conscious capitalism essay

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Conscious capitalism : liberating the heroic spirit of business

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John Mackey's 'Conscious Capitalism'

2019, African Journal of Social Sciences and Humanities Research

This paper draws attention to cultural typology as a factor relevant to the stewardship of offices – in particular those of the business community – and within that focus the notion of dignity is upheld as against that of cynicism. The arguments are developed in the context of entrepreneur John Mackey’s “conscious capitalism”, the best canopy label under which to include more specific endeavors such as ‘social entrepreneurship’ or ‘creative capitalism’ because it implies a known and considered responsibility to certain normative, chiefly ethical, ends.

Related Papers

Journal of Indian Business Research

Rajendra Sisodia

Ashley Heacock

People in the United States are increasingly looking for fulfillment in life. The Millennial Generation in particular wants a job that incorporates impact, flexibility, creativity, and empowerment. Adults are turning towards populist candidates who highlight income inequality as a top concern and who argue that companies are not valuing their employees as human beings integral to the success of the firm and entitled to the profits. Many Americans are dragging their feet at jobs that pay well, but have no higher purpose. Customers are demanding companies be more fair and sustainable to their employees and the environment. The old spirit of capitalism that was motivated purely by providing for one’s family is under siege, and the largest and most popular companies are scurrying to find ways beyond pay to motivate employees to retain the best and brightest, and to do good in the world to keep their customers. Will capitalism survive millennial and populist sentiment, and the overall decline in the old spirit of capitalism? This paper examines the stability of the capitalist system overtime to understand how it has adapted to changing circumstances. It looks at the theoretical perspectives from Max Weber, Karl Polanyi, and Luc Boltanksi and Ève Chiapello (B&C) – social theorists who have examined capitalism through the centuries. Weber views capitalism as founded upon meaning, but sustained through a morally defunct and unbending Iron Cage. Polanyi sees capitalism as inherently crisis-ridden because the basic human needs of reciprocity, householding, and redistribution are not being met due to the commoditization of labor, land, and capital. B&C view capitalism as stable, but constantly changing as a result of injustice and contradictions in society, and critique against those sources of indignation. This paper then turns to the newfound threat to capitalism – the decline in the spirit of capitalism due to yearning for fulfillment beyond earning a salary – and analyzes how the three social theories explain this phenomenon. It argues that B&C’s theory of the evolution of change within the capitalist system is the most useful paradigm to consider when thinking about this newfound threat. Capitalism is a stable system, but only in its ability to change and adapt to the cultural currents of society.

Work, Employment and Society

Tim E Strangleman

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Why has capitalism persistently managed to survive in spite of its inherent critical contradictions? The erudite book The New Spirit of Capitalism clearly answers this question, shining light on the dialectical dynamics between the development of capitalism and its critiques. In their book, Boltanski and Chiapello call it “the spirit of capitalism,” which is defined as “the set of beliefs associated with the capitalist order that helps to justify this order and, by legitimating them, to sustain the forms of action and predispositions compatible with it” (Boltanski and Chiapello, 2006, p. 10). In this paper, I navigate so-called “business ethics,” which has shown significant growth since the 1980s (Donaldson and Fafaliou, 2003), is the concept most appropriate for the study of the spirit of capitalism to determine whether or not it contains the characteristics of the newest spirit of capitalism. In order to address the question, I adhere to Boltanski and Chiapello’s methodology, qualitative content analysis, given that this research follows the same framework as their work. Fifteen randomly but representative managerial texts will be analyzed. The research outcome confirmed that “business ethics” can be regarded as the potential newest spirit of capitalism. On top of that, I argue this paper contributes to the study of the spirit of capitalism.

Encyclopedia of Business and Professional Ethics

Matthew Sinnicks

Human Systems Management

Claus Dierksmeier

A paradigm change from mechanistic to humanistic management theories and practices is underway, exemplified in a shift from an economics oriented at the fictional homo oeconomicus towards novel models oriented at the real conditio humana. This methodological turn brings about both the opportunity and the necessity of reorienting management theory as well as business education to the idea of human dignity, as was common in the long-tradition of moral economics from Plato up to Adam Smith. In order to contribute to this theoretical move, in its first part, this paper surveys important conceptions of dignity throughout the ages, and then, in the second part, discusses their implications for a future humanistic business education. Recent economic crises further fueled the debate over the social impact of economics and management education. Former fixtures of the conventional wisdom of the economics discipline – such as the macroeconomic quest for ever more growth and the microeconomic pursuit of profit – are held responsible for the many social, ecological, and moral failings of the present economic system. Behind this critique and propelled by it, a deeper shift in economic thought is underway. After about 200 years of imitating the methods of the natural sciences and their positivistic approach, and after decades of relegating any and all normative considerations to the margins of business theory, now, arguably, we are about to witness a thoroughgoing paradigm shift. Management education, having inched away from the homo oeconomicus-model for several years now, is arguably about to cut loose fully from its old positivist moorings. Instead of depictions of human behavior as merely a rational pursuit of utility-maximization, new courses are being chartered all around the globe. More and more economists and management scholars declare for a broader set of normative objectives and vie to present their theories as amenable to demands for social, ecological, and moral sustainability. We are seeing, in short, a return of ethics to economics.

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Sara R. Farris

Polish Journal for American Studies

Mirosław Miernik

This essay discusses Joyce Appleby’s idea that capitalism, apart from being an economic system, also is a cultural one. Her earlier work, which included the intellectual history of capitalism, stressed the impact of early American thought on the emerging national identity of the United States, particularly in the context of free enterprise, individualism and the marketplace. After a brief discussion of Appleby’s early conceptions, the article goes on to assess the concept of capitalism as a cultural system, tracing its potential usefulness in the study both of American culture and of the discourses pertaining to this economic system and the culture it is associated with.

Epitheōrīsī koinōnikōn ereunōn

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Starting from the current debate on work and recognition, the article describes how shifts within the cultural frames of work, the transformation of hierarchies into internal markets and the development of a service economy lead to problems which can take the form of a 'paradox of recognition'. This paradox cannot be dissolved simply by a conceptual distinction between equal respect for persons and qualifying esteem of performance and efficiency, at least as long as we are interested in a matching of empirical analysis and normative critique. The normative claims for visibility and transparency of work are described as a paradigmatic case for the entanglement of questions of respect and esteem. With respect to recent developments within critical theory, the article argues that the idea of immanent critique needs further elaboration in order to accentuate the relation between normative critique and functional analysis.

