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Institutions at Different Levels

34 important questions on Institutions at Different Levels

What are core rigidities?

Core competencies that have become so ingrained in the workings of the firm, that they are difficult to change and make it impossible to adapt to a changing environment

At which levels do institutions exist?

1. Individual behaviour values assumptions
2. Group institutions
3. Organisational institutions
4. National institutions
5. Supranational institutions

What is institutional bandwith?

It is the degree to which institutions can vary at a certain institutional level. E.g. low level institutions have less bandwith about stuff that has been decided on supranational level

What are national institutions?

Formal and informal rules that apply within a country and through which economic, social and political activities are structured

What are international spheres?

Fields of power that create or influence the creation of institutions, and influence the maintenance or adaptation of institutions

What are the 3 institutional spheres?

1. The state
2. The market
3. Civil society
They shape the national institutions

What are the characteristics of the state sphere?

1. Political organisations that govern country
2. Financed through taxes and tariffs
3. Coordinated through corrective measures
4. Weakness: bureaucratic and rigid
5. Holds monopoly on legitimate production of regulatory institutions

What are the characteristics of the market sphere?

1. Made up of buyers and sellers of products who interact and engage through transactions
2. Financed through stocks loans and profits
3. Coordinated by competitive forces (supply and demand)
4. Weakness: imperfect markets that don't allocate resources desirably

What are the characteristics of the civil society sphere?

1. Consists of people who represent and serve the interests of a country
2. Financed through donations or volunteers
3. Coordinated through cooperative efforts
4. Weakness: fragmented
e.g. NGO's

What is the logic of the state institutions?

The Iron hand. Rules result from rationalisation and regulation of human activities. E.g. smoking is regulated because it is bad for health (rationalisation)

What is the logic of civil society institutions?

The Intangible hand. Rules result from respect, connectedness and loyalty to the group (society).

What is the logic of the market institutions?

The Invisible hand. Demand and supply create the rules

What is a PPP?

A Public-private Partnership. This is an enterprise that has both private and public investors, like Schiphol. Is a combination of the market and state sphere

How can the tragedy of the commons be solved using the iron hand?

Government limits amount each person can consume of public resource, to ensure it isn't harmful to everyone.

How can the tragedy of commons be solved using the invisible hand?

Make public good private and spread it among individuals. This gives them incentive to manage sustainable.

How can the tragedy of commons be solved using the intangible hand?

People who use resource cooperate out of self-awareness of their destructive behaviour to stop this behaviour.

What are the characteristics of the institutions in the liberal model?

1. Found in US and other Anglo-Saxon countries
2. Spheres: large market sphere, small state, little overlap between spheres
3. Society: free market, few state-owned enterprises, individualistic culture, litigation society (i'll sue you), rules determined in court, focused on shareholder value creation
4. Weakness: short-term oriented, leaves out weak members of society

What are the characteristics of the institutions in the business-statist model?

1. Found in East Asia
2. Small civil society, close cooperation between market and state, many state-owned enterprises
3. Society: Networks/relationships are important. collectivistic, long-term oriented countries
4. Weakness: weak unions, few NGOs

What are the characteristics of the institutions in the corporate model?

1. Found in continental Europe
2. Spheres: All spheres are almost the same size and overlap too. It is known as the stakeholder/polder model
3. society: High income taxes, welfare state. Medium-term orientation. Firms expected to serve interest of all stakeholders. Trade union members sometimes on board
4. Weakness: Potentially slow decision making because everyone needs to be included

What are the characteristics of the community model?

1. Found in Sub-Saharan countries
2. Strong overlap between market and civil society
3. Little state influence and large informal economy

What are the different institutional models?

1. Community
2. Autocratic/religious
3. Corporatist
4. Liberal
5. Business-Statist

What is the polder model?

A model that seeks consensus through using long and elaborate discussion (polderen). The players are employers, employees and the government

How are the cognitive institutions represented in the polder model?

By the culture of cooperation You are expected to cooperate with each other

How are the normative institutions represented in the polder model?

Every issue, no matter how small, needs to have a forum where it can be discussed in an informal way

How are the regulative institutions represented in the polder model?

CAO's and a social economic council with 33 members (11 employees, 11 employers representatives and 11 government officials)

What are supranational institutions?

Regulatory, cognitive and normative institutions that surpass national borders.

What is a beggar-thy-neigbor policy?

Benefits one country at the expense of others

What is a hegemony?

An imperial state controlling subordinate states

What are the 3 hegemony assumptions?

1. Without a hegemony, there is no collective direction in which states develop aka chaos. This is a hegemonyless period
2. The hegemon sets supranational institutions
3. For trade and financial systems to run smoothly, hegemon is needed

What is cultural convergence?

Cognitive supranational institutions. It is about the increasingly similar cognitive institutions in various aspects of work-related attitudes and values, consumption patters, strategic decisions, etc.

What is civilisation consciousness?

When civilisations converge within themselves and sharpen the fault lines with other civilisations in the process.

Why is civilisation consciousness increasing according to Huntington?

1. Crystallising cultural divergence through more cross-civilisation interactions
2. Reviving religious consciousness that underpins differences between civilisations
3. Polarising feelings between the west and the rest due to kin-country syndrome
4. Increasing economic regionalisation (trade agreements)

What is kin-country syndrome?

Culturally similar countries rally together against dissimilar countries

What are torn countries?

Countries with many cultures in their country that make it hard to find kin country allies

The question on the page originate from the summary of the following study material:

Macro case 2

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