How Firms Balance Social Responsibility with Surplus Value from Labor Inputs

Capitalism is an economic system characterized by private ownership and market-allocated resources. Market capitalism currently faces numerous threats that may disturb the foundations of capitalism. In the past 50 years, the world has experienced unprecedented economic growth, which is largely attributable to the global spread of market capitalism (Meyer & Kirby, 2012). Since the 1990s, re-engineering, subcontracting, and globalization have become the prevalent mainstream operation and management models. According to ‘re-engineering,’ business operations are examined from a technological perspective that ignores human needs. Because of globalization, businesses in developed regions can engage in subcontracting to outsource non-core business and direct manufacturing to developing countries and areas, enabling the businesses in developed regions to reduce the long-term burdens and responsibilities of their employees. Because the contracted businesses face substantial cost pressures, they endeavor to reduce labor costs as much as possible. Several businesses even believe that the ability to achieve lower labor costs is a competitive advantage for developing countries and areas. The operation and management models have faced a ‘double squeeze’ from humans’ greedy nature (e.g., neglecting human needs; subcontracting employee challenges and responsibilities) and the pressure of competition (e.g., businesses’ fear of losing contracts and profits).