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THE FUJI DECLARATION IN ACTION:
BUSINESSThe Business Sector Path Towards a
Civilization of Oneness with Diversity!

by:Lori D. Kendall, Ignacio Pavez, Lili Bao, and Chris Laszlo, Ph.D.

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The Business Sector Path Towards a
Civilization of Oneness with Diversity!
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Ignacio Pavez, Chile

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Lori D. Kendall, USA

Advisor:Chris Laszlo, Ph.D.

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CASE WESTERN RESERVE UNIVERSITY
Cleveland, Ohio: United States of America

Lili Bao, China

Study Overview
In the Spring of 2014, The Secretariat of The Fuji Declaration sought background studies
in four spheres (the economy, politics, media, and business) to show the achievability of its goals
for humanity as expressed in the Fuji Declaration, provisionally titled at the time,“AWAKENING THE DIVINE SPARK IN THE SPIRIT OF HUMANITY: For a Civilization ofOneness with Diversity on Planet Earth.” The Declaration points to the possibility of aworldwide shift in consciousness from materialism-centered sustainability to full-spectrum
flourishing.
This report presents the background study in the sphere of business. It outlines the path
toward a Civilization of Oneness with Diversity as it is being shaped and advanced by business.
It offers clear evidence that the purpose and organizing principles of business are evolving froma worldview of tribalism, scarcity and mindlessness to one of interconnectedness, respect for all
living things, and the divine spirit of Oneness.

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In this study, we show:•

The role of what we term positive institutions to awaken the divine spark in thespirit of business•

Generative organizing to awaken the divine spark in the spirit of organizational
citizens•

Benevolent leadership to awaken the divine spark in the spirit of business leaders•

Business as a force for good: why and how companies engage in positively
contributing to society and earth.

Our findings are built on a theory construct developed in earlier research by the authors:
the arc of interconnectedness that highlights the evolution of business towards oneness. The
study identifies a profound shift in the evolutionary process of business. We call this shift the
ontological threshold because it embraces a deep transformational change in the underlying logic
of business to one that contributes to awakening the divine spark of humanity.

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TABLE OF CONTENTS!

How business has contributed to the problem ...........................................................................1
The theory behind an awakened business..................................................................................2
The stages of business evolution towards oneness ....................................................................8
How companies follow the arc of interconnectedness ...........................................................11
Crossing the ontological threshold ..........................................................................................25
Conclusion ...............................................................................................................................28
Bibliography ............................................................................................................................29!

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HOW BUSINESS HAS CONTRIBUTED TO THE PROBLEM“There is one and only one social responsibility of business—to use its resources and engage inactivities designed to increase its profits—so long as it stays within the rules of the game, whichis to say, engages in open and free competition without deception or fraud” — Milton Friedman,
American Economist and Nobel Laureate.

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When Friedman wrote these words in a 1970 article for the New York Times,
neoclassicists in the liberal tradition were shaping a coherent set of economic theories thatshaped financial activity, government policies, business paradigms, and public debate for the
next forty years. These theories centered primarily on: (1) the individual as the unit of analysis;(2) utility and rational choice theory; (3) transaction costs as an efficiency-driven set of
relationships between agents; and (4) an acceptance of hierarchy as a control mechanism to
produce output in the most efficient means possible through centralizing management anddecision-making (Moe, 1984).
The Fuji Declaration business sector study suggests that the heart of the problem is
ontological. It proposes a construct that we call the “arc of interconnectedness” in which there isa clear divide separating two paradigms of organizational thinking. The first paradigm holds thatbusiness in the larger role of society is a utilitarian system with the assumption that individuals
and companies will do the right thing because market forces will create the necessary
opportunities for doing so. The second paradigm is grounded in connections and bonds between
individuals and community, echoing what Martin Buber distinguished in I-Thou (1923), for notjust close ties between individuals within a small familiar network (Putnam, 1995) but aconnection and an awareness of the various expressions of life at a deep physical, emotional, andspiritual level.
We argue that there is a significant divide between these paradigms to explain the
anticipated evolution of business. Understanding this divide is critical to our ability to shift
ourselves as well as the role of business from utility maximizing to that which fosters: (1) our
deep sense of interdependence and interconnectedness with each other; (2) the intersecting
stakeholder relationships between the various actors, institutions, and organizations wherebusinesses operate; and (3) the natural and social environments that support the functions of thebusiness and in turn are supported and are regenerated by the businesses themselves (Ehrenfeld& Hoffman, 2013; Laloux, 2014; Laszlo & Brown et al., 2014).
The study is organized as follows. First, a theoretical framework of the study is
introduced that establishes the basis for understanding emergent business models of humanflourishing. Next, we walk through what we learned in our investigation, and we conclude ourstudy with a final reflection on why we have reasons to be hopeful for the future of business asan agent of world benefit.

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THE THEORY BEHIND AN AWAKENED BUSINESSNew perspectives in business are challenging the paradigms of the industrial era(Ehrenfeld, 2008; Senge, Smith, Schley, Laur, & Kruschwitz, 2008) to see sustainability as “thepossibility that humans and other life will flourish on the Earth forever” (Ehrenfeld, 2008: 49).
This new understanding of sustainability —called “sustainability-as-flourishing” (SAF)— hasallowed the emergence of new types of business, which are created and organized to have apositive impact in the world (Cooperrider & Godwin, 2011; Ehrenfeld & Hoffman, 2013; Haigh& Hoffman, 2012; Laszlo & Brown et al., 2014).

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Positive institutions: awakening the divine spark in the spirit of businessBusiness as the most powerful and dominant institution in society (Bakan, 2004;
Gladwin, Kennelly, & Krause, 1995), is a good starting point to understand (and change) the
multilevel dynamics that are in play when thinking about a flourishing world (Hawken, 1993).
New approaches have been developed to craft business as positive institutions (Thatchenkery,
Cooperrider, & Avital, 2010). According to these approaches, businesses are not primarily
focused on maximizing shareholder returns or reducing harm, but on creating prosperity and wellbeing in the whole system in which they operate. Those positive institutions assume a greater purpose
and responsibility for the whole, embracing a greater sense of connectedness and care (Ehrenfeld,
2008; Eisler, 2007; Laszlo & Brown et al., 2014).
A key feature of positive institutions (in the business context) is the commitment toreconcile the profit motive with making a positive impact in the world (doing well by doinggood), an idea which has been captured by the concept of sustainable value: “a dynamic statethat occurs when a company creates ongoing value for its shareholders and stakeholders” (Laszlo& Zhexembayeva, 2011: 42). Paradoxically, companies that embed sustainable value (adopting
the seemingly opposite goals of profit and care) at the core of their business strategy are likely toperform better than the average in the industry (Laszlo & Zhexembayeva, 2011; Mackey &Sisodia, 2013; Porter & Kramer, 2011; Sisodia, Wolfe, & Sheth, 2007) because the changing
context of the business environment (declining resources, transparency and rising expectations)has created new business risks and opportunities in every sector of the economy (Laszlo &Zhexembayeva, 2011).
Furthermore, the evolution of business —as an embedded system within society— hasallowed us to witness the emergence of new organizational forms which have come to compete not
only on the quality of goods and services, but also on the ability to produce positive social andenvironmental change. Those types of organizations, usually referred as “hybrid organizations” or“benefit corporations” (Battilana & Dorado, 2010; Haigh & Hoffman, 2012; Honeyman, 2014), areconsidered examples of positive institutions and are called “sustainability-driven”, because they havedemonstrated the capacity of for-profit companies to develop generative and mutually enrichingconnections between business, communities and the natural environment” (Haigh & Hoffman, 2012).

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Recently, the conceptualization of the hybrid organization has been expanded to not only
create benefit to society, but to raise the level of consciousness in all of humanity. In doing so,these companies have been devoted to enhancing our sense of connectedness —to one’s own life
purpose, to others, and to the natural world— in order to truly embrace SAF. These types ofcompanies, referred to as “flourishing organizations”, highlight the importance of intentionallyelevating our individual and collective consciousness in order to reflect these elevated states ofthe mind to the world (Laloux, 2014; Laszlo & Brown et al., 2014; Senge et al., 2008).

