The Influence of Economic, Political, and Social Factors on Firms

(3) Political and legal environment, factors related to policy and law that influence company’s operation.

During the 19th century, Europe underwent political and economic change resulting in a shift from craft production to factory work. This was a time known as the Industrial Revolution, in which class division and wage labor were the most foregrounded aspects of society (Poynton). Karl Marx’s theories during this time gave way to new perspectives and different ways of viewing oneself in class positions. Comparisons between social and political structures in the 19th century and the 21st century expose the similarities that have yet to be modified. Marxist theory proved to offer a framework for society to undergo evolutionary change that would put an end to the capitalist mode of production that developed during the Industrial Revolution in Europe (Connelley). Marxism greatly outlines the struggle between different classes and groups belonging to the political world and how this class struggle affects the means of production. Broadly speaking, capitalism is a structure of political inequality and once overcome will lead to communism, inevitably weakening the boundary between classes. Although beneficial for the workers who want to live as free men, the upper class will be placed on that same wavelength. The greater political structure will form into a realm that will abolish the exploitation and oppression of workers, thus placing power in the hands of those who do not benefit from the unequal distribution of wealth. It involves a combination of political and economic factors

The Industrial Revolution (1750-1850) had brought about significant changes in agriculture, mining, manufacturing, transportation and technology and subsequently established an era of unprecedented economic growth in capitalist economies. It was within this era that Karl Marx had observed the deprivation and inequality experienced by men of the proletariat, the working class, who had laboured excessively for hours under inhumane conditions to earn a minimum wage while the bourgeoisie, the capitalist class, reaped the benefits. For Marx it was this fundamental inequality within the social and economic hierarchy that had enabled capitalist societies to function. While Marx’s theories, in many instances have been falsified and predictions

Ans. The methods for Bourgeoisie is, the individuals who possessed the methods for generation like proprietors of manufacturing plants while low class, who worked for the proprietors of creation like as specialists on shop floor. Manager controlled to low class and they were misused in light of the fact that they needed to pitch their work to get a wage this is a case of

Instead, the business owners made choices for them and used the workers for their own rewards. The bourgeoisie were the owners "the formation of the bourgeoisie public sphere was ideological to the extent that it secured the domination of one class over another."3 The problem with the bourgeoisie class was that they saw no wrong in their system because they reasoned it to be the right way. The owners controlled the means of production, but it was the people under them that actually knew what they were doing. The oppressed people were controlled by the oppressors and could not make decisions about the work they did, political matters, or equality in the workplace but held the responsibility of making the businesses successful. There was huge clashing between the workers and the owners because the owners made the choices while the workers were forced to take responsibility for them.

The nineteenth century was a time ripe with progress and hope due to booming industrialization. As organizations and workforces grew, people looked for ways to increase their productivity and profit margins. New ideas were needed to satisfy both business owners and their employees and as such, along came theorists such as Marx or other contributors like Frederick Taylor and Elton Mayo. Taylor produced a management style coined Scientific Management whereas Mayo took a slightly different route and conducted the Hawthorne studies. Over the years theorists such as Marx, with his wildly popular theory about alienation in the workplace, have shaped our view of how management should be conducted in

Modern society is organized in a system of moderately regulated capitalism with the goal of economic growth. At the company level, this means maximizing efficiency and productivity at any cost. Karl Marx explains how this inevitably leads small businesses to be replaced by large companies. He writes “expropriation is accomplished by the action of the immanent laws of capitalistic production itself, by the centralisation of capital. One capitalist always kills many” (Marx 437). Because capitalism values efficiency above all, and companies can be most efficient with higher division of labor which favors larger companies, capitalism inherently gives an advantage to larger companies. With increasing size in corporations, the importance of the individual worker decreases proportionally. Companies implement high

Management could be considered as the art of creating output using limited resources. Different models of management have been introduced throughout the progress of mankind. 2 models of management will be discussed in this essay. The first model will be the scientific management introduced by Frederick Taylor in 1917. It was represented by Oswald Jones as: ’Jobs were designed to be done in a mechanical fashion by removing opportunities for worker discretion’ (Jones, 2000, p. 647). The second model to be analyzed is the human relations model which came in the early of 20th century through the studies of Follet and Mayo as a criticism to the scientific model (Bobby & Paton 2011, p51). Instead of the first model which looks at workers as working

In the late 19th century, after the wold experienced the industrial revolution, large amount of managers believed and performance the Darwinism social philosophy, this philosophy believed the nature would select the general regulations and principles and the fittest company would survival in the society (Barnett, 2007). This philosophy are usually be considered as a brutal philosophy, because of this philosophy encourage the company competition but do not encourage the company to concern the employees, environment, or the whole society.

The existence of hierarchy demonstrates the integration role of the bosses in combining separate operations of production process. The specialization and separation of worker task inquires an overlook of the business by a manager. Since each individual worker is assigned and stuck to only a small task of the production process, the bosses undertake the role of providing discipline and supervision to connect those separate tasks together to minimize the costs of production. Consequently, under the longwall system with mechanized separate tasks, the supervision of bosses is responsible for the success of capitalism, not technological superiority. The image of the feeding machine in “Modern Times” provides a critical example of how advanced machines might not help facilitate the accomplishments of the factory. Thus, some researchers have attributed the prosperity of a corporation to the development and management of work organization by the bosses, whom are the exploiters of the capitalist system.

Large manufacturing businesses such as Ford and General Motors were experiencing rapid expansion and were looking to management methods to increase output and focus the efficiency of their workers. Many of Taylor’s principles were adopted in factory production and throughout the 20th century the application of scientific principles had a marked affect on productivity. Ironically, as a result of increased production, the general standard of living improved and so did worker dissatisfaction with the method. Union-management and a popular interest in the ‘human factor’ (by behavioural scientists) resulted in a productivity slowdown. This prompted organisations to relocate their work force to developing countries with cheaper labour, a mirror of the original conditions that allowed scientific management to thrive in the west (Oman, 2000). Organisations were now looking to new management methods to satisfy the increasing needs of their workforce and regain productivity and many found it in the form of the Human Relations Approach (Wilson 1990).

Businesses were shifting from manufacturing to mass production and the Management Gurus like Frederick Taylor studied the new systems and developed the principles to determine how to structure organisations for the greatest effectiveness and productivity. It was the time when term ‘Capitalism’ arise.

To consider how both managerial and behavioural theories differ from neoclassical theory in interpreting the firm it is important to understand the basic assumptions. The neoclassical theory of the firm goes as far back as Adam Smiths (1776) The Wealth of Nations, yet as recently as the early 20th Century. It looks at four market structures: Perfect Competition, Monopoly, Monopolistic and Oligopoly, and assumes all firms within each look to profit maximise . The Managerial theories were brought forward by Marris (1964), Baumol (1962) and Williamson (1963) and are more modern and offer a more specific insight into the workings of the firm. All three look at the diversification of ownership in the firm and how managers look at more than profit maximisation to fulfil their own utility. Cyert and March’s (1963) The Behavioural Theory of The Firm began to evolve our understanding of the firm even

In today’s world, different types of business have emerged and business operations have become the cornerstone of making a success, however the way in which they are operated is what is important. Most businesses hunt the main objective of making a profit without considering how that might affect other factors of society and that is what in most cases diminishes the longevity of the organisation.

Labour and management compose an important and integral part of our industrial society. These groups work as pair of opposites and their divergent interests clash at some point or the other. Despite all the emphasis laid by social scientists on the common goal and the virtues of industrial harmony, conflict has become an inherent feature of modern system of production.