The Business Environment of the UK Essay Example

the industry's bad image:A reviewer in the Times Literary Supplement could claim in 1969 that 'private enterprise business and businessmen are more disliked, detracted and depreciated by the British radio, press, and two out of our three political parties than by all parties and media of public communication in all other western countries.' In the same period, a chief executive vented the kind of feeling that rarely saw print, complaining to a business writer that, behind all the public exhortations to industrial growth, 'industry is a leper.' Not surprisingly, a poll of directors of leading British companies in 1974 revealed that 75 percent thought that television was 'biased against business and private enterprise,' and 88 percent felt that universities were similarly biased; despite the business gloom of that annus terribilis, not many felt the problem to be new. (Wiener 1981, p. 131-132)Also, as Wiener (1981, p.

130) describes, 'the late-Victorian world of politics and government was less than welcoming to industry' and '...these attitudes thoroughly permeated the upper echelons of government', which-like many prime ministers-showed strong 'condescension' towards the industry. As described, the educated public, politicians, the government and the society as a whole disdained especially middle-class businesses in manufacturing and the industry.

Second, Wiener focuses on an economic aspect-the distinction between finance and industry. This distinction between finance and industry shows once more the isolation of industrialists in the society. Especially production had a very low prestige:Even more than sales, however, production itself was the Cinderella of British industry... Men of talent who did find their way into production showed, as Anthony Bambridge put it in 1975, 'an unseemly haste to get out.

' He cited

a report by the British Institute of Management on business graduates in industry that found that although 17 percent of business graduates were employed in production before going to business school, only 6 percent returned to production. Such behavior was a rational personal response to the prevalent standards of prestige and reward within British industry. (Wiener 1981, p. 141)And because, as Wiener (1981, p. 145) claims, "[finance] was already wealthy and socially established in the mid-nineteenth century" and "..

.it was 'clean' - well removed from the actual process of production", the "milieu of finance...

was not all that different from the traditional world of aristocracy."As shown, social, cultural and economic circumstances and aspects led to an isolation of the middle-class industrialists, especially in production. As a consequence business leaders developed an inferiority complex, as Wiener (1981, p. 137) shows, "..

.it also conditioned the outlook of those who remained in or entered industry. Businessmen's self-images and aims adapted to the climate of opinion." Wiener (1981, p. 137) cites the minister of economic affairs at the U.

S. embassy in London, "who was struck by 'a sense of doubt concerning the social utility of industry and the legitimacy of profit, a sort of industrial inferiority complex often suffered by business leaders themselves... In the extreme, some British industrialists seem almost ashamed of their vocation, looking on their jobs as a necessary evil.

..'"This businessmen's inferiority complex and, according to Wiener, the tendency "to be self-deprecatory and apologetic about their economic role" led to the desire to leave their middle-class status, to adapt aristocratic values and to aspire the gentry.The most striking development in the social history of the businessman

and the industrialist over the last century was the gentrification of the business class. (Wiener 1981, p. 137)Beside the social, cultural and economic aspects, the consideration of two institutions should be taken into account.

These institutions-the public schools and the old universities-played a key role in the process of "cultural absorption". Wiener (1981, p. 138) argued "...the chief agent transmitting these standards was the same institution that first promoted a negative view of the life of business and industry-the educational system, particularly the public schools, developed by the Victorians.

" Bourgeois families sent their sons to the old public schools and to the old universities, in emulation of the aristocracy. But an increasing number of industrial managers were according to Wiener (1981, p.138) "public school products", but "...

despite inculcated preferences for professional and bureaucratic careers, these were simply not expanding at a sufficient rate to absorb the rising number of public school graduates."Thus, virtually all the leading public schools were sending more and more of their boys into the business world - 6 percent from Marlborough in 1846, but 23 percent in 1906; 6 percent from Merchant Taylors in 1851, but 42 percent in 1891; 9 percent from Clifton in 1867, but 25 percent 1907. This trend continued in the twentieth century, more, it would seem, out of necessity than choice. In 1951, a sample inquiry revealed that approximately 58 percent of the directors of the larger public companies in Britain had been at public schools. (Wiener 1981, p.

138)Similarly, the old universities became increasingly attractive to the commercial middle-classes, weakening the vocational schooling required for working in the industry or leading a company. According to

Wiener (1981, p.138) "...most who had been to the ancient universities had read arts, not science.