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Generative organizing: awakening the divine spark in the spirit of organizational citizens
Traditional business practices have been focused on performance and effectiveness(Cameron & Quinn, 2006; Denison, 1997; Kotter & Heskett, 1992) with the purpose of
maximizing financial returns. Positive institutions however, are conceived not just as
performative entities (focused on effectiveness), but also as transformative ones (focused on
positive impact). Consequently, these types of companies show different patterns of individualand collective behaviors, which are focused on making our world a better place to live in.
Positive Organizational Scholarship (POS) has been a major stream of knowledge andpractice devoted to understanding those organizational dynamics. POS research “focuses
explicitly on the positive states and processes that arise from, and result in, life-giving dynamics,
optimal functioning, or enhanced capabilities or strengths” (Dutton & Glynn, 2008: 693). Hence,
the three core aspects of a POS perspective, as described by Dutton & Glynn (2008), are closely
related to the SAF perspective. Those three elements are: (1) concern with flourishing; (2) focus
on the development of strengths or capabilities; and (3) emphasis on the generative, life-giving
dynamics of organizing.
Within the field of POS, an important concept for understanding organizational dynamics
from a strength-based perspective is positive deviance (Spreitzer & Sonenshein, 2003, 2004)
which is defined as “intentional behaviors that significantly depart from the norms of a referent
group in honorable ways” (Spreitzer & Sonenshein, 2004: 841). The concept of positive devianceis helpful to re-think the organizing processes towards SAF because it offers a more precise way
to understand what a positive institution is. Accordingly, a positive institution can be defined as
an organization that carries out an intentional strategy (i.e. voluntary by nature) that moves thecompany beyond the traditional way of doing business (i.e. beyond legislation compliance,
efficiency, and shareholder value creation), in order to produce a positive impact (i.e. honorable
behavior, focused in creating good rather than avoiding harm) in the system that supports —andis impacted by—the company’s operations.
In alignment with this definition (Cooperrider & Godwin, 2011), positive institutions are
centers that “elevate our human strengths, connect and magnify those strengths, and thenultimately, serve to refract more wisdom, courage, love and other human strengths onto theworld stage.” Thus, they develop a generative process of organizing, and give a purpose toorganizational members that help people to experience the wholeness of the systems of which© 2015 The Fuji Declaration

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they are a part, which in turn helps them to embody more conscious decision-making processes
that enhance the positive impact of the company in the world.
The organizing processes for building a culture of oneness, characterized by a network of
nurturing relationships, is essential to understanding the internal dynamics of the organizationthat allow the creation of common good. In this regard, David Cooperrider and colleagues havebeen pioneering the creation of a theory of change based on elevating human virtues and/or
strengths (Cooperrider & Godwin, 2011; Cooperrider & Srivastva, 1987; Cooperrider &Whitney, 2005; Cooperrider, Whitney, & Stavros, 2008). The organizing processes under thisapproach for change are described as “the cooperative co-evolutionary search for the best inpeople, their organizations, and the world around them. It involves the discovery of what gives‘life’ to a living system when it is most effective, alive, and constructively capable in economic,
ecological, and human terms [...] It involves the art and practice of asking questions thatstrengthen a system’s capacity to apprehend, anticipate, and heighten positive
potential” (Cooperrider et al., 2008: 3).
In alignment with the Fuji Declaration, this theory of change is helpful to understand theorganizing processes that sustain the harmony of the whole, because it is based on affirming thedivine spark of every human being to create flourishing organizations. This approach assumes
that organizations are centers of human connectedness that nourish the human spirit. Thus, theconceptualization of organizational life is based on a renewed understanding of the nature of thehuman being (compared to traditional approaches) and authenticity, purpose, andinterconnectedness to others and to the natural environment (Ehrenfeld, 2008; Laszlo & Brown
et al., 2014).
Finally, organizational theory has evolved to increasingly consider spirituality as a humanexperience that can be cultivated and enhanced as part of the organizational life (Duchon &Plowman, 2005). Recent research in this area has shown that spirituality in the workplace has
several benefits, like the enhancement of employee well-being (individual health perspective),
the elevation of the sense of interconnectedness and community (interpersonal perspective), andthe cultivation of purpose and meaning at work (philosophical/transcendent perspective)(Karakas, 2010). As such, workplace spirituality provides a clear path to enhance the capacity ofan organization to embrace a holistic development of employees, which will in turn, help
cultivating a generative process of organizing that continually —and consistently— frees thehuman spirit towards oneness.

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Visionary alchemists: awakening the divine spark in the spirit of business leaders
Central to the development of positive institutions is the role of organizational leaders,
because they are called to initiate —and sustain— the necessary transformations in business tocreate a thriving and prosperous world. For addressing that ideal, organizational leaders (at any
level) have had to depart from traditional ways of conducting business (i.e. mechanistic and© 2015 The Fuji Declaration

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hierarchical relationships), in order to capture the essence of the human being (i.e. our divine
spirit) as a way to enact the organizing principles towards SAF.
In doing so, they had to learn a new set of leadership skills, which are closely related topersonal development practices. Some of those skills are: to continually renew themselves atwork, to engage people from the heart, to elevate the strengths of a person for harnessing his/herhighest potential, and to create an elevated purpose for every organizational member (Boyatzis &McKee, 2005; Boyatzis, Smith, & Blaize, 2006; Cameron, 2013; Covey, 2005; Dutton, Spreitzer,& Achor, 2014; Fry, 2003; Laszlo & Brown et al., 2014; Whitney, Trosten-Bloom, & Rader,2010).
In alignment with the business challenges of the 21st century, new leadership models havebeen developed with the aim of sparking the generative interactions that will allow business to
become a positive institution. One of those leadership models is called spiritual leadership,
which was created to specifically address the spiritual component of human interaction inorganizations. This model entails two main components: “1) creating a vision whereinorganization members experience a sense of calling in that their life has meaning and makes adifference; and 2) establishing a social/organizational culture based on altruistic love whereby
leaders and followers have genuine care, concern, and appreciation for both self and others,
thereby producing a sense of membership and feel understood and appreciated” (Fry, 2003: 695).
Another important model is called benevolent leadership, which was created with the
purpose to offer a theoretically sound basis to create common good in organizations. Benevolent
leadership is defined as “the process of creating a virtuous cycle of encouraging, initiating, andimplementing positive change in organizations through: a) ethical decision making and moral
actions, b) developing spiritual awareness and creating a sense of meaning, c) inspiring hope andfostering courage for positive action, and d) leaving a legacy and positive impact for the larger
community” (Karakas & Sarigollu, 2012: 537). This leadership model is unique because of theway in which it defines —and integrates— the patterns of behavior that characterizes leadership
practices aimed to create common good. The benevolent leadership model constitutes a solid
basis for the creation of societal welfare.

