LINEAR AND NON-LINEAR PARADIGMS OF DEVELOPMENT

QUESTION: BRIEFLY DISCUSS THE LINEAR AND NON-LINEAR PARADIGMS TO DEVELOPMENT. WHICH PARADIGM DO YOU THINK IS MORE APPLICABLE IN UNDERSTANDING DEVELOPMENT TODAY?

ABSTRACT

The linear-stages economic development paradigm and the non-linear paradigm are the two main realms of economic thought. The linear paradigm is the argument that all nations have to go through five stages in the development process. The non-linear paradigm promotes development thinking that does not espouse any specific successive steps. The main non-linear models include structural-change theories and international-dependence views. Each of the paradigms provides a valuable aspect in the study of development economics and in solving economic problems.

INTRODUCTION

Development, according to Nobel laureate Amartya Sen (2000:3),

… is the process of expanding the real freedoms that people enjoy. … Development requires the removal of major sources of unfreedom: poverty as well as tyranny, poor economic opportunities as well as a systematic social deprivation, neglect of public facilities as well as intolerance or over-activity of repressive state.

The two paradigms on development are the linear-stages-of-growth and the non-linear (Todaro and Smith 2012: 110).

    

THE LINEAR STAGES OF DEVELOPMENT

The thinking of the 1950’s and 1960’s was that nations had to pass through a set of successive steps to development, and that all the developed nations of the time had passed through the stages. The argument was that development only required the right combination of savings, investment and aid.

Rostow’s Five Stages Linear Growth

American economic historian Walt W. Rostow (1960) listed five stages as follows:

1.      Traditional society, characterized by subsistence and agricultural production, little or no trade, and limited, low-level capital stock with accompanying low productivity.

2.      Pre-conditions for take-off. Use of machines in agriculture increases and so does trade. Savings and investment are higher but still generally low as a portion of national income.

3.      Take-off. There is greater manufacturing and the relative size of agriculture shrinks even though it is still big and employs a huge part of the population.

4.      Drive to maturity. There is greater diversity in manufacturing. Innovation levels rise and are a source of real per capita income growth as opposed to higher input of factors.

5.      Age of mass production. Output and consumer expenditure rise. The economy has an expanding middle class which keeps the economy growing. Tertiary activity increases.

The Harrod-Domar growth model.

The Harrod-Domar model proposes that a portion of national income should be set aside as savings for investment (Harrod 1939). Growth, it is argued, is proportionate to the level of savings and investment. The linear-stages-of-growth paradigm is premised on four golden principles: (i) Order, meaning known causes lead to known outcomes any time, anywhere; (ii) Deductionism, meaning the whole can be deduced if the constituent parts are known and understood; (iii) Predictability, meaning by adding relevant ingredients to the model, the future causes of events can be worked out IF the whole is known, and (iv) Determinism, meaning that previously existing conditions are the causes of future happenings. There is a linear and orderly manner of happenings. 

Criticism of the growth model

The basic criticism if that while savings is necessary, it is not a sufficient condition.

NON-LINEAR PARADIGM OF DEVELOPMENT

1.      Structural Change Models

These growth models emphasise structure.

The Lewis Theory of Development

W. Arthur Lewis (1954), Nobel Prize recipient, theorised a two-sector transformation model that showed labour transfer from the surplus-labour, low-income agricultural sector to the better-paying industrial sector. It dominated development thought in the 1960’s and early 1970’s (Todaro and Smith 2012: 115).

One frailty of the Lewis model is in the assumption that capitalists will reinvest all their profits in more capital; and that the rate of labour transfer will be proportionate to the rate of capital formation. The problem is that cost-sensitive capitalists might invest in labour-saving capital, so that not so many people are absorbed into the industrial sector.

Structural change and patterns of development   

It is a comprehensive look at a cross-section of structural elements including resource use, international and domestic trade and socio-economic issues like urbanisation and changes in consumer demand. Proponents of this model, like Hollis B. Chenery (1960), argue that development can be hampered by both domestic and international factors. One criticism of the structural change and patterns of development model is that emphasis is placed on structure and patterns rather than on what is supposed to be done. That is, the cart is placed before the horse.

