Professional Documents
Culture Documents
Submitted by:
HRM B Group 10
XLRI, JAMSHEDPUR
Q1. Define also your unit of analysis of the market phenomenon: for instance, in respect to the
GST Bill, is it the whole GST Bill, or any specific component (e.g., Central versus State, the
legislative process versus its planned enforcement, specific action or actor, and so on) that you
choose to investigate and analyze under the following questions. Why did you choose this unit of
analysis? Justify your choice. [10 marks].
(Assigned to Debadrita)
Brexit is something which will affect the global economy and so we took up this topic to study the
moral and ethical implications of such a global issue.
Our unit of analysis is the decision of Brexit by referendum.
In 2012, Prime Minister David Cameron rejected calls for a referendum on the UK's EU membership,
but suggested the possibility of a future referendum to ascertain if the people of UK really wanted to
remain a part of the EU. Under pressure from many of his MPs and from the rise of UKIP, in January
2013, Cameron announced that a Conservative government would hold an inout referendum on EU
membership before the end of 2017, if elected in the next term. The Conservative Party won the 2015
general election with a majority. Soon afterwards the European Union Referendum Act 2015 was
introduced into Parliament to enable the referendum. Cameron favoured remaining in a reformed
European Union and sought to renegotiate on four key points: protection of the single market for noneuro zone countries, reduction of "red tape", exempting Britain from "ever-closer union", and restricting
EU immigration.
The outcome of the renegotiations was announced in February 2016. Some limits to in-work benefits
for new EU immigrants were agreed, but before they could be applied, a country such as the UK would
have to get permission from the European Commission and then from the European Council. In a speech
to the House of Commons on 22 February 2016, Cameron announced a referendum date of 23 June
2016 and commented on the renegotiation settlement. Cameron spoke of an intention to trigger the
Article 50 process immediately following a leave vote and of the "two-year time period to negotiate the
arrangements for exit."
The result was announced on 24 June. 51.9% (17,410,742) of the valid votes were casted in favour of
leaving the European Union and 48.1% (16,141,241) in favour of remaining a part of the European
Union. A petition calling for a second referendum attracted more than four million signatures, but was
rejected by the government on 9 July.
Prior to the referendum, the UK treasury estimated that being in the EU has a strong positive effect on
trade and as a result the UK's trade would be worse off if it left the EU.
Supporters of withdrawal from the EU have argued that the cessation of net contributions to the EU
would allow for some cuts to taxes and/or increases in government spending. However, Britain would
still be required to make contributions to the EU budget if it opted to remain in the European Free Trade
Area.
Unity-UK was a part of the EU and just to walk out when problems start showing is morally a wrong
thing to do. The decision to leave the European Union negates multiple agreements and contracts. Even
if some member of the group does something wrong in a way that affects the group as in case of Greece
or even due not being able to come together to some practical decisions like in case of immigrants,
parting ways because of such reasons does not show solidarity is unethical.
The UK lobbied very hard to get the Eastern Countries into the EU, against the wishes of several other
member states. UK wanted to expand EU, the others however wanted to have stronger bonds within
themselves. But now UK seems to be unhappy about those very same countries and their immigration
into her territory. The fact was very clear when UK had supported these countries to join and it was the
government's prerogative not to use the transition arrangements. By turning against them, UK has
broken their trust.
The UK got into the EU on petitioning for the third time. But now it seems as if it regrets its decision
of joining the EU. UK did not join the Euro club and did so reasonably. But the decision to move away
from EU shows a lack of commitment on part of the UK.
Another ethical issue with Brexit is how will the decision affect others that did not participate in the
vote. Voting is a morally charged act because it impacts everyone. Jason Brennan in
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All British Prime Ministers have played to the galley during campaigning season, blaming the
policy limitations of their government on the E.U. Gordon Brown said, in an election speech,
When I first expressed my doubts about Britain's entry, I stood virtually alone in the Cabinet. Indeed, I
was ready to resign as Chancellor if I was unable to persuade my colleagues of the grave risks of taking
us immediately into euro membership. He also said, The City of London is consumed by an alien
culture of excess to a roaring crowd. As we know, he was elected. Later, he vociferously supported the
Remain camp. Margaret Thatcher, Tony Blair and David Cameron had also stoked the fires of
Euroscepticism as a corner-stone to a successful election as PM. In fact, Thatchers speech opposing
compliances laid down by Brussels is regarded as a seminal work by the Leave camp.
