Issues
The Corporation is an investigative report about the wrongdoings of corporations. The issue is about all the evil that corporations do. Corporations are responsible for many problems in the world including poverty and the exploitation of people, toxic chemicals and wastes, genetic manipulated organisms, warped consumer mentality, among other things. Some of the products they produce do not serve society any good but mainly to earn corporations huge profits. Corporations—large, multinational corporations in particular—exist to earn profits for themselves.
Portrayal of Corporations
The documentary portrays corporations mainly as evil. Although the documentary is truthful and the evidences it presents can be validated, it leaves an impression that all corporations are evil. The documentary uses history, investigative research, and publically available court cases to build its case. History was used to show how corporations veered away from its original reason for existence. History was also used to show how IBM supplied the original punch card computers and provided maintenance service to the Nazis during the war. Investigative research was used to show how young people are exploited to produce Nike products. Some of the investigative processes seem abrasive and violate the rights of local companies in Third World countries. Court cases were used to present the problems that oil and chemical companies. Since the 1940s, oil and chemical companies have been producing synthetic chemicals. There were many health and environmental hazards accompanying the use of these synthetic chemicals. The industry had actually been aware of the hazards but either dismissed or lied about them. Monsanto produces antibiotics in cows that affect humans. However, it has been allowed to continue with the product. The use of Monsanto’s chemicals in the war in Vietnam had affected thousands of civilians. None of these people were assisted, treated or compensated. Genetic modification and its adverse effects are among the other issues raised against Monsanto.
The evidences presented in the documentary are very compelling and convincing. However, the conclusions are a bit sweeping. All corporations are portrayed as all evil. The documentary actually focuses only on large, multinational corporations.
Conventional Wisdom and Blind Spots
Corporations exist primarily to earn profits and maximize these for their stakeholders, i.e. stockholders. Other objectives have become secondary. Corporations also produce goods in an efficient way for the benefit of society. In the process of producing goods, they created jobs and employ people. They are able to help a nation build its wealth. Aside from government infrastructure, much of the US’ progress seems to have been driven by corporations in the last century. This seems to be the conventional wisdom and accepted view of corporations.
The filmmakers take a contrarian view of the wisdom. Their position seems to be based on truth. Corporations did not enjoy such prominence in centuries past. It was mainly in the past century that they suddenly took over the role of development in many countries beginning with the industrial revolution.
Before the age of industrialization, land, sea and air were considered gifts from God and managed by the Church and the aristocrats. They were considered the wealth of the community and were communally developed by the people. Today, these natural wealth have been divided to be owned privately as property. Wealth today seems to include only those created by corporations, private individuals and government. There is less concern about the nation’s natural wealth.
Originally, corporations were charters from government. Some government (or the Church or the aristocrats in previous centuries) duties are passed on to corporations because they can perform these tasks more efficiently. They exist to provide benefits for the people and not for themselves. However, through creative interpretation of laws, corporations evolved into entities that primarily serve the owners’ interest.
Externalization is a serious blind spot of conventional wisdom. Because corporations are chiefly concerned with making profits, they pass on to others outside the organization anything that is outside their focus. They externalize these tasks. Cleaning rivers after dumping wasted is considered not their responsibility and thus passed on externally. Corporations lose sight of the welfare of labor as certain manufacturing activities are passed to other countries.
Trickle-down effect is another blind spot. Benefits of corporations never trickle down especially in Third World countries that corporations are exploiting.
While corporations are legally defined as “persons”, they are not and they never will be like any real person. One important difference is that corporations lack soul. They have no moral compass. Individual members could actually be moral and good people, but they separate themselves from the organization. Lawyers thus push the laws to limits without moral convictions to maximize corporate profits.
Presentation of Arguments and Counter Arguments
What makes the documentary convincing is the seemingly balanced presentation of arguments and counter arguments. Corporations certainly have positive contributions to the economy. They create jobs and produce products more efficiently than other means. However, the corporations exercise their functions with little social responsibility. They do not exercise their powers with moral responsibility. They maximize profits but limit responsibility within legal requirements.
