Entrepreneurism, Neoliberalism, and Governance in Contemporary Society - Coursework Example

ENTREPRENEURISM, NEOLIBERALISM AND GOVERNANCE IN CONTEMPORARY SOCIETY Contents Introduction 3 Neoliberalism and Governance 4 Management and the Changing Business Environment 6 Evolution of Entrepreneurial Systems and Cultures 8 Entrepreneurism and Governance 11 Conclusion 13 Bibliography 15 Introduction Enterprise is an important engine for the growth of national economies in modern times and in our generation. Entrepreneurship is a vehicle and system through which individuals form businesses, manage them and grow them as a means of contributing to national growth. Miller and Rose (1990) argue that enterprise is an aspect of neoliberalism and governance in contemporary society. This implies that enterprise is an important part of modern Capitalist economies and this contributes to the control of resources in the national economy and this helps the nation to thrive and keeps the economy moving. In the landmark journal of Miller and Rose, they propose that governance and authoritarianism in nations are significantly influenced by enterprises and the private governance and control of firms and organisations which form the foundations of these economies. Hence, they ask for the concept of governance and governmentality to be expanded to include the main entrepreneurship in controlling national affairs and economic matters in various liberal economies around the world. There have been many changes in management policies in management practices due to the need for various businesses to be modified as a result of massive changes in the environmental variables (Boltanski & Chiapello, 2005). These changes have had a major impact on the development of the economy and the modification of actions and processes by the various constituents of the society. And this has a major impact on the national economy and on many variables about the state and its various actors. The aim of this essay is to examine the relationship between enterprise and neoliberalism and governance. This essay will begin by examining the structures of a neoliberal economy and the elements of governance. From there, the paper will evaluate the aspects of the changing business environment and management. This will culminate in an evaluate of the changes in entrepreneurial systems and cultures and from there, the relationship between entrepreneurism and governance will be established. Neoliberalism and Governance Neoliberalism has various definitions and conceptions and can be viewed from so many different facades. However, as a background to neoliberalism, it is worthy to point out that the Post World War II economies in the developed world evolved from the ruins of the war as welfare-states (Sabillon, 2008). This is because the war-ravaged economies of Western Europe tilted towards a system of Keynesian-based Economics which sought to maintain a welfare-state that ensured that there was full employment and the state remained central in ensuring that all people of working age, willing and able to work were given employment (Keynes, 2006). They Keynesian view indicates that the economy does not automatically return to full employment after a major adjustment period (like after a major war like World War II), hence these Economists argued that there must be some kind of intervention by the government in the form of various controls and policies to improve employment and keep prices low (Welch & Welch, 2012). Therefore, between 1945 and 1970, Britain and several other nations affected by the War, set up system within which the state played a fundamental role in ensuring full employment and also intervening in the decisions of employers and private enterprises as a means of leading the nation back to a track of steady recovery. Clearly, this process of governmental intervention had an impact on the economy in various ways. This is includes the fact that it promoted some degree of under-productivity due to the fact that most employers were far less in their efficacy due to governmental interventions and controls. A typical example includes the fact that the government’s interference in private enterprises led to a culture of trade unionism that used strikes and underproductive activities as the main means of demanding salary modifications. This led to many years where labour was withheld and this caused the UK’s economy in particular to go through various challenges and difficulties. Neoliberalism, fundamentally introduced in the era of Margaret Thatcher turned the British economy around. Neoliberalism shifted the control of economic variables and the making of economic decisions from the public sector to the private sector. Neoliberalism asserts that the intervention of the government and the state are a hindrance to economic growth and economic development (Gallaher, Dahlman, Gilmartin, Mountz, & Shirlow, 2010). This is steeped in the fundamental concepts and ideas presented by Adam Smith which sought to allow nations’ economies to be regulated in a laissez-faire manner where the forces of demand and supply was used to fix the economy and regulate matters and issues in various ways and manners. Campbell and Pedersen argue that neoliberalism has three core dimensions and this include: 1. The normative dimension: Where markets are unregulated and value was defined by the interaction between the forces of demand and supply; 2. The positive dimension: Where predictive claims about the movements of the economy is based on economic performance; 3. The regulatory dimension: Where the rules like property rights and labour-capital accords are governed by empirical data and factors that exists realistically in the economy (Campbell & Pedersen, 2011) These new arrangements in the economies of nations