strategy+business Winter 2013 : Page 64

B E S T B U S I N E S S B O O K S 2 0 13 / C O M PA N Y S T O R I E S 64 a complex textile ecosystem, “insanely fragmented but incredibly efficient.” No one profited more than Nesi’s family. He imag-ines familial ghosts taking their places at the empty tables around him, “drinking their martinis and their negronis and their camparis…miserably happy with all that they possess, their houses at [the seaside] and their Ferraris, their boats and their elegant clothing, their fac-tories and their spectacular lovers.…” It reminds him of scenes written by F. Scott Fitzgerald. “If only nov-els and movies and paintings and poetry and opera and songs and even fashion—yes, even fashion—could ride to the rescue,” he writes, “preserving jobs and saving us all from a long, steady slide into, first, depression and ultimately poverty.” There is, of course, no savior waiting in the wings, and Nesi’s grief over the loss of a way of life for his family, Prato, and, indeed, all of Italy turns to rage as he reflects on the causes of the economic catastrophe wrought by globalization. He shoulders part of the blame, admitting that the leaders of Prato’s textile indus-try mistakenly believed that they “could go on in the third millen-nium, selling the same fabrics… made out of the same raw mate-rials and the same yarns, weaving them on the same looms, [dyeing] them the same colors…selling them to the usual customers in the usual markets,” never realiz-ing that they were artisans, not industrialists, heirs to ancient traditions who had benefited from a once-in-a-lifetime opportunity. However, he reserves the lion’s share of the blame for Italy’s technocrats, politicians, and economists, who spun tall tales of the infinite bounty of globalization and signed away the keys to the country. As it turned out, their reasoning that China’s markets would drive Italy’s economic growth was fatally flawed: The emerg-ing Chinese middle class shows no sign of developing a taste for fashion “made in Italy.” Instead, Chinese ap-parel makers have knocked off the designs, copied the fabrics, and produced them in China for a fraction of the price. Yes, says Nesi, niche businesses with global brands, such as Ferrari and Armani, can still prosper. But their success can accommodate only a few people. “A country the size of Italy won’t fit.” Prato’s textile industry is going to the Chinese, but not always leaving the city. Nesi points out that Prato now has the second-largest Chinese population in Italy, after Milan. In a city of 200,000 people, about 10,000 Chinese live legally and another 40,000 illegally. They work and sometimes live in about 3,500 businesses, often in squalor. “Even the most powerful words, the most elevated concepts seem to be emptied of meaning in the face of this horrendous story of indifference and exploitation among losers,” Nesi writes, “where all the characters are the victims of a chain of dishonesty that spreads out from a deeply rotten idea of work.” What will happen next? Nesi has nightmares about an outbreak of ethnic violence between Italians and Chinese, but the story closes with a demonstration in Prato’s piazza, where he, along with thousands of others who have been displaced by globalization, carry a kilometer-long banner of Prato-made fabric. “I am not sure where we are going,” he says, “but we are certainly not standing still.” A Failure of Values strategy+business strategy+business issue issue 73 73 best books 2013 company stories Sometimes a firm fails even as it thrives financially. How this can come about is the theme of What Happened to Goldman Sachs: An Insider’s Story of Organizational Drift and Its Unintended Conse-quences, a biography of an orga-nizational culture derived from the doctoral thesis of Steven G. Mandis, who is a Ph.D. candidate in the Department of Sociology at Columbia University and an adjunct associate professor in its busi-ness school. The book’s structure may be formal, but its content is fascinating and often reported firsthand. Mandis worked with and for some of the most senior people in Goldman Sachs’s investment banking, private equity, and proprietary trading units between 1992 and 2004, although he never made partner. Mandis’s objective is to explain how and why the culture and values of Goldman Sachs changed, espe-cially during the period when he was there, but also over the longer term, as the firm grew from a small group of New York–centric investment bankers into a large, global, diversified financial-services corporation. He begins at the memorial service for John L. Wein-

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