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Monday, May 30, 2011

Conscious Capitalism

     In an April 4, 2011 article The National Law Journal discusses Bentley University professor Raj Sisodia's concept of "conscious capitalism".  Simply stated, Professor Sisodia suggests that corporations, or other business entities, that have a "sense of higher purpose" often excel financially as well. As a starting point Sisodia suggests that management ask itself whether the firm would be missed if it disappeared. If the firm is fixated only on its own bottom line it is less likely to be able to answer that question in the affirmative.
     Sisodia suggests that firms should not be driven by the notion of creating value for themselves, or by creating value for their clients at the expense of others. Implicit in this concept is the idea that you can seek value for your clients without doing so at either the expense of third parties or the firm's own success. Firms that practice "conscious capitalism" are often highly profitable says Sisodia. Of course, Sisodia notes that there are forms of compensation other than money, and firms should not too quickly discount these benefits of doing well by others.

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