Researchers propose a radical new approach to economic performance that emphasizes cooperation, ethical behavior, and sustainability over traditional self-interest models. This forward-thinking paradigm, known as the “prosocial market economy”, offers a vision for businesses to achieve both financial success and positive social impact. Exploring evolutionary theory and insights from Nobel laureate Elinor Ostrom, the study suggests integrating principles of prosocial groups into organizational practices can foster long-term viability and sustainability.
Rethinking the Profit Motive
The conventional economic paradigm, driven by a compulsion for short-term profits is wholly unfit in an era that confronts us with challenges such as climate change, inequality and resource scarcity. A group of researchers from the University of Turku and other institutions in Finland, the United Kingdom, United States and UAE has come together to suggest a novel approach called the “prosocial market economy”.
The underlying principle is that companies which require cooperation, ethical conduct and sustainability are bound to succeed much more than organisations motivated purely by self-interest. Integration of the core design principles that have evolved for successful prosocial groups into management and performance measurement should lead to better returns on investment and clearly defined improvements in policy-making, argue the researchers, building from evolutionary theory and the pioneering work of Elinor Ostrom.
Building Sustainability into the DNA of Your Company.
The prosocial market economy widens the scope of the traditional Environmental, Social and Governance (ESG) discourse that is grounded in external validation through reducing green washing opportunity. This new model is not about bolting or adding on sustainability and partnership values to existing organizations; it incorporates literally renovating companies themselves, in converting the very culture of the corporation, from one where such a demand had itself already been transformed into its own core.
As Associate Professor Jan Pfister explains, “Our research illuminates why and how prosocial groups — those in which members prioritize both their own success and the success of others (sometimes referred to as a ‘love group’) — outperform selfish groups. It is consequences has the potential to re-write how we measure and manage performance, how we encourage organizational behavior which safeguards the world upon which our future depends…” The prosocial market economy can deliver the true, durable sustainability that stands in contrast to the fake ESG compliance hypocrisy being demonstrated by corporations.
Economic and societal success goes hand in hand.
The prosocial market economy provides a route out of this conundrum by enabling growing, profitable businesses that also are environmentally and socially responsible. These results support the idea that interdisciplinary research is essential to combine behavioral science and management studies into a sustainable and more collaborative economic system.
By doing this, the authors seek to help business executives with some concrete ideas” of how to balance teamwork for the greater good (and the greatest numbers) while still building successful businesses—indeed one could argue that this ends up being a brief on understanding the foundations of teaming overall. ‘This new model represents a new way of doing business that challenges the short-term profit based economic models. It is high time that companies move beyond this conundrum and explore strategies that can help them navigate their way through the complexities, a prosocial market economy framework which brings success and accountability together to solve today’s challenges while securing future prosperability for business as well as society.” As the pressure mounts for companies to adopt sustainable practices, this research is a clear light pointing in the direction of those trying to succeed in the 21st century.
