Session 05: Systemic Thinking

Question 1

Profits can go where?

Answer 1

pay dividends (to shareholders) / → retained earnings (for re-investment)

Question 2

Why is capitalism called capitalism?

Answer 2

reinvestment in capital (main focus) for mass production/consumption

Question 2

Companies invest in what?

Answer 2

invest in capital (tech, assets…) to reinvest because no reinvestment = losing competitive edge (expelled from market)

Question 2

Capitalism relies on competition but also…?

Answer 2

pushes away from competition (bc. monopoly = profit maximisation)

Question 2

Anti-trust legislation → ?

Answer 2

reduce monopolies

Question 3

“Aligopolazation” / oligarchy = ?

Answer 3

market structure w/ few competitors

we have the tools to stop oligopolarisation but chose not to use it = democracy at risk

Question 3

Mergers & acquisitions do what to competition?

Answer 3

reduces competition
More concentration = less competition

Question 4

Market share caps = ?

Answer 4

market share caps = limits to markets

Question 5

Firm Dynamism = ?

Answer 5

when there is lower competition (just big co-operations) it is harder for new company’s to enter the market