In a recent book aptly titled "Conscious capitalism", Whole Foods founder and CEO John Mackey and Bentley University business professor (and author of the related 2007 book Firms of Endearment: How World-Class Companies Profit from Passion and Purpose) Raj Sisoda show the evolution of Whol,e Foods towards a full Mega concept.
The authors emphasize that entrepreneurial capitalism is not contradictory with adding social value, but a requirement for it. For as Mackey sustains, remembering his beginnings as a progressive idealistic entrepreneur distrustful of what he considered "exploitative" nature of capitalism, profits are essential for keeping adding value to stakeholders (investors, customers, employees, suppliers and communities) but only means toward value creation as an end.
Mackey quotes pioneer stakeholder theorist Ed Freeman concept that " business is not about making as much money as possible. It is about creating value for stakeholders" adding that to that end, profits and good management are critical but not enough.
Mackey and Sisoda criticize the "conventional wisdom" of business schools and short-term thinking business leaders that place exclusive focus on maximizing profits at the expense of value, ending in catastrophic failure such as Enron or the recent housing bust. The authors point out to an oversimplifcation of Milton Friedman's famous article and dictum about "maximizing profit as the only social responsibility of business" explaining that Friedman himself agreed with Mackey shortly before his death in 2005, underlying the importance of creating value and considering business as mre than a "zero-sum game".
The book describes the cases of several companies following the concept nd how to create value for and with different stakeholders.
It still falls short, however, of being able to monetize and reflect value added (or subtracted) to stakeholders in the P&L statements as PII does with the double bottom line business case.
But it is a significant move from business leaders towards the Mega concept
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References
- Mackey, J. & Sisodia, R. (2013) Conscious Capitalism: Liberating teh heoric spirit of business. Harvard Business Review Press
- Sisodia, R. (2007) Firms of Endearment: How World-Class Companies Profit from Passion and Purpose. New Yok, NY: Pearson Prentice-Hall
- Conscious Capitalism. org
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