“What’s a Business For?” Report

For this blog post I am being asked to respond to specific questions from “What’s a Business For?” By Charles Handy. This article was published in 2002 by Harvard Business School Publishing Corporation. 

Based on what you read in the first two pages (pages 3 and 4), why are virtue and integrity so vital to an economy?

Virtue and integrity are vital and essential in our economy. Handy said it best when he said, “Markets rely on rules and laws, but those rules and laws in turn depend on truth and trust. Conceal truth or erode trust, and the game becomes so unreliable that no wone will want to play. The markets will empty and share prices will collapse, as ordinary people find other places to put their money – into their houses, maybe, or under their beds. The great virtue of capitalism – that it provides a way for the savings of society to be used for the creation of wealth – will have been eroded. So, we will be left to rely increasingly on governments for the creation of our wealth, something that they have always been conspicuously bad at doing.” What’s laughable is that so much of our stock market and government is untrustworthy and deceitful, but Handy is saying that Americans continue to lose faith in businesses and the government because they can no longer rely on the rules and laws to have virtue and integrity. Virtue and integrity are vital to the economy because the economy needs people to trust that their money is safe, so that they will invest and keep the economy moving, rather than hiding their money under the mattress. 

According to Charles Handy, what is the “real justification” for the existence of businesses?

The “real justification” for the existence of businesses is to “make a profit so that the business can do something more or better.” Handy explained that the “something” is the justification. Corporations, and leaders of corporations need to have more purpose than just themselves. 

What are two solutions proposed by Handy that you agree with? Why?

1. I like the solution proposed that employees are members rather than employees with a responsibility to validate the results of their work. I like the idea that key people are rewarded with shares of profits. I like this option, because it means that if someone works harder, they are rewarded with the success of the company. I feel like if more companies did pay this way, people would work harder. But those that did not work hard would be weeded out more easily. 

2. I like the idea of businesses having to take a version of the Hippocratic oath to “do no harm”. I like what Handy said, “Doing no harm goes beyond meeting the legal requirements regarding the environment, conditions of employment community relations, and ethics. The law always lags behind best practice. Business needs to take the lead in areas such as environmental and social sustainability instead of forever letting itself be pushed onto the defensive.” I believe that businesses and business leaders need to be more accountable for their actions and how they treat others.