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

2. 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.

3. 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.

5. 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 nation’s holdings of gold.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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 worker–management conflict.

11. 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.