Reading “What’s a Business For?” this week raised a few points of thought for me.
Virtue and integrity. Virtue is behavior that shows high moral standards. Integrity is the quality of being honest and possessing strong moral principles. These are such important themes in all facets of life, including in the business world. In 2002, according to the article, a Gallup poll found that 90% of Americans felt that those who run corporations could not be trusted to look out for the interests of their employees. It would be easy to blame these top players for this general sense of insecurity in the country. Yet, they are playing by the rules of the game. The new rules, that is. A huge part of success in our economy is shareholder value. Increasing productivity and long-term profitability are only two options to make this happen. Mergers are another, which, in the end, usually don’t add much value to a company. If the slow road to growth is pursued, that growth will be tenfold more worthwhile, because it will have been achieved organically, through a problem-solving, creative process.
This all leads back to the question of why virtue and integrity are so important to an economy. As my example above illustrates, companies play by rules. If those rules are rewritten, so does their behavior. When virtue and integrity are the rule writing executives, among other qualities, they will construct a system that in turn creates more mindfully growth oriented businesses. Until we make that a priority, however, we will have a very difficult time in making these ideals a true reality in the marketplace.
According to the author, Charles Handy, the real justification for the existence of a business is to make a profit, so that they can create something more or better. This fact is important to owners, but useless to investors.
Handy offers a few changes that need to be made in the economy. First, businesses need to take best practice into their own hands, before waiting for the law to tell them so. By taking charge in areas such as environmental and social sustainability, businesses take a stand for what is right. Through giving to the community, they cultivate a culture that is based on virtue and integrity.
Second, in order to sustain and care for their human assets, businesses need to determine ways to protect people from the demands of their jobs. As it becomes more strenuous for individuals to balance the role of work, personal, and family, businesses are in danger of running a work force composed of stressed, robotic humans that have lost their spark for their jobs. When businesses see themselves as communities, they will care for their member’s individual needs. This benefits all parties. I cannot agree more with the truth of these solutions.
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