The World Economy

OVERVIEW

Preparation to enter into international business requires managers to develop an understanding of the country’s political, legal, and economic system, as well as its infrastructure, technological, and communication capabilities.

Political systems have two dimensions: the degree of collectivism versus individualism, and the degree of democracy versus totalitarianism. Collectivism stresses collective goals over individual goals, while individualism is defined by individual economic and political freedoms. Democracy is based on citizens being directly involved in decision making, while totalitarianism consists of one person or political party exercising absolute control over all spheres of human life. These dimensions are interrelated; systems that emphasize collectivism tend toward totalitarianism, while systems that place a high value on individualism tend to be democratic. However, it is possible for democratic societies to emphasize a mix of collectivism and individualism, and for totalitarian societies to not emphasize collectivism.

Political ideology and economic systems are connected. In collectivism-based societies, the government may control enterprises, and markets are likely to be restricted. In individualism-based societies, free market economic systems are likely to exist. The three broad types of economic systems are market economy, command economy, and mixed economy. Classifications commonly used to define a country’s development are gross domestic product (GDP), the human development index (HDI), and the human poverty index (HPI).

TOPICS

Module 2 covers the following topics:

● Political systems of countries
● Legal systems of countries
● Economic development of countries
● Technological systems in countries
● Transition economies
● Market-based economies
● Worldwide political and economic changes

OBJECTIVES

After successfully completing Module 2, you should be able to:

MO 2.1 Explain in detail why and how the political and legal systems of countries differ.

MO 2.2 Analyze the classifications which determine the level of economic development of nations.

MO 2.3 Discuss how developing countries transition into emerging markets.

MO 2.4 Analyze the impact of international economic cooperation among nations and the role of the World Trade Organization (WTO).

MO 2.5 Assess the main types and major geographic areas of regional economic integration.

Course objectives covered in this module include CO 2

STUDY MATERIALS

Textbook Readings

● Chapters 4 and 5 in International Business

Written Assignment 2

Write a 4- to 5-page paper (1000 to 1375 words) in APA format and thoroughly address the prompts below. Whenever possible, provide specific examples or recommendations. Be sure to cite all of your sources and include at least one outside source in this paper.

For this assignment, please select two specific countries (whose systems are different from each other) to compare as your focus. Provide a descriptive title or heading for your paper such as, “Political and Economic Developments in…” [MO 2.1, MO 2.2, MO 2.3, MO 2.4, MO 2.5]

Address all of the following prompts in your paper:

1. Explain in detail why and how the political systems of your chosen countries differ.
2. Discuss how the legal systems of your chosen countries differ.
3. Explain what determines the level of economic development of a nation and describe the economy of each country, including the level of technology used.
4. Discuss the macro-political and economic changes taking place worldwide and include examples.
5. Analyze how transition economies are moving toward market-based systems.

Submit your paper to the mentor for grading. Consult the Course Calendar for due dates.

WRITING AND RESEARCH RESOURCES

The following links provide online writing and research aids to help you with your paper assignments.

● OWL (Online Writing Lab) at Purdue University
● Writer’s Handbook, the Writing Center at the University of Wisconsin–Madison
● APA Guidelines
● Information Literacy for TESU Students (an online guide from the New Jersey State Library to assist you in starting your research, searching databases for articles, citing sources, using ILLiad to request books or articles, etc.)