Wednesday, May 15, 2013

Business : Government, NGOs, Society etc.



Business doesn’t run in isolation and it can’t be run in isolation. Social institutions play a crucial role in shaping the business. Social institution can make the business liberating or suffocating. I look at role of social institutions all around and I find their actions very depressing. Social institutions are designed to create and manage value in the society. Social institutions should be focused to create free and fair capitalism all around the world. By free and fair capitalism, I mean that people should have choice to exchange of goods & services and everybody should move towards perfect competition.

Creating perfect competition based markets should be goal of mankind as without freedom to utilize special talents of an individual or organization, higher goals in the society can’t be achieved. Again creating perfect competition doesn’t mean helping the inefficient to beat the efficient one by providing shield of legal cover or giving subsidies. By perfect competition, I mean that people should have a choice to enter in market at lowest possible cost put by social institutions such as government.

Present day governments are most bizarre kind of institutions. These governments are supposed to create an environment of value creation to reach higher levels of efficiency so that we can fight against hunger, illiteracy, poverty etc. Its my worst nightmare that I find that the governments are willingly breaking all the principles of efficient organizations as we learn in schools. First of all government is not supposed to govern at all and should be facilitator. Facilitation and not the raw force creates an environment of trust. Governments are focused on revenues and not on cost. So their focus is on extracting value from people instead of creating more value for people. Also governments all around the word tied the costs with revenue and that's why these holy cows failed to provide what we expect.

Overall, I feel all social organizations are facilitators of business. NGOs play a greater role of working for poor and not so fortunate. Businesses may not reach to the bottom of the pyramid to cater the needs of the people. NGOs are tools which help businesses to contribute to uplift people. NGOs creates an environment of trust and focus. Businesses can and should work with full efficiency to create resources for society. All this created value must reach to the people who may not be able to participate in the business due to any unfortunate reason.

Governments should create efficiency in itself. Governments should take care of larger good of society by disallowing businesses to do negative things such  as environmental destruction. At the same time, governments should create an environment of entrepreneurship to allow people to come up with innovative solutions for the problems of the day.