberals in the 1980s. (History of Economic Thought, 2008) Definition of Economic Development I decided to put a definition of Economic Development that would best fit my analysis of a third world country. Economic development is the fundamental process of increasing the factors of productive capacity- land, labour, capital, and technology -through sustainable growth from a simple, low-income to a modern high-income national, state or local economy. Its scope includes the process and policies of using its resources and powers to reduce the risks and costs which could inhibit investment but improves the economic, political and social well-being of its peoples. 3.2 Economic Theories The crisis facing the underdeveloped countries can not be accurately and properly analysed without the examination of some theories underpinning the problem. These crises have triggered scholar and writers with different theories, explanations and research projects aimed at solving and bringing to light the causes and complexities surrounding these crises. (Baran, 1957, Frank, 1971) maintained that dependency theory is the best for understanding the causes of the crises. While others argue that development theory (Rostowe, 1960) or economic explanations (Offiong, 1980) give a more lucid view. Yet, there are others who contended that political explanations (Migdal, 1988) or the liberal theory (Burchil, 1996) is of most important. For the purpose of this paper, I will consider the dependency and liberal economic theories 3.2.1 Dependency theory The economy of Nigeria is in doldrums from the recent pandemic crisis of capitalism. Though it has always been a battered economy which has been suffering from a form of Dutch Disease socio-economic hardship and where the poor masses benefited nothing from the boom in the annals of Nigeria. Nigerians naively thought that for not being fully integrated into the world economy, they could at worst receive a mere scratch from this contagious capitalism crisis. However, this economic maelstrom was made truly global by globalisation. Andre Gunder Frank, one of the earliest dependency theorists, made it quite clear on this point, historical research demonstrates that contemporary underdevelopment is in large part the historical product of past and continuing economic and other relations between the satellite underdeveloped and the now developed metropolitan countries. Furthermore, these relations are an essential part of the capitalist system on a world scale as a whole.(Andre Gunder Frank, The Development of Underdevelopment, in James D. Cockcroft, Andre Gunder Frank, and Dale Johnson, eds., Dependence and Underdevelopment. Garden City, New York: Anchor Books, 1972, p). 3. This view shows that capitalism promotes greed and blind pursuit of profit. The enforcement of international division of labour is the one proof but the most explicit manifestation of this doctrine is the Comparative Advantage characteristic. This division of labour (dependent and dominant states) is largely responsible for the underdevelopment of large areas of the world. The osmotic act that occurs in this system provides at large an ultimate explanation for the persistence of poverty in these areas of the world. The dependent states are made to supply cheap minerals, agricultural commodities, and cheap labour and these economies also serve as the repositories of surplus capital, obsolescent technologies and manufactured goods. This flow of goods, money and service into the dependent states are considered functions which orient these economies towards the outside. However, these dependent states have little or no influence to determine the allocation of their resources; it is rathe r determined by the economic interests of the dominant states. This division is considered by the capitalist a necessity for efficient allocation of resources. Dependency theory can be an explanation of economic development of a state in term of the external influences (political, economic, and cultural) on national development policies. (Osvaldo Sunkel, The Journal of Development Studies, Vol. 6, no. 1, October 1969, p. 23) Dependency can be define with emphasis on historical dimension asà ¢Ã¢â€š ¬Ã‚ ¦ an historical condition which shapes a certain structure of the world economic such that it favours some countries (Dominant states) on the detriment of others(dependent) and therefore limits the development possibilities of the subordinate economics. This a situation which the economy of a certain group of countries is put under unfavourable condition by the development and expansion of another economy, to which their own is subjected. (Theotonio Dos Santos, Readings in U.S. Imperialism, 1971, p. 226) However, there are serious disagreements among the various strains of dependency theorists. Although there are some core propositions which seem to underlie the analyses of most dependency theorist, nonetheless there are vigorous and challenging debates among the liberal reformers (Prebisch), the Marxists (Andre Gunder Frank), and the world theorists (Waller Stein) on the dependency theory. 3.2.1.1 The Core Propositions of Dependency Theory There are contestable numbers of propositions, which form the core of dependency theory. I will take two out of these numerous propositions because the suit my paper: 1. Underdevelopment is a condition fundamentally different from undevelopment. The latter term simply refers to a condition in which resources are not being used, while Underdevelopment refers to a situation in which resources are being actively used, but used in a way which benefits dominant states and not the poorer states in which the resources are found. 