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What Is Conscious Capitalism?

How It Works
Guiding Principles
Company Examples

The Bottom Line

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Socially Responsible Investing

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The term "conscious capitalism" refers to a socially responsible economic and political philosophy. The premise behind conscious capitalism is that businesses should operate ethically while they pursue profits.

This means that they should consider serving all stakeholders , including their employees, humanity, and the environment. They shouldn't limit the impact of their achievements to just their management teams and shareholders.

The idea of conscious capital was created by Whole Foods co-founder John Mackey and author and marketing professor Raj Sisodia.

Key Takeaways

Conscious capitalism is a socially responsible economic and political philosophy created by John Mackey and Raj Sisodia.
Proponents believe businesses should operate ethically by serving the interests of all stakeholders, not just corporate management and shareholders.
The four guiding principles behind conscious capitalism are a higher purpose, stakeholder orientation, conscious leadership, and a conscious culture.
Whole Foods, Trader Joe's, and Starbucks are just three examples of companies that embrace conscious capitalism.

Understanding Conscious Capitalism

The concept of conscious capitalism was coined and popularized by Whole Foods co-founder and co-CEO John Mackey and marketing professor at Babson College, author, and speaker Raj Sisodia in their book Conscious Capitalism: Liberating the Heroic Spirit of Business .

The two are also co-founders of Conscious Capitalism, a nonprofit organization that has chapters in more than two dozen U.S. cities and 10 other countries.

Conscious Capitalism Credo

The conscious capitalism credo acknowledges that while free-market capitalism is the most powerful system for social cooperation and human progress, people can aspire to achieve more. It does not minimize profit-seeking but encourages the assimilation of all common interests into the company's business plan.

This credo includes competition, entrepreneurship , freedom to trade , the rule of law, and voluntary exchange. It also builds on this foundation of traditional capitalism by adding elements such as trust, compassion, collaboration, and value creation to the formula.

Although profits don't take a backseat in conscious capitalism, the philosophy emphasizes profits that result from integrating the interests of all major stakeholders in a company.

4 Guiding Principles of Conscious Capitalism

Higher Purpose : A business that adheres to the principles of conscious capitalism focuses on a purpose beyond pure profits . In doing so, it inspires and engages its key stakeholders.
Stakeholder Orientation : Businesses have multiple stakeholders—customers, employees, suppliers, and investors, among others. Some companies focus on their shareholders to the exclusion of everything else. A conscious business, on the other hand, concentrates on the whole business ecosystem to create and optimize value for all of its stakeholders.
Conscious Leadership : Conscious leaders emphasize a "we" rather than a "me" mentality to drive the business. By doing so, they work to cultivate a culture of conscious capitalism throughout an enterprise.
Conscious Culture : Corporate culture is the sum of the values and principles that constitute the social and moral fabric of a business. A conscious culture is one where the policies of conscious capitalism permeate the enterprise, fostering a spirit of trust and cooperation among all stakeholders.

Companies That Embrace Conscious Capitalism

Conscious capitalism has become an increasingly popular concept in the business world. A growing number of businesses have adopted its principles. Examples of such companies are:

Amazon ( AMZN )
Whole Foods Market
Starbucks ( SBUX )
Alphabet ( GOOG )
Trader Joe's
The Container Store
Southwest Airlines ( LUV )
Costco ( COST )

Firms that adopt this philosophy reap significant rewards, and not just from more satisfied and productive employees.

Many consumers and investors consider the impact that businesses have on the environment. These stakeholders seek businesses that align moral principles with corporate values .

A survey of 1,000 U.S. consumers found that 37% of them seek out environmentally-friendly products and are willing to pay up to 5% more for them.

In addition, Sisodia's research of conscious capitalism companies found that over a 15-year period of time, these businesses achieved investment returns of 1646% versus investment returns of 157% for S&P 500 companies that did not subscribe to the philosophy.

Because of the increasing popularity of socially responsible investing, companies that reject conscious capitalism may see a negative impact on their profits and revenue.

Criticism of Conscious Capitalism

Despite the generally favorable sentiment toward the idea of conscious capitalism, the business philosophy has its critics.

Naysayers believe that adherents of conscious capitalism cannot fix problems within the corporate structure . They also state that adopting this ideal may not necessarily bode well for investors who, for the most part, are after good returns .

Other critics say that the onus for ethical performance shouldn't be borne by the business sphere—notably the private sector . They feel that enabling change should be the responsibility of those shaping public policy and the collective efforts of various leaders.

Is Conscious Capitalism Profitable?

It can be. Companies have embodied the concept and adopted socially-beneficial policies that attract ethically-minded consumers. At the same time, they've maintained a focus on generating profits.

How Is Conscious Capitalism Different From Impact Investing?

While they share socially-conscious principles, the two concepts are not identical. Conscious capitalism refers to specific business practices that might be adopted by an individual company, such as sourcing sustainable materials or incorporating fair labor practices. Impact investing is an investment style that seeks out companies with social or environmental benefits, such as "conscious capitalist" firms.

How Is Conscious Capitalism Related to Corporate Social Responsibility?

As you might expect, these two business approaches have similarities. Many companies with strong corporate social responsibility (CSR) programs also follow the ideas of conscious capitalism. However, conscious capitalism differs from the traditional understanding of CSR by stressing a holistic view of the relationship between business and society.

The conscious capitalism movement is an acknowledgment by some entrepreneurs that their companies can help promote social good in their communities.

Although most corporations continue to place profits and shareholders first, some businesses are also taking responsibility for the well-being of their employees, local communities, and the environment.

John Mackey and Rajendra S. Sisodia. "Conscious Capitalism: Liberating the Heroic Spirit of Business." Harvard Business Review, 2013.

Conscious Capitalism. " John Mackey ."

Conscious Capitalism. " Raj Sisodia ."

Nasdaq. " Conscious-Capitalism Stocks: Companies That Have Succeeded by Doing Good ."