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Business as a force for good: why companies engage in positively contributing to society
The historical evolution of the field of business in society has shown that, despite thedifferences among the several streams of research that constitute the field (e.g. corporate social
responsibility, corporate citizenship, corporate sustainability, social issues in management, andcorporate environmentalism, among others), there are some common elements that would help
an understanding of why —and how— business organizations positively contribute to society. In
particular, there are three elements that are closely interlocked and act interdependently when
configuring business as a force for good (Pavez & Beveridge, 2013): 1) value generation logic,
2) forces or drivers of business practices, and 3) stages/levels. The first two elements (i.e. value
generation logic and forces) have been used by scholars to explain why companies engage in© 2015 The Fuji Declaration

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using business as a force for good, whereas the third element (i.e. stages/levels) represent how
business implement and accomplish the creation of common good (Pavez & Beveridge, 2013).
The value generation logic refers to the underlying assumptions that people hold behindthe motivation to be involved in SAF strategies. Those logics have been classified as
instrumental (profit logic), normative (social logic), and integrative (combination of social andprofit logics). The instrumental or profit logic assumes that companies are instrument for wealthcreation and that is their crucial responsibility. Thus, SAF strategies are considered means to theend of profits. Companies that follow this approach are involved in SAF strategies because they
believe it is good business (Laszlo & Zhexembayeva, 2011; McWilliams, Siegel, & Wright,
2006; Wallich & McGowan, 1970). The normative or social logic assumes that the relationshipbetween business and society is embedded with ethical values. Under this logic companies
should put their ethical obligation above any other consideration, even if it damages theirfinancial returns. Consequently, companies that follow this approach decide to implement SAF
practices because they believe it is the right thing to do (Garriga & Melé, 2004). Finally, theintegrative logic reconciles the two dialectical logics previously mentioned (social and profit).
Under this approach people feel a deep desire to do good for society, but the financial health ofthe company is equally important. Companies that follow this approach support the idea that
wealth creation is the mechanism by which companies, under the forces of the current economic
system, should use to create societal welfare (Gladwin, Krause, & Kennelly, 1995; Haigh &Hoffman, 2012; Honeyman, 2014).
The forces represent the drivers of business practices towards SAF. Those drivers could
be internal or external, and are helpful to understand why companies engage in SAF strategies(Swanson, 1995; Wood, 1991). Internal forces represent the individual and organizational
motivations towards SAF strategies (e.g. the moral responsibility and personal values ofdecision-makers, the social values of the company, the organizational identity, and the internal
capabilities of the firm, among others) (Clarkson, 1995; Hart & Milstein, 2003; McWilliams etal., 2006; Sharma & Henriques, 2005; Sharma & Vredenburg, 1998; Waddock, 2008). External
forces, on the other hand, are the factors that trigger the implementation of SAF strategies, which
are beyond the boundaries of the company (e.g. pressure from civil society, legal regulations andindustry standards, among others). They typically represent what is expected of business interms of normative legitimacy (Suchman, 1995; Wood, 1991), as well as the mechanisms —coercive, mimetic and normative isomorphism— that produce similar practices and structures
across other organizations (Campbell, 2007; Delmas & Toffel, 2004; DiMaggio & Powell, 1983).
Finally, the stage models specifically focus on how companies integrate SAF from a
dynamic and long-term perspective. These models assume that organizations demonstratedifferent levels of acceptance, understanding and integration of SAF principles at different points
in time. They emphasize the dynamic and evolutionary nature of the developmental process
towards SAF, during which sustainability-related initiatives become more integrative,
sophisticated and demanding. Stage models are generally composed by the elements that help
companies to institutionalize SAF, which includes the organizational structure, the organizational© 2015 The Fuji Declaration

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culture, stakeholder relationships and the leadership logic/style (Maon, Lindgreen, & Swaen,
2010a; Mirvis & Googins, 2006; van Marrewijk & Werre, 2003).

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THE STAGES OF BUSINESS EVOLUTION TOWARDS ONENESS
One of the purposes of the Goi Peace Foundation research was to uncover theevolutionary process that business follows for contributing to the creation of a flourishing world.
Our findings suggest that firms that are the furthest along on this evolutionary journey are
creating engagement models within their companies that have the potential to awaken the divine
spark of humanity across stakeholders; much like stones thrown into the pond create a ripple
effect, or the beat of a butterfly’s wings creates a hurricane thousands of miles away.
This is the nature of interconnected, breathing, and organic systems. We cannot
understand these models from Western reductionism, or the study of systems in isolation, but can
only glimpse the profoundness of their effects from an interdisciplinary system lens. The divine
spark is indeed like a ripple in the pond, but in this case, a small force that creates a much larger
impact through the sheer force of the multiplier effect.

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The Arc of Interconnectedness
Based on a combination of the data of our research inquiry as well as our syncretic
theoretical understanding, previous research provided a starting point to represent the stages ofbusiness evolution for becoming a force for good (Maon, Lindgreen, & Swaen, 2010b). Our
analysis reveals that businesses transform themselves to become agents of societal welfare along
two complementary dimensions: business purpose and organizing principles (Pavez, Kendall, &Bao, 2014). Business purpose represents the object toward the company exist and/or theintention of founders when the company. Along this dimension it is possible to observe fourstages that describe the evolution of business purpose.
At the beginning is the traditional purpose of business (as stated in the law), which is
maximizing shareholder value or creating economic wealth. This stage represents the ideas ofcapitalism in its pure state. The second stage represents an important shift, because it includes
stakeholders as an important part the business model. At this stage companies seek to create
ongoing value for shareholders and stakeholders without making tradeoffs (i.e. create sustainableor shared value), and they engage in activities oriented to social and/or environmental value (e.g.
energy efficiency, waste management, community engagement, etc.) because it is good business.
The third stage represents another important shift in terms of the business purpose
because it moves companies from sustainable value creation (Laszlo, 2008; Porter & Kramer,2011) to the deep desire of doing good in the world as a way to succeed (i.e. creating benefit tohuman, environment, and social endeavors as a way for the organization to thrive). The mantra
for companies at this stage is “becoming a force for good” and/or “being the best company for
the world” (Haigh & Hoffman, 2012; Honeyman, 2014). This higher purpose is reflected inbusiness practices such as creating higher quality jobs and improving the quality of life

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throughout the communities where the firm operates. Companies that are born with this purpose
are created to explicitly address some environmental or social issues.
Finally, the purpose of companies at the fourth stage is to awaken the divine spark ofbusinesses to raise the collective consciousness of humanity. This stage represented the highest
and noblest business purpose, because it aligns with the principles of oneness and wholeness that
constitutes the basis of an interconnected and flourishing world. This highest purpose ismanifested in business practices that strive for wholeness and community, supporting people’s
longing to be fully themselves at work, and to be deeply involved in nourishing relationships(Pavez et al., 2014). For example, Laloux notes an increase desire of people “to affiliate onlywith organizations that have a clear and noble purpose of their own. We can expect that purpose,
more than profitability, growth, or market share, will be the guiding principle for organizational
decision-making” (2014: 50).
The set of organizing principles represents the underlying assumptions behind the social
processes that shape interactions among organizational members. Those modes of organizing
also followed an evolutionary path, which revolves around the nature of human interactions thatpervade the organizational design.
The first stage is characterized by an organizing style in which power and hierarchy aresalient. Interactions are design to be predictable, efficient and rigid, so they follow a cascade offormal communication/reporting lines from bosses to subordinates. The mental models of
production are based on efficiency, so employees are treated as resources to serve theinstrumental purpose of the organization of generating profit (Daft, 2012; Lee, 2008).
The second stage is characterized by an organizing style with the underlying assumptionthat effectiveness and success replace morals as a yardstick for decision-making: “the better I
understand the way the world operates, the more I can achieve; the best decision is the one thatbegets the highest outcome.” For these companies, the goal as human beings is to get ahead, tosucceed in socially acceptable ways, and to best play out the cards we are dealt.
The third stage is characterized by an organizing style with the underlying assumptionthat employees are part of the same human family in pursuit of doing good for society itself. The
organization endeavors to increase each member’s wellbeing while becoming a force for good ina broader context (i.e. the principle of caring in action) (Haigh & Hoffman, 2012; Honeyman,2014). Personal values and beliefs of top management and all intersecting stakeholders hold thatdoing good for oneself and for others (environment included) is integral to how the firm isorganized to act.
Finally, the fourth stage is characterized by an organizing style that transcends caring toyearn for wholeness (Laloux, 2014). Here, companies strive to bring together the ego and the
deeper parts of the self; integrating mind, body, and soul; cultivating both the feminine andmasculine parts within; being whole in relation to others; and nurturing our relationship with lifeand nature (Kofman, 2013). Oftentimes, the shift to wholeness comes with an opening to atranscendent spiritual realm and a profound sense that at some level, we are all connected and© 2015 The Fuji Declaration

