Competition and Cooperation

Competition and Cooperation

Business cover from FreelanceInsure 

Competition and cooperation are alternative ways to get things done in society.. Competition motivates individuals to outdo each other in attaining scarce objects. Cooperation is a means whereby individuals can join forces to accomplish objectives beyond their individual capabilities. Both processes are found in some degree in every society.

The balance between them depends upon the values, goals, and problems of the society. Competition was emphasized in the Age of Enterprise because it fitted the individualistic temperament of the UK people and was helpful in attaining the goal of industrialization. The profit ethic was appropriate in such a competitive setting because it provided the motivation required to transform the economy.

But there has been a shift in the organizational society from competition to cooperation. We now recognize how interdependent the elements of the economy are. Labour, management, government, agriculture, and the professions must cooperate to attain such goals as full employment and price stability. The profit ethic does not fit into a cooperative system as well as it does a competitive one. It is uncompromising, whereas what is needed is accommodation. Shifting the economic frame of reference from the market to the entire economic system has) undermined the profit ethic because it is primarily a microeconomic concept whereas the focus of public policy today is on macroeconomic problems.

The increased importance of the political aspects of economic life has been criticized by Drucker. He finds little evidence that large-scale organizations have materially benefitted their members, but he argues that there are definite disadvantages to the shift from economic to political controls over business. He believes that the "unconscious and automatic coordination of human activity" through the market is vastly superior to the "conscious planning through instruments of authority and subordination" of political organizations. Niebuhr, on the other hand, takes the position that the "politicization" of economic life is necessary to overcome the inequalities of power created by the rise of the big-business corporation. Regardless of who is right, one thing stands out: The profit ethic is much more of an economic than a political concept. to the extent that there has been a politicization of economic life, the profit ethic has diminished in importance as an operational business ethic.

The transformation of the company from a producer of goods and services into a multipurpose social institution also has undermined the profit ethic. This transformation reverses the historical trend toward specialization of social structures. Primitive societies tend to have few social structures, and each one performs many different functions. The family, for example, may perform economic, educational, social, political, military, and religious functions. As societies become larger and more complex, social structures tend to specialize in function. As a social structure in-creases in size, it becomes unwieldy and it breaks down into separate components through the process of "structural differentiation," each part now becoming an independent structure.27 The reverse has occurred in the case of the modern large corporation. It has taken on additional functions in society as it has grown larger. The profit ethic may have been an adequate guideline in decision making when the business firm was a specialist economic organization, but it is not up to the task of deciding between complex alternatives which affect the members of society in many different ways.

Businessmen have always been controlled by society in some way. The most comprehensive way to conceive of this system of control is to think of the businessman as the occupant of a social status. Associated with this status is a set of role expectations-what society expects the businessman to do. When he lives up to his expectations he is rewarded and when he does not he is punished. Profit making was the major expectation of the businessman role in the Age of Enterprise. But because of the different milieu in which the company operates and the different social role of the corporation, the role expectations of the modern manager go far beyond profit making, and they do not include profit maximization. A parallel can be drawn between the role expectations of managers and market structures. We used to think there were only two market structures-pure competition and monopoly. Consequently there were two ways to make decisions about price and output. Since the demonstration by Mrs. Robinson and Professor Chamberlin that there are various degrees of imperfection of markets, we have become aware of monopolistic competition and oligopoly and a variety of approaches to price and output decisions. Now we are ready, perhaps, to see that just as there are other market structures so there are other legitimate business goals besides profit and thus other role expectations besides profit maximization.

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