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Entrepreneurship in the 21st Century

What are some ethical business concerns today?

The rise of ‘conscious capitalism’ has marked a profound breakthrough in the world of business. Today, more companies are addressing pressing social and environmental concerns.

Compared to traditional capitalism, conscious capitalism emphasises the generation of profits through socially and environmentally responsible choices. Colin Mayer, a professor from Oxford University’s Saïd Business School, explains that the purpose of conscious capitalism is “to produce profitable solutions to the problems of people and planet, and not to profit from producing problems for people or planet.” It fosters better trust, compassion, collaboration and value creation.

Essentially, the conscious capitalist pursues profits for shareholders while ensuring positive social and environmental impact. This new framework includes four interconnected principles:

1. Higher purpose: While profits are essential for a sustainable business, conscious capitalism places a greater emphasis on purpose. Founding a business on a noble purpose or mission inspires employees, customers and other stakeholders.

2. Stakeholder orientation: Conscious capitalists create business ecosystems which seek to create equal value for all of their stakeholders. This means that everyone in the ecosystem, including customers, employees, suppliers, investors, shareholders, funders, communities, and the environment, benefits from the success of the company.

3. Conscious leadership: Conscious capitalism acknowledges the collaborative nature of business-doing. By championing a group mindset as opposed to a winner-takes-all mentality, conscious leaders are able to inspire confidence and camaraderie for all of the company’s stakeholders.

4. Conscious culture: Conscious capitalism fosters a culture of deep trust, care, and cooperation among the company’s employees and all other stakeholders.

These four principles are complementary and mutually reinforcing. By bearing these principles in mind, companies may, in the long term, outperform other companies in many aspects including environmental and financial sustainability.

The next few articles explain how some big companies in the coffee and mining industry have embraced the above principles to bring about better environmental protection and increased stakeholder loyalty.

© Adam Smith Center, Singapore
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