Critical Analysis of Joel Bakans Argument in the Corporation Book - Term Paper Example

Business and society: Critical analysis of Joel Bakan’s argument in the book The Corporation Introduction Corporations refer to business entities constituted by a group of people with similar interest in profitability. Just like any other businesses, corporations exist solely to make a profit and therefore do everything logically possible to ensure that they sustain their interests. It is this aggressive view of business that Joel Bakan argues, in his book, that this has made corporations more pathological. Corporations exists in the society, they therefore interact with the society on a daily basis and even share some fundamental resources. Bakan argues that societies sustain the corporations that exist among them. It thus becomes natural for corporations to consider the interests of the societies and at times implement their policies in a manner that benefits the society (Bakan, 2004). Despite this open fact, most corporations in the modern day society prioritize profitability and therefore operate oblivious of the societies in which they exist. They implement policies that exploit the society and earn them their objective of profitability regardless of the state of the society in which they operate. This is further aggravated by the subsequent greed for power. Most corporations compete for the market share and the bigger the share one earns for itself the more powerful it becomes. Thereby resulting in semi-autonomous powerhouses capable of influencing the societal politics and therefore governance in order to increase profitability and advance the hold on the market. The seamless transition from profit orientation to the current greed of power arguably makes corporations pathological. In the course of their operations, they exploit societies through inconsiderate pricing and outlawed operations, furthermore they gain access to the lawmakers who have further liberalized their operations thereby earning them more power. They portray carefree operations, which at some extreme times exploit the stakeholders and eventually self-destroying themselves. This should never be the case as corporations exist to benefit the society, besides they also benefit from the society, their actions therefore whether good or bad affect the society. Corporations draw their employees from the society. These constitute their human resource from which they make profits. The actions of corporations affect their employees first hand, from where the effects trickle down to society. Corporations should often practice social responsive investing. Through this, the corporations consider and uphold the interest of the society in the everyday operations. This develops a feeling of belonging among the societies thereby legitimizing the existence of such corporations among them. Social corporate investing makes the corporation conscious of its immediate society, which in most cases constitute the market for their products. It thus becomes insensitive for corporations to amass power and use the power to the advantage of the societies among which they exist (Lane, 2005). Secondly, corporations share such vital resources as water, land and electricity among others with the rest of the society. The manner in which they use these resources therefore affects the society in a way. Most corporations influence policies that permit them destroy the environment through pollution and over reliance on the national electricity grid financed by the taxpayers. Such actions benefit a handful of people at the expense of the million others living in the same society. Such self-centered capitalist thoughts continue to prioritize profit at the expense of the quality of life of the people living in the societies. The possible impacts of corporations to heir societies is immense a fact that validates considerations for the actions and impacts of corporations on society. The modern day corporation in its greed for both wealth and power has become pathological quite literally. In an effort to gain the two, the corporation has become a place where the top managers plot negative schemes most of which exploit the society in many ways. The greed and the ability to exploit the society arise from the composition of top management of such corporations. Leading corporations in the world deal in lucrative sectors of the economy such as energy. The energy sector through oil and other forms of energy sustains the rest of the economic sectors. It is therefore important that such corporations make decisions considerate of other aspects of the economy and the rest of the world in general. Oil, for example, comes from the war torn regions of Northern Africa and the Arab peninsula, it is therefore interesting to note that while the conflict in these regions escalate the leading oil corporations in the world continue to expand their market share and amass more profit. This implies that the corporations take advantage of the mayhem in these regions and despite their ability to develop and pacify the regions, they enjoy the unstable markets in the regions from where they buy their oil in the black market at cheaper prices and therefore make abnormal prices money they use to gain power by influencing the legislations. As state earlier, the composition of the top management in every corporation determines its operations and the depth of its influence in a region. Most of these people are powerful politicians who have direct influence on the legislations in the country. It is interesting to note that legally, corporations have the right to pursue financial interest inconsiderate of the negative consequences of its operations. This makes the market precarious enough especially for smaller and less established corporations. Powerful corporations