Business at a Crossroads The Crisis of Corporate Leadership_10 doc

186 BUSINESS AT A CROSSROADS
title” the executive director Graham Parker told Jennifer Higgs.
6
A few
hours after the core team has met the full orchestra assembles to
rehearse. In “the executive,” board and orchestra members may have
different roles – musicians may have administrative roles; staff members
may sit on orchestra committees. “We try and mix it up as much as we
can,” says Parker. Orpheus is tinkering constantly with its system.
Richard Hackman, a Harvard Business School professor, was recently
appointed to the board (see Chapter 6). He is working with Orpheus to
improve integration, communications, and accountability. Hackman
introduced Orpheus to the linking pin model where the team sits at the
center of a horizontal and vertical matrix, and groups radiate from it.
Orpheus is the 2008 award winner at WorldBlu Inc., a design studio
founded by organizational democracy evangelist, Traci Fenton. The
25-strong, 2008 WorldBlu List of Most Democratic Workplaces also
included a Fortune 500 group for the first time – DaVita, a leading U.S.
supplier of dialysis services. A company much admired by Fenton and
many other organizational democracy advocates is Semco Group, a
Brazilian supplier of industrial machinery. It has a charismatic leader in
Ricardo Semler, but the CEO is elected. As the principal architect of
Semco’s democratic system, Semler thinks he has too much power. He
spends as much time writing books and spreading the gospel at business
schools and elsewhere, as he does at Semco. The company, which before
the 2009 recession had recorded 14 years of uninterrupted, double-
digit growth, ran perfectly well without him for several months in early
2005 when he was recovering from a car crash (see box at the end of
this chapter).
The election of the company’s senior managers by employees, rather
than shareholders, is the crucial democratizing step. There is no

avoiding it. In The Democratic Enterprise, Professor Lynda Gratton
follows former London Business School colleague, Sumantra Ghoshal,
in assigning a key role to leaders in corporate reformations. She says
that in the democratic enterprise “it is in the creation of a shared purpose
that the role of the leadership is most vital,” and that without the
containment of such a purpose people will “simply go their own way
and the organization rapidly becomes an adhocracy … the leaders’
personal philosophy pervades the company and their sense of purpose
articulates a common vision for the realization of freedom and choice.”
Gratton’s book is an excellent survey of the business benefits of a demo-
cratic workplace, but she advocates benign tyranny, rather than democ-
racy. She doesn’t acknowledge the possibility that leaders are the
problem, not part of the solution.
7
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10 CORPORATE REFORMATION 187
In their book The End of Management and the Rise of Organizational
Democracy,
8
Kenneth Cloke and Joan Goldsmith take that crucial step
and advocate the election of CEOs by employees. They also advocate
the replacement of hierarchies by what they call “heterarchies” in which
the employees “make decisions for themselves and one another horizon-
tally.” I approve fully of the sentiment and the shape, but in English
English, “heterarchy” means rule by an alien. Companies are already
heterarchies, because in theory they’re ruled by their shareholders.
Cloke and Goldsmith democratize leadership itself, by arguing that
it is a quality required at every level and that companies should try to
develop “ubiquitous, linking leadership.” This is similar to the “context-
specific” leadership developed by the Nhunggabarra in Australia tens of

thousands of years ago (see Chapter 6).
I have no quarrel with this kind of leadership, but it is not what most
people understand by the word. If democracy is to come to the large
modern company, the omnipotent CEO has to go.
In the political world tyrannies can be overthrown by revolutions
and replaced by democracies, but you cannot turn business tyrannies
into democracies overnight. You have to take one step at a time as
Ricardo Semler did at Semco. You have to nudge.
Numbers that nudge
When I was doing my research on Gini coefficients for Chapter 4, it
occurred to me that companies wishing to establish reputations for
being fair organizations might consider publishing their own Gini coef-
ficients. To save you leafing back let me remind you. The Gini coeffi-
cient is a measure of inequality. A coefficient of zero is perfect equality;
everyone in the population measured has the same income. A coeffi-
cient of one is perfect inequality; one person has all the income. Insofar
as able people think extremely high levels of executive pay are wrong,
unfair, or merely unfashionable in this day and age, they will be attracted
by a company with a Gini below the average for its sector.
Numbers such as these can make a difference. If a graduate has two
equally attractive job offers, he or she might choose the one from the
company with the lower Gini. It would be easy to calculate the Semco
Gini, because the pay of every employee, including Ricardo Semler’s, is
an open book. This was part of the democratization of Semco; the
opening up, the laying of cards on the table, an end to secrecy. Most
writers on organizational democracy make much of the need for open-
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188 BUSINESS AT A CROSSROADS
ness or “transparency” as the modern parlance has it. In conventional
companies the possession of information is closely linked to power. The

