Question – Choose a firm in a particular Variety of Capitalism in a particular institutional context of one country, or two firms in different countries (within one Variety of Capitalism or contrasting Varieties and this can be a developed country or an emerging market country).
What sort of property rights are and have been protected and how? What sort of state fiscal and legal capacity has evolved over time in that country? What type of legal system has evolved in that country? How do these characteristics affect your chosen firm(s) strategies – in terms of labor conditions and working practices and in terms of corporate governance practices? How have these institutional characteristics affected your firms’ internationalization strategies and other strategies?
Chosen firm and country = Huawei and China
Highlight and give examples of particular issues: over wage setting/collective bargaining; unionization and strike activity; over corporate governance issues such as use of the stock market, the incidence of merger and acquisition activity, the concentration or dispersion of shareholding of your company, the state influence on the firm in its strategy-making. Analyse the links between the firm(s) and the Variety of Capitalism in that country and its institutional characteristics.
You can choose one firm in a particular country or compare two firms in two different countries.
Aim is to link company strategies to their Varieties of Capitalism and to their home country institutions.
1) Outline what the key institutions underlying economic growth are and 600 words summarising the debate – why institutions are important for economic growth and which ones are important. Do not spend much time or space going through the theories on institutions – this is a complex area and I want you to apply the concepts rather than describe the theories.
2) Do some research on chosen institution – think about its PRs, legal system, nature of its state – whether there are constraints on the state in the form of freedom of press, independence of judiciary. You may need to look for articles in the press eg The Economist for comments on freedom of press, independence of judiciary. There are some articles attached.
Use the various databases eg World Bank Doing Business, World Bank Governance Indicators, World Economic Forum Global Competitiveness Index, Transparency International, Heritage Foundation Index of Economic Freedoms – to give some indicators of its institutions. Are they good/poor? What can you say about them – can you be critical of the measures – are they an accurate reflection, do they embody biases in their collection.
3) The Variety of Capitalism – labour market institutions and corporate governance institutions of your country. Find some data or bits of information relating to VoC eg employment protection and worker participation, training, trade unions, shareholding structure, use of the stock market or banks, business groups.
4) See what you can find about their ownership (chosen company) – are they privately-held or listed on the stock market; where do they raise their finance from – self-financing, banks, stock market. What kind of skills and training do they provide. Is there anything on the length of employees’ tenure or is there rapid turnover. How is wage bargaining done – is there involvement of the union. Are there strikes or are industrial relations peaceful. Is there worker participation.
5) Rough guide to the sections and their lengths – you can vary this, it is not meant to be exact but just to guide you through:
a) Theory 600 words
b) Measuring institutions in your country or countries 600 words
c) Its Variety of capitalism and data/analysis of that 600 words
d) On your chosen company and its strategies/policies 600 words
e) Tying them together and reflecting on the linkages 600 words