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- W1489237501 abstract "CASE DESCRIPTION The primary subject matter of this case is the integration of statistics, macroeconomics, and business ethics. Secondary issues include descriptive statistics (interpretation of standard deviation), normal distribution, and statistical hypothesis testing. The case has a difficulty level of three, appropriate for junior level. The case is designed to be taught in three class hours, including a formal case presentation by a team and a challenge by another student team. Three hours of outside preparation by students are required. CASE SYNOPSIS Students must balance bottom-line financial criteria against ethical issues of social responsibility as they decide if they should invest in one of two developing countries. East Arketia has a poorly educated work force, an inefficient government, and may not enforce property rights, but it has a democratic government with free speech protection. West Arketia is undemocratic, without free speech, but has a pro-business economic policy and a higher education level compared to East Arketia. Students interpret the standard deviation in terms of the gap between the rich and the poor and use the normal area table to estimate the proportion of households below the poverty level in each country. In addition, they use hypothesis testing to estimate average household disposable income, as well as the proportion of prisoners who are political prisoners. In the economics question, students evaluate the potential for growth in the two countries. The last question asks students to apply ethical principles to their decision, with specific references to the issue of the alternative political systems. Does your company have an obligation to support the more democratic political regime of East Arketia, even if it turns out that returns to your firm will be lower? INTRODUCTION Westman, Inc., a large manufacturer of consumer durables, is considering expanding into two developing countries. East and West Arketia recently split off from the former Soviet Union and may provide opportunities for both manufacturing and sales. While the two countries have similar backgrounds and current GDPs, they differ substantially in economic policies. Because of limited resources, Westman can only expand into one country. Westman, Inc. would like to invest in a country that will be growing rapidly so that the citizens will be able to afford to buy its products. The president of Westman has hired your consulting firm. Members of your firm are assessing the prospects for investing in the two countries. They have met with the Minister of Commerce for West Arketia, Ms. Coranish, and the Minister for Development for East Arketia, Mr. Ali el. Your company has also sent a number of representatives to the two countries to gather data to help make a decision. EAST ARKETIA East Arketia has had a democratic and populist tradition. This has resulted in the people enjoying substantial civil rights after independence, including free speech and popular elections. However, the government has an inefficient civil service and a mixed record of enforcing property rights. Investment in education and physical capital is low even though public spending and the federal deficit are high. WEST ARKETIA West Arketia is run by a generally peaceful one-party government. The government budget has been balanced, with taxes and tariffs at a level typical for a developing country. Government spending has focused on education with the goal of universal primary education. The legal system is well developed and has been effective in supporting property rights (although less effective for political rights). Corruption is low. Unlike East Arketia, West Arketia is more restrictive in terms of civil rights and democracy. There are no prospects for elections in the near future and a number of opposition leaders have been jailed. AU television and radio is run by the government. …" @default.
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- W1489237501 date "2007-09-01" @default.
- W1489237501 modified "2023-09-24" @default.
- W1489237501 title "Investing in Arketia" @default.
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