0
What are the negative effects of turning from a planned economy into a market economy?
Wiki User
∙ 13y ago
In a planned economy, many workers may have been employed in industries that produced more goods or services than were needed. In moving to a market economy, those workers may be displaced and need retraining to find new employment. In some cases, whole industries which produced inferior products or had inefficient cost structures may find that their products are not competitive in a market-based economy, causing massive dislocation of workers.
Corporate management may not be equipped to handle the transition, either. In a planned economy, operational planning is simple, because the production quotas are known in advance. Having little experience in quickly adjusting their operations to meet fluctuating demand, managers may not be prepared to make rapid and accurate changes to their operations. Sales departments may be completely inadequate to handle the competitive environment and staff with marketing skills may be non-existent.
All of those things can cause the organizations which were built under the planned economy to be non-competitive and ultimately fail. In time, they are replaced by new companies which are far more efficient and adapted to the competitive environment, but that process cannot occur without the destruction of the old, unprofitable organizations. This process of "creative destruction" can cause social and political reactions, some of which may prolong the transition and make it more difficult for everyone.
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
Quickly turning the USSR from an agricultural to an industrial economy was?
Stalin's ive year plan
How do you improve GMROI?
By turning your inventory!
What are the turning points of the business cycle called?
The turning points of the cycle are called the peak, which is at the end of the expansion phase, and the trough, which is at the end of the contraction phase.
How was the Soviet Union's command economy successful - how was it unsuccessful?
The command economy under Stalin is credited with turning Russia into a modern industrialized nation, and giving Russia the industrial capacity that it needed to successfully defeat the invading army of the Third Reich. In the longer term, however, it failed to gain the support of the general population which became increasingly unproductive and rebellious, culminating in the collapse of the Soviet system in 1990. People prefer to run their own lives, they do not want a command economy that controls all of their economic activity.
How did the capitalism effect the cold war?
by turning the heating on.
Is Obama turning around the economy?
no
Can never turning off tv be harmful?
Never turning off the television can have many negative effects. Firstly it runs up your electric bill and can burn out your television. Secondly, too much television is harmful to kids, it causes laziness.
What are the release dates for Turning Point - 2000 The Fall of the American Economy?
Turning Point - 2000 The Fall of the American Economy was released on: USA: 19 September 2010
What were the effects of the blitz in World War 2?
the effects of the blitz was people turning into cannibals
What argument was made by some in favor of turning to socialism or communism in the face of the depression?
a state-run economy
What are the negative effects of politics?
Politics or political systems can have a negative in various ways not built into a political system at all. Turning aside from the positive affects, the negative side can result in the following: bribery, false promises, and wars never expected to happen. Political systems can be used to adversely control the economics of a nation, prevent voters to vote, and create a negative affect on the way people look at their governments.
Quickly turning the USSR from an agricultural to an industrial economy was?
Stalin's ive year plan
Is there a formula for turning a negative number into a positive one?
Multiply that number by -1.
How investment multiplier defend public works in depression economy?
Investment multiplier defends public works in the depression economy because it promotes investments in a deadbeat economy in hopes of turning it around.
Why would a 2000 Ford Expedition die intermittently when turning or stopping?
If your expedition is a 4wd have the front CV joints checked. The 4WD models have auto 4WD that sometimes lock into position and don't unlock ~ even when you don't 4WD. This have very negative effects on the front wheels when turning (especially at lower speeds on 4WD high).
What is a turning force?
The turning effects of forces are known as moments. A moment is computed by multiplying the force by the perpendicular distance from its line of action to the fulcrum.
What are the effects of politics?
Politics or political systems can have a negative in various ways not built into a political system at all. Turning aside from the positive affects, the negative side can result in the following: bribery, false promises, and wars never expected to happen. Political systems can be used to adversely control the economics of a nation, prevent voters to vote, and create a negative affect on the way people look at their governments.