2. The distinction between underdevelopment and undevelopment places the LDCs countries of the world in a profoundly different historical context such as behind or catching up to the developed countries of the world. 3.2.2 Liberal Economic Theory Capitalism has failed to develop Nigeria, despite it huge natural and human resources. The Nigerians with necessary lesson incur from capitalism needed an alternative for economic -oriented revolution. The neo-liberal saw this as an opportunity to present itself as an economic alternative system for Nigeria and Africa as a whole. Since then, Nigeria has been compelled to swallow one economic prescription after the other such as IMF and World Bank imposed reforms; SAP (Structural Adjustment Program), PRSP (Poverty Reduction Strategy Papers) etc. and now NEEDS (National Economic Empowerment and Development Strategy), yet poverty still persist. The World Banks seminal report title: Sub -Sahara Africa (1999) signified an ideology that retain both emphasis upon domestic sources of economic malaise and the faith in liberal economic policies which has a twin resemblance to belated centrality of state and accountable government to sustained the capitalist development.(Sandbrook, 1993:2) This report claim that Africa needs not only good governance but better governments that will concentrate more on trade liberalisation and not on direct intervention. Hence, a proposal of the conversion of the monopolistic Africa states by IMF and World Bank into liberal democracies linked to enlarge and rejuvenated private sector and to build a reformed states institutional capacity are formulations of neo-liberal capitalist to teach poor nations the good old fashion fiscal discipline. To say in a clear statement, liberal economic theory is manoeuvre of the western capitalist to have continuous clutch on the underdeveloped countries championed by the Financial Institutions (IFIs). The major argument is that economic liberalization has provided the flow of foreign investment into the underdeveloped countries, as the means of reducing trade and exchange restrictions. This idea was that in the process of homogenizing the political economy of every member states of the international community, the creation of a market society on a global scale is achieved (Biersteker, 1993). Professor Mason Gaffney, a renowned America economist stated that the neo-classical economics present us with choices often too hard a dilemma. According to him, these dilemmas are choices of sacrifices that are not favourable for government to undertake and at the same time developed. For efficiency, government must sacrifice equity; to attract business government must lower taxes so much as to cause the closure of libraries and starve the schools; to prevent inflation government must keep a huge unfortunates rate of unemployment; to make jobs government must chew up land and pollute the world; to motivate workers there must be unequal wealth distribution and so on. These dilemmas have provided the solid reasons that contribute to the present poverty in the underdeveloped countries and these are by imposition of free market strictures on the underdeveloped countries by the powerful trans -national bodies (IFIs) which personify free trade liberalism as part of their governing ideology. They lock peripheral states into agreement which forces them to lower their protective barriers thereby preventing the underdeveloped nations from developing trade profiles which diverge from the model dictated by their supposed comparative advantage. Burchill et al, (1996) stated that; the IMF and the World Bank for example, are responsible for the provision of finance assistance(or more accurately debt) to underdeveloped societies upon

Philips vs. Matsushita: A New Century, a New Round Essay

1. How did Phillips become the leading consumer electronics company in the world? Philips started its business in 1892 in Eindhoven with its basic product, a light bulb. The company focused on only producing light bulbs at the beginning, and could therefore specialize and create significant innovations. The rapid growth to being the leader in industrial research, helped to broaden its product line. During the post war era Philips gained success and the company was able to adapt to country-specific market conditions. This helped Philips expand to other countries and also generated in a broadened sales volume. Phillips also developed National Organizations (NO ´s) in different countries, which helped to serve other markets more easily. NO ´s were after the Second World War helpful to distribute products to the customer while taking care of specific customer needs as well as country and market needs. This greatly increased self-sufficiency. The company ´s change to a multi-national company in the 1930s was also a specific point why Phillips was the leading cons umer electronics company. How did Matsushita succeed in displacing Philips as No. 1? Matsushita focused its competitiveness in high quality, low cost, and standardized products during the 1970s and 1980s. Also they had rapid product and process innovation and their company wanted to focus on exporting sales to world markets. Matsushita represented 40% of appliance stores in Japan as they