INTRODUCTION TO

BUSINESS ETHICS AND

VALUES
(BAGD2113)

ASSIGNMENT
Course Leader: Mr Helmy Rizal

Mohammad Rafie Bin Abdul Latif

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Ruban A/L Kaliannan
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Asmirafazila bt amri
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Pavithren A/L Shanker
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Dean Darryl Antonynus
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Contents
No Title Page
.
1 Introduction 1

2 Definition of capitalism and history 2-3

background
3 Key features of capitalism 4-5

4 Moral justification 6-7

5 Criticisms of capitalism 8-10

6 Conclusion 11

7 Reference 12
 Introduction
The capital is started when in Mach 1996, department of labour announced to the public that

the countrys economy has added more 700,000 jobs, which has the record breaking rising in

number of jobs since 1983 and the unemployment tare 5.8 percent to 5.5 percent. Even

though, theres are positive outcome from the announcement above, but theres a negative

impact in the DOW JONES industrial average plunged down 171 point, which is lowest

decline error. Based on this situation, capitalism is a worldwide system, multinational firm

operate without depending on traditional political boundaries. The economies of capitalist

nations are intricately interconnected. The benefit of capitalism is shown once we hip the

history. Capitalism broke the constraints of medieval feudalism, where the situation limits.

The possibilities of improvement, it offers opportunity to has an ability to plan and has a

willingness to work, enhancing the abundance and diversity of consumer good.

 Capitalism

Capitalism can be defined as an economic system. In a situation where all the major part of

production and distribution in private hands which is operating under of profit or market

system. One of the wolds leading capitalistic economic country is the united states, where all

the manufacturing firms are owned by private, includes the firms who supply military

accessories with the exception of government and expenditures for such things as health,

education and welfare, there will be dictation of central governing body. For an example,

where Ford, Chrysler and General Motors decided to set their own production goals

according to customer needs.

 Historical Background of Capitalism
The background of capitalism was developed during early forms of merchant capitalism

which was known as an economic and social system. It was first started to be practiced in

Western Europe during the middle ages especially the Netherlands and England. It is also

based on mutual dependence between state and commercial interests.

Implicit in mercantile free enterprise is that the belief that the country's wealth and

power is best served by increasing exports and aggregation precious

metals reciprocally which the role of governments is to produce legal and economic policies

designed to market the assembly of foreign trade, avoid imports and promote the control of

the state.

For now the top most capitalist country is Germany because its capitalism is found in

its institutions such as banking and educational systems. Its industries have prospered

because the county has made it a priority to train its labour force to succeed in various

industries. These various systems have worked together to make a robust capitalistic market

for the country.

In the United States during the period after the Civil War, industrial capitalism

emerged, which is associated with the development of large scale industry. Therefore, it is

known as the risk takers and capital makers. In the US it is possible to begin a business of

humble means and expand it to grow into a conglomerate business model for people wanting

to start a new business. Now its holding second place in the top most capitalist country.
 As a conclusion, I had learn that we as a Malaysian who is patriotic towards our

nation, should work out more efficiently as had been done by those residents in their

countries.

KEY FEATURES OF CAPITALISM

Although capitalism will continue to evolve, it has four characteristic features.
The existence of companies, profit motive, competition, and private property.

Companies

One key feature of capitalism is the existence of companies or business firms are

separate from the human beings who work for and within them.
Not in the companys interest
A basic characteristic of capitalism is capitalism permits the creation of companies or

business organizations that exist separately from the people associated with them.
Corporation is intangible, has rights and legal obligation, enters contract can sue or be

sued.

Profit Motive

Second characteristic of capitalism lies in the motive of the company is to make

profit.
The profit motive implies a critical assumption about human nature.
Profit in the form of money is the lifeblood of the capitalist system.
It implies and reflects a critical assumption about human nature.
That human beings are basically economic creatures, who recognize and are

motivated by their own economic self-interests.

Competition

An Inquiry into the Nature and Causes of the Wealth of Nations (1776), Adam Smith

said free competition is activated only by self-interest.

When restraints are removed from the sale of goods and from wages, everyone has

equal access to raw materials and markets.

Laissez faire is free to pursue own interests, to let people do as they choose.
Competition, regulates individual economic activity.
Competition keeps prices for desired goods from escalating is high supply and high

demand calls for lower prices.

Private Property

Private property is central to capitalism.

Both tangible (cars, house) and intangible (stocks).
Property ownership involves rights and rules.
Central to capitalism (socioeconomic system of private property).
Socialist society permits people to own houses, television sets.
Private ownership of the means of production.

Moral of justification
 This is the moral justification of capitalism. It is a system that respects property rights

and allows people to function as free individuals, just as the Founding Fathers envisioned.

People interact with each other voluntarily in such a system, valuing and trading goods and

services only when they see a benefit for themselves. Capitalism is not evil. It is not a

necessary flaw to 0olbe tolerated. It is the system that has made the United States the

wealthiest nation in the world. It is the reason why for hundreds of years immigrants have left

their homes to follow their dreams in the land of opportunity. It allows all people to live at

their highest potential, enjoying the fruits of their own productive work with the guarantee

that it is theirs.

