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Chapter from: "Capitalism at Risk: Rethinking the Role of Business"
Published by: Harvard Business Publishing
Originally published in: 2011
Revision date: 21-Jul-2020

Abstract

The decades since the end of World War II have seen unprecedented economic growth on a worldwide scale. A host of nations have chosen to join the free-market system and have prospered in it. A global network of enterprise has emerged, linking giant corporations in developed nations with small businesses in emerging nations. Increasingly, the world operates as one economic system. In this chapter, Harvard Business School professors Joseph Bower, Herman Leonard, and Lynn Paine review their central argument: that business leaders must take a more active role in sustaining the global free-market system. They then reveal some of the new leadership skills and organizational capabilities that will be required of executives if they are to fulfill this role effectively: being attuned to far-reaching sociopolitical and institutional factors; being able to lead coalitions through persuasion in realms distant from their own; being able to think creatively and traverse different levels of analysis (firm, industry, nation, globe); and being comfortable with complexity and risk. The authors also pose a set of questions - from the company level to the industry level to the international level - that companies and their leaders must ask themselves in order to determine practical ways to better align their strategies and activities with the needs of a sustainable free-market system. The chapter concludes with further illustrations of what companies can do to tackle the pressing problems and challenges facing the system today - health care, environmental protection, income distribution, mass migration, and climate change. The severity of these problems (and others) notwithstanding, the fact is business leaders must recognize that they have a long-term abiding interest in the future viability of market capitalism. This chapter was originally published as Chapter 8 of ‘Capitalism at Risk: Rethinking the Role of Business.’ This chapter is excerpted from ‘Capitalism at Risk: Rethinking the Role of Business'.

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Abstract

The decades since the end of World War II have seen unprecedented economic growth on a worldwide scale. A host of nations have chosen to join the free-market system and have prospered in it. A global network of enterprise has emerged, linking giant corporations in developed nations with small businesses in emerging nations. Increasingly, the world operates as one economic system. In this chapter, Harvard Business School professors Joseph Bower, Herman Leonard, and Lynn Paine review their central argument: that business leaders must take a more active role in sustaining the global free-market system. They then reveal some of the new leadership skills and organizational capabilities that will be required of executives if they are to fulfill this role effectively: being attuned to far-reaching sociopolitical and institutional factors; being able to lead coalitions through persuasion in realms distant from their own; being able to think creatively and traverse different levels of analysis (firm, industry, nation, globe); and being comfortable with complexity and risk. The authors also pose a set of questions - from the company level to the industry level to the international level - that companies and their leaders must ask themselves in order to determine practical ways to better align their strategies and activities with the needs of a sustainable free-market system. The chapter concludes with further illustrations of what companies can do to tackle the pressing problems and challenges facing the system today - health care, environmental protection, income distribution, mass migration, and climate change. The severity of these problems (and others) notwithstanding, the fact is business leaders must recognize that they have a long-term abiding interest in the future viability of market capitalism. This chapter was originally published as Chapter 8 of ‘Capitalism at Risk: Rethinking the Role of Business.’ This chapter is excerpted from ‘Capitalism at Risk: Rethinking the Role of Business'.

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