develop a monopolistic hold on the market, through their powerful stakeholders; such corporations stifle competition by formulating and implementing policies that favor their operations. It is a basic knowledge that a monopolistic market is exploitative, the single company sets prices and the society has no alternative avenue owing to the lack of competition. Such operations are unorthodox but the powerful corporations find a seamless way of implementing such schemes. The most common mechanism is by creating different brands of a product supplied by a single company. This dupes the consumer while in the real sense the entire financial gain ends up with the same corporation. The law validates such actions since they are in line with the pursuit of financial interest, which the law sustains. In 2010, the British Petroleum had an accident, which did not only claim eleven lives but also amounted to the worst environmental degradation disaster in the world in the history of oil marketing. Despite the numerous court cases, the corporation easily acquitted itself of all the charges by making a financial commitment. This is an open indication of the might of the corporation, after causing an international disaster, the company simply makes the monetary commitment and resumes operations without any investigation into the operations of the company. Oil is a dangerous substance and requires tactful handling. After the accident, the American government ought to have put on hold all the operations of the international market leader and certified whether it was capable of handling such amount of oil in is subsequent operations. After the accident, the American government made it clear that it would not consider the company for any subsequent government tenders. Apparently, the British Petroleum had been the government’s most preferred service provider (Thomas & Michael, 2001). To regain its favors, the BP simply went to court where it made further financial obligations and earned its spot once again as the most preferred government’s service provider, clear portrayal of pathological operations of the powerful corporations. This shows open lack of competition in the government tendering processes since British Petroleum had a history with the government. The government has progressively and seamless created legislations that have freed corporations making them masters of their own destinies and operations. The situation is further aggravated by the subsequent privatization of public corporations. It is often advisable that the government in the process of offering favorable services to the people create a number of public corporations in different sectors of the economy. This provides a permanent competition to other service providers who would otherwise monopolize the market. Public corporations are often relevant in the transport and the energy sector among other financial sectors. However, the law also permits the government to privatize such corporations in order to make additional money in case of a financial difficulty. Privatization is a process through which the government sells its public corporations to individuals thereby making them private and at the operational mercies of their new owner. This relinquishes the corporation from other public policies such as the public procurement and other management policies that govern public bodies. A part from the spontaneous financial benefit, the economy loses a lot of money in the end while the population previously cushioned by such corporations becomes subjected to the exploitation by the proprietors. Additionally, privatization has a number of discrepancies, which end up favoring the existing corporation. It is common to find that the policy makers such as congressional representatives among other powerful politicians passing bills permitting the privatization of a public corporation while they harbor interest of purchasing the same (Elizabeth & Michelle, 2008). The privatization laws permit anybody to form a public company and therefore bid for the purchase of a public corporation provided they tender as private entities detached from the government. Politicians therefore participate in such tender as private entities alongside other competing firms (Fournier, 1998). Whichever way such tenders turn out the existing powers of the time, win maybe as previous companies in the market that therefore win this to expand their market share or the new forces with the infrastructure to institute an effective competition. After all, they have the financial will to purchase them. In retrospect, corporations in the modern economy contribute to the escalating inflation, the violence and the environmental degradation. They operate in pursuit of their financial interest well oblivious of the implications of their actions. This is evidently pathological as Bakan postulates in the book that he interviews the top management of some of the leading corporations in the world. In the lack of regard, corporations amass power, wealth and therefore becoming policy makers. They gain total control of the market by dissolving smaller corporations or passing formulating operational policies that discourage such smaller corporations a fact that does not discourage competition but also economic growth. References Bakan, J. (2004). The corporation: The pathological pursuit of profit and power. New York: Free Press. Elizabeth, B & Michelle, C. (2008). Definition of Social environment, New York, Mc GrawHill. Fournier, S. (1998). Consumers and their brands: Developing relationship theory in consumer research. New York: New York Times. Lane, M. (2005). Socially Responsible Investing: An Institutional Investor’s Guide, Euro money. London: Aspen. Thomas, D. & Michael, C. (2001). Successful Management Projects. Oxford: OUP Publishers. Read More