During the junk-bond and LBO craze of the 80s, Michael Jensen wrote an article for Harvard Business Review called "The Eclipse of the Public Corporation". His point was that Private Equity would create better-performing companies because the conflict between owners and managers would disappear as they became the same people. An example being behaviors like building a big unnecessary staff to feel important (which if you were an owner you'd be more likely to decide wasn't worth the actual dollars), or promoting toadies regardless of their actual ability to run the business.
Obviously that only held true when the owners wanted to be managers, rather than flippers (speculators), which is what brought on the end of the JuniBond era.
More to the question of Sustainable Capitalism, the clear problem is that non-owner managers (e.g. managers of publicly-held corporations) feel that have to manage only for short-term financial results, or else they'll be replaced by the owners (equity holders), who are too far removed from the operation of the business to consider other perspectives.
And, hand-in-hand with Scale Vs Consolidation, the complexity that comes with a large organization makes it difficult to juggle "competing" issues/agendas. Which makes it easier to default to managing-by-the-numbers.
Another management-vs-scale interaction is that, even if the organization is privately held, when it's big it becomes easier for middle managers to act for their own foolish benefit.