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How firms adapt to environments is the key determinants of their futures as going concerns. Modern market dynamisms keep corporates on their toes, one day a multi-million company could be a world influence and the next become an underdog if it does not pay enough attention to all the happenings going on in the world of business. Entrepreneurial spirit hardly thrives in conservativeness. Unfortunately, classical economics is known for this limiting trait. Heterodox economics seek to inject entrepreneurship principles into the field of classical economics to produce firms that can adapt to the environment and remain on the go in a changing global business climate. The purpose of this report is to show how firms can learn from environment, and how proponents of classical economics can adapt the principles preached by entrepreneurial skills to create more efficient corporate systems.
Entrepreneurship calls for an unusual knack to learn from the environment and think outside the conventional confines that define business processes. The orthodox, otherwise called the conventional view of economics has some considerable support for this ideal. The heterodox economics is mainly a challenge to the mainstream view of economics, on some of its policies and principles. Hard line heterodox economists are firm in the opinion that the conventional, or classical view of economics lacks in foresight and adaptability to new economic environments. Entrepreneurship can help these warring disciplines come to a fruitful merger.
Modern economic climates present newer challenges that businesses have to contend with every day. The classical approach to economics overlooked factors such as environment, which were not considered less influential to the process of conducting business. With the coming of globalisation, the corporates can no longer afford to ignore these factors (Davis, 2003). New approaches to the means of conducting business have come into play, to supplement and even replace some of the older ideologies that classical economists propagated over the ages.
The paper is designed to tackle major areas that explore the background of each of the variables under discussion namely: conventional economics, heterodox economics and entrepreneurship. The report then proceeds to discuss how corporates can learn from the heterodox genre of economics and improve on their mainly classical views, which approach the topic in ways that disregard the major areas of economics.
Entrepreneurship includes the canny ability to see an opportunity and turn it into a successful nosiness idea. Entrepreneurship is not just the ability to see the opportunities when they come but also to sustain the will power to pursue them to their full measure. Environment is one of the key areas for an entrepreneur (Tony, 2006). In fact, the area is so common in the disciplines that it has been divided into some significant branches including technological environment.
Technology is synonymous with the future of business is slowly drifting this direction. Many corporates economic futures rest upon their ability to adapt the most effective technologies to fit their business environment. Just as changes occur in the field of technology, they likewise seep into the field of corporate structuring.
Change management is one of the major management roles in today’s corporations (Tony, 2006). Project managers in our modern business have to possess this trait to remain relevant to the constantly changing environments. Entrepreneurship and the right business acumen mean that the businessperson has to aim at achieving this ideal. The world is constantly changing and the business world has to change with it.
Orthodox economics and learning from environment
Orthodox economics is environment-driven in nature. The economic approach seeks to finds ways to adapt to each specific environment instead of trying to create general models that fit into any case. The economists in this field of economics look at the environment first before knowing and deciding the model that will fit the particular situation (Davis, 2003). Therefore, terms like green economics, Islamic economics or bio economics are the genres that define the field of heterodox economics.
Business in the United Kingdom is under environment regulations that highly influence business activities. Voluntary practices towards the community have been adopted by various companies in a response to growing concern that business companies that should cooperate with consumers to save the environment. United Kingdom business environment accept the latest ideology to apply laissez-faire allocation of capital funds to community based projects aimed at transforming the society (Forsyth 1997). This particular entrepreneurial behavior has recently been adopted by many companies in a response to consumer awareness in which consumers are likely to buy more from responsible corporate. As assessment of the behavior reveals that if the government or the legal braches of the government were ever used to create the culture, it would have failed because companies operate in a closed space protected by the freedom of trade free of government interference.
Business practices in the commercial sector have taken a new turn following establishment of ethical restrictive legislations in the United Kingdom. Business ethics as whole have added value to corporate business plans whereby most industries instead of opposing the government regulations have instead enacted mission statement and business objectives that intended to improve the corporate image in the UK public (Forsyth 1997); for instance the UK chemical Industries Association formulated the Producer Responsibility Group whose main mission remains to oversee waste packaging paper and reduce the wastage. However, business critics opposed the move defining the campaign as a source of business interference. Social movements of the 1980s and 1990s created environmental awareness in the United Kingdom creating a culture of responsibility (Forsyth 1997). Public concerns were raised about environmental issues such as environment pollution that affected the water and air.
