Nonmarket Environments

Nonmarket Environments

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Part 1:
Across nations, there are considerable differences in the nonmarket environments. These differences become apparent through corporate governance and their reflection in the interests and power of various stakeholder groups. For example, the US places more importance on shareholders, followed by banks, business partners, and lastly employees; whereas, Germany places higher value on employees and banks, followed by business partners, and then shareholders. The US has a market for corporate control, the ?Wall Street Rule,? there a board of directors is nominated by management, encouraging corporate takeovers because business shareholding is fragmented. Germany is co-determined, banks, unions and management work closely together in business, and supervisory boards are independent of management.
The primary purpose of economic activity in the US is to maximize total wealth, by benefit consumers, increase ?the size of the pie?. Secondly, is the importance of wealth distribution. In a market-oriented system of capitalism businesses are treated as commodities, they are freely traded without real regard to social effects. Thus, corporate responsibility is low in the U.S. This is ?shareholder capitalism?, where firms concentrate on making profits for shareholders and not the welfare of its citizens. This focus is also on yearly profits and

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