Why Is It Not True That Relying on Informal Connections

question 76

Essay

Why is it not true that relying on informal connections is a strategy only relevant to firms in emerging economies and that firms in developed economies only pursue "market-based" strategies?

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Definitions:

Decentralization

The process of distributing or dispersing functions, powers, people, or things away from a central location or authority.

Decision Making and Control

Processes involved in selecting among various options and implementing the selected course of action, ensuring objectives are achieved efficiently.

Binding Price Ceiling

A legally established maximum price for goods or services that is below the market equilibrium price, leading to shortages.

Binding Price Floor

A government or regulatory-imposed price control that sets a minimum price for a good or service, potentially leading to excess supply if set above the equilibrium price.