Sunday, January 30, 2005

Quote - corporate stewardship

Thanks, everyone, for your kind thoughts on my ongoing health fun. My cold has morphed into something sinus-related. I'm popping Sudafeds now and hoping the headaches subside enough so that I can actually function. On the plus side, my voice is approaching Barry White territory.

Now, time for today's issue:

It's not often that the head of a major profit-seeking organization says something that thoroughly impresses me. That's because I've built up some firmly-held biases against the corporate ethos that dominates our world.

Why? I spent years working for huge companies whose leaders made no bones about their pursuit of shareholder happiness to the exclusion of all else. The employees who made it happen didn't figure into their thinking, nor did doing the right thing for the right reason. As long as the bottom line was served, their thinking was, quite simply, "To hell with everything - and everyone - else."

This trickled down into a corporate culture that encouraged unfettered nastiness, immoral behavior and day-to-day flouting of the basic rules of kindergarten (do unto others, etc.) by those occupying the requisite countless layers of management. Cruelties were - and presumably still are - justified by quoting the applicable bureaucratic truth to which the drones subscribed.

I still get e-mail from former colleagues, virtually all of whom share their thoughts on what a miserable environment this kind of thinking has created. If I only had a nickel for every time someone told me, "You're lucky you got out when you did."

Which is why this quote came as such a pleasant surprise:
“Honda’s vision is to be a company that society wants to exist.”
Honda Motor Company Ltd. president and CEO Takeo Fukui said this recently while discussing his organization's pursuit of new propulsion technologies. Honda has been a leader in gas-electric hybrid development, and continues to lead the industry in building efficient, powerful and clean-burning powerplants. If a car company can ever be called green, Honda is likely as close as any such company can be.

Mr. Fukui's quote runs counter to the scorched earth ethics that seem to guide so many large organizations today. Will his words be heard in other executive suites? Will they be understood and appreciated?

I don't have the answer to that, but as consumers, perhaps we can begin to exert our influence by choosing to deal with companies that make it clear their priorities are symbiotic to the environment - social, economic, geographic, etc. - within which they exist.

Do you believe your voice can be heard? How will you make that happen?


markisdead said...

Sound ethics AND great engineering. Thanks for bringing that to our attention!

Trillian said...

Great quote. It seems like there are a few business men out there that "get it". Everyone else is waiting for consumers to lead the way. And until people stop demanding low quality, low priced goods created on the backs of the third world and produced through the raping of our natural resources, big business may not listen.

It seems to be chaning slowly. I'm noticing more people caring. I've even met a couple of granola-eating MBAs. Perhaps there is hope for us after all.

Wheelson said...

I like to believe that we the consumer give a corporation our vote for their right to exist whenever we buy something from them. That's very idealistic but that's the way I am. Corporations do evil nasty things because they can. If they did those things and people didn't buy their products as a result, they wouldn't do those evil things. But, like I said, that's idealistic. Why?

Look at what this CEO says. He's saying, "Look just because we can do something and get away with it doesn't make it right."

Ah now we're talking! How are ethical standards enforced? They are enforced by those in power and influence. In an economy the consumer doesn't wield unlimited power and influence. They hold some, but not all. The corporation themselves holds quite a bit of the power and influence as well. So how can they be citizen and judge at the same time? Logistically it's easy. But in practice it is easier said than done since as profiteers it's hard to compete and be ethical at the same time. However if they use such ethical behavior to their advantage and use it as a marketing tool then that just makes sense.

Perhaps the question is, does ethical behavior by a corporation cut into profits or is it just a question of marketing? If we look hard at the issue, and take in the big picture, is being unethical profitable, or just easy? Is easy business automatically the most profitable form of business?

Veda said...

(will I regret this?)
Carmi, I agree that it's nice to see a company that takes into consideration what it's product can do to the environment and make it the best it can be. That's definitely worth the gold star, no question.

I think the comment (quote) can be taken in many ways, my own perception is that if society doesn't want their company, where would that put them? Off the map, that's where. Of course they want society to want them... But yes, it can go the other, less capitalistic way, of "generosity" in a twisted sense, as straight-forward generosity would've been, "We want to be the company you heart." There is a difference.

I'd like to comment to Wheeler, as well. (Hi, Wheeler!) :) -a smile to show I'm not a crabby type. I understand the points you're making, though muddled, and wonder which side of the arguement you're on. It is a dog-eat-dog, capitalistic world out there. Not just a few companies, but all of them need to vie for the number one slot in sales. In order to be number one, someone must get stepped on. Don't want to get stepped on? Don't play.

