Carefully outline the four models explaining the Business
Carefully outline the four models explaining the Business, Government & Society relationship as presented in the main text. In your assessment, which of these models best describes the relationship between business, governments & society in the Jamaican environment? Explain.
A business cannot exist without customers (society) they both need each other, while the government acts as a referee between the two having laws to protect the society of unfair trade.
Based on the definition from our lecture notes a business is a profit making activity that provides product and services to satisfy human needs. While the government is a structure and process in society that authoritatively make and apply policies and rules. And the society is a network of human relations composed of ideas, institutions and material things. The business, government and society interacts and influence each other’s specific goals and objectives.
The four models that governed business, government, and society are market capitalism model, dominance model, countervailing force model and the stakeholder model.
Market Capitalism Model
A market is the interaction between buyers and sellers while capitalism is an economic and political system in which a country’s trade and industry are controlled by private owner for profit rather than by the state. According to Doshi.R market capitalism is a business operating within a market environment, responding primarily to powerful economic forces. It is protected from direct impact by social and political forces and acts as a buffer between business unit and non-market forces. Most economic activity is carried on by private firms in a competitive market. In market capitalism model persons have the choice to pursue self- interest and are motivated by the desire to make money, and freely risk investment, while there is limited amount of government intervention. The business, government and society relationship to the market capitalism model is that business exist to make a profit for themselves and promote the interest of their shareholders, government regulation should be limited, and the market will discipline the production, distribution and consumption of goods and services to promote social welfare. It has being criticized that increase prosperity comes at the cost of increase inequality and the result in base values being energized and virtue being eroded.
The dominance model is based on the idea that a few persons are rich at the expense of many. It symbolize mainly the perspective of business critics. It is where society is a pyramid where the great mass of people is control by business and the government. Power and wealth remain in a small group where society does not have any control. It focuses on the defects and inefficiencies of capitalism giving way to control of the many by the few. Government have heavy regulation and owning big business. It denotes populism and Marxism, where populism is a political pattern where the common people who are oppressed and disadvantage persons will seek to take power from a ruling elite, populism opposed the dominance model. While Marxism is an idea that workers should rebel against property owning capitalist who exploit them replacing economic and political control with more equal and democratic and socialist institution.
The countervailing model is one of multiple or pluralistic forces, where businesses government or society will never fully dominate. It consists of four major social elements, which are environmental catalysts, the public, corporation and government. Basically economic and noneconomic forces. The environmental catalyst are the economic conditions, markets,
geopolitics, ideology,technology,nature, and cultural change. While the public includes the value, opinion, demand, supports, and non-governmental organization. The corporation involves the market operations, influence effort, lobbying and leadership. And finally the government which is the statutes, regulations, political leadership and partisan behavior. The countervailing force suggests exchange of power among major elements of society that is not giving constant power to none. Power fluctuated for each element base on the subject at issue, strength of competing interest, intensity of feeling and the influence of leaders. Business will easily adapt to changes because they cannot be fully in control of those changes in their operating environment. According to the Steiner business is deeply integrated into an open society and must respond to many forces, both economic and non-economic.They are a major initiator of change in society through its interaction with government, its production and marketing activities, and its use of new technologies. To maintain broad public support, business must adjust to social, political, and economic forces it can influence but not control.
A stakeholder is a party that has an interest in a company, who can either affect or be affected by the business. A stakeholder model is one that states that the purpose of a business is to create value for its stakeholders, and it also have an ethical duty to its shareholders. Directors must keep the interest of society and shareholders align for the success of the business. Within this model are primary and secondary stakeholders where the primary are a small amount of society who are immediately affected by the decision of the business. Examples of a primary shareholder are customers, government and the community in which the business operates. And a secondary stakeholders are made up of a wider range of society who impact on the business is limited such as activist groups, trade associations, labour unions and the business direct competitions. The Steiners mentioned that it is an unrealistic assessment of the power relationships between the corporation and other entities, it sets up too vague a guideline to substitute for the yardstick of pure profit, there is no single, clear, and objective measure to evaluate the combined ethical/economic performance of a firm ,the interests of stakeholders vary and conflict with one another (e.g. shareholders and employees),most obsessive pursuit of profit creates greater lasting good for society than pursuit of profit tempered by compassion.
Base on the information gather, in my opinion none of these models independently describe the business government and society relationship in Jamaica. In Jamaica there are part of each model, there are market capitalism where persons buy and sell without government intervention where self -interest is key, person taking risk and sellers of the same products, while the government and business have dominance in certain aspects. On the other hand there is not one group that have power, society can break or make a business and also reverse government decisions. Finally there are firms that only have their shareholder interest at heart. Jamaica is a unique country that gravitate towards little of everything but doesn’t standout in one model therefore highlighting our motto “Out of many one people’.