Product Description

Capitalism is indeed at a crossroads, facing international terrorism, worldwide environmental change, and an accelerating backlash against globalization. Companies are at crossroads, too: finding new strategies for profitable growth is now more challenging. Both sets of problems are intimately linked. Learn how to identify sustainable products and technologies that can drive new growth while also helping to solve today's most crucial social and environmental problems. Hart shows how to become truly indigenous to all markets -- and avoid the pitfalls of traditional 'greening' and 'sustainability' strategies. This book doesn't just point the way to a capitalism that is more inclusive and more welcome: it offers specific techniques to recharge innovation, growth, and profitability.

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Product Details

• Amazon Sales Rank: #193726 in Books
• Published on: 2005-02-24
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 288 pages

Review

http://www.socialfunds.com/news/article.cgi/article1596.html

 

Book Review--Capitalism at the Crossroads: The Unlimited Business Opportunities in Solving the World's Most Difficult Problems
    by William Baue

According to author Stuart Hart, sustainable global enterprise holds the key to reducing poverty, reversing environmental destruction, and even counteracting terrorism.

SocialFunds.com -- Cornell and University of North Carolina Business Professor Stuart Hart's Capitalism at the Crossroads perfectly complements University of Michigan Business Professor C. K. Prahalad's The Fortune at the Bottom of the Pyramid, perhaps even surpassing it in significance. The two professors collaborated from 1998 through 2002 on the seminal article that gave birth to the "bottom of the pyramid" (BOP) concept that Prof. Prahalad explains so eloquently in his book (see related book review). The BOP market theory holds that multinational corporations (MNCs) can simultaneously profit and help reduce global poverty by serving a market they have largely ignored until recently: the 4 billion people in the world living on less than $2 a day.

As good as Prof. Prahalad's book is, however, it leaves unanswered the question of how the BOP theory fits into the larger context of sustainability, particularly environmental sustainability. Prof. Hart's book not only answers this question, but also presents a comprehensive and compelling argument that capitalism cannot afford to ignore sustainability--indeed, that capitalism will thrive by embracing sustainability (and vice versa).

"This book takes the contrarian's view that business--more than either government or civil society--is uniquely equipped, at this point in history, to lead us toward a sustainable world in the years ahead," writes Prof. Hart. "Properly focused, the profit motive can accelerate (not inhibit) the transformation toward global sustainability, with nonprofits, governments, and multilateral agencies all playing crucial roles as collaborators."

Prof. Hart introduces the book describing how the shift in the relationship between capitalism and environmentalism from antagonistic to (sometimes) complementary forces mirrored his own shift from distrusting capitalism to respecting its power to leverage positive social change. The "greening" revolution of the 1980s demonstrated that companies could profit by employing more environmentally benign processes, such as recycling or waste reduction.

However laudable the greening approach is, it became apparent in the 1990s that reducing the environmental impact of existing business models would prove insufficient to address the imminent environmental and social crises, according to Prof. Hart. He was among those who at that time promoted moving "beyond greening" through "creative destruction" of environmentally and economically wasteful processes, replacing them with environmentally (and economically) beneficial processes.

"Unlike greening, which works through the existing supply chain to effect continuous improvement in the current business system, 'beyond greening' strategies focus on emerging technologies, new markets, and unconventional partners and stakeholders," writes Prof. Hart. "Such strategies are thus disruptive to current industry structure and raise the possibility of significant repositioning, enabling new players to establish leading positions as the process of creative destruction unfolds."

The primary business strategy that promises to arise from the ashes of creative destruction is the BOP approach of serving the needs of the poor in ways that are culturally appropriate,

From the Back Cover
Capitalism is indeed at a crossroads, facing international terrorism, worldwide environmental change, and an accelerating backlash against globalization. Companies are at crossroads, too: finding new strategies for profitable growth is now more challenging. Both sets of problems are intimately linked. Learn how to identify sustainable products and technologies that can drive new growth while also helping to solve today's most crucial social and environmental problems. Hart shows how to become truly indigenous to all markets -- and avoid the pitfalls of traditional 'greening' and 'sustainability' strategies. This book doesn't just point the way to a capitalism that is more inclusive and more welcome: it offers specific techniques to recharge innovation, growth, and profitability.

About the Author

About the Author

Stuart L. Hart is one of the world's top authorities on the implications of sustainable development and environmentalism for business strategy. He is currently SC Johnson Chair of Sustainable Global Enterprise and Professor of Management at Cornell's Johnson Graduate School of Management. Previously, he taught strategic management and founded both the Center for Sustainable Enterprise (CSE) at the University of North Carolina's Kenan-Flagler Business School, and the Corporate Environmental Management Program (CEMP) at the University of Michigan. His consulting clients range from DuPont and Hewlett-Packard to Procter & Gamble and Shell.