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part of one big whole (Laszlo & Brown et al., 2014; Scharmer & Kaufer, 2013; Senge, Scharmer,
Jaworski, & Flowers, 2005).
The organizing principles previously described are closely intertwined with the businesspurpose that characterizes each stage. This suggests that they represent two evolutionary axes
through which companies evolve to become positive institutions; one representing thecontribution of the company to society (purpose) and the other one the principles behind thesocial processes that shape organizational practices (organizing). Consequently, we argue that weshould look at the evolution of business toward wholeness through the framework, “The arc ofinterconnectedness” (Pavez et al., 2014).
This evolutionary path begins with shareholder value (the dominant paradigm), evolving
to sustainable value (creating value for shareholders and stakeholders simultaneously), then theorganizing principle and purpose of the sustainable/social enterprise (business as a force forgood), to ultimately transcend and become a flourishing organization (business that spark the
divine spark of humanity).
Notably we found a profound gap in terms of the worldview that dominates the first twolevels (shareholder and sustainable value) and the last two (sustainable/social enterprise andflourishing organization). We called that gap “The Ontological Threshold”, because it embraces adeep transformational movement that completely changes the underlying logic of business. Thatmovement is based on a totally different conception of the nature and relations of being, whichgoes from a mechanistic and fragmented worldview based on seeing humans as separate andselfish to a holistic and interconnected one in which we are part of the Oneness of the world andin which caring for others and for future generations is an essential quality of being human(Pavez et al., 2014). We will discuss the implication of that gap after we present our findings.

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The institutionalization processes towards Oneness
The two axes that frame the model of business evolution illuminate the way (how) inwhich business embodies each evolutionary stage of “the arc of interconnectedness.” In otherwords, each shift in purpose and organizing results in a different set of frames around theinstitutionalization processes that a company follows to become a positive institution. We
divided the institutionalizing processes into four categories, as shown in Table 1.

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Table 1. Institutionalization processes towards wholeness. Adapted (Pavez et al., 2014)
Institutionalization
Stages / Levels Purpose

Organizing

Shareholder

Bureaucracy/efficiency

Maximizing
shareholder
value© 2015 The Fuji Declaration

Structure

Stakeholders

Leadership

CultureHierarchicalContractualCompetent
managerComplianceseeking

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Sustainable
value

Deliversustainablevalue

Effectiveness

Delegatedauthority

Interactive

Strategic
achiever

Strategizing

Sustainable
enterprise

Becoming aforce forgood

CaringDistributed
authority

PartnershipSocialinnovator

Caring/transforming

Flourishingorganization

Awakening
divine spark

Wholeness

Fullyautonomous

Integrative

Visionaryalchemist

Flourishing!
Structure refers to how activities such as distribution of power, task allocation,
coordination, supervision, and measurement and reward systems are directed towards theachievement of organizational aims. A company can be structured in many different ways
depending of its objectives (purpose) and on the assumptions about the nature of people andrelationships within the organization (organizing). Stakeholders refers to “any group orindividual that can affect or is affected by the achievement of a corporation’s purpose” (Freeman,2010: 46). Leadership refers to “the ability of influence a group of a vision toward theachievement of a vision or set of goals” (Robbins & Judge, 2013: 178). Culture refers to thepattern of shared —and taken-for-granted— assumptions about sustainability that was learned byorganizational members as the company solved its problems of external adaptation and internal
integration. To be considered a cultural trait, that form of understanding sustainability should has
worked well enough to be considered valid and, consequently, to be taught to new members as
the correct way to perceive, think, and feel about sustainability (Schein, 2004: 17).
The process of institutionalization is described in the following section, with examples ofreal business practices that represent each element at all levels. We will illustrate the tension
between the two dialectical worldviews that represent the ontological threshold, and how
companies are moving from the fragmented and disconnected worldview to the holistic andinterconnected one.

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HOW COMPANIES FOLLOW THE ARC OF INTERCONNECTEDNESS“The way we think about our purpose and approach to the environment can be expressedin the following way: (1) we lead an examined life; (2) we clean up our own act; (3) we do ourpenance; (4) we support civil democracy [by supporting environmental campaigns and groups];(5) we influence other companies, including our competitors to engage with us on this” —prominent U.S. clothing manufacturer executive and environmental steward.

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What we find in the companies we researched are key institutionalization factors thatallow us to see more deeply how businesses evolve from utility-driven purpose and theorganizing principles of maximizing shareholder value or driving social and environmental© 2015 The Fuji Declaration

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change only as a means of gaining comparative advantage to a paradigm with an entirely
different set of organizing principles and business purpose, to be truly interconnected.
What we find with this understanding is that each shift in purpose and organizing results
in a different set of frames around the institutionalization processes that companies follow to
become positive institutions. We divided the institutionalizing processes into the following
categories: structure, stakeholder, leadership, and culture.
Structure“How to improve the vitality of people's lives transcends everything we do from ourstrategic planning process to setting our goals and objectives; to turning those goals andobjectives into division strategies rolled into department strategies, and then rolling these into
individual goals and objectives. This is how we can integrate it through all of our efforts andassure that we’re truly aligned to that particular vision” — CEO, U.S. Products manufacturing
firm.

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Institutionalization in terms of structure is the process by which a business creates anorganizational structure to define and direct activities of the firm to achieve organizational
objectives. From Weber’s definition of bureaucracy forming the basis of the modern corporation
as an organizational pyramid concentrating power and control at the top (Child, 1972) to scholarsthat describe companies that are fully autonomous structures with power and control in the handsof each employee (Laloux, 2014; Robertson, 2007), structure has a great deal to say about how
work is done. Table 2 illustrates how the paradigmatic worldviews of utilitarian andinterconnectedness implement structures that serve their organizing principles.

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Table 2. Institutionalization: Structure (adapted from Pavez et al., 2014).
Paradigm !

Fragmented: “Me”

Stages !

Shareholder

Structure !

Hierarchical

Decisionmaking

Decisions require
correct authority
and are driven topdown into
organization

Interconnected: “We”

Sustainable value

Sustainable
enterprise

Flourishingorganization

Delegated authority

Distributed
authority

Fully
autonomous

Decisions haveincreasing complexity;
top management
establish overall
direction and delegate
downwards

Goes outside
pyramidal model tofocus on culture,
decentralization, andempowerment.
Structure evolves toalign with being aforce for good

Organizations arepeer-relationshipbased onperceiving what’s
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Workdefinition

Procedures
established a priori
for efficiency;
deviation not
tolerated wellStaff given control andlatitude to reachobjectives

Employees work inteams to exercise
responsibility andauthority to define
objectives

Employees work
independently todefine roles,
function, andperformance

Informationflow

Communication
flows rigidly from
top to bottom

Input flows from bottom
up while decisions flow
downward

Emphasizes informal
communication
channels

Communication isa function of one’s
whole andauthentic self

Measuring
performance

Financiallymeasured: past
performance used todescribe future
expectations inpurely monetary
terms

Performance describedin terms combining
financial data andsocial / environmental
costs to be the best in
the world

Performance isreflected in social
justice andenvironmental terms:
to be a force for goodby being best for theworld

Performance isevaluated on thewhole person’s
growth and org’s
fulfillment of
evolutionary
purpose andbenefit to theworld

Exercise ofpower

Power is exercised
depending on
location inhierarchy; amassed
at the top

Employees havesignificant power overtask execution

Employees havesignificant control
over role definitionand power over task
execution

Employees createrole definition andtask execution

Locus ofcontrol

Bureaucracy as
controlling function
through commandand control

Matrix management andproject teams are thehallmark of this level ofstructural evolution

Virtual and selfdirected work teams
replace pyramidal
structures withleaders providing
facilitation andguidance

Autonomy exists at
the individual level
without managers
exerting control
overRole ofdepartments

Functions are
fiefdoms anddifficult to evolve
without creating
defensivenessmoves

Staff functions andoverlay organizations
have significant control
over traditional linefunctions

Department functions
are more fluid andevolve as thebusiness evolves

Departments/
functions serve thenature of the workand come and goby agreement!
“We try to keep it small... We try to have as little middle management as possible. The
founders intent from the beginning was to create a flexible organization with small teams
pursuing hundreds of projects simultaneously as the key to our ability to be innovative” — VP,
global technology firm.

