Intrinsic and Instrumental Value

Daintith, J. (2004). “While statistical methods are widely used in the life sciences, in economics, and in agricultural science, they also have an important role in the physical sciences in the study of measurement errors, of random phenomena such as radioactivity or meteorological events, and in obtaining approximate results where deterministic solutions are hard to apply”.

BM Project Solutions will define the difference between Intrinsic Value and Instrumental Value. While doing so we will examine the two to confirm if there is not a possible link between them.

Intrinsic Value

Thomas, H (2006). “A thing’s intrinsic value is the value it has in itself as opposed to the instrumental value it derives from causally producing something else. Such value is important for the theory of the right, since on most views at least one moral duty is to promote intrinsic goods and prevent intrinsic evils. But it also matters in itself”. Business Management Project Solutions understands that intrinsic value is the actual value of something. This value must be or have good value to it as it needs to be something positive.

An example of this would be a motor vehicle. Motor vehicles have two values when it comes to retail prices. There is the market value, and then there is the actual value of the vehicle. The actual value is the intrinsic value as this is the value of the entire vehicle including every nut and bolt from back to front, interior, etc.

A company can also be listed as an example of Intrinsic Value. There is the value of the company which investors wanting to buy the company are willing to pay (Market Value). Then there is the actual value of the company including its assets and actual funds on its books (Intrinsic Value). This value would include everything from the buildings and offices to the very last employee of bit of stationary.

Positivity is another example of Intrinsic Value as it is a good thing to be positive.  Positivity can help you make the most out of a bad situation as you will always look to the brighter side of a situation rather than the bad. Being positive motivates not only yourself but those around you and allows for another Intrinsic Value to follow which is Happiness. This is an example where you can say one Intrinsic Value leads to another.

“Intrinsic value has traditionally been thought to lie at the heart of ethics. Philosophers use a number of terms to refer to such value. The intrinsic value of something is said to be the value that that thing has “in itself,” or “for its own sake,” or “as such,” or “in its own right.” Zimmerman, M.J (2014).

BM Project Solutions sums up intrinsic value as what is within every single person or organisation. This is what either motivates us or makes us better people within society.

Instrumental Value

“The theory of instrumental values stems from the idea of an object or idea that directly or indirectly leading to a value.  For example, an instrumental value of pleasure may be reading. If the individual enjoys reading, then that action directly leads to their pleasure”. Taylor, T (2012).

The bank is a financial institution which helps keep financial affairs in order. With this said, the bank plays and instrumental value when it comes to new businesses or finance. Without a loan from the bank most organisations or businesses will not be able to start their company. However, individuals and investors allow the bank to have these funds on hand to borrow to the business owner.

This would mean that citizens and companies are all instrumentally connected in some way. If we did not earn salaries or have a lump sum of money which could be deposited into a bank account, then banks would not exist as there are no clients. Investors would not receive a return on their investment and new companies would not have capital to start their operation. This can be regarded as the circle of survival or growth.

The business does not get the loan from the bank to start operation, and then it cannot employ people and add value to society or the economy. Without this organisation there will be no revenue income and salaries to pay which in turn will go back to the bank. That means by this business receiving a start-up loan allows it to generate income and employ staff who in turn will be able to bank money and take up financial products. If this organisation does not receive the start-up loan, the economy might take strain as there will be more unemployment.

As you can see that instrumentally speaking each action has a reaction which can either be positive or negative. Instrumentally speaking, one good thing will lead to another.

Michael Joseph

Business Management Project Solutions.

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