Editor's Note: This is a summary of an HBS Business Summit presentation. View a full summary and video of the event on the HBS Centennial Web site linked below.
|Date of Event:||October 14, 2008|
|Moderators:||Joseph L. Bower, HBS faculty|
David A. Moss, HBS faculty
Lynn S. Paine, HBS faculty
|Speakers:||Rahul Bajaj, Chairman, Bajaj Auto Ltd.|
Nancy M. Barry, President, Nancy Barry Associates
Bertrand P. Collomb, Honorary Chairman and Director, Lafarge
Jorge Paulo Lemann, Founder, InBev
David Murray, Chair of the Board, Guardians of the Future Fund
Gustavo Roosen, Chairman, Envases Venezolanos SA
Two separate panels shared their views with HBS faculty on the challenges faced by and the future of market capitalism, with very different perspectives among the panelists.
In recent HBS research, most business leaders agree on the threats to market capitalism. These threats include income inequality, environmental issues, inadequate governance, and lack of transparency. But these same leaders have very different perspectives on the most appropriate path forward.
Some feel the sole focus of business should be on building great companies. Others believe that for market capitalism to be seen as legitimate, it must consider the interests not just of shareholders, but of all stakeholders. Several panelists see societal problems as opportunities for entrepreneurial businesses. They believe it is possible for business to help solve societal problems, improve the standard of living in poor countries, and also earn an attractive profit. In this way, market capitalism can be a legitimate and sustainable solution for some of the world's major problems.
Key concepts include:
- HBS research shows that attitudes toward market capitalism fall into four categories.
- Although some feel that market capitalism solves problems by self-correcting, there is still a belief that business leaders must act ethically.
- Light regulation across all aspects of the business world could promote greater transparency.
- To sustain market capitalism, businesses must earn legitimacy in the eyes of society.
- Opportunities exist for entrepreneurial businesses to market products/services to low-income people, providing a new source of profits and benefitting society.
- Greater emphasis is needed on employees and the human systems within business.
- The public and private sectors can play distinctive roles, while co-existing harmoniously.