Hence, expedient solutions leading to votes in the general election, served to inflame the antiimmigration and freedom from European interference rhetoric peddled by the Leave camp. Hence,
yesterdays expedient solution led to todays Brexit.
2) The harder you push; harder the system pushes back:
In 2004, Tony Blair effectively scuttled negotiations for a European Constitution by asking for
excessive concessions. In 2007, Gordon Brown missed the Lisbon treaty declaration ceremony, which
the British had long opposed. In 2011, David Cameron opposed E.U financial reforms and announced
that he would bring power back from Brussels. There are many other representative incidents including
a back bencher rebellion in Parliament over the 1992 E.U concessions. In other words, the U.K has
always attempted to dominate the E.U in order to assert its independence while retaining the privileges
of membership. Needless to say, it had several run-ins with Germany, France, Belgium etc.
After the Brexit vote, the U.K desperately needs to negotiate a favourable trade treaty with the E.U.
Inevitably, there are voices rising from the member states that want to make the British pay ball.
Wharton Finance Professor Joao Gomes expects the E.U to take a tough stance on Brexit ahead of the
French and German elections next year.
Id recommend the E.U, the EC and member states to play hardball, says Michelle Egan, a professor
at American Universitys School of International Service and a fellow at the Wilson Centers Global
Europe Program. She notes that Article 50 of the Treaty on European Union, the legal mechanism for
an E.U member state to break away, has never been used before. If they make it easy and give too many
concessions to Britain, then the risk is other states will want an a la carte Europe as well, adds Egan.
3) Behaviour grows better before it grows worse:
The 2014 referendum for Scot independence was settled in the U. Ks favour after a promise by the
Conservative Government to devolve further powers to the Scottish Parliament. The Conservatives
delivered their promise after sweeping Scotland at the expense of the pro-independence SNP in the
2016 general elections. Relations between Glasgow and London were extremely amicable. However,
the hawks for independence have risen again after the overwhelming Scottish vote for Remain. The
demand for a 2nd referendum is catching steam, citing a dissonance between the U. Ks Euro-scepticism
and Scotlands Euro-centricity.
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According to this law, when we make a decision about anything, we should be equipped to handle the
worst scenario that may arise in the future.
The decision to form the European Union was for the ease of doing business across Europe. While this
was a good move on part of the nations to move towards a unified and friendly world, it may not have
been thought through. The idea of creating a unified zone in which the respective nations enjoyed their
own governance system but a common monetary system was novel but difficult to gel. At the same
time, the union mandated the nations to follow certain rules which may have been counterproductive
for the respective economies. There are two ideas in discussion with respect to this law
i.
ii.
In retrospective, the union may never have predicted the crisis in middle-east having such tremendous
impact on their economy. At the same time, their immigration law was the reason for the exit of Britain.
Observing this phenomenon shows that the purpose of forming the union in the first place is being
defeated. Could Britain have negotiated on immigration laws at the time of joining as it did to maintain
the pound? This is a question we can ponder over.
In the current scenario, we will discuss Britains decision to exit the European Union. Post this decision,
Britain needs to be ready with the worst possible scenario that may occur. Until now, the growth of
Britain has not been up to the mark post its exit, in fact its budget deficit was much lower than last
years, at around 4% of the GDP. Having taken this decision, Britain would have thought of the possible
outcomes - good or bad that may arise.
In the perspective of the future, Britain and the European union need to work out all their decisions
keeping in mind the most challenging scenario that may come their way.
Minus X Minus Plus
According to this law, committing two mistakes does not make the outcome correct. This means that
when we make two consecutive incorrect decisions, the outcome will not turn out to be positive. It is
like saying that killing a person and hiding the murder does not make you innocent or free from stress.
In the context of the market phenomenon under purview, there have been many decisions that the
European union and Britain have taken for example the initial consensus of the rule of the union such
as the immigration laws which are doing more harm than good and correspondingly the exit of Britain
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It is a common belief that the only way to move forward is by making decisions. These decisions being
correct or incorrect is another matter into consideration. But in perspective, choosing not to act on
something is a decision in itself and every moment of indecision is a decision altogether. It may
conclude to an opportunity lost or an opportunity gained depending on the final outcome.
