For many years the world has witnessed the intense rivalry between two economic systems that have fought one another for dominance, Capitalism and Socialism. These two govern very different business systems that have led the world to be divided for many years. Even today even though capitalism has become the dominant market system, socialism has been growing back in popularity from different places, such as the Socialist based American President nominee Bernie Sanders, or the E.U’S new socialist policies to help save the Greek economic crisis. If you were to ask which the best system for a business was, the answer is not simple since these two systems don’t only relate economically, but morally and ethically as well. Let’s take a small look at as to how these systems came to being.
Capitalism dates back many years all the way to the 16th century when most Europeans were slowly beginning to expand across the globe with trade. The system they followed was centered on profit gain, very individual based and had very little intervention from government. Some set sea routes for trade to satisfy their royalty but most of the intent was for personal gain. During this expansion we saw the spread of western imperialism where Europeans forcefully instilled their religion, custom and economic systems on the oppressed ranging from Africa, Asia and even the Americas. This led to the spread of capitalism altogether and the culture of the business was embedded in the locals psyche. Capitalism further gained expansion when after the fall of the British Empire, the United States became a superpower and spread its aid all across the globe. This was more on to build an alliance against the U.S.S.R. Once the U.S.S.R. fell in 1991 capitalism had reigned supreme over the world since.
Socialism began under the thinking of an economist and philosopher Karl Marx. His theories spread across Europe and became a proper economic system in Russia under Lenin. This system was completely opposite to capitalism where the focus was more on the peoples well being, state owned businesses and equality in all walks of life. Some experts believe it to be a reaction against the evil spell of capitalism. After World War 2 the world divided in to economic based fighters, socialists and profit seekers.
To decide which the best business system to follow is isn’t simple. Some suggest that best to choose would be based more on circumstance rather than internal belief. Socialism would in fact suit a more poor country rather than a rich one while capitalism will fit a more rich country. The reason is so because socialism allows the removal of classes and establishes all as equal, so no one is better than the other, and sets the basic foundations of the country on equal basis. This is why it’s more dominant in places like Africa today. Capitalism will suit a more rich country since its more profit driven and individual based. There are both flaw and gains in each system, so it all boils down to who implements the system better or a booming business.
As of today, the world has become dominated by the norms and values of a capitalist economic system. This system is profit based, individually driven and has little or no government intervention. Since its driven towards profit,. Many people turn a blind eye to the fact that it has set the way for excessive corporate greed. This lust and ambition of excessive wealth and power is responsible for most of the current economic crisis today. The 2008 crash in the United States of America, was no mere accident, it was the many years of secret dealings, banks giving out bonuses, and lack of consideration for the future consequences that led to it. So many people were lost in their lavish lifestyle they never thought the system would collapse. As of today their worst nightmare has come true. All over the world there one economic crisis one way or another, in Europe the Greece Debt, Brazil with its Economic decline and India who is struggling with the great class divide of wealth. If people are to engage in any business form of activity they must remember that there is a set criteria of ethics and morals they have to follow, or they will end up in the same vicious cycle that could lead to their demise.
Business ethics refers to the norms and values a firm or company follows in order to maintain positive standards and establish goodwill with its customers and shareholders. These as of today are of top priority because over the years many have suffered over the insatiable greed of C.E.O.’s who prioritized their own personal gain over other factors such as the environment or employees. By instilling business ethics in a workplace you have automatically set a sense of discipline which can guide employees towards the right direction. There won’t be chances of a scandal breaking out because everyone remained away from corrupt tactics to benefit their own selfish desires.
Business ethics have been around for plenty of years, but have also evolved as well. Before the fall of the U.S.S.R, the business ethics were somewhat different and when America became the world’s sole superpower, business ethics were changed again. The notion of ethics is not limited to just the individual working in a firm, but to departments as well. For every different department, be it finance or human resource, the basic foundations of ethics will be the same but there will made according to the nature of the work as well. For example in H.R there will an ethic of how to let go of an employee, whereas in the finance department, ethics preventing false numbers to be put into balance sheets will be instilled.
There have been many cases across the globe where companies have had to shut down due to public scandal. These scandals tend to originate because these firms refused to follow public policy of etiquette. If C.E.O’s don’t take these matters under consideration then they will meet the same fate.