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Country Strategy. Mode of Analysis. View country as a unit much like a firm with goals, comparative advantages and measurable outcomes. More complicated as the goals are less obvious, constituencies more varied, and decision making less clear.
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Mode of Analysis • View country as a unit much like a firm with goals, comparative advantages and measurable outcomes. • More complicated as the goals are less obvious, constituencies more varied, and decision making less clear. • Examine past & present and project into the future. • Must choose time frame of analysis to guide focus.
Three Parts Context Strategy Performance Economic: GDP, Employment, Inflation Social: Income Distribution, Health, Education Political: Stability, Freedom International: Balance of Payments
Context • Background & Resources • Players of the Game • Firms: Corporate Sector • Government Actors • Non-state Actors • Rules of the Game • Formal Rules • Informal Rules • International Dimension
Background and Resources • Resources • Natural • Labor • Capital • Infrastructure • Technology • Strategy • Vision • Goals • Policies • Context • Rules of the • Game • Players • Background • History • Culture • Demographics • Geography Austen, J.E., 1990, Managing in Development Economies
The game • Players of the Game • Government Actors • Political Leaders • Government Departments • Firms: Corporate Sector • Non-state Actors
Corporate Sector • State Owned Enterprises • Preferential access to finance • Run on a policy, non-commercial basis, may • Engage in activities that boost economy-wide productivity • Support subsidized consumer prices or employment.
Accelerating Privatizations of SOE’s through 2007 World Bank Privatization Database
State-owned enterprises in China: How big are they? SUBMITTED BY GAO XU ON TUE, 2010-01-19 17:03 Link
Sovereign Wealth Funds Link Link
MNC’s vs. Business Groups • Multi-national Corporations: Geographically diverse, but industrially concentrated. • Business Groups: Geographically concentrated but industrially diverse. • A dominant model in emerging markets and developing economies.
Business Groups – Large, multi-company associations operating under common control with long-lasting co-operation. • Heavily diversified. • Usually family owned. Austen, J.E., 1990, Managing in Development Economies Link
Business Group in EM • Advantages • Economies of Scope: Bargaining power with suppliers, marketing muscle, information sharing, use management skill. • Diversify Risk and Increase Access to Capital • Disadvantages • Insiders may use corporate assets to server group at expense. • May use connections with gov’t to eliminate competition. Link
Non-government Actors • Political parties & movements • Religious groups
Rules of the Game • Formal • Constitution, • Type of Legal system • Property Rights Link
Rules of the Game • Informal • Unwritten practices • Business/work culture Link 2011 Investment Climate Statement - Japan · A highly insular and consensual business culture that is resistant to hostile mergers and acquisitions (M&A) and prefers to do business, especially M&A transactions, with familiar corporate partners;
Strategy Vision - Overall view of society Ideology Orientation Goals Policies
Orientation Dimensions of Analysis • Market Implementation vs. Government Control • Externally Oriented vs. Internally Oriented • Business Oriented vs. Labor Oriented
Synthesis • Construct a story that uses the different elements to describe the situation faced by the country.
No perfect system for describing a country’s situation. This system offers a straight-forward, easily comparable framework. Country-level approach may also be questioned. Any country has many individual actors which will each have their own objectives, strategies and performance measures.