higher up the hierarchy you are, the more you are allowed to know, and
vice versa. Giving everyone access to the important numbers is a vital
step toward democracy.
OPEN-BOOK MANAGEMENT
Giving everyone access to the critical numbers is called open-book
management (OBM). Ricardo Semler was an OBM pioneer. So was
Jack Stack, CEO of Springfield ReManufacturing Corporation. The
idea is that a company performs better when everyone involved knows
how it is performing. It is also in tune with demands for openness in
our institutions, and a dislike of secrecy and obfuscation. People are less
willing to be pawns in other people’s games and stories, and are more
financially sophisticated these days. They have more skin in the business
game and have become more interested in the wealth creation process.
The OBM evangelists argue that, if that interest is satisfied by opening
the books, employees will understand how their work contributes to
wealth creation, and more wealth will be created.
But you can’t stop there. “Opening the books” is opening Pandora’s
box. It unleashes a host of new desires, hopes, and anxieties that can
initiate changes so profound the OBM company could soon become
unrecognizable.
In The Open-book Management Experience John Case tells the tale of
Jack Stack’s experiment at Springfield ReManufacturing and of many
other companies that have implemented OBM.
9
He reaches three main
conclusions. The first is that it is pointless to tell people the whole,
unvarnished truth in a language that’s foreign to them. It follows from
this that OBM implies an obligation to educate and explain, so that the
critical numbers disclosed are understood.
Since the goal is to get people to work more effectively, and make

better decisions, OBM also requires a strong form of empowerment,
because it would be fruitless to help people understand how they
contribute without giving them responsibility for, and the freedom to
increase, their contributions. Case’s second conclusion is that OBM
companies are “companies of businesspeople.”
Transparent companies, employing “businesspeople” are risk-
sharing companies, because employees who see the critical numbers
“moving south” know they will have to tighten their belts. Their know
-
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10 CORPORATE REFORMATION 189
ledge restrains them but, in return for their restraint in hard times, they
will feel entitled to more rewards when the numbers tell them the good
times have returned. This is Case’s third conclusion. OBM requires
employees to have “a stake in success,” because they will not feel they
own the critical numbers unless they own some of the value they
measure. Case sees bonuses as “an integral part of the whole manage-
ment system [which are] expected, not only to motivate employees, but
to help them learn.” He says bonus plans should be “fair, generous and
comprehensible” and designed by employees. But surely an employee-
designed bonus scheme would favor employees, at the expense of share-
holders? Apparently not. “For reasons I don’t entirely understand,”
Case reported, “the opposite is more common.” This is indeed puzzling,
until one learns that most of the open-book companies Case studied are
owned in whole or in part by their employees. When employees are
owners a miserly, employee-designed bonus scheme reflects people’s
preferred mix of income and capital appreciation.
Employee ownership or part ownership is an implicit destination of
OBM, because equity can be seen as the capitalization of income from
bonus schemes. In large companies in which employees cannot, in the

short term at any rate, own a significant proportion of the equity, and
the contribution of an individual has only a marginal impact on overall
performance, the performance benefits of OBM are likely to be less
evident than in small companies. But insofar as OBM does improve
performance, there are two implications for large companies. The first
is that small and medium-sized companies that adopt OBM will outper-
form their larger rivals, and so become more attractive to able people.
The second is that large companies that seek the benefits of OBM
should review their bonus schemes.
OBM bonus schemes are “fair, generous and comprehensible.”
Schemes that are confined to senior executives are unfair, they’re
usually extremely generous, but only to senior executives, and their
blend of salary-based bonuses and grants of options and restricted
stock make them incomprehensible to the average employee. It is an
axiom of OBM that everyone contributes to company performance.
The bonus schemes at most large companies implicitly deny this
obvious fact, and imply instead that only top executives, particularly
the chief executive, create value.
A significant step toward democracy, and to a fairer distribution of
valued added, would be to put everyone on the same bonus scheme
and, as far as possible, to base the bonus of each employee on the
economic value he or she adds.
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190 BUSINESS AT A CROSSROADS
MEASURING CEO PERFORMANCE
It’s often said that you can’t measure the economic value added by
CEOs, because they’re members of the staff function, and the staff
function’s job is to consume value (and how!) supporting the line func-
tion. All you can do is ensure that the interests of the staff are aligned
as closely as possible with those of shareholders.

