Capitalism Works When Value is Created Rather Than Extracted, and Management Practices That Benefit Stakeholders Can Help, Fortune Article Argues

      The article in Fortune first notes that Americans’ views about capitalism are not great, with a recent poll showing that only 54% of Americans have a favorable view of capitalism, the lowest amount since tracking began 15 years ago. The authors, Ravi Dhar and Jon Iwata, suggest this is because more Americans see capitalism as extracting value rather than creating it. They call this a zero-sum view of corporations. Of course, the growing wealth of the already super-wealthy is likely one reason for this. I think that the level of unfairness perceived in growing income inequality tends to make us cynical, and capitalism is an easy target. However, they also note that:

“…the more than 200 CEOs we have interviewed over six years through Yale’s Program on Stakeholder Innovation and Management reject this zero-sum view. Their reasons, however, may not be what most people assume. They see creating value for customers, employees, partners and communities not as an alternative to shareholder value, but as essential to creating it over the long term.”

     This suggests that CEOs are indeed working to improve the tarnished reputation of capitalism by stressing stakeholder concerns, instead of focusing only on shareholder returns. The CEOs did admit that making a full stakeholder form of capitalism work is challenging, and they sometimes struggle to find the best ways to do it. The article explores three examples of stakeholder capitalism that have worked.

 

Example 1 Walmart: Design the enterprise around the interdependencies that create value.

     The first example is Walmart, one of the biggest companies in the U.S. The article notes that when Doug McMillon became Walmart’s CEO in 2014, store sales were in decline amid competition from Amazon and other online retailers, employee turnover was high, and its reputation as an employer was not great. Its share price had also been stagnating. In response, they worked on improving their own online retailing capabilities, employee satisfaction, and supplier optimization to keep prices low. Technology improved forecasting, inventory, and store operations. The new approach required big investments and sacrificing near-term profits, but it paid off.   

“In February 2026, Walmart became the first traditional retailer to exceed $1 trillion in market value. Comparable-store sales, which had been falling, recovered and then compounded. In 2024, Walmart appeared for the first time on Fortune’s list of the 100 Best Companies to Work For.”

“McMillon later described the management approach: “Over time, designing a business that  benefits all stakeholders is the best way to provide returns to shareholders.”

 

Example 2 Starbucks: Test management decisions against the value they create—and for whom.

     Brian Niccol became Starbucks’ CEO in September 2024. The company had previously removed amenities like condiments and other amenities, expanded its menu, and began charging extra for non-dairy milk. This, they say, led to degrading the customer experience and burdened the baristas. As in the Walmart case, the initial and near-term results were a loss of revenue.

“When Brian Niccol became CEO in September 2024, he saw these choices as symptoms of a company that had drifted from what made it distinctive, so he reversed course. Starbucks restored condiment bars, ceramic mugs and comfortable seating, and eliminated the non-dairy surcharge, even as customization had grown into a business generating more than $1 billion annually. The surcharge change alone reduced North American operating margin by about 60 basis points in its first quarter—a meaningful near-term financial cost.”

     Niccol made other changes, including simplifying the menu and store operations, and adding more staff. These changes reduced stress on employees and improved customer experiences.

“The early results are encouraging. Starbucks has reported four consecutive quarters of comparable-sales growth, with global comparable sales up 7.9% in its latest quarter. Since  Niccol took charge, its shares have risen more than 22%.”  

 

Example 3 Rio Tinto: Manage intangible sources of value with the same rigor as tangible ones.

     The third example involves global mining giant Rio Tinto and its work toward the moniker “social license to operate.” In 2020, the backlash from destroying 46,000-year-old rock shelters in indigenous lands in Australia resulted in several senior executives leaving the company, including the CEO. New CEO Jakob Stausholm immediately focused on restoring trust with the public and relevant stakeholders.

“Rio invested in community engagement, cultural-heritage expertise and the governance that supports both. Over the five years through 2025, Rio generated a 66% total shareholder return. Sustaining that kind of value creation requires managing not only the assets on its balance sheet, but the intangible capabilities that allow those assets to be developed.”

     The authors argue that a similar public trust issue has developed with backlash against AI data centers. Creating value, they suggest, is more than just producing a useful product.

“Customer trust and workplace culture are different kinds of intangibles, but they too can affect a company’s ability to create value.”

 

Stakeholder Capitalism Tweaked for Fairness Works

     They conclude the article as follows:

“Whether the public experiences capitalism as value creation or value extraction depends in no small measure on how companies are led. Declining confidence in capitalism is, therefore, a challenge to the practice of management. The know-how exists, but it remains uncommon. The task now is to make it a core management capability. That may be the most convincing answer business leaders can offer a public losing faith in capitalism.”

     Whether one calls it compassionate capitalism, stakeholder capitalism, or conscious capitalism, the evidence suggests that it works, not only for all stakeholders, but for the companies’ bottom lines as well.

   

 

  

References:

 

Americans are losing faith in capitalism. The problem isn’t capitalism. Ravi Dhar and Jon Iwata. Fortune. September 9, 2026. Americans are losing faith in capitalism. The problem isn’t capitalism