Sustainable Management Futures - Assignment Example

?Sustainable Management Futures Table of Contents 1 Using Your Knowledge of the Free Markets Perspective Examine the Ethics and Morality of "Let Capitalism Rip" Allegation made by Prime Minister David Cameron. 3 1.2 Evaluate the system using Milton Friedman’s and Norman Bowie’s Neo-Classical Models of Corporate Social Responsibility (CSR). Make recommendations on the way forward for a more ‘sustainable’ market economics. 7 References 10 1.1 Using Your Knowledge of the Free Markets Perspective Examine the Ethics and Morality of "Let Capitalism Rip" Allegation made by Prime Minister David Cameron. “Let Capitalism Rip”, in the speech of British Prime Minister David Cameron signifies the dominance of capitalism in the society which concentrates on demolishing the free market. According to Prime Minister David Cameron, the popular capitalism should allow everyone to share in the success of the market. The Prime Minister also includes in his speech the social responsibilities of the firms and to prevent the abuse of the policies that have been conducted by the organisations to gain larger profitability as well as competency (BBC, 2012). To be precise, Prime Minister David Cameron, by making counterarguments over chronic capitalism practiced in UK documented the need for free market considerations not only on profit maximization but also toward Corporate Social Responsibilities (CSR). With due consideration to the aspect of capitalism and market labours, the government intends to enforce the policies toward the determined poverty level, ecological demolition, fundamental inequalities of wealth, and concentrated power in the hands of corporation, and property-owner among others (Charter & Johnson, 2011). The labour economics from a free market perspective signifies that the labours in the economy are based upon the three crucial factors of production which are recognised as land, labour and capital that generates the massive part of the annual GDP of the country. Therefore, the traders as well as the government in the United Kingdom provide significant consideration towards these issues of labours in the economic stature of the country (Block, 2008). In this regards, the speech of Prime Minister Cameron indicates to build a better and structured economy, so that the country along with its citizens can be benefitted in the free market, in terms of avoidance towards economic crisis and other similar challenges including poverty as well as power and wealth distribution (BBC, 2012). The proposal put forward by Prime Minister David Cameron in this speech elaborates on the proper utilization of the human resources (labours) and other natural resources signifying a free rein perception within the market moving ahead against the traditional approach and “Let Capitalism Rip”. In the context of his speech about the dominance of capitalism in the entire business society of UK and its impact on the economic structure of the country, the moral highlighted was to apply the basic fair market approach in the business environment (Charter & Johnson, 2011). Prime Minister David Cameron, in this regard, stated that capitalism can be one of the strongest tools for development of the country’s financial structure, involving wealth creation as well as social responsibilities that was ever recognized. An effective capitalism insists the proprietors of intellectual property rights along with the economic property rights facilitating them to earn a profit as a reward for investing the capital at risk in a suitable form of free market financial activity (Norman, 2011). Capitalism is not only concerned about the economic and social conditions, it also be acquainted with its morals. The notion of capitalism involves morality as it considers a few auspicious demands, such the individual freedom based on personal principles, the assets of hard work and creativity, the social exchange regarding effectiveness of the traditions and intellectual practices along with government’s responsibilities to generate and implement regulations. Notably, these attributes are often present in a capitalist market focusing on the sharing of the costs which bears social activities and observable wider culture and stable social orders (Norman, 2011). However, the notion of capitalism disregards the barriers among present market knowledge and basic information in this regards emphasising on the efficiencies of the growth levels of the economic condition. This may in turn lead toward a faulty interpretation of the market characteristics and thus misinform the market players (Lal, 2008). It was in this context that Prime Minister David Cameron signified the awareness required for overcoming such vagueness in the market information by endeavouring the concept of free market economy. With the involvement of certain regulations recognised as the counterarguments of capitalism, Prime Minister David Cameron stated that the economic growth of the country began with the industrial revolution, which pointed towards the enhanced transition of certain colonial power produced resources rather to maximise the wealth creation for the growth of the economic structure (Lal, 2008). It is in this context that according to the free market concepts, organisations or market players must provide due consideration to the present scenario with regards to the trade operations and manufacturing industries that accumulatively affect the economic levels of the entire country (Norman, 2011). Furthermore, according to the Prime Minister David Cameron, the capitalism that exists in UK is not completely considerable as fair market capitalism; rather it is more justifiable to confirm the process as chronic capitalism which indicates toward a moral and more advanced economic stature to be attended through free market policies (Norman, 2011). However, it needs to be mentioned that morality or ethics, both the aspects are almost entirely based on the perceived values of an individual and his/her principles. Thus, immoral conducts can take place in either of the market stature, i.e. capitalist or free market structure. It cannot be entirely controlled by altering the market structure; however, other elements of the market operation, such as wealth maximisation strategies, along with the prevailing market competition can be re-established through this process (Bishop, 2000). Thus, the allegation put forward by Prime Minister David Cameron making counterarguments regarding the capitalism approach of UK shall lack in adequately gauging the implications of morality as well as ethics. 