Corporations: a wolf in sheep’s clothing?

by | Apr 30, 2021 | Corporate power | 0 comments

Image: https://unsplash.com/@jeroenbosch 

 

By Lusindy Liang

 

It is an age-old question whether the existence of corporations does more harm than good in this society. Due to its drive for maximising profits, it is apparent that they will go to extreme lengths to achieve this, from large-scale pollution to exploitation of workers, the corporation continues to act in its own and their shareholders’ interest with a disregard for people and regulations. But have corporations really made an effort to be more aware of their moral responsibilities?

It is a known fact that corporations have used exploitative methods in order to create a profit and the increase of globalisation has made it easier for them to exercise it on a worldwide scale. From outsourcing to other countries where tax is less to even using child labour for production, all these things are done in the name of maximising profit. Despite all this, there are little restrictions in place that are truly effective against the most dominant institution of this time. According to King (as cited in Campbell & Pedersen 2001) ‘technological advances that make transnational trade possible have made it more difficult for states to regulate labor standards and the flow of capital’ and so corporations are able to get away with using these exploitative methods.

It can even be argued that Governments are trying to stay in the favour of corporations in order to maintain and to attract more investments by implementing more ‘business-friendly policies’ at the expense of the workers (Bakan, J. 2004). This corporate favouritism can be seen in the 2019 plan to cut corporate taxes by 2 percent that is estimated to cost the treasury £6.2 billion, which enables corporations to make more profits.

With the lack of control that governments have over Corporations that are outsourcing their work, it is left to social movements and NGOs to prevent corporations from exploiting workers. By using tactics to raise awareness and to increase media and public attention, they are able to hold corporations accountable and to force corporations to be more transparent about their production process and how they treat their workers in order to preserve their reputation (King, B.G. 2010). This pressure also forces them to be more vigilant of who they outsource their work to and how the working conditions are there. 

But are they really effective against the most dominant institution of our time?

It is acknowledged that social movements and NGOs are definitely not effective enough when holding corporations accountable. Some corporations are still using exploitative methods like forced labour in order to earn more profit. According to the 2012​ International Labour Office statistics, of the 21 million people in forced labour, it generates approximately $51 billion in profits per year and their statistic of 25 million people being in forced labour in 2016, there is an indication that there has not been an improvement in corporations and how they treat their workers. There is also the issue of social movements and NGOs not being able to expose all of the corporations and their actions. Public and media attention might not be enough to convince all corporations to address these issues fully. Especially when the exploitation of workers can provide the easiest and quickest way to maximise profits.

Despite the rise in the number of people in forced labour, there are more and more corporations taking an active role in trying to address the issue of exploitative methods being used in production. With the increase of pressure from consumers and investors, there has been an increase of corporations disclosing information about where they outsource their manufacturing to. More corporate audits are happening which ensures that corporations are working within the law and that they are upholding their ethical standards and therefore allow corporations to be more aware of their moral responsibilities.

There is no arguing about how much corporations impact the economy, but it has been made apparent that their profit has been made through unfair and even dangerous methods at the expense of the workers. There is still a long way to go before the situation is fully addressed and that corporations are fully held responsible for their effect on this world.

 

Bibliography:

Bakan, J. (2004) The Corporation: The Pathological Pursuit of Profit and Power​. New York: Free Press. Especially Chapter 1: The Corporation’s Rise to Dominance, pp. 5-27.

Campbell, J. and Pedersen, O. (2001). The Rise Of Neoliberalism And Institutional Analysis​​. Princeton University Press, p.1-25.

King, B.G. and Pearce, N.A. (2010) “The Contentiousness of Markets: Politics, Social​ Movements, and Institutional Change in Markets”.​ Annual Review of Sociology Vol. 36: 249-267

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