Based on what you read, why are virtue and integrity so vital to an economy?
We read an article from the Harvard Business School titled, What’s
a Business For? written by Charles Handy. Because of recent financial
scandals people are reexamining the purpose of businesses. Several scandals have
created a distrust in corporate leadership based on fraudulent financial reports.
Handy said, “Not everyone is so complacent. 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 one will want to play” Investors
want to trust the financial reports given. The investors want to be making wise
choices with their money. Handy says, “Trust, too, is fragile. Like a piece of
china, once cracked it is never quite the same. And people’s trust in business,
and those who lead it, is today cracking. To many, it seems that executives no
longer run their companies for the benefit of consumers, or even of their
shareholders and employees, but for their personal ambition and financial gain.”
Creating financial documents with integrity will help to build trust with the
investors in the future. People want to have faith that they leaders of the company
they are investing in are people that have virtue as a leading characteristic.
According to Charles Handy, what is the “real
justification” for the existence of businesses?
In the article Hand says, “The purpose of a business, in
other words, is not to make a profit, full stop. It is to make a profit so that
the business can do something more or better. That “something” becomes the real
justification for the business. Owners know this. Investors needn’t care.” Handy discusses the importance of helping others. We need to
think of how we can make the world a better place, not just make ourselves more
money. “To mistake the means for the end is to be turned in on oneself, which
Saint Augustine called one of the greatest sins.” implores Handy. Thinking about
helping others is what a business is really trying to accomplish.
What are two solutions proposed by Handy that you agree with? Why?
1. “More honesty and reality in the reporting of
results would help for a start.”
a. I totally agree with this solution that Handy proposed.
b. We need to have a sense of honesty from those who are running companies. We also need to have reality in looking at the financial reports. We
can not always be growing at record rates.
2.
“Global businesses not only do harm, but that
the harm outweighs the good. If those charges are to be rebutted, and if
business is to restore its reputation as the friend, not the enemy, of progress
around the world, then the leaders of those companies need to bind themselves
with an equivalent oath. Doing no harm goes beyond meeting the legal
requirements regarding the environment, conditions of employment, community relations,
and ethics.”
a. I agree with this solution proposed by Handy.
b. We have all
heard of cases where a company dumps toxic waste in an illegal way to avoid expensive
costs. This would be unacceptable if the people in charge were honest and
committed to “Doing no harm.” We must as a community of business leaders set an
example of doing what is right even if no one is watching.