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The executive from the global technology firm just quoted echoes a theme we heard over
and over again in our interviews with firms who focus on organizational structures from theperspective of an interconnected ontology. Employees can be trusted, and do not need the layersof management or elaborate processes many firms put into place to control the activities of theiremployees. For example Zappos, known for its fully autonomous organizational structure andlegendary customer service, doesn’t implement any of the typical call center metrics thatmeasure dozens of efficiency and effectiveness key performance indicators like the amount of© 2015 The Fuji Declaration

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time an agent spends on a single call, or the amount of time it takes for an agent to pick a ringing
phone (Hsieh, 2010).

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Another example: “I encountered huge amounts of jealousy from people at the corporate
level because they owned the global sustainability team and they weren't really doing anything
except to produce a sustainability GRI report that nobody in the company even knew was being
produced. When our business unit started to win the major awards and recognition, it becamevery difficult as there were a lot of people who did not like it because it wasn’t being driven fromthe central office” — Sustainability VP, European chemical company.
Compare our example of organizations that structure their operations with distributed
authority or are fully autonomous this with the voices of a firm that depends on hierarchicalstructure squarely from a utilitarian ontological perspective. Here, we see what happens when asustainability officer from a multi-national chemical company spoke leads a complete revampingof his business unit’s sustainability strategy and portfolio, resulting in highly defensive but
predictable reactions by department leaders at the corporate level. Our sustainability officer,
operating under empowerment that comes from distributed authority is met with fierce
resistance. It makes perfect sense when we understand that from the ground of being
corresponding to a hierarchical structure, such an encroachment on the span of control of thecorporate office has challenged the very definition of power, locus of control, and strategic
decision-making.

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“Anyone can initiate a project to make a positive impact in a community, like our local
Korean community, or something to impact the larger world in a positive way just by posting itinternally for everyone to see. Anyone from the company can join the project, or sign up to
volunteer for a specific activity. The company doesn’t drive this from the top down. It’s selforganized because if someone forces you to do something, it’s not going to be regenerative,
because that has to come from within” — HR executive, global technology firm.

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For leaders contemplating changing their organizational structure to empower theiremployees and increase employee engagement, sometimes crossing the ontological threshold is amatter of just letting go, so that employees can connect with each other on what they care themost about.

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Another example:“For the business leaders in our company who only care about the
numbers, they need to be able to take sustainability one step at a time. However, externalpressures sometimes accelerate the whole thing very nicely for us. We have one particularbusiness that was a steel manufacturing plant. Steel is very water-intensive and they weredrawing water from the municipality that was meant for the farming community. After direction© 2015 The Fuji Declaration

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came from the government and a pretty big protest was organized in the village about anotherbusiness running afoul of the community, the head of steel manufacturing asked us to help wean
them off of municipality water altogether.A year later, we have a plant that has it own rainwater
harvesting and a ground water recharge system that allows them to be water self-sufficient for
about half the year.” — EVP, Sustainability officer for Indian multinational conglomerate!

Businesses do evolve, and we find that large corporations have institutionalized theirstructures to evolve at different rates for any given point of time. The Indian multinational firmin this case, a $30 billion (in USD) company with 150,000 employees recently launched areinvention of the company to become a sustainable enterprise, following Gandhian principles of
economic and social justice combined with the chairman’s desire to unleash the innovation
potential of 150,000 employees to solve the biggest problems confronting Indian and global
society. To do so, this firm recognized that the institutionalization structures that were largely
hierarchical were holding the company back. The reinvention targets leapfrogging over delegatedauthority to distributed authority. The senior leader reported that empowerment was an easierchange to talk about when they focused on innovation as a institutional force compelling torethink the role of structure. Managers at the ground level talked about how hard it was to let
employees have more freedom to make mistakes, to experiment, and to change how they
worked. This is a powerful ontological shift, especially for a structure that is deeply imbued withhierarchy as a means of achieving firm objectives.
Additional analysis of the primary and secondary data reveals stories about how
businesses are influenced by the diversity of people and their changing expectations, especiallymillennials seeking purpose and meaning, as well as expecting autonomy. Businesses arechanging in no small ways with the influence of the Internet and social media demandingtransparency, with the inclusion of women into positions of leadership and entrepreneurship,even in cultures where women as entrepreneurs would have been unheard of ten years ago. A
review of how these companies talk about themselves in social media reflects purpose and vision
in increasingly holistic and spiritual terms. As we continue this line of inquiry in our broader
research themes, we believe that we will see increasing numbers of companies redefining theirstructural organization in ways that reflect this interconnected worldview.

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Stakeholders“A sustainability strategy should not only guide the activities development and skills, isalso a form of business relationship with customers, vendors, suppliers, shareholders, politicians
and stakeholders. Environmental sustainability is the single biggest challenge facing ourindustry and society this century, because the response affects not only products but every aspectof our business and every person in it.” — Chief Environmental Officer & Chief Executive
Officer of a leading Japanese multinational automaker.

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Institutionalization in terms of stakeholders is the process by which a business views
relationships with those outside the firm in either a limited morality context (e.g. moral
stewardship or corporate egoist and instrumentalist) or an elevated state of consciousness (e.g.
caring and holistic) (Jones, Felps, & Bigley, 2007). Table 3 illustrates how the paradigmaticworldviews of utilitarian and interconnectedness view relationships that serve their businesspurposes.

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Table 3. Institutionalization: Stakeholders.
Paradigm !

Fragmented: “Me”

Interconnected: “We”

Stages !

Shareholder

Sustainable value

Sustainable
enterprise

Stakeholders !

Contractual

InteractivePartnership

Integrative

Concern forothersMoral stewardshipInterests of relevant
concern for others is stakeholders integrated
limited to concern
into business strategy
on behalf ofshareholders

Purpose built aroundsatisfying
stakeholder needs
and to benefit society
by impacting wholeorganization system

Company built
around developing
a greater sense ofinterconnectedness
between company
and all living
systems, with aimof leading creationof a flourishingworld

Stakeholder
Engagement

When doing so
benefits
shareholders in an
instrumental way

By engaging with those
who directly impact
business performance,company creates
sustainable/shared value
in a systematic fashion.

Close relationships
with moststakeholders to act aspartners of societal
betterment

Broad definition of
stakeholders (notjust ones directly
impacted bybusiness), andembraces deep
collaboration

Satisfying stakeholders’needs is consideredgood business

Understood as central
element to enhance
positive impact of thecompany uponsociety

Stakeholders arehighly synergistic
and collaborative,
which means thatthey are actively
involved in cocreating/improving
the businesspractices ofcompany to create
societal welfare

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Relationship
type

Purely contractual

Reciprocal (win-win)
relationships to assure
success in
implementation ofbusiness strategy

Close and based on
mutual trust, goesbeyond an
instrumental strategy
to improve
performance

Stakeholder
relationships aretransformative innature. In otherwords, they help toincrease themeaning/purposeof business actors
and enhance theirsense of interconnectedness!
“We believe that sustainable logistics, in our production processes must include
environment, economics and social costs and resources. This concept includes the supply chain
management, production process, and all stakeholders. We have been able to reduce absolute
CO2 emissions across our logistics network for a number of years running, despite having higher
distribution volumes” — VP, Logistics for Japanese automaker.

