This article is primarily inspired by my recent experiences consulting on an M&A deal for a mid-sized technology company which was acquired by an American private equity group.
Conceptually, the notion that most businesses ought not to exist challenges the prevailing orthodoxy of modern entrepreneurship, yet I believe consultants, business owners, and investors must demand earnest consideration in societies aspiring toward sustainable progress. The proliferation of enterprises is frequently mistaken for indisputable evidence of economic vitality, but this perspective overlooks a more nuanced and vital reality: the social contract that binds businesses to the communities and markets in which they operate. In a truly healthy free market, businesses are not isolated “profit engines” but instead function as stewards of both economic and societal resources.
Among business owners, particularly across transitional economies such as Romania’s, there can often be a limited understanding of this dual responsibility. Many entrepreneurs enter the market armed with ambition, yet lacking a robust grasp of either the rudimentary principles underpinning free market capitalism (such as the fundamental principles of innovation) or the ethical structures that uphold the social contract (such as valuing employee contributions that are beyond a contracted scope of work). In the absence of such foundational knowledge, enterprises risk devolving into short-term ventures that externalize costs onto society – be it through environmental neglect, precarious labor conditions, or disregard for regional or national community welfare. Genuine free markets cannot thrive in such a context; rather, they depend upon participants committed not only to profit maximization but to honoring their implicit obligations to stakeholders, the environment, and the rule of law. That is not to say, however, that these commitments should be mandated by the law, but instead a shared moral obligation that is shared amongst those who operate businesses within their communities.
A critical factor in aligning corporate behavior with societal well-being is the structure of ownership itself. In an ideal model, those who own and lead businesses would retain significant, if not full, control over their organizations, coupling economic power with a deep, long-term commitment to both profit and the broader good (aka the corporation must also contribute to the social contract). This blend is feasible only when ownership entails a psychological predisposition towards seeing beyond immediate returns. Sustainable entrepreneurship demands a capacity for long-term planning, resilience through adversity, and the foresight to prioritize the enduring health of both the company and the society in which it operates. However, it is precisely this disposition that is least common among the general population and even seasoned executives. Most people, by temperament or circumstance, are programmed for short-term reward; the patience, discipline, and ethical grounding required for meaningful stewardship are rare rather than universal traits.
Romania’s business landscape provides an instructive case. Many companies remain family-owned and eschew more rigorous corporate governance, often prioritizing legacy or personal advantage above broader social responsibility. This tendency is not unique to Romania, but is magnified by the country’s rapid economic transformation and ongoing integration into European and global markets. As companies scale, pressures mount to deliver quick results or appease transient investors, frequently at the expense of long-term obligations. The result is an ecosystem where the proliferation of businesses can outpace the cultivation of genuine enterprise stewardship, diminishing both public trust and the resilience of the broader economy.
It is therefore worth considering whether society might benefit from a higher threshold for business ownership – one that emphasizes not just financial capital or just innovative ideas but, more fundamentally, the willingness and capacity for responsible long-term engagement. Such a shift would not only foster a more sustainable business environment; it would also strengthen the social and ethical foundations upon which truly prosperous economies are built. If prosperity and trust are indeed the goals, it may be that fewer but more responsible businesses could serve society more effectively than a multitude of ventures driven by short-termism.
Ultimately, the question is not simply “how many businesses exist,” but “how many should exist in light of their ability to balance profit with broader societal duties.” In elevating long-term vision and stewardship, societies like Romania, and indeed the global community, can move closer to a model of enterprise that genuinely deserves its place within the social fabric.
While I have strived to approach these complex issues with objectivity and an appreciation for market dynamics, I am deeply aware that such corporate transformations have tangible consequences for those whose livelihoods, stability, and sense of belonging are directly affected. To those impacted by the outcome of the deal I recently worked, I want to express my sincere (albeit anonymous) regret for the disruption that can accompany such changes. Although my own economic philosophy is rooted in free market principles and a belief in the virtues of entrepreneurial dynamism, I cannot – and will not – defend the pursuit of profit when it utterly disregards morality or societal wellbeing. There are lines that neither market logic nor business tradition should cross, and the outright minimization of human impact in the name of short-term gain remains indefensible, even to the staunchest Libertarian. Those on the other side of the table which openly brag about their actions as “ruthless capitalism” will someday pay the accrued consequences of their actions; of this I am certain.