Trust, Ethics, and Real Justification

In the article, "What's a Business For?" by Chales Handy, the author discusses the importance of having integrity and virtue in business. He shows that trust is crucial, even foundational of a healthy economic market. Investors lose confidence in the company if the owners are not honest or ethical. Customers may not want to purchase products or services from a company who deals dishonestly. Employees will likely feel disgruntled if they feel they must also be shady to keep their jobs or if their employer is not ethical. Good people generally do not want to work for unethical businesses. In general, people can sense when someone is either being deceiptful, or when a company is self-serving. Investors may pull out, consumers will stop purchasing, and workers will not stick around. It reminds me of an idea that Stephen R. Covey said in "The Speed of Trust". He taught that when employers don't trust employees, the employees tend to slack off, take more time off for sick leave, work slower, and even get hurt on the job more. In "What's a Business For?" the roles are reversed. When the employees don't trust the employer, they will have the same results. Handy refered to recent scandals in the corporate world, such as the Enronn scandal. He used these examples to show that the loss of trust can ereparably damage entire economies, and even whole societies. Trust is the key that creates thriving, successful markets and relationships. "Real Justification" Handy taught that the "real justification for a business" is more than simply makeing money. It is also to fill a need; to provide new innovations that are needed in societies, such as goods and services. Money is what keeps a business going and supports our families, so it is necessary that businesses create profit. But profit is not the end goal. Handy makes a correlation between making a profit and breathing oxygen. Both are necessary for survival, but neither are our life's purpose. He teaches that businesses exist to contribute to the common good by creating value for society. Two Solutions: 1. Business Beyond Profit Handy argues that a business should recognize and always remember that their primary role in society is to serve their fellow beings. Shareholders are not their only concern. I agree with this because when service is our main goal, our business can fill more needs. It can encourage creativity and innovation. it can promote sustainability. it opens more doors for productivity. When companies only focus on the bottom line, they are tempted to cut corners, over work employees, or do damage to our beautiful planet. But companies who do business with a sociatal purpose will find ways to work with integrity, and find ways to balance responsibility and profit. 2. Involving Employees: Charles Handy allowing employees to take part in ownership or profit share. He suggests they be permitted to voice their opinions and ideas in the companies for which they work. I think this is a great idea. When people know they have part ownership, they work harder and smarter to make it succeed. If they know that at the end of the fiscal year, they will receive a profit share bonus, they are more likely to work harder all year long so that profit is higher. They become more creative, more motivated, and more committed to the company. Better employee performance leads to happier, heathier company culture. When they are happier and healthier, they tend to create more wealth in the world.