Term paper_INB 5807 - Foundations of Global Business - Article Example

This paper seeks to evaluate institutional environments of Turkey as a developing nation, and those of Germany as a developed country, and critically analyze how these environments impact stability and development of these countries. Political Environment Germany is a federal republican economy with republican form of government where there is division of powers between the federal government and the government of individual subdivisions. Turkey on the other hand has the parliamentary system of democratic governance where the executive derives its democratic legitimacy and is held accountable to the parliament/ legislature and legitimacy regarded on the will of the citizens.

These kind of political institutions have the executive arms of the government as ceremonial with much accountability based on the legitimacy of the legislature with which activities of the government are shared with majority in the legislature. . ls of governments with regular checks on the legitimacy of the executive by other branches of the government which helps to promote accountability and transparency (Weatherly & Otter, 2011). Stability in both countries can be traced on their legal systems and the provisions of representations in that for instance, Germany practices civil law system with many fundamental matters of administrative law being left in the hands of the states with the penal system aimed towards rehabilitation of the criminal and protection of the general public.

Stability on the other hand can be traced in Turkey’s universal suffrage form of election and representation and continued efforts by government and international organizations to enhance observance of human rights which promotes development in the long run. Economic Environment Germany has a social market economy; capitalism combined with social policies that favor union bargaining and social insurance, coordinated by highly skilled labor force and levels of innovations, and higher capital stock and strict levels of management.

Turkey on the other hand has a private and a more market based economic system where investment, production and distribution decision are broadly defined by market forces of demand and supply; with prices determined by these market forces. Unlike in social market economy where Rhine capitalism; where finance is more dominated by banks instead of stock exchanges, market model primarily depend on the willingness of the parties to transact. The social and economic/ financial institutions in a Rhine model enhance a well-adjusted balance of power between shareholders and managers, partnerships between employers and unions, regulated markets and shred relationships between banks and companies, and shared values