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.
Author(s): Subramanian Rangan
Publisher: Oxford University Press
Year: 2015
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
