Adam Smith

BUSINESS ETHICS | GROUP PRESENTATION

 Philosopher That Is Relevant to
Our Business is “Adam Smith”
Adam Smith was a moral philosopher economic thinker
generally recognized as the father of classical economic
theory. The founder of the invisible hand theory that
underpins capitalist economic systems. Smith's most well-
known work was most probably The Wealth of Nations,
which gave rise to macroeconomics. Most of modern economic theory based
on Smith's theories, Smith argues in one of his most famous theories, the
invisible hand theory, that individuals looking out for themselves (rather
than government) do a better job deciding what people should produce. He
described the process to a "invisible hand" that guided the marketplace more
e ectively than the "physical hand" of a government o cial serving as the
central planner. This theory was introduced as the foundation for capitalism.
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 Examples of the Impact of the Philosophy on Business

Adam Smith's philosophies that are relevant in business

Adam Smith is considered the father of modern economics, and

his ideas have had a signi cant impact on business philosophy.
Here are some of his most relevant business philosophies:

Adam smith impact of foods and drink on business ethics?

Adam Smith did not directly address the impact of foods and
drinks from our company on business ethics in his writings.
However, his ideas on free markets and competition have
indirectly in uenced the way that businesses in the food and
beverage industry operate.
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Division of Labor: This philosophy is still relevant in modern businesses, as

it promotes the use of specialized skills and expertise to achieve optimal
results.

Example 1

The CEO of Food Drinks Company gives the task to HR (human resources)
to create an implementation project for the promotion of their new
products to sell because their marketing manager is on vacation, but even
he is not assigned to do that instead he is conducting job interviews for new
employees. Adam Smith argued that the division of labor increases
productivity and e ciency by allowing individuals to specialize in tasks
they are best at. Adam Smith promoted the idea that, for example, let the
HR department decide to refuse the task and let the marketing manager
have the skill to do the project so the implementation of promoting a new
product will be more e cient and productive.

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Invisible Hand: This idea is relevant in modern businesses as it emphasizes the importance
of competition and the role of free markets in promoting economic growth.

Example 2
The CEO can command a stock controller to produce new stock products that only he wants,
but instead the COO knows the needs of each person because he is responsible for managing
day-to-day operations and reporting the trends directly to the CEO. Adam Smith believed
that markets function best when left to their own devices and that self-interest leads to the
best outcomes for all parties involved.Adam Smith promoted the idea that, for example, the
CEO should let the COO make the best decision for the stock needs of their company. In the
end, the CEOs realize that their company will result in dead stock and that their investment
will be lost. So on that day, the CEO who approved the COO decision is the one responsible
for the stock controller making an e cient decision.and best outcomes for the company

According to Smith, consumers are the ultimate decision-makers in the market, and
businesses must compete to provide products and services that meet their needs and
preferences.

Overall, Adam Smith's philosophies emphasize the importance of productivity, e ciency,

competition, and free markets in promoting economic growth and success for businesses.

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