Natural right to property is capitalism allows people to own as much or as many

properties as they are capable of as long as they are legal. For example in America people,

they live in socioeconomic system that guarantees them certain property rights. Although

they are no longer permitted to own other people, they are certainly free to own variety of

other things, from livestock to stock certificates, from their own homes to whole blocks of

apartment building. A common defense of capitalism is the argument that people have

fundamental moral right to property and that our capitalist system is simple the outcome of

this nature right.

Concept of the invisible hand is an Adam Smiths concept where an invisible hand

would be able to satisfy the conflicting and unlimited human demands through efficient

resource allocation and that it is the best way to ensure that the wants of everyone in a society

is catered for. For example in Adam Smith concept economic case, he argue that when people

are left pursue their own interest, they will without intending it, produce the greatest good for

all. Each persons individual and private pursuit of wealth results. In addition, human have a

natural propensity for trading, to truck, barter and exchange and also human being are

acquisitive creatures. Self interest and personal advantage, specifically in an economic sense
may not be all that motivate people but they do seem to motivate most people much of the

time.

On the other hand, structured and efficient production processes is also moral

justification where it provides the public with necessary goods and services, which otherwise

would have been produced inefficiently. For example in smith concept, he disposition to trade

and lead to the division of labor. It means that to dividing the labor and production process

into area of specialization, which is the prime means of increasing economic productivity.

Thus, smith reasoned that the greatest utility will result from unfettered pursuit of self-

interest. Individuals should be allowed unrestricted access to raw material, market and labor.

Government interference in private enterprise should be eliminated, free competition

encouraged, and economic self-interest made the rule of the day.

CRITICISM OF CAPITALISM
The following criticism are a mix of both theoretical and operational concerns. They raise

political, economic, and philosophical issues that cannot be fully assessed here. The debate

over capitalism is a large and important one. The presentation that follows should be viewed

as a stimulus to further discussion and not as the last word on the pros and cons of capitalism.

Two types of criticism: Critics raise both theoretical and operational objections to

capitalism.

1. Theoretical criticisms challenge capitalisms fundamental values, basic assumptions,

or inherent economic tendencies.

2. Operational criticisms focus more on capitalisms failure to live up to its own

economic ideals.

Inequality

With divisions of social and economic class comes inequality of opportunity. From a child

born to a working-class family, let alone to an unwed teenagers in an inner-city ghetto, has

life prospects and possibilities that pale beside those of children born to wealthy parents.

Critics argue that poverty and inequality challenge the fairness of capitalism and its

claim to advance the interests of all.

Defenders of capitalism respond in three ways:

1. By blaming government for interfering with the market.

2. By arguing that the capitalist system can be internally modified by political action.

3. By arguing that the benefits of the system outweigh its weak points.

Human Nature and Capitalism

The theory of capitalism rests on a view of human beings as rational economic creatures,

individuals who recognize and are motivated largely by their own economic self-interest.

Adam Smiths defence of capitalism, for instance. Assumes that consumers have full

knowledge of the diverse choices available to them in the marketplace. They are supposed to
know the price structures of similar products to be fully aware of product differences, and to

be able to make the optimal choice regarding price and quality.

Human nature and capitalism:

1. Capitalism wrongly assumes that human beings are rational economic maximizers.

2. Capitalism offers us no higher sense of human purpose.

3. Capitalism operates on the assumption that human beings find increased well-being

through ever greater material consumption.

Competition isnt what its cracked up to be:

Capitalism breeds oligopolies concentrations of property and resources (and thus

economic power) in the hands of a few.

Corporate welfare programs often shelter businesses from competition.

Critics contend that cooperation, rather than competition, leads to better individual

and group performance.

Exploitation and alienation: Karl Marx argued that as the means of production

become concentrated in the hands of the few, the balance of power between capitalists

(bourgeoisie) and labourers (proletariat) tips further in favour of the bourgeoisie.

Because workers have nothing to sell but their labour, the bourgeoisie is able to

exploit them by paying them less than the true value created by their labour.

Exploitation and alienation: In his Economic and Philosophic Manuscripts

(1944), Marx explains the notion of alienation as the separation of individuals from

the objects of their creativity.

This separation in turn results in ones separation from other people, from oneself, and

ultimately from ones human nature.

 Conclusion

We gain much knowledge on capitalism through specialized work we, where we use

resources from various to deepen on capitalism. Among them where are exists an

event regarding capitalism and background also has the feature features that suit with all

generations.

Apart from that, we also learnt values that are absorbable in a company that dream of

becoming having vision highly in all sectors and aspect also have objective that
is constructive.

At the same time, we also learnt and strengthen our relationship a group

of and cooperate to resolve assignment that had been given.

Preference

Books:

Business ethics, William H.Sham, San Jose State University, page 114 - 130/ edition

2005
Business ethics, William H.Sham, San Jose State University, page 116 - 135/ edition

2012
Internet:

www.coursehoro.com/ethics-values/business