- Elgar original reference
Edited by Jan Peil and Irene van Staveren
Patrick J. Welch and Stuart D. Yoak With the expanding global marketplace dramatically changing business relationships it is reasonable to question whether the traditional neoclassical economic model based on self-interest, which was largely adequate for explaining and justifying outcomes of business relationships in more homogeneous geopolitical and cultural settings, is losing its viability in this broader and more complex setting. Alongside concern about the viability of the traditional model, we might also ask whether there is an alternative to which we can turn. The answer is yes. In addition to the traditional model there is an emerging solidarity-based model for evaluating business behaviours that build on respect for others. Solidarity has been characterized as the ‘third principle’ between classic economic liberalism and communitarianism. According to Cima and Schubeck, ‘[solidarity] tries to balance the first two by affirming how individuals, groups, and government ought to see themselves in relationship to each other . . . [It is] based on knowledge, trust, and friendship that moves the parties to do business together’ (2001, p. 226). Globalization and its implications for business relationships One of the strongest forces stimulating change in business relationships in recent years has been the rapid globalization of economic activity. The magnitude of globalization’s expansion can be understood by comparing the growth of countries’ exports and imports with the growth of their gross domestic product (GDP). For example, in the United States in 2005, real (inflation adjusted) GDP was slightly more than 50 per cent greater than in 1990, while real exports...
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