Random Rant: The Trouble with Corporations
The problem with corporations is that they have no ethics. This is because they only have one responsibility: to make the maximum amount of profit for their shareholders. Individuals associate with the corporation-stockholders, boardmembers, employees, all will probably have a moral and ethical standard, but none of them will really have enough power to force that on the company, and their morals and ethics eventually end up averaging to nothing. Look at Enron: the perfect example of a corporation gone wrong. You may blame the boardmembers(and that's entirely correct: you blame the thief for the theft), but everybody involved has partial responsibility for the disaster: all they were looking for was the bottom line.
Corporations may look and/or act ethically, but this is only because their bottom line is enhanced by looking and/or acting ethically, not because they have an ethical standard.
The alternate option, of course, is single-owner business. One person can keep a business to an ethical standardWhile this works well at a low-level, major global businesses will not work as well because it is harder for one person to gain the capital than for six, or six hundred. There are obviously exceptions, of course.
What is the solution to this problem? I'm not sure. I'm thinking of maybe a system where the business is owned by the employees, but that just ends up with the business hiring the shareholders. Maybe ownership by the customers? Like co-ops? That sounds like a good idea, but I don't have a degree in economics, so I don't think I have the solution.
Further reading:
Ethical Corporation Magazine
posted by TheLoneAmigo @ 10:47 am
3 comments
3 Comments:
Is it unethical for a corporate to aim to maximize its profits?
Corporations have the benefit, in modern legal systems, of being regarded as a legal person. This means that they can take legal action, and have legal actions - including criminal actions - brought against them.
Corporations can be executed by law, too: a company can be wound up through a corporate bankruptcy or other proceedings.
So, as a legal person, do corporations have to be ethical? For that matter, do real corporeal human beings have to be ethical?
Humans have to follow the laws - arguably a codification of our ethics anyway - but do they have to be ethical? Are ethics equal to laws?
Corporations exist as a way to have a permanent existence. Something that you can create, and then keep alive, and then sell or will to your heirs. A corporation can own a trademark forever (whereas a person, obviously, can only own it for as long as that person lives).
Anyway, a number of good thoughts... would recommend http://economist.com for some other thoughts and news about companies, with a worldwide perspective.
It is unethical for a corporation to maximize its profits at the expense of other humans.
The laws do not always work. There are unethical people, and they break the laws. Sometimes, they get away with it. Corporations have more resources than normal people, therefore, they can evade the laws with greater ease.
Ethics is the basis of society and civilization. Without ethics, there is nothing to prevent one human from killing another for personal gain. Without ethics, human civilization is impossible. I hate to say it, but ethics is what seperates humanity from nonsapients.
The thing is, corporations have no requirement to act ethically if they can get away with it. Neither do humans, but most humans will return a wallet they find on the floor. They could easily take it and get away, but most would return it.
If a corporation was presented with a similar situation, they would most likely keep it. Individual members of the corporation wouldn't, but the totality would.
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Some might say corporations are merely democracies in the business world, and if you criticize corporations, you criticize democracy. Democracy has its problems, but their are many differences between democratic governmentss and corporations:
1. In a democracy, everybody has a equal vote.
2. Governments have many more measures of success than their bottom line.
3. In a democracy, every citizen is affected by the government. This is true to some extent in corporations, but again only affects the purse.
etc.
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