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For the automotive maker, stakeholders have been conceptualized as all living things, inthis case, planet earth. Reducing emissions is an outcome of viewing impact upon an indirect
stakeholder (the environment) and understanding that this is a central element in order to produce
a positive impact upon society.
What is different in this example, in comparison to what we may find in a typical CSR
report? Let’s consider some language about value creation in a 2012-2013 report fromagricultural giant Smithfield Foods, Inc., whose CSP score at 1070 makes them one of worst
corporate social performers worldwide, according to a 2010 study published by the UCLA
Institute of the Environment (Chen & Delmas, 2011).
Under the banner of Corporate Social Responsibility, the language of the company is oneof moral stewardship combined with instrumentalism. Stakeholder value is only aimed at
generating benefit to the shareholder. We observe this through how each CSR metric is tied to afinancial benefit. Furthermore, note that even the language tied to raising awareness about
hunger is tied to “connecting more consumers with our brands,” ostensibly to generate
opportunities to see more product (Smithfield Foods, 2013). Smithfield may talk about being asocially responsible company, but both empirical evidence and the use of language suggests a
utilitarian paradigm of separateness, and not one of interconnectedness and motivation to benefit
society, or one to lead in the creation of a flourishing world.

!

Another example: “For the independent recycler (also known as trash pickers), the firm
offers a partnership that finances half of their entry costs for the recycling technology, andallows them to have 100% of the income derived from its operations... Because of thispartnership, the independent recyclers can emerge from extreme poverty and learn how to© 2015 The Fuji Declaration

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achieve higher levels of income from an occupation that used to be part of the informal economy
in Chile” — CEO, South American recycling company.

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Many of the firms we studied were focused on partnership in the way they viewed
stakeholder relationship as partners in societal betterment. In these cases stakeholders are an
opportunity to understand the whole organizational system, going beyond instrumentalism oregoism to the ontological view of wholeness. In some cases, these firms are evolving into
integrative stakeholder relationships, as is the case of the South American recycling company
because they are transformative in nature. The recyclers, most of whom come out of desperate
poverty situations, give the business meaning and purpose, and in turn, the business provides thesame back to the recyclers, along with dignity and a sense of hope.
Another example: “Because of our relationships working with farmers, we were able tofundamentally change our entire business model from farm tech manufacturing to farm techprosperity. We don’t look at just selling tractors and other farming equipment to the farmer
anymore, but give them end-to-end support from seeding to new technology in farming for
efficient use of water, conservation of soil moisture, interaction with a local university’shorticulture program, and access to a 24/7 local/rural television programs. This shift to being in
the farm tech prosperity business is huge for us. We create ergonomically tractors that women
can use. Farmers taught us to modify the design so that the tractor can be used for applications
beyond the limited four to five month growing season, to use it for other applications that could
also mean transporting some heavy equipment or timber or something from one place to theother” — SVP, Indian multinational conglomerate.
Here again are stakeholder relationships that allow the firm to focus on transformative
activities that could significantly change the lives of a population in India that is deeply mired in
the type of poverty and hardship associated with the fickle monsoon seasons that make farmingin India very difficult. We note that this isn’t a business case aimed at selling more tractors, nor isit an ontological perspective about utility, although utility is certainly implied by extending theuse of a piece of equipment beyond traditional farming activities. What we find the mostremarkable is that the firm’s relationship and business purpose with the farmer has been
completely transformed, to one of seeing the farmer’s situation as their own. This suggests thatan ontological threshold has been crossed, with an associated paradigmatic shift towards
interconnectedness and oneness.
Leadership“I care deeply about people sustaining their life, about people having life and vitality.
Of people being able to enjoy and live a life and feel great while they're living it. Being in thisparticular role not only allows me to do that personally, but allows me to inspire an entire
workforce around the world to help others achieve the same thing” —Chief Executive Officer,
U.S. appliance maker.

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Institutionalization in terms of leadership is how the businesses structure, design, andview the role of leadership and the top management team to manage the activities of the firm.
Table 5 illustrates the paradigmatic worldviews of utilitarian and interconnectedness from aleadership perspective.

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Table 4. Institutionalization: Leadership.
Paradigm !

Fragmented: “Me”

Interconnected: “We”

Stages !

Shareholder

Leadership !

Competent
manager

Strategic achieverSocial innovator

Visionaryalchemist

Role of leader

Establish standards,
procedures, andoutput statistics toregulate activities.

Strong strategicorientation focused ongetting results; satisfy
stakeholder needs inorder to improvebusiness performance.

Challenge
assumptions to reachhigher performance(social, economic,
and environmental).

Generate socialtransformations
that reinvent
organizations inhistoricallysignificant ways

Purpose ofleadership

Organize people
and resources
towards effective
and efficient pursuitof predetermined
objectives.

Get tangibledeliverables by
empowering andmotivating teammembers.

Generate effective
organizational andpersonal change

View the world asa web of interconnectedness fullof possibilities forsocietalflourishing.

Modus
operandi

Driven by power
and logic; aware of
power dynamics,
expect people tofollow instructions;focused on
maintaining power
structures overaffective relations.

Creates positive work
environment andprovide challenges that
help employees growand develop; set
strategic objectives thattake into accounts thestakeholders’ needs.

Develops highlycollaborativeenvironments, andweaves meaningful
visions withpragmatic, timely
initiatives.

Consider the wholesystem and thelong-term
consequences;integrates all
stakeholders,embracing thatwhich supports the
positive evolutionof humanity.

Typicalleadershipstyle

Authoritative, relies
on top-down
approach;distinguishes
between executives
as knowledge andworkers (source ofphysicaltransformation of
inputs to outputs).

Promote teamwork toeffectively deal withmanagerial duties; workwith reciprocal
influences between thecompany and its
stakeholders.

Empower employees
to grow and develop
personally andprofessionally bygiving them
responsible freedom.

Sought out inorganization for
wisdom andcompassion;
Builds frameworkof elevated humanvalues that guideteam members intheir daily
activities.

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Primary
objectives

Focus on financial
returns andshareholders’interest; impacts tosociety are
externalities;
stakeholders
relevant when
specific issue
affects financial
returns.

Reliably lead a team to
implement new
strategies over a one tothree-year period,balancing immediateand long-term
objectives.

Cooperate acrossinstitutionalboundaries (widerange ofstakeholders) for themutual benefit of theorganization andsociety (& triple
bottom-line results).

Transcend theboundaries of theircompany tobecome influential
leaders of aflourishing world.

!
“We saw a change in leadership at the overall business level with the total focus on the
short-term, and we saw my CEO who was really quite visionary replaced by somebody with asales focus who really did not have that vision. Sustainability didn’t necessarily mesh with his
management objectives, so everything we were working related to the sustainability portfolio on
became a non-priority” — VP, European chemical company.

!

Leaders who have a worldview aligned with the shareholder stage are competentmanagers with a clear focus on financial returns and shareholder’s interests. The purpose ofleadership is to organize people and resources towards effective and efficient pursuit of predetermined objectives. For our R&D leader above, it was a personal and professional shock to gofrom reporting to a social innovator with an entirely different focus on stakeholder and societal /economic / and environmental impacts to a leader who told him in the first five minutes, “I don’tcare about what you do, and I don’t care about sustainability.” We observe that executive hiring
committees who are not oriented to the stages of institutionalization may end up hiring or
promoting leaders into roles that are a mismatch for the organization; often in hidden ways thataren’t exposed until talented staff and well-respected leaders like our interview subject leave thecompany altogether.

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Another example: “One of the most the most important thing our leaders do is to get on
the stage every week, every single week no matter what, share their own vision, share how ourbusiness is going, and then take a lot of questions with straight answers. I think that's really anamazing thing to do as a leader, because it’s not an easy thing to do” — VP, HR global
technology company.

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We heard a lot of descriptions about leaders who are strategic achievers, and excel at
empowering and motivating their teams. Some of the world’s top companies with charismatic
leaders like Cisco System’s John Chambers, or Li Ka-shing of Hutchison Whampoa-Cheung
Kong (Hong Kong) are legendary achievers who are well-liked by the rank and file employees© 2015 The Fuji Declaration

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for their personal generosity. However, the goals are ultimately about business performance, anddo not enter into transformational change beyond the bottom-line.