inevitably shaped the terrain and framework within which economic matters were analysed and evaluated. This culminated in a system through which the position of the state in economic matters was modified greatly and significantly. This is because the economy of nations were to be adjusted and reviewed through the use of various factors that related to the interaction of the forces of demand and supply rather than the rules and regulations issued by the state and the government. With the changes in the economic orientation of states like Britain came some important modifications of the markets and the flow of capital and distribution of resources. This is because the business environment changed significantly and entrepreneurship and the steering of business entities changed to one in which firms had to also take supply-sided decisions in order to fit into the neoliberalist economic structures. Therefore contemporary society, as presented by Miller and Rose is one in which the structures of governance and control are fundamentally in the hands of entrepreneurs and/or management. Management and the Changing Business Environment Miller and Rose fundamentally argue that there were major changes in the way political power is exercised in advanced liberal democratic societies around the world (Miller & Rose, 1990). This is presented in the conception of “governmentality” and the “political rationalities” as well as “technologies of government” which all come together to define and influence the existing framework within which businesses must carry out their activities (Miller & Rose, 1990). The traditional role of management as defined by Henri Fayol has remained on the premise of the five main duties and obligations of management which include: 1. Planning and forecasting; 2. Organising; 3. Commanding; 4. Coordinating and 5. Control These functions of management were exercised in a different manner and framework that was fundamentally different from what existed in the period where society was fundamentally one that was steeped in the welfare-based economic plans. However, Hassard and Parker argue that the traditional role of management which was one that most people entered into without much preparation changed with the onslaught of neoliberalism (Hassard & Parker, 1993). This is because in the past, management was not as specialised as it became after 1979 when Thatcherism took the centre-stage in economic affairs in the UK. This is because concepts like survivability and competitiveness became important and relevant because the protectionism that was offered in the past was replaced by the need for various competitive practices that allowed a firm to maintain the highest and best levels of profitability. As a result of the changes in the business environment, there was a massive move from amateurish and patriarchal forms of business controls to one that required professionalism and a distinct knowledge of management and education as a means of training the next level of management to be able to perceive changes in the external business environment as a means of gaining and retaining competitiveness. This is because the new elements of neoliberalism was one that required the best and most competitive tools and processes that could be used to attain the best results. And since entrepreneurship and management are arguably the most important and most sensitive aspects of running businesses, there was a general trend towards the attainment of the best and most important forms of management through the retention of the best and most significant persons to help to match the firm’s resources with the volatile external environmental factors that occurred at different points in time. The natural standard that evolved after the transition from the traditional Keynesian model of managing the British economy meant that management was fundamentally based on the use of rational techniques as opposed to the use of a system of satisfying governmental requirements and expectations (Parker, 1992). Rather, the focus of managerial decisions in the neoliberal economic framework is one in which the emphasis was shifted to the optimisation of resources and the attainment of the highest levels of results through the best use of firms’ scarce resources. The main cause of this general trend that underlines and defines neoliberalism is steeped in the fact that the society was said to be in a period of postmodernism whereby the following factors were somewhat pervasive: 1. Breakdown of cultural, economic and political boundaries; 2. Collapse of the conventional institutions of political and economic powers (Parker, 1992) These different changes and modifications played a role in the change in the terrain within which firms were to operate. This is because demand factors and conditions were modified after the breakdown of culture and political boundaries. Thus, a typical household where there was a working father and a housewife or a wife working no more than 5 hours a day was changed to one in which both spouses are working. This system inevitably changed the household structures and hence changed the pattern of demand and purchasing in most situations and conditions. Secondly, the collapse of conventional institutions that had major bureaucratic structures that were somewhat complicated and confusing led to the need for businesses to also restructure and change their ways of presenting their products and services to the market. Evolution of Entrepreneurial Systems and Cultures As identified above, the trends in management and entrepreneurship had to change with the changes in international and local business polity and discourse. This is fundamentally because the society and business environment changed and there was the need for businesses to change in order