Management - The changing face of capitalism.

(From Financial Director)

Byline: Roger Trapp, freelance journalist.

It is not just the scale of the fall of Enron and other spectacular corporate collapses of last year that sets them apart from previous corporate failures. What truly distinguishes them from others is the bout of soul-searching they've unleashed. While past failures led to calls for tighter regulations and better corporate governance, they did not prompt the questioning of the capitalist premise that has been a feature of recent months.

This may just be an overreaction to the sudden bursting of the internet bubble, a phenomenon that transcended business in much the same way that David Beckham transcends football. Thanks to the urgings of management gurus, we were all enthralled with the idea that a new form of capitalism was breaking old rules and threatening to leave us behind unless we embraced the enterprise spirit.

If you feel you have been taken for a ride, it is tempting to suggest that the whole thing was a terrible mistake and insist that, because nothing has changed, the only sensible thing to do is go back to the basics of the old economy. But it is not true to say that nothing has changed. It might be true that only a few people are making any real money from the internet today, but it is still having a fundamental effect on the way in which organisations do business.

In fact, one of the arguments of a new book, The Support Economy (Penguin GBP25), is that the internet is changing the way in which individuals want to do business and that the organisations with which they would traditionally do that business are not always measuring up. Stressing that "people have changed more than the organisations upon which their well-being depends", Shoshana Zuboff and James Maxmin, the book's authors, claim that this has created a chasm between producers and consumers. This gap in understanding goes some way to explaining why various initiatives, such as customer relationship management and customer satisfaction programmes, have limited success.

It is easy to see how this book can be positioned in the 'What's Wrong With Capitalism' camp that is riding high at present. After all, the authors come up with plenty of evidence of the disconnect between corporate executives and the people ...