Table of Contents
Backgroundof John Lewis Partnership ……………………………………………………………4
Principlesof conscious capitalism at JLP…………………………………………………………5
Principleof conscious leadership at JLP…………………………………………………………6
Principleof conscious culture at JLP…………………………………………………………….7
Theprinciple of Stakeholder integration at JLP…………………………………………………8
Theprinciple of conscious management anddecentralization……………………………………8
CriticizingJLP model Negative aspects of John Lewis Partnership……………………………15
Consciouscapitalism refers to ‘value-based’ activities that are concernedwith social and environmental aspects and are tied to businesseconomic interests. The concept of conscious capitalism as a businesspractice is gaining impetus in the modern economy. Consciouscapitalism in business means creating social economic value to allstakeholders in the society. Enterprises that exhibit consciouscapitalism principles have conscious leadership, conscious culture,and stakeholder integration and are governed through democraticmanagement structure.
JohnLewis Partnership follows the conscious capitalism practice in mostof business operations. John Lewis Partnership is an example ofconscious capitalism as exhibited through its conscious management,conscious culture, accountability, stakeholder integration andcreating value for the society. Conscious leadership and managementare practiced at JLP. Allemployees are co-owners in the business and are governed throughdemocratic leadership. In order to enhance management efficiency,there are three governing authorities that share power.
Theprinciple of conscious culture means operating business thatconsistently adhere and maintain harmony of interests across allstakeholders. JLP promotes conscious culture through its democraticmanagement structure, transparency, creating egalitarianism, loyaltyand creating trust among all stakeholders.
Stakeholders’integration is an important aspect of conscious capitalism. JLPpromotes transformative relationships with all key stakeholders inco-developing social and environmental solutions. All stakeholders(employees, customers, investors and the local authority) participateinclusively in JLP business activities. Lastly, JLP as an example ofconscious capitalism is involved actively in promoting social andenvironmental values in the local community.
However,as a conscious capitalism business, JLP has some limitations. JLPfocuses more on improving the welfare partners at times theenterprise should direct profits to social and environmental causes.In addition, JLP overlooks the interests of other stakeholders suchas clients and investors thereby limiting its brand as a consciouscapitalism enterprise.
Furthermore,JLP input in CSR are not well spelt out and there is limited resourceuse in promoting social and environmental agenda. Nonetheless, JLP isan example of conscious capitalisms as epitomized through itsconscious leadership, accountability, transparency, conscious cultureand loyalty.
JohnLewis Partnership is “an example of conscious capitalism”
Consciousrefers to being awake, mindful and concerned. A conscious capitalismbusiness is that which is social-economic based and upholds the ruleof law, fairness in wealth creation and promotes the economic valueof the society (Baron and Cayer, 2011: 344). Conscious capitalism areenterprises that have adopted strategies that are of value to peopleand the environment while pursuing economic initiatives (Mackey,2013:123). Conscious capitalism enterprises do not focus much onprofits but creating social value (Laszlo and Zhexembayeva,2011:156). In this essay, an assessment is made on John LewisPartnership and how the enterprise has embraced conscious capitalismprinciples. The discussion in this essay assesses JLP principles ofconscious capitalism with regard the enterprise conscious leadership,conscious culture, stakeholder integration, consciousmanagement and decentralization.To this end, this essay presents a discussion on JLP as a consciouscapitalism.
Briefsummary of John Lewis Partnership
JohnLewis Partnership is Britain’s retail business with departmentalstores and a several Waitrose stores (johnlewispartnership.co.uk).JLP is operated as a partnership entity that began in 1864. The firsttrust settlement came into effect in 1929 and JLP became a legalentity with profits been shared to all employees. Spedan Lewisenvisioned a business owned and run by employees to promote‘industrial democracy’ (Du and Sen, 2007: 23). By promoting‘industrial democracy’ through the integration of employees’interests in the business, Spedan instituted a conscious capitalismbusiness (Baron and Cayer, 2011: 314).
In1950, JLP became a legal Trust company with the name John LewisPartnership Trust Limited. In this aspect, JLP was to be managed bythe Trust Chairmanship and the deputy all appointed by the councils.John Lewis partnership is Britain’s largest co-ownership businesswhere approximately 63,000 staffs are partners(johnlewispartnership.co.uk). Workers share profits and are includedin the decisions making for firm. Workers have enabled JLP attain acompetitive edge among competitors (Korschun,Bhattacharya and Swain, 2014: 23).
