Week Twelve Reflection: What's a Business For?

 According to the first two pages of Charles Handy’s article “What’s a Business For?”, having virtue and integrity is super important for a functioning economy because they create the trust and truth that markets depend on. Handy points out that while markets are governed by rules and laws, those laws really only matter when there’s honesty and a shared sense of trust behind them. Without integrity, the whole economic system can fall apart. When companies twist the truth for quick gains, like in the accounting scandals mentioned by Handy, people lose confidence. When trust gets broken, investors pull back, share prices drop, and folks turn to less productive ways to store their money, like real estate or savings, instead of investing in new ideas and businesses. This can cause the economic engine to stall, weakening the very things that create wealth in society.

For Handy, the main reason businesses exist isn’t just to make a profit. He says, “the purpose of a business... is to make a profit so that the business can do something more or better.” So, profit isn’t the end goal, it’s just a way to achieve something bigger. He believes that companies should add value to society, whether that’s through coming up with new products, providing helpful services, or improving people’s quality of life. He takes issue with the obsession over shareholder value because it can lead to unethical behavior and short-sighted thinking.

Two ideas from Handy that I really connect with are:

Viewing businesses as communities: Handy suggests that companies should act like communities of members (the employees) instead of cold properties that can be owned and exploited. This shift in perspective values everyone involved, not just the shareholders. I think this is a great idea because it builds a sense of ownership, accountability, and loyalty among employees, which can boost creativity, productivity, and long-term success.

Redefining profit as a means to a greater end: I really resonate with Handy’s idea that profit should serve a higher purpose. Businesses that only chase financial gains often ignore their social and ethical responsibilities. But when profit is seen as a tool to contribute to the greater good, like through innovation, sustainability, or community improvement, it connects capitalism with broader human values.

In a nutshell, Handy encourages us to rethink the narrow view of businesses as just profit-driven. His focus on integrity, purpose, and community gives us a powerful way to reimagine capitalism so it benefits both the economy and society.