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Moral Capital Increases Value

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The Theory of Moral Capital
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Abstract

This chapter mainly analyzes how morality, as a factor of production, helps enterprises create more benefits and profits, and as a spiritual factor, increases employees’ moral qualities, thus comprehensively improving the strength of enterprises. The chapter also explains why morality is a kind of capital from various perspectives.

Wang (2014, pp. 138–145; 2015, pp. 178–187), Li (2010).

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Notes

  1. 1.

    Koslowski (1996, p. 3).

  2. 2.

    Kang (2012, pp. 8–9, 28–29).

  3. 3.

    Wang (2011).

  4. 4.

    Some thought that the concept of “morality is a productive force” has reversed the positions of “material basis” and “moral level” in the relationship of “material basis determines moral level” in terms of historical materialism. In my view, it is a wrong conclusion caused by the wrong understanding of moral capital. “Morality is a productive force” can be understood from two perspectives. First, only when man as a “subjective productive force” makes use of machines which are an “material productive force” can social productive forces come into being. Morality qualities directly affect the value orientation of laborers and the improvement of material productive forces. Second, the perfection of man as the subject of moral activities, and the establishment of harmonious interpersonal relationships play a unique and irreplaceable role in guiding, promoting and regulating the existence and development of material productive forces. This means that material productive forces cannot exist or develop without spiritual factors such as morality. Also, only by relying on material productive forces can morality play its role as a spiritual productive force. Therefore, morality as a productive force is not independent from social productive forces. As a basic element of material and spiritual productive forces, morality depends on material productive forces to exert influence. This well demonstrates the dialectical relationship between materials and spirits, and between material productive forces and spiritual productive forces. Historical materialism fundamentally emphasizes the dialectical relationship and interaction between material productive forces and spiritual productive forces, and highlights the function of morality as a productive force in a specific context.

  5. 5.

    Collected Works of Karl Marx and Friedrich Engels (2009, p. 582).

  6. 6.

    Collected Works of Karl Marx and Friedrich Engels (2009, p. 195).

  7. 7.

    Collected Works of Karl Marx and Friedrich Engels (2009, p. 43).

  8. 8.

    Collected Works of Karl Marx and Friedrich Engels (2009, p. 211).

  9. 9.

    Collected Works of Karl Marx and Friedrich Engels (2009, p. 67).

  10. 10.

    Collected Works of Karl Marx and Friedrich Engels (2009, p. 96).

  11. 11.

    Collected Works of Karl Marx and Friedrich Engels (2009, pp. 197–198).

  12. 12.

    Wang (1998).

  13. 13.

    Novikova (1988, pp. 316–317).

  14. 14.

    Wang (2001).

  15. 15.

    Collected Works of Karl Marx and Friedrich Engels (1972, pp. 228–229).

  16. 16.

    Collected Works of Karl Marx and Friedrich Engels (2009, p. 77).

  17. 17.

    Collected Works of Karl Marx and Friedrich Engels (2009, p. 67).

  18. 18.

    Hu et al. (1994, p. 7).

  19. 19.

    In this case, human needs refer to the needs of human beings as determined by their natural and social attributes. For the former, human beings have specific product requirements due to physiological reasons, while for the latter, human social activities require products to be helpful in improving interpersonal communication and quality of life.

  20. 20.

    “Moral input” refers to the sense of moral responsibility of enterprises for consumers and society. It has an effect of guiding the entire operations process from market survey, product R&D, and manufacturing, to after-sales service, in a bid to fully satisfy customer needs, improve the production efficiency as well as quality of life of customers, and increase consumers’ sense of happiness.

  21. 21.

    Example: China Resources is a Fortune Global 500 enterprise which ranked 115th in 2015, with more than 400,000 employees and a wide range of business covering consumer goods (retail, foods and drinks including beer), electricity, real estate, cement, gas, pharmaceuticals, finance, and so on. As of the end of 2015, China Resources generated 472.92 billion yuan in revenue, 44.03 billion yuan of total profits, and 999.48 billion yuan of total assets. One of the important missions of China Resources is working with the customers, shareholders, employees, and partners to build a rational business environment without unnecessary resource consumption caused by friction; and creating a better life through social care and environmental protection. It provides its customers with quality products and services that continuously exceed customer expectations, and constantly create customer value. For shareholders, it improves corporate governance and performance to yield steady business development in accordance with laws and regulations. Also, it protects the rights of its employees, helps them achieve individual value, and enhances their sense of happiness. When it comes to partners, it follows business ethics, creating a favorable win-win business environment through cooperation. For the whole society, it participates in charity and promotes mainstream values for social harmony and development in response to national policy. Last but not least, it strictly abides by environmental protection laws and regulations, and takes measures regarding energy efficiency and resource recycling, in a bid to build a green planet for human beings. (Data source: http://www.crc.com.hk/about/culture/).

