Marketing and Economic Efficiency Create Societal Improvement

Artwork: Dr. Murad Abel

The bridge between economic growth and government efficiency is not an easy one to find. There are many factors that go into the process of building stronger economies, better societies, and more accountable government. Research by Sirgy, et. al. (2012) helps to show how marketing activities improvement of economic, social, health, and subjective health of a country is mediated by economic efficiency. As marketing activity increases and government oversight becomes more efficient the economy grows for the benefit of all societal members.

Marketing Activity:  The totality of marketing expenditures throughout society that increase awareness of products and services that speed up economic activity (Wilkie and Moore, 2007). This can be measured as dollar amount of advertising expenditures per GDP.  It is tightly woven retailers that fulfill the needs of customer’s life domains that enhance their quality of life. It improves upon information flow, consumption opportunities and improves job opportunities.  

Economic Efficiency:  When a country has lower levels of corruption, more liquidity in movement of money, the informal market is small, and additional employment opportunities it is said to be efficient (Matel et. al., 2010). The overhead transactional costs related to corruption is low while the political structure of the country allows money to move to those who have the abilities to earn it. This translates into efficient opportunities, government oversight, and skill based earning without a significance presence of the shadow market. 

When marketing activity is high, information is readily available, and people can make proper choices the economic activity increases. This economic activity raises the lives of people and revenue throughout an area. To maximize the benefits, government needs to be transparent, build trust, and gain revenue off of transactions.  Low government efficiency can damage economic prospects for business by strengthening the shadow market that seeks to avoid regulation/taxes. 

Measurements for marketing activity include advertising expenditure as a % of GNP and number of retail outlets per capita. Economic efficiency can be measured from the Corruption Perception Index (CPI), Economic Freedom Index (EFI), and shadow economy in % of GDP. Indicators of economic well-being are seen through the measures of inflation, Consumer Price Index (CPI), and GNI as international dollars using Purchasing Power Parity (PPP). Social well-being is measured in adult literacy rates and net enrollment ratio in secondary rules. Health Well-Being is measured in under-5 mortality rates, maternal mortality ratio, life expectancy, and public expenditure on health.  Subjective Well-Being is the subjective satisfaction of society-the happiness factor. 

Through reviewing data of 133 nations the authors found that economic efficiency has a significant impact on societal well –being. Government efficiency is a mediator of this relationship. Societal Well-being is defined as economic, social, health and subjective factors. As economic efficiency increases so does the opportunities and choices of societal members. Trust with the economy and government rises and this encourages greater economic activity that benefits a whole range of societal members across a broad spectrum. 

Comment: The report helps us to understand there are multiple factors in building a strong economy and society. Marketing gets out the “voice” on products and services and provides opportunities for people to understand these products and where they can be obtained. Government oversight can either damage economic growth or encourage it. When officials are in doubt about when to increase or decrease regulation it is beneficial see this through the lens of how this impacts economic growth, societal development and the basic factors of trust that underlines it all. 

Matei, et. al. (2010). Public integrity, economic freedom and government performance: a comparative study for the EU member states and acceding countries. Theoretical and Applied Economics, 18 (11)

Sirgy, M. (2010). Does marketing activity contribute to a society’s well-being? The role of economic efficiency. Journal of Business Ethics, 107 (91). 

Wilkie, W. & Moore, E. (2007). What does the definition of marketing tell us about ourselves? Journal of Public Policy and marketing, 26 (2).

How Online Learning can Foster Global Perspectives and Leadership

The world is changing and the interconnected nature of cultures and information is moving forward at a rapid pace. The need for global perspectives and education that meets those global needs is particularly important if difficult problems will be solved. Research by Gibson, et. al. (2008) delves into fostering higher levels of global perspective within the gifted population to ensure that there is a stream of leadership abilities available for the future. 

Globalization is seen as related to the interconnectivity of trade, technology, and the environment (Adams & Carfagna, 2006). The elements within the system begin to create higher levels of influence on each other and new ways are thinking are needed to handle the constant stream of information. The end effects of globalization include interdependence, interconnectedness, and culture diversity (Anheier, et. al, 2001). 

