The conclusion is that corporations use cost-benefit analysis in making decisions regarding producing any product and its safety. In making such decisions corporations assign value to human lives, human injuries, polluted environment and any possible lawsuits. If the amount of legal actions is lower than making a product safer, they will not improve the product. The conclusion is that corporations do not care whether the product will harm any human being or will pollute the environment as long as that product brings profits to the company.
The conclusion is that corporations behave as psychopaths and as ‘doom machines’, and in their pursuit of profit will destroy everything. The most harmful decision will be carried on as long as the profit margin is increased by that decision. The conclusion is that corporations in destroying the evironment finally will destroy themselves. In this chapter, and in the whole book, the author does a good job with showing different points of view, different aspects of decision making porces, and different impacts on different groups of shareholders.
The author gives examples of what are the impacts of the decision on the company, on the individuals, on the employees, and on the customers. Bakan does not show only one point of view, he shows major points of view. By showing different points of view the author asks whether a certain point of view could be totally right or wrong, or whether there needs to be a mix of approaches in order for corporations to operate properly. The author writes about facts and theories of others, giving a reader free hand to make his/her own opinion regarding the topic which in this case are externalities.
Eventhough, the author gives a free hand in forming own opinion regarding the topic throughout the chapter; at the end the author clearly states his point of view. Joel Bakan says that he disapproves what is happening to the world because of corporations and lack of regulations regarding sweatshops and externalities. It is clearly understood that he is against big corporations and their exploitation of people and environment. The whole chapter is about externalities, exploitation of people in developing countries, and pollution of the environment.
Nonetheless the whole book shows two sides of corporations, one is making profit and the other is doing harm whether to environment or to people. I think that this book would make everyone think about the path that the world is going through and the future that is coming. I think that every reader of this book regardless who she/he is, after finishing the book stops for a second and thinks whether the things that are happening around us are right or wrong.
The sad conclusion; however, is that many readers would say “yeah, it’s wrong, but what can I do? I’m just a regular citizen”. I think that it would be a good idea to actually include some kind of guidelines regarding what people can do to stop those corporations in harming societies and environment. Questions: 1. Corporations can be thought to be socially constructed (constructed by people); therefore, why people agree to illegal actions of corporations and how social construction can be helpful in changing corporations?
2. In doing cost-benefit analysis should corporations include legal or moral obligations towards the society and the results externalities can have, or should they just obligate the legal responsibility towards their stock holders and maximize the profit? 1. I posted this question because I think it is an interesting question because if we agree that corporations are socially constructed, meaning constructed by people, why those people agree with illegal actions of corporatins.
What I mean by this is that all people somehow depend on the corporaions and in some degree are harmed by coroprations, regardless whether a person is an employee, a customer, a third person, or a CEO, all people are harmed. For example if corporations pollute the environment not only the enviromnetnt is harmed but all people that depend on the environment are harmed. For instance, maybe the CEO of that corporation is not swimming in the water polluted by them but maybe another CEO has a cottage next to the lake or river that was polluted by that company.
I am asking how social construction can be helpful in changing the way the corporations are operating, if some people created those harmful corporations how other people can change the way they work. People created corporations and people let them do harm but how those people can now stop corporations in doing harm. 2. My second question is somehow connected to the first one. My point is that if corporations should have only legal obligations towards their stockholders what happens if those stockholders are harmed by the corporation.
Shouldn’t the corporations include moral obligations towards their stockholders? We all know that corporations have a legal obligation towards stockholders to make profit but how we should reason if that stockholder buys defected product produced by this company and harms himslef. For instance, the case of Armstrong whose car exploted becase of deliberatly unsafe positioning of the gas tank, what happens if Armstrong was also a stockholder of GM or maybe a manager at one of the GM’s plants? How it would work then?
If we argue that moral obligations and legal obligations are equally important towards stockholders, the answer would be easier regarding whether the corporations should be morally responsible towards the societies. My point is that if corporations should be morally responsible towards their stockholders they would not launch unsafe products because there would be a possibility that one of the stockholders could buy it. Therefore, if corporations would keep in mind their stockholders safety they would not pollute the environment as much, or they would not sell unsafe products.
Furthermore, other people would be safe, because all corporations have stockholders, and if those corporations would have a moral obligations not to harm their stockholders they would not harm other people either, simply by not letting unsafe products go on the market or by not polluting the environment the stockholders live in.
References: All references are from the book by Joel Bakan ” The Corporation, the pathological pursuit of profit and power” page numbers are indicated in the text next to the citation.