It's all a bit more subtle than you suggest Dawid but it's not really
an extreme view. The fact that charities have incorporate in the US
and elsewhere is not really an objection - so do private schools and
all sorts of other institutions. That's merely a legal convenience and
they do not have shareholders as such. They are a different class of
thing although they will often act badly as well.
But if we look at a business corporation, that's where the thesis
holds good and the best example is the way in which corporations in
developed economies have chased cheap labour by moving offshore. My
own view is that the sole reason for any corporation to exist in a
society is to provide services - and those services include the
production of goods and also employment. Unless it does that, it has
little value to that society and does not deserve its protection. Most
decent economists will assign some fairly heavy value to that but they
do not work in corporations, or at least, not for long. Some here may
consider that socialism or extreme but so be it - without that
mindset, we allow sharks to circle within our midst and to apply their
own dubious ethics.
I'm fond of Robert Michel's Iron Law of Oligarchy which is based on
the idea that individuals will always act in their own self-interest
in organisations - if we see the corporation as an individual (and the
law does) then the same rule applies within society. It does not
matter what the Mission Statement or the Press Releases claim - they
are written and issued in the self-interest of the entity and will be
discard immediately if they do no longer match the shifting interest
of the corporation. The same goes for 'Policy' - that's extremely
mutable and the response 'I'm afraid that's our policy' should always
be rejected as a reason or excuse for poor behaviour.
I once went for an advertising job with Kodak in Melbourne, which I
did not get. I fluffed one question - 'What is the purpose of
advertising?' I gave too academic an answer. The correct response was
'To sell product.' Plain, brutal and regardless of consequence.
'Customer satisfaction'? That's to keep them coming back for more.
Tobacco, Macdonalds, Coca Cola - sell an addictive product.
Bottom line - increase profit, dividend, yield - grow and stay healthy
in a corporate sense. The duty is to the shareholder, not the employee
or the customer - because the shareholder can hurt them directly and
immediately.
Andrew Fildes
afildes@xxxxxxxxxxxxx
On 04/12/2009, at 6:52 AM, Dawid Loubser wrote:
> Fair enough, my views sometimes do come across as too extreme, it must
> be
> the Boer in me... Perhaps instead of an extreme view, you should
> simply
> read (in my comments) a wariness to trust big publicly traded
> corporations.
>
> I am of the opinion that, in every possible scenario, when they have
> to choose
> between shareholder profit, and the greater good, they will always
> choose shareholder
> profit, even when the cost of choice is loss of life, environmental
> destruction, etc.
>
> It's not their fault, it's what a corporation is designed to do :-)
>
>
> On 03 Dec 2009, at 4:50 PM, Sue Pearce wrote:
>
>> Dawid,
>>
>> This is certainly an extreme view with bitrs of truth, but in
>> reality, it
>> remains an extreme view .
>>
>> Bill Pearce
>
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