Familiarize yourself with GNH using two credible sources other than its official
ID: 1189812 • Letter: F
Question
Familiarize yourself with GNH using two credible sources other than its official website. Based on your understanding of GNH, analyze its strengths and weakness with respect of GDP.
In your analysis, focus on the following questions:
What are the components of GNH and GDP?
Which measure, GDP or GNH, is easier to compute?
Which measure uses more logical assumptions to measure economy’s performance?
Can GNH be a reliable measure of economy’s performance of a developed nation, such as the U.S.?
Is measure of economy’s performance incomplete without incorporating the happiness factor?
Does GNH factor the power of capital in driving economic growth? Why or why not is it important?
Does GDP factor the power of human sentiments in driving economic growth? Why of why not is it
important?
Now, imagine you are the CEO of a U.S.-based organization. How will the U.S. government’s decision of replacing GDP with GNH affect your organizational strategies?
Consider the following questions for your analysis:
How will your budget allocation for different functional departments, such as finance, marketing,
human resource, training and development, operations, and IT change?
How will your focus on employee engagement change?
How will your payment policies change?
How will your accounting policies change?
Explanation / Answer
Gross national happiness (GNH): This is the aggregate of economical and non-economical growth of a country in an year.
Gross domestic product (GDP): This is the monetary value of all finished goods produced in an economy domestically during a year.
Components of GNH = GDP + Spiritual growth + Cultural growth + Mental health + Physical health + Corporate strength + Political strength
Components of GDP = Consumption + Investment + Government spending + (Export – Import)
GDP is easier to compute, because it is based on numerical values. GNH components like spirituality or cultural growth are not based on numerically. Therefore, converting these to numerical figures is very hard.
More logical assumption towards economy’s performance is GDP, because its values are real but not in assumption. Non-economical values of GNH are assumption-based.
GNH is not a reliable measure of economy’s performance of a developed nation, since the country is progressing fast its non-economical activities like spirituality may go down. Sometimes it becomes negative. It reduces the total GNH.
Happiness factor is not so important for economy’s performance. Only GDP can serve that purpose.
Strength of GNH: It covers the whole growth of a country. Mental growth and happiness is equally important with GDP.
Weakness of GNH: The only weakness is some factors of GNH are assumption-based. It is very difficult to calculate those values accurately.
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