DaSilva, C. & Trkman, P. (2014), “Business Model: What It Is and What It Is Not”, Long Range Planning 47, 379–389
DaSilva, C. & Trkman, P. (2014), “Business Model: What It Is and What It Is Not”, Long Range Planning 47, 379–389
A few days ago, I attended a conference on the work of French sociologist Pierre Bordieu and its relevance for accounting. There were many things to take away but one of them was the fact that, in later life, Bordieu increasingly became an activist as well as an academic. In his 2003 work Firing Back: Against the Tyranny of the Market 2, he famously wrote:
“Those who have the good fortune to be able to devote their lives to the study of the social world cannot stand aside, neutral and indifferent, from the struggles in which the future of the world is at stake.”
He was specifically referring to sociologists, but I think the same is true of business educators and, most relevant to me, finance educators. Following the financial crisis, a writer in The Economist observed the following:
“Most of the people at the heart of the crisis— from Dick Fuld at Lehman Brothers to John Thain at Merrill Lynch to Andy Hornby at HBOS—had MBAs after their name . . . In recent years about 40% of the graduates of America’s best business schools ended up on Wall Street, where they assiduously applied the techniques that they had spent a small fortune learning. You cannot both claim that your mission is “to educate leaders who make a difference in the world”. . . and then wash your hands of your alumni when the difference they make is malign.” (Economist, September 24, 2009: on-line edition, quoted in Crossan et al, 2013)
Of course, business schools have always included at least some materials on ethics, and are even starting to consider character, as Crossan and her colleagues set out in their paper, but I do not think this goes far enough. There is a bigger issue that has bugged me more and more in my many years as a finance educator and I would express it like this:
The general assumption seems to be that finance is a technocratic, value-neutral discipline. It is taught the same way all over the world to people of widely different cultures and outlooks. Ethics in finance largely consist of reporting things correctly (sic), ensuring that controls are effective, rules are complied with and that managers discharge their responsibilities to their shareholders or stakeholders.
It does not take very much effort to deconstruct and undermine this view. Jacques Derrida argued that symbols (which include words and numbers) never have a fixed, neutral meaning. Meaning of symbols is always “deferred” into other symbols. In other words, meaning of any sort depends on a complex web of context. Financial numbers mean nothing in isolation, they can only be interpreted in a context, and that context will include values. It follows on from this that, like Bourdieu, Derrida insisted on an activist dimension to his project – “Deconstruction, I have insisted, is not neutral. It intervenes” (Positions).
To take one concrete example, the law in the UK requires directors to act in the best interests of shareholders, which is assumed to be maximising financial return. This is also the assumption behind corporate governance codes and the starting point for most financial analysis techniques. This point is further reinforced by the structure of an income statement, which culminates in the profit or loss attributable to shareholders, inherently conveying the idea that the only really important number is the return to providers of equity capital, as pointed out by Sikka (2015) and others.
It is clear that there is a value system hard-wired into the way we do finance and, to my mind, the best ever summary of that system was set out by the fictional financier Gordon Gekko in his famous speech from the 1987 film Wall Street. If by some chance you have never seen this speech, I highly recommend viewing it. It is an extraordinary piece of film:
Of course, it is obvious to us now that Gekko was spectacularly wrong in his prescription for the USA, and many of us would recoil from his description, but who can deny that his approach is the morality at work in our boardrooms and trading desks? If you have an hour available at some point, a contrary view can be found in this absorbing documentary where the entrepreneur Peter Jones interviews Mark & Mo Constantine, the owners of Lush, along with Chris Dawson, owner of discount store The Range.
Lush is a rare example of a business run to maximise social good rather just profit, although along the way the Constantines have created a spectacularly successful business too. They can do this because the business is privately owned – the reason Mark Constantine declares he would never sell the business is because a publicly-owned company could not operate like this. If he sold the company, it would be absorbed by the dominant paradigm and its values would not last long.
So if we are not happy with Mr Gekko’s approach, are there some alternative approaches which can inform our finance education and practice? I think there are, and will aim to explore these in my next blog post.
Crossan, M., Mazutis, D., Seijts, G. & Gandz, J., “Developing Leadership Character in Business Programs”, Academy of Management Learning & Education, 2013, 12 (2), 285–305. http://dx.doi.org/10.5465/amle.2011.0024A
Sikka, P. (2015) “The hand of accounting and accountancy firms in deepening income and wealth inequalities and the economic crisis: Some evidence”, Critical Perspectives on Accounting, 30, 46–62. http://dx.doi.org/10.1016/j.cpa.2013.02.003
How do people who work creatively – writers, artists, musicians, playwrights – make a living? The question is as old as civilisation and the answer has usually involved some mix of patronage by wealthy individuals or institutions, and getting people to pay for something that is scarce – a live performance or a unique painting for example. The technologies developed over the last five hundred years, from printing to the CD, have steadily increased the opportunities for creative work to be distributed, but have also tied that work to a physical artefact. This has allowed the development of copyright and royalties – the creator of the work gets a slice every time one of these artefacts is sold. It worked for a while in a rough and ready sort of way but now we are in a new era. Pretty much anything can be digitised and if it can be digitised, it can be copied at negligible cost.
