Capitalism Structures and the Relationship between Business and Society

Capitalism Structures and the Relationship between Business and Society


Society refers to a group of people residing in communities sharing values and laws. Diverse cultures, lifestyles, religions, interests and attitudes also make up society. Conversely, business refers to organizations participating in economic, industrial, and consumer activities for profit and non-profit benefits. Business and society, however, share similar goals and objectives in relation to capitalism structures. Capitalism focuses on supply and demand in an open free market system. Thus, demands from businesses and society determine capitalism. A review of society and business objectives will determine how the two structures interact and sustain a symbiotic relationship. For example, business ventures maintain complex relations with diverse individuals and communities affecting actions of the firm and managerial roles identifying relevant stakeholders (Simons, 2013). The identified stakeholders ought to assist in understanding the nature of businesses’ interests, alliances, and power with society. As a result, the stakeholders should build positive and mutually beneficial relations within business and society boundaries. More so, they should strive to enhance business and society reputations while resolving crucial social, economic, and ethical challenges (Lombardo, 2015). Thus, the report will affirm that capitalism structures influence and drive the symbiotic relationship between business and society.

Capitalism and Business Ventures and Society

Resources found in business and society economies include land, capital, and labor. Entrepreneurs also represent resources in business ventures and society among people with skills and abilities to use capital, land, and labor to produce and create value. For example, people using their skills to improve accessibility to health care should be identified as entrepreneurs in business. Individuals relying on their skills to improve the quality of the environments by reducing water, air, and noise pollution should also be identified as entrepreneurs in the society. The entrepreneurs’ efforts, however, endure tough financial risks as they build their socioeconomic ventures. More so, personal risks can impede their efforts to create value and the profit margins. Thus, capitalism in society and business ventures continues to allow individuals to access a wide range of opportunities crucial in creating socioeconomic value (Simons, 2013).

Consequently, the entrepreneurs or individuals have to make the decision of identifying the best opportunities that can enhance their personal well-being. Global governments set rules of law to protect individuals’ rights and freedoms as they use economic resources to improve the society. The governments can also spend time to ensure individuals access economic resources to create value in the society. Thus, recognizing federal, state, and local governments can ensure self-interests within the business and the society’s environments are protected. A significant level of capitalism competition is also recommended (Pisano, & Shih, W2009). Competition improves the quality and quantity of the society and business structures. For example, business ventures are advised to identify diverse ways to gain significant market share levels. Conversely, competition is a natural result of a capitalistic society as large firms dominate capitalistic economic markets (Khurana, & Spender, 2012). As a result, small firms should develop new products and services meeting the expanding consumer demands. Ultimately, capitalism competition between large and small firms can ensure business and society needs are fulfilled.

According to Caramazza, Carroli, Magatti, and Monaci, capitalistic or free market economies tend to rely on minimal government involvement. Firms in capitalistic environments, therefore, adjust business practices in line with government regulations. The adjustment, however, can change the businesses’ and society’s economic environments either positively or negatively. The society often regards the adjustments as changes being implemented by business ventures for their own advantage rather than to implement and comply with government policies. As a result, they identify stakeholders analyzing the actions undertaken by business ventures in attempts to protect their individual interests. Thus, stakeholders are people or organizations affected by actions undertaken by businesses. Businesses within the 21st century are identified as templates for capitalism depending on their size and ability to impact groups in the society. For example, single companies seem to best exemplify management, social, and technological systems and relations. Multinational companies including Google and Wal-Mart are identified as the largest private employers as they operate more than ten thousand facilities globally. They are enormously popular with consumers as they draw great varieties of services and products under one roof (Simons, 2013).

In 2012, economists claimed that actions by multinational companies influence supply chains directly and indirectly. The stakeholders with invested interests in such companies are awarded richly as the businesses continue sustaining huge multinational operations ranging from worldwide to tiny persons actions. Some companies, however, are criticized for providing workers with poor working conditions, corruption, unfair employee remunerations, and failure to fulfill their social corporate responsibilities. For example, Wal-Mart was accused of conducting a campaign of bribery in attempts to facilitate the company’s growth and expansion to Mexico. Multinational companies have also been accused of eliminating health insurance for employees; and engaging in operations harming the environment through air, water, and noise pollution. As a result, businesses should evolve their operations. More so, they should change how they interact with the society to improve the symbiotic relationship. For example, they should offer financial help for society to address environmental pollution by reducing waste and encouraging use of renewable energy. Consequently, they can improve the reputation as they manage a complex global network of stakeholders. Thus, businesses should acknowledge their actions influence the society. For example, their actions affect individuals and groups such as creditors, partners, suppliers, employees, and local as well as government communities. Thus, they should strive to satisfy the diverse needs and interests of the society (Pfeffer, & Fong, 2004).

