Chapter 19, Economic Institutions

1
Chapter 19, Economic Institutions

• Sociology and Economics
• Markets and the Division of Labor
• Economics and the State
• Workers, Managers, and Corporations

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Economics and Sociology

• The subjects of sociological research are
• Markets and the division of labor.
• Interactions between government and economic
  institutions.
• The nature of jobs and professions.

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Markets

• Economic institution that regulates exchange
  behavior.
• Different values are established for particular
  goods and services.
• Market transactions are governed by agreements -
  a seller agrees to supply a particular item and a
  buyer agrees to pay for it.

4
The Development of Markets

• Began in the late 15th century as a result of
  the development of new technologies that
  facilitated trade.
• Today world markets are dominated by
  multinational.
• Economic globalization is a worldwide shrinking
  economic distances between nations.

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Economic Ideologies Mercantilism

• The wealth of a nation could be measured by its
  holdings of gold.
• The best economic system was one that increased
  the nations holdings of gold.

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Economic Ideologies

• Laissez-faire capitalism - wealth is measured
  only by capacity to produce goods and services.
• Socialism - private property and personal profit
  should be replaced by public ownership of
  property and sharing of profits.
• Democratic socialism - large corporations should
  be owned by the nation for the benefit of all
  citizens.

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Changing Economy in the U.S.

• Transition from economy based on production of
  goods to one based on provision of services
  resulted in the displacement of thousands of
  skilled workers.
• These trends indicate a change in the social
  contract in which individuals who work hard can
  expect increases in their living standards.

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Corporations

• In the U.S. the corporation has gained
  ever-greater dominance over other economic
  institutions.
• During the last hundred years, the importance of
  corporations has come to outweigh that of
  individuals in most institutional sectors.
• The individual is often at a disadvantage in
  dealings with corporations.

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Approaches to Management

• Scientific management approach attempts to
  increase productivity by determining how each job
  could be performed most efficiently.
• Human relations approach seeks to improve
  cooperation between workers and managers.

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Conflict Theory of Management

• Study how social class and status at work and
  outside the workplace influences relations
  between workers and managers.
• Asserts that the human relations approach fails
  to consider the basic causes of workermanagement
  conflict.

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Interactionist Theory of Management

• Devoted considerable study to professionalization
  
• Which occupations gain the status of professions.
• The processes of learning the formal and
  informal norms of a profession.