Corporate Governance And Employer Employee Relationship

At the end of the eighteenth century, with the rise of the enlightenment and the industrial revolution came the development of the capitalist economy. As mercantilism faded with the developments of the industrial revolution, capitalism, a new economic system developed. Capitalism is a system in which the means of production, distribution, and exchange of wealth are controlled chiefly by private property owners who are free to seek profits in competitive conditions. Capitalism can be broken down into five functional components; self-interest, private property, division of labor, competition, and the invisible hand. Each component is an integral aspect of capitalism both at its inception and in our contemporary global economy.

According to Gitman, the goal of the firm, and therefore of all managers and employees, is to maximize the wealth of the owners for whom it is being operated (2009). The financial manager is responsible for acquiring sources of financing and allocate amongst competitive investment alternatives. The ultimate goal is to invest in projects yielding higher returns than amount of financing used to invest, so profits can be used satisfy claims and increase shareholder wealth. The issues facing financial managers are therefore to 1) increase sources of financing from investors and 2) increase shareholder wealth while maintaining a

As the Industrial Revolution begins, the idea of capitalism began to come up. It is economic and political system in which private owners control the country’s trade and industry for personal profit. The government intervenes the least as possible so that the best companies survive

Capitalism can trace its roots all the way back to when Great Britain would create joint-stock companies and trusts to form an industry so that they can control the whole line of systems in which the industry was affiliated to. Capitalism helped spark the industrial revolution as well. The industrial revolution began when mass production of products emerged along with the new technological innovations. People took advantage of the expanding demand for products and created their own industries which allowed some to become the most wealthy on the planet. By the end of the twentieth century, “capitalism had become the world's dominant economic system”(Capitalism). Growing to become a dominant system shows that it works well and suit many countries’ form of

“But capitalism began to shape society and impress its stamp on every page of social history only with the second half of the eighteenth century” (Schumacher 66) .Capitalism enhanced democracy in politics and economy; Moreover, it considered war a way to destruct and interfere with the diversity and society’s purpose. Nowadays, capitalism establishes fundamentals against wars and armaments. Capitalism had an impact on the economy of countries; it encouraged production, operation of profit and competition between markers. Impoverishment was apparent when capitalism was established in countries; however, “this tendency slowed up since the turn of the century (Schumacher 86)”. It was believed that production, export and monopoly capitalist expansion would increase the wages and labor demand. However, imperialism was considered a phase of capitalism because it influenced its

This was a very interesting article, in my opinion it brings to mind the derived phrase, which came first the chicken or the egg. Meaning, is corporate governance an attempt to control the results of unethical practices of corporations or is it meant to deter them. In reading this article, it is clear that certain corporations practiced unethical business behaviors for self-interest, but the questions this author have are: 1. Should corporate governance be regulated by the legislature as well as the organization and to what degree, 2. Is corporate governance, there to protect the shareholder or the stakeholder, 3. How effective is corporate governance on a global level. The need for a governance system is based on the assumption that the separation between the owners of a company and its management provides self-interest executives the opportunity to take actions that benefit themselves, with the cost of these actions borne by the owners (Larcker & Tayan, 2008).

Arguably the most dominant economic system throughout history, Capitalism is both a political and commercial structure in which the production as well as management of goods and services are privately owned and operated in contrast to state or federal government. The origin of this booming fiscal policy could be attributed to various different factors such as the Industrial Revolution and an increasing interest in the investment of securities. The spirit of entrepreneurialism and the hunger for profit has led corporations and businesses [whether big or small] to inadvertently create a system that would stimulate the creation of wealth on an international scale for those countries who

Theorists began to recognize capitalism as pre-industrial society developed economically and major social changes began to occur. Modernization resulted in industrialization, urbanization and bureaucratization as the workplace shifted from the home to the factory, people moved from farms into cities where jobs were more readily available and large-scale formal organizations emerged. Classical theorists’ observations addressed numerous facets of social organization and interaction that came about as a result of modernization; however this essay will focus on their ideas regarding capitalism and the capitalistic society. Over

The world has developed over years in business, technology and science. Capitalism has been the key to the development of business and a countries economy capitalism has changed the economy and society in both positive and negative ways both suitable. Robert Heilbroner book”Twenty-first-century capitalism(1993)” talked about going beyond economic theories too but focuses on the problems of modern economic society. He thought of capitalism as the interrelationship between the economic system and a political order ,that is how“two realms of capitalism” were formed. As we go on in this essay certain questions would need to be answered like “ how did capitalism start competition , is the government allowed to interfere in a capitalist market

Employee-owned companies exist for a variety of reasons, from the personal vision of an owner to management and employee buy-outs, a way out of family succession problems or employees responding to closure threats. The evidence is that companies with high levels of employee ownership outperform others, and the government has demonstrated through

* Equity value is established for the firm * Current shareholders can diversify personal portfolios

This paper will have a detailed discussion on the shareholder theory of Milton Friedman and the stakeholder theory of Edward Freeman. Friedman argued that “neo-classical economic theory suggests that the purpose of the organisations is to make profits in their accountability to themselves and their shareholders and that only by doing so can business contribute to wealth for itself and society at large”. On the other hand, the theory of stakeholder suggests that the managers of an organisation do not only have the duty towards the firm’s shareholders; rather towards the individuals and constituencies who contribute to the company’s wealth, capacity and activities. These individuals or constituencies can be the shareholders, employees,

Good employer to employee relations is one of the key ingredient factors in determining success of a particular organization. Many organizations are encouraged through the Human Resource Department to uphold values that promote the creation of a conducive environment in both the welfare of the employees and the employer in the realization of organizational goals. In retrospect, practices such as poor employee behavior, sexual harassment, substance abuse, fighting, internet abuse, and work family conflicts are highly discouraged not only within the confinement of the working environment, but also outside of work as they portray a negative image of the organization or company (Series, 2015).

This will enable financial institutions and markets to better execute their important function that is to monitor investments and exert corporate governance. Their control can compel firms to pursue activities which generate higher value and retain investor’s confidence which is essential for continuous flow of capital

Nevertheless if companies operate in weak markets and fail to create growth and profit the concept of maximization of shareholder wealth is also an opportunity for self-regulation and security against threats for a company. This approach is in particular useful for safeguarding against difficulties arising from wrong or misguided leadership within a corporation. Shareholders of a company have the strongest interest in a company’s success because they often invest a lot of capital in the business and require revenues for their deposit (Moore, 2002). As a matter of fact, they become more