Chapter 19, Economic Institutions

Sociologyand Economics
Markets and the Division of Labor
Economics and the State
Workers, Managers, and Corporations
Economics and Sociology

The subjects of sociological research are:

Markets and the division of labor.
Interactions between government and
economic institutions.
The nature of jobs and professions.
Markets

Economic institution that regulates exchange

behavior.
Different values are established for particular
goods and services.
Market transactions are governed by
agreements - a seller agrees to supply a
particular item and a buyer agrees to pay for it.
The Development of Markets

Began in the late 15th century as a result of

the development of new technologies that
facilitated trade.
Today world markets are dominated by
multinational.
Economic globalization is a worldwide
shrinking economic distances between nations.
Economic Ideologies: Mercantilism

The wealth of a nation could be measured by

its holdings of gold.
The best economic system was one that
increased the nations holdings of gold.
Economic Ideologies

Laissez-faire capitalism - wealth is measured

only by capacity to produce goods and services.
Socialism - private property and personal profit
should be replaced by public ownership of
property and sharing of profits.
Democratic socialism - large corporations
should be owned by the nation for the benefit of
all citizens.
Changing Economy in the U.S.

Transition from economy based on production

of goods to one based on provision of services
resulted in the displacement of thousands of
skilled workers.
These trends indicate a change in the social
contract in which individuals who work hard
can expect increases in their living standards.
Corporations

In the U.S. the corporation has gained ever-

greater dominance over other economic
institutions.
During the last hundred years, the importance
of corporations has come to outweigh that of
individuals in most institutional sectors.
The individual is often at a disadvantage in
dealings with corporations.
Approaches to Management

Scientific management approach attempts to

increase productivity by determining how each
job could be performed most efficiently.
Human relations approach seeks to improve
cooperation between workers and managers.
Conflict Theory of Management

Study how social class and status at work and

outside the workplace influences relations
between workers and managers.
Asserts that the human relations approach fails
to consider the basic causes of worker
management conflict.
Interactionist Theory of
Management

Devoted considerable study to

professionalization:
Which occupations gain the status of
professions.
The processes of learning the formal and
informal norms of a profession.