to meet the modifications around it. Taylor stated that the following factors were relevant to the changes that occurred that forced the entrepreneurial systems and cultures to also change and they include: 1. Increased managerial uncertainty and anxiety; 2. International financial changes and global changes; 3. Knowledge of management and the practical requirements placed on managers; 4. Crisis for industries, governments and other institutions (Taylor, 2005) These changes caused the concept of entrepreneurship to be viewed from several different facades and possible frameworks. The first framework indicated that entrepreneurs are more or less a set of individuals in society who merely owned an ran businesses. A second view of entrepreneurship is to view it as an important aspect and component of the society. And this comes with major part of the neoliberal system and an important part of governance in the society and the economy. Either ways within which the concept of entrepreneurship is viewed, it was one that had to be examined in relation to the attainment of the optimal and most important results and there were different conceptions and views presented to the idea and the practice of entrepreneurship. This has to do with the view that there was a general need for the business terrain to be changed into one that was not based on paternalism but one that was based on the marketism of the business’ products and services. Hence, there was a general need for entrepreneurs to find ways of remaining operational by producing goods and services that were in demand and trying to find the best ways of selling them in order to attain the best and most optimal results as a means of remaining competitive. Therefore, the changes in the business environment and macroeconomic conditions indicated that there was the need for entrepreneurs to either use their in-born traits and characteristics or learn new things. However, in most cases, it is apparent that entrepreneurs blended these two different character traits as a means to create some kind of systematic process and system that could be applied in order to gain the best ends for the business in question. Meanwhile, the cost dynamics of society had to change significantly, this is because the welfare system changed significantly and prices were to be set based on the proper allocation and distribution of resources (Du Gay, 1996). Hence, there was a natural tendency for entrepreneurs to create attitudes and character traits that are based on efficiency and the attainment of optimal results. This is a cultural and business trait that evolved as a result of the switch over from a welfare-based system to one that is steeped in supply side and neoliberal concepts and ideas meant to attain the best and the highest levels of results in everything a firm and an organisation does. Entrepreneurial culture and entrepreneurial systems naturally evolved as the business terrain changed. And instead of pursuing ends like working with paternalistic figures and people employed in various capacities, the business system changed to include people who had the ability to deliver. Delivery of results were somewhat presented through the ability to combine factors of production in an environment where the highest and best results could be attained through the business process and system. This culture has evolved and this is done by the ability to read important trends in the economy and identify major changes that are due to the factors of demand and supply that are changing in the economy. These changes and modifications must be one that a good entrepreneur must identify and position the firm properly and appropriately. In conclusion to this sub-section, it can be stated that in the UK, an entrepreneurial culture was formed and evolved naturally after aspects of neoliberalism and governance took a different shape after the 1980s. And this is because there was the need for firms to be ran by people who had the ability to examine aspects of the laissez faire British economic system and this enabled the most talented persons to take up sensitive managerial and entrepreneurial processes in the country. Failure to attain the ends of combining factors of production most appropriately effectively disqualified an individual from becoming a successful entrepreneur. Entrepreneurism and Governance Governance was influenced significantly by neoliberal systems and processes in the contemporary British society. This is because entrepreneurism was judged by different variables and different factors. This is because the modification of the existing legal and corporate terrain changed as a result of various changes in the key indicators and elements of the business environment. Rose and Miller identified that governance in the new political economy was one in which there was “governance at a distance” (Curtis, 1995). This implies that the government was not directly influencing affairs in most businesses. This is because the state deliberately decided to stay away from interfering in affairs and issues in businesses and enterprises. This led to a general trend towards the laissez-faire system that Adam Smith and other classical economists presented as the means of improving the economy. Therefore, the state also evolved from interference to a system of political science and political technology where a minimal volume of issues were handled and dealt with by the governance system which was mainly centred around political matters and public sector affairs meant for a section of the society (Curtis, 1995). This created the impetus for some degree of specialisation and a kind of division of labour between the public and private sectors. Whilst the public sector focused on national policy and the building and maintenance of national