Michael Porter on Rethinking Capitalism

Topics: Employee benefit, Value, Profit Pages: 2 (738 words) Published: February 22, 2013
Rethinking Capitalism
Michael Porter dicusses in the video interview with Adi Ignatius the need for business leaders to shift away from the profit only mindset and move towards a system of shared values. This shared-values approach can greatly benefit a company and also benefits the people who are affected by the company and its operations. Companies are becoming the enemy and government has to get increasingly involved in regulating industries. People often think of large corporations as the enemy when in reality they have the most power to influence change and be a global leader for good. Shared values would improve the company’s profits as well as improve the lives of the people who are affected by the company and its operations and production.

What used to be good for business was good for society. Now that notion is changing and what is good for society is good for business. This is not a rule but more or less a guideline and is becoming increasingly true as business evolves. The idea that whatever a business did as long as it increased profits has shifted to emphasize that profits will follow societal benefits not only business benefits. This means that shared value created an increase in the size of the pie being distributed and not just the distribution of the pie. By benefitting society the company in turn benefits themselves and becomes more profitable. No longer is being a social benefit company something that requires you to be a non-profit. What is good for society is also good for company. And what used to be good for the environment is now also good for the company as it can cut costs and eliminate wastes and disposal sites and costs.

Porter has asserted that what we think we are doing to save our environment and our cannibalistic economy is futile. The real change needs to be on the macro level not the micro. We need to remake the way we make things and have a cradle-to-cradle design emphasis. This will allow society to thrive in their...
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