Introduction
The impact of industrialization in national business systems and institutions cannot be over emphasized. Different countries in the biosphere had different stages of industrialization. Some countries were pro-active while others started late after the industrialization process had begun. Development had different progressions had an impact on the institutional and organizations in the business systems of different nationalities. Industrialization can be understood from two fronts. There is early and late industrialization. This therefore explains the developmental nature of different nations across the world. The dissimilarities in the institutional and organizational characteristics on the long-term enactment of national commercial systems can be can be enlightened based on ‘early’ or ‘late’ industrialization. Even though the UK and United States came first in terms of industrialization, China, Japan and Germany have emerged as overriding figures in institutional and organizational wellbeing even though they came late in terms of development advantage.
The two industrialization eras can best explain the developmental nature of institutions and administrations in the developed and less developed nations. It should be noted that not all countries had the same method or procedure of being industrialized. In the history of industrialization, the United Kingdom is placed as one of the countries to have achieved early industrialization (Blackford et al, 2). The United States followed in the full steps of Britain and became the second nation to be developed. Through the edges, a number of countries emerged as industrial capitals in the early industrialization epoch. Countries such as China, Japan and Germany have emerged industrial nations in the twentieth century. The economic comfort of these countries can be explained because they become industrialized at an early period.
An Initial developmental theory made other nations to be far ahead of others in terms of development. It has been noted that the reason as to why nations such as the UK and America are where they are today is as a result of early industrialization (Martin, 87). Japan and Germany are considered late industrialists while China came a distant last in terms of development. However, the development nature of their institutions and organizations varies only to the extent to which industrialization took place. For instance, in the UK, the development nature of institutions and organizations far much stretches the rest of the other countries. In the early industrial period, the underlining factor was the rate at which a nation industrialized. When talking about the development of different nations, the basis on the different paths that nations took in order to ensure that an industrial maximum was achieved. While the UK came first in terms of industrialization, the other nations that implemented their industrialization plan came and surpassed them in terms of development.
The impact of industrialization on different nations can be understood based on the periods of early industrialization. Case in point is that almost all the countries that went through early industrialization have different institutional and organizational characteristics. It should be noted that a comparative analysis could be ensured based on the idea that the nations that went through early industrialization had different ways through which they implemented their programs. Based on the different styles of implementation, institutions had different characteristics in terms of their development. When talking about institutions and organizations, the focus is on the banks, business groups and other organizations charged with different development issues. Late development cannot be in any way being compared to the early development. The two theories of developments are different worlds apart and therefore, in the comparative analysis of the two, each should be treated as independent variables. Independent variability comes in the sense that the two theories can only be applied with respect to the different times through which an impact was made. Though there can be some elements of dependency, independent nature comes into the extent to which the different countries had their own implementation plans (Amsden, 19). Understanding the two theories can only be put into proper perspective with respect to comparative analysis of different countries.
Late development theory with respect to the industrialization process had different issues. The UK was the first country to industrialize and in this sense, its development nature can be understood based on the early industrialization. In the late eighteenth century, the UK emerged as a power in industrialization (Mokyr, 15). Almost one hundred years after the industrialization of Britain, the United Sates together with Germany emerged have industrial powers. One thing that should be noted is that countries such as Germany, China, Japan and the US are considered late industrializers taking into consideration the duration between their rise to industrial state and that of Britain. The late industrializers did not have factors of production during the period of industrialization. During this time, the nations that came late in terms of industrialization borrowed components such as technology to raise their production. They had nothing of their own and that made the countries go for the items that were missing to make ends meet. Late development theory, therefore, puts into perspective the nature of the environment where the different nations belonged to terms of industrialization. The different institutions and organizations had some differences in their structures and the modes of operations.
The late industrializers had different institutions that supported their wellbeing. As nations that were just starting, the different nations need well-grounded foundations in order achieve the various ends. To this end, the nations relied much on the banks for loans and grants in order to develop their structures. Countries like Germany and Japan relied on the different banking institutions both within and abroad to get a basis through which they could establish structures that could enable them get to the level of other industrial powers. At the time of late industrialization, the UK and the United States were relatively stable in terms of their banking institutions. To some extent, the late industrializers depended on the financial institutions in the developed nations in the case the early industrializers to get grants and loans for their development. The late industrialists also depended largely on the business groups for support. Even though the nation has only had small pockets of search business groups, they were influential to the extent to which they gave financial incentives to the different industries for the purpose of development (Suehiro, 36).