JohnLewis Partnership major focus is making profits and social economicvalue and this has enhanced the business growth. The principle ofsocial economy and integrating stakeholders in the business hasenhanced the business attain its position as a competitive consciouscapitalism (Baron and Cayer, 2011: 340). JLP is governed through alegal framework shareholders has less influence in running businessoperations. Employees’ happiness is enhanced through jobperformance. The legal framework has ‘rights and responsibilities’which give staffs the obligation to perform well in their tasks(Laszlo and Zhexembayeva, 2011:156). These rights andresponsibilities are ways of enhancing the conscious capitalismbusiness (Zender, 2015:122).
Principlesof conscious Capitalism
Businessesthat practice conscious capitalism have specific principles thatidentify their businesses as conscious capitalism. In this case, JohnLewis Partnership conscious capitalism is assessed in relation to itsconscious leadership, conscious culture, stakeholder integration,accountability and empowerment.
ConsciousLeadership and management
Good leadership in business leadsto productive business, better working conditions and happy clients(Mackey,2013:311). At JLP,all employees are co-owners in the business governed through ademocratic leadership. Allemployees are co-owners in the business a democratic managementstructure run the business. Power is shared at JLP among threegoverning authorities. These authorities are the Board andpartnership council. Each employee has equal opportunity toparticipate in the management councils through a democratic process.The elected council leaders promote fair leadership by integratingemployees and other stakeholders in decision making for the firm.
JLPobjective is to create stakeholders value through strategies ofretaining and hiring competent people, easing management negotiationsand improving the social economic status of employees. On of thetenets of conscious capitalism and an embedded system as practiced bythe JLP is its ability to prioritize the interests of itsstakeholders before that of its investors. The results have beenincreased consumers and more profits thereby achieving theshareholders needs (Prahalad, 2006: 138).
Theconscious capitalism approach used by JLP is a form of strategy wherestakeholders’ interests are satisfied first and the returnstrickles down to the business (reputation and investors profits) (Duand Sen, 2007: 23). It is imperative to note that, while JLPprinciples and constitution is to pursue stakeholders’ interestfirst, the firm has never compromised on the price and quality of itsproducts (Mackey, 2013:321).
Theprinciple of conscious Culture
Theprinciple of conscious culture means operating business thatconsistently adhere and maintain harmony of interests across allstakeholders. Conscious culture is exhibited in businesses throughcreating self-sustaining, self heating and evolutionary operations(Mackey, 2013:213). JLP promotes conscious culture through itsdemocratic management structure and raising the social economy of itsemployees. John Lewis is a conscious capitalism that embracesconsciousness through conscious Culture practices (Prahalad, 2006:147).
Besidesa democratic management structure, JLP has upholds the principle ofradical transparency when conducting all business operations. Allemployees (co-owners) share, inquire, criticize and tell themanagement all that is important (Laszlo and Zhexembayeva, 2011:156).Each partner has a priority to voice any aspect deemed necessaryregardless of age, education or experience. A democratic managementculture is important in creating trust among the employees, customersand the management teams. By having a democratic management structureJLP is a conscious capitalism.
Anotheraspect of conscious culture at JLP is its conscious consumerism.Conscious consumerism requires that businesses sell and produceproducts that do not cause social problems (Zender, 2015:232). At JLPall stakeholders are treated with genuine heart, love and care.Relationship among JLP stakeholders is based on mutual loyalty,transparency and caring. In most of JLP activities employees aretaught to uphold high levels of integrity, loyalty and everyone istreated with dignity and respect.
Theprinciple of Stakeholder integration
Stakeholders’integration is an important aspect of conscious capitalism. At JLPemployees are important stakeholders and essential roles in thebusiness. Building transformative relationships with all keystakeholders is essential in co-developing social and environmentalsolutions. By integrating the interests of its stakeholders throughcore business activities, John Lewis serves as a conscious capitalism(Mackey, 2013:213).
Principleof conscious management and decentralization
JohnLewis Partnership is a conscious capitalism with a unique businessstrategy. First, as a conscious capitalism, JLP has a partnershiparrangement where all employees are partners (co-owners in thebusiness) and are governed by a democratic management structure. Inaddition, the partnership enterprise has a legal framework thatoutlines the rights and responsibilities of each member (Prahalad,2006:146). One aspect that distinguishes JLP from other businesses isits conscious business model that focuses less on profits butstakeholders happiness (customers and employees).