In the whole bit about poor-moral acts that "filter down," I think it's a simple case of not understanding where the limits are. Even in the "lower ranks" of business (as in the higher up ones), there is toe-stepping. (again, the "don't play" mentality applies) However, there are those in the lower ranks (as well as the higher up ones, again) that don't understand the proper ethics to "stepping." You don't step in spite. You step only in light of reaching higher ground for yourself. If you're among a group (say, Union), then as a group the stepping would be only appropriate to better the group. If such stepping doesn't benefit the company overall, how much will it likely benefit the union? Zilch. Again, it's the thinking that is lacking in those situations.

I'll be quiet now. :)

Wheelson said...

Yes, sorry about the muddled ideas. Carmi's posts deserve a thoughtful and well crafted comment. If I did that everytime I'm afraid that I'd never comment because I don't have the time. I know Carmi understands...right? I'll try to rectify my transgression with this post.

Veda, your question regarding what "side" I'm on is valid because I don't think I've said what "side" I'm on. I'm simply asking questions and making statements.

Also, I'll take it to mean that by "capitalistic" you actually mean "Free Market" where a corporation's actions are limited by law and where the economics of supply and demand are not regulated (or regulated with only minor restrictions). Capitalism refers to who owns the production and distribution; specifically that they be privately or corporately owned rather than governmentally owned.

In other words, in a free market corporations are free to do whatever they want as long as it isn't illegal. It's the same system that governs my life (I live in the United States of America where I'm free to do whatever I want as long as I don't violate any laws as I do it) because in the US corporations are considered people.

Veda, I do hope that you are not suggesting that businesses in a free market somehow sacrifice their freedom or profitability as they decide to behave ethically? Ethical behavior has nothing to do with "capitalism" or Free Markets. Ethics is simply a set of "right conduct" Your statement about "the other, less capitalistic way, of generosity" is exactly the point of view I tried, muddled as it was, to argue was misguided. It seems as if you are saying that ethical behavior is somehow less profitable? That consumers wield all the power as we influence whether a company will be ethical? That, if a company is unethical and profitable it's ok, but if they are unethical and the consumer doesn't like it, they'll not send business their way and the company will fold. That line of reasoning is flawed. Here's my counter argument:

How do we decide what is "right conduct" (ethical)? Is it via laws? Certainly a little bit, but I know tons of unethical stuff that I can do that is not illegal. Should I engage in unethical behavior in an attempt to "get ahead"? Only if I want to behave unethically. I can still succeed and behave ethically. If I succeed as I do some "toe-stepping", does the success justify the unethical behavior (I'll assume that 'toe-stepping' is a euphemism for 'unethical'). It's the old "Does the end justify the means," question.

What I'm saying is, why can't corporations act the same as me as I ponder the "Does the end justify the means" question?

Maybe corporations shouldn't be free to behave unethically? Well, in the US of A corporations are afforded the same rights as people, so in the US that's not an option. Corporations are free to do whatever they want as long as they don't break any laws. Does that make their actions ethical? No, it makes them legal. Ethics is a different issue.

Take this hypothetical example, say you are a large car manufacturer. As such you can influence the marketplace. The marketplace being defined as the market that your corporation has influence in. For a car manufacturer, that marketplace deals with cars.

Now, you can choose to design cars that use gas engines or electric engines since those are the available practical technologies for moving cars around. (A hybrid car is essentially an electric car since the engine that powers the wheels is electric, but it's really not important to this argument) Do you use your influence as a car manufacturer to drive sales of gas engines and put off or stall electric engine sales because it would be expensive for you to do R/D on electric motors, or do you embrace electric engine R/D as well as the costs? Do you say, "To hell with everything else" and use your influence to convince the consumer that the environmental, sociological and political impact of gas engines is negligible or not important despite evidence you have to the contrary?

Should you do that or, should you play a part in educating your own consumers about has engines are fine in moderation but we should all work toward adopting alternatives such as electric engines? As you do this education perhaps you market this initiative as an attempt to differentiate yourself from the competition and to strategically position yourself for future success?

Which is more profitable? I'm not sure. That depends on a lot of things. From the example we wouldn't be able to tell. They both seem equally positioned to be profitable.

Which is more ethical? That answer is obvious.

Would the consumer wield absolute power and influence over the directions of each company took? No, the example clearly states how the corporation influenced the situation so the consumer did not wield absolute power.

My point is, unethical behavior does not guarantee more profits and conversely ethical behavior does not guarantee less profits. Ethics and profit have nothing in common. A corporation can be ethical and profitable. Laws exist that define some right behavior and thus influence a corporation's behavior. Likewise, consumers are also able to help a corporation know when it is engaging in right behavior but they do not wield absolute power and so their voice is limited as well. A corporation is ultimately the one responsible for judging whether their behavior is ethical or not and if a corporation, or a person, reaches the conclusion that they must be unethical to succeed then they are mistaken.

Veda said...

