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Market capitalism, a system that has proven to be a remarkable engine of wealth creation, is poised for a breakdown. That sounds dire, and it is. Increasing income inequality, migration, weaknesses in the global financial system, environmental degradation, and inadequate government and international institutions are just a few of the forces that threaten to disrupt global market capitalism in the decades ahead. In conversations with business leaders around the world, the authors found that virtually all of them shared a deep concern for the sustainability of the market system, but their beliefs about how to respond varied widely. Some said that changing their behavior would be unnecessary or even inappropriate. Others were unsure how to deal with issues seldom thought to be the responsibility of individual firms. The authors call for business to be both innovator and activist in protecting and strengthening market capitalism. Instead of seeing themselves as narrowly self-interested players in a system that is overseen by others, business leaders must spearhead entrepreneurial activity on a massive scale-devising strategies that provide employment for the billions now outside the system, inventing business models that make better use of scarce resources, and creating institutional arrangements for coordinating and governing neglected and dysfunctional aspects of market capitalism.

Many companies in mature markets assume that the only reason to enter emerging markets is to pursue new customers. They haven't yet realized the potential for innovation in developing countries-though a few visionary multinationals are tapping that potential for much-needed ideas in products and services. General Electric, with its portable ultrasound technology, and Intel, with its inexpensive Classmate PC, are two examples. Other companies see the potential but find it hugely difficult to develop ideas in unfamiliar settings, much less turn them into global businesses: C-level executives may resist disruptive concepts, or their organizations may lack the processes necessary for absorbing outside innovation. The authors' research shows that a new kind of manager-a "global bridger"-can help these companies take advantage of the innovative energy that permeates emerging markets. Global bridgers tend to be good at developing and maintaining relationships of trust; they understand emerging markets; they have long tenure with their companies; and they are skilled at selling their ideas internally. They have learned to intentionally observe customers, suppliers, and competitors. They cultivate "translators"-people with insights into the local environment. And they test their ideas before taking them back to headquarters, where they rely on advocates to help promote their ideas.

As a young woman, Bachelet was tortured and exiled by the Chilean government. She went on to become the country's first female president. Here's a look at her approach to leadership.

This case describes an IQ experiment in which 66 students, under the direction of their professor, used Excel to generate simulated IQs. The instructions were such that the generated IQs should have come from a normal distribution with a mean of 100 and standard deviation of 15. The sample average IQ, however, was 104.3. Students are asked to use their data-analysis skills to make sense of the results. The data set also contains gender (male or female) and fall section (A, B, C, D, or E) for each student, which allow for additional statistical analyses (tests of equality of means).

Fairmount Minerals, producer of industrial sand in the United States, embarked upon a journey of sustainable development in 2005. The mining industry had an unenviable reputation that threatened the sustainability of the company. Given the strong personal values of stewardship of the planet and community held by the CEO, and because of the reputation of the industry, Fairmount Minerals was moved to action to integrate sustainable development in every step of its value chain - from mining to shipping the product to the customer. Fairmount's journey had been exciting and full of hard work and dedication to the practice of sustainable development. The three broad themes of people, planet and prosperity resonated in all facets of the company. Starting in 2006, each year the organization generated a set of bold goals and monitored its progress toward these goals. These goals clearly spelled out the benefit for the environment and the planet. The question that remained was how this benefit translated into prosperity for the stakeholders and the company. Under what conditions did this stewardship of planet and people lead to increased growth for the company?

Fairmount Minerals, a leading producer of industrial sand in the United States, embarked upon a journey of sustainable development in 2005. The mining industry had a reputation for environmental harm that threatened the sustainability of the company. Given the strong personal values of stewardship of the planet and community held by the CEO, and because of the reputation of the industry, Fairmount Minerals sought to integrate sustainable development in every step of its value chain — from mining to shipping the product to the customer. Starting in 2006, each year the organization generated a set of bold goals and monitored its progress toward them. These goals clearly spelled out the benefit for the environment and the planet. The question that remained was how this benefit translated into prosperity for stakeholders and the company. Under what conditions did this stewardship of planet and people lead to increased growth for the company?