       

      2.      The International Dependence Revolution

It is a predominantly later-1970’s argument, that underdeveloped nations have institutional rigidities and are caught up in a dependence and dominance model with advanced economies.  

Neo-colonial dependence model

This dependence model feeds into Marxist thinking that the rich and poor worlds are bound in an economic relationship that makes rich nations richer and poor countries worse off.

The False Paradigm Model

It states that solutions offered to developing nations are devised by foreign experts who do not know the practical realities of the under-developed societies, such as influence of social class.

The Dualistic Development Model

The model openly recognises that there is a rich world and a poor world internationally and locally, with possibly increasing differences.

One weakness of dependence theories is that even though they offer good insights into reasons for under-development, they do not explain ways to start and sustain development.

3.      The Neo-classical Counter-revolution

In the 1980’s and 1990’s, thinking on development based on the magic of the market place and the invisible hand of capitalistic practice emerged. This model, according to Todaro and Smith (2012: 127) has three variants called free market analysis, Public choice and market-friendly approaches. Robert Solow (1956) provided a defining contribution to the neo-classical growth model by adding labour and technology to the  Harrod-Domar model.

CONCLUSION: WHICH IS MORE APPLICABLE IN UNDERSTANDING DEVELOPMENT TODAY?  

In the view of this writer, neither of the two paradigms can be said to be the better one. They each have positives and negatives in understanding development and devising policy. There should be, in other words, complementarity in their application to understanding development theory.

BIBLIOGRAPHY

Chenery, Hollis, B. (1960) Patterns of Industrial Growth. American Economic Review, Vol. 50, No. 3 (September 1960), pp. 624-54.

Harrod, Roy, F. (1939) Essay in Dynamic Theory. The Economic Journal, Vol. 49, No. 193 (Mar., 1939), pp. 14-33. New Jersey: Blackwell Publishing. Available online at: http://piketty.pse.ens.fr/files/Harrod1939.pdf. Retrieved May 14, 2020.

Lawrence, E. and Sargent, Thomas (2014) Harrod 1939. Available online at: http://www.tomsargent.com/research/Harrod_tom_6.pdf. Retrieved May 17, 2020.

Lewis, W., Arthur (1954) Economic Development with Unlimited Supplies of Labour. Manchester: Wiley. Available online at: https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1467-9957.1954.tb00021.x. Retrieved April 30, 2020.

Rostow, W. Walt (1960) The Stages of Economic Growth: A Non-Communist Manifesto. Cambridge University Press.

Sen, Amartya (2000) Development as Freedom. New York: Alfred A. Knopf.

Solow, M. Robert (1956) A Contribution to the Theory of Economic Growth. The Quarterly Journal of Economics, Vol. 70, No. 1. (Feb., 1956), pp. 65-94. Available online at: https://www.econ.nyu.edu/user/debraj/Courses/Readings/Solow.pdf. Retrieved May 11, 2020.

Todaro, Michael, P., and Smith, Stephen, C. (2012) Economic Development 11^th Ed. Boston: Addison-Wesley.

HOW TO GET PROMOTED

‘Promotion’ is one of the few words that make people work that little bit harder in their job. The reasons are not far.

Promotion is when an individual is moved from one position to a higher one. For example, from salesman to sales manager, or accountant to head of finance.

Promotion normally brings higher pay, more privileges and better status. These are generally what the word is about. Does it need explaining? The question is, how does one put their hands on that promotion?

There are many ways to get elevated. Some of the things you can do to get your promotion include:

·        Putting your best in your work. Work professionally and present to your supervisors the best that you can achieve. This is perhaps one of the two most important rules.

·        Being trustworthy. Cultivate confidence in those around you that you can be trusted – with all forms of organisational assets including money, equipment and information. This certainly has to be the second of the two cardinal rules (the other being the above, of course).

