BUSI2025 Chapter Notes - Chapter 3: Longrun, Income Distribution, Economic Freedom
Document Summary
Managers study economic environments to estimate how market trends and government policy influence the performance of their companies. A cou(cid:374)tr(cid:455)"s eco(cid:374)o(cid:373)ic policies are a leadi(cid:374)g i(cid:374)dicator of gover(cid:374)(cid:373)e(cid:374)t"s goals a(cid:374)d its planned use of economic tools and market reforms. Economic development directly impacts citizens, managers, companies, policymakers and institutions. Level indicates: current market potential, current market conditions. Rate of change indicates: future market potential, future market conditions, possible first mover advantages the advantage of being the first entrant to a new market. Activity of private firms: short term: firms mobilize productive resources, long-term: firms generate technological change (products and services, processes, strategies, organizations, management practices) Firms need conducive business environment to develop innovations and deploy entrepreneurship: market economy, price mechanism, strong property rights. Key government role: to create conducive preconditions, although preventing excesses of market economy. Economic, political and legal systems: attractiveness of a country as market/ production site.
