.. left. Bibliography ? Corporate Responsibility As we moved into the 1990’s companies became aware that social responsibility was essential to their corporate responsibility to make a profit. Companies are now discovering that “high road” practices such as working with unions, and treating the community and environment are often more profitable, and certainly more respectful than old style “low road” practices that companies used to use that often overlook the needs of the unions, community and environment. William Norris, the founder of Control Data Corporation sums it up well when he stated that, “You can’t do business in a society that’s burning.” What he meant was that if your community houses the poor and uneducated, you can’t run a business. If your employee pool is uneducated, than your product will be poor, and if your community is poor, than no body will be able to afford your product.
One step in being a responsible corporate entity is to better your relationship with your employees. One notable example of this is GM’s Saturn division. Saturn is known for making managers partners rather than bosses, and during meetings, everybody has say. Other companies look to distribute stock to its workers, therefore making the workers the owners. This is usually done through the companies 401k plan. Another step to being a responsible corporate entity is to give back to their community. Organizations such as Levi Strauss, Honeywell, and Reebok encourage their employees to serve community service by working in soup kitchens, tutor in local schools, and give their time to other charitable organizations.
While it may give these corporations a good image because they are acting socially responsible, there is also hard evidence that it also makes them more profitable. For example, the Council on Economic Priority’s (CEP), a prestigious resource council has found that the more socially responsible a company is, the more likely that a company is going to be financially successful. A Dickinson College study done in 1992 found the same results, and a 1993 Rutgers study found that the top 25 percent of firms rated by their social responsibility had an 11% higher gross rate of return on capital than their competitors. Corporations using self-managing or empowering their workers show fewer turnovers, less absenteeism, and a higher rate of productivity. This leads to a duel bottom line of achieving both higher financial gains, and valuing workers. ? Flaws in Corporate Responsibility Corporations still make huge profits from sweatshops and child labor that no socially responsible corporation could attain. Many of these corporations listed above still use the resources of El Salvador and China for their ultra cheap labor. For a company to be truly socially responsible, it must act in a responsible manner when profits are to be had, and it also must act in a responsible manner when it may indeed be more profitable to take the “low road”.
Part of the flaw in corporate responsibility is that nobody defines the meaning of responsibility, and nobody has the power to decide the values of a responsible corporation. In today’s corporate responsibility scene, there are many contradictions. ? Corporate Democracy Corporations have much power. With their money they are able to control the media, make political donations, and manipulate consumers. Many people believe that this is better than the other systems of government, most notably communism and socialism.
One of the problems is that no institution willing gives up power. The irony of our system is that as corporate power grows, the more corporations rely on democracy. Some people believe that a form of democracy for business and society would benefit both businesses and social well being. There are five key ways that a form of democracy would effect a corporation. The first key is to create a national seminar on the role and morality of markets.
The second key is to empower all stakeholders, not just the shareholders. The third key is to recharter the corporation into the public entity that it is. The fourth key is to develop new forms of ownership and networks of cooperative community based business. The fifth key is to rewrite rules of our current economic and political environment to increase democracy. The reason that people believe that corporations and our economic system need these changes are that they have the potential to “undermine themselves by destroying family values and any sense of common good”.
One way that corporations and the economy can destroy the common good, is when corporations over extend their reach. For example, chains of for-profit schools use TV curricula that force children to watch advertising that are programmed into the history and biology curricula. Other examples are when the state of Massachusetts contracted Raytheon to do the welfare service, the only people that really benefited from that deal was Raytheon. Long term radical privatization in the areas of medicine are also impractical. This is because corporations make the system as inefficient as possible to collect the insurance payoffs.
This is why there is a need for the corporations chartered in the public interest. While these will probably not eliminate all conflicts between people and profit, they can certainly ease tensions, and reduce the role of big government. ? Foreign Corporations In countries such as Japan and Germany, corporations rely on stakeholder, and not just shareholder principals. This means that they are legally obligated to take the interests of their workers, suppliers, and communities into consideration. This is closer to the model of a pubic corporation than its American counterparts. In America, this type of corporation has gained more interest lately. Many newer corporations now have “stakeholder status” built into their laws of incorporation.
