NEW YORK UNIVERISTY

STERN SCHOOL OF BUSINESS

INDIA LEADERSHIP EXCHANGE PROGRAM SUMMER 2013

Capitalism and Development:

The roles of Social Institutions, Organizational Capabilities and Entrepreneurial Leadership

Prof. Venkat Srivatsan

Course Description and Requirements This is a course on how different versions of capitalism have promoted development in different countries over time. The focus is mainly on the role of the private sector in promoting development. Through both macro- and micro-perspectives, we examine political, cultural, social and economic similarities and differences of national enterprise systems, paying special attention to impacts of government, financial institutions, organizational capabilities, entrepreneurial leadership and management in promoting development. The intellectual goals of the course are to develop an understanding of different enterprise systems and to hone abilities to think comparatively, both over time and across national contexts. The practical aim is to inspire future leaders to participate in human development as a personal life goal and to instruct and inform them as to how to go about achieving this life-giving objective. We will start by considering the issues and challenges of development, followed by the lessons we can learn from the histories of the UK, the US, Germany and Japan before examining the more recent progress of economies and firms in such diverse countries as China, Russia, Chile, Nigeria, and Turkey. Students will be provided with a conceptual framework and analytical tools to assess the lessons one might learn from the histories of these economies, their institutions, organizations and leadership and will be encouraged to think about their application to India in the 21st century. Classes will be a mix of lecture and discussion of the assigned readings. Attendance is important. It is important to do the reading sufficiently in advance. Please read for comprehension. Think about what the important themes are. Dont get lost in the mass of detail. Course Deliverables: The course has three deliverables: 1. Three one page write-ups [one on a country and two on companies] that are to be decided in conjunction with your group [of 4-5 students each] so that all the 4 countries below and all the 8 companies below are covered by at least one member of the group. These one-pagers are due at the beginning of the class on the date that the country/company is to be discussed. The relevant questions are at the end of this syllabus. Late submissions are not accepted. 2. A group project proposal and presentation that is focused on an organizational decision-maker [private or public, large or small, start-up or ongoing organization] who can contribute to Indias economic development. Your proposals should advise him/her on how they can fulfill their organizational goals while simultaneously contributing to Indias development. This presentation will be evaluated by all the members in the class [and maybe by external judges as well] and one group will be chosen as being the best overall. The evaluation criterion for this proposal competition is given at the end of the syllabus. 3. A soft copy of the proposal [in pdf format] is due about 24 hours before the actual presentation, so that it is available for audience review.

Book Thomas C. McCraw, ed., Creating Modern Capitalism (Harvard University Press, 1998).

Book Description [on Amazon]: http://www.amazon.com/CreatingModern-Capitalism-Entrepreneurs-Revolutions/dp/0674175565 Accessed Jan 21, 2013 at 4:37pm IST.
Publication Date: January 2, 1998 | ISBN-10: 0674175565 | ISBN-13: 9780674175563

What explains the national economic success of the United States, Britain, Germany, and Japan? What can be learned from the long-term championship performances of leading business firms in each country? How important were specific innovations by individual entrepreneurs? And in the end, what is the true nature of capitalist development? The Pulitzer Prizewinning historian Thomas K. McCraw [student of Alfred Chandler] and his coauthors present penetrating answers to these questions. Creating Modern Capitalism is the first book to explain for a broad audience the interconnections among technological innovation, management science, the power of entrepreneurship, and national economic growth. The authors approach each question from a comparative framework and with a unique triple focus on national economic systems, particular companies, and individual business leaders. Above all, the book focuses on how specific entrepreneurs influenced the economic success of their countries: Josiah Wedgwood and Henry Royce in Britain; August Thyssen and Georg von Siemens in Germany; Henry Ford, Alfred Sloan, and the two Thomas J. Watsons in the United States; Sakichi Toyoda, Masatoshi Ito, and Toshifumi Suzuki in Japan. The product of a three-year collaborative effort at the Harvard Business School, the book combines cutting-edge scholarship with a finely tuned sense of the art of management. It will engage general readers as well as those with a special interest in entrepreneurship and the evolution of national business systems.

SESSION OUTLINE 28th May 2013 INTRODUCTION Film: Capitalism A Love Story by Director Michael Moore. Read: Chapter 1 in Creating Modern Capitalism 29th May 2013 PATTERNS OF DEVELOPMENT - I THE RISE OF ENGLAND Read: Chapter 3 in Creating Modern Capitalism GERMANY Read: Chapter 5 in Creating Modern Capitalism

30th May 2013 PATTERNS OF DEVELOPMENT II US Read: Chapter 9 in Creating Modern Capitalism JAPAN Read: Chapter 12 in Creating Modern Capitalism 31st May 2013 ENTREPRENEURSHIP AND MANAGEMENT Read: (1) Josiah Wedgwood, Chapter 2 in Creating Modern Capitalism (2) Henry Ford and Alfred Sloan, Chapter 8 in Creating Modern Capitalism