Corporations practice social responsibility according to their publicity. The practice of social responsibility is at the same time a way to promote themselves and improve their bottom lines. It is philanthropy and at the same time PR and marketing. However, the corporations are able to project an image of being socially responsible because they “externalize” potential areas for problems. Nike does not have labor problems; its suppliers do. Unfortunately, consumers and investors recognize the problem is attributable to the company once exposed. The use of the term “philanthropy” to refer to corporate social responsibility make it seem that CSR is optional when certain aspects should actually be an integral part of operations.
Corporations argue that there is nothing wrong with earning profits. They need to earn profits to survive and sustain themselves. However, at what point is the earning profits can be considered bad. Is not there a limit to the accumulation of profits. Some products are developed and produced chiefly for profits. Monsanto’s terminator seed is one example. This seed has been genetically modified so the cannot be used to reproduce. The seeds are useful only for one planting season. The harvested seeds cannot be used anymore for replanting. So, farmers will have to buy the seeds again. Clearly, this is the kind of product that does not serve humanity but only the corporation.
The arguments are well presented and are really compelling. Of course, the documentary is biased as expected. It presents more counter arguments than arguments in favor of corporations.
A Concern of Business
Businesses should be concern with all these issues. In the end, these things will also affect them. Perhaps, they will not be affected in terms of profits, especially in the short term. However, the can be affected in more profound ways.
Climate change for one will affect everyone, including every official of corporations that contributed to the problem anyway. They can be displaced from the comforts of their private and artificial environments. Hurricane Katrina and Hurricane Sandy are examples of how climate change could affect people. Hurricane Sandy in particular caused massive blackouts that people never experienced before and never imagined could happen to them. The damage in New York caused by Hurricane Sandy is merely a preview of how worse thing could become. It is minute compared to the devastation wrought by Typhoon Haiyan in the Philippines. The Economist describe the situation in Tacloban, Philippines as hell. Sandy gave America a foretaste of things to come and how things worse things are in Third World Countries. Unfortunately, most CEOs, owners and officers of large corporations in America are rich, white males who have no concept of the world outside their comfortable world. They have no idea of the environment in the Third World and in climate change affected areas. They should learn some lessons from Hurricane Sandy on how bad things could be. Hurricane Sandy was merely a peek into the situation.
The abuse of natural resources and people too has its consequences. The spate of terrorism—i.e. like 9/11, among many others—seems to have stemmed from accumulation of anger through the years. Rightly or wrongly, some people in the Middle East view the US as evil, not only because of its government but mainly because of its corporations. Foreign markets and foreign resources should be treated with respect as one would treat his family or neighbors. Terrorism around the world seems to be some form of backlash against the West for all the abuses against the West.
The situations mentioned above are probably extreme cases. Businesses should not wait for any of these to happen. They should realize that, even if there are a lot of things that they do not see, the situation outside their walls could be terrible because of their activities. A lot of problems in the world came about because of the. Corporations should look back to see the original reason to see why they exist : To serve the people, not themselves.
Corporations must also realize that they may not have any more excuses not to perform their civic responsibilities especially with regard to cleaning up their wastes in the environment. Many countries—including the US—are signatories to the Paris climate agreement. Soon, the US will be pressing private corporations—especially their offices abroad—to undertake environmental protection measures. The triple bottom line approach to computing for performance will no longer be an option but a legal requirement. Corporations must pursue CSR activities that are sustainable and have measurable and real impact on communities and the environment. CSR will no longer be a choice; it will be a requirements. Even without the legal pressure, corporations will have to act on their environmental and societal impacts. Even without government action, there could be some adverse reaction from the public as what happened to Apple and Nike with regard to their labor exploitation in outsourcing countries.
Corporations must act now or else suffer the consequences.
References
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