This means that they can now protect their stakeholders without violating their fiduciary responsibility. These laws however are weak, as they do not give workers or other stakeholders any new legal decision making authority. This is different than most European countries. Germany for example requires that 50 percent of the board of directors be made up of people chosen by the workers. This does have its weaknesses however.
For example, stakeholders have their own interests, and these could be different than the best interest of the corporation. ? The need for public corporations Boeing is chartered as a private corporation, but it is so intertwined with the government, it is really more of a public corporation. Many of Boeings technologies are a product of government supplied research funds. It has a monopolistic presence that can make or break our economy, and many of its products are available only to the government. This is a case where a public corporation should apply because of its power over the public, economy, and close dealings with governments. ? Globalization Globalization is quickly becoming an important issue to corporations. In order for corporations to grow, they must now deal with overseas communities. In 1996, global corporations invested 1.5 trillion dollars in foreign nations.
The task of regulating and managing the world economies has been given largely to the WTO, IMF and the World Bank. These organizations protect the corporations, the workers, nations, and the communities. The problems with these organizations are that they effect everybody’s lives, but they are undemocratic. It is not up to the public to decide whom wins and who loses in these organizations’s policies. ? Drawbacks to Globalization In the past decades, when public and a corporation could not get along, the corporation may have simply moved to another state where they could carry on with business, and laws were not so stringent.
Today, it is possible for corporations to move out of the country to places where the public is less informed about what the corporation is involved, and there are absolutely no laws preventing them from continuing their unethical ways. For this reason, the populace must also go global and monitor corporations out side of their countries. ? The four movements to join. In order to put an end to corporations not acting responsible, there are four main fronts on which to fight. The first is the new labor movement.
The new labor movement calls for corporations to realize that people are more important than profits. It also wants labor to reach out to people in America and abroad who are suffering from “the over-reaching of profit hungry corporations”. The Second force is the grassroots community groups. These groups are known as the Third Sector. These Third Sector groups are not part of either the public or market sectors.
Their cause is they reach out to fight for jobs, living wages, good schools, safe streets, affordable housing, and a new sense of civility and community. The third force is multicultural groups. These groups speak for all immigrant and ethnic communities as well as race, gender, and sexual preference. Their common cause is the celebration of the differences of people and the rights and respect that is often denied by the dominant culture. The fourth group is the green populism.
This is because trees, air, and water do not have any legal standing in court. People have argued that if corporations deserve the protections accorded to living, breathing individuals than the ecosystem should be afforded that same right. Many of our corporations do not consider the needs of the environment in their quest for profits, and the ecosystem is quickly being depleted because of this. ? Decline in personal personal values One of the lessons that we have learned is that corporate ascendancy and economic growth can happen hand in hand with declining spiritual decline. American businesses, while they are not the only reason for this decline, contributes in many ways to this decline. One reason for this decline is the materialism that runs in our society.
This materialism is fueled by our corporations. An example of this merging of money and morals is now you can find churches located inside shopping malls. Shopping is also identified by the majority of teenage girls as their favorite “hobby”. Another way that corporations have spawned a moral decline is because of an insecure workforce. This workforce has become selfish due to an “everybody for themselves” attitude.
One major reason for this attitude is because of corporate downsizing and shifts to disposable, or temporary labor. Another reason for the decline in personal values is “double trouble” defined as people who feel that both their marriage and their jobs are in trouble, and temporary. This leads to peoples trust in all relationships to erode, and people become more guarded. Corporations also contribute to spiritual decline by requiring parents to spend more and more time at work and less time with their children. Many of these parents let the television do the baby sitting, and corporations are able to saturate children’s minds with their advertising slogans.
? What we can do about Social Decline One movement that is seeking to instill responsibility back into Americans is the Promise Keepers. These members believe that supporting their households financially, guiding their wives morally, and imposing discipline on their children is a start to reinstalling morality. This is a dramatic shift from what politics used to be about, being power, income, and the moral codes of institutions. There has been a lot of talk of family values recently. Some of these values include shifting responsibility from corporate America and the government, to individuals.
These family values, or new politics have been endorsed by Bill Clinton, who brought this issue to the entire political spectrum. The Christian Right speaks for these values among the conservatives, while the Liberals who speak of community and civil society speak for the left. Political Issues.