.. As time went on, the larger the business the more likely it was that its leader had attended public schools or the ancient universities."To sum it up, Wiener gives another argument for the "cultural absorption" of the industrial middle-class. This process occurred, because the sons of middle-class families and future industry leaders preferred the aristocracy's education. Public schools and universities were agents of the cultural fusion, but they propagated the values of the old aristocracy.

Finally, if there was a decline of the British economy over the last centuries - which is contentious - it happened not only due to what Wiener claims, but it probably is a mixture of cultural, institutional and other reasons.Generally speaking, as Lee (1997, p. 65) points out, "of all the factors that might account for national economic performance, culture remains the most nebulous." Lee argues that, "despite their widespread and enduring popularity.

.. cultural explanations are essentially flawed." In addition, Raven (1989, p.

184) states that "the influence of expressions of the anti-technological and anti-urban in the nineteenth century is recklessly overstated."Raven claims that there were several reasons for the alleged British economic or industrial decline, but not cultural ones:Throughout this century resources were less efficiently deployed than in many rival nations... Slow and faltering comparative growth rates are best understood as the consequence of long-term international economic relationships.

..Following from this, domestic expansion after the Second World War, raising incomes and stimulating a boom in imports, contributed crucially to the instability of the 1960s. Problems were aggravated by the over-extension of Britain's international role and

the repeated failure of political initiatives and economic planning. Investment necessary for a restructuring of the domestic industrial base was diverted overseas, a strategy that bred successive stop/go cycles and sterling-first policies. (Raven 1989, p.

182-183)Moreover, there is the issue of management education and business training. Raven (1989, p. 187) argues that "even here, however, there have been exaggerated and peculiarly narrow claims for the effects of education upon commercial enterprise. Almost all would agree that from the late nineteenth century interest in commerce and industry was not encouraged in British public schools and universities.

"Furthermore, Payne (1990, p. 34) points out that "what Wiener has discovered is not so much a decline in industrial spirit as a reaffirmation of the stratified and hierarchical nature of British society."Payne (1990, p.32) makes another point. He criticizes that Wiener "tells people what they want to hear" and believes that "Wiener's beautifully written thesis is extremely seductive but basically flawed. It is not that the evidence that he has marshalled is wrong, it is partial and inadequate.

" Also, Rubinstein (1993, p. 23) thinks that Wiener does not argue academically: "It seems clear that Wiener's presentation is as seductive as his argument is appealing, and was pitched at just the right level between the popular and the erudite to win wide influence... Many critics have pointed out that the mere massing of quotations by British writers who sang the praises of rural life in no way addresses the significance of writers with a very different viewpoint or of the real influence of such writers on behaviour and attitudes.

"Rubinstein (1993, p. 24), moreover, provides another view on the "cultural critique".

He states that "Britain's was never fundamentally an industrial and manufacturing economy; rather, it was always, even at the height of the industrial revolution, essentially a commercial, financial, and service-based economy whose comparative advantage always lay with commerce and finance." If Britain, according to Rubinstein, never used to be an industrial economy, there could not be a decline of the industrial spirit, as claimed by Wiener.Wiener's cultural argument was often criticized as shown above. The critics point out that cultural explanations are "too nebulous", "essentially flawed (Lee, 1997, p.

65) and "recklessly overstated (Raven, 1989, p. 184). Moreover, Raven (1989, p. 187) states that the influence of education is "exaggerated".

Payne and Rubinstein criticize that Wiener does not argue academically and therefore draws wrong conclusions. Rubinstein, then, claims that Britain never had an industrial spirit and thus Wiener's "decline of the industrial spirit" could never have happened.However, Wiener's arguments should not be dismissed or ignored entirely. Payne (1990, p.37) states that "the foregoing discussion indicates that while the central thrust of Wiener's argument is erroneous, it would be foolish to ignore the importance of certain cultural elements in Britain's relative economic decline, however difficult it may be to determine their exact significance or the manner in which they have operated." In addition, Raven (1981, p.

181) admits that "cultural, 'environmental' factors unquestionably contribute to changes in the pattern of economic activity, and many studies offer precise investigations into the history both of English ideas about business and of social influences upon the development of business firms."In conclusion, Wiener's argument-is for the reasons shown above-not convincing. However, his idea should not completely be dismissed, because finally,

it cannot be proved either right or wrong.