Explanation:
American big business and its executives face public demands for new actions, different policies, and changed attitudes in four areas rarely before considered business responsibilities. The response of business to the challenge of these demands will determine in large measure the continued public acceptance of American business as the core institution of economic progress and development. These challenges are centered on the following areas:
(1) Big business is expected to maintain (and where necessary, restore) America’s ability to compete in the world market. Central here is the need to change deeply embedded—but outmoded—principles of American wage and job policy, with management viewed as the leader in bringing about these changes.
(2) Big business is increasingly supposed to be a policy innovator, in addition to its more traditional role of innovator in technology and in business practices (e.g., in the distribution system or in organization). For example, it is business, rather than government or “the economists,” that is expected to work out the basic concepts and policies for “semifree markets,” such as the defense business or the large-utility market.
(3) The manageability of the large business enterprise itself is coming to be looked upon as definitely “affected with the public interest,” rather than the “private affair” of the individual company, its managers, and its stockholders. Top managements that duck this issue may find themselves eventually saddled with restrictive regulation.
(4) Finally, the public increasingly expects the big-business executive to develop a code of conduct which reconciles the demand that he be a businessman with the demand that he be a professional.1 For example, executive compensation plans need to be re-examined in light of the public’s expectations about these twin roles.
These four basic demands may appear to businessmen as a new wave of “hostility to business.” Actually, they arise from an opposite attitude: acceptance of big business by the American public as the tool best suited for most of the economic jobs of our society and, parallel to that, acceptance of the big-business executive as a member of the nation’s leadership and a “professional manager.” Less than ten years ago, the appointment of one automobile company president as Secretary of Defense was considered a significant declaration of political principles. When another automobile company president got the job a year ago, the only question was: “Is he a big enough man?”
Because public attitudes toward business and businessmen are fundamentally positive, public expectations with respect to big business and its leaders are rising sharply. As a consequence, public sensitivity to any gap between actual and expected business behavior is heightened. This, rather than any sudden boost in public morality, explains the deep and lasting public concern with the General Electric-Westinghouse price-fixing affair.
The new demands, which I shall sketch in this article, are the first concrete manifestations of these expectations. They are therefore likely to be test cases, having an impact far beyond their intrinsic significance to public attitude and public policy toward business and businessmen in the United States.
