Charles Handy : organisation
Gruter Institute Project on
Values and Free Enterprise
With support from:
John Templeton Foundation
UCLA – Sloan Research Program
Ann & Gordon Getty Foundation
What is a Business For?*
Charles Handy
Fellow of the London Business School
This chapter is part of a collection posted on the SSRN website in the Economics
Research Network section located at - http://papers.ssrn.com/abstract=932676
Electronic copy available at: http://ssrn.com/abstract=932676
2
What is a Business For?
Charles Handy
Could capitalists bring down capitalism, wondered the New York Times in the wake of the series of corporate scandals in both America and Europe in recent years?
They concluded that a few rotten apples would not contaminate the whole orchard, that the markets would eventually sort out the good from the bad and that, in due time, the world would go on much as before.
Not everyone was so complacent. Markets rely on rules and laws, but those rules and laws in their turn depend upon truth and trust. Conceal the truth or erode that trust and the game becomes so unreliable that no one will want to play. The markets will empty then and prices 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 transformed into the creation of wealth, will have been eroded and we shall all be the poorer. Either that, or we shall have increasingly to rely on government for the creation of our wealth, something that they have always been conspicuously bad at doing.
In the recent scandals truth seemed to be too easily sacrificed to expediency and the need, as the businesses saw it, to reassure the markets that profits were on target.
John May, a stock analyst for a US investor service, pointed out that the pro forma earnings announcements by the NASDAQ 100 companies overstated their profits by
$100 billion in the
Values and Free Enterprise
With support from:
John Templeton Foundation
UCLA – Sloan Research Program
Ann & Gordon Getty Foundation
What is a Business For?*
Charles Handy
Fellow of the London Business School
This chapter is part of a collection posted on the SSRN website in the Economics
Research Network section located at - http://papers.ssrn.com/abstract=932676
Electronic copy available at: http://ssrn.com/abstract=932676
2
What is a Business For?
Charles Handy
Could capitalists bring down capitalism, wondered the New York Times in the wake of the series of corporate scandals in both America and Europe in recent years?
They concluded that a few rotten apples would not contaminate the whole orchard, that the markets would eventually sort out the good from the bad and that, in due time, the world would go on much as before.
Not everyone was so complacent. Markets rely on rules and laws, but those rules and laws in their turn depend upon truth and trust. Conceal the truth or erode that trust and the game becomes so unreliable that no one will want to play. The markets will empty then and prices 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 transformed into the creation of wealth, will have been eroded and we shall all be the poorer. Either that, or we shall have increasingly to rely on government for the creation of our wealth, something that they have always been conspicuously bad at doing.
In the recent scandals truth seemed to be too easily sacrificed to expediency and the need, as the businesses saw it, to reassure the markets that profits were on target.
John May, a stock analyst for a US investor service, pointed out that the pro forma earnings announcements by the NASDAQ 100 companies overstated their profits by
$100 billion in the