Posts Tagged ‘Globalisation’
The clear advantages of free market economy above centrally planned economy were confirmed with the fall of USSR in 1991. However, free market economies have differences in their variations as well, the main of which are liberal market economy and coordinated market economy. The fundamental differences between liberal and coordinated market economies can be summarised in a way that in liberal market economies hierarchies and competitive market arrangements coordinate the activities of businesses, whereas coordinated market economies mainly focus on non-market relationships in terms of coordination of their activities (Vestergaard, 2009). NewAge-Bio is a biotechnology company that is considering opening a research and development centre abroad and has to choose between the USA, a country with liberal market economy, and Germany a classical coordinated market economy. This article represents a report for NewAge-Bio CEO Mr Mark Phillips and gives advices backed by research and justifications regarding the choice of the country to open a research and development centre. The article starts with general discussions about advantages and disadvantages of liberal and coordinated market economies in cases of USA and Germany and proceeds to focusing on five main aspects of the issue: industrial relations, employee relations, education and training, inter-company relations, corporate governance and financial markets. Moreover, a personal letter is also included to NewAge-Bio CEO Mr Mark Phillips that gives specific recommendations regarding the choice of the country, providing detailed justifications for each of the points being recommended. Advantages and Disadvantages of Liberal and Coordinated Market Economies for Opening NewAge-Bio Research and Development Centre: USA or Germany? Liberal and coordinated market economies are the two forms of free market economies that have specific differences which would have direct impact on various aspects of practice of NewAge-Bio Research and Development Centre. The basis for the distinction between liberal and coordinated market…