Taking the case of the market phenomenon in discussion, at the time during the referendum for Brexit
was taking place, many investors were in a state of indecision regarding investments. Few decided to
invest, few decided not to invest and a few were indecisive till the end. This indecision in a way is a
decision to not invest. By not making investments, the investors will eventually invest in another place
which will amount to an opportunity gained but at the same time, they would have lost the opportunity
to invest at the time of Brexit. If we look at the phenomenon of Britains exit itself, the debate had been
going on for long and no decision was being reached before they decided to go by the method of
referendum. In those indecisive moments Britain ended up deciding to be a part of the European Union.
Know your rivals, but know your friends better
This law goes opposite to the saying keep your friends close, but your enemies closer. There is no
point in having a friend who at the time of crisis is not there for your rescue. He/she will always be
present when times are good but disappear the moment things start going wrong. In addition, a friend
will not take a decision which will create an adverse impact on you.
Taking into consideration the market phenomenon under investigation it may be interesting to know
who is a friend and who is an enemy. There were many nations involved that lead to the culmination of
Brexit - the US, Syria and the nations of the EU including Greece, Germany. Observing from a macro
level we see that none of the countries are friends of each other. It is a known fact that the problem in
Syria today is attributed to the US. The Syrian crisis had led to mass immigration of refugees into
Europe which in turn caused the slowdown in economy of the European Union.
In the present and future context, the nations need to figure out who will support them at the time of
crisis and who will leave.
Q4.Apply now the Ten Archetypes of Systems Thinking (see Chapter 2A) as Assurance of
Learning (AOL10) that studies any market phenomenon. Explain each Archetype and its
potential for explaining and predicting, past or expected structures of market behavior in the
Case you have for investigation. Illustrate the application of each Archetype by past, current or
projected examples. [20 marks]
(Assigned to Snehi)
1) Limits to Growth
Management Principle: Do not push growth; remove the factors limiting growth
The steady growth before Britain left EU: There were many benefits that Britain enjoyed while it was
a part of EU. The most important was that EU provided millions of jobs to Britain. According to the
report published by Centre for Economics and Business Research, EU provided 3.1 million jobs for
Britain. If Britain were to remain the member of EU, the increase in the number of jobs by 2030 would
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Initially, EU and Britain enjoyed economic benefits like worlds largest free-trade zones, single largest
market to name a few. Gradually EUs way of doing business started affecting Britains trade
negatively. For instance, Britains fishing policy is political imperatives of Europe which is in turn
controlled by Brussels, huge membership cost of 17.4 billion pounds levied by Europe and disparities
in immigration system led to Europes success while hampering Britains trade and eventually its
failure.
The virtuous and vicious cycle was formed which ultimately led to Brexit. So, in order to curb the
failures of trade relationships the entire economic curriculum should be redesigned so that benefits of
both the partners are taken into account.
7) Balancing Process with Delay
Management Principle: In a sluggish system, aggressiveness produces instability. Either be
patient or make the system more responsive
When the relationship of Britain with EU was getting strained (which refers to the sluggish system as
mentioned in the archetype), the then PM of Britain Mr. David Cameron embarked on a tour of EU
states to renegotiate the membership of Britain. He promised to put the best if his efforts in keeping
Britain as a part of EU. However, with a majority of 52% Leave campaign was declared leading to
Brexit. Thus, giving rise to instability and uncertainty.
The system has since seen a slowdown of growth. According to John Van Reenen, director of Centre
for Economic Performance at the London school of Economics, You get a rabbit-in-the-headlights
phenomenon where businesses don't want to make new decisions, or new investments, because they are
uncertain about the future. The immediate effect will be a lowering of investment activity, a lowering of
hiring. There will an immediate slowdown of growth."
If Britain could have negotiated properly with EU and given it a chance, maybe Brexit would not have
happened, given the various benefits Britain had enjoyed.
8) Growth and Underinvestment
Management Principle: If there is a genuine potential for growth, build capacity in advance
of demand, as a strategy for creating demand
Since more than 50% of Britains exports go to EU countries and it had access to the single market,
there was a potential for growth. However, according to the Brexiters the benefits of leaving EU
outweighed that of being a member of EU.
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