Working Capital Review. " Why Leading Companies Employ 'Conscious Capitalism' ."

Harvard Business Review. " 'Conscious Capitalism' Is Not an Oxymoron ."

Workplace Ethics Advice. " What Is Conscious Capitalism? "

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Conscious Capitalism: what is It?

How it works

The primary concept of this case is Conscious Capitalism’ which introduces a new holistic approach of doing business that seeks for the winning situations for all stakeholders by creating a higher purpose and foster the well-being of all stakeholders from various aspects. This new emerging paradigm eventually is more beneficial for the firm and the shareholders compared to the outcome of chasing after the profit maximization. “Conscious Capitalism: What Is It? Why Do We Need It? Does It Work?” illustrates how conscious capitalism could be the future business model that not only the benefits itself, but also impacting the overall stakeholders, constituencies and the world, and yet the movement of conscious capitalism could be a long process to be implemented in reality with interfering critics in place.

Case Background

After analyzing the case, it can be evaluated that free market capitalism had brought incredible accomplishments and improvements to the economy, yet there are some criticisms in place. In order to create a great business, it is important for this free-enterprise capitalism to be built around ethical principles where the concept of conscious capitalism is applied to benefit all parties with share value creation rather than maximizing profit.

Subsequently the key theme that can be extracted from the case is the four principles’ of the conscious capitalism which involves purpose orientation, integration of stakeholder, conscious leadership and conscious management culture’ (Weiss, 2014). This ensures that a conscious business exists with the purpose of creating an optimal value for all stakeholders beyond just generating profit, acknowledging the entire ecosystem and the importance of interdependent stakeholders, under the leadership of a conscious business who shares the firm’s value and its higher purpose, which all leads to an organization with a conscious culture that inspire more innovation and commitment.

Based on my analysis on the case, it is obvious that conscious capitalism is ultimately practiced by Firms of Endearment (FoEs) where they foster the humanization of company experience in order to create greater value for its customers, employees and all other respective entities. The updated performance and financial analysis of these FoEs in comparison to the other firms provides me with an evident that conscious companies have always outperformed. This evident is supported with the research information available from the Harvard Business Review in which Schwartz (2013) stated that the companies that companies that engage in conscious capitalism have achieved the performance results, which is 10 times better that those that did not.

On the other hand, regardless of the case illustrating the great benefit that conscious capitalism brings to the marketplace, the society and the world in countless way, I believe there are still the dark and the destructive side of the capitalism. Even in the case, (Weiss, 2014) clearly mentioned that capitalism was under attack with many criticisms turning it into a profit maximizing machine despite the achievements that free market capitalism had brought over 200 years. Also, there is an argument raised by the critics of conscious capitalism that the model is still not acknowledged and practiced by every business in the market, since they assume that emphasizing on the well-being of the stakeholders by paying employees more than the industry range, treating the suppliers well and fairly, etc. can have a huge impact on the firm’s bottom line of the company.

Moreover, even though the financial research of conscious companies has proven with amazing results such as higher profits and premium ROEs compared to S&P 500, DJIA and Russell 3000, it is obvious that the number of these compared companies are still much higher that of conscious companies. In other word, there are still only minority companies that truly practice conscious capitalism as of today. In my opinion, it is due to the majority of the firms’ belief that it is impossible for them to eliminate profit from the top primary concern. Besides, Aschoff (2017) also argued that the idea of conscious capitalism can only be applied on if the business is in the phase of thriving. If the business happens to struggle at any moment, their primary concern will shift to the profit’ again.

Additionally, (Aschoff, 2017) mentioned that not all stakeholder shares the equal purpose in this global economy and thus, even the businesses with the best intention may sometimes end up running back to achievement of larger profit or winning competition. The author also inserted his opinions that one way to solve this problem would be through legal obligations and the demands that place people before profit.

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More From Forbes

How to unleash the full potential of conscious capitalism: values, habits and purpose.

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Founder and CEO of Symphony Advantage and Certified Conscious Capitalism Consultant.

Many companies are pivoting toward conscious capitalism, and for a good reason. After all, 7 in every ten consumers demand it. It’s also proving to be a powerful motivator for talent attraction, retention and engagement. With the rise of more caring leaders and executives, there’s a profound shift happening right now within the entrepreneurial community.

What makes conscious capitalism so powerful and transformational as a new business model can be summed up with "purpose." A conscious business aims at solving an important societal or environmental challenge. Profits, therefore, become the fuel for the mission and not an end in itself.

However, a company won’t be able to unleash its full potential if its higher purpose isn’t fully integrated at all levels of the company. The purpose can’t be a program or initiative on the side. It has to be at the very core of the organization in order to create the kind of impact (and associated engagement and performance) it seeks.

That’s where values and habits come into play. Indeed, while purpose aims at inspiring the company’s stakeholders, values guide that purpose, and habits facilitate its implementation in day-to-day operations. Think of values as a vehicle to achieve the organization’s purpose and habits as the everyday steps the company’s stakeholders take to reflect that purpose.

1. Define your values.

Once you’ve identified your company’s higher purpose, it’s time to associate core values that are aligned with said purpose. These values — conscious or unconscious — should motivate every decision made or action taken.

There are many models available out there, but I tend to favor the work of Richard Barrett . He adapted Abraham Maslow’s hierarchy of needs with a conscious mindset that suits modern-day realities. The Barret model identifies the seven areas that comprise human motivations. These range from basic survival at one end to service and concern for future generations at the other.

Conscious businesses’ core values will be naturally on the higher end of this dual-pyramidal structure anchored around alignment, collaboration and contribution. It provides a useful map for understanding the values of your employees, leaders and stakeholders as a whole.

From there, you can take actionable measures to reflect these values in your day-to-day operations.

2. Establish your habits.

To fully unleash the entrepreneurial spirit for good, you need to start with transparency, integrity, honesty and trust. Without these key elements, it will be very difficult to inspire stakeholders to be fully engaged with your higher purpose.

How do these values translate into habits and become part of a company’s culture? One case I had was an IT service provider company whose profits, margin and cost reductions were front and center in their minds, but their purpose, values and habits weren’t. Because of this, they were in jeopardy.

