Keynote: Rebecca M. Henderson.

Theme of her presentation: The Economics of Purpose Driven Management

Time: 12:30 – 01:30 pm CEST

Rebecca M. Henderson, a distinguished professor at Harvard Business School and research fellow at the National Bureau of Economic Research, advocates for a fundamental reimagining of capitalism. Her work emphasizes balancing the power of the free market with effective government and a robust civil society to address major societal challenges like climate change, inequality, and systemic exclusion.

A core tenet of her research is the need to change the purpose of the firm from merely maximizing shareholder value to “solving public problems profitably and avoiding creating new problems“. Henderson argues that purpose-driven firms can become catalysts for systemic change, supporting transformation within industries, fostering public-private cooperation, and strengthening global democracy. These firms are also more likely to implement “high-commitment employment systems,” characterized by better wages and respectful employee treatment.

Henderson’s work extensively explores “relational contracts” within organizations. These are informal agreements, unlike formal legal contracts, that rely on future interactions for their enforcement…. She posits that many competitively significant management practices, such as inspiring employees to “use good judgment” or “continuously improve,” depend crucially on these uncodified agreements.

Building and maintaining these relational contracts presents significant challenges, primarily revolving around two intertwined problems: credibility (persuading others that promises will be kept) and clarity (ensuring promises are understood). Henderson highlights that clarity can be difficult and time-consuming to develop, and its interaction with credibility can create substantial barriers to successful implementation. Empirical findings from her research suggest that interventions focused solely on changing relational contracts can directly influence firm performance, indicating that managers can indeed alter these deep-seated agreements, though it is a costly and time-consuming process.