Karma Capitalism and The Increasing-Returns World

Today the Economy of the world is typically the Economy of Increasing Returns What would happen if Marshall’s diminishing returns were reversed so that there were increasing returns? If products that got ahead thereby got further ahead, how would markets work?Let’s look at the market for operating systems for personal computers in the early 1980s when CP/M, DOS, and Apple’s Macintosh systems were competing. Operating systems show increasing returns: If one system gets ahead, it attracts further software developers and hardware manufacturers to adopt it, which helps it get further ahead. CP/M was first in the market and by 1979 was well established. The Mac arrived later but was wonderfully easy to use. DOS was born when Microsoft locked up a deal in 1980 to supply an operating system for the IBM PC.
For a year or two, it was by no means clear which system would win. The new IBM PC DOS’s platform was a kludge. But the growing base of DOS/IBM users encouraged software developers such as Lotus to write for DOS. DOS’s prevalence and the IBM PC’s bred further prevalence, and eventually the DOS/IBM combination came to dominate a large portion of the market. That history is well known. But notice several things: It was not predictable in advance (before the IBM deal) which system would come to dominate. Once DOS/IBM got ahead it locked in the market because it did not pay users to switch. The dominant system was not the best:DOS was derided by computer professionals. And once DOS locked in the market, its sponsor Microsoft was able to spread its costs over a large base of users -it enjoyed killer margins.These properties, then, have become the hallmarks of increasing returns: market instability (the market tilts to favor a product that gets ahead), multiple potential outcomes (under different events in history different operating systems could have won), unpredictability, the ability to lock in a market, the possible predominance of an inferior product, and fat profits for the winner
Today , we see this similar story happening with Google . Microsoft has to now allow Google docs&spreadsheets to open in its Internet Explorer . This is a huge loss consdering the fact that it has its own Office Suite for over a decade now. A straight cut in the revenue clearly means that Google is locking in the market by superior technology ofcourse and Microsoft only has a graceful exit to make or go up one level higher in abstraction to sense the next business oppurtunity (wave) and when that happens they are ready to lock-in the market.

It is with this Macro Economic situation that allegations like (Un)Fairness , Choking out Market Competition ,Pricing etc are being made
But , should you penalize success ? Just because somebody was smart enough and took huge risks , suffered initial losses to gain the market ,Not Enjoy the lock-in period ?
This is what has prompted management guru's and top consultants across the world to propound what is now being called Karma Capitalism

The ancient spiritual wisdom of the Bhagavad Gita seems at first like an odd choice for guiding today's numbers-driven managers.Karma Capitalism has its roots from the Gita .Karma Capitalism can be defined as a more moral approach to what is often seen as the dirty business of business.Where once a company would bow only to the demands of its shareholders and customers, under the new order it must take on board its impact on everyone with a
direct or indirect interest. Top business schools have introduced "self-mastery" classes that use Indian methods to help managers boost their leadership skills and find inner peace in lives dominated by work. And Indian-born strategists like C. K. Prahalad are among the world's hottest biz gurus.The major themes? Executives should be motivated by a broader purpose than money. Companies should take a more holistic approach to business - taking into account the needs of shareholders, employees, customers, society, and the environment. It's business as seen through karma. The Longer view. Greener.

The seemingly ethereal world view that's reflected in Indian philosophy is surprisingly well attuned to the down-to-earth
needs of companies trying to survive in an increasingly global, interconnected business ecosystem(Increasing Returns Market).
While corporations used to do most of their manufacturing, product development, and administrative work in-house, the emphasis is now on using
outsiders. Terms such as "extended enterprises" (companies that outsource many functions), "innovation networks"
(collaborative research and development programs), and "co-creation" (designing goods and services with input from consumers) are the rage.



Will Karma Capitalism Work ???