They realized quickly that a big part of the issue they were facing was a lack of trust between employees and the leadership team. They decided to support a more transparent working environment by establishing two 30-minute all-staff meetings each week. Each meeting would start with an “ask me anything” session.

The first four meetings had a lot of questions, often hard to answer. However, the leadership team made a firm commitment to answer these questions using facts and absolute truth. After a while, most questions ceased, and the following all-staff meetings reported on results and plans for the future.

By addressing their lack of transparent communication, the company was allowed more time and space to learn and grow as an organization.

This is just one example that anchored the value of transparency in the company’s day-to-day operations. Another habit could be to celebrate mistakes, starting with members of the leadership team, in order to showcase that the company favors honest communication over optics.

If one of your values is about employee fulfillment, what are internal processes that you can establish to make it tangible? Could you add personal (not only professional) development opportunities? How about creating a space to celebrate successes outside of the workplace?

3. Pivot toward a new evolutionary operating system.

Purpose, values and habits are leading to a new kind of operating system. Operating systems were created in the early 1800s — during the early industrialization period — to increase productivity at all costs. It’s a predefined system designed to get the most from people. But today, it’s often a cause of tension or a barrier to creating and executing a new way of conducting business with care.

An evolutionary operating system is like a living organism that evolves with the organization. Just like nature, it self-regulates, adapts and evolves. The company’s purpose, values and habits must be its guide, aligned in harmony.

A Dallas chef turned entrepreneur made use of an evolutionary operating system when he opened Café Momentum to provide training and skill development opportunities to young people serving time. Successful completion of the culinary program allowed participants to be released from serving time and become self-sufficient with the opportunity of getting hired at restaurants around Dallas.

This entrepreneur set out to solve a worthy societal problem, and according to a recent PBS article , Café Momentum participants’ recidivism rate is 15.2% compared to Texas’ 48.3%.

Conscious Companies

Conscious companies don’t settle for PR veneer. They walk the talk, and the way their organization is run moves its purpose forward every step of the way. By doing things like defining your values and establishing habits, you too can be part of this new take on capitalism.

Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?

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Social Sciences

What is Conscious Capitalism?

27 Sep 2022

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Academic level: Master’s

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Conscious capitalism is a socially responsible economic and political philosophy that stresses organizations' need to operate ethically while they strive to make profits. This philosophy implies that organizations should always focus on serving all their stakeholders and providing higher purpose and creating value to the involved communities (Cheretis & Mujtaba, 2014). Social capitalism is anchored four main beliefs, higher purpose, caring culture, conscious leadership, and stakeholder orientation. Many organizations are adopting the philosophy of social capitalism due to its benefits, which include the creation of better relationships between stakeholders and the organizations and more engagement of the community in organizations’ operations (Wang, 2013). This essay will explore how the Department of Defense practices conscious capitalism and how it can further its understanding and implementation of the same.

One way through which the Department of Defense practices conscious capitalism through creating opportunities for the army personnel and other employees in the organizations to advance their careers through promotion. This practice ensures the employees do not have to wait for the seniors to retire or leave the organization to get the promotion. In the Department of Defense, promotion is accorded to employees based on merit and not through favouritism, as it may happen in some organizations. Continuous career advancement through promotion in the Department of Defense keeps the employees, who are the core stakeholders, motivated to work hard in their respective positions. Secondary, another way through which the Department of Defense practices conscious capitalism is through creating value for the army personnel by holding them to higher standards. The department has various programs to support their employees even after they leave the service or after retirement. In addition, in the organization, leaders have embraced conscious leadership. They lead intending to create value for the employees, be inspirational, and positively impact the world. Also, there is a caring culture in the department of defence that promotes personnel integrity, learning, and empowerment. The caring culture of the organization is also advanced to the civilian communities in the areas where the army personnel get to serve.

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The Department of Defense has done incredibly well in implementing and practising conscious capitalism. However, there is a need for further understanding and implementation of social capitalism to advance the practice. The organization must always purpose to understand the guiding principles of conscious capitalism, which are higher purpose, stakeholder orientation, caring culture, and conscious leadership (Wang, 2013). Within the U.S, the Department of Defense has demonstrated a good understanding of conscious capitalism; however, the department needs to advance the same to the countries where the armies serve. For example, in the troops' areas to restore peace, the organization's leadership should uphold with higher purpose both its personnel and the civilian communities they are protecting. In addition, the department should ensure that responsible utilization of taxpayers' money and ensure that only the enemies are harmed during their operations and not the civilians. Finally, the department should implement ways of helping the army personnel who suffer post-war traumas after service.

In conclusion, social capitalism is a philosophy that revolutionized how organizations operate even as they pursue to make profits by stressing the importance of ethical practices. Through creating career development opportunities for its employees, creating value for the personnel by upholding higher purpose, creating a caring culture, and practising conscious leadership, the Department of Defense practices conscious capitalism. While the department has done well in implementing conscious capitalism domestically, there is a need for the organization to implement the practice in the areas where the army personnel are sent to serve in other countries.

Cheretis, D. & Mujtaba, B. (2014). Maximizing long-term value and conscious capitalism at Whole Foods: Quarterly Journal. S.A.M. Advanced Management Journal, 79(3), 4-10.

Wang, C. (2013). Conscious capitalism firms: Do they behave as their proponents say? University of California, Berkeley, 55(3), 60-86. DOI: 10.1525/cmr.2013.55.3.60

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Ivey Business Journal

A case for conscious capitalism: conscious leadership through the lens of brain science.

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Conscious capitalism is more practical and comprehensive than other corporate philosophies that are based on virtuous behaviour and philanthropy. This is especially so when Conscious Capitalism is viewed through the lens of brain science. Even risk management, for example, can be understood – and practiced – better when Conscious Capitalism becomes the foundation of a company’s operating philosophy. Readers will learn how Conscious Capitalism can affect their company, including its bottom line.

