A book review by Dr. Owen A. Anderson, The Hawthorne Corporation, June 2009
Beyond Good Company: Next Generation Corporate Citizenship by Bradley Googins, Philip Mirvis, and Steven Rochlin (Palgrave MacMillan, New York, 2007)
Can your Company be a force for good without sacrificing the bottom line? Based on interviews with hundreds of executives, you will be inspired by the result.
What theories will be needed to support twenty-first-century business? Just before he died, the brilliant Sumantra Ghoshal published an urgent essay (Ghosal on Management) about how “bad management theories are destroying good management practice.” And that was before the recent housing debacle and economic crisis. Author and thinker Henry Mintzberg was similarly criticizing conventional MBA programs which train people in the functions of business rather than a general education in the practice of management. As Mintzberg says “we require better managing in this world, and need serious educational institutions to help get us there.”
Ghoshal chastised business schools for uncritically embracing agency theory and its simplistic notions. Agency theory connects corporate management, directors and Wall Street at the hip with “shareholder value”, with stock price being the primary objective for a business. Other stakeholders, customers, employees, the community and the planet, become marginalized in this model, which became a corporate religion beginning in the eighties. Business forgot Peter Drucker’s famous definition of the purpose of business: “To discover a customer”. Engaged corporate citizenship (which is what the Rix Center at The Board of Trade is all about), as described in this book puts others, including the community back into the corporate equation for sustainability.
These concepts are still being taught in many schools. A new stage in corporate citizenship is needed. New theorizing and research is needed to help managers look at the holistic character and positive potential for good of the business world.
This is a call to courage for business leaders and academics alike. Do you want to serve the world?
It should go without saying that one cannot sacrifice the bottom line. That by-product is a necessary condition to being in business. Attitudes about citizenship and the role of business are changing. A more active and courageous leadership role is the challenge we are given in Beyond Good Company.
What do the authors mean by corporate citizenship?
1) do no harm; minimize the negative
2) maximize the benefits
What is the shared value in the form of economic wealth and social welfare? This means working on the big picture in society, and taking into account the full social, economic, and environmental outputs. This takes time and energy and has enormous benefits.
As the authors note many companies are not playing the good company game. In a recent survey 4 in ten adopted a minimalist view of their role: maximize profits. Next generation citizenship is emerging in select companies, connecting it to purpose and strategy. Inspired leaders make business out of citizenship. Those leaders are moving from the minimalist agency theory view to the renewal, repairing and building society itself. Next generation business will repurpose the enterprise and take an integrative, strategic approach to adding value to both business and society.
We all need to contribute to this discussion about the evolving role of business.
This book Beyond Good Company can assist you and your organization to step up to the next level in corporate citizenship. The examples in the book will help you build courageous leadership. New theories are needed which will go beyond the dated agency theory.
There are many stages of corporate citizenship. This book will help raise the level of discussion in your organization.
Dr. Owen Anderson is The Vancouver Board of Trade’s literary critic-in-residence