capitalized greatly on their broad line of 5,000 products by opening 25,000 domestic retail outlets. This resulted in a direct access to market trends and consumer reaction as well as an increase in sales volume. Being the first Japanese company to adopt a divisional structure gave each division of the company a clearly defined profit responsibility. This structure created a small business environment to maintain growth and flexibility. It also generated competition amongst divisions. Matsushita’s global organizational model centralized the product and process innovation and then the development and manufacturing of the  products were the product division’s responsibi lity. What were its distinctive competencies and incompetence? Philips competencies: Ability to adapt in Local market conditions, strong national organizations, employee centric values, 14 product divisions (PDs), and NOs built their own technical capabilities and product development Philips Incompetence: No Economy of scale in manufacturing, many technological innovations, but its ability to bring products to market was weak. Difficulties in reorganizing the company when dealing with its growing problems. Matsushita competencies: Broad line of Products, Centralized structure, Fast follower’s strategy Matsushita incompetencies The tough leadership, Lack of resources for new development, inability to compete with other companies that outsourced to low cost factories. Why is the change so hard for both Matsushita and Philips? What recommendations would you make to Gerald Kleisterlee? And to Kunio Nakamura? The change was hard due to the difficulty of changing a company with a strong history and culture without changing the companies’ core values. As the changes were radical and made the companies change to a new way of acting and thinking, the companies had a hard time following and adapting to these changes which altered the core of the companies. Recommendations for Philips: As Philips success initially was in developing new products, though they were not able to successfully introduce them in the markets, this is an area they should exploit further. Also in this area they have capabilities that competitors do not possess. They need a better relationship and coherence between the NOs, PDs and the head quarter to be able to successfully introduce new technologies and products to the market. Also they need to make the whole company adopt the product and not just parts of it. Once they achieve a better coherence they can concentrate on improving their corporate marketing strategy to better position the new products. As Philips is a decentralized company they should work on being more towards a centralized company. They should also not give up its value proposition of being a ‘technology developer and global marketer’, which could be the result of outsourcing the majority of its production. Recommendations for Matsushita As Matsushita had a centralized organization, which was a large disadvantage and a reason for slow market responsiveness, they should work towards a more decentralized organization. Matsushita will need to anticipate on the globalization of the market, so that they are capable of sustaining their competitive advantage in low-cost production. To strengthen their position they need to focus on coherence between subsidiaries and headquarters.

What the In-Crowd Wont Tell You About Best Research Paper Websites

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Book Report On Ethical Decision Making - 830 Words

Ethics Hamed Alanazi Book Report Ethical decision-making 10th edition Ethics The book I chose is â€Å"Business ethics: Ethical decision-making† 10th edition is written by O. C. Ferrell, John Fraedrich, Ferrell. It was published by Cengage Learning in 2014. This book consists of almost 340 pages and five parts. According to Amazon this book is among top seller. Something extraordinary about this book is that, this book highlight several cases related to the business ethics that help the reader to develop better understanding of how to solve several ethical issues in different situations. The authors O. C. Ferrell, John Fraedrich, Ferrell hold remarkable credibility. O.C. Ferrell is a Ph. D. from Louisiana State University. He is also a distinguished professor of at Belmont University. Recently he have served nine years as Creative Enterprise Scholar and marketing professor at University of New Mexico. He is also a past president Academic Council of the American Marketing Association and also takes hold of American Marketing Association Ethics Co mmittee twice. O. C. Ferrell has published more than 100 articles and is co-author of 20 books. Fraedrich s also had distinction of one of the top 50 professors of marketing ethics, who were selected for International Consortium on Ethics and Social Responsibility. He wrote and published 50 articles all on his own. On the global level, he helped the business ethics dialogue by being invited as the business ethicsShow MoreRelatedReport On Ethical Decision Making1055 Words   |  5 PagesDATE: November 5, 2014 SUBJECT: Requested report on Business Students and their Ethical decision-making As requested, here is the report on ethical decision making and how it affects business students. This report focuses on ethical decisions and how important they are, or aren’t, to commerce students. The report features information from scholarly articles and books relating to business ethics. Mainly, what