In fairness, since I have betrayed a pretty negative view of American corporate behavior in a couple of recent posts, here is a counter example involving McDonalds.
http://opinionator.blogs.nytimes.com/2012/02/13/omg-mcdonalds-does-the-right-thing/
It is probably best not to speculate too much about motive in these situations, and just acknowledge and credit commendable actions as they are taken.
To continue the corporate kudos, it is important to remember that several corporations were far ahead of government(s) in the area of gay rights. Again, their motives are less important than their actions.
5 comments:
Why am I the only one commenting on this blog? It is a "bully pulpit" for sure, but I know you have other correspondents who would be much more entertaining and informative.
Couple of things, I don't know why you comment on the motive. Isn't the corporate motive to make money? From that motive, there are so many branches, like short term, long term, job creation and so on that can lead to good behavior or bad behavior. You and I have agreed to disagree on the general direction of corporate governance--I concede that there has been bad behavior, but don't believe that the profit motive leads to only bad behavior.
Take, for example, the 1982 case of Johnson & Johnson and the Tylenol murders. Quick, decisive action that cost the company a lot of money and set them up for decades of profits despite short term loss. For my own body, I take aspirin since that compound has been used for centuries by people, some of whom are my ancestors. Tylenol is "new" when compared to aspirin, and despite the wonderful reputation of J&J, I don't trust the long-term effects. Just me.
My youngest, Matt, works for Hormel. From what I see through his eyes and my observation of the way they treat him, here is a company that operates ethically and treats their employees well in an industry that is noted for some of that bad behavior we talked about. We need go no further than Upton Sinclair's The Jungle (1906) and (here I go again...) my personal experience with another Bob Peterson, the head of IBP.
Glad to see that you give a nod to good corporate actions.
I wish more people would comment. I assume they will if I ever write something that interests them.
Actually some people apparently never come to the blog; they receive it as an email, and then share their comments with me in an email.
What did J&J do that was so extraordinary at the time of the Tylenol murders? Didn't they choose to loose a large amount up front by recalling everything as insurance against even bigger potential loses in future lawsuits?
Hormel didn't have a very good reputation for treating their workers well in Austin, MN in the mid 80s. I know people who will still not buy a Hormel product because of what the company did at that time. It was an ill-advised strike, in which the local was opposed by the national union, but Hormel had cut wages and benefits despite making record profits. Busting the union was their main concern.
Well, that's one opinion on Johnson & Johnson's response to the murders, but let me point out some facts:
1. They responded to something that was bad, but completely unknown at the time, within a week.
2. Thirty-one million bottles were pulled off the shelf, one of the first major recalls.
3. Their quick response was widely praised and has been known as the "gold standard" for responses during a crisis.
4. The company has been recognized by many, including the US Government, for its deeds.
Compare that to the corporations, governments and individuals who, when confronted with adversity, either run or try to cover it up.
Yours is definitely the predominant opinion out there.
As far as Hormel is concerned, you are much better informed than I am on its actions in the 1980's.
Breaking the unions in the meat packing business in that time was the sport of the day, wasn't it?
Not that it is apropos to anything, but working in the packing plant was the second worst job I ever held.
Let me quote Bob Peterson in his first comment to this post: "I don't know why you comment on the motive. Isn't the corporate motive to make money? From that motive, there are so many branches, like short term, long term, job creation and so on that can lead to good behavior or bad behavior."
Based upon that idea, Johnson & Johnson saw it as more profitable in the long run to act quickly, absorb a large loss, and try to prevent future lawsuits. In that case, their perceived profit motive coincided with the larger public good. As you put it, the profit motive led to good behavior.
If you are right and good results are almost accidental to the perceived profit motive, shouldn't we be a little more reserved with the kudos and accolades?
The counter argument would probably be that the ability of corporate leaders to distinguish long-term from short-term interest in a situation like J&J found themselves in deserves commendation...and it was the ability to make that distinction and act upon it that led to the actions you are praising.
But it is still just the profit motive at work, right?
Although I don't know and can't know what ran through the minds of the people involved and what guided them, I believe that there are corporate leaders who believe that operating for the common good is good for business and for profits.
Unfortunately, there are built in pressures that run against that--primarily, the need for quarterly results. The lack of quarterly results can cause huge reductions in the price of stocks, as you well know.
I would expect that it is difficult for a CEO to determine a course of action that they know will deteriorate the value of the IRA's and investment accounts of people they know, and their own, yet they go ahead knowing it is the correct thing to do. Not exactly "almost accidental" from my point of view.
Has to be difficult when we see examples all the time of people who lie or avoid responsibility. We don't have to look too far in politics and sports.
I have no answer for the quarterly profit dilemma, but I yearn for a bit longer horizon for the analysts and the journalists who cover that news.
This is fun!
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