Every organization has certain ethical responsibilities in addition to responsibilities towards other shareholders and stakeholders. Therefore, the concept of conscious capitalism refers to the moral aspect of a business or a company. While each business seeks to become the most competitive, it is also important to observe the moral aspect of operating in a business. Conscious capitalism involves thinking beyond self-interest and presenting the company through a systematic view. Conscious capitalism indeed thinks about capitalism and the business as well but does so in a manner that creates positive impact to the society. Popularized by Whole Foods cofounder and co-CEO John Mackey, the concept of conscious capitalism acknowledges that free market capitalism is one of the most powerful systems for social cooperation and progress (Sisodia, 2013). Therefore, most businesses are driven by the desire to profit over the need to create a positive impact on the society. However, Mackey also argues that this progress is inspired by values such as freedom, compassion, trust and collaboration. Therefore, businesses engage in social corporate responsibilities as a way of creating positive impact on the society.
From a business perspective, it is always apparent that companies that observe moral business behavior base their operations on four principles. These include having a higher purpose beyond pure profits, stakeholder orientation that means considering the whole business ecosystem, conscious leadership that focuses on ‘we’ as opposed to ‘me’ and a conscious culture in terms of the social and moral nature of a company’s operations (Simpson, Fischer, & Rohde, 2013). Corporations such as Wal-Mart are undoubtedly some of the most influential organizations in the world therefore making them subject and targets to speculations in terms of moral behavior. Rather than perceiving hourly employees as a different group from the full time employees, Wal-Mart has been increasingly offering equal treatment to their employees since the previous accusations of discrimination against various employees. By acknowledging that happy employees equal higher productivity, Wal-Mart is able to improve the terms of working for their employees hence enhancing the company’s image to the public (D’Innocenzio, 2016). However, research indicates that only 15% of the American public believes that business executives practice ethical and honest business behavior. The main reason is that a majority of large corporations lose up to 5% or up to 2.9 trillion dollars per year of their annual revenues to fraud or other forms of dishonest behaviors (Wang, 2013).
Amongst others, companies such as Whole Food pay their employees more than $15 an hour, which is more than the minimum wage in the US. On the other hand, companies such as Wal-Mart have been accused of underpaying its employees hence failing to practice conscious capitalism. However, Wal-Mart gave its employees a pay rise in 2016, leading to speculations that the business was engaging in conscious capitalism. For instance, in January 2016, Wal-Mart Stores Inc. announced that employees would benefit from more than 1.2 million wage increases for the hourly employees (D’Innocenzio, 2016). Additionally, the company also promised additional disability for full time and hourly employees. These changes came about as the company continues facing a lot of pressure to offer better wage and benefits especially for its hourly employees. Other aspects of conscious capitalism also include vetting suppliers by considering their supply chain and other aspects such as child labor and trafficking. By following a specific set of principles, Wal-Mart is able to enhance business conduct perceived as moral and ethical from a public perception. Indeed, conscious capitalism is likely to change the future of the free market and this is what real business entail in this digital era.
- D’Innocenzio, A. (2016, January 20). Wal-Mart to give pay raises to most of its workers. Retrieved June 15, 2017, from AP News: https://apnews.com/3b80f41702ee416abbbed666297c3a03/wal-mart-give-pay-raises-most-its-workers
- Simpson, S., Fischer, B., & Rohde, M. (2013). The conscious capitalism philosophy pay off: A qualitative and financial analysis of conscious capitalism corporations. Journal of Leadership, Accountability and Ethics , 10 (4), 19-29.
- Sisodia, R. (2013). Understanding the performance drivers of conscious firms. California Management Review , 55 (3), 87-96.
- Wang, C. (2013). Conscious capitalism firms: Do they behave as their proponents say? University of California. Berkeley , 55 (3), 60-86.