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Monday, February 08, 2010

Corporate View

Much has been written about "corporate America," but I have worked in several countries throughout the world and am a student of globalization myself. It think it's safe to say that whenever someone refers to "corporate America," it's really a broader category that is occupied by all corporations in all of the western nations.

So what is it that they're writing? Well people write about corporate politics, corporate policy, productivity, management, leadership, corporate responsibility, social responsibility in the corporation, etc. I sometimes wonder if any concept of being has been written about more than "the corporation."

There doesn't seem to be nearly as much written, for example, about churches, about governments, about clubs or schools or neighborhoods. It would seem that we have some fascination with corporations.

Could it be that our capitalistic view leads us to believe that corporations are where the true power lies?

I guess I'm no different. I'm a student of "the corporation" as well. But there is something that perplexes me more and more as I get older. It is this notion that corporations seem to have about layoffs. Honestly, it seems to be part of the fabric of "the corporate world." Whenever times are difficult or a company is struggling, they immediately move to lay off staff.

Jack Welch, former CEO of General Electric, laid off about 112,000 people between 1980 and 1985. He then announced his intention to lay off "the bottom" 10% of his staff every year! In a 1987 New York Times article, the editor said that a new corporate order had emerged.

This new corporate order "eschews loyalty to workers, products, corporate structures, businesses, factories, communities, and even the nation. All such allegiances are viewed as expendable." The article concluded that, "only market leadership, strong profits and stock prices can be allowed to matter."

Really? You know, there was a time when the word "corporate" suggested a group engaged in some collective undertaking - beyond just making money for shareholders. In other words, the notion of a corporation was a group of people providing a valuable service or good that made the world a better place to live.

And their shareholders were to be rewarded for financing that and making the endeavor possible. So corporations could be measured based on their overall contributions to society.

But somewhere in the 1980's, we changed our minds. We decided that stock price and shareholder profits should trump all other considerations - including pride in the product itself. And relieved of any concern for employees, customers or society as a whole, corporations then degenerated into mere aggregations of financial assets.

And what did corporate executives decide that the best thing to do with those aggregations of financial assets would be? Plunder them, disaggregate them or merge them into another (corporation) at will.

I think books like Tom Peters' In Search of Excellence or Swim with the Sharks without Being Eaten helped pave the way for this new thinking. The latter, for example, specifically stressed that the (new) corporate setting is basically every man (or woman) for himself. Even high level managers came to realize that they were as expendable as anyone else.

Even CEO's were being churned (and still are) in and out of their jobs. But the higher-ups had one great advantage over the average employee living under the threat of layoffs. They have been increasingly rewarded with stock options and outrageous bonuses. So they stood an increasing chance of striking it rich (literally) in the ongoing turmoil.

Now the combination of great danger and potentially dazzling rewards makes for a potent cocktail. It has become a wave of business leaders that reject the notion of thoughtful methods of professional management or management that actually leaves a true legacy.

Instead, CEO's have formed a new self-image as charismatic gurus who have almost divine powers to discern the truth in any situation and who can be relied upon to make only the best decisions in the moment. While it may appear to us commoners that they are flying by the seat of their pants, they are convinced that they - and only they - know what is right and best. And they execute with that mantra every day.

Between 1981 and 2003 - a span of 22 years - more than 30 million Americans lost their full time jobs in their trained profession. They fell from the stable corporate life into tenuous social positions and even dire poverty or homelessness. Of course since then, in the last 6 years, we've continued that trend and tens of millions more have lost their jobs. As I write this blog, some 30 million Americans are receiving unemployment benefits. So the behavior of "corporate America" has had a devastating effect on society. In fact, few of us can even comprehend the level of this devastation. It is that complex.

It appears that the world has vastly underestimated the ability that corporations have to build societies and to impact societies positively. And perhaps because of that, we failed to act when corporations changed their mantra and began to destroy our societies.

I don't think that the corporate executives who make these decisions are all that wise. We're seeing many great companies disappear from the landscape completely. Their boards are allowing it and their top executives are becoming filthy rich from it. But society is being destroyed.

Every time I hear of a company laying off people (which is at least a weekly event in my country), I think to myself, "How on earth can any company slash and burn its way to greatness?"

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