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The Enlightened Capitalists: Cautionary Tales of Business Pioneers Who Tried to Do Well by Doing Good

James O'Toole

3.84 · Rating details · 38 ratings · 9 reviews

An expert on ethical leadership analyzes the complicated history of business people who tried to marry the pursuit of profits with virtuous organizational practices—from British industrialist Robert Owen to American retailer John Cash Penney and jeans maker Levi Strauss to such modern-day entrepreneurs Anita Roddick and Tom Chappell.

Today’s business leaders are ...more

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Hardcover, 592 pages

Published February 26th 2019 by Harper Business

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Apr 22, 2019 D.L. Morrese rated it really liked it

Is it possible for a business to make money without exploiting workers, polluting the environment, dodging taxes (and other social responsibilities), or swindling customers? Well, sure. Probably, anyway. At least for a while, under certain conditions. But it's not as easy as one might think. And those that try often fail. In this book, a business professor at the University of Southern California profiles some 'enlightened' business leaders who have tried, and he explains why so few large Is it possible for a business to make money without exploiting workers, polluting the environment, dodging taxes (and other social responsibilities), or swindling customers? Well, sure. Probably, anyway. At least for a while, under certain conditions. But it's not as easy as one might think. And those that try often fail. In this book, a business professor at the University of Southern California profiles some 'enlightened' business leaders who have tried, and he explains why so few large corporations have been able to adhere to the enlightened principles of their well-meaning founders.

I'll try to summarize a few key points that I took away from this below.
*SPOILER ALERT* It all comes down to money.

Every now and then, someone with high ideals will start a business that respects all its stakeholders: owners, workers, customers, the local community, the environment, humanity in general.... It acknowledges its impact on them and its responsibilities to them. That's an 'enlightened' way of looking at business.

But there is another way, a Wall Street way. Many people in the business profession seem to believe that the primary business of any business is to make money. In their eyes, a business has a fiduciary responsibility to maximize profits for its owners/investors. And that's pretty much its only responsibility. Everything else, such as making better products, providing good service, creating jobs, responsibly discarding industrial waste..., aren't necessary. A business still might do such things, as long as they don't lower profits, but it isn't obligated to. If it can get away with making cheaper products, charging its customers more, cutting its workforce, working them harder, paying its remaining employees less, discarding its trash in the local duck pond, and then selling the dead ducks as a secondary product line, then that's what it should do. That's good business. Profit comes before all else.

So, when in the course of events and the passage of time, control of a business passes from its original enlightened founders and into the hands of investors, priorities change. The business that had once been someone's life's work, possibly with a goal of making at least one small corner of the world a better place, comes under the control of people who view it as little more than another profit generator. With little or no personal stake in the business, it's employees, or the surrounding community, the investors demand higher profits. New managers are brought it, managers who share the 'normal' business school outlook. With a keen eye and the ethical principles of loan sharks, they review the practices of the newly acquired business and discard those that don't add to the next quarter's profits. If the business still can't generate the level of profits needed, they have no qualms about dismembering it and selling the parts.

The author doesn't really provide any solutions to this state of affairs. Sadly, it seems to be an unavoidable consequence of free market capitalism. He is writing, as the subtitle states, a collection of cautionary tales to warn current and future entrepreneurs of what to expect if they seek to go public by selling stock to investors. He's warning them that they have to decide if the 'soul' of their company matters more than the money they can get from selling it.

...more

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Jul 07, 2019 Luiza rated it liked it

Shelves: 2019

The book brings several different stories of a variety of companies, which are very very interesting. The problem is that the amount of stories is so large that the book somehow loses the momentum and turns into "more of the same" very quickly. I believe it wouldn't be an issue if the author's opinion about the whole picture was presented in the beginning of the book, but the way the chapters were organised made the middle of the book (the stories themselves) be repetitive.

I would give the book ...more

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Apr 18, 2019 Daniel rated it really liked it

The title says it all: The enlightened capitalists (who cared about the workers’ pay and living condition, environment, suppliers and customers well) tried to do well by doing good, but then they eventually failed. That happens even when they were able to follow the Golden Rule and make good profits and revive their town and workers are happy and suppliers and customers are fairly treated! Why?

The reasons:
1. They eventually sold to a big public corporation that behaves normally, that is, their ...more

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Nov 11, 2019 Harry Chernoff rated it it was amazing

I spent my career at one of the companies described in the book (SAIC). The description of the company, its extraordinary success, the employee ownership approach instituted by Bob Beyster (founder, CEO, president, inspirational force) are all accurate. The section in the book on Lincoln Electric does, in fact, sound a lot like the approach Beyster took at SAIC (as noted in the book).

This business model works and it works at scale. Corporate America and the Federal government should spend a ...more

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Mar 27, 2019 Doug Cornelius rated it it was ok

Recommended to Doug by: 17 BRRH2019 A business book

Shelves: publisher-provided, bookriot-rh-2019, read-in-2019

They tried. Business is pulled in two different directions: to make money and be a positive corporate citizen. The book tells the stories of dozens of business leaders who try to make their businesses go above and beyond the level of good expected.

Such early leaders often turned from social good to paternalism.

Most of companies' period of greater good come to an end. The decision to be so good is based on the decision of the leader at the time. As leadership changes, the devotion to the social ...more

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May 14, 2019 Mark rated it liked it

I learned from this survey of 500 years of enlightened capitalists & what worked or didn't in their broader purposed businesses. Some addressed externalities and others simply did "good". None really endured past the enlightened leader. Most came from altruistic motivations, not pragmatism or business sense. One takes away a jaded view, which is sobering but maybe also a bit cynical as historians can be. Good grounding and thought provoking anyway. Nothing is new? Or is it.

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Apr 01, 2019 William Pate II rated it really liked it

Good read. Profiles of business owners who attempted to do well by their employees. Sadly, the majority of the businesses abandoned their good doing in search of profits after Wall Street got their hands on them.

Essentially, it's a book showing how capitalists have proven capitalism won't/can't work to support everyone and save the planet. The author doesn't say it in so many words, but he's, essentially, without knowing it, advocating for democratic socialism.

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Mar 23, 2019 Paulo Adalberto Reimann rated it it was amazing · review of another edition

Worth everything line

Lovely reading. Historical approach with a delightful approach. Which makes reading fun. Throughout history, economics, personalities, advancement, failure but mostly success. A must read.

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Jun 18, 2019 Michael Dowling rated it it was amazing

A wonderful book about business people who set an example for today's environment. You will read about people you may know nothing or little about and their contributions, such as James Penney, Robert Owen, Milton Hershey, Levi Strauss, Ken Iverson, etc.

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