·        Pointing out serious mistakes or omissions – even if it is your boss who has made it. This is a sensitive area. Some supervisors, if they are insecure, may not take it well. However, it might be more damaging in the long run for you not to say anything when you see something wrong than to do so. All supervisors secretly appreciate sub-ordinates who act as their third eye (it insulates them from being in trouble themselves). Only, choose the right moment and right way to do it.

·        Being brave. If called upon in a large meeting to share with others what you know about a particular subject, rise and speak. The plenty eyes around you will not swallow you. If anything, you will establish yourself as a leader and solution-provider. 

  Self-improvement. Formal education, reading and listening to people with more experience are powerful ways of moving from one level of knowledge and competence to a higher one. Self-improvement must be an ongoing process.

Drawing a line between business and pleasure. Leave business for business time and pleasure for pleasure time. They rarely move together. Many careers of otherwise capable women and men have been wrecked or slowed down because of not observing this rule. If you have not been, be smart about it - starting today! Finally,

·        Sacrificing a bit of your private time to get important tasks done. All managers do this. So, you will be marking yourself as one, by missing one beer to complete one vital job. Thirty minutes or so will be a valuable investment in your career progression.

This is it for now. Get your career on fast track by observing these rules. They may not be the only important principles. Nevertheless, they are among the highest-ranking.

Bye!!

HOW YOU CAN MAKE YOUR WORKPLACE HAPPIER

SPREAD HAPPINESS: MAKE YOUR WORKPLACE A CHEERFUL ENVIRONMENT

Research has shown that workers are more productive when they operate in a happy environment. Here are some things you can do as manager to lift spirits in your workplace.  

Use well-considered, positive language

Strong words create a negative mood. Communicate professionally, using rational language, no matter how badly you may feel inside.

Do not reprimand anyone in the presence of others   

The risk is that everyone that hears might think the message is for them, too. Even when done discretely, it must be about showing the right way rather than threatening or bashing.

Forgive and forget

Those who make mistakes must not be held prisoner forever. Remind them of their weakness one moment and act as though nothing happened the next.

Have a truly encouraging motto

The workplace mantra must be inclusive and totally upbeat. That is, something like:

Together, we will get there, rather than something like The hardworking will get there.  

Enjoy life

The office does not always have to be about papers and tenders (I really sweated with tenders as Sales Manager!). You could have, for example, a Crazy Friday, when all could dress as adventurously as they liked, and be treated to some free drinks and snacks. Not only would that be a release of pressure. It would also encourage freer mingling and promotion of a sense of sisterhood or brotherhood among workers, vital ingredients in making people live more merrily.  

Encourage everyone to appreciate others

There must be a deliberate policy of reminding employees that there is good in everyone and that all deserve appreciation.

Brighten up the offices with flowers

Place a vase of bright flowers in a central place where everyone can see and admire them. Flowers (and pictures of smiling faces) have great soothing and uplifting effects that suggest: Everything is alright. And so everything shall be!

Congratulate others on good work

People like their good deeds to be recognized. It could be as simple as, John, that was a well-written quotation!   

Be cheerful

As manager, it is important for you to radiate a positive mood. You have to be the happy-person-in-chief. It rubs off on all the others. Try to smile even when you do not really feel like it.

Keep bad times of the past buried in history

Do not keep reminding others of something that went wrong in the past. Talk about bad events gone by sparingly and only when absolutely necessary, or it could bring about an air of gloom.

Handle problems with a cool head

No matter how serious a problem, it is important to be level headed as you attempt to solve it. It sets the tone for others in similar situations in the future.

Celebrate happy occasions

Mark anniversaries, arrival of new babies and other important moments in the life of each employee with joyful get-togethers.

Finally, remember this...

·      

•   People like to see smiling faces.

•  People (without exception) are so in need of love. A smiling face tells them: You are loved. They feel happy. Love is the message we all want to receive; even though many of us are not even aware of it.

•  Happier people work harder and better. And they make others happier.

• And before you know it ... everyone around you is cheerful and working harder and better. Ultimately, you have a more productive workplace.

