Inside business: Praise be to the non-believers

Listening to all the current talk about stakeholders and various other manifestations of the belief that businesses exist for something other than to maximise the earnings of shareholders, it is easy to run away with the idea that this is a recent enthusiasm. In truth, though, companies have been forced to respond to such pressures in varying degrees pretty much since the end of the Second World War.

Accordingly, the sort of things now being considered by consumer groups, business academics and even some more enlightened corporate executives are not the result of sudden piercing insights. They are just elements in a trend that has been developing for decades.

In fact, Art Kleiner's fascinating study of this phenomenon, The Age of Heretics, goes further - to say that modern business has been buffeted by the same powerful social forces that have rocked the rest of us.

Mr Kleiner, a former editor of The Whole Earth Catalog, a counter-culture bible, describes how many organisations, while subject to angry protests from outside, were challenged by radicals within. Some of these people were ignored - even fired or demoted - but others were able in small ways to change how corporations behaved.

Among the examples he cites are the early experiments in teamworking at factories operated by Procter & Gamble, the American consumer goods group. The P&G factory at Lima, Ohio was designed with the company's blessing. But the man put in charge of it was an organisational development specialist who had tapped into Sixties thinking by looking closely at the thinking of G I Gurdjieff, a spiritual leader, who would also influence the scenario planners at Shell, whose work is also described in the book.

According to Mr Kleiner, some of Charles Krone's associates "liked the way his conversation mixed nuts-and-bolts shopfloor data with cosmological theories about the purpose of human life".

The counter-culture link is much more obvious, though, in the descriptions of how companies like Kodak were forced by outside pressure to change. In the 1960s the photographic company in Rochester, New York, appeared to be the picture of benevolence, albeit with a prim culture that required executives who kept secretaries after 5pm to call in chaperones and did not permit expense account drinking. But its weak link was its hiring policy.

With black unemployment rising in northern cities, Kodak was made the subject of protests led by Saul Alinsky, a renowned community organiser. Though the campaign was assisted by the efforts of a sympathetic "heretic" executive with the company, Kodak agreed to a "settlement" after the use of a tactic that is commonplace now but was then unheard of - protesting at the company's annual meeting.

General Motors was targeted by Ralph Nader, a crusading consumer lawyer, in a book called Unsafe at Any Speed, in which he claimed that the company had sacrificed safety for looks in its Corvair model. From there, he went on to attack corporate practice in all areas - and to be at least partly responsible for the growth of the consumer movement and of interest in business ethics.

Mr Kleiner, who has collaborated with Peter Senge, a "learning organisation" guru, and others at Massachusetts Institute of Technology to produce The Fifth Discipline Handbook, is optimistic enough to conclude that "sooner or later", business managers will have to realise that they can only profit by participating. When they do not own the means of production they will have to rely on other forms of loyalty.

And, far from outliving their usefulness, heretics have grown in number. Some work in large organisations, others run them. "Their greatest aspiration is to bring their work lives in tune with their personal hopes and dreams," he writes.

But he is also honest enough to point out - in gentle asides, like the reference to the research showing how every company in a study of businesses moving out of New York had relocated to within eight miles of the chief executive's home - how senior managers have often put their interests ahead of those of the organisation as a whole.

`The Age of Heretics' is published by Nicholas Brealey Publishing at pounds 20.