👉The table of contents so far is here.
Chapter 12: Planned Economy and Corporate Management
12.1 Public interest-oriented management decisions
Corporate management in a planned economy naturally differs significantly from that in a market economy. As already mentioned, a true planned economy does not presuppose monetary exchange, and therefore corporate activities are not intended to generate monetary revenue. For public enterprises, which are subject to a planned economy, serving the public interest is essential to their business activities.
Since such public enterprises are managed in accordance with the common plan formulated by the Economic Planning Conference, the discretion of the management body is limited. Business decisions are made within the common plan, focusing on how to produce environmentally sustainable, safe, and high-quality products and services and contribute to the promotion of the public interest.
This does not mean that management decisions are simply based on a "central plan," as occurred under the Soviet-style planned economy, and are therefore mechanical and bureaucratic. In a sustainable planned economy, voluntary "joint planning" (not "central planning") by enterprises themselves through the Economic Planning Conference, serves as the common management guideline, and therefore foresight and preparation for the formulation of this joint plan (three-year plan) also become important management decisions.
Such non-profit-making management decisions can be called public interest management decisions. However, such management decisions are primarily applicable to public enterprises (Production Business Organizations) that are subject to a planned economy, and are not entirely applicable to private enterprises that are outside the scope of a planned economy.
However, private enterprises are similar to public enterprises in that, unlike in a market economy, they do not earn revenue through monetary exchange. And to the extent that they receive products, services, etc. from public enterprises, given that economic planning extends to them indirectly, their management decisions will likely take on a public interest nature to a considerable extent.
However, private enterprises are permitted to engage in certain exchange transactions in the form of barter, and in that respect they have the freedom to engage in profit-making activities. To that extent, private companies are required to make profit-oriented business decisions, but these will naturally be different from the profit-making decisions made in a monetary economy where financial profit is the supreme goal.
Generally speaking, business decisions in a planned economy are not based on "how to make a profit" but on the public interest of "how to contribute to society." In this sense, "corporate social responsibility (CSR)," which in a market economy is at best a secondary responsibility of companies and is ultimately nothing more than an aid to PR, is thought to be embedded so much in the essence of corporate management that there is no need for such a specialized term.
👉The papers published on this blog are meant to expand upon my On Communism.
