How RTO “small business” ideology is too narrow, self-limiting & unsustainable

corporate

idelogy

Because Private RTOs are “in a business” by choice, following the recognised principles of good business acumen, they annually plan in advance to adjust to the inherent Economic Fiscal Cycles. Recent changes to Government Voc. Ed. and Training subsidised training will be challenging, however, no doubt, they will have applied the excellent business practice they publicly promote that they have (e.g., efficiency, effectiveness, links to demand and supply with industry, much better than TAFE) and therefore will not need to rely on Government subsidies for their privatised/commercial operations because of the strategic and annual business plans they have in place. [Bruce D. Watson]

Politicians often can’t see beyond the current economic climate in which they are serving and make decisions based on a single cycle rather than following sound fiscal policy as promoted by economists following the cyclical patterns of the different cycles.

Reducing funds geared toward education and public infrastructure projects also slows growth as the business community takes up the slack.

There is a frightening ignorance of macro-economic realities and an over-reliance on micro-economics by VET System practitioners. [Bruce D. Watson]

Not everyone subscribes to the winner takes all philosophy.

by Jonathan Lister, The Role of Ideology in the Policy-Making Process, Demand Media, http://bit.ly/1LPPYIz

Ideology is a system of belief or core values. Every human being has a personal ideology and belief system cultivated from upbringing, experiences and reflection. In the business world, personal ideology can play a role in shaping a company’s policies regarding conduct, operations and even product offerings. Balancing ideology with smart business sense is key for a company to achieve sustained success.

Value judgments and facts

A business owner’s ideology or personal doctrine shapes how her company considers policies for adoption and individual facts within those policy proposals. According to public policy historian Larry DeWitt, ideology allows a business owner to make value judgments on facts. This allows the owner to mitigate the immovable nature of facts and shape these statements to suit her ideological beliefs. For example, a business owner with an ideological belief that all people are deserving of forgiveness may adopt a softer policy on employee theft than an owner with a belief that the guilty should always receive the maximum punishment possible.

Operational schedules/”product” offerings

Spiritual ideology can control a company’s operational schedule and hours of business. This can mean a company’s business locations close at certain times of day or do open for business during days of important spiritual significance. For example, Mormon-owned fast-food chain Chick-fil-A does not open any of its national restaurant locations on Sundays in observance of mandatory days of worship for those who follow that belief system.

Spiritual ideology can also shape product a company’s product offerings. For example, a company may choose to offer fewer meat products on days where ownership’s spiritual ideology discourages the consumption of red or white meat.

Influence of pro-social values

Pro-social values are the psychological desires to establish connections with others and provide help to those in need. A business owner promoting an ideology heavy with pro-social values can create company policies that encourage employee cooperation in groups, promote assistance to struggling workers and create open lines of communication between departments. According to the “Journal of International Business Studies”, company policy built on pro-social ideology can also help break down cultural barriers and create a more inclusive workforce where employees of different backgrounds feel welcome.

Family-owned businesses

A family-owned business uses a different ideology and process for creating company policy than a company formed from unrelated owners. This occurs because familial standing can circumvent normal business hierarchy. For example, it may be difficult for a son owning a business to force his father to follow rules, regulations and accept discipline as an employee.

This can also create conflict between family employees and workers who have no relation to ownership, if these workers perceive favoritism on the part of ownership. A family-owned business may have to make policy decisions designed specifically to address family members working as employees to address potential issues before they occur.

Different cycles in fiscal policy

by Linda Ray, Different Cycles in Fiscal Policy, Demand Media,  http://bit.ly/1Bwpd5z

The economy experiences cycles of growth and recession on a regular basis. Government fiscal policy plays a role in determining the balance of the business cycles and how well business survives through the various shifts. Since the Great Depression, the government has tried to play an increasingly influential role in the different cycles in an effort to stabilize growth and employment.

Slow growth

The economy contracts, business slows and markets retract during the beginning of the contraction cycle. Public spending decreases and fiscal policy typically calls for tax increases to cover the losses, according to Princeton University. The aim of fiscal policy is to mitigate the effects of the negative business environment.

Debt also increases during the contraction cycle, creating a counter-cycle in the fiscal policy compared to the varying cycles of business. Fiscal policies used to spur growth in the business community include increased government spending and taking a risk by choosing to reduce taxes.

Bottom

Once the negative growth cycle reaches its depth, it’s in the ditch, or a trough where the economy can start an upward trend. Unemployment begins to reverse during this cycle as businesses respond to the fiscal policies set in place to reverse the negative trend. As business expands and markets rebound, the fiscal policies revert back to pre-recession levels and governments work to rebuild their own coffers.

When fiscal policy does not properly react to the mounting deficits and credit growth accumulating during the times when the economy is in the ditch, public debt grows rapidly, creating a crisis in the banking industry that makes it even more difficult for fiscal policy to resolve, according to the International Monetary Fund.

Expanded growth

Fiscal policy responds quickly when growth resumes an upward spiral in the predictable cycles of business. As people head back to work and spending increases, fiscal policy-makers’ primary aim is to control inflation. Governments often raise taxes at this time to control growth.

Reducing funds geared toward education and public infrastructure projects also slows growth as the business community takes up the slack. Markets in this phase of the fiscal policy cycle often react negatively when expansion and government growth are taken out of the expansion, according to Informed Trades.

Top

Peak growth is the fourth piece of the economic business cycle that drives fiscal policy decisions. It’s during this period that economists begin predicting the next downward turn in the economy, leading to another cycle of slow growth. Government debt often rises as legislators borrow money based on predicted tax revenue growth while the economy is experiencing its peak cycles.

Politicians often can’t see beyond the current economic climate in which they are serving and make decisions based on a single cycle rather than following sound fiscal policy as promoted by economists following the cyclical patterns of the different cycles. Taxes often are reduced and spending increased to prevent the inevitable slow growth that follows the peak cycle of the economy at its best.

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See:  “A frightening ignorance of macro-economic realities in the Voc. Ed & Training System” – http://linkd.in/1FKpVQT

 

 

 

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