ethics are, what factors impact ethical decisions, and how universities have taken steps toRead MoreEthical Dilemma Of Recording Unrecognized Revenue Under The Generally Accepted Accounting Principles1528 Words   |  7 PagesThe â€Å"cooking the books† case study is intended to raise our awareness on an accounting issue that bankrupted firms and caused hundreds of employees to lose jobs. People are often challenged to make decisions on the business environment day-to-day. The contemporary companies often require following an ethical model when making these decisions. Strong decision making and business ethics can also help companies select the best business opportu nities. The paper discusses a business ethic scenario andRead MoreThe Case of the Wayward Water: Drinking Water Getting Tainted with Fracking Fluid1445 Words   |  6 Pagesfracking. As reports of drinking water becoming tainted with fracking fluid flood the news, both oil and gas companies as well as environmental groups are presenting competing facts about the effects of drilling on ground water. Economists are often asked to prepare reports with objective analyses balancing the cost and potential damage to the water sources against economic benefits to the local and national communities. These requests for analysis can provide interesting ethical questions forRead MoreReporting Practices and Ethics Paper996 Words   |  4 Pagesfinancial records are kept up- to -date and they follow specific guidelines. The books kept up- to- date and in order, this will show the amount of money being brought into the organization for profit and the amount of money the organization has lost in profit. One thing that may cause the honesty of the organization to be on the brinks is the organization financial management and the correctness of the financial books. This paper is about information that will address financial reporting practicesRead MoreJust Business Christian Ethics For The Marketplace1578 Words   |  7 Pagesthe title of his book â€Å"Just Business-Christian Ethics for the Marketplace†. In this book he defines good as a balance of holiness, justice and love. If each of these is areas is met the decision is moral. Badaracco, in comparison, points out in his title â€Å"Leading Quietly-An Unorthodox Guide to Doing the Right Thing†, his view is not conforming to rules, traditions, or modes of conduct, as of a doctrine, religion, or philosophy (dictionary.com 2014). By the title of his book, Badaracco identifiesRead MoreJust Business Christian Ethics For The Marketplace1575 Words   |  7 Pagesthe title of his book â€Å"Just Business-Christian Ethics for the Marketplace†. In this book he defines good as a balance of holiness, justice and love. If each of these is areas is met the decision is mor al. Badaracco, in comparison, points out in his title â€Å"Leading Quietly-An Unorthodox Guide to Doing the Right Thing†, his view is not conforming to rules, traditions, or modes of conduct, as of a doctrine, religion, or philosophy (dictionary.com, 2014). By the title of his book, Badaracco identifiesRead MoreSummary Of Concussion, By Jeanne Marie Lasgames1378 Words   |  6 Pagespaper is to address ethical concerns in the book Concussion, written by Jeanne Marie Laskas. The paper will present a summary of the work, statement of an ethical question, enumeration of ethical concerns, discussion of the data used in the decision making, evaluation of the options, discussion of what legal, moral, and ethical actions can be taken to address the ethical question raised in the book, and a conclusion of a summary on what is ethically desirable. As a summary of the book, Concussion revolvesRead MoreOrganizational Behavior Trends1619 Words   |  7 PagesBehavior Trends Outline: 1. Definition of OB and related terminologies. 2. Role of decision making in OB environments. 3. Conflicts involved in decision making processes in organizations. 4. Rifts between managerial level staff and operations level workforce. 5. Stakeholders in decision making in a corporate hierarchy. 6. Self-inflicted ethical dilemmas and differences, causes for it. 7. Values and goals affecting causing ethical dilemmas in OB 8. Globalization and its strategic alliances. 9. Impact of technologicalRead More Organizational Behavior Trends Essay1565 Words   |  7 Pages  Ã‚  Ã‚  Ã‚  Ã‚  Definition of OB and related terminologies. 2.  Ã‚  Ã‚  Ã‚  Ã‚  Role of decision making in OB environments. 3.  Ã‚  Ã‚  Ã‚  Ã‚  Conflicts involved in decision making processes in organizations. 4.  Ã‚  Ã‚  Ã‚  Ã‚  Rifts between managerial level staff and operations level workforce. 5.  Ã‚  Ã‚  Ã‚  Ã‚  Stakeholders in decision making in a corporate hierarchy. 6.  Ã‚  Ã‚  Ã‚  Ã‚  Self-inflicted ethical dilemmas and differences, causes for it. 7.  Ã‚  Ã‚  Ã‚  Ã‚  Values and goals affecting causing ethical dilemmas in OB 8.  Ã‚  Ã‚  Ã‚  Ã‚  Globalization and its strategic alliancesRead MoreReporting Practices and Ethics Paper813 Words   |  4 Pageshealth care managers, from the basic elements of financial management to the heavy burdens of ethical compliance and accuracy. In this paper the subject to discuss is financial reporting practices and ethical standards in health care, how health care reform is changing and making these organizations more accountable, and summaries of generally acceptable accounting principles and general financial ethical standards. Financial Management â€Å"There are four recognized elements of financial management: