Economic Development Study Assignment Sample

ECONOMIC DEVELOPMENT
STUDY
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An economy is defined as the system of country which consists of various factors of
production such as land, labour, capital and material etc (Bowles, 2006). The main objective of
wealth system is to maintain the balance between available resources and needs or wants of
citizens. It consists of basic three types of economies such as planned, market and mixed
economy (Chen and Mohamed, 2008). Whereas mixed economy is the combination of both
private and public sector. Most of the countries enjoy this type of wealth including United
Kingdom and United States of America. This essays shows benefit of mixed economy to UK in
which detailed description of meaning, advantages and disadvantage of combined wealth is
being given (Dettwiler and et.al., 2006).
The government has to make decision relating to what, when, how and for whom to
produce goods and services. Their judgment is basically depends on the type of economic system
of country (Elsevier, 2013). There are basic three types of wealth structure which can be adopted
by the nation; it includes private, public and mixed economy. In planned wealth the power of
decision making relating to the benefits of society rest with the government known as public.
Here capacity of development is very slow, so growth and investment are limited. The
infrastructure is usually under developed which makes government to spend money on some
other area as defense (Gabriel, 2004). Usually it is seen that employee motivation on such type of
economic system tends to be very low. On the other hand in capitalist economy most of the
decision is to be taken by private entrepreneurs. The role to government is restricted in forming
various rules and regulation relating to business and consumers. In the similar manner, buyer
demands for product and services which affect the level of supply and pricing in state (Drake and
Davies, 2006).
Mixed economy is the combination of both private and public sector economies. Most
nations demonstrate a combined financial system, including communist country like china. In
such type of wealth, some resources is being controlled by government other decision rest with
market (Sander, 2004). The administration makes such assessment which proves to be beneficial
for a society on a whole. It includes decision relating to defense, hospitals, road construction and
infrastructure etc. Whereas private entrepreneurs make judgment on the basis of demand and
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supply of goods as well as services; accordingly they influence the price of goods produced
(Newton, 2011). It contain following features such as welfare systems, employment standards,
environmental protection, publicly owned enterprises, and antitrust policies etc. The country
having this type of system seems to be beneficial for the nation in terms of cooperative
managerial decision making (Alleyne, Doherty and Greenidge, 2006).
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Here most of the decision is made according to market relating to consumption of goods and
services. However some judgment is taken by administration that are concerning to road
building, school and supply of medicines etc. In 1980 economic condition of United Kingdom
faced massive transformation when nation was under the leadership of Margaret Thatcher. Here,
state owned enterprises such as industrial and service sector were privatized. But now British
government owns very few industries such as ‘The Royal Mail’. In the year 1990 United
Kingdom has underwent the phase of civilization and modernization (Liow and Adair, 2009).
Then only UK financial sector came into the big screen and played a role in contributing the
country’s outcome revenue. Now most of the sector in United Kingdom is of service division
and account for 75 percent of the UK economic output. This has contributed most on the United
Kingdom financial system and raised grossed domestic capacity of the country (Vossos, 2014).
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Overall UK mixed economy has mostly free market features but retain some sort of socialist
characteristics.
There are various features of mixed economy which has benefited UK in a way to
became one of the most diversified nations. Here Britain government owns such sector through
which it can provide benefits for the society. It involves major hospital like national health care
services (NHS) which works under the control of UK administration. Whereas the company like
MC Donald and Tesco owns by private individuals who produce goods and services according to
the taste and preference of customer (Gupta, Clements and Inchauste, 2004). Here, production
will be done on the basis of need and wants of buyer and accordingly prices are set for each
product. This type of economy exhibits different types of objectives in which administration aim
for society benefits in whole. So, that no company or an individual is able to exploit the right and
duties of citizens. On the other hand private entrepreneurs aim is to provide utmost satisfaction to
their buyer. Through producing goods which satisfy needs and wants of the customer in an
effective way. In order to perform this manufacturer conduct thorough analysis of market, and
accordingly goods as well as services will be produced. In spite of this it is seen that mixed
financial system poses very tough competition between organizations (Why Mixed Economy is
necessary, 2009). This is because here producer are free to make decisions and strategy are
formed in order to attract their purchaser of goods and services. But government restricts their
ways through imposing various laws such as Competition Commission and the Office of Fair
Trading etc. Restriction is to be performed by regime so that companies will not became too
competitive, which some time negatively affect the country. Another feature is of pricing system,
which basically depends on the market structure of United Kingdom. The most of company in
UK uses competitive pricing strategy due to the present of high level competition. Such type of
strategy will be being considered to be very beneficial for the customer due to the availability of
close substitute. But when it comes to government side were they tend to provide some services
to be free such as NHS and education etc. While some of the charges like prescription and school
lunches will has to be paid by citizen of nation (What is an economy, 2014).