JohnLewis Partnership operates under embedded system as evidenced in itscore business activities. Stakeholders’ interests are integratedinto the business core activities as one way of promoting consciouscapitalism (Laszlo and Zhexembayeva, 2011: 215). In particular, thecore goal of JPL is value creation. This has been achieved bypursuing stakeholder value creation for workers and customers. At JLPthe enterprise has a well designed constitution and principles whoseaim is to create stakeholders’ value. Employees are importantstakeholders at JLP and are treated with utmost respect. Eachemployee at JLP has rights and obligation in participating in corebusiness activities (Prahalad, 2006: 142).
Integratingstakeholders’ interests in the core business activities is onetenet of embedded system and as an example of conscious capitalismbusiness (Du and Sen, 2007: 23). JLP is cognizant that employeesperform important tasks in the business and are able to increaseperformance if well treated. Studies in human resources affirm that,when intrinsic and extrinsic needs of employees are met, employees’motivation is improved and this makes them more innovative, creativeand responsible for their job(Smith, 2013:132).This is what JLP has achieved by establishing principles of corebusiness operations that focuses on members (employees) happiness.
Humanresources practitioners agree that a happy employee is a happy clientand this trickles down to the organization returns. In John LewisPartnership the principles outlines the purpose, members’relationships, sharing of profits and responsibilities. Each employeehas a purpose in right and responsibilities to enhance theirperformance. The partnership provides for profit sharing, equality inthe management and running of the firms’ affairs and this hashelped boost employees’ motivation to work hard and improve ‘their’business (Mackey, 2013:133). By integrating employees’ needs withinthe core of business activities, JLP qualifies as an embedded systemand an example of conscious capitalism (Mackey, 2015:2).
Inconscious capitalism enterprises, the focus is buildingtransformative relationships and co-develops solutions with all keystakeholders (investors, employees, clients and the larger community)(Laszlo and Zhexembayeva, 2011: 215). It is evident in the JLP casestudy, that the firm has outlined this aspect in its management andcore business activities. John Lewis Partnership has consistentlybuilt transformative relationships with clients, employees, the localauthority and charity organizations in its pursuit of sustainableconscious capitalism business. Employees who are key members in thefirm take part in volunteer drives with the local authority, schoolsand charity organizations to facilitate social and environmentaldevelopment. This is a key aspect in firms that have an embeddedsustainable business strategy (Lovins and Hawken, 1999: 213). At noone time, does JLP leverage on transactional relationship by usingits stakeholders as resources or inputs to be managed in thebusiness.
Radicaltransparency is an issue of importance for firms embracing embeddedsystem. At JLP the management structure and the principles ofoperations under which core business operations are conducted,dictates that all partners to consistently share, inquire, criticizeand tell the management all that is important (Laszlo andZhexembayeva, 2011:156). This is achieved by giving priority to eachindividual’s voice regardless of age, education or experience. Inthis way, JLP embraces an important sustainability concept of radicaltransparency while conducting key business activities (Lovins andHawken, 1999:323). Imbued in this aspect is the equality inparticipation during core business activities decision making eachemployee decision is considered an input in the management andimprovement of the firm and this is a reflection of an embeddedsystem (Laszlo, 2003:213). By enhancing accountability within thecore of business activities, JLP qualifies as an embedded system andan example of conscious capitalism.
Anotherkey aspect of conscious capitalism enterprises is the ability of abusiness to integrate environmental, health and social value as partof the core activities carried out without paying any price for suchintegration. In this respect, at JLP there is a well structuredintegrated program within the core of the business that deals withmembers’ health, pensions and the social welfare of the communitythrough partnership charitable (Pete and Rob 2013:3).
Accordingto conscious capitalism systems, business enterprises have anintegrated corporate social responsibility that is aligned along thebusiness activities as opposed to having periphery programs for CSR.At JLP business activities are part and parcel of promoting socialand environmental economy the business is driven by a uniqueinspiration where the pursuit of social and environmental goals isseen as a means of achieving its economic goals (Laszlo andZhexembayeva, 2011:212).
JohnLewis Partnership has a consistent innovation of new business modelin product designs and the process of business operations with an aimof leveraging on competition challenges from other businesses. Byinnovation JLP qualifies as an embedded system and an example ofconscious capitalism JLP acknowledges that the only way to survive inan unpredictable global society is through making hidden choices. Forinstance, most of the products sold at the retail have been packagedand processed from suppliers that have high concern for the socialenvironment (Du and Sen, 2010:13).
