Alfred Chami

Globalization

Essay

February 8, 2015

The Corporation is a mind-altering documentary that highlights the negative light that corporations shed on society today. Joel Bakan, the filmmaker, is well known for his works that criticize the adverse roles multinational corporations play on humanity. Joel raises public attention to the paradox of a corporation’s functioning, defining it as “ an institution that creates great wealth but causes enormous and often hidden harms. “ (Achbar and Abott, 2003,17:43). The documentary describes a corporation as a structure that has the equivalence to an individual’s legal status, thus raising the big question: if the corporation really is a person, what type of person is it? In response, the film focuses on arguments that try to prove this “person” to be psychopathic, partaking violent social behavior. The document questions the responsibility of production methods that corporations favor, the utilized marketing techniques, and whether a corporation is really an institution or in fact, an individual. As the harms continuously rise, businesses are challenged to encounter the concept of corporate responsibility.

The central argument of the film is centered on the question: “Is the firm an individual or an institution?” (Achbar and Abott, 2003,21:16). Based on the historic development of the corporation, it seems to be that the answer is leaning towards being an individual. Corporations have developed to carry their own legal entity, allowing them to perform actions, such as suing in court, similar to humans. However, the trick is, corporations don’t have to abide by the moral responsibilities that humans face, and experience no punishment in not doing so. Noam Chomsky argues that: “corporations are special kinds of persons, who have no moral conscience. They are designed by law to be concerned only for their stockholders.” (Achbar and Abott, 2003, 34:26) Sir Mark Moody-Stuart reminds us about the true core of a corporation: it’s economic field, by stating: “There is no organization on this planet that can neglect its economic foundation, even someone living under a banyan tree.”( Achbar and Abott,, 2003, 41:02) This claim is accurate because regardless of what CEOs try to imply about doing good for the environment and for social development, the process remains a key marketing scheme, opting for economic gain in the long run. Corporate responsibility is achieved through individuals within a corporation, however when the responsibility is given to the abstract entity of a corporation, the responsibility begins to blur out. The film also raises the question on the ethical standing of advertising and marketing processes that modern day corporations utilize. A good demonstration is the “nag factor” which is a method that marketing divisions use in order to persuade children and teens to nag on their parents in order to purchase a product. The ethical question here is whether it is right to manipulate the naive mind of a child to believe that he/she wants a certain product that isn’t really needed. Another subject is “stealth marketing” which is a form of marketing which pays actors and celebrities to use products in order to persuade consumers to “be like them” by purchasing such products. The problem here is that the use of such methods only tend to rise. What happens when consumers reach a point in which they cannot differentiate between a salesman giving actual facts concerning a product and a salesman who utilizes psychological tactics to convince us that we need the product? The film highlights the delicate subject of customer trust and loyalty, which apparently is becoming more and more problematic with time.

One of the films strongest arguments is that of responsible production and product use. The film takes an example of scientists who injected RBGH into cows in order to increase milk production, however this was done so without studying potential consequences, keeping only one eye open, for one reason: profit. Another argument is that of the controversy that took place with IBM. The film shows evidence of senior management being aware of the use of IBM’s punch card system in order to locate victims of concentration camps back in the third Reich. The film argues that fascism rose in Europe due to corporate support that facilitated such horrible processes. Such cases bring rise to the enormous question: Who is responsible for the product safety of humans—customers or organizations?

On the other hand, many right wing globalists, including sociologists and CEOs argue that too much attention is put on the harm that corporations may have caused, leaving too little emphasis on the positive effects corporations have shed on society. Ever since the rise of corporations, global issues such as unemployment, and poor economic development have been diminishing. Not only do the corporations provide more job vacancies as they grow, most of them carry social programs to improve standards of living in third world countries. A good example of this is Shell. “ Last year, Shell spent $20 million establishing hospitals, schools, educational programs, and scholarships” (Klein, 2000). Yes, maybe once in a while, corporations may do some harm, but all the harm is always recovered, with excess given to improving social welfare.

The second counter argument opposes claims that say corporations operating in third world countries are violating labor rights by exploiting the workforce. However, these are claims by critics, comparing labor rights in first world countries to less developed ones. The question is, are labor rights actually getting violated? Are workers getting under-paid? Bhagwati answers otherwise: “ several empirical studies do find that multinationals pay what economists now call a “wage premium”: they pay an average wage that exceeds the going rate, mostly up to ten percent, and exceeding in some cases.” (Bhagwati, 2005) Another point made by Bhagwati questions whether it’s the multinationals fault that labor rights are getting violated or whether in fact, it’s the host countries problem which has poor skills in enforcing the law. Such corruption is found all around such countries, is it necessary that multinationals should pay the cost for “violating labor rights? “ That is tantamount to saying that multinationals must effectively boycott anything that is produced and sold by countries where labor laws are not enforced effectively” (Bhagwati, 2005.)

Left wing globalists tend to argue that, the rise of adverse actions that corporations endorse are increasing uncontrollably and that society is going to be facing a great challenge versus this rising corporate power. However, studies from the United Nations tend to prove otherwise. A publication by the UN concerning corporate responsibility states that the UN, ILO, and OECD have been setting more and more regulations to control the harmful effects corporations may have been causing. “The number of codes of conduct increased exponentially over the last decade.“ (Ibekwe, 2015) With such statement in mind, it is easy to say that those without evidence who claim that society is going to face a corporate challenge in the future are simply pessimists who avoid the reality of the subject.

The debate in the recent years seems to be only rising and rising. First comes first, to counter-argue whether a corporation is an individual or institution. Let us consider that it is an individual, why is it directly implied that harms aren’t taken into account when making decisions? Individuals, similar to institutions, are not so perfect. The only difference is that an individual’s harm may have much less impact than an institution. However, critics cannot simply conclude that corporations directly want to harm others. With the rise of corporate responsibility, institutions, rationally, do all they can in power to avoid such harms, because in fact these harms don’t lead to excess profit, but in contrary, short-term losses due to negative advertising from pressure groups.

Nonetheless, an argument that I fail to oppose is the one questioning the ethics of advertisement and production that corporations apply. I agree that it is not right to alter the innocent minds of young children to believe that they want certain products. I believe that regulations should be set on advertisement targeting people not responsible enough to differentiate between what they want and what they are fooled to want. I also judge that corporation must place more time studying the possible harms that chemicals utilized in production may lead to. However, I don’t solely put the blame on the multinationals, but in the regulators, which in most cases is the government. Regulators are out there for securing public health; it is their job to make sure that potentially harmful chemicals are not used in productions processes. With that it mind, it’s hard to fully blame corporations for such incidents.

In conclusion, maybe corporations do have the legal status of humans, but I do not see the functioning of such human different from the processes of any other rational person. On the other hand, I do agree that corporations may fail in meeting ethical standards in their methods of production and advertisement, but such failures are always compensated. Overall, corporations may have minor harms to society, but I believe it is extremely hard to overlook the positive role multinationals play for the development mankind today.

Bibliography:

Achbar and Abott, The Corporation. (2003). Canada.

Bhagwati, J. (2005). In Defense of Globalization. International Journal, 60(2), 592. doi:10.2307/40204318

Ibekwe, Ngozi.DISCLOSURE OF THE IMPACT OF CORPORATIONS ON SOCIETY. (2015). United
Nations.

Klein, N. (2000). No space, no choice, no jobs, no logo. New York: Picador USA.