An implication of this argument is that if the value added by a CEO
personally, rather than employees collectively, could be measured, she
or he would not have to be paid so much (unless of course, she or he
was adding enormous, and measurable amounts of value. Were I a
shareholder, I would be willing to take my chances on that).
I’m not aware of any attempt to measure CEO value added. For
their part, CEOs are unlikely to see it as in their interests to partake in
such a study. But, given the potential savings, it would surely be in the
interests of shareholders to explore the possibility.
The obvious approach is to apply the activity-based costing method
that has revolutionized management accounting and ask each area of
the business – manufacturing, marketing, distribution, public and
investor relations, accounting, human resources, and so on – touched
by the CEO how much it would be willing to pay for the services he or
she has rendered. Negative figures would be acceptable. Some value
could be added to the total for strategic moves and balance-sheet trans-
actions such as acquisitions, but only insofar as they can be shown
subsequently to have created value.
It would be useful for assessing the value added by the CEO in the
company’s strategic and other balance-sheet moves, and appropriate in
a company committed to openness and candor, if the board, the board
committees, and the executive committee were all required to publish
the minutes of their meetings.
It wouldn’t be easy to calculate CEO value added and the result of
such a calculation would not be precise, but precision wouldn’t be
necessary. A ballpark figure would do. The objective is to bring some
proportion and clarity to CEO pay, so that both employees and share-
holders can be confident that taking as much as possible into account,
the CEO’s pay packet is reasonable.
It’s entirely possible, of course, that an activity-based analysis of the

CEO’s value added will produce such a small number that the company
will decide it can do without a CEO.
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10 CORPORATE REFORMATION 191
Redeeming the corporation
The dramatic events of the past two years or so in banking and in busi-
ness at large, offer an unprecedented and, hopefully, never to be
repeated opportunity, which should not be wasted, to take stock of our
economic arrangements and institutions.
The large listed joint stock company is an enormously powerful and
successful institution and is, in large part, the creator of the modern
world. If things had turned out differently, other forms of enterprise
might have done a better job, and might still do so in future, but the
corporation as we know it today has been and will continue to be for
the foreseeable future the main engine of world economic develop-
ment. But although its achievements are all around us and its strengths
are formidable, it has serious weaknesses.
I have argued in this book that it has recently become a liability for
liberal capitalism, because the huge sums of money it pays its top execu-
tives, which are not required for the efficient conduct of modern business,
are eroding the consensus on which the liberal capitalist system depends.
Excessive executive pay was tolerated before the crash because the
system seemed to be working. Now that those highly paid executives
running the system have turned out collectively to be reckless and
incompetent the trust invested in them has dissipated and the myth of
business leadership has been dispelled.
As shown by the furor over the $165 million worth of bonuses that
were to be paid to executives of U.S. insurance giant AIG, after it
received $152 billion of bailout cash, people are angry. They feel badly
let down. The least that they, as the ultimate owners of big business

(through pension funds and savings) had a right to expect from such
well-paid servants was prudence and competence. They got neither,
because as the past two years have made abundantly clear, the CEO-led
system of corporate governance doesn’t select for such qualities.
The danger, in these times of turbulence and anger, is that deeply
disillusioned and resentful voters will insist that the commanding
heights of their economies be taken into state ownership, and that the
liberal capitalist experiment be abandoned.
To pre-empt such a backlash, the large listed company must reform
itself. It must become freer, fairer, more open, more reasonable in its
dealings with its various constituencies, and more decent. In its shape,
governance, and distributions of power and rewards, it must come to
resemble more closely the political system we call liberal democracy to
which it owes its freedoms.
9780230_230941_12_cha10.indd 191 09/09/2009 10:03
192 BUSINESS AT A CROSSROADS
State ownership of our large companies is too drastic a remedy for
what ails big business. Its poor record disqualifies it. It would cost too
much in lost efficiency, dynamism, and the disciplines of competition.
My prescription is decapitation; the removal of the institution’s head; of
the position of CEO. The CEO-led system, in the power it gives to
individuals (untested during their climbs to the top for prudence and
competence), and the inequalities within companies and society at large
it creates, is the source of almost all the company’s own problems and
of the problems it creates.
In this chapter I have suggested how such a decapitation might be
executed, so to speak, and proposed other steps companies can take to
make themselves more democratic.
Democratic companies will be driven, not by the dreams and visions
of omnipotent CEOs, but by the interactions of self-interested and self-