In the fall of 1996, Bestseller became one of the first international fashion companies to enter the Chinese retail market. Earlier that year, Allan Warburg and Dan Friis had made contact with the CEO of Bestseller A/S, Troels Holch Povlsen, regarding the prospect of selling Bestseller brands in China, where they felt there were many business opportunities. Holch Povlsen found himself convinced by the two entrepreneurs’ enthusiasm for the Chinese market.<br><br>They quickly proved that they had been right about China. A decade after the first store opened, Bestseller China had almost 2,000 stores, and accounted for more than one-third of the total turnover of Bestseller A/S. The secret to Bestseller China’s extraordinary success was its ability to sell price-competitive European designs with a Chinese touch, which was achieved by locating all production in China and modifying Bestseller A/S’s designs to suit the size and tastes of Chinese middle-class consumers. With a 10-year headstart over potential competitors, Bestseller China had by the end of 2007 managed to establish a strong presence in China. However, high economic growth and the growing middle class were making the Chinese market highly attractive for other companies. Although global giants, such as Zara and H&M, were devoting big chunks of their budgets to entering China and capturing market share, these aggressive new entrants were not Bestseller China’s biggest concern. In fact, the competition from local companies was seen as the real threat.

In January 2010, global automotive manufacturer Toyota faced the task of notifying customers of a recall that involved a faulty accelerator pedal on 1.7 million vehicles. Toyota had already come under intense public scrutiny the previous year over a floor mat recall that affected 4.2 million vehicles. In an attempt to reach the masses for the current recall, Toyota created a letter to customers that was featured in major newspapers and on its website. The letter caused outrage as Toyota did not apologize to consumers. Instead, it talked about the company’s 50-year heritage and how Toyota was halting production to focus on fixing the vehicles that were on the road. The president of Toyota Motor Sales, U.S.A. Inc. needed to identify the problems with the letter before drafting a new one.

In August 2010, Phaneesh Murthy, chief executive officer of iGATE Global Solutions, was reflecting on the strategic options before him with regard to the future of iGATE. The options were two-fold. Should iGATE continue to focus on its traditional markets of North America and the European Union, or should it change track to focus on India? The U.S. and E.U. markets had been growing at less than four per cent since 2008, and this would likely continue until 2013. However, iGATE had developed a product tailored to the specific needs of customers in the developed world who were facing the economic downturn. Known as iTOPS, it was showing the promise of adding to both the top line and bottom line of iGATE. <br><br><br><br>The IT-enabled services market in India was growing at an average of 14.5 per cent for the period of 2008-2013. The promise of top-line growth had drawn many global business process outsourcing (BPO) companies to India. iGATE would be just another player in India with plain vanilla offerings and no differentiation. The domestic market was competitive. The commoditization of its BPO products and services had, of course, opened up an opportunity to develop a product tailored to Indian needs, but iGATE had no such offering in the pipeline. It was in this context that Murthy wondered what strategy he should pursue: iTOPS or India?

Dr. Edson Bueno created Amil, Brazil's largest health insurer. Unlike many others, it is vertically integrated. Dr. Bueno has two opportunities for growth. Which, if any, should he pursue?

This case is a supplement to Toyota: Accelerator Pedal Recall (A).

"This is a supplement to Toyota: Accelerator Pedal Recall (A). In January 2010, global automotive manufacturer Toyota faced the task of notifying customers of a recall that involved a faulty accelerator pedal on 1.7 million vehicles, spread across eight different models. In some cases the faulty accelerator pedal was found to stick in depressed position and be slow to return to the idle position, causing unintended vehicle acceleration. With the throttle stuck in the open position a vehicle would continue to accelerate while the driver is trying to brake and slow the vehicle down. Toyota had already come under intense public scrutiny in the previous year over an existing floor mat recall that affected 4.2 million vehicles. Lessons in the automotive industry had been learned the hard way from tire manufacturer Bridgestone. A public backlash occurred in 2003, with class action law suits against Bridgestone for faulty tires that caused some vehicles to roll over. In an attempt to reach the masses, Toyota created a letter to customers that was featured in major newspapers and on its own website. The letter released caused anger and outrage as Toyota stayed clear away from apologizing to consumers. Instead it talks about the companies 50 year heritage and how they are halting production to focus on fixing the vehicles that are on the road. Just days later Toyota drafted and released a second letter to customers. This time they attempt to use better language, but missed the mark on taking full accountability for the problem."

De Kuyper Royal Distillers was a 300-year-old family firm in the Netherlands and produced the largest variety of liqueurs in the world. The firm had always been owned and controlled by the De Kuyper family. In 2009, Bob de Kuyper, the 10th generation to own and run the firm, retired from his position as managing director and an outsider was brought in as the interim managing director. In January 2010, Marc de Kuyper, the eldest son of Bob de Kuyper, worked for an outside firm in a marketing position. He had a strong desire to join the family firm and was trying to decide how to convince his father, and the family firm's supervisory board, that he had the capabilities to eventually take a leadership role in the family business. Was there a future for Marc at the family firm? What could he do, if anything, in the succession process?