  22. 22.

    “Diachronic perspective” means that during economic development or business operations, whether rational consumption has a direct bearing on optimal production which creates the best environment for value increase. “Synchronic perspective” describes that during economic development or business operations, whether rational consumption in various fields directly leads to rational resource distribution and utilization, and thereby promotes the profit creation of enterprises and the whole economic development.

  23. 23.

    Zhou (2013, pp. 168–169).

  24. 24.

    Example: Founded in March 1989, Xuzhou Construction Machinery Group (XCMG) has been leading China’s construction machinery industry for 25 years. As the fifth largest construction machinery enterprise in the world and the largest and most competitive construction machinery enterprise in China with a wide range of product lines, XCMG holds onto 150th place on the list of Fortune China 500, and 55th place on the list of China’s 500 Largest Manufacturing Enterprises. One of its visions is to gain global trust. “Aiming at the global market, we commit ourselves to meeting customer needs in products, technologies, services, and solutions, and to helping customers achieve success. We must put ourselves into the customers’ shoes to satisfy their practical needs and value-added needs with sincerity, enthusiasm, dedication, concentration, and constant innovation, for the purpose of winning their affection and trust.” To this end, they have designed a customer satisfaction questionnaire containing 34 questions using a 1–10 scale. 1. What do you think of the image of XCMG based on our product, services, advertising, price and other factors? 2. Do you think our product has prominent advantages in performance, reliability, price, service and brand? 3. Before buying or using our product, did you think it can satisfy your needs based on the information that you knew? 4. Had you always heard or read about problems occurring in our products before you bought or used our products? 5. What’s the comments you had heard or read on the pre-sales and after-sales services we provided before you bought or used our product? 6. What did you think of the quality of our products before you bought or used our product(s)? 7. What do you think of the appearance of the product that you’ve bought or used? 8. What do you think of the operator comfort of the product that you’ve bought or used? 9. What do you think of the quality of the electrical system of the product that you’ve bought or used? 10. What do you think of the quality of the hydraulic system of the product that you’ve bought or used? 11. Did the product that you’ve bought or used always break down? 12. Did the key parts (engine, gearbox, drive axle, and chassis structural parts) of the product that you’ve bought or used always break down? 13. What do you think of the maintainability of the product that you’ve bought or used? 14. What do you think of the safety of the product that you’ve bought or used? 15. What do you think of the environmental friendliness (e.g. noise, emissions, and vibration) of the product that you’ve bought or used? 16. What do you think of the quality of the product that you’ve bought or used? 17. Are you satisfied with the reception and introduction services provided by our sales personnel? 18. What do you think of the delivery service (including inspection and technical guidance) based on the experience of yourself or others? 19. Has maintenance service been provided in a timely manner when your product broke down? 20. What do you think of the professional ability of our technical personnel in solving technical problems? 21. Are you satisfied with our technical consulting service? 22. Have spare parts been supplied to you in a timely manner? 23. Are you satisfied with the spare parts? 24. Do you think the prices of the spare parts reasonable? 25. Are you satisfied with our pre-sales and after-sales services? 26. What do you think of the price of the product considering its quality? 27. What do you think of the quality of the product given its price? 28. Has our product lived up to your expectation? 29. If comparing our product with the products of other brands that you know, how do you rate our product on a scale of 1–10? 30. If you compare our product with the product of your desired brands, how do you rate our product on a scale of 1–10? 31. Are you satisfied with our product given its performance, price, quality, services and brand? 32. How likely will you buy our product again if you have many choices? 33. If you choose to buy our product, but its price is raised, what’s acceptable increase for you? 34. If you do not choose our product, but its price is reduced, what’s the reduction that will attract you to buy our product? (Data resource: http://www.xcmg.com/into/know.htm).

  25. 25.

    Data source: http://www.njgsy.com/about/history/.

  26. 26.

    China Association for Quality, and China Institute for Quality Excellence (2012, p. 348).

  27. 27.

    Wang (2003).

  28. 28.

    Boton (2002, p. 128).

  29. 29.

    Data source: http://www.alibabagroup.com/cn/global/home.

  30. 30.

    Wang (1999, p. 67).

  31. 31.