confident employees empowered to make decisions and motivated by
fair rewards and their hunger for self-esteem, to be innovative and
entrepreneurial. They will perform better than unreformed CEO-led
companies, because they will find it far easier to attract and keep able
people who want work to be, not a price they have to pay to be them-
selves outside work, but an interesting, challenging, and deeply satis-
fying part of their lives.
We must move away from the current system, which John Rawls
called the “capitalist welfare state,” because it concentrates too much
power, wealth, and story in the hands of a small elite to allow the full
flowering of liberal principles. We must create a new kind of liberal
capitalism. Rawls proposed a “property owning democracy,” in which
ownership of wealth and productive assets is spread more widely, or a
“liberal socialist regime” in which political power is widely shared and
economic power is dispersed within companies, as when, for instance,
employees elect managers and own a significant proportion of their
company’s shares.
10
Ordinary people in search of self-respect will be the sculptors of the
reformed system. They will seek out organizations and forms of associa-
tion that don’t retain power, wealth, and story in the hands of a small
elite and, instead, allow each contributor to feel that he or she is being
fairly rewarded and is the author of his or her own story. There’s no
reason why people should continue to be mere “extras” in the stories of
superstar CEOs. They can be the authors of their own work narratives
and play significant roles in stories of enterprise with beginnings,
middles, and ends.
9780230_230941_12_cha10.indd 192 09/09/2009 10:03
10 CORPORATE REFORMATION 193
References

1 Managing Across Borders: The Transnational Solution, Harvard Business Press, 2002.
2 The Individualized Corporation: A Fundamentally New Approach to Management, Harper-
Collins, 1997.
3 The Organization Man, Simon & Schuster, 1956.
4 The Human Side of Enterprise, McGraw Hill, 1960.
5 The Open Society and its Enemies, Routledge, 1945.
6 Orpheus Chamber Orchestra embodies democratic principles. Self-governing orchestra
empowers musicians, by Jennifer Higgs, Axiom News, October 28, 2008.
7 The Democratic Enterprise, Prentice Hall, 2005.
8 Jossey-Bass, 2002.
9 The Open-book Management Experience: Lessons from Over 100 Companies that Have Trans-
formed Themselves, Nicholas Brealey Publishing, London, 1998.
10 Justice as Fairness: A Restatement, Belknap Press, 2001.
Semco’s steps to democracy
Ricardo Semler’s guru and principal ally in the democratization of Semco was Clóvis
da
S
ilva Bojikian, a radical educator and admirer of
A
.
S
.
N
eil’s
S
ummerhill school in
E
ngland. They took it slowly.
T
he first step was to respond to complaints about the cafeteria by asking

employees to help improve it.
A
group of employees ended up running it.
I
t was a
small step from there to let employees choose the color of their uniforms and the
paint on factory walls.
Th
e
Sã
o
Pa
ulo rush hour is notorious –
Se
mco employees spent hours in traffic
jams travelling to and from work.
No
problem.
Th
ey can set their own hours, and
travel at non-peak times.
Sk
eptics within
Se
mco’s management warned of disaster,
but it worked fine, because employees sorted out schedules that suited them and
the factory.
I
t was another small step from setting their own hours, to setting their own pay.
Benchmarks based on pay at 35 comparable companies were established and 10

percent was added to help reduce employee turnover. Everyone’s pay, including
S
emler’s, is published.
P
eer pressure produces differentials that are seen as fair.
I
t
was not a huge step from there to allow subordinates to appoint and review their
supervisors and ultimately for employees as a whole to elect the senior executives.
I
t was not as easy as all that, of course.
T
here were problems and arguments
along the way and the whole democratization process took nearly five years. But the
results, in terms of performance, speak for themselves.
Source: “Ricardo Semler Won’t Take Control,” by Lawrence Fisher, Strategy + Business,
issue 41, January 2006.
9780230_230941_12_cha10.indd 193 09/09/2009 10:03
194
Index
A
Accenture 166
Acorn Computers 167–8
activity-based costing 59, 190
administrative coordination 52–5,
60
agency costs 10, 38, 45, 53, 54,
65, 81, 94, 97, 98, 111, 112,
117, 119
AIG 191

