Mgmt4670 Week 1 Study Guide

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Bich Dang (QN3536) 10/7/2013 MGMT4670 WRITTEN RESPONSE #1 Political economy, property rights and corruption 1) A. What types of conditions in the political economy encourage economic growth? Pptchap3 * 2 types of conditions: Innovation and entrepreneurship are the engines of long-run economic growth * innovation includes new products, new processes, new organizations, new management practices, and new strategies * entrepreneurs commercialize innovative new products and processes * Innovation and entrepreneurship help increase economic activity by creating new markets and products that did not previously exist * Innovation in production and business processes result in more productive labor and capital further boosting economic growth…show more content…
Public infrastructure investment has been low for years, the road system is a mess, and haft of country’s population has no access to electricity, over 90% os population lacks access to modern sewerage facilities. Oil production declined. a. - What type of business environment is prevalent in Indonesia? Political and Economic Environment * What type of risks do foreign firms face in trying to conduct business in this type of environment? Lack of transparency, corporate governance, Poor regulatory environment, Widespread corruption, Organized crime, money laundering, counterfeiting, trafficking (humans, drugs, arms), Conflicts of interest, Fraud, Theft of proprietary information, Industrial disputes. b. Why is corruption so prevalent in Indonesia? P.65 Because political and economic factor listed above; In addition, government bureaucrats salaries are very low, inevitably demand bribes from any company that cross their path meaning a long line of officials might require bribes. c. Based on this case and what you have learned in this chapter, what are the consequences of corruption on a country? Ppt
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