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What IS Different About Emerging Economies: Case Study

Poor infrastructure in emerging economies can significantly dampen foreign business investment and economic growth. Emerging markets often have deficiencies in infrastructure like transportation that make domestic and international commerce more difficult. Corruption is also common in the governance of emerging economies and deters investors who seek stable and transparent business environments. Diversity across cultures and in leadership is increasingly important for companies to consider as well, as emerging markets tend to have greater cultural differences and lower representation of women in business positions.

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Jessie Franz
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42 views

What IS Different About Emerging Economies: Case Study

Poor infrastructure in emerging economies can significantly dampen foreign business investment and economic growth. Emerging markets often have deficiencies in infrastructure like transportation that make domestic and international commerce more difficult. Corruption is also common in the governance of emerging economies and deters investors who seek stable and transparent business environments. Diversity across cultures and in leadership is increasingly important for companies to consider as well, as emerging markets tend to have greater cultural differences and lower representation of women in business positions.

Uploaded by

Jessie Franz
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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MAN-010 ACTSY31S1 | Jessie Franz Radomes

CASE WHAT IS DIFFERENT ABOUT EMERGING


STUDY ECONOMIES?
BACKGROUND OF THE STUDY

In developing markets, the higher share of GDP coming from the private sector means that it is

no longer sufficient to regard 'industrialized nations' and 'advanced economies' as synonymous.

In these markets, greater detachment from influence, collectivism, and long-term focus both

suggest criteria for different leadership strategies for executives. Moreover, greater cultural

fractionalization and lower representation of women on boards illustrate the importance of

thinking about diversity both within and across countries.

Administratively, developing market rates considerably lower on structural efficiency metrics,

such as rule of law, political stability and corruption prevention, than industrialized economies,

both of which can dampen foreign business investment. Despite their institutional shortcomings,

more trust in their governments is reflected by the public in developing economies. And while

emerging economies' higher risk of being landlocked is not statistically important, infrastructure

deficits make landlocked emerging economies much less open than landlocked advanced

economies.
CASE ANALYSIS

Why should business managers critically think of the higher cultural fractionalization and
lower representation of women with regards about diversity across emerging economies?

The number of women in business nowadays is comparably higher than the volume of working

women in previous generations. A myth has been in circulation with regard to women and other

minorities can loan easier compared to others however the truth was otherwise. Both male and

female executives have a lot in common professionally. However, the playing field is far from

being equal. A survey done by Catalyst, a non-profit research group, showed that both men and

women are willing to sacrifice delaying a marriage and children. That willingness itself shows

the inequality in the field of business. Women are encouraged to be married and to born children

at younger age compared to men for reasons such as health. These reasons made decision making

for women even harder.

Business managers should consider employing women, or even women consider themselves

founding companies because the feminine leadership traits will grow in importance in the 21 st

century. Accordingly, 160 international companies and 75 senior executives envision gender

equity in parallel to firm’s progress. Most respondents have predicted that the dominance of

“team-oriented” style will be more effective for businesses in the future. This fits perfectly for

women than the “command and control” approach of men. [ CITATION Dia16 \l 1033 ]

The vast majority of ethnic and entrepreneurial literature centers on the idea of ethnic

entrepreneurship. However, relatively little is understood on how entrepreneurship is influenced

by ethnic importance.
How can the poor administration strategy of emerging economies dampen international

business activity?

Economies that suffer from a high degree of corruption, which entails the abuse of authority in

the form of money or power to attain such purposes in illicit, unethical, or unjust ways, are

unable to succeed as completely as those with a low level of corruption. Corrupted markets are

unable to operate efficiently because the natural rules of the economy are hindered by corruption

from working freely. Corruption in the political and economic activities of a country causes

misery as a result.

One of the disincentives for foreign investment is corruption. Investors who are searching for a

decent, competitive market climate would stop investing in countries where corruption is high.

While investing in emerging markets remains a common field of investment, investors are

understandably unwilling to jeopardize their capital in countries considered to have high levels

of corruption. Studies indicate that corruption in a country and the attractiveness of the economic

climate are closely related. [ CITATION Elv20 \l 1033 ]

Many emerging-economy countries suffer from a high degree of corruption that slows down

their overall growth. As a consequence of inadequate capital distribution, the existence of a

shadow economy and low-quality schooling and healthcare, the whole population is impacted.

Thus, inequality leaves these economies worse off and reduces much of their peoples' living

conditions.
How might infrastructure affect business in emerging economies?

Infrastructure allows commerce, empowers industries, links people to their careers, provides

opportunity for neighborhoods that are struggling, and protects the country from an increasingly

volatile natural climate. It also provides jobs. Data from the Bureau of Labor Statistics shows

that 14 million persons are working in areas specifically connected to infrastructure.

Infrastructure workers account for almost 11 percent of the nation's population, from locomotive

engineers and electrical power line installers, to truck drivers and airline pilots, to construction

laborers and meter readers, providing career options that have low entry barriers, are expected to

expand over the next decade.

Public-private collaborations may be another infrastructure. These often complicated

arrangements allow the public sector to directly engage private enterprises in the existence of the

infrastructure asset. At their heart, these collaborations share planning, development,

maintenance, funding and operations risks and costs. [ CITATION Rob15 \l 1033 ]
References:

Diana Ezparsa. (2016, March 16). How is the role of women in business changing. alphagamma.

Mirzayev, E. (2020). How Corruption Affects Emerging Economies. Investopedia.

Puentes, R. (2015). Why Infrastructure Matters: Rotten Roads, Bum Economy. Brookings.

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