Theories of Capitalism

According to Freeman, capitalism is a system of large private owned firms open to new and fresh ideas or capital. Thus, the capitalism rationale should be recognized as dynamic. Capitalism embraces innovation as they subtly select models generating growth and development. Capitalism, however, can generate instability due to financial crises, failure to include the minority, and job insecurities. Competition between business and society structures enhances economic innovation and dynamism. Private ownership, however, does not support socioeconomic dynamism. This is because capital cannot freely move in new directions without permission from the state. Mechanisms of capitalism’s socioeconomic advances, therefore, lead technological and innovation developments to create new investment opportunities. More so, they represent business ventures’ personal interests while fulfilling society’s demands. For example, they can represent businesses’ needs to make profits while fulfilling society’s increasing demands for fixed capital. Fostering early and decisive responsiveness to new socioeconomic opportunities, however, can result to capitalism structures generating endogenous innovations. Thus, business people can be discouraged from creating innovations resulting to low profits. More so, the essence of capitalism structures should rely on the following theories (Freeman, 2004).

The general systems theory argues that all creatures are open to interact with external environments. Although it was introduced in 1940s, it asserts that organisms strive to maintain clear boundaries that should not be regarded as forms of isolation. Rather, the boundaries should be recognized as relationships maintained depending on the surroundings. Thus, the idea developed should be applied by businesses and societies to attain growth. For example, businesses ought to acknowledge that they can only grow by adapting to changes in their operating environments. As a result, managers should identify concepts enhancing the relationship between society and business and other external environments. Businesses and societies should rely on the system theory to understand how to form interactive social systems. Consequently, they can acknowledge they need each other. More so, they can influence each other as their actions are intertwined. Thus, businesses are part of society. Conversely, society influences decisions undertaken by business (Freeman, 2004).

The property or finance theory recognizes business as owner’s property. The theory argues that business purpose to maximize market values in short-term and long-term basis. As a result, they work hard to make more money for shareholders to benefit and be reward for investing in the firm. Businesses, however, also serve a broad public purpose of creating value for society. For example, they strive to make profits for the owners to survive while creating other kinds of values including professional development for employees. Commercial partners and government authorities depend on the successes recorded by business ventures to maintain the trust of stakeholders. As a result, business owners and stakeholders should exercise power on behalf of one another within the legal concepts of sustaining the symbiotic relationship with society (Freeman, 2004).

How Business and Society can Create Value in Dynamic Environments

Paul Polman (2014) asserts that capitalism serves multinational firms while expanding access to health care, education, and reducing poverty. He, however, emphasizes that capitalism incurs business enormous costs. The costs include unsustainable public and private debt and excessive consumerism. The capitalism structures have, therefore, ensured society and business access limited and unsustainable resources prompting several people to live below the poverty line globally. Polman, therefore, believes that capitalism has enabled 85% of global populations to be the wealthiest in equal measure as the bottom 3.5 billion (Jun, & Cai, 2010).

Interactions between society and business occur within finite ecosystems. Thus, people share the planet and the resources it provides such as oil and gas with business ventures to fulfill their needs. People, however, ought to acknowledge that they have the responsibility of using the planet sustainably. They should not take more than the planet can replenish naturally to avoid demands of society and business exceeding the ecosystem. Technology has been affecting business and society dramatically and powerfully. Technological innovativeness has also enabled consumers to access enormous opportunities connected to wealth, power, and population growth (Polman, 2014).

