An analysis of the recent spate of recalls of products made in China was the subject of an op-ed piece for the Chicago Tribune written by GSB Dean Edward Snyder. The dean plans to offer future comments on other matters that affect the city and its residents.
In "The Market's Place," Dean Snyder identifies what he sees as the reason behind so many dramatic problems with consumer goods coming out of China. At issue is brand name capital. According to Snyder, the Chinese lack the alignment of producer and consumer interests that results from brand power. Simply put, if your brand name isn't at stake, why worry about quality control?
Snyder lists three ways to deal with concerns over quality control:
He offers an analysis of each in keeping with the Chicago school of economics. Among tenets for which the Chicago school is known throughout the world are free-market economics and the lack of government regulation of business. As he notes in the op-ed piece, another aspect of the Chicago school is its emphasis on statistics over theory when analyzing a situation.
In his article, Dean Snyder mentioned two key facts. Here are the citations:
*The Chicago Approach emphasizes that a high ratio of facts to opinions combined with frameworks. This Key Fact comes from BusinessWeek’s “List of Top 100 Brands”, August 6, 2007.
**August 1, 2007 Matel product recall announcement
More About Chicago and Economic Policy
In "Critical Dialogues," you can read interviews Dean Snyder conducted with two faculty members who have been asked to play significant roles in helping to develop economic policy at the national and international level.
The GSB has several research centers that focus on key areas of business and economics. The Initiative on Global Markets deals with the massive global movements of capital, products and talent in the modern economy.
Read Dean Snyder's op-ed piece.