Article by Hayato Masuda

Photo by Sean Pollock on Unsplash

We live in the world where few corporations earn more than the governments of many nations combined in Today’s capitalist society. Their significant presence in the world allows them to have large influence on how we think, live and what we value, making it more like social institution rather than simply being economic entity. The blog will explore the significance of corporation in the society and evaluate both the benefits and the challenges of their growing influence.

Transnational corporations (TNCs) such as Apple have been acting as rule makers rather than just following the laws and regulations of each country. For instance, Apple played a important role in implementing international wireless-charging standard called “Qi2” in January 2023 which includes Apple’s MagSafe as a main technology. This allowed Apple to enhance its product ecosystem power and further boost its revenue, all while being marketed as environmentally friendly product. Yet, this indicates that Apple is not just following the nation’s standard, but actively shaping the industry norms, illustrating how its profit motive and brand image drive corporate “responsibility”. As sociologist Tim Bartley notes in Transnational Corporations and Global Governance (2018), this new form of governance looks like responsibility, but it often reinforces corporate control. In other words, while corporations appear to self-regulate ethically, they do so in ways that strengthen their influence instead of democratizing it.

The problem isn’t just the power they have, but rather how they use it. In Corporate Capitalism’s Moral Lack (2024), Joel Bakan argues that the modern corporation is incapable of genuine modern responsibility. Due to the nature of capitalism society, corporation prioritize its shareholder values above anything else. An example of this contradiction would be Volkswagen scandal so called “Dieselgate”. During VW’s campaign to promote diesel vehicles as clean and low-emissions as sustainable alternative, it was revealed that VW intentionally used software to cheat emissions test. This highlighted the corporate irresponsibility, enabling corporation to gain status and market advantages while hiding its social and environmental cost. As Bakan highlights, “Corporations often perform morality without embracing it, turning ethics into branding, not behaviour.

Despite its negative impacts on society, corporations have been a key driver for innovation, job creation and economic growth in many countries. When their economic interest aligns with social objective, it often results in positive impact. For example, personal care product company Unilever conducted Project Shakti in India in 2001 which has helped over 160,000 women to become entrepreneurs, lifting thousands of families out of poverty and improved access to essential goods. This clearly shows that corporation conducting business that integrates social inclusion can represents its genuine social responsibility to the public. As Gavin Fridell notes in Fair Trade Coffee and Commodity Fetishism, Market driven forms of justice can provide real, if limited, social benefits. Thus, Corporation can use their enormous resources and logistics to enhance social benefit.

However, even when corporations claim to fulfil social responsibility, their motive of actions can also expose inequality in power. Joel Bakan addresses this issue in The Corporation: The Pathological Pursuit of Profit and Power (2004), Corporations are not designed to serve society — They are designed to serve shareholders. Their social initiatives, however well-branded, usually operate within the limits of profit-making logic. What looks like compassion is often calculation. This means that even corporations operate with social responsibility, it often disguises exploitation of labor or inequality in the regions. A corporation may promote sustainable product yet rely on cheap labor to reduce its cost of production, or they may donate to charity for brand image while avoiding taxes that could be spend for various social programs. Bakan describes this as “pathological” because they act according to a capitalism system that rewards self-interest instead of doing good deed. This results in the world where large corporation decides what counts as ethical or sustainable, and act like global policymaker without democratic oversight, becoming more like social institution with enormous power.

Corporations today act as global governors, significantly influencing policies, economies, values and meaning of morality. While some corporations enhance innovation and creates opportunities all around the world, their influence often overlooks negative impacts to the society. As Bakan warns, the corporation’s “responsible” gesture often disguises in its self-interest motive, while Bartley and Fridell shows us that their responsibility can still worsen inequality. We must demand transparency in the corporations and promote democracy in the capitalism society.

References
• Bartley, T., Cook, K.S., & Massey, D.S. (2018). Transnational Corporations and Global Governance. Annual Review of Sociology
• Bakan, J. (2024). Corporate Capitalism’s Moral Lack. Business History Review
• Fridell, G. (2007). Fair Trade Coffee and Commodity Fetishism: The Limits of Market-Driven Social Justice. Historical Materialism
• Bakan, J. (2005). 

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