Quiz 2 Flashcards
Does Capitalism operate with any ethics?
Wealth, Prosperity, Human well-being
Unleashes creative, productive forces to create value
Arguments that capitalism is ethical
- Honours rights of individuals to set their own objectives and pursue their own happiness
- Business needs to respond to consumer demands, social media pressure
- Moral individuals exist and are in the majority
- Integrity makes sense due to the consequences of not acting with integrity
Achieving social lience for Capitalism
Businesspeople and managers need to account for the ethical implications of the fundamentals of capitalism
- increasing consideration is given to social responsibility, business ethics, corporate citizenship, stakeholder management
Two main engines of capitalism
Production (work) - Weber, Marx
- Labor creates value
Consumption - Baudrillard
- It is consumption that mainly drives capitalism
Reproduction
Life is more than production and consumption
- Not just having kids, but also cultivating them
Fundamentals of Capitalism
- Right of private property
- Equality of opportunity
- Competition
- Individualism and economic freedom
- Profits
- The work ethics (Important)
- Consumer sovereignty (Important)
- The role of government
What is work?
Work is “an activity”, such as a job, that a person uses physical or mental effort to do, usually for money
History of work - ancient greek civilization
Work - Physical labour or services - was seen to fit only for women and slaves
Aristotle
- Work does not make you a better person
- It makes you worse as it hinders your social and political obligations
History of work - Eurpoean Middle Ages
- Almost everyone was expected to spend the first 7-15 years of his or her working life as a servant
- Work had a clear ending
apprentices > journeymen > masters
History of work - East Asia
- East Asian work culture is said to be largely rooted in Confucianism
- Community over individual
- Emphasis on social harmony and loyalty
- Although this is changing fast
History of Work - Industrial Revolution
Began in Britain in the 18th century
- Farmers had to learn how to work with new technologies
- Workhouses emerged as a person’s worth was increasingly connected to their working capacity in society
Workhouse: institution that provides employment for the poor and those who are deemed to have failed
History of work - Scientific Management
The principles of scientific management (1911)
- As an engineering manager, FrederickTaylor was disappointed by workers’ inefficiency
- Tried to find”one best way” of work
- Scientific management aka “Taylorism”
Potential problems with scientific management
- High turnover
- Employee dissatisfaction
History of work - Later 18th century
Labour problems began arising
- Scientific management focused on production
Human resources movement
- concern for people and productivity
The protestant work ethic
Code of values, or body of moral principles, claiming that work is desirable, a natural activity, and good in and of itself
- Assumes unemployment is a temporary misfortune or a result of a deficiency of the individual
Criticisms of the protestant work ethic
- Individuals may have other life purposes
- People who don’t participate in the work force still have inherent worthiness and dignity
- savings and thrift vs. promotion of consumption
Work today
Emphasis on
- Flexibility
- Egalitarian structure
- Empowerment
- Perpetual learning and development
-EQ
- Well-being and happiness
What makes a job satisfying
- doing what you love
- having passion for your work
- Fulfill oneself
- to grow
- place to show creativity
Extrinsic vs Intrinsic Motivation
Extrinsic - Money, promotions
Intrinsic - the activity is the reward itself
How extrinsic can hurt intrinsic
Pay can affect explanations people use to understand their reason for working
Intrinsic over Extrinsic
Extrinsic motivation and extrinsic rewards have serious limitations
Intrinsic motivation and rewards are here to save the day
Benefits of Passion
Individuals
- less stress and depression
- greater life and work satisfaction
Organizations
- Proactive workers
- highly engaged employees
Downside of Passion
- Passion can lead to higher burnout and less goal flexibility
- Passionate people tend to be willing to sacrifice for extra work
Consumer sovereignty
the assumptions that consumers have and exercise power over producers through decisions they make in purchasing the goods and services provided by corporations
- The more competitive the market, the stronger the power of the consumer
Consumer sovereignty - Marketing
- Understand and shape consumer behaviour
- Promote the sale of goods and services in the market
Heavily promoted: The more you have, the more you want
Consumer sovereignty - consumers
Consumers challenged to exercise sovereignty- - - Lack of awarness of all their alternatives
- Some goods and services are technically complex
- Persuasive advertising shapes preferences
Consumer sovereignty - government
Governments regulate in public interest
- Arguably more in the “producer interest”
- Monopoliges: marketing/professional organizations
- Tariffs/quotas on imported goods
Consumer sovereignty - Boycott
Abstaining from using, buying, or dealing witha. person, organization, or country as an expression of protest, usually for moral, economic, social, political, or environmental reason
- easier due to social media
Right which is fundamental to the capitalistic system
Right to ownership of property
The right of private property
the legal right to own and use economic goods, for example, land and buildings.
Intellectual property
patents, copyrights, trademarks, etc.
Individualism
The individual, and not society or a collective, is the paramount decision-maker in society and assumes that the individual is inherently decent and rational.
Agency
Individuals have the capacity to actively and independently make choices and effect change
Freedoms
the capability to have and control property, freedom of association, freedom of information, and freedom of movement
When does economic freedoms exist
when the business system operates with few restrictions
Equality of opportunity
the assumption that all individuals or groups have an even chance to respond to some condition in society
Why is equality of opportunity hard to achieve in capitalist system
leads to economic or income inequality
Inequity to equity
INEQUITY > unequal > uninformed > sensitive > specific > transformative > EQUITY
Unequal - perpetuates inequalities based on protected rights
Uninformed - Ignores social norms regarding protected rights
Sensitive - Acknowledges but does not address inequalities
Specific - Acknowledges social norms and considers intersectional needs
Transformative - Addresses the causes of inequality and works to transform harmful systems and structures of inequality
Competition
condition in a market which many rival sellers seek to provide goods and services to many buyers
Oligopoly
few sellers in an industry behave similarly
Profits
Excess of revenues over expenses. are closely associated with competition
Government regulation of business
- architect of economic growth
- major purchaser of goods and services
- major promoter and subsidizer of business
- provider of financial capital
- rescuer of failed businesses
- owner of business enterprises
- Protector of business interests
- Protector of various interests in society, business exploitation
- Directly manages, through regulation, large areas of private business activity
- Directly regulates 1/3 of the economy through over 600 organizations
Deregulation
reduction of government influence of impact on the economy
Privatization
strengthening of the market at the expense of the state
- defined as the provision of public service by the private sector
- complete or partial
- divestiture, contracting out
Self-regulation
regulation imposed by the corporation or industry
Private or civil regulation
non-profit, independent organizations that set standards for responsible business practices
Private - non-involvement of the public or government sector
Civil - voluntary, community, and social organizations or institutions that contribute to the functioning of society but are usually not related or supported by the government
Third-party certification
when an independent organization varifies that a product or service meets specific safety, quality, or environmental standards
Capitalism challenges - Greed
Excessive and selfish form of self-interest where individuals desire more of something than what is needed or fair
Capitalism challenges - Economic Downturns
because capitalism is based on a market system, there will be swings between prosperous times and recessions or even depressions
Capitalism challenges - Business failures
failure that disposes of unsuccessful businesses and shifts resources to new or stronger ones. Thus, bankruptcy laws need to work well to transfer resources efficiently
Capitalism challenges - Income and wealth inequity
inequities are inevitable and necessary in a dynamic economy to provide incentives and prevent the regimentation of equality
