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The excessive greed associated with the corporate scandals at the turn of the millennium and the more recent global financial crisis have led many observers to fundamentally reappraise the longer-term viability of the capitalist model that prioritizes maximizing shareholder returns and executive pay to the disservice of other stakeholders.
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For example, in Fixing the Game (2011), strategy expert Roger Martin examines why the "shareholder capitalism" model of the 1980s and 1990s came to be so detrimental to corporations and society, and he argues that it now needs to be replaced with a more "customer-centric" capitalism.[1] Notable leadership experts like Michael Beer and Rosabeth Moss Kanter urge companies to rebalance stakeholder priorities to advantage employees and customers, arguing that winning both "in the workplace" and "in the marketplace" is in the best longer-term interests of investors. Among the most influential has been strategy guru Michael Porter and his co-author Mark Kramer calling to redefine the primary purpose of business in society as the creation of "shared value" - highlighting the opportunity to create economic and social value simultaneously by mobilizing capitalism and the profit motive to solve some of society's deepest and most pressing needs.[2]
The new book by John Browne, Connect: How Companies Succeed by Engaging Radically with Society (Public Affairs, 2016 - with Robert Nuttal of McKinsey and technology entrepreneur Tommy Stadlen), is a timely and valuable contribution this debate, and it suggests practices that could be more successful than those of the Corporate Social Responsibility (CSR) movement. Lord Browne, a British peer, was CEO of BP (British Petroleum) from 1995 to 2007 and is currently executive chairman of L1 Energy, part of the Russian-backed, privately-owned, international investment company based in Luxemburg, with ambitions to "build a new world-class global energy group, fit for the 21st century."
His interviewer is Brian Leavy, a professor of strategy at Dublin City University Business School and a Strategy & Leadership contributing editor (). He is the author of the S&L Masterclass, "Getting back to what matters - creating long-term economic and social value" in Vol. 40, No. 4, 2012.
Strategy & Leadership : In Connect: How Companies Succeed by Engaging Radically with Society you write that history demonstrates that "business is the most powerful...