Capitalism is defined as a system of indirect governance for economic relationships, where all markets exist within institutional frameworks that are provided by political authorities. Capitalism is a fundamental component of western business operations and therefore has a strong influence on management practices. As such, it has lead individuals to be stimulated by self-interest and personal gain, despite this objective not necessarily contributing to greater happiness and personal wellbeing. Furthermore, an organisations single minded drive for profit, driven by a capitalist system has sometimes hindered their ability to uphold good corporate culture. However, despite certain companies succumbing to the negatives pressures of capitalism, other more progressive organisations have adopted a socialist approach of management. Therefore, capitalism remains partially at the heart of management of individuals and organisations in contemporary society.
Capitalism has been the catalyst for individuals to be driven by materialism, despite it not necessarily leading to greater happiness and personal wellbeing. In modern society, there is a growing slavish pre-occupation with materialism. However, this consumption has more to do with boosting status and self-esteem, then with maintaining a good wellbeing. Therefore, in contemporary capitalism, greed and excess dominate; and in these circumstances many people find it difficult to develop a sense of fulfilment. This is further compounded by the countless images and messages which declare that employees and individuals lives will be bettered by acquiring more items, finer titles and more impressive careers. Consequently, this materialistic drive has employees caught up in a ‘rat race’ where insecurity is temporarily suspended but unaddressed and so effectively reinforced. To further reinforce this, most developed countries, like the United States of America for example, the proportion of workers working more than 48 hours per week rose from 16. 6% in 1986 to 24. 3% in 2005. However, research findings indicate that the materialistic aspirations of these employees are negatively associated with happiness and psychological health. In further support, from empirical analyses, beyond a certain income level, any further increases in income makes little to no difference to overall happiness levels. Yet, employees continue to work increased hours for supposed materialistic happiness. Research also indicates that increasing working hours has a detrimental association with maintaining a work life balance as time available to pursue family responsibilities, namely regarding parenthood and caring for other family relationships is curtailed. Which further diminishes personal wellbeing and happiness levels. Yet, employees continue to play the victim to the modernised rat race to fuel a materialistic addition to goods, despite corresponding decreases in happiness and negative implications to their wellbeing.
Modern companies utilise their employees drive to aid them with the accomplishment of their business goals. However, a firms tunnel sighted motive for profit in a capitalistic system sometimes hinders their ability to uphold corporate social responsibility. Business organisations have often been accused of having an excessive and uncompromised focus on the pursuit for profit. However, it is when this capitalistic pursuit for profit turns excessive that capitalism controls the management of the business operation, hindering its corporate culture in the process. In 2008, the Volkswagen Group launched the “Clean Diesel” engine campaign designed to debunk the “diesel is dirty” misconception. The organisation announced that their new line is environmentally friendly, and the diesel engines are of high performance. However, less than 10 years later, Volkswagen confessed to intentionally installing ‘defeat device’ software on their diesel engines to evade United States emissions regulations. Consequently, this fraudulent behaviour resulted in excess nitrogen oxide emissions from over 500,000 vehicles in the United States, and a further 11 million worldwide.
Researchers have suggested the scandal was the result of Volkswagens’ corporate culture, once described as “cutthroat, confident, and insular”. Furthermore, Apple’s obsession with excessive profit has seen the diminishing standards of production. Apple’s iPad were found to be built in harsh working conditions widely considered to be characteristic of a ‘sweatshop’. In 2010, 137 workers at an apple supplier in eastern China were injured after they were ordered to use a poisonous chemical to clean iPhone screens. Furthermore, two explosions at iPad factories killed four workers and injured 77 others despite Apple being alerted to hazardous conditions inside the plants before they occurred. Overall, the capitalistic pressures associated with business operations has led certain companies to hinder their image and culture. Despite, companies succumbing to the pressures of capitalism, other more progressive organisations have adopted a socialist approach of management. Businesses trapped in the capitalistic greed and profit maximisation has seen companies ruin their image, branding and corporate culture. However, in the modern society, there is the evolving concern that companies must focus on their customers as well as important stakeholder groups that hold the firm accountable for its actions. As such, companies are paying attention to the longer term, to the perceptions of their company, and to the social consequences of their products. Moreover, companies are realising that the business world needs a more sustainable from capitalism in order to build a more prosperous society.
Hence, organisations are implementing corporate social responsibility into their management practices. For instance, Xerox has established a community involvement program into their business operations. In 2010, 1840 non-profit organisations, colleges and universities received direct financial support from the Xerox Foundation through grants, gifts or community involvement. Furthermore, it is through this adopted sustainable and humble approach to capitalism that has further seen Xerox partner with local schools in Dallas, Texas, to develop and implement ‘Readers Are Leaders’. This program is aimed at improving reading skills and comprehension with the aim of stimulating a lifelong interest in reading. More importantly, Xerox’s deeply embedded corporate social responsibility, has resulted in the Community Involvement Program contribute to a further 712 projects throughout the year, ultimately contributing to a monetary donation over one million dollars. Therefore, through this socialist, innovative implementation of corporate social responsibility sparked by senior management, employees have been accustom to the standard in which they need to contribute to the community. And as such, further positioning themselves away to succumbing to the negative pressures of capitalism.
Overall, despite certain companies such as Volkswagon falling victim the pressures of capitalism, other companies with a visionary and sustainable approach to capitalism have led the way in how management needs to be implemented.
In conclusion, whilst certain employees and companies fall victim to the materialistic and profit maximisation desires associated with modern day capitalism, certain companies are developing a socialist approach to management to combat these pressures. Hence, whilst companies are still continuing to focus on profit, companies are also planning innovative strategies and plans to better the community. Overall, to some degree capitalism is at the heart of how people and organisations are managed in a contemporary society as businesses are desiring a progressive movement towards a responsible management practice countering ‘true capitalism’.
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