Hrm, company-of-origin, analysis

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The Creation Of the Welfare State


  1. The communal support structures And extended family networks characteristic of traditional  agrarian society progressively ended . Children could not earn an Independent living and the capacity of their parents to combine childrearing with work was impossible .
  2. They needed  pensions And elderly care. In addition:  Problems emerged in industrial capitalism, industrial accidents, urban sanitary problems, and indeed Unemployment (paro)

Origin : Bismarck reforms In Germany in the 1880s, which were followed by similar reforms in other European nation states.

4.2. Industry in the 1945-1970s period:

The industries of the second Industrial revolution reached full maturity during the 30 years following the Second World War. Big business grew in size and number, especially in the three Largest European economies (Britain, France and Germany). As in earlier Periods, American firms were the largest.

Large corporations were vertically integrated. For example, Ford the automobile company used to own A tire company, a glass company, a metal company and distribution centers. All Of these are related to car production.

New management techniques were introduced during this period as showed By Alfred Chandler (1990) in his book Scale And Scope: cost-accountancy, marketing, human capital organization, etc. Anyway, some of these points were not satisfactory, for example the Bedaux System with too rigid definitions of jobs and tasks, and the Japanese were employing Much more efficient management techniques.

In addition, there’s a large Literature focusing on the difference between the American model of enterprise (shareholder) and the European model of corporation (stakeholder). As we have seen, in Europe shareholders are not the sole owners of enterprises, And other actors have a say also: the Community, banks, workers (through Co-determination in Germany). Another problem has been that management has had Too much power everywhere, through their better knowledge. This is the so Called Management Capitalism.

Industrial Policy and Market Failures

Market failures are Circumstances when the market doesn’t work properly. Examples:

1) Economies of scale:  they Make products cheaper to produce. But they lead to great corporations, Oligopolies and barriers to entry for developing countries, as they find Difficult to invest in such large and expensive shops.

2) Lack of information is also a basic failure. Thus, Technology is not free nor easy at all.

Due to the existence of Market failures, many times it takes the state to step in to solve them through Industrial policy 

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