2. Overview
2
• Describe the various economic systems that exist
and go over the advantages and disadvantages of
each
• Describe the major differences between a free-market
and planned system
• Compare different countries economic and
political differences
• Describe the relationship between business and
society
• Describe and illustrate what is CSR
• Explain the differences between philanthropy vs
strategic CSR
• Describe the four perspectives of CSR e.g.
minimalist vs proactive with examples
3. Learning Outcomes
3
• Determine and evaluate the different economic
systems
• Identify the national differences in economic and
political systems
• Define CSR and explain the difference between
philanthropy and strategic CSR
• Be able to distinguish between the four
perspectives of CSR
5. Importance of economic environment
assessment
Countries differ in
different ways
Economic &
political changes
alter market
circumstances
It is important to
understand
connections,
change and
consequences
The challenges of
the comeback
Choices of
citizens,
policymakers and
institutions
6. Concept of Economic Freedom
People have the right to work, produce, consume, save,
and invest the way they prefer
Economic Freedom by Region, with Population
Source: Daniels et al, 2013
11. Types of Economic Systems
• An economic system refers to the mechanism
that deals with the production, distribution, and
consumption of goods and services
• Three Types:
Market
Economy
Command
Economy
Mixed
Economy
13. Market Economy
• In a market economy individuals rather than
governments make most economic decisions
– Capitalism
• private ownership of capital
– Laissez-faire
• governmental noninterference in economic
affairs
14. Command Economy
• In a command economy the visible hand of the
state supersedes the invisible hand of individuals
– Government
• owns and controls resources
• determines prices
• Communism
15. Mixed Economy
• Most economies are mixed economies
– fall between market and command economies
• Socialism
– regulate economic activity with a focus on
social equality and a fair distribution of wealth
16. Different Political Ideology
• A political ideology stipulates how society
ought to function and outlines the methods
by which it will do so
• Most modern societies are pluralistic
– different groups champion competing
political ideologies
• Democrats vs. Republicans in the United
States
• Democratic Party vs. Liberal Party in
Japan
18. Democracy
• In a democracy
– all citizens are politically
and legally equal
– all are equally entitled to
freedom of thought,
opinion, belief, speech,
and association
– all equally command
sovereign power over
public officials
• Prominent types of
democracy include
– Representative
– Multiparty
– Parliamentary
– Social
“Summer of 2014 was the
greatest for modern democracy”
Bobby Ghosh, Time
Contrasting India and
Indonesia’s Election
View video:
http://time.com/50062/elections-india-indonesia-
video-guide/
19. Totalitarianism
• A totalitarian system
subordinates the individual
to the interests of the
collective
– dissent is eliminated
through indoctrination,
persecution,
surveillance,
propaganda,
censorship, and
violence
• Prominent types of
totalitarianism include
– Authoritarianism
– Fascism
– Secular
– Theocratic
20. What is CSR?
“Corporate social responsibility
(CSR) refers to companies
taking responsibility for their
impact on society. As evidence
suggests, CSR is increasingly
important to the
competitiveness of
enterprises. It can bring
benefits in terms of risk
management, cost savings,
access to capital, customer
relationships, human resource
management, and innovation
capacity.”
21. Issues in CSR
Many firms’ corporate social
responsibility efforts are
counterproductive, for two
reasons: They put business
against society, when the two
are actually interdependent.
And they pressure companies
to think of CSR in generic
ways, instead of crafting social
initiatives appropriate to their
individual strategies
23. The Relationship between
Business and Society
• Consumers in contemporary
societies enjoy and expect a
wide range of benefits, from
education and health care to
credit and products that are
safe to use
• Profit-seeking companies are
the economic engine that
powers modern society; they
generate the vast majority of
the money in a nation’s
economy
• Much of what we consider
when assessing a
society’s standard of
living involves goods and
services created by
profit-seeking companies
• Companies cannot hope
to operate profitably
without the many
benefits provided by a
stable, functioning society
24. Philanthropy versus Strategic CSR
Philanthropy
The donation of money,
time, goods, or services
to charitable,
humanitarian, or
educational institutions
Strategic CSR
Social contributions that
are directly aligned with
a company’s overall
business strategy
25. Strategic CSR? Tata and the Nano
Source:http://www.examiner.com/road-driver-in-national/world-s-cheapest-car-the-tata-nano
29. Reuters Market Light: Transforming Agriculture
• Reuters Market Light brings Reuters traditional strengths of
price discovery, price transparency and decision support -
the power of information - to a new customer segment.
• Source: Omkar Joshi, Reuters
30. Reuters Market Light: The Pain
“If I had known timely and accurate information about the
price of mustard in Latur market, I would have made 40%
more money.”
“Heavy rains decayed my coffee berries. Had I known this in
advance, I would have harvested early and reduced my heavy
financial loss.”
“I get a very poor price for my crop. I do not trust my buyer. I
take my produce to the market and have to accept his
money. I am not treated with respect.”
Source: Omkar Joshi, Reuters
31. Reuters Market Light: The Solution
RML provides accurate, relevant and customized
information that impacts customers livelihood and
productivity through mobile phones
Local Spot Prices Local Weather Crop related news
तूर (दर्जा 1)
ह िंगणघजट -
क:3456,कक :1234,औ:2345,आवक:1000
लजतूर -
क:3456,कक :1234,औ:2345,आवक:1000
अमरजवती -
क:3456,कक :1234,औ:2345,आवक:1000
नजगपूर -
क:3456,कक :1234,औ:2345,आवक:1000
वजमजन
नजगपूर
12/12- क:
23°C,कक:18°C,पजऊस:2mm,शक्य
तज:2%
13/12- क: 23°C,
कक:18°C,पजऊस:2mm,शक्यतज:2%
मक्यजच्यज आवकीत वजढ.
मजत्र पोल्ट्री व स्टजर्ा
उद्योगजकडून
मजगणी कमी. दरजत घट.
रजज्यजत दर प्र. कक्विं. ६९०
ते७ ५ ० रू. दरम्यजन.
Source: Omkar Joshi, Reuters
32. Reuters Market Light: The Result
“sold 100 bags of onion after
following the prices and
realised a benefit of Rs. 50 per
bag. i.e. total of Rs. 5,000”.
10% higher profit. 5% of
annual income.
“I did not engage field labour
whenever there was a rainfall
alert. I saved Rs. 70 per head
for 3 labourers in 3 instances
totalling to Rs. 630. Saving of
£8 a day. Return on
investment of 100% in 3 days”
“I have instructed my labourers to
sow the seeds 3 inches into the
soil, earlier this method was not
scientific, they would sow the
seeds 5-7 inches.”
Source: Representative Feedback 7000 farmers
Manikrao Gawade held back 70 quintals
of onions following RML news. In the next
20 days, realised a 70% gain, made extra
profit of £350, or nearly 33% of annual
income.
Source: Omkar Joshi, Reuters
33. Essential work for next week
• Please consult the OLE for details of:
– Essential readings*
– Seminar/workshop preparation work*
– Recommended further readings
– Any additional learning
* Essential readings and preparation work must always be completed in time
for the next session
33
