Chapter 1: Towards Sustainable Leadership
This book starts with the two forms of capitalism described in the above quotation and looks at their profound inﬂuence on the leadership and sustainability of organizations. One form of capitalism, referred to as Anglo/ US capitalism, stems from the USA and focuses on short-term maximization of shareholder value. It is often called ‘neoliberalism’ or ‘liberal market economics’. Variations are typically found in other parts of the English-speaking world, including Australia, Canada, Ireland, New Zealand and the UK.8 Anglo/US capitalism is widely celebrated as the ideal form of capitalism. The second form of capitalism is less widely publicized. It is based on concepts of social justice, and recognizes the interdependence of businesses and their local community. It is known as ‘Rhineland capitalism’, ‘stakeholder capitalism’ or ‘coordinated market economics’. This approach is concerned about the long-term sustainability of an enterprise and its relationships with many interest groups, not just with shareholders. It is typically found in countries like Austria, Denmark, Finland, Germany, The Netherlands, Norway, Sweden and Switzerland, and in more widely varying forms in Italy and Japan.9 Capitalism has not always been popular. After the Second World War, capitalism was considered morally objectionable because it appealed to individual greed instead of idealism, promoted inequality and, through industry’s collusion with Hitler, was partially blamed for the war itself.10 European countries like France, Italy and the UK chose somewhat different economic systems, some with considerable state involvement. Most other ‘isms’, including various attempts at socialism and communism, have since failed.11 Former...
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