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The countries having mixed economy system poses various advantages because of its free
market and regulatory system. There are various benefits of combined nation seen on the activity
of United Kingdom. It provides business opportunity to many new entrepreneurs where they
have to make decision relating to what to sale (Holt and Edwards, 2012). Such type of
administration activity will always motivate producer to produce their best. Overall it will prove
to be very beneficial for the populace of realm.
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These types of system encourage many organizations in United Kingdom such as Tesco,
Sainsbury and ASDA etc. Though they all are tough competitors but has made their all effort in
order to give best to the buyer. For the purpose to maintain healthy competition UK government
has made efforts in the form of imposing various policies. Through using mixed economy system
United Kingdom has enjoyed balanced regional growth in the country (Alleyne, Doherty and
Greenidge, 2006). This is to be achieved by nation through rigid efforts of planning commission
of the country, where government has tried to develop every section of population.
The most important benefit of combined economy for UK is of pure free market. This is
because here producer are free to produce goods and services. Such type of activity has
encourages most of the companies in United Kingdom. It provides platform to many industries to
once come and represent their innovation. This is the reason why United Kingdom poses most
recognized name of companies, which has established their name in whole world. For example
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company like Wal-Mart which is one of the most famous retail industry. Here, all types of goods
and services will be made available to customer under one roof. Wal-Mart gives their buyer one
of the immense pleasures while purchasing product (Bowles, 2006). The whole thing is possible
due to economic system of United Kingdom. Along with this combined nation poses the
advantage of planned development (Schwartz and Francioni, 2004). It is possible due to equal
divisibility of work. Capitalist sector has a work to produce according to the needs and demands
of customer. On the other hand socialist section has to make various decision which leads to
society benefits in whole. Since each section has their own way of working so systemized efforts
is seen in UK which will ultimately result in planned development. The combined financial
system is helpful in increasing national production in United Kingdom. This is because here both
public and private sector work hard to bring more production in nation. They both make efficient
decision which leads to upliftment of country in whole. Another benefit of such type of economy
is of freedom to own private property. Every citizens of nation are free to purchase and sale
property in their own name which initiates them to work and earn more. The whole activity will
results in rapid development of economy. Along with the manufacture, citizen of the nation are
also benefited most through such type of system. This is because production is being done on the
basis of their decision and it is buyers who influence demand and supply of goods (Alleyne,
Doherty and Greenidge, 2006). So, produces has to produce such type of goods which will
provide them utmost satisfaction. On the other hand government has to form such type of policy,
which will protect customer from exploitation (Fethi, Fethi and Katircioglu, 2006). The main aim
of private firms is to earn and maximize its profits. Accordingly government is able to change
their policy in relation to the market condition. For example in the period of boom where
demand of goods and services will tends to get high. The whole activity will lead to raise the
employment level of nation. But in recession, where production and demands of product will
tends to be slow which results in retrenchment of many worker (Chen and Mohamed, 2008). So
due to the availability of government intervention employee job security will be maintained. This
is to be performed by administration through imposing various rules and regulation relating to
labor acts and laws. In mixed economy market prices is being regulated by UK government,
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where they ensures that prices do not go beyond the actual one. The combined effort of both
private and public sector economy makes optimum utilization of national resources. Here
citizens of Britain enjoy more power as they regulate demand and supply of country (Bujaki and
McConomy, 2010). It is because of through buyer intervention only quality and quality of
product will be maintained by manufacture. As well as mixed economy also help in removing
monopoly of an enterprise, due to the availability of many competitors. Through having such
type of policy customer will be benefited at most and they are able to buy goods and services at
comparatively low prices. This results in increasing the demand and supply of product in United
Kingdom.
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The whole activity imposes psychological fear of taken over on various organizations (Fernando,
2011). Though combined nation poses various benefits but it is not being able to maintain
equality in United Kingdom. The result is rich people grows richer and poor people remain in
between poverty line which causes serve inequality in the country.
