On September 16, 1983, the board of directors of Time Inc. voted to close down TV-Cable Week, a magazine that only 13 months before this same board of directors had enthusiastically voted to establish. Twenty-five issues of the magazine had been produced by 251 employes, most of whom had been brought in from outside the Time empire. "Direct cash losses exceeded $47 million," Christopher Byron writes, "but the indirect damage was far greater, from slippage in Time's stock, which lost nearly $750 million in market value in little more than two weeks, to the anguish and dislocation of those suddenly unemployed."

How this corporate calamity came to pass is described by Byron in The Fanciest Dive, a marvelously intelligent and entertaining book that must be read as an antidote to the panegyrics to business glory now so popular among yuppies and other upwardly-mobile strivers. There are countless morals to be drawn from Byron's tale, not one of them flattering in any way to Time Inc., but chief among them is that when a business steps beyond the bounds of its competence, it is doomed to failure; that gloomy prospect becomes all the more certain when, as had happened to Time Inc. by the early 1980s, the "overriding sense of shared values" among employes at all levels is replaced by an inert bureaucracy presided over by "image-conscious executives more concerned with their own futures than with the future of the company that employed them."

To put it another way, The Fanciest Dive is a story of what happens when creative leadership expires and the MBAs take over. The result is no leadership at all, for MBAs are trained not in magazine publishing and video -- the two principal enterprises in which Time, Inc. is engaged -- but in "the financial abstractions of all business -- in high finance and strategic planning, in structural decision making and computer modeling." In allowing itself to be taken over by these driven young hotshots, Time "simply reflected a trend that has spread through more and more of American business, as those at the top have learned to substitute image for substance, management for leadership." Thus The Fanciest Dive is not merely the story of the collapse of TV-Cable Week but a cautionary tale for all of those who think that a master's in business administration is the key to the kingdom.

Yet the villains of the tale are not Jeffrey Dunn and Sarah Brauns, the Harvard MBAs "still in their twenties and barely out of business school" whose researches were so important to the planning, such as it was, of TV-Cable Week. The real villains, in Byron's view, are those seniormost executives of Time Inc., who permitted the new magazine to evolve in an utter vacuum of leadership. Henry A. Grunwald, editor-in-chief for all Time magazines, viewed TV-Cable Week with disdain and even on the day of its death refused to accept editorial responsibility for it. J. Richard Munro, president and chief executive officer of Time, was largely oblivious to major decisions about the magazine, leaving them to ambitious, rivalrous subordinates whose ignorance about the market they were attempting to exploit was stupefying.

From inception to collapse, TV-Cable Week was a disaster, "the impossible magazine: a publication that had to be an immediate smash hit wherever it was sold, instantly achieving unheard-of penetration levels in every market, or else the entire business plan would collapse." This house of cards was assembled by Kelso Sutton, group vice president for magazines, "the quintessential corporate politician, capable of shaping his persona to whatever the circumstance demanded." What Sutton provided as TV-Cable Week took shape was not leadership but "incredible pressure to keep moving the project forward," even when evidence demanded that it either be delayed or abandoned. His crucial decision was to ignore the advice of his own MBAs, strongly pressed by both Brauns and Dunn, to test-market TV-Cable Week, normal procedure for virtually any new magazine or other product; to all intents and purposes this guaranteed the publication's failure -- for which, once it came to pass, Munro rewarded Sutton by promoting him to the Time Inc. board of directors. Byron writes:

"The effect on the (Time Inc.) staff was quick and obvious. When the company began its United Fund drive with posters featuring photos of officers urging employees to 'give the United Fund Way,' a Sutton poster soon sprouted illustrative graffiti: a black eye and the quote 'No thanks, I gave $47 million at the office.'"

IT WAS a disaster compounded of many elements, all of which Byron examines closely and clearly; he makes a great deal of sense about what is, in its rawest state, a complex and confusing story. What it all boils down to -- all the business about cable-television operators, television- listing problems, computer hookups, distribution deals and suburban offices -- is that Time Inc. did not have the foggiest idea what it was doing. What had once been a company that knew how to edit, publish and distribute magazines was now a faceless corporate empire dominated by "accountants, lawyers and MBAs," none of whom understood either the magazine they sought to create or the readership to which it was ostensibly directed. Combine corporate ignorance with corporate arrogance -- one of Sutton's aides actually chirped, "If you want to know how gutsy Time, Inc., is, think of this: we launched this magazine without ever testing it!" -- and you have the recipe for precisely the disaster that Time Inc. so richly deserved.

The story does have one hero, though an unlikely figure he is. Richard Burgheim -- disorganized, disheveled and unprepossessing, but "an editor of fierce intensity, with an adder-like wit, the drive of a workaholic" -- edited TV-Cable Week with a devotion and commitment to standards utterly beyond the comprehension of his counterparts on the business end of things. He believed in "the editorial integrity of Time, Inc.," and his entire editorship, however brief, was devoted to providing "editorial independence, quality of the product, value for the reader." The brief history of TV-Cable Week, Byron believes, is the story of "the lonely struggle of one man, Richard Burghein, to defend the values upon which his corporation had been built." It is a struggle that seems to have been lost not merely by Burgheim himself but by those larger forces within the corporation that represent those same values; the latest evidence of their defeat is to be found now in the grocery stores, where Time Inc. is testing a rancid little gossip sheet called Picture Week.

It is not merely sad but infuriating to see so much talent and resources being frittered away on such empty, characterless "products," but that is what happens when a company loses sight of what it does best -- a loss it is bound to suffer when its top management is taken over by people who have no experience in its real business. Accountants, lawyers and MBAs are valuable people in corporate life, but they don't know how to edit magazines or manufacture widgets; when they persuade themselves that they do, and when they are encouraged in this fantasy by their employers, everyone is in for a dive just like the one that Time Inc. took. Sic transit Henry Luce.