Consequently, the consumers are putting more pressure on the planet as business and society leaders are not ensuring capitalism evolves. Managers ought to cope with change and diverse challenges affecting business and society structures. They should be intelligent, humble, and hardworking as they rely on managerial integrity and ethics to foster growth and development. For example, they should focus on establishing effective and transparent partnerships between business and society guarantying long-term benefits. Business leaders, however, fail to acknowledge that they ought to serve the society. More so, they fail to formulate policies that can ensure resources are utilized effectively. The business leaders also fail to identify sustainable and equitable ways business models can generate reasonable returns while utilizing the available resources sustainably. For example, small-scale farmers face the challenge of solving food insecurity due to deforestation, insufficient rainfalls, and lack of high quality agricultural materials. Business leaders should identify the challenges faced by small-scale farmers and strive to either prevent or reduce them. They should stop being bystanders in a system giving life to the society. They should acknowledge they have to maintain a symbiotic relationship with society leaders (Simons, 2013).

As a result, they ought to undertake and fulfill the responsibility of resolving issues adversely affecting the relationship. For example, the business leaders can opt to train employees to be internally focused as they think of short-term solutions to resolve challenges resulting to food insecurity. Consequently, the leaders should decide how to undertake actions creating long-term value in business models and the society. Thus, business should acknowledge that it could not save its way to prosperity. More so, business leaders should identify diverse and sustainable ways of utilizing the planet’s natural resources while developing inclusive growth models. Consequently, the models should be applied to reduce and prevent adverse environmental impacts while increasing positive social impacts (Polman, 2014).

Benefits of Long-term Capitalism Structures

Long-term plans often remove enormous shackles from business and society structures. The plans also enable leaders to make better decisions and formulate policies on how to either commit or invest capital successfully. Business ventures that focus on long-term basis also apply strategic actions in serving the society while serving each group’s interests. Long-term basis also encourage and motivate employees as business and society’s stakeholders interact. Ultimately, long-term plans make business and society groups to be proud for sustaining their relationship while attaining the intended goals and objectives by relying on purpose-driven models and structures (Simons, 2013).

Long-term plans, however, should not mean that short-term plans are underperforming. Thus, they should not compromise short-term goals and objectives. Instead, they should hold business and society models accountable for time-bound responsibilities to be fulfilled effectively and efficiently. For example, business ventures can plan to create fifty thousand jobs annually. On long-term basis, the plan seeks to ensure the society is held accountable as it utilizes natural resources in the planet. On short-term basis, creating the job opportunities guarantees that the beneficiaries will improve their living standards and wellbeing. Thus, long-term and short-term plans should identify measures guarantying growth of business and society structures. For example, the plans should stimulate the right behaviors between business and society. More so, they should encourage business and stakeholders to hold mature discussions on models driving sustainable growth and development. Lastly, the plans should be reviewed regularly to ensure they are relying on responsible-investment principles of capitalism (Polman, 2014).

The capitalist system plays a major role in the outstanding dynamism of business and society structures. Innovation should also be identified as a great contributor of dynamic growth and development among business ventures and society groups. As a result, capitalism and innovation should be identified as the mechanisms of dominant economies. They develop and drive capitalist economic performances through productivity, creation of job opportunities, and intellectual stimulation for business ventures and society to attain personal growth. Entrepreneurial capitalism, however, should not be overused in evaluating how business ventures and society structures create jobs, limit spending, and influence government regulations. Instead, it should be identified as private capital invested as a startup as it has the potential to create sustainable value (Simons, 2010).

Thus, business and society structures should rely on entrepreneurial capitalism to support economic growth and improve infrastructures and technology. Consequently, fair competition can increase prompting business and society structures to create more value through job opportunities and shift socioeconomic environments in line with short-term and long-term plans. Ultimately, socioeconomic systems based on capitalism concepts should rely on division of labor, technology innovations, and self- interests to drive growth and development for social good (Caramazza Carroli, Magatti, & Monaci, 2015).


In conclusion, capitalism is an economic system enabling business ventures and the society to own economic resources. Besides capitalism enabling the groups’ stakeholders to make decisions about their self-interests, it also drives socioeconomic solutions. As a result, business ventures and society groups striving to protect their interests should undertake applicable capitalism initiatives. For example, they should identify sufficient and credible infrastructures and corporations within public-equity markets to provide liquidity. The venture capitalism can further enable business ventures and society structures to enhance investments. Business and society structures as well as rules of markets support capitalism. As a result, investment ideas and opportunities coupled with technological innovations should protect businesses and societies’ personal and economic interests. Consequently, the government can support business and society groups to attain growth and development by expanding their economic systems structures and resources. For example, business ventures can find more success in capitalistic economies as private ownership enables people to produce wide range of goods and services. Consequently, the owners can keep the large profit margins and fulfill personal interests.



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