Carmi, we're still good on this whole "Veda debates with other commentors" bit, right? ;)

Wheelson, I hope you'll forgive me for twice using the wrong name. I'm very sorry for that.

Indeed, I do regret. :) I wasn't ready for all this when it came through, holy cats! But I stand by what I said. Let me try to work through all that is there, and I'll get back in here with it. Unless, Carmi, you'd prefer I email Wheelson instead? I'll work on it and check back here to see what's news.

Carmi said...

Thanks, y'all for your thoughtful and thought-provoking comments. I'm always humbled by how eloquently you conduct yourselves in this little comment forum below the main blog forum.

Veda/Wheelson: your conversation is totally cool with me. I don't think either one of you has come close to stepping over any line. From my perspective, you're both engaged in a well thought-out, erudite discussion on the ethics of capitalism. I wish all my posts were able to provoke such incredibly rich discussions.

Carmi said...

Oops, looks like Veda and I were composing right around the same time, so I didn't read her comment before I wrote mine.

Veda: I actively encourage commenters to get into it with each other. Go for it! And feel free to keep the discussion going here - as opposed to e-mail. That way, everyone else can learn as well.

markisdead said...

to think that capitalism is always selfish is like thinking evolution is always selfish. it OFTEN is, but you can't ignore the power of altruism, and i think the most successful animals AND companies use this tactic.

Veda said...

Carmi, thanks for those two comments giving the go-ahead here. Indeed, you are very gracious to do so. :) Has your cold gone away yet? -hope so.

I just considered a point-for-point arguement for this debate here with Wheelson that I've gone and gotten myself into and when I reached the end of (his?) piece I decided that any large response (ie, point-for-point) would be in vain.

Wheelson, to sum up, I found that we appear to share a very similar level of ethics/standards. They are higher than average, I think, and I like to believe such upholding is on the rise overall in the general public of the world. Both on the private and the coporate levels.

We disagree terribly on the prescence or absence of a connection between corporate ethics and their respective profits. Perhaps I've misunderstood you're statement, so let me quote it here. "Ethics and profit have nothing in common." I'll likely regret saying this next bit, but will do so anyway. I find it shameful to believe that there is zero connection between business ethics and consumer-based profit. There are conscious consumers that pay very close attention to the companies they make purchases from - in other words, support - and there are mutlitudes of examples of this both in present times and throughout history. The correct term for companies that are not supported financially by consumers as a group is "boycott" and I'm sure everyone here is familiar with it.

You hope that I wasn't suggesting that businesses in a free market would sacrifice their freedom/profitability as they decide to behave ethically. The opposite, actually. Perhaps I worded poorly, obviously the wrong impression was taken. I apologize, let me clarify.

A business that conducts itself in the corporate realm with a high level of standard (or ethic) will be supported based on merit. Not the other way 'round. In fact, a company (as stated briefly above) that exhibits low standards of decency/respect to others/the environment will not be supported well by consumers, given there are other avenues in which to receive the same product/service. With today's economy, that is not typically a concern - finding an alternate company to do business with, that is.

Why don't corporations act the same as you (or me)? Because that would suggest, no matter the level of ethics, single-mindedness. Diversity is what makes the free market of America the great economy that it is. And by great, I refer to the consumer-corporation relationship. I suppose this would be a good time to get to that "absolute power" bit between consumer and supplier.

There isn't one. An absolute power, I mean. Your example does not clearly state how either manufacturer of cars influenced the situation taking absolute power from the consumer. Instead, I find your example to only further my own point that if a car company were to "use (its) influence to convince the consumer that the environmental, sociological and political impact of gas engines is negligible or not important despite evidence (it would) have to the contrary," the consumer would discontinue to support the company by purchasing their product. Further, I wonder what would've pushed your hypothetical company of car manufacturing to look into electric engines to begin with? The public, likely (showing awareness through news stories, articles, what have you), would be the correct answer. Therefore, the consumer. (Which you do suggest with the line, "market(-ing) this initiative as an attempt to differentiate (the company) from the competition and to strategically position (it) for future success." -Via the conusmer, yes?)

The "power" is balanced. That balance of supplier/consumer tips this way and that often and it drives the economy.

I will say that your example does clearly illustrate which company is following a higher standard of ethics.

I agree with your last sentence, that for a corporation (or an individual) to feel obligated to act in unethical ways in order to succeed is poor judgement. Let's again hope that this sort of mentality is on the decline.

Everyone still happy? ::shaky smile::I'm sorry it took me so long to get through this, I needed to take the time to go through everything, get it straight, before spitting anything out. Thank you for being patient.

Carmi, thanks again to you for the forum. I'm glad to hear that you enjoy this sort of discussion on your blog and appreciate the idea of sharing it all with others, keeping it public. Again, thank you.