1.2 Evaluate the system using Milton Friedman’s and Norman Bowie’s Neo-Classical Models of Corporate Social Responsibility (CSR). Make recommendations on the way forward for a more ‘sustainable’ market economics. The Corporate Social Responsibility (CSR) initiatives generally involve extended models of corporate governance to be the accomplishments in the process. While the corporate governance involves with the internal activities of the organisation, such as accounting procedures and general business ethics, CSR initiatives precisely deals with the external stakeholders along with the communities in which the business is operating. CSR initiatives evolved from a controversial to one of the most recognized models of today’s globalized business world. It not only signifies the extensive involvement of business enterprises in the social welfare, but also focuses on the attainment of sustainable growth in the industry context. In order to unambiguously elaborate on this relationship of the CSR activities and industrial development within an economy, various models have been developed in the recent years (Akerstrom, 2009). For instance, the model developed by Milton Friedman indicates the significance of CSR initiatives by relating the sole motive of organisations to attain increasing profit with its responsibilities toward repaying the community through social welfare. This competing model of CSR focussed on a range of actions based on the ethical limitations faced by organisations while executing a certain process towards significant objective of increasing profits according to the demand of the customers (DesJardins, 2005). As was stated by Freidman’s CSR model, any unethical activity can change the overall view of CSR associated with the neoclassical economics (Branden & et. al., n.d.). In this model, Freidman signified the involvement of the stockholders in the business context with due consideration to the phenomenon that in realistic terms, organisations are motivated toward the increasing profitability. However, the increment should be attained with respect to the existing economic norms of morality, anti-deceptiveness and anti-fraudulent. Examining a negative notion, the Freidman’s model emphasised on the assumption that the fraudulent and deceptive behavioural traits in its organisational practices determine the failure of the economy rather than its free form of market structure (Kakabadse & et. al., 2005). With due consideration to the aspects raised by the Freidman’s model of stockholders, it can be affirmed that the proposed system of free market by Prime Minister David Cameron is unlikely to define the future prospects of the economy in terms of failure or development. Notably, it is not the “open and free” approach of economy that liberalises the overall development of the economy; rather it is the morality which determined its enhancement (Freidman, 1970). Therefore, based on the Milton Freidman’s model it can be stated that the sole intention shall be to minimise the deceptions and the fraudulent practices, encouraging morality within the organisational environment so as to preserve continuous economic development preventing failure through crisis. Another significant model developed in this regards is the Norman Bowie’s approach to CSR which signifies that organisational operations should be ethically sound executing moral strategies even if any specific legal enforcement is not prevailing in this regard. It was further noted by Bowie, that the organisations which are lacking in executing the developed strategies with morality and ethical considerations are most likely to be ignored by the customers in the long-run and thus leading to its overall failure which in turn can harm the entire economy. Thus, to secure the economic development, the government and other ruling institutions should focus on developing a moral as well as ethical conscience amid the market players (DesJardins, 2005). Based on the approach considered in the Norman Bowie’s CSR model, it can be affirmed that legal barriers and obligations to perform CSR activities are not sufficient to determine the overall economic sustainability and development in the long-run. Organisations are in this regard, needed to be encouraged to perform initiatives regarding social welfare because of their individual sustainable growth rather than any obligation. Hence, market structure and governmental interventions are hereby observed to be confined to the enhancement of such moral consciences within the market players where free form or capitalist market structure is likely to have an insignificant impression on the morality as well as ethics of the business enterprises. Even with due consideration to the Freidman’s CSR model, it has been observed that the market structure can be more useful to determine the profit maximization system of industries than to determine the morality and ethical representation of the industrial operations. Therefore, the UK government should emphasise on the root level of industries to develop socially responsible values amid the organisations rather than altering the market structure extensively. References Akerstrom, A., 2009. Corporate Governance and Social Responsibility: Johnson & Johnson. GRIN Verlag. BBC, 2012. UK Politics. David Cameron says UK Must Build 'A Better Economy'. [Online] Available at: http://www.bbc.co.uk/news/uk-politics-16626707 [Accessed April 21, 2012]. Bishop, J. D., 2000. Ethics and Capitalism. University of Toronto Press. Block, W., 2008. Labor Economics from a Free Market Perspective: Employing the Unemployable. World Scientific. Branden, N. & et. al., No Date. Capitalism: The Unknown Ideal. Theory and History. [Online] Available at: http://tfasinternational.org/ila/WhatIsCapitalism.pdf [Accessed April 21, 2012]. Charter, G. & Johnson, C. W., 2011. Markets not Capitalism. Introduction. [Online] Available at: http://radgeek.com/gt/2011/10/Markets-Not-Capitalism-2011-Chartier-and-Johnson.pdf [Accessed April 21, 2012]. DesJardins, J. R., 2005. Doing Well By Doing Good. Distinguishing the Right from the Good in Theories of Corporate Social Responsibility. [Online] Available at: http://www.stthomas.edu/cathstudies/cst/conferences/thegoodcompany/finalpapers/desjardins%20final%20pap.pdf [Accessed April 21, 2012]. Friedman, M., 1970. The Social Responsibility of Business is to Increase its Profits. The New York Times Magazine. [Online] Available at: http://www.umich.edu/~thecore/doc/Friedman.pdf [Accessed April 21, 2012]. Kakabadse, N. K. & et. al., 2005. 2005. Corporate Social Responsibility and Stakeholder Approach: A Conceptual Review. International Journal of Business Governance and Ethics, Vol. 1(4): pp. 277-302. Lal, D., 2008. Reviving the Invisible Hand: The Case for Classical Liberalism in the Twenty-First Century. Princeton University Press. Norman, J., 2011. Conservative Free Markets, and the Case for Real Capitalism. The Moral Case for Capitalism. [Online] Available at: http://www.jesse4hereford.com/pdf/Case_for_Real_Capitalism_28122011.pdf [Accessed April 21, 2012]. Read More