Conscious Capitalism is a philosophy of doing business that incorporates the principles of higher purpose (beyond profit maximization), stakeholder interdependence (rather than shareholder centricity), conscious leadership (instead of command-and-control or “carrots and sticks”) and conscious culture (in place of bottom-line obsession).1 The pragmatic value of Conscious Capitalism is underscored by the fact that companies that adhere to these principles outperformed the market by a 9-to-1 ratio over a ten-year period (1,111 percent versus 123 percent for the S&P 500).2

This philosophy is distinct from others such as corporate social responsibility, Shared Value Capitalism, Creative Capitalism and Capitalism 3.0. In particular, this way of doing business goes beyond the ideas of philanthropic thinking or virtue in that it is meant to create an entirely new structure for businesses whose financial integrity rests upon the following: the thought processes inherent in purpose-driven leaders; creating multi-faceted value for all stakeholders; leading through mentoring, motivating and developing people rather than through diktat or simple reward and punishment incentives; aligning leadership style with organizational purpose, and creating a culture of trust, authenticity, caring, transparency, integrity, learning and empowerment.

In this paper, we present another view of the pragmatic underpinnings of Conscious Capitalism by examining the implications of four variables inherent in this way of thinking about business. We examine the implications through the lens of recent findings in brain science. The four variables are:

The consequences of running a fear- vs. trust-based organization
The implications of understanding the neural basis of prejudice in the workplace
The impact of nepotism or the exclusion of stakeholders in the workplace, and,
Why optimism in the workplace should be viewed as a choice rather than depend on an objective assessment of reality.

The prefrontal cortex and business performance

There is substantial evidence extending far beyond the studies quoted here that business performance is strongly influenced by proper risk management. In addition, sound decision-making is considered central to achieving and maintaining adequate profits and the sustained of all stakeholders.

While there are a number of brain regions that work together to assess and manage risks, multiple studies show that accurately assessing financial risks requires adequate functioning of the prefrontal brain regions (the regions at the very front of the brain). In fact, when the prefrontal cortex is damaged, research shows that people tend to make irrational financial decisions. It is evident, therefore, that any factors that adversely impact prefrontal cortex functioning would affect both financial risk-management and the overall quality of managerial decision-making, which in turn would impact profits and overall business performance.

Fear vs. trust in corporate culture

While at first glance, fear and trust may not seem like direct opposites, in the human brain, they are. According to the Yerkes-Dodson law, mental tasks have an inverted U-shaped relationship with anxiety. That is, higher arousal or anxiety improve performance up to a point, but after the peak effect, there are declining returns. Numerous studies have demonstrated that fear and anxiety activate the brain’s emotional processor, the amygdala. Remarkably, this fear or anxiety does not have to be conscious (i.e. you do not have to be thinking about it) for it to activate the amygdala. In fact, unconscious fear appears to activate the amygdala even more powerfully than conscious fear. In the work environment, this means that a leader who leads with an iron fist, a manager who uses intimidation, and a corporate culture that is infused with threat and punishment all activate the amygdala, regardless of how much an employee pushes this out of conscious awareness.

So, why does this matter? It matters because many studies have shown that the amygdala is connected to prefrontal pathways. Excessive amygdala activation disrupts prefrontal pathways, thereby impacting economic decision-making (as discussed above).3 A high level of trust, on the other hand, decreases amygdala activation, thus offsetting the adverse impact of fear on decision-making and risk-assessment. When a corporate culture is trust-based (even implicitly), it makes things easier on the amygdala, especially during stressful economic times. Thus high-trust corporations are preferable to high-fear corporations. Add to this the fact that high-trust organizations have been shown to outperform low-trust organizations by 286 percent in total return to the shareholders. Thus, the case for activating the trust-brain rather than the conscious or unconscious fear-brain becomes even stronger, especially in these stressful economic times.

The neural basis of prejudice in the workplace

Most people are neither overtly prejudiced nor desirous of being prejudiced. In fact, people often try hard to eliminate their own prejudices when making decisions. Why, then, do we still have so many inequities in corporate cultures? And, does this matter? For example, studies show that employees have better outcomes when they are of the same race as their managers; there are still significant pay gaps between men and women in the workplace; and there are multiple other decision-making biases (such as the status-quo bias).

It is useful to examine the brain regions involved in prejudice, and to see what we can learn from this.

Early studies showed that explicit racial prejudice (when we know that we are prejudiced) has no correlation with amygdala activation, whereas implicit prejudice (when we genuinely believe we are not prejudiced but nevertheless act in prejudicial ways) has a direct correlation with amygdala activation.4 Since the amygdala processes fear, it appears that unconscious prejudices may be fear-based, but are entirely outside of our awareness. The problem with this is that when the amygdala is activated, people are also likely to misjudge neutral stimuli as negative. Therefore, in businesses, a person whose brain is overtaken by fear will act with excessive prudence and defensiveness. Furthermore, studies have shown that when people judge stigmatized individuals in a negative way (with obesity, facial piercings, transsexuality, and unattractiveness), there is increased amygdala activation and increased prefrontal activation as well, thereby jeopardizing the quality of decision-making and risk-assessment. Implicit gender bias is also correlated with amygdala activation, suggesting that our hidden gender biases may also be based on fear.

Thus, we can see that much like fear, prejudice may be an unconscious phenomenon that affects business outcomes, since affected employees are not able to make decisions or assess risk optimally due to the disruptive effects of amygdala activation.

The biological importance of stakeholder inclusion

Conscious capitalism stresses the importance of viewing stakeholders as interconnected and interdependent. All stakeholders – employees, customers, suppliers, investors, and community members – are regarded as important in their own right (not just as a means to better business results). Ensuring they’re continued is a key managerial responsibility. When this not achieved, people in the excluded groups feel more isolated. This concern has more than humane roots – it has business implications as well, and brain science provides part of the explanation for this.

Loneliness increases vigilance for threat and creates the negative amygdala-related consequences described above. In addition, the brains of people who feel socially isolated do not feel rewarded by even pleasant interactions. Their brains (the visual cortex when they see a stimulus) also become more sensitive to threat.5 Individuals whose reward centers are not activated through positive feedback are less likely to feel motivated to produce the results that they need to produce.

When financial resources are constrained, businesses would benefit from providing social rewards (such as peer recognition and special privileges), as the brain regions for social and monetary rewards significantly overlap. This overlap is especially significant for women. For stakeholders who feel excluded, however, no amount of social reward results in a positive impact on the brain. Another critical element is fairness. Our brains are wired (the striatum) to have a reward response to fairness. Without fairness, there is no registration of reward and as a result, there is far less motivation and drive to achieve company goals.