Itis important to note that JLP has made transformative relationshipswith other likeminded firms that operate under the principles of‘conscious business.’ In the recent past, the firm has been vocalalbeit through resource use in developing environment and promotingsocial welfare. In all these activities, JLP lives to its mission ofpromoting social economy before deriving its own returns thisexplains its popularity across the UK for its passion for socialvalue(Korschun, Bhattacharya and Swain, 2014:13).
Onestep towards the realization of a conscious capitalism business thathas an embedded system is through having the right start asepitomized in the JLP case study. One of the initial steps used byJLP founder was to set the pace for an embedded system throughco-ownership partnership with employees (Lovins and Hawken, 1999:127). In this way, JLP founders were able to introduce the businessto the next step of conscious capitalism systems by aligning the firmvalues and vision with those of its stakeholders (employees andinvestors). This was followed by incrementally designing newinnovative ways that captured the requirements of all stakeholdersthereby having an embedded system (Laszlo and Zhexembayeva, 2011:213).
Akey aspect in conscious capitalism enterprises is how they relatewith competitors. John Lewis as an example of conscious capitalismenterprise has a unique way of relating with competitors as have beenseen through its collaboration and partnerships to promote the socialand environmental good (Korten, 2001: 133). This has seen the firmmerge with several competitors thereby enlarging its business as wellas enhancing its sustainability. In all these aspects, John Lewis hasproved to be a conscious business with an embedded system (Mackey,2013:216).
CriticizingJLP model of conscious capitalism (Negative aspects of John LewisPartnership)
Onthe negative side, JLP should not focus entirely on improving thewelfare partners at times the enterprise should direct profits tosocial and environmental causes. There is danger in focusing too muchon partners profits as this may create the wrong impression to otherstakeholders (Fisher and Lovell, 2009:123). In addition, JLP overlookthe interests of other stakeholders thereby limiting its brand as aconscious capitalism. However, by focusing more on partner membersinterests, JLP lacks adequate conscious capitalism culture (Korschun,Bhattacharya and Swain, 2014:15).
Itis apparent from the case study that the business does not operateunder the whims of its investors to make profits but rather focus onworkers as the supreme purpose. This is bad and does not support theprinciple of conscious capitalism that agrees to the tenets ofembedded systems (Lovins and Hawken, 1999: 134). All stakeholdersshould be treated equally and their opinions addressed. Although, JLPaddresses the interests of employees first in order to achieveinvestors’ interests later, this should not always be the case(Pete and Rob 2013:6). Sometimes investors concern may be justifiedand beneficial in enhancing business operations.
Allstakeholders are important in any business and JLP appear inclined topartner members’ whims. The interests of customers are not alsowell addressed in the JLP model of conscious capitalism (Cannon,2012:123). Clients, lenders and suppliers are also key stakeholderswhose interests need to be well spelt in JLP activities. JLP onlyindicates its environmental responsibility by producing products thatabide by environmental protection. However, JLP should indicate itsprogram of educating clients on environmental protection throughcontrolled consumerism (Laszlo, 2003:218).
Furthermore,JLP input in CSR are not well spelt out and there is limited resourceuse in promoting social and environmental agenda. Although, JLP boastof an integrated CSR program through forging transformativerelationships with local stakeholders, the programs activities arenot well spelt out.
Theevaluation of John Lewis Partnership reveals a staunch consciouscapitalism enterprise through its multifaceted operations. In part,the business has integrated heath, environment, radical transparencyand social values as part of its key business activities (Mackey,2013:213). Stakeholders (employees) interests define how businessactivities are to be undertaken. In addition, the managementstructure of the business is aligned towards leadership and businesssustainability by promoting an ‘industrial democracy’ whereemployees’ voice matters in the management of the business.
Furthermore,as a conscious capitalism enterprise, JLP has developed a network ofrelationships with the local authority, community members and charityorganizations as part of social environmental development. Insummary, as an example of conscious capitalism enterprise andembedded system, JLP pursues social values, find smart solutionsthrough innovation and integrates the interests of its stakeholdersas part of core business without making trade-offs on price orquality. The result have been a competitive conscious business thatis unmatched by conventional businesses in the market.
However,JLP has significant limitations in its model of conscious capitalism.The partnership is focused more on particular stakeholders thanothers and this undermines the principles of conscious capitalism. Inaddition, the partnership has limited CSR resource and activitieswhich raises the ethical concern regarding the business.
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