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Sustainable Stakeholder Capitalism - Essay Example

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The model takes into considerations the compelling moral issues of financial risk management that contributes to economic crisis. Petrick employs the…
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Sustainable Stakeholder Capitalism
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Lecturer: Sustainable Stakeholder Capitalism Sustainable stakeholder capitalism (SSC) is a model that examines the micro and macro financial risks that affects the economy. The model takes into considerations the compelling moral issues of financial risk management that contributes to economic crisis. Petrick employs the sustainable stakeholder capitalism as a theoretical model whereby capitalism exercise moral imagination, which balances four-multi levels factor (Petrick (101). These factors include the moral theories, credit risks, human nature drives and the types of capitalism, (Petrick (102). This factors call for practical reforms in order to prevent the occurrence of economic crisis in the contemporary society. This is because employing macro level practical reforms will create a systematic integrity in the financial institutions across the globe. This is essential because it will contribute to responsible risk management for the SSC in the present and future.
One of the factors that contributed to unethical economic environment of the Great Global Recession is unregulated capitalism. Unregulated capitalism in the field of economics is one of the risk factors contributing to economic crisis. Petrick argue that the irrational market actors whose aim is to fulfill their self-interest and their unethical behaviors employed in accumulating wealth can be one of the challenges to the economy of a state. This is because it creates economic imbalances in a country and this contributes to other associated problem such as poor resource distribution in an economy. The capitalism nature and ineffective managerial education contributed to the global recession; thus non-market and market stakeholders were unable to prevent capitalism.
Secondly, poor market-based regulatory solutions in the global economy contributed to economic crisis. The ineffective fiscal and monetary policies failed to reignite residential investments; thus contributed to financial crisis. The government employs poor fiscal policy in regulation of business activities. Moreover, the unregulated marketing principles contributed to poor price determination in many entities. The managers employed poor managerial theories and practices that affected the marketing activities. For instance, the Wall Street banking and other financial banks employed speculative risks that affected the investors.
Lastly, overuse of resources due to need of increasing wealth, and this contributed to resource depletion. The resource overuse resulted due to managerial competences whereby many actors wanted to expand and accumulate wealth. The resources depletion contributes to economic crisis because many companies exploit the raw material in order to increase productivity. However, due to the scarcity of resources and poor managerial skills employed in resource harvesting, many countries suffer the impact of resource depletion.
There are effective steps that responsible business leaders should take in order to improve the ethical economic environment conducted in the future. First, employing managerial control and monitoring closely self-interest human activities in order to prevent the opportunistic abuse of power (Petrick 104). Managers can employ the model of psychological self-interest in order to understand the human behaviors in the economic market; thus limiting their self-interest behaviors. Secondly, employing competing value frameworks and carrying out marketing research analysis in order to determine the behaviors of capitalist in the market. Competing values framework should be realistically effective in order to account for competing and the complementary role that individuals or managers employ in the business environment. The diagram below reveals a SSC model for managerial role competencies. Thirdly, responsible leaders should carry out economic research and develop systematic norms effective for protecting the common pool resources.
Work Cited
Petrick, Joseph. A. “The model of Sustainable Stakeholder Capitalism and redesigning
management education”. Lessons Generated From the Great Global Recession. Greenleaf Publishing. (2010): 101-124. Print. Read More
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