In recent HBS research, most business leaders agree on the
threats to market capitalism. These threats include income
inequality, environmental issues, inadequate governance,
and lack of transparency.

But these same leaders have very different perspectives on
the most appropriate path forward. Some feel the sole focus
of business should be on building great companies. Others
believe that for market capitalism to be seen as legitimate, it
must consider the interests not just of shareholders, but of all

Several panelists see societal problems as opportunities for
entrepreneurial businesses. They believe it is possible for
business to help solve societal problems, improve the standard
of living in poor countries, and also earn an attractive
profit. In this way, market capitalism can be a legitimate and
sustainable solution for some of the world?s major problems.


Two separate panels shared their views on the challenges
faced by and the future of market capitalism, with very
different perspectives among the panelists. This summary
combines the key takeaways from both panel discussions.
HBS research shows that attitudes toward market
capitalism fall into four categories.

In anticipation of HBS?s centennial, several professors at
HBS thought it would be a fitting time to take stock of
market capitalism. Starting in 2006 (well before the current
financial crisis) a series of discussions was held with
business leaders from around the world. Two questions
were asked: 1) What are the threats, if any, faced by
market capitalism? 2) What should be done about those
threats, and by whom?
Several themes emerged. Business leaders from around
the world consistently saw the following threats associated
with market capitalism:

* Growing disparities in wealth and income.
* Concerns about environmental degradation and scarcity
of resources.
* Inadequate governance at the firm, national, and
international levels.
* Increasing concentration of financial power among
entities that lack transparency, such as sovereign
wealth funds and hedge funds.

While the perspective on these threats was consistent, the
views on the role and responsibility of business differed
greatly. These views can be categorized as:

* Business as bystander. Leaders in this group feel that
problems associated with market capitalism, like income
inequality, are most appropriately addressed by government.
Business should get out of the way.

* Business as activist. In contrast to the first group,
leaders in this category don?t trust government. They
feel that international institutions are inadequate and
that business should mobilize and be active in bringing
people and organizations together to effect change.

* Business as entrepreneur. Members of this group feel
that there needs to be a shift in how businesses think
and relate to other parts of society. These leaders
believe that business can play an important role in
addressing social problems. This means transforming
how companies do business and measure success.

* Business as usual. These leaders feel that the current
system of market capitalism is adaptable. They see the
current financial crisis as just another bump in the road
and believe the system will adapt. As a result, no
changes are needed in how business organizations
think and relate to the world.