How Economic Systems Attempt to Allocate and Make Effective Use of Resources Essay Example

organization, only a limited number of employees possess high levels of skill. The educated elite may find themselves either unemployed or working in positions unrelated to their education. BaoViet offers training courses to enhance the skills of their staff, aligning them with the demands of their profession. The government provides the capital for these initiatives, and BaoViet has the authority to increase it by issuing shares.

The text explores the impact of social welfare and industrial policy initiatives on organizations and the wider community. In a regulated market, the government's primary objective is to control and guide it towards supporting people's profits. These policies are closely intertwined with organizational operations.

BaoViet focuses on two main areas of business: financial and insurance. As a result, they consider the impact that social welfare and industrial policies can have on their operations. Social welfare policy involves the overall well-being of society, which is a complex concept that includes both objective and subjective judgments. It goes beyond just the standard of living and encompasses various factors that contribute to quality of life, such as the environment (air, soil, water), crime rates, drug abuse prevalence, availability of essential social services, and even religious and spiritual aspects (source: http://www.).

According to businessdictionary.com, some of the national income is allocated to meet the physical and spiritual needs of members of society. This includes expenses for health, convalescence, nursery schools, retirement bonuses, and social insurance. The social welfare funds come from three main sources: government's fund, companies' welfare fund, and corporation's welfare fund. The government plays a role in redistributing income through tax policies to ensure fairness after taxation.

About BaoViet, the corporation has implemented social welfare

policies that include the following:

• Old age programs: This policy provides retired individuals who were long-term employees of BaoViet and contributed to the corporation's success with retirement salaries when they are no longer able to work.
• Disability: Similar to the government, BaoViet corporation supports individuals with disabilities by providing training for suitable jobs and offering employment opportunities afterwards.
• Unemployment: BaoViet staff members purchase long-term insurance to protect against unemployment.

Terminated employees will receive financial compensation, assistance in finding new employment, and health insurance coverage during their unemployment period. Industrial policy is essential for national growth and development. It involves implementing appropriate economic policies at different times. The industry sector contributes significantly to the GDP and drives advancements in the service and agriculture sectors. Vietnam recognized the importance of industrialization as a major objective starting in the 1960s. However, between 1975 and 1986, the government's unified industrial policies based on public ownership and governmental management systems did not achieve desired outcomes. In 1986, Vietnam's Communist Party initiated economic reforms that led to the development of industrial policies centered around two key approaches: prioritizing specific industries and implementing supportive measures for their growth.

Realize that current government still applies the need to "quickly develop industries with advantages and compete in the export market, establish key industries, improve material facilities, construct industrial areas, and develop strong industries in rural and suburban areas." The selected industries include stockinet, aquatic product processing, mechanical, electronics and information technology, chemical, and petrochemical. Moreover, taking into account the natural conditions and social-economic factors of each area, the government of Vietnam divided six industrial areas to suitably

develop the industry.

The TayNguyen area, for instance, is ideal for cultivating both long-term and short-term industrial trees. As a result, industries such as coffee and rubber production are given top priority. In the case of BaoViet, the government aims to transform the country from an agricultural nation into an industrial one by promoting investment in various industries. In order to attract companies to invest in this sector, they must be provided with insurance coverage for added security.

The government intends to boost funding for insurance development, benefiting BaoViet. Moreover, investments in improving infrastructure are anticipated to enhance Vietnam's competitiveness and create opportunities for BaoViet in the banking industry. In Vietnam, multiple organizations and stakeholders analyze the effects of macroeconomic policies, including fiscal and monetary policies, as well as the influence of the global economy. The government's economic policies aim to stimulate growth, achieve full employment, and stabilize prices. Typically, fiscal and monetary policies serve as the primary strategies employed by the government.

Fiscal policy is the government's plan to change tax rates and public spending to influence economic growth. Currently, fiscal policy is not very successful. When fiscal policy is raised, monetary policy becomes stricter. For example, when the Consumer Price Index (CPI) improved by 6.12% in the first quarter of 2011, public spending decreased without clear criteria for deciding which projects would be impacted. Although the government has overall responsibility for competence, individual sectors have some freedom in choosing projects.

The reduction of projects has two negative effects, but it is an ineffective strategy. Monetary policy serves as the government's second tool, which includes interest rates, exchange rates, and bank reserves. When interest rates are too high,

money circulation slows down because people tend to save rather than spend, and companies borrow less, leading to lower growth. Conversely, low interest rates can cause inflation. Vietnam's participation in the WTO demonstrates how the global economy affects international organizations and stakeholders; this participation also attracts more foreign investment. As a result, BaoViet has numerous opportunities for collaboration with foreign partners like HSBC Insurance (Asia - Pacific) Holdings Limited and the State Capital Investment Corporation (SCIC).

However, corporate will face a challenge when foreign insurance companies enter Vietnam.