This can be removed by government through forming more strict policy in relation to
competition. So that every citizens of the state is able to enjoy the goods and service produced in
nation. Along with this mixed economy invites corruption in the country which is in the form of
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Black-marketing, profiteering and dishonest dealings etc. It is to be seen at both higher and lower
levels. Mixed economies of United Kingdom are criticized by socialist for allowing too much
market forces. This is because it leads to formation of inequality and an ineffective allocation of
resources (Bujaki and McConomy, 2010). Along with this in combined economy bureaucratic
decision making is affected. This is because a state controlled enterprise has to take decision on
issues which are affected by capitalist self regulatory decision. Due to the unpredictable nature of
free market success of bureaucratic decision will be guaranteed. The clash of decision making is
also being seen in the mixed economy that affects many company policies. For example,
companies in United Kingdom aim to raise the prices of product in order to remain competitive
in market. But various competition policies restrict them in performing such type of action
(Drake and Davies, 2006). It will discourage producer to show their innovativeness in market
and which ultimately affect the economic condition of the country.
Attributing all the facts from given essay it can be concluded that, mixed economy is very
beneficial for United Kingdom. It is because if there is a relying on only one sector then it will
tend to restrict the activity of government (Alleyne, Doherty and Greenidge, 2006). Through
involving both public and private sector administration can take effective decision for the
country. There are various benefits seen for the mixed economy if it is to be applied in an
effective way. Combined nation allows policy of fair competition as well as encourages producer
for innovative thinking (Holt and Edwards, 2012). It gives opportunity to many manufacturers in
the form of free entry into big market of Britain. Such type of system helps United Kingdom in
its rapid economic development, which allows optimum utilization of resources (Elsevier, 2013).
Along with this it also has the advantages of less inequality of income. Here market prices are
well regulated by United Kingdom government (Gupta, Clements and Inchauste, 2004). This
permits administration to follow the prices which provides overall benefit to the society. Thus
having mixed economy, United Kingdom will be able make optimum utilization of its natural
resources. It is because collective decision making makes works perfect for the country (Bowles,
2006). Through following combined financial system, country will be able to satisfy needs and
demand of their citizens. In order to perform it manufactures has to carry out thorough analysis
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of market in an effective way and; accordingly producer has to produce goods and services.
There are various big brand names flourishing under such type of economic system (Chen and
Mohamed, 2008). It includes Tesco, NHS, Sainsbury, Wal-Mart and ASDA etc. These are big
names in industry and it is due to mixed economy only they are flourishing in an effective
manner. So it can be said that mixed economy has provided numerous benefits to United
Kingdom Gabriel, 2004). This is reason why country has been included in the list of largest
developed economies in world.
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REFERENCES
Books and Journals
Alleyne, P., Doherty, L. and Greenidge, D., 2006. Approaches to HRM in the Barbados hotel
industry. International Journal of Contemporary Hospitality Management. 18(2). pp. 94–109.
Bowles, P. 2006. The political economy of UK foreign aid. International Review of Applied
Economics. 1(2). pp.225-240.
Bujaki, M. L. and McConomy, B. J., 2010. Gendered interactions in corporate annual report
photographs. Gender in Management: An International Journal. 25(2). pp. 119–136.
Chen, L. and Mohamed, S., 2008. Impact of the internal business environment on knowledge
management within construction organizations. Construction Innovation: Information,
Process, Management. 8(1). pp.61–81.
Dettwiler, P. and et.al., 2006. Business environment and property management issues: A study of
growth firms in Sweden. Journal of Corporate Real Estate.8 (3). pp.120 – 133.
Drake, P. R. and Davies, B. M., 2006. Home care outsourcing strategy. Journal of Health
Organization and Management. 20(3). pp. 175–193.
Elsevier, B. V., 2013. Business environment, operations strategy, and performance: An
empirical study of Singapore manufacturers. Journal of Operations Management. 13(2).
pp.99–115.
Fernando, A. C., 2011. Business Environment. Pearson Education India.
Fethi, M. D., Fethi, S. and Katircioglu, S. T., 2006. Estimating the size of the Cypriot
underground economy: A comparison with European experience. International Journal of
Manpower. 27(6). pp. 515–534.
Gabriel, S. A., 2004. Quality of the Business Environment versus Quality of Life. The review of
economics and statistics. 86(1). pp. 438-444.
Gupta, S., Clements, B. J. and Inchauste, G., 2004. Helping Countries Develop: The Role of
Fiscal Policy. International Monetary Fund.
Holt, G. D. and Edwards, D. J., 2012. Innovation or business survival?: A preliminary,
qualitative study of UK construction plant supply chains. Construction Innovation:
Information, Process, Management. 12(1). pp. 99–122.
Kew, J. and Stredwick, J., 2005. Business Environment: Managing in a Strategic Context. CIPD
Publishing.
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