infrastructure, the private sector focused on the distribution of resources and goods and services. The state focused on governing whilst the private sector focused on the distribution of goods and services. Another view presented by Miller and Rose indicates that the concept of governance was modified significantly when the concept of State was put in place ahead of the concept of government and authority as a means of changing things in the economy (Rose & Miller, 1992). This is because they identify many problems and issues with governance in which the state has major power and authority to decide how resources should be allocated. This is presented as the “problematics of government”. And this is viewed as a set of issues that come with serious interference of government’s control of the way resources are allocated. And this is mainly steeped in the fact that the government’s attempt to control affairs and issues is based on the governments’ sentiments and desires which might not be most productive. Also, the allocation of resources through government is one that might be fuelled by various levels of personal interests by politicians and political groupings. In order to avert these issues, entrepreneurism was seen to be the main way through which resources could be properly distributed in order to deal with issues and matters. This led to cuts and reductions in the ways through which governments could influence the economy. This leads to the critical theory of the entrepreneur as a socially constituted being that was meant to provide solutions to issues and problems that existed in society. With the profit motive, the entrepreneur is seen as the one who fills the gaps and voids that come with the natural need to limit the overwhelming control of resources practiced and carried out by a welfarist nation and community where the government has unlimited power and control. Therefore, the most important and most fundamental definition of entrepreneurship indicates that entrepreneurs are people who manage resources for the best levels of resources (Czarniawska-Joerges & Wolff, 1991). Entrepreneurs specialise and they carry out their activities in the best way possible to attain results in shaping up the economy and improving the structures of society and the distribution of scarce resources. Schumpeter also identifies that entrepreneurship promotes innovation and the quest for the continuous improvement of services and resources in the economy as a means of bettering the lives of people in the community. Hence, the removal of the concentration of power in the hands of the government allows the entrepreneurs to seek to improve and enhance existing technology and also get better means of producing goods and services for the betterment of lives in the nation or economy. Conclusion The essay fundamentally identifies that there is a strong relationship between enterprise, neoliberalism and governance in Western liberal democratic communities and society. And this is a relationship steeped in the fact that allowing governments to control the allocation of resources leads to under-productivity and the poor utilisation of scarce natural resources. However, in cases where allocation of resources in the economy are kept in the hands of private entrepreneurs and government regulation is replaced by the interaction of the factors of demand and supply, resources are utilised more appropriately and results from scarce resources are much more optimal and higher. The study finds that the need for the proper utilisation of resources in Britain led to the move from Keynesian based welfarist principles to supply-side economics that was based on a laissez-faire model where the government played minimal role in regulating affairs and focused on running a public sector that performed the basic functions of collecting taxes and establishing and maintaining basic social infrastructure. The tendency of government to hold back in controlling affairs in the state creates a system whereby the private sector builds a culture of entrepreneurism. This is a culture that is based on the need to groom a generation of entrepreneurs who have the inborn trait and competency to examine elements of the external environment and match it with the internal resources of the firm in order to attain the best and most optimal results. This allows firms to make the best use of resources and attain the highest levels of results. Entrepreneurism creates a tradition of governance and control of significant resources of the society. This implies that the era where the state and government controlled vast amounts of power is gone. Rather, the dominant trend in our time and in this period is one in which corporate entities ran by entrepreneurs is the norm rather than the exception. This has led to the need for the concept of optimal use of resources, complemented by other ideas like corporate governance which holds entrepreneurs responsible for their actions and control of resources for people in the community and society. Other practices like auditing and supervision are important aspects that results from this new trend of entrepreneurship. Bibliography Boltanski, L., & Chiapello, E. (2005). The New Spirit of Capitalism. London: Verso. Campbell, J. L., & Pedersen, O. K. (2011). The Rise of Neoliberalism and Institutional Analysis. Princeton: Princeton University Press. Curtis, B. (1995). Taking the State Back Out: Rose and Miller on Political Power. The British Journal of Sociology , 579-589. Czarniawska-Joerges, B., & Wolff, R. (1991). Leaders, Managers, Entrepreneurs on and off the Organizational Stage. Organization Studies , 529-546. Du Gay, P. (1996). Consumption and Identity at Work. London: Sage. Gallaher, C., Dahlman, C. 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