Self-Interest and Social Interest 

Self-Interest and Social Interest

Self-interest versus social interest in a business is based on the economy of a firm or an organization. Self-interests are actions that aim at improving and benefiting the firm or organization with its economic growth and expansion. Self-interest helps the firm at large, including its workers and its management at large, which significantly affects its productivity and development. Social interest, on the other hand, is choices and decisions made by the firm or an organization that benefits society as a whole. These benefits can be in terms of offering job opportunities, amongst other things that help the community. However, self-interest and social interest tend to clash when it comes to the international expansion of firms. The conflicts arise in terms of productivity, efficiency, cost savings and job opportunities and losses, among other contexts that will be discussed further in the paper.  Despite the conflicts, self-interest and social interests have their advantages and disadvantages to the firms in terms of expanding their business and the result of their expansion to society.

Gains of Self-Interest to Firms

International expansion of a firm means they get to open their business in other countries and continents for economic growth. One gain of self-interest is that it increases their productivity in terms of their output per unit of input, such as their capital, labour and any other resources. When the firms open a branch in another country, they will require capital as an output, and to return the money, they will need more labour as a form of input. Therefore, after a while, the productivity level increases, which benefits the company in terms of the expansion of their business.

Secondly, self-interests benefit the firms in terms of total revenue during international expansion. Total revenue refers to the total receipts from sales of a given quantity of goods and services, thus becoming the total income of a business. When a firm goes international, it means an increase in the company or firm in general when combined. For example, in the article of Starbucks replicating its growth in China by (Patton & Roeder, 2019), they give a brief analysis of the growth of the company when they decided to go international. Even though the company experienced some deviation in its annual growth, it still aimed at putting up more of its stores in China to improve their total income in both states.

Gains of Self-Interest to Consumers and Worker

International expansion of firms benefits the consumers and the workers in various ways. First and foremost, consumers get easy and quick access to the products when it goes international. The product is brought closer to them, thus making business easier for both the consumers and the workers. Also, the workers benefit in the sense of being able to work with international consumers, thus attain knowledge of working with different people.

Secondly, international expansion leads to job opportunities, which can be classified as both self-interest and social interest. It is self-interest in that the firm can employ more workers, thus providing jobs to the people makes it a social benefit. However, some firms misuse social importance for their self-interest. For instance, when it comes to offering jobs to people, they do so for their benefit. For example, the case by (Greenhouse 2019) on how Malaysia factories abused the NGO’s softly-softly tackles labour. The factories in Malaysia used the immigrants as workers and paid them less with poor leaving conditions. The immigrants were promised jobs that were a social interest for the companies. However, they were forced to work for them for the self-interest of the company.

Gains of Social Interest to Society

International expansion of firms brings more benefits to the society, thus provides more social interest than self-interest. First, it provides job opportunities to workers as the case mentioned above by (Greenhouse 2019). Even though the workers were mistreated, the introductions of Transparentem helped the workers get their rights. They were able to work generally under reasonable wages and equal rights as other workers.

Secondly, the international expansion of firms leads to cultural change for both the company but mostly the consumers. For example, when Starbucks decided to introduce its products to China (Patton & Roeder, 2019), it introduced a new product to China, thus creating a cultural change to the consumers.

Another gain is in terms of openness of the society, which means being ready to take the risk of changing the environment of a firm to taste its options in other places. This scenario is present in the case by (Gwyn 2018), where the Jaguar Land Rover decided to move its UK production of discovery to Slovakia. They did so, not voluntarily as the circumstances forced them to, to improve their income in the new state.

Losses of Social Interest to Society

As much as the international expansion of firms leads to gains for society, it also leads to injuries. First, it leads to job losses of traditional agencies of the firm. For example, when the Jaguar Land Rover decided to move their production to Slovakia (Gwyn, 2018), they were aware that it would lead to job losses to the agency staff employed at the former workplace. This loss is brought up by the fact that the company was moving its whole business to another state, thus cannot carry all its employees with it from one country to the new location.

In conclusion, the international expansion of firms has its gains and losses in terms of its self-interest and social-interest. However, the interests differ when it comes to their advantages and disadvantages basing on the firms and their management. Self-interests benefit the company basing on its workers and consumers and how they improve the firms’ income. The social interests benefit society in terms of offering job opportunities but also lead to job losses, as discussed above.

References

Greenhouse, S. (2019). Ngo’s softly-softly Tactics Tackle Labour Abuses At Malaysian Factories. The Guardian.

Gwyn, T. (2018). Jaguar Land Rover to Move UK Productions of Discovery to Slovakia. The Guardian.

Patton, L. & Roeder, J. (2019). Starbucks Is Replicating Its Too-Fast U.S. Growth In China. Bloomberg.