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Another example: “I remember when a CEO from a certified B-corporation that had
been acquired by a major conglomerate was invited to present in front of the entire 600-person
sales team. The person who was coaching him about the presentation warned him not to waste
his time talking about being a benefit corporation, but to focus on why his products were greatand how the sales team could make a lot of money. The CEO’s response was ‘You don't get it.
Our products are great and our people are great, but the reason why we’re growing faster thananyone else in our business is because we're a B-Corporation.’ And his sponsor told him that it
was his funeral, but it was his choice. So he takes the stage, gives his fifteen minute talk, at theend of which the six hundred sales team stood unified with a standing ovation” — CEO, nonprofit.

!

Social innovator leaders challenge us to think about company performance in terms ofsocial, economic, and environment. We wouldn’t expect a typical sales team to respond to a pitch
about a company legal structure, but it isn’t about a governance model, it’s about what thisacquired company stood for. The leader who can operate from a commitment to do good for theworld, while pragmatically combining meaningful visions with practical initiatives for the
purposes of creating mutual benefit for the company and society will stand out, and in somecases, receive standing applause. Why do these leaders instill this type of reaction?
Unlike the leader who is a strategic achiever and may be very charismatic, we believethat people instinctively respond to the authenticity of a leader who speaks from both their head
and their heart with actions that are congruent with the words being spoken. Being a benefit
corporation is a significant statement because it requires changing the articles of the corporationand declaring to the shareholders that the firm is legally obligated to pursue objectives that are abenefit to society at the same level of priority as financial ones. Instead of being measured byshareholder performance, the firm is declaring that it will be measured externally by stakeholder
performance, against criteria that is objective and challenging.
When we find this type of leadership, we also find other factors of institutionalizationthat map to the corresponding stage of business evolution.
Culture“Imagine coming to work for a company and in the interviewing process you're being
interviewed to find out whether you passionately believe in making the world a better place.
Because if you don’t passionately believe in that, we don’t really want you to work for ourcompany.” — Chief Executive Officer, multinational healthcare products.

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Institutionalization in terms of culture is how the business functions by implicit andexplicit rules that are understood as “this is how we do things around here.” Table 6 illustrates
the paradigmatic worldviews of utilitarian and interconnectedness from a Culture perspective.

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Table 5. Institutionalization: Culture.
Paradigm !

Fragmented: “Me”

Interconnected: “We”

Stages !

Shareholder

Sustainable value

Sustainable
enterprise

Culture !

Complianceseeking

Strategizing

Caring /transforming

Flourishing

Sustainability
definition

Sustainability is acost without clear
business value.

Sustainability is seen as
source of strategic
advantage.

Sustainability is
deeply woven into
the firm’s raisond'être.

Culture ofcompany supports
a societal
transformation for
creating a thriving& flourishingworld.

Mission andobjectives

Company mission
descriptive and built
around businessobjectives andshareholder value.

Mission includes idea ofcontributing to society
but is centered on“being the best company
in the world” and uses
sustainability to achieve
those goals.

Mission built aroundpositively
contributing tosociety, whichpermeatesorganizational
practices.

The mission built
around enhancing
oneness and interconnectedness
among all living
systems is lived byevery employee;creates a new stageof development forbusiness as aninterconnected
entity into thewhole.

Impact ofvisionVision does notinspire employees
passion for work.

Includes contributing tosociety but employees
don’t buy-in because
integration ofsustainability into
operations are
fragmented.

Employees are
attracted to thecompany by thestrong sense of visionand purpose that thecompany embraces;
deep source of innermotivation at work

Employees are
attracted to thecompany because
they perceive astrong sense of
meaning andcalling at work
which transforms
their lives.

Transmittal ofvaluesValues largely
unknown by
employees; used for
PR image.

Values reflect
contributing to society
but are not totally sharedby employees.

Organizational
values deeply reflect
the idea ofcontributing tosociety and/or being
good corporate
citizens; shared by
employees.

Organizational
values deeply
reflect elevatedprinciples ofrelating and acting,which impact the
lives of employees
even beyond thejob.

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DominantrelationshipmodeInteractions andrelationships aretransactional withhigh level of control
and power plays.

Interactions andrelationships among
employees include
caring for emotional
wellbeing, but behindthat is a utilitarian
purpose of improving
business performance.

Interactions andrelationships among
employees arestrongly based on
caring andcompassion, and thework environment ishighly collaborative.

Interactions andrelationships
among employees
are transformative; enables
employees tothrive/flourish
personally andprofessionally.

!
“We were dealing with organizations like Wal-Mart that were asking lots of questions,and we knew that if we were working to reduce the impact of our products, that would give us amajor business advantage. At one point, we had over 200 major corporations sitting at the sametable having the same discussion. Some were there because they really wanted to make adifference, and some were there because they just wanted to make sure they could continue to dobusiness with Wal-Mart.” — SVP, European consumer products firm.

!

Most of the firms we studied were aspirational in wanting to be caring/transforming, but
ended up displaying most of the characteristics of a strategizing culture. With our European
consumer products firm, sustainability viewed as a source of strategic advantage, although thisSVP and other employees wanted the impact of the vision to be around positively contributing tosociety and a good corporate citizen as a caring/transforming culture. This firm suffered from nothaving sustainability completely integrated into business operations, and with the mission
statement clearly articulating wanting to be the best in the world, with sustainability as a means
to an end. The challenge with being on the left side as a utilitarian worldview is several-fold: (1)employees don’t buy into the vision or values because they are self-serving; (2) A change inleadership that is hostile to sustainable value makes it easier for the company to retreat back tobeing a shareholder stage company as discussed previously; and (3) when interactions andrelationships are really a means to an end (a utilitarian or instrumentalist purpose of improving
performance), people know inauthenticity when they see it, which creates distrust anddisengagement. In many ways, sustainable value as a phase for the company makes sense
intellectually, but falls short at a human connection and relationship level.

!

Another example: “To me, culture should be that you care deeply about your employee.
You care deeply about your planet. You care deeply about the impact that you’re having on thisworld. You have to have an aspirational vision of how to make the world a better place. The
more companies that believe that and practice it, the easier it will be on us when we hire new
employees because we won’t be so different.” — CEO, multinational consumer products
company.

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When CEOs focus on creating a caring/transforming culture, the vision, mission, andvalues of the company are transmitted more authentically and clearly through the organizationand the various stakeholders. Mission permeates organizational processes like hiring, sales, andcustomer service. Bill George, the former Medtronics CEO developed and practiced caring/transforming principles during his twenty-year tenure (George, 2010), and emphasized theleaders’ role in facilitating an interconnected culture. He argued that leaders have to pursue with
passion, openly express values, engage with heart and mind, and develop connected relationships(George, 2010).

!

Another example: “Our partners and our employees told us what our five guiding
principles are: (1) We passionately believe in making the world a better place; (2) We
passionately believe that every person matters and we can make a difference; (3) Our future
depends on learning and innovation; (4) We passionately believe in creating our future andembracing our past; and (5) We passionately believe in treating people with dignity andrespect.” — CEO, American appliances firm.

!

We got chills when we heard the CEO describe her company’s flourishing culture in thewords above, for there was no denying the forcefulness and passion in her own voice describing
the strong sense of meaning and calling of what work meant to her employees. You can’t fake acompany’s purpose to lead societal transformation to create a thriving and flourishing world. She
spoke of employees, customers, and stakeholders co-creating a future by paying attention to what
they’ve done together in the past and using that shared experience to write the next chapter. She
spoke of how their relationships and interactions were transformative beginning with values oftreating people without exception with dignity and respect.
Another CEO we spoke with talked about how much communication played a part indeveloping a flourishing culture, requiring large amounts of collaboration and humility,
especially from the entire management team, along with demonstrated willingness to admit andtake ownership for mistakes and embracing uncertainty. All of this to create an ethos ofempowered employees who can take ownership for their work and their contribution to thevision and mission.

