Performance and Progress: Essays on Capitalism, Business, and Society

Description

The prevailing aspiration of business is performance, while that of society is progress. Capitalism, both the paradigm and practice, sits at the intersection of these dual aspirations, and the essays in this volume explore its fraught status there. Contributions to this volume address questions such as (i) what's the problem with capitalism?; (ii) is the problem just with the practice or with the very paradigm?; (iii) what is progress and who is responsible for it?; (iv) what evolution is required at the individual, system, and paradigm level so that enterprises and the executives who lead them may better integrate performance with progress?; and (v) whither consumers, employees, and investors in this evolution? The book offers perspectives from two distinct intellectual domains-social science and philosophy. Scholars in social science (including economics, management, and sociology) tend to study performance. Ideas of progress, on the other hand, tend to fall more under the purview of philosophers (in particular social and political philosophers). Further, to obtain an insider's view on practice and possibilities, the volume includes essays from a handful of thoughtful business leaders. Research should consider not just how to make sustainability profitable, but also how to make profitability and the modern economic system sustainable. If we are to better comprehend why the world is in protest, to reflect on progress or dilemmas of trust, we must appreciate the tenuous assumptions of modern microeconomics and markets, and hear from modern philosophers about the basis and limits of rationality. Cover Performance and Progress: Essays on Capitalism, Business, and Society Copyright Acknowledgments Contents List of Figures List of Tables List of Contributors Introduction The Five Themes Problem Progress Balancing and Trade-Offs Choices and Preferences Power and Trust Intended Readership So What? Looking Back, Looking Forward Part I: Problem Chapter 1: What´s Wrong with Capitalism? Fundamental Issues with the Contemporary Paradigm and Practice of Capitalism The Purpose of an Economic System-Confusing Moral Aims with Amoral Methods Testing our Assumptions Risks and Consequences The Role of Business The Multiple Roles Played by Individuals Self-Correcting Forces and the Need for Regulation Gaps in Knowledge and Future Research Bibliography Chapter 2: Do the Mistakes Lie in Decision-Makers or in Economics? Decision Theory Intelligence Interpreting Deviations from Decision Theory Intelligence The Limitations of Adaptation Possible Advantages of Rule-Following The Social Functions of Decision-Making The Limits of Economics Do the Mistakes Lie in Decision-Makers or in Economics? Acknowledgment References Chapter 3: Some Failures of the Economy Introduction Complex Adaptive Systems: Adapting to What? The Economy as a Complex System: How do we Evaluate its Performance? The Case for the Success of the Economy Increasing Returns and Economic Performance Information and the Economy: The Good and the Bad The Failures of the Price System The Social, Political, and Ethical Necessities for Good Performance References Chapter 4: Corruption Concentrated Power: The Cure that is the Disease Concentrating Power Is there an Alternative? Beyond Money Corruption Compromises Self-Awareness Agency is an Achievement Compromised Group Agency No Man is an Island Beyond Men of System Conflict and Justice Acknowledgments References Chapter 5: Social Control in a Stateless World Society Introduction A Note on Labels The Structural Setting of Perceived World Problems Expansion and Interdependence A Stateless World Society The Lowered Legitimacy of the National State The Cultural Construction of Global Social Order Scientization The Entitled and Empowered Human Individual Education Summary: The Rise of the Actor Problem-Solving Activism and Organization in the Global Order Social Activist Orientations and Action The Ubiquity of Organization Legitimating and Controlling International Capitalism Dialectics, and the Problems Created by Solutions Contestations Problem-Creating Capacity Conclusion Acknowledgments References Problem: Discussion Summary Part II: Progress Chapter 6: Capitalism and Human Progress Methodological Preliminaries 1: Progress Methodological Preliminaries 2: Capitalism Capitalism and Progress: Poverty and Inequality Social Norms Institutional Responsibilities Law, Money, Honor Honor Worlds Envoi References Chapter 7: On Progress Introduction Preliminaries Natural Science Ethical Progress Social Progress Questions Acknowledgments References Chapter 8: Freedom, Responsibility, and Keeping (Our) Hope Alive Evidence Beyond Running Reflections Progress Hope and Hopelessness Keeping Hope Alive Keeping our Hope Alive Faith Acknowledgments References Chapter 9: Progress and Public Reasoning 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 References Chapter 10: An Entrepreneur´s Reflections on Progress Progress: Discussion Summary Part III: Balancing and Trade-offs Chapter 11: The Business Enterprise as an Ethical Agent Ethics in the Context of Business Enterprise The Firm as a Joint Enterprise Founded on Relations of Reciprocity and Trust Ethical Implications of Understanding the Firm as a Nexus of Reciprocal Relationships Constraints on the Reciprocity Model? Fiduciary Duties of Corporate Directors The Market for Corporate Governance Capital Constraints Competitive Pressures Corporate Governance Constraints Executive Compensation Executive Culture References Chapter 12: