The individual and the Corporation

A few years ago a group of Harvard MBA students pledged to, on a voluntary basis of cause and under the banner of Responsible value Creation, that they as business leaders would recognize their role in society. A MBA that signed the oath recognized that his or her purpose is to lead people and manage resources to create value that no single individual can create alone. And that the MBAs decisions affect the well-being of individuals inside and outside my enterprise, today and tomorrow.

Therefore, a MBA promise that:

  • I will manage my enterprise with loyalty and care, and will not advance my personal interests at the expense of my enterprise or society.
  • I will understand and uphold, in letter and spirit, the laws and contracts governing my conduct and that of my enterprise.
  • I will refrain from corruption, unfair competition, or business practices harmful to society.
  • I will protect the human rights and dignity of all people affected by my enterprise, and I will oppose discrimination and exploitation.
  • I will protect the right of future generations to advance their standard of living and enjoy a healthy planet.
  • I will report the performance and risks of my enterprise accurately and honestly.
  • I will invest in developing myself and others, helping the management profession continue to advance and create sustainable and inclusive prosperity.

But to what extend is this oath really valid and worth the paper it is written on. One of the central questions that members of organizations and corporations alike are faced with is if their personal conviction could be in contrast to the business decisions and actions they are taking. As part of a machine bureaucracy the individual means less and less, they are just part of a system which in the end only have one aim and that is to ensure its own survival.

One might argue that even though the individual wants to do what is right and fair, he or she will always be under and held accountable to the overall purpose of business and that is to create and accumulate wealth. If we started to define the purpose of the corporation in any other way it would no longer be the same institution.

One might ask. What role does the individual really have in the machine room of corporate enterprise? And the answer might not be what we want it to be.

First of all an individual that wants to be part of any organization needs to accept and play by the rules that are embedded in its DNA. If one is unable to do so he or she will be expelled from the organization or leave on their own account. So if one does not accept that creating wealth is the purpose of business, it is very hard to stay within an organization which has this very purpose. This does not mean that it will be the only value or norm that guide corporate decision-making it just means that when corporate individuals does something it will always be with this rational as a guiding factor.

So for example when companies goes into partnership with NGOs there might on the surface be ethical reasons why such as reducing child labor or remedy some of the impacts of pollution has on the environment. But, there will also be an economic rationale behind the partnership. This could for instance be that it will hurt the company financially, if it receives negative exposure in the media or risks being a target of consumer boycott. It is not that the individual manager taking the decision about a potential partnership is not a good person or has genuine feelings about child labor or the environment, it is just that he or she will not be able to free themselves from the underlying rational of profitability.

Second, if individuals want to change an organization it needs to be done in accordance with the profitability rational in mind. In short it means that they will have to implement change that is systematic in nature, and which can be linked to the economic performance of the organization. There have been plenty of examples were corporations have been able to say one thing and do another just think of Enron and BP to name just two. So instead of pretending not to be greedy companies need to accept that it is in there nature and that it is part of “who” they are. Just like the crocodile can’t pretend not to be what it is, basically an eating machine, corporations need to accept that the accumulation of funds is central to their identity. And just like the crocodile, not because they are evil or are out to “get” somebody, but because it is so deeply rooted that it defines them.

So as an individual one have to accept that if you are part of a corporation you will also be tempted and influenced by the beast. It is not because you are a bad person, and in your private life you might be the best friend, father, mother, husband, wife etc. around, but when you take on that suit the very nature of your judgment and decision-making paradigm changes. The very nature of your existence change from being a friend, father, mother etc you become the manager, the CEO, the Supervisor, the controller and that is what guides your actions.

And when you pledge that you “will not advance my personal interests at the expense of my enterprise or society” or engage in “business practices harmful to society” you will always put your enterprise before society not because it is wrong or right but because you can’t do anything else.


One thought on “The individual and the Corporation

  1. Pingback: ecological disasters | reptilian race | is 2012 real?

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