Reflective Essay #1: The Revival of Corporate Accountability

The past few weeks have been an inspiring journey in understanding and appreciating human life. Prior to the first intensive, the massive 7.0 earthquake in Haiti struck leaving 3 million people dead, injured, and/or displaced from their homes. The following week, we recognized Martin Luther King Day on Monday. Meanwhile, I am researching the importance of Social Justice in life and in business. It’s ironic how separate events coincidentally converge at the right time to fuel my reflection. I found the impact of the Haiti quake hit me harder than past natural disasters. Granted, this one is especially destructive, but the concern I had for Haiti people and the hopeless depression I felt was unusual and unexpected. On MLK Day, I reflected more on the ambition and achievements of Dr. King than I have in the past. Perhaps it is just a sign of maturing, but I can’t help to consider that my education is opening my eyes to the world around me.

I would bet that the first couple weeks of this course have provided me with more enlightenment than many of my classmates. Despite achieving a bachelor’s degree in Business, social justice is a topic that I have had little to no education in. Although I took required classes in international business and cultural diversity, there weren’t any courses that examined causes of poverty, child labor, unfair wages, or other major business issues that are detrimental to our fellow man. Perhaps there weren’t enough hours in the school day, or it was a controversial topic that was deemed “inappropriate” for the classroom, but it has excited my interest in the subject.

At the intensive, the second half of our course kicked off with an analysis of the “Great Place to Work” survey that was self-administered by the class. One strong takeaway that I got from that was great news for business: Work engagement and feeling valued were the most important characteristics employees felt towards their job! It wasn’t more free time, higher pay, or less stress, rather, they were qualities that were easily attainable and could only serve to increase employee morale, production, and retention. I forget the source, but I remember reading that employers have taken a similar survey and responded with higher pay and less stress as being bigger job motivators. The employer response only validates the average employee’s assertion that “feeling valued” is important, and likely not a concern of the average employer. This revelation proves the importance of a deep understanding of social justice and how it relates to business. Although, social justice has its obvious role in the triple bottom line, human resources play an invaluable role in the production and profitability of a company.

On the Friday of the intensive, Jill concluded her lecture by displaying a quadrant map displayed below:

She posed the question: Where do you feel that we need to be? Initially, I had some issues with this diagram and the limited options that were provided. Am I supposed to believe that the system we have in place is really a Win-Lose? This was a difficult thing for me to swallow, but continued research followed with classmate discussion helped me understand that our system is indeed flawed. The hope I have in our current capitalistic system puts my position on the left of the quadrant map, and naturally I am drawn northerly to a “Win-Win World.” The word “reform” felt a little strong at first, but I can see how that classification is suitable when describing the changes that are necessary to achieve a world with less poverty and social injustices. The good news is (I am always on the look out for positives amidst the negatives!), our system (in its relative infancy) is experiencing the natural reform that we are hoping for. Among the child-labor stories of Nike, the unfair wages of Walmart, and the dishonesty of Enron, there are many stories of ethical companies that achieve success largely based on their high regard for humanity and their moral character.

Imagine a world in which the excess energy from one business would be used to heat another. Where buildings need less and less energy and where “regenerative” commercial buildings—ones that create more energy than they use—are being designed. A world in which environmentally sound products and processes would be more cost-effective than wasteful ones. A world in which corporations such as Costco, Nike, BP, and countless others are forming partnerships with environmental and social justice organizations to ensure better stewardship of the earth and better livelihood in the developing world. Now, stop imagining—that world is already emerging.

-An excerpt from The Necessary Revolution by Peter Senge

I read Senge’s book last quarter, and was reassured that although the Industrial Revolution was flawed, we have the ability to learn from our missteps and get it right this time. The “take, make, waste” way of thinking that has dominated the developed world for the past couple hundred years is coming to an end! Environmental and social challenges such as climate change, the depletion of our natural resources, cradle-to-grave consumerism, and a widening economic divide is ushering in a large opportunity for change. Thanks to technologies like the internet, we have an unlimited resource to educate ourselves. Also, as our world becomes more interconnected, we become cognizant to the consequences of unethical corporate actions. I am optimistic that business will change for good, I just hope the “Necessary Revolution” happens sooner rather than later. J

Although I have my qualms with the movie, The Corporation (2003), there were a few topics that I found to be interesting, and stand in the way of the revolution. The biggest fear I have is that Corporate America’s talent at Perception Control slows down our progress to a solution. Growth-grabbing corporations have become experts in public purchasing persuasion. Although, this is mostly done through effective advertising, branding, and marketing campaigns, I believe that the perception Americans have on companies are inevitably defined by the corporation itself. If the corporations can control the public perception of them, then who holds them accountable for their actions? I created a causal loop diagram to help illustrate my thoughts.

Our democratic government operates through a system of checks and balances to ensure that none of the three branches of government can operate exclusively or despotically. For example, the President cannot declare war without the approval of the Congress (on second thought that may have been a poor example). However, the Circle of Control above illustrates how the only one keeping the corporation accountable is themselves. If you ask the CEO who holds them accountable, he would say the shareholders and board of directors do. We all know that profit dictates their decisions. The corporation’s profit is controlled by the public’s perceived need for the corporation’s products or services. This need is often created, inflated, or embellished by the corporation itself. As long as the corporation can control the public’s perception and shareholders are solely motivated by profit, this causes an inadequacy in corporate accountability. I also learned from watching The Corporation that according to the U.S. Court of Appeals, falsifying news is not against the law! After all, our news organizations are private corporations as well, and are often part of a large conglomerate that has a vested interest in preserving an inaccurate public perception. The film asks: “Who will preserve our ability to make our own decisions?”

To quote a favorite sci-fi show: The truth is out there! As the public continues to become interconnected through social media and the internet becomes a trusted source of the people and for the people, I am confident that many of these corporate abilities from the previous era will naturally become eradicated. I am a firm believer in a couple principles:

1. By nature, people are good.
2. Good always triumphs over evil.

Much like the Laws of Economics, these principles only ring true in a perfect world. In other words, in order for good to triumph, we must make the following assumptions:

1. The line between good and evil is clearly defined.
2. People have sufficient information to make an informed decision.

I believe the principles can offer us hope that humans will inevitably make the right decisions, but not until the assumptions listed above become fact.

Today, I feel that there are a few things working in our favor to achieve this. Following the recession and the financial bailout, there is a palpable disgust among the public for the Wall Street greed that not only got us into this mess, but continues to make self-interested decisions. Americans are quickly regarding big business as the enemy. Furthermore, reports such as the GRI, Corporate Social Responsibility Reports, ISO 14000, etc. are providing the consumers with helpful information to make informed purchasing decisions. Lastly, as social networking and information dissemination exponentially increases thanks to the internet, the public will have an unprecedented amount of information at their fingertips.