Over time, there emerged an industrial policy in different nations such as Japan and China. In fact, the development of mega institutions in China and Japan in the current dispensation can be explained from the point of that, the two nations had industrial policies that were geared towards the development of the nations. The aim of the industrial policy was to sustain the mode of industrial development to the extent of achieving the advantage in terms of development. The stock markets in the late industrializers were not as active, though through the different stages, the emerged strong financial institutions and a stock exchange system that could be relied on. The emergence of strong markets and in countries such as Germany can be explained by the fact that as the nations grew in terms of development (Herrigel, 1). Key institutions came up as a back up to a strong industrial system. The market system in Germany became very competitive to the extent that it could not be distinguished from the other nations that had come first in terms of industrialization. While Germany emerged as powerful in terms of industrialization, key institutions came up. The same can be said of a country such as Japan. One of the areas that Japan did well was in the area of technology. Japan emerged as a technological hub to the extent that the development nature of that nation attracted a number of investors.
China is said to have borrowed a life from their neighbors Japan, though the two nations were almost at the same level with each other in terms of development. As the nations emerged as industrial powers, so did the institutions rise to supplement the wellbeing of such institutions? The stock exchange and the financial institutions came up as the industrialization ensured more liquidation of the various economies. Through the different changes that have been experienced, a number of strategies have emerged in terms of how people do business and strategies used to ensure success in the different fields.
The state is an important institution in ensuring the performance of different institutions. Case in point is that the industries or development of key institutions cannot be realized if governments do not provide better environments for operations. However, the government must come up with policies that regulate the operations of key institutions to protect the consumers from unscrupulous business people who take advantage of the masses. While the state plays a significant role in coming up with policies to define relationships among different institutions, the focus is always on the institutions and their role in providing the necessary support for the development of the nations (Poole, 342). The United States ensures that there is a way through which there is a regulated system where single institution is protected under the law to moderate the operations and eventually the performance.
The role of banks and shareholding can be understood based on the relationship between the two components. It has been argued that banks play a significant role in the economy to the extent that they determine key operations in the economy. Previous research done in the past with a focus on the United States and the UK has shown that over the years there has been a surge in institutional shareholding. In the late nineties, institutional shareholding was at about 24%. This figure raised to almost 50% the late stages (Woo-Cumings, 182). This is testimony that institutions have a stronger mandate in the manner in the day to day running of the development agendas of the different countries. The menace of recession in the United States in 2008 was attributed to the banking sector. Case in point being the unresponsiveness of the banks to take charge of own operations. The banks failed to protect the consumers not to mention failing to give financial incentives to the people when needed.
China, Germany and Japan have different characteristics in terms of their organizational and institutional comfort. This can largely be attributed to the differentials in their respective governments. Case in point is that China’s government has a pro-active government that demands for institutional and organizational expansion of the development agenda. China’s government insists on the economic agenda and serving a bigger market. In general, China’s economy has grown to some significant levels because of the strengthened institutions and organizations. The financial sector in China is more vital and versatile. Japan’s government focuses attention on achieving a technological edge over the other countries as Germany. The institutions in Japan are technologically driven because of the emphasis the government has put on technological development. Germany’s government focuses attention the institutional development of organizations for the purpose of gain a diverse competitive advantage over other nations.
National institutions environment to some extent affect the way in which managers carry their managerial duties and decision-making. Case in point is that different firms consider the development agenda of different firms before putting up management teams (Grabowski, 12). The management of institutions in certain environments is designed in such a way that there is an interrelatedness of some sought. The financial wellbeing for some institutions affects the manner in which decision-making is done. In every institution, the finance department draws the budget and is, therefore a key policy initiator. To this extent, there are some decisions that are to be instituted based on the financial strength of the institution. China has emerged as a nation with a powerful development agenda (Garnaut, 240). Improved training skills, management techniques and employment policies have kept China on the list of nations with better development agendas. A comparison analysis between China, Japan and Germany shows that China has been consistent in its development. Late development theory may not really be a factor to consider when it comes to development. The underlining factor is how consistent a nation has been with respect to economic development. The late industrialists and the early ones have had a great impact on the global economy (Weiss, 56)
Conclusion
The disparities in the institutional and organizational characteristics on the long-term performance of national business systems can be can be explained based on ‘early’ or ‘late’ industrialization. Different nations have emerged from the late development industrialization to become stable with strong institutions and organizations. Though UK and United States were some of the early-industrialized nations, China that came late into the industrial system has emerged as a power with improved institutions and organizations. Appreciating the development agenda of a country depends on the consistence and the responsiveness of a nation. The UK, United States, Japan, China and Germany had different faces of industrialization. Institutional and organizational developments are unique and varied.
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