The evidence is thus quite powerful that the brain impact of loneliness is significant. This understanding challenges routine company attitudes of “Who cares?” or “Get over it.” Such responses simply do not work. Every successful company needs highly motivated employees and must therefore do everything it can to prevent feelings of isolation and loneliness among its stakeholders.

The choice of optimism in corporate culture

In the face of the current economic environment, how can you be optimistic? In fact if you were simply reflecting what is happening, pessimism would be the logical response. But what if you are looking for a way out of the dismal forecasts? Can optimism help you sculpt a path to greater success?

Several studies point to the value of optimism in business. In financially constrained firms, optimistic managers are able to save more cash out of cash inflows than non-optimistic managers.6 Furthermore, optimism is associated with transformational leadership, which in turn is associated with superior firm performance (especially for new ventures).

From a brain science perspective, it is important to understand how optimism contributes to the practice of Conscious Capitalism. As pointed out earlier, productivity depends on having the brain resources that you need available when you need them. These resources include a healthy and functioning frontal lobe of the brain. However, when pessimism prevails, the brain is preoccupied with looking for threats. Under these conditions, several threat-related brain activations in different brain regions end up disrupting the action brain, which is responsible for carrying out plans. Rather than paying attention to solving problems at hand, the brain goes on the defensive, looking to protect us from threats. This disrupts attention in the prefrontal cortex as well, and the brain is less able to inhibit distracting influences.

In addition, in people who are depressed, being pessimistic and expecting neutral events have been shown to activate the same brain regions. When times are difficult in business, people tend to feel “down” and depressed. In this state, they are likely to misinterpret neutral events because their brains activate as if the neutral events are negative. However, when people are optimistic, the amygdala activates to optimism, but in this case, rather than being disruptive, the ACC (anterior cingulate cortex) that connects to the amygdala activates to motivate behavior toward a future outcome.7 When you tell your brain that something is not possible, it does not even try to do it. However, when you tell it that something is possible, it stays online. That is why, for example, when girls are told to expect to do badly on quantitative tests, they do. When you expect the worst you often get it. So why not expect the best?

Why understanding the brain science behind conscious capitalism is important

When companies are looking to achieve sustained profits and growth, they need their employees to be highly engaged so they can execute strategies as efficiently and effectively as possible. Even though trust, social inclusion, stakeholder sharing and optimism have been shown to improve outcomes, many employees see them as “soft” variables that they can ignore. Brain science can be used to educate managers and employees about why the thinking and action parts of the brain become compromised when Conscious Capitalism principles are not used. Thus, brain science is a useful way to re-package information and enhance our understanding of these important principles.

Brain science can also help improve the retention of the information once it is more deeply understood. The company’s strategy can then be executed more effectively, because the key brain science principles are remembered throughout the process. Lastly, brain science allows us to develop alternative interventions to coach managers.

In the general case of disruptive amygdala activation that also disrupts the prefrontal cortex, we can use interventions that target each of these areas.8 Brain science also helps us reframe challenges that employees face in a more positive way. By doing so, we can decrease amygdala activation and increase functioning of the prefrontal cortex or thinking brain. Thus, brain science has three main implications for encouraging conscious business practices:

It improves the understanding of the factors that lead to high levels of stakeholder motivation and engagement;
It improves deep learning and memory to allow for smother execution of strategy;
It provides a template for brain-based interventions that work in the business environment.

The Whole Foods example of Conscious Capitalism

One company that embodies an implicit understanding of brain science in its practice of Conscious Capitalism is Whole Foods Market. When John Mackey and his co-founders started the company in 1978, they consciously set out to build a company on love and trust rather than on fear and stress. They observed that most businesses operate with a great deal of stress, internal competition and lack of caring. This reality is reflected in the startling but not surprising finding that heart attack rates spike significantly on Monday morning.

Whole Foods operates with a higher purpose: to educate people that what they put into their bodies makes a difference to their health, the health of the food system and the health of the planet. This sense of higher purpose creates an extraordinarily high level of employee engagement; every employee who comes to work for Whole Foods passionately believes in this purpose. This in turn creates a positive and optimistic work environment in which employees have a strong sense of meaning in their work.

Whole Foods also explicitly operates according to what it terms the “Declaration of Interdependence.” This is an employee-generated statement that recognizes the interconnectedness and interdependence of all of the company’s stakeholders. The company’s management rejects the idea of making any decisions that are based upon trading off the interests of one stakeholder versus those of another. They always look to find synergistic or win-win-win-win-win solutions that simultaneously create value for all their stakeholders. All stakeholders feel like they are part of the Whole Foods family. The company is remarkably open, with a highly diverse set of employees and other stakeholders, and there is a conscious effort to avoid prejudice.

Whole Foods also exemplifies the ideals of conscious leadership. All of its leaders care passionately about the purpose of the business, instead of being driven by profit or power. The company operates in a highly decentralized manner, and all of its employees are empowered to make decisions without fear of failure. The company has worked hard to create an environment in which there is an extremely high level trust within the company as well as with all of its stakeholders. The culture of Whole Foods embodies all of the positive attributes of a conscious business: trust, authenticity, caring, transparency, integrity, learning and empowerment.

Based on our growing understanding of brain science, it is evident that the extraordinary and sustained business success of Whole Foods is strongly related to the fact that it has created an environment in which all stakeholders are operating with high levels of healthy brain functioning, in addition to enjoying the benefits of eating natural and organic food.

While the science of brain imaging is still evolving, there is already plenty of existing evidence that supports the pragmatism of various tenets of conscious capitalism. This provides important neurophysiological justification for the adoption of the tenets of Conscious Capitalism as the foundation of every company’s philosophy.