Industries are scrambling to catch up with this and publishing, in particular, is still dominated by licensing and copyright agreements which seek to restrict access to writing in various ways. However, I (and many others) do wonder if all this is simply missing the point of what it means to be a writer in a digital era. I recently came across a quote from science fiction writer and activist Cory Doctorow which expressed the point well:
“For almost every writer, the number of sales they lose because people never hear of their book is far larger than the sales they’d lose because people can get it for free online. The biggest threat we face isn’t piracy, it’s obscurity.”
Doctorow walks the talk, making much of his work (which I highly recommend) available for free download from his website in multiple formats, on the basis that his work will thus be read more widely, and can be monetised other ways. Besides, he wants people to read his work. There are ways for writers, musicians and artists to make a living today, but trying to do this by selling physical objects which contain copies of your work will only get harder and harder. And writing wasn’t exactly a good way of making money to start with. For every JK Rowling or EL James there are thousands of very talented writers just about making a living and for every one of them there are thousands of others who write and earn little or nothing from it. Clinging on to your copyright and restricting access to your work in the hope of making some money out of your writing one day is a mug’s game. To make money, you are much better off buying a lottery ticket – it’s a lot easier and the odds are better.
That’s the bad news for all of us who like writing, but there is good news too. It has never been easier to be a writer, and to actually find an audience for your writing. No one bothers to count the numbers of blogs out there any more, and then there are countless social media platforms, fiction sites, fan forums and all kinds of other things. Contributing to these requires an internet connection and a bit of time. If you like the idea of a book then it will cost all of £149 to publish your work as a paperback, less as an ebook. Sure, there is a lot of noise out there and it can be hard to be heard, but it is perfectly possible with care and persistence. This humble blog has been going for nearly four years and has clocked over 9,000 views. That’s a long way off the big league, but means that thousands of people have seen my work who would not have done if I kept it to myself, and hopefully some of them have found it interesting or useful.
Needless to say, I do not write this blog to make money and I explained a while ago why I decided to license my blog under Creative Commons. If anyone wants to use my work in any way, I am only too pleased to get a wider audience and would just ask that they acknowledge where it came from. I do not want to hoard my ideas and keep them to myself. I have always trusted that the more ideas I can write about, the more ideas I will have and the easier I will find it to write about them. So far, it has worked for me. F Scott Fitzgerald famously put the point this way:
“You don’t write because you want to say something, you write because you have something to say.”
So, he might have added, the more people who hear it the better. And as so often these days, I notice that all this is something my teenage kids, who have grown up in a connected world, grasp instinctively. My daughter enjoys, and sometimes contributes to, “fan fiction” sites, where people write stories in homage to their favourite writers and characters. My son builds new levels for computer games and sometimes new games on sites which give you the tools to do so. The stories and games can be copied as often as anyone wants and they do it just for fun. They know that creativity is to be shared and celebrated, not hoarded. I’m proud of them.
So Dave Cormier is now getting us to think about “the dark side of the rhizome”, and whether it is invasive and smothers other possibilities. To add further provocation, he notes that the volumes of tweets relating to #rhizo15 is rising, but the number of participants is falling. A closer knit group of people are communicating more intensively with each other. To paraphrase, if I may, he is wondering whether a community based on the principles of openness and discovery is actually becoming something of a closed group, and whether this matters.
For me, the obvious point of comparison relates to my original university studies in theology. Religious groups are fascinating case studies in developing and maintaining communities. They are frequently committed to principles of outreach and welcoming people in, but on the other hand they define themselves quite clearly in ways that of necessity exclude people. Put another way, in order for some to “belong” it is necessary to be clear about who does not belong. This may be related to obvious factors (e.g. who has been baptised or confirmed), or more subtle signals (e.g. what vocabulary you use). My personal experience, from the days when I was a practising Christian, showed me that church groups, despite their ideals, are often very closed and difficult to break into without huge effort.
There is a paradox here for all communities. In order to thrive, they need some element of cohesion – shared understanding, vocabulary or, as Etienne Wenger (1998) has taught us to think of it, shared practices. But the stronger that cohesion becomes, the more this group will turn inward, rejecting outside influences and challenges, with consequences that can be severe. The American psychologist Irving Janis (1972) developed the concept of “groupthink” to describe irrational and even dangerous decision-making that can take place within closed groups. Active measures are needed to prevent this. A few days ago, the General Election in the UK resulted in over 180 new MPs taking up seats in Parliament – we can perhaps see the wisdom of a system that builds in systematic and significant institutional renewal every few years.
So how does this relate to the rhizo15 group? The fact is that, over the few weeks it has been running, those with the inclination to get deeply involved with it have coalesced into a group with distinctive interests and vocabulary, which undoubtedly makes it harder for others to “break in”. This is probably an inevitable aspect of community formation (certainly not unique to rhizomes) and is something that established participants should try to be aware of. However, the community will shift over time and next year (hopefully) offers a brand new chance for anyone who wants to to get involved. The balance here between cohesion and openness seems reasonable to me.
Janis, I. (1972). Victims of Groupthink: a Psychological Study of Foreign-Policy Decisions and Fiascoes. Boston: Houghton Mifflin.
Wenger, E. (1998) Communities of Practice: Learning, Meaning, and Identity, Cambridge: Cambridge University Press .