Green consumerism is specifically a culture that developed out of the populace awareness about that cut a niche creating another culture that is known as ethical consumerism in which consumers do business with publically approved companies that have shown efforts of cutting back at environmental degradation. Though business operates in a heterodox environment that can easily disregard the environment in pursuit of business mission and profitability, the new green concept created a new culture that encouraged company responsibility. Specifically, the public was concerned about corporate responsibility especially in protecting the ozone layer by prevent global warming. Companies that applied the perception started developing greener products and reduced on packaging.
Environmental friendly products became a major hit in the market whereby consumers preferred greener products and services. Consequently, in 1992, environmental related products gained a market edge over the common products by 6.6% percent. Business activities that degraded the environment were red taped by the populace (Forsyth 1997). As a result, business companies started to research and study into the culture in order to find out the credibility of the green-consumerism. Activists marketed the plan making the culture more viable in United Kingdom such that the perception of the consumers changed over time to reflect ethical consumerism. Therefore, companies in the United Kingdom have changed business tactics and policy in order to invest in greener methods of production, transportation and logistics in a bid to win the heart of many customers. Government intervention programs through different authorities and legislations have equally cut back at excess production of waste. Therefore, it is true that the United Kingdom entrepreneurial culture has changed drastically as a result of companies and firms learning and understanding business environment trends by studying the changing business niche as compared to profitability.
At least 6 out of 10 companies in Britain consistently offer ethics training for their individual staff. However, the statistics represent a drop from the 2007 statistics that postulated that 7 companies out of 10 sponsored their staff to train the codes of ethics. Critics have cited low profitability during the current credit crunch that affected company profits forcing firms to cut back on ethical training expenses.
According to statistics, the corporate code of ethics became a popular fad even in the stock exchange firms that enlisted in Spain by 60%, Italy 60%, France 57% and Germany 50% when compared to Britain’s 38% of companies that incorporated ethics while enlisted in stock exchange (Webley & Sabrina 2011). Most European firms provided effective measures for reviewing their ethical measures; indicating that almost 83% of the United Kingdom firms monitor their suppliers to make sure that specific ethical standards are kept to avoid being rejected in the market.
There were four main practices that have been identified by a research panel to affect the business responsibility to the environment of operation. Cost-cutting is the main practice that affects firms’ behaviour in adapting to business environment in which recycling paper, excess products have to be cut from the market with an objective to increase profit while reducing costs. Value-adding is another perspective that is best attained through green consumerism, a behaviour that most firms in the United Kingdom desire to use this tactic to drive sales. Long-term investment is a third practice that is equally affecting the output of business in UK. Lastly, legislations by government and local authorities can help create a smooth environment for ethical consumptions to avoid instances whereby companies misuse green consumerism as an ideology to attract customers for sales.
Heterodox economics contradiction to conventional economics
Heterodox economists have wandered from the traditional school of thought on school of thought on economics. Therefore, it is popular to have this breed of economists openly criticise age-old economic models advanced by economic heavy weights such as Karl Mark and Keynes. The open-mindedness makes them radically different from classical economics who try to look at every economic situation within the boundaries of the classics theories of economics.
Heterodox economists believe that the models by neoclassical economics had hidden political agendas bent o favouring the political class existent at the time. For instance they point to the neoclassical labour model, which they claim leads the population to believe that they can only achieve capitalistic ideal by working away from the common believes of nth ability to achieve phenomenal goals through good entrepreneurship spirit.
While traditional economists focus on optimisations and attainment of balance, heterodox economists believe in looking at all factors right from the social implications, institutional structures and the economic history of the concerned group under target. Heterodox economists are of the opinion that traditional economics is dislocated from reality, and as such, its reliability is critically compromised.
Even within the domain itself, some economists have come up who ask the fellow heterodox economists to look objectively upon the orthodox view on economics. The mathematical tools of the mainstream economics cans be of benefit even in this new age field of economics (Tony, 2006). Most of the economists who are sympathetic to the course of heterodox economics are utterly opposed to the mainstream economics, a standpoint some believe might be misguided and ill-advised; each body of knowledge on economics has a role to play that cannot be pushed aside in its entirety.
Without doubt, ancient economic theorists did incredible work that has brought the world to the position it is today (Mearman, 2007). While the principles they advocated have worked for ages and have some nostalgic and sentimental effects to drafters of corporate structures, the models upon which they were created are significantly different to the environments that the modern business world operates in. Heterodox economics try to fill the deficiencies that classical economics has slowly experienced over time, and especially in the recent past. The goals to mend these differences and the traditional economics dislocation from the business environments we face today have many good for the believers in the conventional economist’s models.