Global learning provides new opportunities for human advancement and skill development. Business distribution networks and government decisions no longer exist in a vacuum but have far reaching implications. Through the use of distance education it is possible that students can collaborate across cultural boarders to learn shared perspectives and additional cultural awareness. This knowledge can be used in business, governance, or general humanity.

Such cross-cultural education offers opportunities to maximize critical thinking, intercultural communication competence, collaboration, teamwork, reflective practices, dispositions and values (Roeper, 1988). These skills are sorely needed in society as the stakeholder pool widens. Without the ability to understand information at a greater level, society is doomed to repeat the same mistakes over and over. 

The gifted population has the capacity to move out of the pattern of events. They often worry about such issues as the environment, trade, hunger, peace, disease and terrorism (Gibson, et. al, 2008). They have the ability to understand these issues in greater levels and feel compassionate about the consequences on others. They are motivated by understanding and have the predispositions to engage in global learning due to their sensitivity and tolerance of others (Van Tassel-Baska, 1998).  They are highly sensitive to moral issues and the rights of others in global social issues (Clark, 2008). 

The process of global learning is the creation of global awareness related to various issues that impact the population. Global learners have the capacity to understand the interconnectedness and interdependence of the world. They must have effective reflection, intrapersonal intelligence, and metacognitive abilities. In other words, they must have the ability to reflect on choices and culture and understand their overall implications. 

The authors suggest that global learning is fostered through either face-to-face cultural interactions or through online collaborative projects. Students engage in online projects with others from varying backgrounds and dispositions. Using gifted students from different countries helps to ensure that the learning is not derailed by the limited perspective of more ethnocentric members. As this population is more open to understanding, empathizing, and helping they are a natural group to foster global learning and citizenship. 

This paper helps highlight the need to think beyond local and national culture. As the world becomes more complex and business more global in their operations, understanding the nuances of these changes will become important for leadership. The gifted population often races ahead of the general population and this makes them prime subjects for understanding the changes that are likely to occur in the future as general awareness increases. Whether one is situated on campus or in the buzz of cyber world, having students interact with those of varying cultures makes graduates more prepared to work in the global marketplace.

Adams, J. & Carfagna, A. (2006). Comitif; of a^e in a fiíoha Üzed world: The next generation. Bloumsfield. CT: Kutnarian Press.

Anheier,  et. al. (2001 ). Introducing global civil society. In H. K. Anheier. M. Glasius. »S: M. Kaldor (Eds.). Global civil society (pp. 3-22). New York: Oxford University Press.

Clark, B. (2008). Growing up gifted: Developing the potential of children at home and at .•school (7t.h ed.). Upper Saddle River. NJ: Pear.son Education.

Gibson, et. al.  (2004). Gaining multiple perspectives in gifted education through global learning reflection. Australian Journal of Gifted Education. 12, 34-40.

Gibson, et. al. (2008). Developing global awareness and responsible world citizenship with global learning. Roeper Review, 30 (1). 

Roeper. A. (1988). Should educators of the gifted and talented be more eoncemed with world issues? Roeper Review, ¡I, 12-13.

Van Tassel-Baska, J. (1998). Appropriate curriculum for the talented learner. In J. Van Tassel-Baska (Ed.), Excellence in educating gifted and talented ¡earners (pp. 339-361 ). Denver, CO: Love.

The Road to Serfdom by F.A. Hayek-Structure vs. Performance

Friedrick August Hayek was an Austrian and later British economist and philosopher. He was awarded the Nobel Memorial Prize in Economic Sciences for his work on a theory of money and economic fluctuations that tied in an analysis of the interdependence of economic, social and institutional phenomena.  He was a lead 20^th century thinker that contributed to economics, systems, neuroscience, jurisprudence and history of ideas. It was these multiple vantage points of seeing the nature of society and its economic system that led to one of his most influential works Road to Serfdom. 

In his work the Road to Serfdom he argues the main points that the loss of individualism also means the loss of liberty, oppression, and the eventual serfdom of people. His argument is that as governments centralize their power they also create limitations on people to develop their economic abilities for the betterment of the nation. Even though centralization has good intentions it eventually limits the ability of people to compete. Development must come through the individual and contribute as an individual to the collective benefit of all. He advocates for a bottom (individual) upwards form of social structure versus a top (administration) moving downward which creates natural limitations. 

