What's a Business For?

Charles Handy, in his article What’s a Business For? states, “Markets rely on rules and laws, but those rules and laws in turn depend on truth and trust.” If there is no truth and trust, then the market becomes unreliable and people won’t want to invest in it.  This could make it so that we rely on the governments for our modes of savings and they have not been very good venues in the past for this. 

Many executives are no longer concerned about the long-term health of their company.  Instead of being concerned about their customers or employees, they are more concerned with their ambition and how much money they can make.  It says in the article that “one result of the obsession with share price is an inevitable shortening of the horizon. . . companies are mortgaging their futures in return for a higher stock price in the present.”  With many executives now receiving stock options as part of their payment, they are more concerned with making money now than in investing in the long-term health of the company.  If we can’t trust those that are running the companies to do what is best for the company, then we don’t want to invest in them which hurts our overall economy.

Handy states that the purpose for business is not just to make money as a means in and of itself, but it should make money with the purpose to “do something more or better.”  When I look at my future business, I have to ask myself – why am I starting a business?  Is my sole purpose to make money or is there a greater purpose in it?  That is something that every business owner should ask themselves, not only in the beginning of their venture, but many times throughout the life of their business.  It will make it a lot easier to stay within your guardrails if you see a greater purpose to your business than making money.

Handy proposes that one way to combat this is to make the business into a community with a purpose.  I agree with this because in a community everyone contributes and everyone benefits.  When those you have working for you are able to feel that they have a voice and that what they do matters, they will be better employees.  When the executives feel that they are accountable to their employees, then they make better long-lasting decisions. 

Another proposition that goes along with this is that we need “better ways to protect people from the demands of the jobs it gives them.”  Many jobs have become so stressful and people find it very difficult to balance the demand of work with other parts of their lives.  The expectations that some companies have for long hours and after-hours work needs to be curtailed.  Ultimately, we need to remember that it’s not about money, it’s about people and our community.  We need to treat others as we would like to be treated and be worthy of the trust that’s been placed in us.