Review article
https://doi.org/10.31337/oz.78.3.5
Modern Business Practices According to Adam Smith’s Value Principles
Maja Martinović
orcid.org/0000-0002-4264-7609
; Zagreb School of Economics and Management, Zagreb, Croatia
Zoran Barac
; Zagreb School of Economics and Management, Zagreb, Croatia
Valentina Pirić
orcid.org/0000-0003-4799-5570
; Nova hrvatska banka d.d., Zagreb, Croatia
Abstract
Adam Smith, one of the creators of economic thought and father of classical economics, emphasized the importance of ethics and moral behaviour in solving economic problems. In this paper, his concepts are analysed in the context of modern business: the authors seek out the connection between Smith’s principles and responsible governance by contemporary managers who lead successful systems which yield competitive advantage. Analysis shows that Smith’s description of the ethical entrepreneur emphasizes characteristics that distinguish successful managers today, namely those who take a holistic approach to management, achieve higher profitability and better long–term survival. Research also points to a connection between better financial performance and companies that follow corporate social responsibility standards as well as environmental, social and governance (ESG) standards, all of which can be linked to Smith’s visionary insights on what needs to be done to protect business operations. Analysis of the connection between Smith’s value principles and the strategic determinants of modern global business processes and models demonstrates that, aside from adhering to ESG standards and taking a holistic approach, successful strategies are backed by ethical codes. Smith’s principles are also evident in the models of corporate social responsibility, in circular and sharing economy. The significance of Smith’s principles lies in the inexhaustible source of postulates which increasingly represent the backbone of competitive advantage in business.
Keywords
Adam Smith; economic theory; contemporary consumers; holistic management; social responsibility; circular economy; sharing economy; code
Hrčak ID:
305262
URI
Publication date:
3.7.2023.
Visits: 421 *