Do Managers Have a Role to Play in Sustaining the Institutions of Capitalism?


In the latest paper for the Initiative on 21st Century Capitalism, Rebecca Henderson and Karthik Ramanna, professors at Harvard, look to business leaders to ask the important question: Do managers have a role to play in sustaining free and fair capitalism? The authors argue that corporations and their managers have a special duty to maintain the conditions that sustain capitalism when operating in sparsely attended political processes where competing voices are seldom heard. In such scenarios, managers have a responsibility to advance the interests of the capitalist system as a whole, even if this entails acting at the expense of corporate profits.

The authors think there are ways to promote a heightened managerial responsibility to the system. These ideas include:

  • Design MBA programs to include courses on strategy and political economy that allow prospective managers the opportunity to explore the idea of multiple competing relationships in a comprehensive intellectual framework.
  • Promote a richer and more informed understanding of the conditions under which a single-minded focus on profit seeking is no longer consistent with the underlying ethical basis for capitalism.
  • Monitor and enforce responsibility to the system.
  • Encourage innovation in institutions that promote and enforce business standards that address managerial agency for the market system.