Purpose driven firms can change the world - a bit

The premise of this book by economist professor and former management consultant specialising in corporate re-engineering Rebecca Henderson is that by re-imagining capitalism business can save the world. This is indeed a bold claim, particularly when you consider that corporate entities exist in a competitive world where their stated goal of management is to maximise shareholder value, meaning that profits come before anything else.
There are some strong examples cited in this book as to when companies have make changes to improve the world and where goals have been re-set to achieve public benefit rather than shareholder value such as the reductions in CFC use that effectively preserved the Antarctica ozone layer. It is clear that re imagining capitalism needs re imagining of accounting standards too, however ESG reporting (Environmental, Social, and Governance) which measures a company's social impact, is currently work in progress with only Japan effectively implementing this properly. Family companies are inherently more purpose driven than capital markets or private equity and it is this concept of having a wider purpose that is central to the ideas of this book. It is very hard for large multinational business to change their ways, for example when major consumer goods companies collaborated to reduce the use of palm oil but failed and this resulted in further deforestation of the Indonesian rain forecasts.
Noble as the aims of this book are, there is still a long way to go, particularly when USA the world's largest economy is one of the three countries in the world not to sign up to the Paris Climate Change Agreement (the other two being Nicaragua and Syria).
It is an interesting analogy that when film-makers decide to "re-imagine" a classic, this usually means bringing it up to date to re-shoot in a way that is more palatable for modern audiences with little change to the original concept. I suspect that if we really are going to "save the world", something more radical that the re-imagining of capitalism as portrayed in this book is required.

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2 people found this helpful

Excellent timely book

Every business person and entrepreneur should read this book. It is well researched and gives clear insight into how business should respond in the current climate. As a Business School lecturer it is now top of my reading list.

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A must read for any business leader.

From the financial system to leadership, Rebecca Henderson takes a broad and inspiring view of what needs to change and what could, if we just had the commitment. A must read for any business listener.

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Woke - pre covid & ESG boom

The author whilst her heart is clearly in the right place, has produced a preachy woke environmentally focused dissertation. I would have liked more detail on the companies who changed themselves rather than supporting Greta.
The book is TOTALLY focused on environmentalism with some focus on labour rights but I would have wanted more on the other aspects of governance, bribes, reporting etc.

Also the book is pre-covid and pre Russia - Ukraine conflict which have had major impacts on energy and working together. Therefore this is much less relevant than it once was. An appendix / epilogue would be useful

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