Andersen Consulting
See Accenture
Apache Software Foundation
138
ARM Holdings 167–70
Armstrong, Lord 67
artificial life 169
asset-skimming 92–5, 98
A. T. Kearney 167
B
Barclays Bank 184
Barnevik, Percy 179
Barrett, Matt 184
Bartlett, Christopher 178–82
Berle, Adolf 37, 62
Black-Scholes 84, 85, 95
Booz-Allen & Hamilton 166,
167
Branson, Sir Richard 26, 63, 90
Brimm, Michael 26–8
Broughton, Philip Delves 61
B-schools
See business schools
business schools 60, 61, 102, 107,
109, 113, 186
Buttrick, John 58
C
Canonical 137
capitalism
entrepreneurial 62, 63, 66, 67,

131
family 62, 63, 67
financial 62, 63
investor 63, 99
managerial 60, 62, 63, 66, 67,
99, 131, 175
Case, John 188, 189
Catalyst 150
Catcher in the Rye 143
CEO
-led company 8, 11, 17, 29,
120, 123, 124, 127, 135,
138, 139, 148, 163–7, 170,
171, 174, 175, 176, 185,
191, 192
pay, pay packet 1, 5, 6, 7, 10,
24, 45, 54, 63, 67, 69, 72,
78–86, 88–98, 100, 102,
104, 106, 110, 114, 117,
119, 143, 148, 159, 165,
174, 175, 182, 183, 184,
187, 190, 191
system 61, 105, 109–11, 113,
114, 117, 119, 132–5, 142,
149, 177, 181–3
9780230_230941_13_ind01.indd 194 09/09/2009 10:35
INDEX 195
Chambers, John 26
Chandler, Alfred 43, 44, 48, 51–6,
58, 60–7, 69, 71, 99, 124, 125,

127, 131, 163, 179
chief executive officer
See CEO
Chrysler 99, 162, 163
Clapham, Sir John 57
Clive, Robert 38, 42
Cloke, Kenneth 187
cloud computing 137
Coase, Ronald 52, 53,
complex adaptive systems 132,
133, 142, 170
coping classes
See Woods, Judith
corporate community 148, 149,
corporate purpose 96, 133, 145,
146, 147, 181, 186
corporate social responsibility
See CSR
corporate soul 148, 149
Cranfield University 150
Crystal, Graef 82, 85
CSR 147, 148, 150, 155
D
Dawkins, Richard 34
Deering, Anne 170, 171, 173,
174
Deloitte 123
Deming, Edwards 163
democracy 3, 9, 11, 17, 18, 20,
29, 48, 69, 71, 90, 118, 131,

149, 185–9, 191, 192, 193
democratization 20, 187, 193
de Quincey, Thomas 41
difference principle
See Rawls, John
distributive justice 24, 70, 71, 145
E
Eagly, Alice et al. 154
Economic Policy Institute (EPI)
95, 96
economies of scale 162
English East India Company
(EEIC), the 37, 38, 53
environment of evolutionary
adaptedness
See EEA 8, 10, 43, 44, 52, 54,
55
F
Fels, Anna 153
Female FTSE Report, The 150
Fenton, Traci 186
Fink, Albert 125, 126
fitness landscape 129, 130
Follett, Mary Parker 154–6, 160,
165
Frank, Barney 81
Free Software Foundation 135,
136, 139
Frenier, Carol 156
Fukuyama, Francis 17, 18, 63

