New Business Ethics Troubled Him. FRAN K MURPHY—
FURNITURE MAKING AND FREEDOM Employees Must Sign 92 Point Agreement
Mr Frank Murphy (" English by bi ri h Silt t'N idontly Irish by descent ") became dissatisfied with the ordinary con4.eptions of business. He thought out a new conception of business and, because he had much money (for who has not heard of Murphy Radio?) lie was able to put his New Conception of Business to immediate test.
Acceptance of individual responsibility.
Willingness to impart knowledge. Willingness to discuss.
And the full enjoyment of the following rights Liberty of conscience. Access to knowledge. Freedom of speech.
These Ideas Disturbed The fact that a business should have an ethical aim is of course the main point about the New Conception of Business.
Ethics have troubled Frank Murphy. During his very successful years in business, ideas about the
purpose and order and achievement of industrial concerns have evolved in his mind; and so disturbing have these ideas been that he has sold all his shares In Murphy Radio for f8,000 and given up a job worth 13,000 a year. The radio firm retains only his name and a reputation for chatty advertisements.
" Churches Can't Provide Solution " " Most people are dissatisfied with the way in which they now have to live. Not only are there such very material troubles as unemployment and lack of security; there is also dissatisfaction arising from lack of responsibility, lack of opportunity to
do our jobs as we would like to do them, and what we feel to be a general absence of idealism in everyday affairs . . . people receiving dividends are, I think, just as dissatisfied as workpeople."
These are the kind of ideas which have disturbed Frank Murphy; and in this way he expresses them in his pamphlet about his New Conception of Business.
"I don't think the clue to our happiness es in the ftrst instance a political one, or one that the churches alone can provide.
"I believe that if we carefully reconsider the whole question of the relations of man to man, with particular reference to everyday business, we shall find the cause of our present dissatisfactions, and if we proceed to act on the knowledge which we shall then discover the adjustments regarding the churches and politics and social life generally will follow automatically."
If you had never heard of Frank Murphy or of his achievements, I think you could have guessed that those sentiments were the sentiments of a successful business man.
The complacent assumption that " everyday business " is the focal point of existence, the looseness of expression whereby religion is reduced to " churches," a conveniently indefinable term with comforting material associations of tiles and masonry, are typical of the mind concentrated on material realities.
What Frank Murphy is saying with heart to heart verbosity is that what counts first and last is the economic system, and only by adjusting that system can happiness be provided— which is, in essence, what Karl Marx said some time ago. I don't suggest Mr Murphy has been cribbing; but it does seem that it is difficult for business men's philosophy to be anything else but fundamentally Marxist.
Debate on a Sideboard
However, within the limits of materialism Mr Murphy is encouragingly sane about the relations between the " Business " and the consumer and about some of the relations between the " Business " and the employee.
" We are finding out what are people's needs and then making goods that will satisfy them."
In the monthly magazine, The Murphy Review, published by the firm and issued free to shareholders and staff of the firm, but at threepence to you who are neither, " people's needs " are examined. In the latest issue there is a report of some voting about sideboards, and a tactful attempt by Frank Murphy to educate public taste in sideboard design.
Interesting for Threepenny Readers There are many other things in the magazine, including an article on freedom, and a long correspondence on pacifism, which are very interesting to the reader who has paid threepence, though possibly in the view of shareholders or staff not quite relevant to furniture nicking.
For selfish reasons—being a threepenny reader—I would have nothing changed.
Relations between staff and management of Frank Murphy's firm arc defined In a Members' Agreement of 92 points which all people seeking jobs in the firm must sign.
The following are some of the most interesting points of this Agreement : " No payment shall be made for overtime and scheduled hours of employment may only be varied on the authority of the Governing Director. Hours may only be worked in excess of schedule if such working is the voluntary act of the employee concerned.
Holidays With Pay
"All employees signing this Agreement shall, after ten years' continuous service or any less period as may be approved by the Governing Director, receive a pension if incapacitated by old age or infirmity, such pension to be on a noncontributory basis, " No employee who voluntarily leaves or is dismissed from the service of the Company shall be entitled to a pension.
" An ex-gratia payment on marriage may be made, at the discretion of the Governing Director, to women employees leaving the service of the Company.
Each employee shall have not less than two weeks' holiday in addition to all statutory holidays. with pay.
" Each applicant for employment !nay, before being appointed, be required to submit to a medical examination at the Company's expense.
Work Hours, Reasonable
"The hours of work of an employee shall be those which would be publicly recognised as reasonable, having regard to the work to be done, the age, health and sex of the employee and the leisure requirements of the employee, but hours of work shall not conflict with any statutory requirements.
" In the event of economic necessity every employee, the Deputy Governing Director and the Governing Director must be prepared to accept a proportionate reduction in his remuneration.
The occasion and extent of any such reduction in remuneration shall be determined by the Governing Director, whose decision shall be final and binding on all parties concerned.
The rates of wages paid shall be those which would be publicly recognised as reasonable for the character, ability and experience necessary for the duties to be performed.
" The Governing Director shall exercise supreme executive authority except as otherwise provided by this Agreement."
And the vital clause, the first clause, which shall be last, which guides, or should guide, all the other 91 clauses is:
" The ideal of applying knowledge with integrity and so expressing individuality in the service of society' shall be accepted as the common objective of the parties to this Agreement and as such shall be pursued by each and every one of them." The Governing Director, who by the
terms of the Agreement holds wide responsibility, is elected for an indefinite period by an Honorary Board of Trustees. The present Governing Director is Frank Murphy. There are several clauses, guaranteeing "right of expression," through staff committees and meetings.
An wages are published in the firm's magazine.
The New Conception of Business works out in practice to be a goodhumoured paternalism. It ought to succeed—financially.
Authorised capital is f50,000, divided into 49,995 6 per cent, cumulative participating shares of f1 each and 100 Founder's shares at one shilling each.
There seems to be no limit as to number of shares which may be held by one person.
" Only Method Worth Anything "
At present., average number of shares held by each person is 25. Shareholders don't get votes.
Says Frank Murphy : "I don't believe that the possession
of a vote gives a shareholder any effective control over his capital, unless he happens to own more than half the shares.
On ' the other hand, I do believe that free expression of shareholders' opinions will enable them to exercise effective control by the only method that is worth anything, i.e., by the publication of knowledge, and this is provided for in the magazine."
When Frank Murphy gave up a Civil Service job in 1920, he started an Advertising Agency with 1450.
That business is still running with a turnover of about £100,000 a year.
In 1928 Murphy changed to radio manufacturing. That business is also still running with a turnover of about
£11n 000,10°°938. he began his business of making furniture—the first flower of the New Conception of Business.
Annual retail value of furniture and furnishing sales in Great Britain is about f120.000,000.