Management students study the eras of their discipline including classical, human relations, scientific management etc. What is emerging for me is a more epochal change in management – the transition from self-serving capitalism to conscious capitalism.
It is always hard to define a starting point for massive change, but, as will be explained, I will go with 1962. Here’s John Mackey, CEO of Whole Foods explaining the basics of conscious capitalism.
Self-serving capitalism is based on greed. Altruistic motives are also there, but they are subjugated by the profit motive. Some underlying assumptions, revealed in business discourse, frame its mode of operation:
- “business is business” – tells us that business operates by its own rules. It somehow decouples from universal moral values and creates its own world-view and playing arena. Another telling discursive phrase is “its nothing personal, its just business”.
- “the bottom line” is code for, among other things, profit is the dominant consideration.
U.S. company Enron has come to personify the worst of self-serving capitalism. If you are unfamiliar with the Enron story here is a link to the documentary trailer.
Before determining the origins of conscious capitalism consider that the father of capitalism, Adam Smith, wrote two books about economic philosophy, The Wealth of Nations, but also A Theory of Moral Sentiments. The latter argued that sympathy, a proper regard for others, is the basis of a civilised society. Conscious capitalism was still-born as business focused more on the “invisible hand” of the marketplace.
The dawn of conscious capitalism
Dr Paul Ray has identified an emerging sub-culture – the cultural creative. He defines them in this video.
In the U.S. cultural creative are fast becoming a dominant segment of society. In his extensive research quantifying this demographic, Dr Paul Ray noted that they are to found in many other countries, but they often under-estimate the size of the demographic, as they are mostly invisible in the media.
The growth of the cultural creative demographic in the U.S. 
Dr Ray identifies 1962 as the dawn of the demographic. Rachel Carson published Silent Spring and Betty Friedan The Feminine Mystique – the former signaling the start of environmentalism and the latter reframing women’s role in society.
In Megatrends 2010, Patricia Aburdene identifies cultural creative a the demographic that drives conscious capitalism.
The engagement connection
A significant milestone along the road towards conscious capitalism was Edward Freeman’s articulation of stakeholder theory in Strategic Management: A Stakeholder Approach.
From self-interested capitalism to conscious capitalism
The concept of the stakeholder displaced the singular focus on returning profits to a businesses financiers, to the more balanced and sustainable stakeholder approach.