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A Baháʼí Perspective on Conscious Capitalism: Working for Individual, Organizational, and Systemic Transformation

First Online: 21 October 2022

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David A. Palmer 19 &
Joseph F. McCormick 20

Part of the book series: Ethical Economy ((SEEP,volume 63))

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This essay is a reflection on how core Baháʼí principles relate to the ideals of Conscious Capitalism. We begin with a brief discussion on how the features of modern capitalism have emerged in history, causing reactions, conflicts and challenges leading to the rise of Conscious Capitalism, and noting how this story intersects with the history of the Baháʼí Faith at several pivotal periods. We then outline the story of Conscious Capitalism since its inception and highlight where the Baháʼí teachings converge and diverge with the vision of Michael Strong, one of the initiators of the Conscious Capitalism movement, based on an interview we conducted with him. This sets the stage for our exploration of a Baháʼí approach to Conscious Capitalism, through a reflection on the experience of two Baháʼí business leaders whom we interviewed for this purpose. A Baháʼí approach, we suggest, involves redefining the meaning of capital to cover its social and spiritual dimensions, and sees the business organization as operating within both a micro-environment of individuals and a macro-environment defined by the socio-political system. Thus, building a “conscious capitalist enterprise” involves a dual process of spiritual transformation at the levels of the individual and of the social system. Ultimately, only rebuilding the social order on spiritual foundations will create the conditions for the full flourishing of a spiritually and socially conscious form of capitalism.

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Spiritual Capital as Practical Wisdom for Management

Epilogue: where do we go from here.

Anthropology of Administration’s Approach to the Study of Management Philosophy as “Spiritual Capital”

The Baháʼí Faith is based upon the teachings of Bahá’u’lláh (1817–1892) and after his passing, his son ʻAbdu’l-Bahá (1844–1921). Over his lifetime, Bahá’u’lláh revealed hundreds of tablets and dozens of volumes, among which the Kitáb-i-Íqán ( Book of Certitude ) and Kitáb-i-Aqdas ( Most Holy Book ) are the core sources of religious doctrine and law respectively. By the mid-twentieth century, the Baháʼí Faith had spread to every country across the globe, from tribal communities to urban territories (Smith 1987 ). For Baháʼís, the entirety of Bahá’u’lláh’s revelation, along with ‘Abdu’l-Bahá’s writings and the guidance of Shoghi Effendi Rabbani (1897–1957, known as the Guardian) and, since 1963, the Universal House of Justice, the elected world governing council of the Faith, constitute the body of authoritative texts of the religion. In this chapter, the “Baháʼí teachings” or “Baháʼí writings” refer to these authoritative texts. Other than quotations from these writings and factual statements about the Baháʼí teachings, the ideas in this chapter represent the personal interpretation of the authors. For a compilation of authoritative Baháʼí texts related to economics, see Houshmand Badee ( 2000 ).

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Palmer, D.A., McCormick, J.F. (2022). A Baháʼí Perspective on Conscious Capitalism: Working for Individual, Organizational, and Systemic Transformation. In: Dion, M., Pava, M. (eds) The Spirit of Conscious Capitalism. Ethical Economy, vol 63. Springer, Cham. https://doi.org/10.1007/978-3-031-10204-2_17

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(Panza & Potthast, n.d.) Ethics is very important to a company’s success. Ethical behavior can bring benefits to a business. They can attract customers, which can lead to a boost in sales and profits. It can attract the right employees and increase productivity. It can also attract investors and keep the company’s share price high. Unethical behavior on the other hand can damage a company’s reputation and make it less appealing to stakeholders. It could also result in lower profits.

Ethics For Nonprofit And Profit Organizations

Ethics are values and principles that individuals use to govern his decisions and activities. Ethics are about moral judgment of an individual about right and wrong. In an organization, code of ethics refers to set of guiding principles and organizations use these principles in their policies, programs, and decisions for business. Within organizations, decisions are taken by groups or individuals and these decisions are influenced by the culture of the company. Decision making and relevance of ethics may also differ for nonprofit and for profit organizations. In contemporary business environment, organizations must have a clear ethical policy and implement it in proper manner. There are many social, legal and economic outcomes that company has to face in case of any ethical dilemma, so there must be a smart strategy to deal with ethical dilemmas. In this paper, we will address the ethics for nonprofit and profits organizations, ethical dilemmas being faced or faced by each of these companies and the outcomes of these ethical dilemmas. Critique of actions of each of these companies will be provided from the point of view of applicable philosophical theories of organizational ethics.

Essay on Ethical Decision Making

8 Works Cited

When an organization is not ethical, this will be seen through their work, employees, etc. A customer will lose confidence in a company quickly if they realize ethics are not a main priority for that particular business. If an organization wants to be in business for the long-run, they will realize their priorities should not be on getting rich quick but on setting standards and maintaining them; by following this rule, customers will continue to roll in, and the company will prosper.

Arguments Against Capitalism

Capitalism has been the subject of ethical criticism since it was first introduced into society. I defend the morality of capitalism because it gives people incentive to work, establishes a web of trust between them, satisfies their material well-being, and generates a wide spectrum of prosperity.

Business Ethics Course Analysis

This paper primarily consists of a personal response to a few questions about ethics in business. Describing the meaning of ethics sets the criteria for evaluating if actions are ethical. Looking at current and future career work, the concept of ethics is applied to predict ethical challenges. Based on this coursework, and outside research, resources will be identified that may be beneficial when business ethical challenges arise. The coursework on ethics covered law, conflict of interest, accounting, environment, finance, marketing, management, reputation, and corporate social responsibility. All of these topics are corporate concerns. Some topics may present dilemmas during the course of business. The responses in this paper

Legal/Ethical Issue Essay examples

Today’s business world presents numerous ethical issues. In today’s world above board/moral ethics in organizations do not often materialize intuitively. Organization must strive to provide employees with a clear understanding of the overall company vision. This will aid employees in practicing the code of ethics, policies and procedures in the workplace. Companies must be unwavering in continuously delivering the uppermost ethics of provision in which customers, applicants and employees are entitled to under fair business practices. One major core value is to uphold responsible and fair business practices.

Explain What Obligations Do Professionals In Your Field Have To Their Profession

The way in which an organisation complies to this moral code creates a certain reputation and increased trust within their stakeholder’s overtime.

