Environmental degradation caused by industrial activity is there for everyone to see. People are also becoming increasingly aware of its impact on the quality of life. Scams like Enron and recent financial crises made them wonder whether capitalism as it is practiced now is the best alternative for doing business.
Corporate Social Responsibility
In the face of increasing intolerance of traditional profit-maximization approach of businesses, many businesses began to add social responsibility to their objectives. Responsible businesses cared for stakeholders other than their shareholders. For example, they sought to minimize the impact of their activities on the environment and to pay more attention to their human resources.
However, corporate social responsibility or CSR was still just an add-on, and looked more like charity than a basic change in the way of doing business.
Conscious Business Enters the Scene
Conscious businesses make awareness of the effects of their actions an integral part of doing business. Erica Pinsky, author of Road to Respect: Path to Profit, defines it thus: Conscious capitalism is a business model that shares the philosophy of 'me to we' - the notion that our own lives improve when we focus on improving the lives of others. Conscious businesses "embrace ethical values like respect: for employees, customers, suppliers, contractors, other businesses and the environment."
A respectful workplace attracts top talent and increases employee productivity and commitment. For example, when most airline companies in the U.S. were going bankrupt, laying-off workers and imposing salary cuts, Southwest Airlines refused to follow suit. It did not resort to layoffs or salary cuts.
The company, which had viewed its mostly unionized employees as partners, has become the largest carrier of domestic traffic - a result to which its employees made a significant contribution. Pilots help flight attendants; ground crews ready the plane for its next leg, and so on saving millions of dollars in costs.
