Question

In many organizations, being “people-centered” is considered soft, irrelevant, and unrelated to profitability. Based on the video, “Everybody Matters” and the assigned readings on Conscious Capitalism (CC), contemplate the CC principles (e.g., conscious leadership, stakeholder orientation, conscious culture, and higher purpose) as a framework. Consider at least two companies that successfully adopted this business philosophy to gain success and combat traditional corporate approaches. How does these companies embody the tenet of “higher purpose” and create deeper meaning by focusing their goals beyond profits and inspiring stakeholders? What connections can you identify between the four principles of Conscious Capitalism and the Christian concept of putting others before oneself?

https://www.youtube.com/watch?v=or6YoXfHWSE

Answer 1

Today, being "people-centered" is considered soft, irrelevant, and unrelated to profitability. Based on the book “Organizational Behavior “and the designated readings article about conscious capitalism, I will interpret how I can deny these arguments. I will consider at least two companies that have successfully adopted this business philosophy to gain success and combat traditional corporate approaches. Zappos and Walmart are two companies that embody the four principles of conscious capitalism, embody the tenet of higher purpose, combat traditional cultures, and can be connected to the Christian principle of putting others before oneself.

In the organization, people-centered is based on human and economic potential. It is the nurture focuses on the individual’s personal needs, wants, desires and goals so that they become central to the care and nurture process. According to Kreitner & Kinicki (2013) Organizational behavior (p. 37) “They are seven people-centered practices to be strongly associated with much higher profits and significantly lower employee turnover: job security, careful hiring, power to the people, generous pay for performance, lots of training, less emphasis on status and trust building”.

According to Mackey & Sisodia (2013) “conscious capitalism refers to business that serve the interests of all major stakeholders, customers, employees, investors, communities, suppliers and the environment.” The success of companies that truly commit to the greater good, it will say that not only can conscious capitalism be profitable, it will be one of the defining mechanisms of profit in the future.

The traditional corporate approaches are when the structure in a business is hierarchical, meaning power flows vertically and all employees follow a chain of command. While conscious capitalism pushes for values-based economic values where values represent social and environmental concerns at both global and local scales. The structure can be centralized or decentralized.

Zappos.com is an example of conscious capitalism with people-centered that had gained success and combatted traditional corporate approaches. Zappos.com is an online shoes and clothing retailer based in Las Vegas, Nevada. The company was founded in 1999 by Nick Swinmurn and launched under the domain name shoesite.com. Zappos has a Holocracy management. Holocracy is a method of decentralized management and organizational governance, in which authority and decision-making are distributed throughout a holarchy of self-organizing teams rather than being vested in a management hierarchy.

Zappos has a conscious capitalism principle based on the four pillars. Company management philosophies are: customer service is priority, customer orientated focused, customer before profit, everyone is boss, self-governance, no management, Holocracy. The corporate culture includes customers (satisfaction, relationship, longevity and transparency), employees (benefits, relaxed and stress free), seek to establish trust (transparency and idea of recognition), stockholders (maximize returns, max profits and reduce expenses), and community (philanthropic, sustain ability and recognition). Zappos is using the TQM (Total Quality Management) principles.

Samuel Moore Walton was an American businessman and entrepreneur best known for founding the retailer Walmart. Walmart stores Inc. grew to be the world’s largest corporation by revenue as well as the biggest private employer in the world. Walmart is an example of a company with a hierarchy culture. This is a formalized and structured work environment.

Procedures decide what people do. Leaders are proud of their efficiency-based coordination and organization. The long-term goals are stability and results, paired with efficient and smooth execution of tasks. The personnel management must guarantee work and predictability. In Walmart market culture, people are competitive and focused on goals. Leaders are hard drivers, producers and rivals at the same time. The emphasis on winning, keeps the organization together.

Reputation and success are the most important. Market penetration and stock are the definitions of success. The organizational style is based on competition. Walmart adhocracy culture is a dynamic and creative working environment. Employees take risks. Leaders are innovators and risks takers. Experiments and innovation are the bonding materials within the organization. The organization promotes individual initiative and freedom. Walmart clan culture is a friendly one.

People have a lot in common, and it’s like large family. The leader or the executives are mentors or may be even as father figures. The organization is held together by loyalty and tradition. The organization promotes teamwork, participation, and consensus. The organization emphasizes long-term human resource development and bonds colleagues by morals. Success is defined within the framework of addressing the needs of the clients and caring for the people. In Walmart company, power don’t flows vertically.

In the case of Zappos, there is a growing network of leaders, including CEO’s of individuals to create value from an inner higher purpose. They have a work environment that supports employees to deliver their higher levels of work. At Zappos, human capital practice helps organization effectively manage their human capital to drive business growth. Their statement of purpose is referred as their “WOW philosophy” is to provide the best customer service possible, which everyone in the company contributes to on a yearly basis: deliver wow through service. At Walmart, they continually engage stakeholders to understand their perspectives, improve the effectiveness and relevance. Their statement of purpose is “the lowest prices anytime, anywhere.”

Walmart provides foods, apparel and household products to hundreds of millions of customers in twenty-eight countries around the world. By doing so, they create economic opportunity for associates, suppliers and others in retail supply chains. They enhance the environmental and social sustainability of retail supply chains. Walmart also strengthens the communities their stores are in by providing work. But what connections can I identify between the four principles of conscious capitalism and the Christian concept of putting others before oneself?

There are four principles of conscious capitalism: conscious leadership, stakeholder orientation, conscious culture and higher purpose. They can be connected with the Christian concept of putting others before oneself. For conscious leadership, the individual at the top is a model, a mirror in action and personality to others. To inspire others, the leader must think about others needs first, and on how to influence and gain them. To become a leader by doing so, the leader inspires loyalty and consistent high performance in their teams.

In stakeholder orientation, the crucial factors for long-term business success are the employees and customers, and often the vendors and community as well. The leader must take care of them first and then they will take care of the leader. It involves putting others before oneself. In conscious culture, the leader is ready to lose his job and save staff jobs when the economy is bad. Leader believe in cut pay. Finally, higher purpose, best leaders here realize that to become successful over a long term, must provide true value.

In conclusion, “doing good has become good business.” said Hernandez-Blades in her article Social responsibility: Doing good is good for business, (2018). The capitalism is winning. Conscious capitalism, as can be seen, is consistent with TQM (Total Quality Management) principles. In the case of Zappos and Walmart, it will always prevail.