Article by Sadie Newman

Photo by Matt Boitor on Unsplash

Corporations have become the most important and dominant social institutions today, with huge influence over politics and how society acts in terms of practices and values. Bakan (2003) states that ‘corporations govern our lives’; they have excessive power which they use for the worse due to its harmful effects. Their leverage over global institutions means that their practices are unfair as they primarily exist purely to maximise profit, disregarding the environmental harm they could cause. Furthermore, policies that are implemented into society encouraged by corporations don’t reflect what the wider population think or want to practice and instead it benefits the rich groups due to their bias. Corporate interests are also always prioritised over anything else and this disregards and overlooks huge amounts of environmental laws.

By having the ability to set their own system of management, corporations can dominate the government by limiting the state’s governance. Bakan (2004) describes corporations as being a person with a ‘legal personality’ who can resist laws and evade taxes. “[T]here is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.”  (Friedman 1970). Huge corporations have increase profits but ended up committed crimes and as a result have had investigations into their company.

An example of this is the Volkswagen emission scandal, Dieselgate, whereby with excessive corporate power, environmental laws and rules were ignored. They forged emission tests in diesel cars which made the cars perform better but evidently it meant the copious amount Nitrogen Oxide exhaust (40 times the allowed amount) were released causing huge damages to the environment. Since this was a large corporation, they had the power to dodge many laws, despite having to pay some fines; proving that corporations can dominate government in terms of laws and practices.

Moreover, there are other similar situations where huge corporations have aimed to evade laws relating to the environment. Corporate social responsibility is a pledge to ensure that a corporation acts in ethically benefitting the environment as well as local communities. But is there such a thing as ‘corporate social responsibility?’ (Bakan 2004). In the 1990s Shell UK owned a huge oil platform, Brent Spar, in the North Atlantic Sea and wanted to sink it as low-cost disposal. However, Greenpeace protested sinking it and occupied it for a few weeks to draw attention to it resulting in people boycotting Shell petrol. One of the Greenpeace activists, Neath (2008) states ‘It is unsustainable in its use of the planet’s resources’ and sinking copious amounts of oil would only further damage our world. Evidently Shell changed its mind and ended up disposing of the oil elsewhere. Since then, Shell has adopted a ‘triple bottom line’ as discussed by Elkington where the corporation focuses on the social, economic and environmental effects, not just one. But the point still stands… is there such a thing as corporate social responsibility? In this case, their practices weren’t genuinely ethical because they were trying to please the eyes of their consumers not caring what environmental impacts they would have created or added too.

However, are all the decisions made by corporations bad? Corporations have proved to have made positive changes like promoting better working conditions as well as job creations. Corporate social responsibility means corporations have the incentive to act in the interests of the consumers, for example, sourcing locally produced goods or making sure these goods are fair trade. This only benefits customers by providing them with higher quality produce and evidently safer goods.

 But is it true that corporations really do make ethical choices?

To conclude, corporations have the ability to both positively and negatively impact society. By using their power incorrectly corporations can evade laws which would but their businesses into a bad light, as seen in the Volkswagen incident. Even though they were caught, their intentions were to fabricate the results to make their cars seem better and more environmentally friendly than they really were. Their business was wealthy enough which allowed them in a sense to ‘pay off’ the crime they committed. Corporations have huge influences over institutions allowing them to control how their perceived even went having aims to commit monstrosities to the surrounding ecosystem; as seen with Shell.

References:

Milton Friedman, ‘The Social Responsibility of Business is to Increase its Profits’ New York Times 1970

Gavin Neath (Senior Vice President Communications & Sustainability, Unilever), Greenpeace Business, 2008

Bakan 2004 In the Corporation: The Pathological Pursuit of Profit and Power

John Elkington

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