Conveniently Conscious: How Conscious Capitalism Constrains Intrinsic Value Creation In Businesses
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Many firms have operated based on Milton Friedman’s views on capitalism, namely that a business has a responsibility to “use its resources and engage in activities designed to increase its profits,” exclusively. There has been significant discussion in recent years regarding whether a business has obligations beyond maximizing the bottom line, such as engaging in socially responsible activities. In this thesis, I seek to evaluate Conscious Capitalism, a theory proposed by John Mackey and Raj Sisodia that discusses how businesses can create value intrinsically and benefit multiple groups of stakeholders. Mackey and Sisodia identify four tenets in the Conscious Capitalism model: higher purpose, stakeholder integration, conscious leadership, and conscious culture and management. I will begin my thesis by analyzing each of the tenets in a comprehensive manner and determining their significance. Ultimately, I hope to determine if firms must fulfill all of the tenets proposed by Mackey and Sisodia in order to be considered conscious or whether there are specific tenets that are more important than others. Additionally, I seek to analyze prominent examples of companies that are considered to be conscious and evaluate whether they fulfill the tenets of Conscious Capitalism. I will begin my analysis with Whole Foods Market because it makes up a significant part of Mackey and Sisodia’s argument. Conscious Capitalism was written before Amazon’s acquisition of Whole Foods Market in 2017, and I am particularly interested in analyzing if the acquisition has changed the company’s touted business model. I will also determine whether Patagonia can be considered to be a conscious firm, not only because it is discussed in Conscious Capitalism, but also because it proclaims to be a socially responsible firm.