ABM 341 - INTERMEDIATE ASSIGNEMENTS 1.docx - ZAMBIA OPEN...

ZAMBIA OPEN UNIVERSITY
SCHOOL OF AGRICULTURE SCIENCE
NAME : PAUL GONDWE
ID NUMBER : 21772487
PROGRAMME : BSC-ABM
COURSE TITLE :
INTERMEDIATE AGRIBUSINESS
MANAGEMENT
COURSE CODE : ABM 341
ASSIGNMENT : 1
LECTURER : MR. D. MAMBO
PHONE : [phone]

YEAR OF STUDY : THIRD YEAR
Despite the prominent role of entrepreneurs in creating economic growth, they are frequently
faced with instances of official harassment especially in countries with archaic labour laws and
lack of proper oversight for regulations and taxation which perpetuate corruption. Entrepreneurs
engaged in building new businesses, or in restructuring existing establishments are often pawns
in the economic and political environment where they are often forced to shell out hard earned
dollars to overcome bureaucratic hurdles.
Large companies are likely to have the resources to engage in bureaucratic corruption as a
survival mechanism. However, corruption can place a significant burden on a small businesses
and entrepreneurs and discourage investments. Corruption is strongly negatively associated with
the investment rate, regardless of the amount of red tape , there is evidence that ins tu onal ‖
inefficiency causes low investment. Corruption can drive out entrepreneurial skills from the
market which is already limited in developing countries such as Guyana. This will result in fewer
active entrepreneurs who can seek out profitable opportunities and add to wealth creation in the
Guyanese economy.
Corruption affects entrepreneurship in a countless of ways. By limiting access to government
funds and permits, the government agents reduce participation in some kinds of entrepreneurial
activity to their own circle of friends and relatives, or to people who have access to this circle
and can get a representative. In this respect, personal relations represent a kind of social capital
in scarce supply. Funds and contract are not tied to the best proposals, but to those proposals
which have connections within the agency in charge.
Resources expended in the form of bribes add to the costs and uncertainty of doing business in a
country. Entrepreneurs have to divert limited resources to corrupt officials, while these resources
could be invested more advantageously in innovations or expansion. In corrupt environments,
more potential entrepreneurs will allocate their time and efforts to noninnovative rent seeking

activities and lobbying and bribing government officers instead of identifying and exploiting new
products, processes or markets and improving productivity.
Political stability , or instability, refers to the reliability and durability of a government's
structures. The more stable a political system is, the less risk a business operating in that country
will face. Nations where there is a high risk of terrorism or internal conflicts are less stable. This
makes opening and operating a business expensive and risky in the region. When a country goes
to war, this decreases business and it can harm the quality of the currency exchange rate , or the
amount the country's money is worth when compared to that of other nations. Thus, less stable