Do not underestimate the power of a smile! And hey, you do NOT have to be a manager to help make your environment joyful. Smile! Show a happy face!

Rupert Chimfwembe

May 28, 2018

SIMPLE RULES FOR MAKING YOUR BUSINESS MORE PROFITABLE

SIMPLE RULES FOR MAKING YOUR BUSINESS PROFITABLE

A business must make profit to be meaningful to the owner or owners and other stakeholders, and to continue to survive.

Advice on making an enterprise profitable could be given under two main headings:

  1.    Keeping Costs Minimal.

-         Drop products that always make losses.

-         Do not increase your staff unless it cannot be avoided. Remember, it is easier to avoid employing than to send employees home (declaring them redundant).

-         Introduce a performance-based salary rise system if you do not already have it.

-         Get better deals from suppliers, buyers and intermediaries (supporters of the business environment such as insurance companies, brokers, consultants and bankers).

-         Use home space instead of renting dedicated offices. If you have to go the lease way, ensure there is no space in the offices or yard that you do not immediately need. The property owner takes every square inch into consideration when fixing how much you have to pay.

-         Deal in products that allow a bigger profit margin, or sell fast.  

-         Improve efficiency. That is, producing more with less, or more with the same amount of investment.  

-         Look around you some more, and see if there are other unnecessary costs your business is bearing: limit office decorations to what just makes it a pleasant place to operate in; can the business support a vehicle with the engine sizes you have in your fleet?

  2.    Increasing Sales.

-         Improve your offer. This is sometimes a short term cost but long-term gain. Areas of improvement are diverse and depend on the product type. In the case of a bathing soap, for example, spheres of attention could include shape, scent and size.   

-         Widen product range. This gives you more sources of profit.

-         Capture new customers. Yes, it does mean more sources of purchases – another way of saying more profit.

  3.   Increasing Price. 

Perhaps the most direct and obvious avenue of making a business more gainful is increasing product price. It has, however, to take into account issues like competitor pricing and ability of the market to pay.

Conclusion

There are also steps of a more strategic nature that businesses, mainly large ones, do, to make their operations more lucrative. Among these are acquiring of powerful suppliers or customers who can easily drive up costs by dictating terms. This gives the acquirer more control over prices at which they buy inputs and the prices at which they sell their finished products, as well as on other contract elements.

                                                                                      Rupert Chimfwembe
                                                                                                     18 May 2018

INTERNET MARKETING

Defining the Internet

The internet is basically the global network of computers storing and transporting information as well as presenting it generally on-screen for use when invoked.

Internet marketing may be defined as:

]

Using the world-wide web to perform marketing functions.

In the last three decades, the internet has perhaps been the most revolutionary addition to the traditional marketing communication tools like television, newspapers, magazines and radio. 

Internet marketing occurs when digital media collaborates with conventional communication tools like radio, television and newspapers in marketing activities.

Benefits and weaknesses of Internet Marketing

What are some of the potential benefits the internet brings to the African global business player? Well, it brings a number of unique marketing possibilities which include:

·           Wider, versatile communication at relatively low cost.  

A small business with limited resources can reach the same global audience accessed by bigger, more financially capable firms.

A wide array of marketing communication is possible. It includes advertising, sales promotion, direct marketing relationship-building and product updates.

Advertising is non-personal, paid marketing communication by an identified promoter of goods, services or other types of product, normally using media like radio and newspaper that reach a wide audience.

Sales promotion is short-term marketing communication frequently aimed at immediately raising sales and rejuvenating interest in a product.

Direct marketing is communication in which a prospective buyer is reached with a taylor-made message and prompted to act in a certain way, such as placing an order.

Relationship-marketing is the cultivation of long-term partnerships with customers.

 The two-way communication capability of the internet (via email, for example) improves the pace of business and helps prevent or keep minimal cost-escalation caused by passage of time.

Older media like newspapers, billboards, television and radio do not give the combination of flexibilities and cost-savings available in internet marketing. 

·           Stock-ordering and selling. 
Businesses can use the internet to ‘window-shop’ and order inputs from their suppliers, and sell to their own customers. 

