During the twentieth century, many changes in the economy and the global market have been realized. Many options have been available for the business people and stakeholders left with the freedom to choose among the different ways of conducting business that best fits their interests and capabilities. Several questions have cropped up regarding conducting general business in the entire world. It is therefore up to the managers to make the right business decisions to ensure that their businesses stay afloat.
Which market system is better: capitalism or communism?
To begin with, capitalism is a market economy whereby people are allowed to own private property and control the same as they wish. The owners set their prices and make decisions on every aspect of their businesses. The market is free and is characterized by fair competition. The main advantage that businesses operating under this economy enjoy is that the government has no right to interfere with such establishments since there is minimal control from the state.
The businesses have the right to compete to the optimum. This type of economy allows people to choose the type of work and environment that best suits their interests. The business stakeholders enjoy their profits as there is no such legal requirement from the state. The problem is that most people in some regions of the world are still too poor to make it alone in the consumer economy.
Decision making takes longer due to the freedom that the corporations leave the business stakeholders to enjoy. On the other hand, communism is a form of a market system whereby ownership of property is controlled by the state. Goods are owned jointly although private ownership is highly discouraged. The advantage is that there is a common power of ownership of property and all aspects of marketing are controlled from one central point.
The main disadvantage is that there is no motivation to work because some people opt to take advantage of the group. There are minimal benefits for working hard as long as the hardworking person gets the same reward as any other person in the group.
What is CSR?
Corporate social responsibility the channels through which businesses give back to the society. Businesses may take responsibility for some of the important issues in communities where they are operating. For instance, cleaning the environment or offering education sponsorships to needy children.
Benefits include customer attraction and retention, improved business relationships with external entities, innovativeness and improved business reputation. Shareholder democracy is a situation whereby managers allow shareholders to take the most important aspects of business management.
It largely depends on the type of business. Therefore, there is no limit on the number of shareholder democracy that a corporation can stipulate. This is a decision that is usually left to the management of a particular business to make.
Should businesses allow government regulation of the economy?
The regulation allows the government to intervene and make decisions regarding how the general economy should be run. Governments set the laws to be followed in a certain marketplace. These laws should be followed strictly failure to which those who violate may face the full wrath of the law.
Government regulation protects businesses from exploitations related to the business and puts fair legal laws for the entire economy. Local governments shield businesses that trade internationally from the exploitations that are connected to international trade. The entire market is controlled by the government or an agency appointed on its behalf.