3rd June 2013 DEVELOPING FIRM STRATEGIES Read: (1) Toyoda Automatic Looms Chapter 11 in Creating Modern Capitalism (2) Rolls Royce Chapter 4 in Creating Modern Capitalism (3) The Deutsche Bank Chapter 7 in Creating Modern Capitalism

4th June 2013 STRATEGIES TO EXPLOIT CONSTRAINTS Read: (1) IBM Chapter 10 in Creating Modern Capitalism (2) 7-Eleven in America and Japan Chapter 13 in Creating Modern Capitalism. (3) August Thyssen and German Steel Chapter 6 in Creating Modern Capitalism 5th June 2013 LESSONS LEARNT ON DEVELOPMENT Read: Chapter 14 in Creating Modern Capitalism DUE AT NOON - PRESENTATION PROPOSAL IN PDF FORMAT 6TH JUNE 2013 7th JUNE 2013

PRESENTATIONS

DEBRIEFING AND CONCLUSION

CAPITALISM & DEVELOPMENT

ASSIGNMENT QUESTIONS
COUNTRY ANALYSIS
Common question for all 4 countries: What surprises you about the economic development of your country? What factors do you believe were most important to its successful economic development? How has it done more recently? Which factors from its history do you believe are most salient today in explaining its economy?

ENGLAND
Why England? How can one account for the fact that it the first nation in the world to industrialize? Also think about: Why did England begin to lose its competitive advantage as the worlds leading industrial power in the latter part of the 19th century? What happened to the British economy after World War II? How did it change in the 1980s?

GERMANY
What surprises you or strikes you as distinctive about German capitalism? Wny? To keep it simple, focus on one or two points.

U.S. What strikes you as distinctive, or unique, about American capitalism?

Also think about: How did its British heritage impact the way in which US economic policy developed? What advantages did the US have that were not present in Britain?

JAPAN
An argument can be made that Japan changed more in the late 19th century than any society in history. Do you agree or disagree? Why?

COMPANY AND LEADERSHIP ANALYSIS

WEDGEWOOD Quick paragraph on what you think, of all his accomplishments, was Wedgwoods most significant, and why. What is particularly remarkable about Josiah Wedgwoods business achievement? (Think about: What are the contexts in which Wedgwoods business was developed? Englands state of development? Public policy toward business? State of the markets? Ideologies of economics/business/trade? Other?)

FORD & SLOAN

Henry Ford is commonly regarded as the 20th Centurys , most important entrepreneur? Is that accolade justified in your mind? Why or why not? Why did GM overtake Ford? (Please note differences in strategy, leadership and organization.) Why do you think GM (and the rest of the US auto industry) began to decline after the 1950s?

ROOLS-ROYCE
Rolls Royce Write on: In what ways did RRs automobile strategy differ from the big US auto producers? Think about: How did the strategy nd methods of auto productions spill over into RRs production of aircraft engines?

Toyoda/Toyota
What did Toyota learn from Toyoda, that is: what experience could the carmaker draw upon from the textile machinery business? Toyoda/Toyota managed to capture markets from superior players in the textile machinery and auto industries. How have Japanese government, culture and institutions contributed to that countrys success in conquering these industries?

DEUTSCHE BANK
Though there is some convergence among different financial systems in the contemporary world, they were significantly different in Germany and the US before the 1990s. How do you account for these differences? Which system, historically, was more effective?

IBM
Why do you think IBM declined from its position of dominance in the computer industry? (Why do you think it lost its competitive position in the personal computer industry?) How did the US government help and hurt IBMs development and do you believe it was a sound business decision to move forward with its 360 program?

7-Eleven/Seven-Eleven
Make a list of no more than 6 bullet points about what the difference is between the two. How did 7-11 Japans strategy successfully adapt to (or take advantage of) government regulation and business conditions in Japan? What went wrong for 7-11 in the US in recent decades? How do you explain the divergence of 7-Eleven strategies and operations in the U.S. and Japan?

THYSSEN
Why was Thyssen called the American? Think about: What did it mean that Thyssens enterprise had too much scope and not enough scale by the late1920s? Also, take a look at the Internet to see what Thyssens enterprise has become today.

CAPITALISM AND DEVELOPMENT - PRESENTATION EVALUATION FORMS YOUR NAME [REQUIRED]

GROUP NAME: PRESENTERS NAMES: 1. 2. 3. 4. 5.

CHOICE OF ISSUE/TOPIC (relevance to course goal Indias Economic Development ) 1 2 3 4 5 Lo Hi

ANALYSIS OF TOPIC (Research/Depth/Logical Structure) 1 2 3 4 Lo

5 Hi

ORIGINALITY (Creative Insights/Innovative Proposals/Novel Ideas/New Learning) 1 2 3 4 5 Lo Hi

OVERALL PRESENTATION/Q&A (Clarity, Organization & Persuasiveness) 1 2 3 4 5 Lo Hi

TOTAL SCORE:

/20