California Management Review
California Management Review is a premier professional management journal for practitioners published at UC Berkeley Haas School of Business.
by John Lund-Delaossa
Image Credit | dariyah
It’s commonly understood that Nordic organizational models are created by the context of collaboration as a cultural value - but a more nuanced, systems view finds that a critical component is not just that values shape institutions and organizations, but that institutions and organizations shape cultural values. In the Nordics, this has led to an upward spiral in trust and prosocial values, unlocking better social and environmental outcomes than their American peers. This article calls for two intertwining goals: promoting shared ownership models and prosocial values in society. Both can be addressed through a recentered business school curriculum.
Robert Strand, “Global Sustainability Frontrunners: Lessons from the Nordics.” California Management Review, 66/3 (2024): 5–26.
Ann Harrison, Michele de Nevers, & Katherine Baird, “Transforming Business Education for Sustainability.” California Management Review, 67/2 (2024): 40-57.
The ownership economy is having a moment. Across the United States, efforts are underway to shift how our economy is owned by establishing companies in forms other than “traditional” publicly-traded or privately-held firms. With the proliferation of benefit corporations, perpetual purpose trusts, worker cooperatives, and Employee Stock Ownership Plans, we’re witnessing a renewed interest in ownership forms - what we can call “shared ownership” models.1 Behind this movement is an understanding that changing the ownership of a company changes the underlying incentives of the firm.2
Those in the Nordics know this maxim well, demonstrated by the popularity of the enterprise-foundation ownership model.3 Foundation-owned companies center a long-term perspective and purpose other than maximizing profits. An underlying purpose, such as foundation-owned Ramboll’s goals of centering employees and sustainability, is held sacrosanct for operational managers.4 However, while there’s a tie between shared ownership models and better outcomes for communities, it isn’t guaranteed. These structures enable good, prosocial decision making by shifting the timescale from short to long-term or from one-dimensional profit incentives to multi-dimensional wellbeing incentives. They don’t inherently create good, prosocial decisions. Models like foundation-ownership can be a double-edged sword as its primary effect is protecting the purpose that those in power write in its bylaws - whether good or bad. The outcomes still rest on a foundation of cultural values. For example, controversial Hobby Lobby is a famous example of a trust-owned company - think of it as Patagonia’s Christian sibling.5 Inspired by Patagonia’s conversion, the founder David Green decided to “choose God” and donate all voting stock to a trust to “fund Christianity.”6
So the question then becomes how do we promote prosocial values? How do we ensure that our better angels are not only seated in the boardroom, through the lens of longer-term and multi-stakeholder perspectives, but truly shine through in strategic and operational decisions?
The Nordics are well-known for cultural values of cooperation and collaboration.7 In shared ownership models, collaboration looks like a healthy tension between differing interests, in line with Arthur Okun’s work in balancing equality and efficiency through the market and democracy.8 This plays out in Nordic economic ownership norms: an enterprise-foundation owned company, such as Ramboll, operates with the tension of long-term care and sustainability against short-term demands for profit generation. Ørsted, a global leader in renewable energy, has a majority ownership stake from the Danish state at 50.1% - ensuring that public benefit takes precedence over competing stakeholder interests.9 Middlegrunden, the famous offshore wind project in Denmark, is half owned by Copenhagen’s municipal utility company and half by a cooperative of over 8,000 members.10 By design, these organizations have to balance potentially different interests and perspectives.
Taking a systems approach, it’s clear that positive feedback loops are crucial in understanding the Nordic context.11 Through the reinforcement of cultural norms enabled by shared ownership models, more Scandinavians are brought up in a prosocial, positive-sum cultural context. This intuitively makes sense - if the large firms and institutions affirm that employees, the environment, and partnerships with government are important, and even bake it into their ownership and governance structure, generations of people will grow up feeling this innately. As prosocial behavior is proven to be rewarded, it creates more of it - and proves that the systems we design end up designing us back.12
We can see this in the relationship between three components of Nordic society - business, government, and labor. The Nordics, especially Denmark, enjoy high levels of labor union participation. Tellingly, the modern Danish labor movement was established in 1899 with the September Settlement, when it was business leaders through the Confederation of Danish Employers that helped negotiate for and promote a strong labor union agreement.13 Today, employers, labor unions, and government come together to do the unimaginable: collaboratively solve wicked problems together. In 2024, Denmark passed the world’s first carbon emission tax on agriculture with farmer participation and agreement.14 This wouldn’t be possible without over a century of reinforcing trust through collaboration and balancing of positive tensions. This undercurrent of trust in institutions and organizations is how a successful welfare state is created and relied on. We can call this a societal upward spiral in both trust and outcome.
There hasn’t been a more critical time than now to discuss the intersection of business management with society in the United States. As trust in government plummets15 and corporate influence looms large,16 it’s incumbent on everyone, business management scholars perhaps most importantly, to critically assess our role in creating the polycrisis around us and how we must course correct. What we offer here is simple: to create a prosocial, sustainable world, we must reform how our economy is owned. We must create and foster shared ownership models that shift the underlying incentives behind firm behavior, and along the way, reform the relationship between business, government, and labor. From municipal-owned utilities to worker cooperatives, businesses and business leaders must recognize that sharing power is the only viable path forward. If creating and fostering these business models is paramount, then teaching these models is equally important. Business schools of the future must reform curriculum17 to truly center the creation of prosocial business leaders for tomorrow - and can start with incorporating shared ownership models as a central premise of the curriculum.
