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Posted on August 19th, 2012, by

Competition is extremely important to the fast economic development. At the same time, it is important to lay emphasis on the fact that competition can be effective in terms of the economic development and decreasing costs of production only on the condition of the existence of fair competition. On the other hand, companies and markets should strive to reach the fair competition, where all companies will be in an equal position. In other words, the competition should keep progressing to reach its ideal model which encourages economic development and cost saving but this progress is grounded on the actual business and competition development.

At first glance, the normative approach is very effective in terms of the definition of the role of competition and its impact on economic development and economizing. However, this approach fails to take into consideration the current position and development of companies. Instead, it focuses on an ideal vision of competition and economy but, in such a context, the risk of errors increases. As a result, the competition can fail to bring positive effects to the economic development and economizing.

In this regard, the positive approach is perspective because it provides incentives based on the actual position of companies and economy. Therefore, the competition can be helpful not because companies are striving for certain ideals and goals but because the competition establishes clear and effective rule according to which companies function and keep progressing. On analyzing the actual position of companies, their managers and top executives develop respective competitive strategies to enhance their development and economizing.

Thus, the development of competition, being based on the actual vision of economic situation but not on the ideal vision of economic development, can tackle the problem of economizing successfully.

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