    Sample: General Provisions of Measures for the Rationalization Proposal Management of Jiangsu King's Luck Brewery Joint-Stock Co., Ltd. (abstract): These measures are formulated for the purpose of further promoting democratization in corporate management, taking the initiative in creating renationalization proposal culture, developing employees’ sense of ownership over the Company, and encouraging collective intelligence and the constant release of innovation potential, thus contributing to the realization of the Company’s ambitious objectives. Rationalization proposals may cover the following aspects: (1) institutional reform and innovation, strategic decision-making, and corporate development planning; (2) corporate management, brand building, marketing, technological innovation, product optimization, and production & life; (3) corporate culture, ideological & political education, and spiritual civilization development; (4) proposals regarding employees’ benefits and interests; and (5) other proposals promoting corporate development. Responsibilities and duties of the Administrative Office include: (1) promoting the Renationalization Proposal Program; (2) conducting the collection, arrangement, assessment and feedback analysis of the proposals; (3) studying and solving problems occurring during the program; (4) organizing relevant forces to assess the implementation program on a monthly basis; and (5) determining awards and honors through discussion. Solicitation: (1) relevant departments shall greatly encourage employees to put forward high-quality proposals promoting corporate development based on careful and well-designed investigation into their jobs out of a sense of responsibility; (2) rationalization proposals put forward by employees shall be collected by persons in charge through the new OA process, and then submitted to the Administrative Office for filing. Program management: (1) the program adopts a two-level management by various departments and the Administrative Office; (2) various departments shall register, arrange and file collected rationalization proposals, (3) rationalization proposals that shall and can be implemented at the department level shall be conducted (including giving feedback) by various departments in a timely manner; (4) rationalization proposals that should and cannot be adopted at the department level shall be submitted to the Administrative Office before the 25th date of each month; (5) implementation of valuable and practicable rationalization proposals shall be tracked. (6) In case the investigation or the participation of at least two departments is needed, the Administrative Office shall organize relevant parties; (7) program implementation assessment constitutes a part of each department’s monthly performance assessment. Awards: Awards are set up according to the economic profits created by rationalization proposals. For rationalization proposals which generate the economic profits that can hardly be calculated, but featuring innovation, high value, and high quality, such as proposals regarding corporate culture, employee education and training, marketing and safe production, awards shall also be given. For rationalization proposals related to process improvement and technical innovation, if remarkable economic benefits are created thereby, money awards shall be given by the General Manager to persons who put forward such proposals, and the teams that they are in shall be named after them. Awarding methods: Awards are given on a yearly basis. For individuals as proposers, awards will be given to individuals, and for teams as proposers, awards will be given to team leaders, who shall, according to the contributions made by team members, distribute the awards. Award winners and the amounts of awards shall be proposed by the Administrative Office, and approved by the Chairman. Awards shall be given by the Administrative Office. Departments and employees with excellent performance in the program will be commended, and such performance will be included in the annual performance assessment.

  32. 32.

    Data resource: 1. http://www.yuchai.com/about/yu-chai-jian-jie.htm. 2. China Association for Quality, and China Institute for Quality Excellence (2012, p. 183).

  33. 33.

    Sample: Measures for the Home Visit Management of Jiangsu King's Luck Brewery Joint-Stock Co., Ltd. (Abstract): I. Purpose of home visits. Every employee is a member of the King’s Luck family. The purpose of home visits is to, based on information (including the states of mind and family backgrounds of employees) collected during home visits, develop solutions to their mental and practical problems, and on the other hand, according to the opinions and suggestions given by their families, to constantly improve the Company’s decision making and management levels, thus creating a harmonious corporate environment which promotes healthy and rapid corporate development. II. Interviewers and interviewees. Interviewers are comprised of executives and department leaders who shall pay visits in groups and assume respective responsibilities while interviewees include all staff members. III. Ways of home visits. For married employees, their spouses shall be interviewed, and for single ones, their parents shall be interviewed. For those who do not live locally, a phone visit rather than site visit may be conducted. IV. Home visit process. 1. Basic family information is collected(including the employment and physical situations of employees’ parents and spouses, and employees’ main social relations). 2. Information about the Company (including the latest achievements, sound development and ambitious plans of the Company) is introduced to the families of employees. 3. The opinions and suggestions of employees and their families are collected. 4. Solutions are developed to solve the problems of employees and their families. V. Other details. Families of each employee shall be interviewed on a yearly basis. For employees having such problems as sick families, family conflicts, special family difficulties, and serious mental diseases, a home visit shall be conducted in a timely manner. During a home visit, the interviewers shall be kind, sincere and patient, creating a harmonious communication atmosphere in which the interviewees can feel the concern of the Company for employees. Particularly, the interviewers mustn’t reveal the privacy of the employees and their families, accept any gifts or treats, or argue with the interviewees. The Employee Home Visit Records shall be filled out within five working days after a home visit. Serious or abnormal events shall be reported and handled in a timely manner, and a repeated visit shall be conducted as necessary.

  34. 34.

    Li (2010).

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Wang, X. (2018). Moral Capital Increases Value. In: The Theory of Moral Capital. Springer, Singapore. https://doi.org/10.1007/978-981-13-0478-1_4

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