Thursday, 6 December 2012

Are modern corporations "prisoners"?

Watch a 62 seconds video introduction of the topic (youtube): http://youtu.be/ERvQMLgtxe4

This is not a final version of work in progress on the subject:

I have experience in public affairs and in public policy, and I am an MBA, but I never fully grasped the concept as well as the practice of corporate social responsibility. "Corporate citizenship" (not the in way interpreted in the US, in that corporations have the same "rights" as individuals/people/citizens) but in the sense that a corporation should act "responsibly" the same way a citizen (in the Ancient Athenian sense of the term) is supposed to act, seemed more applicable. But, as I wrote in an analysis some years ago, prompted by some comments by the then newly elected leader of the Tories now PM, David Cameron, appearing to act as a "responsible" entity may have negative effects.

After all, what is anyone supposed to follow in a society (polis in the Ancient Greece term), other than the (written) laws? Social "laws" or conventions, social pressures and dynamics, are they part of any citizens obligations?

Many corporate people, especially these days, claim that a corporation has a mandate by its shareholders to maximize "value", and only that, and can even be accused if it does not act solely based on that! I assume they mean while following the laws.

But then again the labyrinth of local, regional, national and inter-national laws makes even that goal realistically hard.

My "thesis" in this analysis is that corporations have become "prisoners" of state, social, financial and other constraints, so much so that either they have to run huge multi-variable Operations Research models in order to maximize Net Present Value under millions of constraints or be lost in this "labyrinth".

Can Social Responsibility instead of following all these constraints be a way out? Should it? Is a person or other entity that has accumulated "social capital" in the minds of public opinion, media, clients, authorities, etc, more easily excused or forgiven for stepping over some of the millions of law and other constraints or gates/fences it faces when trying to operate, especially inter-nationally? Is it a heuristic in an effort to find the best feasible (but not optimal) solution?

This is a video version of the above analysis (youtube, 4+ minutes): http://youtu.be/gKUIba5KZPM

How can a corporation that operates in let's say 100 countries be socially responsible (in addition to following the all the laws, which is a tall order to begin with) in those 100 different societies with obviously very different social norms? Can a corporation that does that remain "sane" or even true to the concept of CSR? To put it differently, can a corporation be a responsible citizen of 100 different states/countries at the same time?


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