In May 2011, Alan Joyce, chief executive officer of Qantas Group, needed to think about the future strategy of the airline group. Over the past few years, it had launched a number of strategic initiatives to defend its current position and penetrate new markets and segments. Qantas had discontinued its first-class service on many flights, opting to bolster its business-class service instead. Its forays into the budget travel segment through Jetstar proved to be successful and contributed to the overall financial performance of the group. Qantas had also placed a bet on emerging economies such as China, despite experiencing adverse performance in its international routes. However, the financial performance of the company was far from healthy. Qantas was fighting hard to retain its Australian position in the face of attempts by Virgin Blue and Tiger Airways to compete aggressively and gain market share. Analysts wondered whether Qantas was trying to do too much and, in the process, spreading itself too thinly. Would the Qantas Group be better off simply prioritizing across its various alternatives, or did it have sufficient resources (financial as well as managerial) to pursue all the initiatives? And if a narrow focus was better, then which strategic alternatives should Qantas pursue aggressively?

De Kuyper Royal Distillers was a 300-year-old family firm in the Netherlands and produced the largest variety of liqueurs in the world. The firm had always been owned and controlled by the De Kuyper family. In 2009, Bob de Kuyper, the 10th generation to own and run the firm, retired from his position as managing director and an outsider was brought in as the interim managing director. In January 2010, Marc de Kuyper, the eldest son of Bob de Kuyper, worked for an outside firm in a marketing position. He had a strong desire to join the family firm and was trying to decide how to convince his father, and the family firm's supervisory board, that he had the capabilities to eventually take a leadership role in the family business. Was there a future for Marc at the family firm? What could he do, if anything, in the succession process?

New York Fries’ president and executive vice president were preparing for the next biannual meeting of domestic and international franchisees. They planned to provide an update on all aspect of corporate strategy and planning for the year ahead, but they only had a few days to formulate a new international growth strategy. The president and executive vice president were hesitant to expand into new territories partly due to poor experiences in Australia and South Korea, yet international franchisees had encouraged them to investigate promising areas of expansion into China and India. Complicating matters was the future development of the company’s chain of premium hamburger restaurants. While New York Fries was a well-received brand in Canada, it had not yet decided if and how to internationalize the brand. How could the president and executive vice president pursue new opportunities while maintaining their premium brands of French fries and hamburgers?

New York Fries' president and executive vice president were preparing for the next biannual meeting of domestic and international franchisees. They planned to provide an update on all aspect of corporate strategy and planning for the year ahead, but they only had a few days to formulate a new international growth strategy. The president and executive vice president were hesitant to expand into new territories partly due to poor experiences in Australia and South Korea, yet international franchisees had encouraged them to investigate promising areas of expansion into China and India. Complicating matters was the future development of the company's chain of premium hamburger restaurants. While New York Fries was a well-received brand in Canada, it had not yet decided if and how to internationalize the brand. How could the president and executive vice president pursue new opportunities while maintaining their premium brands of French fries and hamburgers?

"In October 2005, PPG pioneered a new model for online apparel retailing in China. Targeting low-end men's apparel, PPG's new business model met with great initial success due to its responsive supply chain, lighter distribution channel, and the brand established by costly advertising. However, underlying limitations of PPG's business model led to its eventual failure. Followers learned from both PPG's success and failure. The best practices of VANCL provided a good example of the evolution of a business model, which made VANCL the new leader in the online retail industry. To show the evolving characteristics of the apparel retailing business model, this case describes a successive two-stage story, in which each company made improvements based on other forerunners."

In October 2005, PPG pioneered a new business model for online apparel retailing in China. Targeting men’s low-end apparel, PPG’s new model met with great initial success due to its responsive supply chain, lighter distribution channel (i.e. no physical stores), and costly advertising. However, underlying limitations of PPG’s business model led to its eventual failure. Followers learned from both PPG’s successes and failures. VANCL, another online apparel retailer, provided a good example of the evolution of a business model that created a leader in the online retail industry. To show the evolving characteristics of the apparel retailing business model, this case describes a successive two-stage story, in which each company made improvements based on other forerunners.

Late in 2010, Credit Suisse CEO Brady Dougan and his team closed in on the decision of whether or not to issue contingent capital, which Swiss regulators would require by 2019. There were a number of substantial issues facing Dougan and his team, including whether contingent capital would provide sufficient loss absorption when called upon, would there be sufficient demand for this new instrument, would it be cost effective capital, and what were the risks to Credit Suisse' reputation with clients and regulators if an issue did not go well? In addition, The Basel Committee, the body that recommended global bank capital standards, had decided that much of the existing bank "hybrid debt" would no longer count as capital for regulatory purposes, meaning banks would need to replace this portion of their equity accounts with some other form of capital. However, Basel had yet to decide whether contingent capital would be allowable in the new "Basel III" regulatory regime.