In a public policy school, we frequently talk about how to effectively force companies to engage in pro-social behaviors without stymieing the economy. The concept of redefining capitalism to work in pro-social ways by creating value is incredible and I hope to see more of it. The author’s phrasing that a “narrow conception of capitalism has prevented business from harnessing its full potential to meet society’s broader challenges,” illustrates the changing zeitgeist – and how I see successful companies at recruiting the talented millennials they need to succeed and bring about a greater business base.
I thought it was particularly insightful that the article mentioned that “economists legitimized idea that to provide societal benefits, companies must temper their economic success”. Lowell Taylor, however, did a fantastic job illustrating ways to use free market principles to encourage and/or require companies to engage in pro-social behaviors. Policies such as auctioning off pollution permits, forcing private companies to bid for government contracts, and how to institute environmental rules that force companies to innovate rather than being stuck with a method or system that is inefficient, echoes a lot of what the author advocates for here.
As a tie-in to the other article about Strategies that Fit Emerging markets, the article highlighted several companies that are able to operate in emerging economies to solve large problems and bring value to those communities and economies. I think one of the cases we discussed in the Operational Design & Implementation class here at Heinz, regarding Merck’s decision to provide medicine to rural areas of South America and cure river blindness was really on the forefront of this shared value movement. They were able to use profits to help others and in turn experienced returns in not just goodwill but also on the stock market, and created an entire investment market for companies similarly engaging in pro-social behaviors.
Overall, I think the changes in the economy and a greater social realization of companies’ ability to solve large scale problems, combined with millennials’ attitudes on companies will ultimately be a deciding factor in the success of a great many companies. I hope more older, successful companies like Wal-Mart and Coca Cola can continue this trend.