Humanistic Capitalism at Brunello Cucinelli

Francesca  Gino; Gary  Pisano

Case | HBS Case Collection | August 2019

Humanistic Capitalism at Brunello Cucinelli

Abstract

This case explores one company’s attempt to experiment with a different underlying model for a capitalist enterprise. Brunello Cucinelli, S.p.A. is a leading manufacturer of luxury fashion apparel. Despite being a publicly traded enterprise with annual revenues exceeding 500 million, the company follows a somewhat unique human resource and cultural model. The company’s founder, Brunello Cucinelli, has striven to create an enterprise that follows principles of what he calls “humanistic capitalism”. Human capitalism, according to Cucinelli, means pursuing growth and profitability in a “gracious way.” At the company, humanistic capitalism manifests itself in a very specific set of policies and behavioral norms. Workers are paid wages that exceed 20% of the market norms; the workday (even for senior executive) is limited to the hours of 8:30 AM to 5:30 PM; emails are not to be sent after hours or on weekends; lunch breaks are one and half hours long to allow workers to have lunch at home should they choose. There are also strong cultural norms emphasizing respect and dignity. As part of this culture, employees are expected to keep their workspaces clean; eating at desks is not permitted; water can only be drunk from cups (not bottles); speaking should be done in hushed tones so as not to disturb colleagues. None of these cultural norms, however, are explicitly described in any written documents. The company has adopted this model in both its Solomeo, Italy headquarters and in its North American headquarters located in New York City.
The case allows students to explore the strengths and weakness of this culture and human resource model. A particular focal point of the case concerns the question of whether such a model is scalable and transferable across geographies. Does this model contribute to the company’s success or is ‘humanistic capitalism’ only possible because of the company’s underlying success? Is this model sustainable? The case invites discussion of deeper issues concerning alternative models of modern capitalism.

Keywords: corporate culture; Human Resource Practices; Growth; growth strategy; motivation; values; fashion; Capitalism; Organizational Culture; Values and Beliefs; Human Resources; Management; Business Model; Policy; Behavior; Growth and Development Strategy; Luxury; Italy;

Language: English

Format: Print

29 pages

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Citation:

Gino, Francesca, and Gary Pisano. "Humanistic Capitalism at Brunello Cucinelli." Harvard Business School Case 920-007, August 2019.

Leaders’ perceived authenticity – the sense that a leader is acting in accordance with her “true self” – is associated with positive outcomes for both employees and organizations alike. How might a leader foster this impression? Using field and experimental data, we test whether sensitive self-disclosures – for example, revealing an aversion to public speaking – make leaders come across as authentic and lead to positive outcomes, such as an enhanced desire to work with that leader (Studies 1, 2A, 2B, and 3). Stemming from our conceptual account, we show that these benefits emerge when the self-disclosure is mild to moderately sensitive in nature (Study 4) and made voluntarily (as opposed to by requirement) (Study 6) by a relatively high-status person (Study 5). Would-be disclosers do not intuit these positive consequences of self-disclosure (Study 7), suggesting that leaders may under-employ an effective tool for making a positive impression.

Article | Management Science | December 2019

Communicating with Warmth in Distributive Negotiations Is Surprisingly Counterproductive

M. Jeong, J. Minson, M. Yeomans and F. Gino

When entering into a negotiation, individuals have the choice to enact a variety of communication styles. We test the differential impact of being “warm and friendly” versus “tough and firm” in a distributive negotiation, when first offers are held constant and concession patterns are tracked. We train a natural language processing algorithm to precisely quantify the difference between how people enact warm versus tough communication styles. We find that the two styles differ primarily in length and their expressions of politeness (Study 1). Negotiators with a tough communication style achieved better economic outcomes than negotiators with a warm communication style, both in a field experiment (Study 2) and in a laboratory experiment (Study 3). This was driven by the fact that offers delivered in tough language elicited more favorable counteroffers. We further find that the counterparts of warm versus tough negotiators did not report different levels of satisfaction or enjoyment of their interactions (Study 3). Finally, in Study 4 we document that individuals’ lay beliefs are in direct opposition to our findings: participants believe that authors of warmly worded negotiation offers will be better liked and will achieve better economic outcomes.

Keywords: Negotiation Style; Communication Strategy; Perception; Performance Effectiveness; Outcome or Result;

Citation:

Jeong, M., J. Minson, M. Yeomans, and F. Gino. "Communicating with Warmth in Distributive Negotiations Is Surprisingly Counterproductive." Management Science 65, no. 12 (December 2019): 5813–5837. View Details

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Humanistic Capitalism at Brunello Cucinelli

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