Centralized control can be seen as a function of GNP. As governments control higher levels of GNP they will naturally exert certain powers over the lives of individuals. This power creates structures within society that limit the abilities of individuals to manifest their individual destinies. It would seem that strong governments are those that maintain the lowest amount of GNP as necessary to complete their duties and functions. Beyond this, governments could be seen as having unnecessary control over markets.

He argues that the only way to improve upon the betterment of people and the management of society is to push for truly free markets that enhance the ability of people to generate their own income. In this respect Hayek appears to have a level of validity in terms that true Capitalism is a free system whereby each person has an opportunity to produce income and is not thwarted by forced social adherence, policies that protect the conglomerates of companies or individuals, or in any way damage the ability of individuals to produce a living based upon their own skills and abilities. 

From Hayek’s arguments he does not believe government has no place in the market. Yet the government's role is confined to those things such as environmental protections, minimal safety nets, consumer protection, and labor rules that are considered fair and just. However, allowing special interest groups or companies to use government as another system of controlling people and their financial abilities to live free lives is a sure path to serfdom. Government should primarily concern itself with legislation that is necessary for the betterment of everyone and not continual consolidation of power and resources to control or manipulate markets. 

The book moves through a number of great chapters that include The Abandoned Road, The Great Utopia, Individualism and Collectivism, The Inevitability of Planning, Planning and Democracy, Planning and the Rule of Law, Economic Control and Totalitarianism, Who, Whom?, Security and Freedom, Why the Worst Get on Top, The End of Truth, The Socialists Roots of Nazism, The totalitarians in our Midst, Material Conditions and Ideal Ends, Prospects of International Order. 

After reading the book I find myself thinking about the importance of rewarding knowledge and performance in the marketplace versus social adherence. Government’s greatest responsibility would be to legislate only when it is necessary to maintain the free market (i.e. anti-trust laws) or when individuals are no longer free to make a living because of social, economic, or special interests. Laws are nation’s ethical standards and provide a framework for people to understand how to exist and compete in the market. If these laws unnecessarily protect certain groups from realizing their true potential or force a “status quo” on the population these laws should be removed as they limit the potential of a nation.  An entire system will eventually collapse and become impoverished when individuals cannot scan their environments and come to the conclusion that their performance equates directly to their success. The more people who come to this conclusion the closer the population is to serfdom as people’s potential wanes against the need to maintain social structure. Motivation is an internal force that pushes to be realized in a receptive or unreceptive environment. If that environment forces compliance with lower standards and rigid social expectations the highest levels of performance can’t be realized.

Evolutionary Economics-Is your organization innovating?

Is your organization changing to the times? It is important for organizations to consider the market conditions when loosing revenue or attempting to create sustainable growth. Market factors can cause some organizations to be successful while others are forced out of business. This is a process that fits within the evolutionary economic model that sees innovation, change, and development as a result of adjusting developmental patterns.

Evolutionary economics counters neoclassical models by focusing on the fluid development of economic systems throughout history. Where evolutionary economics sees adjustment in a more unpredictable adaptive context, the neoclassical model sees the economy at rest with well anticipated changes. The evolutionary model is fluid by nature and tries to explain how innovation and adaptation emerges from chaotic economic trials.

In evolutionary economics the rationality of the system is bounded (Simon, 1955). This means that people make decisions as institutions, organizations, government, and other entities to adjust to the market. Typically, these elements follow patterns of change and adaptation that worked well in the past. They have the power to innovate and develop from the challenges they face. This change becomes even more possible when the factors see an opportunity for resources or become aware that their existing patterns are not working.

This is different from other theories that assume that the actors have enough knowledge, time, and energy to make logical adjustments to the environment. However, such actors don't work within a vacuum and have imperfect information with imperfect conditions. This forces them to use patterns based upon previous behavioral styles and then adjust these patterns due to market pressures.