Shareholders, Stakeholders, and Strategic Factor Markets The Shareholder Dominance Model Strategic Factor Market Theory Implications of Strategic Factor Markets for Shareholder Dominance Logic An Example with Human Capital Distributing Residual Cash among Multiple Stakeholders The Problem of Externalities Conclusion References Chapter 13: Climate Change, Justice, and Humanity´s Collective Ownership of the Earth 1 2 3 4 5 6 7 8 9 10 11 References Chapter 14: Paradox of Abundance The Paradox of Abundance Is Labor Scarcity Declining? The Puzzle of Falling Wages How Computerization Changes Work: A Concrete Characterization Simulation Communications Engagement Conclusions Acknowledgments References Chapter 15: A Unique Opportunity The Capitalistic System: Chasing Opportunities, with Consequences The Tipping Point: Digitization Introduces a Unique Opportunity Reimagining Capitalism in the Digital Era Guiding the Capitalist System: Making Sustainable Business Good Business Conclusion References Chapter 16: The Goal and Role of Business Achieving Societal Relevance The Smarter Planet Agenda The IBM Commitment to Africa The IBM Commitment to Public Sector Effectiveness The IBM Focus on Transformation, Leadership, and Values Globalization Leadership and Values Earning Trust around the World Balancing and Trade-Offs: Discussion Summary Part IV: Choices and Preferences Chapter 17: Holistic Capitalism Capitalism: An Early Oversimplified Definition An Introduction to Holistic Capitalism Freedom to Define Preferences and Make Choices Voice and Decision: The Power of the Individual Choosing Means versus Ends Balance Defines Choices and Preferences: The Four Poles of the Good Society Influences Extrinsic Factors Intrinsic Factors and the Notion of ``Purpose´´ Prospects for Societal Progress within a Capitalist System The Concept of Holistic Capitalism: A Natural Evolution The Role of Individuals within a Holistic Capitalism System The Role of Investors: How to Convince them to Move beyond Profits? The Role of the Business Leader The Role of Consumers: How to Convince them to Move towards Sustainable Products and Services? The Role of Government: Providing a Fertile Ground Awareness-Raising Partnering Proactive Soft Interventions A Sense of Urgency The Power Lies Within Questions for Future Research References Chapter 18: Whither The Good Firm Introduction Can Corporate Goodness be Accurately Measured? Separating Agency Motivated from Strategic CSR Distinguishing among Different Strategic Motivations for CSR Conclusion References Chapter 19: Positional Externalities As A Source of Market Failure A Troubling Feature of the Left´s Critique of Capitalism An Equilibrium Explanation of Insufficient Workplace Safety Hours Regulation Regulating Financial Markets Mandatory Savings Progressive Taxation Better Still: A Progressive Consumption Tax Concluding Remarks References Chapter 20: Well-Being, Values, and Improving Lives Well-Being As Value Fulfillment Overview Values and Valuing Value Fulfillment Value-Full Lives Changing Values and Improving Lives Value Fulfillment and Holism Applying the Theory: Individual Change and Global Crises Conclusion Acknowledgments References Chapter 21: Ideas of Reason References Choices and Preferences: Discussion Summary Part V: Power and Trust Chapter 22: Two Fallacies About Corporations Introduction Against the Claim that Corporate Bodies are Not Real Agents Corporate Bodies are Representable as Agents Corporate Bodies Represent themselves as Agents Against the First Fallacy Against the Claim that Corporate Agents Have Autonomous Rights Some Legal History Against the Second Fallacy Conclusion Acknowledgments Chapter 23: Corporate Power in The Twenty-First Century What is Corporate Power? Corporate Power in the Twentieth Century The Collapse of Corporate Power in the Twenty-First Century Nikefication and the Dispersal of Production The Impact of Nikefication on the Corporate Form The Collapse of the Corporate Elite The Post-Nike Corporation The New PowerBall Economy Corporate Power Today Conclusion and Future Research References Chapter 24: Contesting the market Introduction The Threat of Market Power The Distinctive Value of Contestation Vulnerability to Arbitrary Interference Insensitivity to Relevant Interests Trust in Markets The Deliberative Constitution of Public Value Prospects for Ameliorating the Threat References Chapter 25: Recasting The Corporate Model Introduction Corporations in Question The Dominance of Shareholder Value Capitalism A Global Crisis of Confidence The Search for Alternative Corporate Models The Rise and Spread of Social Enterprises A Brief History of Social Enterprises The Contemporary Spread of Social Enterprises A Delicate Balance A Roadmap for Research on Hybrid Organizing in Social Enterprises Hybridizing Tensions Facing Social Enterprises External Challenges Internal Challenges Hybrid Organizing Organizational Activities Workforce Composition Organization Design Inter-Organizational Relationships Organizational Culture Concluding Remarks: Towards an Increased Hybridization of the Economy Acknowledgments References Chapter 26: Trust and Power Trust is Critical to a Free Market Economy The Promotion of Institutional Trust Is Trust Disappearing in our Societies? Power without Trust Cannot Run a Company The Development of a Compliance Culture The Incredible Power of Trust The Limits of Restoring Trust through Regulation A Trust Based on Ethics Trusting People, and Not Only Institutions Trust and Ethics in Business Schools Conclusion References Power and Trust: Discussion Summary Index of Names Index of Subjects