Essay on Organization Ethics

4 Works Cited

Every organization also has a profession responsibility to conduct business honestly and ethically. Our readings reported, “Experts estimated that U.S. companies lose about $600 billion a year from unethical and criminal behavior” Kinicki and Kreitner (2009). The organization could avoid having ethical issues by meeting the

The Importance of Ethics in the Workplace Essay

In their personal and professional lives, people can and, unfortunately, sometimes do go against their moral and ethical standards. Ethical standards are what it means to be a good person, the social rules that govern our behavior. Ethics in business is essentially the study of what constitutes the right and wrong or the good or bad behavior in the workplace environment. A business is an organization whose objective is to provide goods or services for profit. The organization has a group of people that work together to achieve a common purpose. The moral challenges that these men and women face each day along with a whole range of problems that could occur, are why ethics plays such an important

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PDF An Introduction to CONSCIOUS CAPITALISM
Conscious Capitalism is a philosophy, movement, and framework that supports business leaders as they elevate humanity through good, ethical, noble, and heroic business practices to continue the positive historical trajectory capitalism has afforded society. Higher Purpose. Conscious Leadership. Stakeholder Orientation.
Download Free Chapter: Conscious Capitalism
Download a FREE excerpt from. Conscious Capitalism, With a New Preface by the Authors: Liberating the Heroic Spirit of Business. , by John Mackey, Rajendra S. Sisodia, and Bill George. The ...
Conscious capitalism : liberating the heroic spirit of business
Social responsibility of business, Business ethics, Capitalism -- Moral and ethical aspects, Corporations -- Moral and ethical aspects, Social values Publisher Boston, Mass. : Harvard Business Review Press Collection internetarchivebooks; inlibrary; printdisabled Contributor Internet Archive Language English Item Size 542.6M
John Mackey's 'Conscious Capitalism'
This essay discusses Joyce Appleby's idea that capitalism, apart from being an economic system, also is a cultural one. Her earlier work, which included the intellectual history of capitalism, stressed the impact of early American thought on the emerging national identity of the United States, particularly in the context of free enterprise, individualism and the marketplace.
Conscious Capitalism: Definition, 4 Principles, and ...
Conscious capitalism is a socially responsible economic and political philosophy created by John Mackey and Raj Sisodia. Proponents believe businesses should operate ethically by serving the ...
PDF Two and a Half Cheers for Conscious Capitalism
The Conscious Capitalism movement goes a step further. For example, a recently published book of essays is titled Be the Solution: How Entrepreneurs and Conscious Capitalists Can Solve All the World's Problems.9 It contains an essay by John Mackey, the CEO of highly successful Whole Foods Market, who has become the leading business advocate ...
The Ethics of Conscious Capitalism: Wicked Problems in Leading Change
We take Conscious Capitalism (CC) as foundation for and target of leader development. As such, we explore the complex discursive ... Our contributions in this essay are threefold. First, we provide a critique of CC as an emerging business Discourse that appears to offer hope for business and societal transformation. Since 'D'iscourses tend
Conscious Capitalism: Liberating the Heroic Spirit of Business
As leaders of the Conscious Capitalism movement, Mackey and Sisodia argue that aspiring leaders and business builders need to continue on this path of transformation--for the good of both business and society as a whole. At once a bold defense and reimagining of capitalism and a blueprint for a new system for doing business grounded in a more ...
Can Capitalism Be Conscious of Anything But Itself? Gnosticism
This essay attempts to provide a complementary value-add to the evolving system of conscious capitalism by considering the consciousness capitalism itself produces. It aims to provide a critical edge to the urgent task of ennobling exchange and theorizing responsibility in a world created by technological demiurges.
Concious Capitalism
Notes, essay outline, and essay conscious capitalism is business philosophy that emphasizes the integration of purpose, values, and stakeholder orientation in. Skip to document. University; High School. ... Conscious capitalism has gained traction as a viable business approach, with numerous successful companies serving as examples of how ...
Conscious Capitalism: what is It?
Essay Example: The primary concept of this case is Conscious Capitalism' which introduces a new holistic approach of doing business that seeks for the winning situations for all stakeholders by creating a higher purpose and foster the well-being of all stakeholders from various aspects. This. Essay Example: The primary concept of this case is ...
How To Unleash The Full Potential Of Conscious Capitalism ...
2. Establish your habits. To fully unleash the entrepreneurial spirit for good, you need to start with transparency, integrity, honesty and trust. Without these key elements, it will be very ...
What is Conscious Capitalism? Free Essay Example
Essay Sample Conscious capitalism is a new way of doing business that is based on the belief that businesses can be a force for good. Learn more about this new business model and how it can benefit both businesses and society. ... Conscious capitalism is a socially responsible economic and political philosophy that stresses organizations' need ...
A case for Conscious Capitalism: Conscious leadership through the lens
Conscious capitalism is more practical and comprehensive than other corporate philosophies that are based on virtuous behaviour and philanthropy. This is especially so when Conscious Capitalism is viewed through the lens of brain science. Even risk management, for example, can be understood - and practiced - better when Conscious Capitalism becomes the foundation of a…Continue reading →
Conscious Capitalism with John Mackey Co-founder and Co-CEO ...
(Visit: http://www.uctv.tv/) John Mackey, Co-founder and Co-CEO of Whole Foods Market and author of "Conscious Capitalism: Liberating the Heroic Spirit of Bu...
The Christian Contribution to Conscious Capitalism
The purpose of this chapter is to offer a vision on the possible improvement of capitalism, in the line of what is called conscious capitalism, exploring the possibilities of ethical change generated by Christian religious doctrine and experience. In the first sect. I will try to show why, although institutional improvements - especially the ...
A Baháʼí Perspective on Conscious Capitalism: Working for Individual
This essay is a reflection on how core Baháʼí principles relate to the ideals of Conscious Capitalism. We begin with a brief discussion on how the features of modern capitalism have emerged in history, causing reactions, conflicts and challenges leading to the rise of Conscious Capitalism, and noting how this story intersects with the history of the Baháʼí Faith at several pivotal periods.
Conscious Capitalism
According to Conscious Capitalism (2016) deals with four main principles, which are higher purpose, leadership, stakeholder and culture. These are all very important subjects that can cause balance and effectiveness to and organization or if left out can cause behavior that is unwanted. They all. Get Access.
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Our Local Chapters unite like-valued leaders committed to advancing the Conscious Capitalism philosophy at the local level. Collaborate with fellow Conscious Leaders, do business together, and create new opportunities for your community. "The idea of Conscious Capitalism goes considerably beyond being "virtuous" or seeking to "do well ...