G
Gates, Bill 26, 90, 175
GE 96, 100, 101, 105, 114
Gekko, Gordon 89
General Electric
See GE
Gent, Sir Christopher 94
Gerstner, Louis 106, 126
Ghoshal, Sumantra 178, 179, 180,
181, 182, 186
Gilligan, Carol 159
Gini coefficient 72, 73, 74, 76,
187
in China 73–4
in the UK 75–7, 82
in the US 75, 82
Gini, Corrado 72
GNU 135, 136, 142
GPL 135, 137, 138
9780230_230941_13_ind01.indd 195 09/09/2009 10:03
196 INDEX
GNUpedia 139
golden parachute 2, 24, 80, 81,
82, 83, 114
Goldsmith, Joan 187
Gould, Jay 126
Gould, Stephen Jay 44, 49
Graham, Jacey 150
Graham, Pauline 155
Granovetter, Mark et al. 126

Gratton, Lynda 186
greed 5, 6, 10, 86, 88, 89, 90, 91,
98, 108
H
Hackman, Richard 110, 186
Hamel, Gary 133
Harvard Business School 59, 60,
61, 63, 71, 98, 116, 186
Harvey-Jones, Sir John 101
Hastings, Warren 38
Hayek, Friedrich von 84
Hegel, Georg W. F. 18
hierarchy-climbing 47, 59, 111,
152, 153
Hirsch, Fred 29
Hobbes, Thomas 18
Hudson’s Bay Company 39, 48,
49
I
Iacocca, Lee 99, 100, 101, 102
Ibbotson, Piers 143
IBM 106, 126, 136, 138, 139,
162, 163
ICI 100, 101
Industrial Revolution 4, 39, 41,
42, 57
information costs 52, 53
inside contracting 58
Institute for Fiscal Studies (IFS)
76, 77

Interstate Commerce Act 125, 126
J
JIT 163
JLP 155
John Lewis Partnership
See JLP
Johnson, Thomas 58
Johnson, William 82
joint stock company
CEO-led 8, 11, 17, 29, 120,
123, 124, 127, 135, 138,
139, 148, 163–7, 170, 171,
174, 175, 176, 185, 191,
192
company as a state 22, 23,
company as a people 22, 23
“nice” company, the 25, 146
justice as fairness 18, 69, 70
K
Kaplan, Robert 58, 59
Kauffman, Stuart 55, 127, 128,
129, 130, 131, 134, 135
Keynes, J. M. 3
Keynesian 64
Khurana, Rakesh 63, 98, 99, 115,
124
Kingfisher 94
Kotter, John 59, 60, 61
KPMG 123
Kuznets, Simon 73–5

L
Landes, David 34
Lazear, Edward 46
Lewis, John Spedan 155
liberal capitalism 1, 2, 3, 4, 6, 10,
11, 70, 71, 78, 84, 86, 88, 102,
119, 191, 192
consensus 3, 6, 10, 11, 70, 72,
77, 78, 83, 86, 88–90, 102,
119, 143, 145, 160, 177,
191
9780230_230941_13_ind01.indd 196 09/09/2009 10:03
INDEX 197
liberal democracy 9, 11, 17, 18,
20, 29, 48, 69, 71, 90, 191
liberal socialist regime 71, 192
line-and-staff organization 51
Linux 11, 56, 126, 135–8, 142,
143, 163, 170
London Business School 178, 181,
186
M
Machiavelli, Niccolò 18
managerial hierarchy 51, 54, 55,
57, 63
Marx, Karl 2, 40, 41
Masefield, John 40
MBA 60, 61, 71, 106
McGregor, Douglas 182
Means, Gardiner 37, 62

meme 34
mercantilism 36, 39, 40, 41
mergers and acquisitions (M&A) 7,
22, 54, 65, 93, 94, 105, 114,
162, 184, 190
Microsoft 4, 135, 136, 138, 139,
163
Mulcahy, Sir Geoff 94
multi-agent business enterprise
(MaBE) 11, 126, 138, 139,
143, 163, 164, 166, 171, 175,
176, 181
multi-agent system 134, 135, 138
multi-unit business enterprise
(MuBE) 43, 44, 48, 52–67, 69,
71, 123, 124, 125, 126, 127,
130, 138, 139, 163, 175, 176,
179, 182
Murdoch, Rupert 63
Murphy, Anne 170, 171, 173, 174
N
nabob (nawab) 38, 42, 53
National Association of Pension
Funds 94
netbook 137, 138
Nhunggabarra 118, 119, 187
niceness 146, 148
Nietzsche, Friedrich 18
Nupedia 140, 142
O