Evolutionary economics fosters the belief that adjustments within the systems are a learning process (Lall, 2000). In essence, unlike the neoclassical model where an optimum level of performance is desired the evolutionary style sees no optimal level of performance. It only sees the amount of adjustment and change in relation to economic factors presented. Growth is seen by how much change actually has occurred over a given time period.

Innovation within the economic system can cause levels of uncertainty (Schumpeter, 1950). As uncertainty increases so does the opportunities for innovation. Innovation coming from multiple sources within the economy and can also cause "creative destruction" which leads to winners and losers in economic development. It is this uncertainty that forces the factors to continually adapt to find market advantages.

Innovation in the market can come from the natural cooperation of entities within the system as well as through the institutionalized developers such as universities and governmental agencies (Nelson, 2008). Organizations and corporations often seek to develop products and services for specific market capitalization. Universities and public research focus on larger social platforms of market development that may take longer if relying on private interests alone. Thus, private and public research has an important change producing function in society.

The question business owners should ask themselves are 1.) "Is my organization changing to market needs?"; and 2.) "Are the patterns my management team developed through its policies & procedures adequate for this market change?".  If the answer is no then the organization needs to make a stronger environmental analysis and adjust its patterns in order to be one of the winners in this "creative destruction" process.

Lall, S. (2000) Technological change and industrialization in the Asian newly industrializing economies,in: L. Kim & R. Nelson (Eds) Technology, Learning, and Innovation (Cambridge: Cambridge University Press).

Nelson, R. (2008). Economic development from the perspective of evolutionary economic theory. Oxford Development Studies, 36 (1). 

Simon, H. (1955) A behavioral model of rational choice, Quarterly Journal of Economics, 69, pp. 99–118.

Schumpeter, J. (1950) Capitalism, Socialism, and Democracy (New York: Harper).

Book Review: Alan Grenspan-The Age of Turbulence

Alan Greenspan's book The Age of Turbulence: Adventures in a New World reached no.1 on the New York Times best seller list in 2007. The book appears to be one part autobiography and economic theory. His philosophical and economic approaches are spelled out between the pages. Through the work a reader should understand the nature and life of an important intellectual theorist within American culture.

The New York Times states, "For a memoir from such a high-profile figure, it is surprisingly frank. Large parts of the book are downright entertaining. Its biggest failing — the reason it isn’t a great memoir — is Mr. Greenspan’s reluctance to be as forthright and penetrating about himself as he is about others" (Leonhardt, 2007).

The first part of the book outlines his life from high school clarinet player, professional service, philosophical discussions, and through various employment positions leading to the Federal Reserve Chairman. He provides some wisdom for how markets act and interact with each and touch upon the various economic principles used to important make decisions. "There are no moral absolutes: values and ethics and the way people behave are reflections of culture and are not subject to logic (Greenspan, 2007).

To him culture and values are relative and the markets can be chaotic. Through analyzing data within his industry work he was able to expand his concepts to a larger society. This gives the readers some indication of how his self-perception and method of learning eventually led him to setting global financial policy. "My early training was to immerse myself in extensive detail in the workings of some small part of the world and to infer from that detail the way that segment of the world behaves. That is the process I have applied throughout my career." Greenspan, 2007).

Throughout the work he discussed various politicians and social elites he has met. Bill Clinton, Rush Limbaugh, Ronald Reagan, Newt Gingrich, George Bush, and other important figures. The book provides some understanding on how he saw each person and the approaches they used to make important decisions. At the very least, it provides some level of insight on how Washington works and the decisions that make up policy.

It is suggested that anyone who has some interest in politics, economic theory, or government administration should pick up a copy. The book provides insight into the nature of the Federal Reserve Chairman and the policies he enacted. Furthermore, it moves into the basic economic principles that are used as the vantage point in understanding and managing a larger societal economic structure.

Price: $12

Blog Ranking: 4.5


 Greenspan, A. (2007). The age of turbulence: adventures in a new world. NY: Penguin Books. ISB 978-0-14-311416-1

 Leonhardt, D. (Sept. 18th, 2007). Economist's life, scored with jazz theme. The New York Times. Retrieved January 5th, 2013.