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6 Cards in this Set
- Front
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Post-Fordism |
Definition: Post-Fordismrefers to an economic force that has changed product and consumption systems inmodern marketplaces. The change also affects social interactions. Post-Fordismis distinct from Fordism. Fordism was a driving force behind economic growth inthe early 1900s. The Fordism system is closely associated with Henry Ford’s carfactories that utilized the production line. The production line was aninnovation that allowed workers to increase efficiency by specializing in onepart of the production process. In the Fordism system, workers with aspecialized task would repeat their task or process continuously during theirwork shift. For consumers, Fordism means that products were more affordable. Producerslike Ford could build cars more quickly and at a lower cost that could bepassed on to consumers. Significance: Post-Fordismchanges some of the key attributes of Fordism. Fordism has an emphasis onvolume production, while Post-Fordism has a greater focus on the varieties ofproducts. Why? The Post-Fordism system has a focus on specializing products tomeet the needs to consumers Example: Forexample, a car in the Fordism model would be made in volume with one version. Onthe other hand, the Post-Fordism focuses on producing a variety of particularmodel of a car. A Ford Focus may be produced as a simple four-door car, ahatchback or a hybrid to fit the needs and wants of the most potentialconsumers. Post-Fordism also employs new computer technologies that haveautomated many tasks from the Fordism model. The change comes from a greaterunderstanding of the marketplace and newly available technologies |
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Stakeholder Capitalism |
Definition: Stakeholdercapitalism refers to the way a private firm or organization is run. Instakeholder capitalism, the firm considers the impact of their decision makingon their shareholders, employees, managers, consumers, and their community. Thedecisions made in this model consider the potential effects of their decisionson anyone who may be affected by changes in policy Significance: Inshareholder capitalism, decision makers of a firm or organization consider theeffects of their decisions on the shareholders (owners of the firm). Why chooseone model or the other? Neither model is “better” than the other. Both havemany advantages and disadvantages. Stakeholder capitalism can lead to a firmmaking a positive impact in their community. They may provide resources toimprove the community such as community service days or scholarship funds.Firms may also consider their pricing models on their products or services tomake it affordable for community members. The result from this type ofdecision-making can be impact the firms profits positively and negatively. Thecosts associated with the stakeholder capitalism can outweigh the profits thatresult from a positive image of the corporation. On the other hand, theshareholder model can save money by not contributing to their community andlowering wages, but they may suffer when consumers cannot afford their productsor services due to lower wages in the economy Example: The battle between thesetwo models can be exhibited by the analysis of Robert Reich from UC Berkeley.Reich discusses how Market Basket, a chain in the NE United States had a CEOthat followed the stakeholder model. He lowered prices and raised wages.Stakeholder were not pleased and tried to fire him. The firm had an outcry fromconsumers that lead to boycotts. The CEO stayed in place as result. Thisexample of Market Basket represents the tension that the Stakeholder capitalismmodel can have on a community |
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Disintermediation |
Definition: Disintermediationrefers to decreasing or the removal of intermediaries in the production andconsumption of products and services. This process has grown in recent years.It means that producers can reduce the size of their supply chain and theconsumers can buy products or services more directly without a middleman or areduction in the number or middlemen Significance: Disintermediationcan often mean that products or services can have reduced costs, because theproduct or service can go through less individuals or firms that can take a cutof the profits. This process had been made possible by increased access towholesalers to consumers and Internet sales Example: For example, a clothingretailer can reduce the steps that it takes for a consumer to buy theirproducts. Instead of consumers having to pay gas to drive to a store and thestore having to pay employees to run the store, retailers can directly dealwith shoppers. Employees are expensive and the can come carry risk ofliability. With disintermediation, consumers can order products from anywhere. Disintermediationhas had a major impact in the entertainment industry. Music used to be mostlysold in stores. People had to buy physical copies of their music albums thatcame in the form of records, cassette tapes, and CDs. Now, music is mainlyconsumed electronically. Manufacturers of CDs would no longer have muchbusiness. Physical stores can’t take their cut as retailers anymore. Recordcompanies can now directly sell to consumers or having an online retailer selltheir music without much overhead cost. |