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!
CROSSING THE ONTOLOGICAL THRESHOLD
According the Merriam Webster dictionary, the word threshold has two importantmeanings, both of them related to transition or change: 1) “the place or point of entering or
beginning (e.g. the threshold of a new age)”, and 2) “the point at which a physiological or
psychological effect begins to be produced” (e.g. the threshold of consciousness)1. The word
threshold comes from the age-old process of threshing, which separates the grains or seeds fromthe straw. Thus, threshold literally means “sitting on the gold” (Scharmer, 2009: 113).
In our model of business evolution we defined the ontological threshold as the transition
that companies follow to begin to function as a vehicle for something even more precious thatgold or light: “the enlightenment of business to the creation of a flourishing world” (Pavez et al.,2014). This transition occurs at the very deep level of mental models and/or worldviews (Beck &Cowan, 1996; Senge, 1993), where the traditional conception of being (fragmented, mechanistic,
and utilitarian) is essentially questioned, challenged and changed. Therefore, companies thatcross the threshold realize that their habitual way of seeing and acting is not connected to the true
nature of being (holistic, sacred and interconnected), which move them to re-design and re-frame
business practices from a higher level of consciousness (Barrett, 1998; Mackey & Sisodia, 2013;
Pavez et al., 2014).
Central to the movement of crossing the threshold is the notion that the failure ofbusiness to contribute to a healthy world is due primarily to a mechanistic and fractured
worldview (Scharmer & Kaufer, 2013; Senge et al., 2008). This worldview “drastically separates
mind and body, subject and object, culture and nature, thoughts and things, values and facts,
spirit and matter, human and nonhuman; a worldview that is dualistic, mechanistic, atomistic,
anthropocentric, and pathologically hierarchical… A broken worldview that alienates men andwomen from the intricate web of patterns and relationships that constitute the very nature of lifeand Earth and cosmos” (Wilber, 1995: 14–15). This worldview, heavily grounded with the rise ofmodern science and philosophy —particularly associated with the names of Copernicus, Kepler,
Galileo, Bacon, Newton, Kelvin, and Descartes— (Capra, Steindl-Rast, & Matus, 1993; Gergen,
1999; Wilber, 1995), puts rationality as the dominant element of our existence. Hence, it fosters
the development of a utilitarian and anthropocentric ethics, which sees people and nature as
resources to be exploited, and the soul/spirit as something separated to the everyday life of anormal citizen (Gladwin, Kennelly, et al., 1995).
Fortunately, the last twenty years has been witnessing a growing awareness of the
problems related to this traditional —and taken-for-granted— worldview by leaders and thinkers
of different background and sectors. The Western lens on this matter owes much toepistemological criticism of liberalism and its exclusive focus on the individual, from theorists
such as Martin Buber, Charles Taylor, and Robert Putnam among others (Cates, 2012). Much
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also comes from Asian tradition and teachings from both a philosophical and political tradition,and draws upon various forms of communitarianism that balances intimate connections, honor,
and purpose as defined between the individual actor and the community (Liu, 1955; Odin, 1992).
Interestingly, this collective process of awareness has allowed the re-birth of ancient
wisdom coming from different cultural and spiritual traditions, which constitutes a totallydifferent mindset for understanding —and relating to— ourselves, others and the naturalenvironment. This mindset, which has been called holistic and/or ecological worldview (Capra,
1997; Capra et al., 1993), sees the world as an integrated whole, where matter, life and minds“are part of a vast network of mutually interlocking orders subsisting in Spirit, with each node in
the continuum of being, each link in the chain, being absolutely necessary and intrinsicallyvaluable” (Wilber, 1995: 20). It is a worldview that acknowledges the inherent value of humanand nonhuman life, because it recognizes that all living beings are members of ecologicalcommunities bound together in a network of interconnectedness and interdependencies (Capra,
1997).
Besides, it has demonstrated the power of creating a radically different system of ethics,
when this perception becomes part of the daily awareness of the beholder (Capra, 1997). This has
produced important advances in different scientific disciplines —such as physics, biology,
cognition, psychology, sociology, anthropology, and medicine— which have tested the
hypothesis of interconnectedness and holistic awareness. Those studies have come to the sameconclusion that ancient spiritual traditions has told us for a long time: we are deeplyinterconnected not only to each other and all life but also to the universe and to the spirit ofhumanity (Capra, 1997, 2013; Dispenza, 2010; Goswami, 1995; Maturana & Varela, 1987;
Radin, Hayssen, Emoto, & Kizu, 2006; Varela, Thompson, & Rosch, 1992; Wilber, 1995; LaszloE., 2014).
This ontological way of being is causally related to the evolving nature of humanity andthe role that businesses play in expressing that humanity as a set of values, expectations, andcultural norms. Hence, this worldview has pervaded the generation of scientific knowledge —and practice— in the field business as well. Under this new paradigm, business are seen as
entities that should look for individual and societal wellbeing (Haigh & Hoffman, 2012;
Honeyman, 2014; Mackey & Sisodia, 2013; Senge et al., 2008; Waddock, 2008), encouraging
the possibility that “human being and other life forms will flourish on the Earthforever” (Ehrenfeld, 2008; Ehrenfeld & Hoffman, 2013; Laszlo & Brown et al., 2014).
This new logic of conducting business is based on the affirmation of human divinity but
is not anthropocentric, because it connects that divinity with the divinity of the whole. The only
way business can act as a force for create a flourishing planet, and a flourishing human being, isby replacing the taken-for-granted fractured worldview with a “worldview that is more holistic,
more relational, more integrative, more Earth-honoring, and less arrogantly human-centered. A
worldview, in short, that honors the entire web of life, a web that has intrinsic value in and of
itself, but a web that, not incidentally, is the bone and marrow of our own existence aswell” (Wilber, 1995: 15).

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CONCLUSION
More than anything, we are hopeful with the exemplars we have encountered in thisresearch. We see leaders who made the leap of faith, in all of the countries we researched,including Latin America, Europe, India, the United States, and in Japan. We also encounteredexamples on the utility side of the ontological threshold in terms of Sustainable Value, or for themost part, in the Shareholder stage, particularly in the West.
The organizing principles our research previously uncovered are demonstrated in ourstudy for the Goi Peace Foundation that show two evolutionary axes through which companies
evolve to become positive institutions; one representing the contribution of the company tosociety (purpose) and the other one the principles behind the social processes that shapeorganizational practices (organizing). We find that evolution of business toward wholeness does
indeed go through this framework called the “The arc of interconnectedness” (Pavez et al.,2014). This evolutionary path represents a practical manifestation of the march toward a
consciousness of oneness.
In this study we show how “The Ontological Threshold” transforms the underlying logic
of business. This is based on a totally different conception of the nature and relations of being,
and in our study, shows how business goes from a mechanistic and fragmented worldview basedon seeing humans as separate and selfish to a holistic and interconnected one in which we arepart of the Oneness of the world and in which caring for others and for future generations is an
essential quality of being human (Pavez et al., 2014).
The key institutionalization processes we illuminated in this study show how the twoaxes that frame the model of business evolution explain how a business evolves to become apositive institution. What we find with this understanding is that each shift in purpose andorganizing results in a different set of frames around the institutionalization processes thatcompanies follow to become positive institutions. We divided the institutionalizing processes
into: structure, stakeholder, leadership, and culture.
Our work with the Goi Peace Foundation closes with our thoughts on the Fuji Declaration
itself. As business leaders and scholars, we are called to catalyze a shift in the course of humanhistory. It is time for leaders from diverse fields—scientists, artists, politicians, business leaders,and others—to travel “The Ontological Threshold” in our personal and business evolution
journey towards a stage of interconnectedness, one that demonstrates humility, wisdom, andintention to benefit of all living things.

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“By so doing, we can overcome the hold of obsolete ideas and outdated behaviors intoday’s unsustainable world and design a more harmonious and flourishing civilization for the
coming generations” —The Fuji Declaration.

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