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MGT520 - International Business - Lecture Handout 11

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The Determinants of Economic Development:

  1. Different countries have dramatically different levels of development, as shown in Map 2.1. GDP/capita is a good yardstick of economic activity, as it measures average value of the goods and services produced by an individual.
  2. But GDP/capita does not consider the differences in costs of living. The UN's PPP index as shown in Table 2.1 shows the differences in the standards of living of people in different countries.
  3. A problem with both GDP/capita and PPP is that they are static in nature. From an international business perspective it is good to look at the rate of growth in the economy as well as the status of its people. Map 2.3 shows that some of the fastest growing countries economically are those have been slower to develop.
  4. A broader approach to assessing the overall quality of life in different countries is the Human Development Index. This is based on life expectancy, literacy rates, and whether (based on PPP indices) incomes are sufficient to meet the basic needs of individuals. Map 2.4 shows the Human Development Index. Notice that some of the worse off countries are heavily populated and have rapidly expanding populations.
  5. What is the relationship between political economy and economic progress? This is a difficult issue. One thing that is generally accepted is that innovation is the engine of long-run economic growth. Another thing that we have come to generally accept in recent years is that a market economy is better at stimulating innovation than a command economy that does not have the same types of incentives for individual initiative.

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MGT601 - SME Management - Lecture Handout 30

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Breadth of Scope

  • Raw Materials and Piece Parts Inspection.
  • Vender Relation.
  • Process Control.
  • Motivation of Employees.
  • Reliability

What is Quality?

Quality is Conformance to Given Requirement or Specifications on a Product or Service.
The term quality by itself does not necessarily mean high quality. It means uniformity, consistency and conformity to what user wants.

Two Aspects of Quality.

  • Design Quality.
  • Manufactured Quality.

Design Quality

  • Design Quality Covers (materials, form, appearance, functions )
  • When Reference is made to “high cost of quality” such Reference is Almost Associated with Design Quality.

Manufactured Quality

Manufacturing is the transformation of raw materials into finished goods for sale, or intermediate processes involving the production or finishing of semi-manufactures. It is a large branch of industry and of secondary production. Some industries, like semiconductor and steel manufacturers use the term fabrication.

Read more: MGT601 - SME Management - Lecture Handout 30