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Abstract

The project of social trust

Social trust, Arrow remarked is a social lubricant. The business world requires financial efficiency and expediency for its decisions to be realized. The matter that surfaces in the relationship between trust and business efficiency and expediency of decisions impinges on the profitability, and sustainability resulting in a two-way causality: The firm benefits from the trust of its customers. Customers earn the trust of the firm in its provision of desired goods, services, and trustworthy relations. An example of such trust between business and customers is the Customer Services Department of most large businesses. In small firms and businesses there is no such organized department. But respect of customer complaints and the earnestness to provide reliable products and services to customers prevail in conscious business ethics, although this is left to an understanding, rather than a formal and legal code.

Objective

In this paper we will formalize the inter-causal relations based on business and customer trust that lead to mutual wellbeing. The objective criterion of the wellbeing function thereby, replaces the profit-maximization or expected utility maximization of the financial firm by the project of social consciousness in the interactive business-customer environment. This replacement is not an imposed criterion on business. It is a logical and ethical one. An example here is the trust that society places on environmental goods, services, their suppliers, and business-customer relations. Customers and lobby groups campaign for green and sustainable futures. Corporations prevail on profit and output maximization and risk diversification. Contrarily, the objective criterion of small and medium size firms and microenterprises rests upon the consciousness of trust rather than costly customer service department. The small firms do not undergo corporate governance and corporate social responsibility strictures. The response in these directions is inherent in the type of business they do. Thus social trust between business and customers on dynamic ethical effects in preferences and objective functions is based on the process of learning within the complementary outlook of business and customers on the basis of mutual trust.

Methodological formalism

The formalism of complementary relations in mutual trust is explained by circular causation relations. This kind of methodology can be represented by the following type of schema. This schema will be formalized and evaluated to bring out the empirical validity of the ensuing decision making premised on mutual social trust. Note that the circular causation implies the need for sustainability of ethical values, as by the impact of trust, and this to be sustained by its reproduction in the business-customer relations. Thereby the project of ethical consciousness takes its functional roots in preferences, conduct, and interactive relations. A brief explanation of the circular causation method is provided by Fig. 1. It is to be developed extensively on details in the full paper for oral presentation. Significance of the proposition The global significance of the proposed paper is in its development of extensive and transcultural organizational behaviour based on the ethics of consciousness. This is studied in an institutional and academic framework. Students and scholars in every discipline need to develop the theory of endogenous business and social ethics that is presented in the paper. Practitioners and public authority are in need of realizing the inherent ethics of quality and stability of goods, services, durability, sustainability and prices that they offer with empathy beyond the old understanding of demand the supply mechanism. Such social reconstruction generates and sustains good ethical governance between multiplicities of transacting agents, and transforms society at large. Good conscious corporate social responsibility prevails in the measured implications of measured wellbeing as the social index. In a world of financial and social uncertainties today it is not so much the policed and regulated social environment that is appropriate. Rather, much needed today is the development and sustainability of conscious ethical conduct through human and institutional interactive conscious preferences. This will be the academic and practical message of this paper with its empirical and organizational content.

Circular Causation by Complementary Relations of Mutual Trust T qÎ(W,S) B(q,x(q)) C((q,y(q)) SOC((q,z(q)).

It is evident from Fig. 1 that the vectors induced by the trust-value, q, (x,y,z)[q], generate a complex system of relations if their interdependencies were to be charted by any system method. Instead therefore, the circular causation model is used. This approach simplifies the complexity of the system method. Details will be shown in the paper for academic and practical guidance. The vector (x,y,z)[q] will be given types of variables belonging to (B,C,SOC) respectively, and their interactions defined. The set (W,S) forms a topology on the universal set of ethical values, W, by the functional ontological mapping S. The objective function to simulate is stated in terms of the wellbeing function, Simulate W = W(x,y,z)[q], subject to the circular causation (double arrows in Fig. 1) inter-variable relations between the variables in terms of their explained attributes of ethicality underlying trust signified by the value of complementary mutuality. Now two analyses are launched and explained: Firstly, an explanation of the above simulation problem is done by using the idea of risk and return being replaced by spreading risk diversification over social goods and services, and increasing number of stakeholders, as in the case of development of SMEs and microenterprises to increase mutual wellbeing by trust. Trust is thus a conscious cementing (complementary) value of mutuality of interest and satisfaction spanning the vectors (x,y,z)[q] through circular causation as the trust factor. Secondly, a non-parametric Spatial Domain Analysis is displayed to further bringing out the simulation results of social trust generating and being generated recursively by the inter-causal variables of the vector (x,y,z)[q]. The circular causation and simulation perspective of the wellbeing function are thus brought together by epistemic economic explanation and its application in visual form. The methodology will be of a combination of ethical dynamics and financial economics and analysis. The paper is expected to be approximately 3000 words long.

Principal references for this abstract

Choudhury, M.A. & Hossain, M.S. 2007. Computing Reality, Aoishima Research Institute: Tokyo, Japan. Hammond, P.J. 1989. “On reconciling Arrow's theory of social choice with Harsanyi's Fundamental Utilitarianism”, in G.R. Feiwel Ed. Arrow and the Foundation of the Theory of Economic Policy, pp. 179–221, Macmillan, London, Eng.

Kim, W.C. & Mauborgne, R. 2005. “Creating blue oceans”, in their Blue Ocean Strategy, pp. 3–22, Harvard Business School Press, Boston.

MA. Lawson, A. 1997. Economics & Reality, Routledge, London, Eng. Stiglitz, J. Sen, A. & Fittousi, J-P. 2010. Measuring Our Lives, the report of the Commission on the Measurement of Economic Performance and Social Progress, The New Press, New York.

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/content/papers/10.5339/qfarc.2016.SSHAPP1002
2016-03-21
2019-10-16
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