He wrote the seminal article "Beyond Greening: Strategies for a Sustainable World," which won the McKinsey Award for Best Article in Harvard Business Review in 1997, and helped launch the movement for corporate sustainability. With C.K. Prahalad, Hart also wrote the pathbreaking 2002 article "The Fortune at the Bottom of the Pyramid," which provided the first articulation of how business could profitably serve the needs of the four billion poor in the developing world.

© Copyright Pearson Education. All rights reserved.

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Customer Reviews

Toward Sustainability
“Global capitalism now stands at a crossroads: Without a significant change of course, the future for globalization and multinational corporations appears increasingly bleak. It might be argued, in fact, that global capitalism stands at a juncture similar to the one faced in 1914. Between 1914 and 1945, world war, depression, fascism, and communism almost succeeded in eliminating capitalism from the face of the Earth. The problems global capitalism now faces (international terrorism, the backlash, against globalization, global-scale environmental change) are no less daunting. Constructively engaging these challenges will be the key to ensuring that capitalism continues to thrive in the coming century-to everyone’s benefit (from the Prologue).”

In this context, Stuart L. Hart divides this excellent study into three main parts.

• Part One – Mapping the Terrain: It describes the global situation and establishes the business case for pursuing strategies that aim to solve social and environmental problems. It also outlines the challenges and opportunities that remain to be addressed, particularly those that involve the development of new, more sustainable technologies and the needs of the four billion people who have been largely bypassed thus far by globalization.

• Part Two – Beyond Greening: It develops the logic and content of these ‘beyond greening’ strategies in more depth.

• Part Three – Becoming Indigenous: Stuart L. Hart suggests how corporations might begin to move beyond even these strategies for sustainability by learning to become more embedded in the local context. He argues that learning to become indigenous is the next strategic challenge on the road to building a sustainable global enterprise.

Stuart L. Hart writes, “In this book, I have tried to suggest ‘what’ companies might do to pursue the path of sustainable global enterprise-the strategies, practices, and capabilities that are required. What is less clear is ‘how’ to pursue this path, particularly within the context of large, incumbent, multinational corporations. Indeed, as Raghuram Rajan and Luigi Zingales point out in their book ‘Saving Capitalism from the Capitalists,’ it is precisely the large incumbent corporations that most often stand in the way of fundamental change. I close the book, therefore, with some thoughts on what it will take to make sustainability happen in the real world of budgets, quarterly earning reports, discounted cash-flow analysis, and the discipline of the investor community. Leaders in companies will need to avoid the top-down bias, think as a disrupter, reinvent cost structures, transform the meaning of scale, and align the organization. Most important, to enable employees to build the sustainability cathedral, senior managers will have to step up to the challenge with visible and tangible commitments that far surpass what they have been willing to do to date (pp. 220-221).”

Strongly recommended.

What Capitalism Could Accomplish
This interesting and provocative book synthesizes several of the most influential ideas in modern business and distills a new idea: that disruptive innovation at the bottom of the pyramid will solve the crises of environmental pollution, business stagnation and international terrorism at the top. No one can accuse author Stuart L. Hart of thinking small or of lacking imagination. His big ideas are all in place. The only missing element, as he freely admits, is one small detail: how. Capitalism must take a new course, and it’s pretty clear what the new course must be, but Hart presents only a vague notion of how businesspeople are to go about turning his vision into reality. We recommend that business leaders read this book anyway, because it will stimulate your thinking about what might be possible. Maybe you’ll be the one to figure out how to make the difference.

Great ideas, some recycled and repetitive material.
I'm a poor Master's student, but figured I'd purchase this book because I wholeheartedly believe in the vision of merging corporate strategy with sustainability elements. The book does achieve this, with interesting case examples and generally useful models for interpreting the proposed theories, but I found the repetition annoying at times. Another problem with academic authors is that usually their books are just adaptations of their journal articles. This book is certainly a prime example. If you have access to journal article databases, you could probably find 75% of the material found in this book.

Anyways, the fact that this book goes beyond advocating eco-efficiency is the real importance of this book. The authors see beyond simply redesigning our products to be less wasteful; they foresee a world where corporations respond to both sustainability AND human development issues simultaneously - and are awarded with competitive advantage and profits. This is a bold vision for capitalism and certainly one I can believe in. Most people blame the ecological/social pressures we face today on the capitalist system, and they are quite right to do so, but we must not forget that in many cases higher standards of living also produce the environmental awareness we exhibit today. We also forget that within the capitalism system are the most advanced mechanisms for innovation the human race has ever seen. It follows that if we are to start making great strides towards sustainability we will have to operate within this framework, as we don't have enough time to "re-test" how socialism would handle environmental problems (which it was equally as bad at, mind you). The only answer is believing in corporations as sustainability agents. These authors set out the blueprint.