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Free Market and Business Costs Essay

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Updated: Apr 28th, 2021

It has been argued that free-market economies stimulate greater economic growth than do state-directed economies. Make a well-constructed and persuasive argument on why or why not this may be true.

Creating opportunities for economic growth is crucial to promote the further advancement of a state in the environment of the global economy. However, when choosing the tools for enhancing economic progress, one may hesitate while balancing between free markets and state-directed economies. While the latter allows for a more rigid control over the crucial economic and financial process, the former helps meet the needs of the target customers in a more efficient manner, which makes them more compelling. Also known as the command economy, the state-directed one implies that the government has rigid control over the crucial processes occurring in the context of the target market. While the identified framework helps prevent instances of fraudulence in the market environment, it also imposes a range of restrictions on the participants. For instance, with a rather vague concept of the current market trends, the tendencies in the customer demand, etc., the state government is unlikely to make sensible decisions. Consequently, organizations are likely to lose a substantial amount of money. Furthermore, profits will drop significantly, triggering a rapid reduction in the competitiveness levels. Thus, the organizations will lose their competitive advantages in the global economy realm. Free markets, in their turn, allow organizations to be flexible in the choice of the available strategies. Furthermore, the decisions related to the crucial processes, including transactions, financial choices, etc., are made based on the analysis of external and internal (company-related) factors. As a result, the foundation for rapid progress in the target market is built successfully. Therefore, free markets should be deemed as more efficient as far as the economic growth of the state is concerned (Gregory, 2014).

Provide an outline as to why the culture of a country may impact the costs of doing business in that country. Explain your answer and provide examples that enhance your point(s).

The connection between the cultural specifics of a state and the economic opportunities that it has to offer might seem rather loose. However, a closer look at the subject matter will reveal that there is, in fact, a strong link between the two. Because of the difference between the culture of the company and the one of the target state, a significant amount of financial resources will have to be spent on the analysis of the said differences to develop an efficient communication strategy. Indeed, to penetrate a specific market successfully and attract the attention of the target customers, one must create an elaborate message and design the product that will appeal to the identified demographics. However, because of the differences between the two cultures, a range of misunderstandings may occur at the stage of branding and promotion. For instance, because of language issues, a specific message may be misinterpreted. Furthermore, the differences in the perception of visual elements may make the citizens of the target state misinterpret the very essence of the firm’s brand. Consequently, it is imperative to carry out a vast analysis of the cultural specifics of the state, thus, spending a significant amount of money on research. Furthermore, a better understanding of the local culture helps build relationships in the organizational environment successfully. As a result, the relationships in the workplace will develop properly, and the few conflicts that will emerge will be resolved successfully. Moreover, opportunities for improving the staff’s performance and enhancing their motivation levels can be explored with a better understanding of the staff’s culture. Therefore, the premises for the proper functioning of the firm and its further success in the market will be built (Petrakis, 2014).

References

Gregory, S. (2014). The state is out of date: We can do it better. San Francisco, LA: Red Wheel/Weiser, LLC.

Petrakis, P. E. (2014). Culture, growth and economic policy. New York, NY: Springer Science & Business Media.

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