Charles Handy article on why business organizations have gained so much power, and possible methods that can be used to rein in the power, immunity, and unaccountability of business organizations. Handy begins the article discussing how his drive through Europe reminded him that history is recorded in the skylines, how European buildings reflect the transfer of power through the centuries, and how their structure and worldly functions offer a number of paradoxes to the observer. Handy proceeds to ponder why these business organizations have acquired so much power, concluding that the joint stock company, coupled with limited liability, have spurred such changes in business’s power. However, Handy understands that such inventions have also put Britain on a dangerous course, for, by separating the theoretical ownership of a company from its management, companies turned shareholders into competitive actors. As a result of such developments from the nineteenth century, stock options and, later, bonuses tied to share prices became the compensation of choice, with managers manipulating those share prices in their own interests and frequently to the detriment of the business. Handy concludes that the next good idea would be to require directors to obey the law and put the long-term interests of the company as a whole before those of themselves or their shareholders.
Handy, Charles B Harvard business review book series Jensen, Michael C Meckling, William H Europe Management Management by objectives Management science Organizational effectiveness Organizational change Organizational behavior Organization Business ethics Business planning Business, culture and change Harvard Business Review Shareholders
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Charles Handy article on why business organizations have gained so much power, and possible methods that can be used to rein in the power, immunity, and unaccountability of business organizations, 2012; Charles Handy Papers; Box 20, Folder 18; 1 page
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