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.
“This is the way the world thinks about innovation; they don’t think about countries or states or metropolitan areas, or even cities, they think about districts,” he said. “You have that now, and you need to play it out.” [Report release event: Capturing the next economy: Pittsburgh’s rise as a global innovation city]
Bruce Katz of Brookings said Oakland, with the University of Pittsburgh and Carnegie Mellon University, could become a “playground of innovation” through a partnership recommended in the report. The InnovatePGH partnership would feature collaboration between the city, universities, entrepreneurs and corporations to nurture high-tech business. [Report release event: Capturing the next economy: Pittsburgh’s rise as a global innovation city]