Analysis of Handy's Article, "What's a Business For?"

 

My assignment this week is to report on an article we read in class called: What’s a Business For? By Charles Handy for the Harvard Business Review, dated December 2002.

The questions I am to answer are:

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

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

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

Without virtue and integrity, the majority of the general population has lost trust in big business. There is a sense in that CEOs are more concerned with lining their pockets than they are in behaving with integrity. The rise of the stock option as a hiring benefit rose from 2% in 1980 to approximately 60% at the writing of this article (2002). CEOs may be more interested in bumping up their stock value in the short term at the risk of damaging a company in the future – long after they are gone and have taken their spoils with them. At the time of this writing, 90% of Americans believed that people running corporations were not trustworthy in looking after the welfare of their employees.

According to Mr. Handy, the real justification for running businesses was not to make money, as many people assume. The real reason that businesses are created is to create “something collectively that they could not accomplish separately.” Businesses are or should be created to contribute something useful that makes the world a better place.

The two solutions that I agree with Mr. Handy about are that 1) We should consider that the success of a company should be measured about how it impacts others and not only ourselves. Companies need to focus on the greater good as well as the bottom line. And 2) Our American culture could learn from the Europeans about quality of life. Two weeks of vacation a year is minimal compared to the rest of the world. Many American companies call this “PTO” and lump the sick time and vacation and personal time all into one basket at two weeks, and maybe three when you’ve been there for 5 years. People need to take breaks from the office, to decompress and recharge. Having lived overseas and been the beneficiary of a European approach to “there is life outside of work,” employees tend to be happier, work still gets done, employees don’t as easily get burnt out and resentful. Five weeks of vacation a year is a blessing most Americans don’t get to experience but should be allowed to.