In the case of products like books, newspapers, movies, news and music, the actual product can be sent to the client as a digital copy. This way, the internet serves as a global distribution medium. Distribution, as we saw earlier in this chapter, is one of the four key marketing mix variables.

·           Increasing sales volume. 
The wider exposure made possible by the internet means greater sales figures are also possible – from across the globe. Using traditional media, this level of exposure would have big cost implications, and be a real limitation for small businesses.

·           Holding onto mobile customers. 
The internet minimises distance-sensitivity of business. It creates greater capacity to maintain communication with customers who have moved farther away, and therefore increasing the possibility of continued loyalty.

·           Spreading information. 
Companies can use the internet to disseminate general information including staff movement, share value and policy changes.

·           Web analytics.  
 Web analytics enable instant collection of statistics on the market and market behaviour. The information enables (quicker) decision-making by business people. 

·           ‘Beating night’. 
 Both ordering of production inputs and selling can take place round the clock, making it possible to accomplish more in a day than when human beings (who have to rest, for instance) are used. 

  

The internet as a marketing tool also has weaknesses. For example, some potential customers might still not be excited enough by an internet advertisement until they see the actual offering or get middleman assistance. Naturally, the fear is that a product may not live up to the hype on the internet.

Another challenge is that competition can increase, as the products of across-the-globe marketers who may otherwise prefer to concentrate on their local markets also have increased visibility: customers, understandably, normally go for the best package of offers. 

 

Despite challenges like the above, African entrepreneurships, many with not enough resources to reach the world using the customary (but indeed still very useful) communication means like television, newspaper and radio, or opening physical subsidiaries abroad, perhaps have an indispensable means of competing with gigantic firms on the world stage. Besides, even if the internet can increase competition, the larger exposure can also have the effect of bringing more potential buyers. 

The challenge, quite clearly, is how to take advantage of the revolutionary capabilities of the internet.

General Marketing Strategy on the Internet

The internet is basically a communications channel. So, internet marketing must be seen as use of an additional communications tool to further promote business. 

The fundamental aspirations of business people are the same irrespective of marketing instrument used. For example, profit remains the main focal point. The marketer only takes advantage of the possibilities and opportunities presented by the internet to do their job better.

The internet has to work in conjunction with other information channels like magazine, billboard, radio, mobile advertising, newspaper and television. What the internet must achieve, and how, (taking into account its capabilities like interactivity, wide reach, video, sound, general inexpensiveness, two-way communication, text and memory) must be clearly defined, just as with other communication media like television.  

Some Internet Marketing Tools

The internet offers numerous technical instruments for performing marketing functions. A few of the best known are listed and explained below.

Websites and blogs

A website is an address or location on the internet where information about a particular subject is found. Creating a website therefore means giving a globally visible and accessible ‘residence’ to any or all of the following:

·           The business.

·           The enterprise’s products.

·           Purchasing point.

·           Information exchange centre.

A good website needs to be user-friendly, so that visitors are able to easily get the services they require, such as placing an order or making clarifications they consider important to them. 

Blogs, like websites, are internet ‘homes’, but are normally used as news update centres of individuals, groups or organisations, both commercial and non-commercial. Increasingly, businesses have placed their adverts on popular blogs (those that enjoy interesting content and frequent visits). Many blogs are maintain a single theme, such as gardening.

A blog is simply an internet information centre.

E-mail

Electronic mail (e-mail) enables sending and receiving of digital messages. Marketers are able to cost-effectively and quickly communicate with suppliers, customers and intermediaries such as insurers and bankers. They can, for instance, easily send customers a digital copy of the product with prices and specifications and prompt them to buy. They can also send regular news bulletins to keep customers up-to-date and loyal to their brands and company.       

Social and Professional Media

Facebook, Twitter and LinkedIn are examples of internet platforms that provide marketers an opportunity to ‘meet’ customers, through advertisements.

Extranet

The extranet is a closed internet in which a marketer is able to share information with suppliers or other parties, usually in the same business environment, to improve collaboration.