Obama, Barack 84
O’Neal, Stanley 79, 81
open-book management 188,
189
original situation 19
Orpheus Chamber Orchestra 110,
185, 186
Ousterhout, John 138, 142
outsourcing 9, 53, 54, 170
P
parasite strategy 169
Parker, David 133, 134
Parker, Graham 186
Peter, Laurence 133
Peters, Tom 133
physiocrats 32, 40, 41
Pickett, Kate 76
Popper, Sir Karl 3, 30, 96, 183
Porter, Michael 133
powers of sovereignty 16, 22, 24,
26, 30, 117
Prahalad, C. K. 133
PricewaterhouseCoopers 123
primary good 9, 17, 18, 28, 70,
127
Prince, Charles (Chuck) 78, 79,
81
procedural justice 21
property owning democracy 71,
192

psychological contract 9, 17, 145,
148
Q/R
Quesnay, François 40, 41
9780230_230941_13_ind01.indd 197 09/09/2009 10:03
198 INDEX
Rappaport, Alfred 96, 97
Rawls, John 9, 18, 19, 22, 24, 30,
69, 70, 71, 78, 81, 117, 127,
192
Ray, Thomas 169, 170
regents committee 182–5
regulated companies 36
RemCo 83, 84, 85, 93, 98, 104
Remuneration Committee
See RemCo
reputational assets 25, 147, 148,
154
restricted stock 92, 93, 148, 182,
183, 189
Ricardo, David 34
Ridley, Matt 33, 112, 151, 152,
153
RISC 167, 168, 169
Rousseau, Jean-Jacques 18
S
Salinger, J. D. 143
Sanger, Larry 140, 142
Sarbanes-Oxley Act 4, 111, 112,
158

Saxby, Sir Robin 168
Scarman, Lord 76
self-organization 132, 133, 134,
141, 142, 170
self-respect 7, 9, 11, 15, 17, 18,
20, 21, 24, 26, 28, 29, 30, 31,
48, 70, 127, 131, 145, 149,
159, 176, 177, 192
Semco 186, 187, 193
Semler, Ricardo 186, 187, 188, 193
Senge, Peter 133
shareholder value maximization
See SVM
Shuttleworth, Mark 137
Skuthorpe, Tex 33, 118
Smith, Adam 32, 33, 35, 36, 37, 39,
40, 41, 49, 58, 62, 66, 123, 131
social construction 99, 104, 123,
124, 126, 127
Stacey, Ralph 133, 134
Stack, Jack 188
stakeholders 21, 96, 146, 156
Stallman, Richard 135, 136, 139,
142
Stern, Joel 97
Stern Stewart 97, 114
Sternberg, Elaine 147
stock options 5, 32, 46, 63, 79,
84, 85, 92, 93, 95, 97, 114,
148, 182, 183, 189

Sveiby, Karl-Erik 33, 57, 118
SVM 96, 97, 146, 147
T
TARP 79–82, 112
Tawney, R. H. 35
Taylor, Frederick W. 57, 179
Taylor, Martin 184
telegraph 43, 56, 126
Thomson, Peninah 150
Tierra 169, 170
Torvalds, Linus 136, 137, 142
tournament theory 46, 47, 72,
97
TQM 163
transaction costs 52, 53
Troubled Asset Relief Program
See TARP
Tyler, Carlotta 155–7
U/V
Ubuntu 137
value-added reseller 166
value-adding partnership 166
Vanderbilt, Cornelius 126
veil of ignorance 19, 30
Vickers-Armstrongs 62, 64, 67–8
Vodafone 94
9780230_230941_13_ind01.indd 198 09/09/2009 10:03
INDEX 199
W
Wales, Jimmy 140, 142

Wall, Larry 138, 142
war for talent 7, 24, 59, 150
Weber, Max 33, 89, 99
Welch, Jack 26, 96, 100, 102, 105,
179
Western Railroad 34, 43, 51, 56,
126, 179
Whyte, William 180
Wikipedia 11, 139–41, 142, 143,
163
Wilkinson, Richard 76
Williamson, Oliver 53
Windows 4, 136, 137, 138
Woods, Judith 77
work–life balance 7, 17
work-related stress 17
WorldBlu 186
Wyclif, John 35, 36
Y
Yir Yoront 33, 34
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