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Collective Bargaining |
Definition: Consists of negotiations between an employer and a group of employees to determine the conditions of employment. Employees are often represented by a union or other labor organization. Collective bargaining is governed by federal and state statutory laws, administrative agency regulations and judicial decisions. The National Labor Relations Act is the main body of law that governs collective bargaining, it gives employees the right to collectively bargain and to join trade unions and was originally put into action in 1935. The NLRA sets the standards for procedures for the selection of a labor organization to represent a unit of employees in collective bargaining, because of this, employers are prohibited from interfering with this selection. The NLRA does not mean that groups have to agree to a proposal or make concessions but it does set guidelines on good faith bargaining. Collective bargaining is regulated even more by state and federal laws and is closely monitored while agreements are occurring Significance: -It increases the strength of the workforce, thereby, increasingtheir bargaining capacity as a group -Collective bargaining develops a sense of self-respect and responsibilityamong the employees -Collective bargaining increases the morale and productivity of employees -It becomes easier for the management to resolve issues at thebargaining level rather than taking up complaints of individual workers -Collective bargaining tends to promote a sense of job securityamong employees and thereby tends to reduce the cost of labor turnover tomanagement -Collective bargaining leadsto industrial peace in the country -It provides a method or theregulation of the conditions of employment of those who are directly concernedabout them -It results in establishmentof a harmonious industrial climate which supports which helps the pace of anation's efforts towards economic and social development since the obstacles tosuch a development can be reduced considerably Example: NFL, NBA |
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Developmental State |
Definition: A state that uses key agencies to steer economic development in tandem with business. Instrumental in creating comparative advantage, competitiveness and innovation in order to ensure economic growth. (Developmental state created for Japan). The state-led macroeconomic planning in East Asia in the 20th century; characterized by having strong state intervention and extensive regulation and planning Significance: -Emphasis on market share over profit -Economic nationalism -Protection of fledging domestic industries -Focus on foreign technology transfer -Large government bureaucracy -Rationality, meritocracy, and professionality bureaucracy -Improved infrastructure for business by state -Institutional encouragement for saving and strategic credit Example: South Korea- South Korea has undergone rapid economic development since the end of the Korean War(1950~1953). Like other "late industrializers" (Amsden, 1989) such as Taiwan, Economy of South Korea was led by the bureaucratic governmental state that controlled and manipulated the market system. Korean government implemented various economic measures in order to pursue export oriented growth Korea at the early 60s was lacking capital and technological basis, so the only competitive advantage the country had was the low wage Therefore, Korea first penetrated the global market with cheap labor in the light industry sector such as wigs and cotton spinning in 50s~60s Korean industrial policy moved towards the heavy and chemical industries in the 70s and 80s, mobilizing the state’s financial resources for the rapid growth of industries such as steel and ship-building. |
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Co-Determination |
Definition: The practice where employees have a management role in a company. The practice began in Germany, and has developed throughout the years and over different countries. Co-determination rights are different in different legal environments. In the US, employees have little to no management role, while in Germany, employees have a more important role. Workers in large companies generally form special bodies, like councils, throughout the company Significane: Interests of workers On the assumption that the primary goal of employers is to maximise profits in the interests of shareholders, codetermination can reorient the company's goals in the interests of workers. A better balance may be struck so that the company interests are not so one sided. For unions, codetermination is part of democratising the economy. It is also a way for workers to better the terms and conditions of their contracts in an orderly and regulated way Interests of employers Much economic discussion mentions the thesis that employers also have an interest in codetermination. It can be an instrument for long term increase in productivity of the company. Some economists dispute this on the basis that the losses in efficiency in production outweigh any gains in productivity Example: Germany |
