Academic journal article Journal of Financial Management & Analysis


Academic journal article Journal of Financial Management & Analysis


Article excerpt

It is true that there may be as many different interpretations on the most important issue of inflation-cumstagflation as there are financial management specialists-cum-economists and at this point the words of Dr. Graham Hallett of Cambridge University ring a bell when he opines :

academic economists are, quite rightly, concerned primarily with general problems and principles of implementing policy, and may well indeed have less competence and knowledge on this subject than professional administrators... so, successful economic policies require the participation both of academic "ideas men" and experienced administrators... The Times published on the same page, letters from Sir Roy Harrod and Sir Ralph Hawtrey, giving contradictory accounts of our present economic predicament. Sir Ralph (reflecting the official view) explained that the country was suffering from inflation as a result of excessive monetary demand and that deflationary policies were therefore needed. Sir Roy explained that the country was suffering from deflation rather than monetary inflation, and that a prices and incomes policy was what was needed. Neither conceded that they might possibly be wrong or that there might be more than one way of looking at the problem.

Hallett, G., The Role of Economists as Government Advisers, Westminister Bank Review (London, May 1962)

On a parallel basis, a corporate executive may have a highly developed moral sense as a private citizen and may represent very high levels of ethical and moral behaviour in his or her home and community. That same executive may exclude those ethical principles in corporate decision-making and corporate behaviour. The executive defines principles and rights as important as a private citizen and denies their applicability to the business he or she is managing. Though he considers himself a good citizen, in the corporate environment he functions In a decision-making context in which mistreating the customer, milking the government, and taking advantage of his suppliers are acceptable business practices.

There are executives who see no problem in unsafe working environments, products that injure and kill, the polluting through toxics of surrounding communities, bribery for the sake of profit, and the disability and death coming from defective products - yet practice and believe entirely different thoughts and behavior in their private lives. Ironically, they are civilized at home while practicing barbarisms at work and contributing to the barbarism of others. An assessment of the people involved in the Nixon scandals, insider trading scandals, government contract scandals, defective product scandals, and bribery scandal indicates that the overwhelming majority of these people were considered good citizens, good family people, good contributors to their communities, good religious people. In short they were in their personal lives moral and responsible people.

Reilly, B. J. & Kvj. M. J., Ethical Business and the Ethical Person, Business Horizons: (November-December 1990).

From a different perspective, the celebrated economist Adam Smith's essential argument, buttressed by a brilliantly original economic analysis and which is highly relevant in the present times where there is rampant bureaucratic redtapism and bureaucrats evading responsibilities in crises, was that the bureaucratic controls of the eighteenth century mercantilistic system were poisoning the well springs of economic progress.

Every regulation introduces some degree of real disorder into the constitution of the state, which it will be difficult afterwards to cure without considering another disorder.

Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (The Modern Library: New York, 1937).

The net productivity-oriented team in almost every department is the upper middle-level manpower holding the ranks of section officers, assistant (under) secretaries, deputy secretaries - - who are on State Government pay roll - - who is the backbone of the department who keeps on feeding the secretary (for example, a member of the Indian Administrative Service (I. …

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