ELEVEN INHERENT RULES OF CORPORATE BEHAVIOR by Jerry Mander
The following list is an attempt to articulate the obligatory rules by which corporations operate. Some of the rules overlap, but taken together they help reveal why corporations behave as they do and how they have come to dominate their environment and the human beings within it.
1. The Profit Imperative: Profit is the ultimate measure of all corporate decisions. It takes precedence over community well-being, worker health, public health, peace, environmental preservation or national security. Corporations will even find ways to trade with national "enemies"â€”Libya, Iran, the former Soviet Union, Cubaâ€”when public policy abhors it. The profit imperative and the growth imperative are the most fundamental corporate drives; together they represent the corporation's instinct to "live."
2. The Growth Imperative: Corporations live or die by whether they can sustain growth. On this depends relationships to investors, to the stock market, to banks and to public perception. The growth imperative also fuels the corporate desire to find and develop scarce resources in obscure parts of the world.
This effect is now clearly visible, as the world's few remaining pristine places are sacrificed to corporate production. The peoples who inhabit these resource-rich regions are similarly pressured to give up their traditional ways and climb on the wheel of production-consumption. Corporate planners consciously attempt to bring "less developed societies into the modern world" to create infrastructures for development, as well as new workers and new consumers. Corporations claim that they do this for altruistic reasons to raise the living standardâ€”but corporations have no altruism.
Theoretically, privately held corporationsâ€”those owned by individuals or familiesâ€”do not have the imperative to expand. In practice, however, their behavior is the same. Such privately held giants as Bechtel Corporation have shown no propensity to moderate growth.
3. Competition and Aggression: Corporations place every person in management in fierce competition with each other. Anyone interested in a corporate career must hone his or her ability to seize the moment. This applies to gaining an edge over another company or over a colleague within the company. As an employee, you are expected to be part of the "team," but you also must be ready to climb over your own colleagues.
Corporate ideology holds that competition improves worker incentive and corporate performances and therefore benefits society. Our society has accepted this premise utterly. Unfortunately, however, it also surfaces in personal relationships. Living by standards of competition and aggression on the job, human beings have few avenues to express softer, more personal feelings. (In politics, non-aggressive behavior is interpreted as weakness.)
4. Amorality: Not being human, corporations do not have morals or altruistic goals. So decisions that maybe antithetical to community goals or environmental health are made without misgivings. In fact, corporate executives praise "non-emotionality" as a basis for "objective" decision-making.
Corporations, however, seek to hide their amorality and attempt to act as if they were altruistic. Lately, there has been a concerted effort by American industry to appear concerned with environmental cleanup, community arts or drug programs. Corporate efforts that seem altruistic are really Public relations ploys or directly self-serving projects.
There has recently been a spurt of corporate advertising about how corporations work to clean the environment. A company that installs offshore oil rigs will run ads about how fish are thriving under the rigs. Logging companies known for their clearcutting practices will run millions of dollars' worth of ads about their "tree farms."
It is a fair rule of thumb that corporations tend to advertise the very qualities they do not have in order to allay negative public perceptions. When corporations say "we care," it is almost always in response to the widespread perception that they do not have feelings or morals.
If the benefits do not accrue, the altruistic pose is dropped. When Exxon realized that its cleanup of Alaskan shores was not easing the public rage about the oil spill, it simply dropped all pretense of altruism and ceased working.
5. Hierarchy: Corporate laws require that corporations be structured into classes of superiors and subordinated within a centralized pyramidal structure: chairman, directors, chief executive officer, vice presidents, division managers and so on. The efficiency of this hierarchical form (which also characterizes the military, the government and most institutions in our society) is rarely questioned.
The effect on society from adopting the hierarchical form is to make it seem natural that we have all been placed within a national pecking order. Some jobs are better than others, some lifestyles are better than others, some neighborhoods, some races, some kinds of knowledge. Men over women. Westerners over non-Westerners. Humans over nature.
That effective, non-hierarchical modes of organization exist on the planet, and have been successful for millennia, is barely known by most Americans.
6. Quantification, Linearity, Segmentation: Corporations require that subjective information be translated into objective form, i.e. numbers. The subjective or spiritual aspects of forests, for example, cannot be translated, and so do not enter corporate equations. Forests are evaluated only as "board feet."
When corporations are asked to clean up their smokestack emissions, they lobby to relax the new standards in order to contain costs. The result is that a predictable number of people are expected to become sick and die.
The operative corporate standard is not "as safe as humanly possible," but rather, "as safe as possible commensurate with maintaining acceptable profit."
7. Dehumanization: In the great majority of corporations, employees are viewed as ciphers, as non-managerial cogs in the wheel, replaceable by others or by machines.
As for management employees, not subject to quite the same indignities, they nonetheless must practice a style of decision making that "does not let feelings get in the way." This applies as much to firing employees as it does to dealing with the consequences of corporate behavior in the environment or the community.
8. Exploitation: All corporate profit is obtained by a simple formula: Profit equals the difference between the amount paid to an employee and the economic value of the employee's output, and/or the difference between the amount paid for raw materials used in production (including costs of processing), and the ultimate sales price of processed raw materials. Karl Marx was right: a worker is not compensated for full value of his or her laborâ€”neither is the raw material supplier. The owners of capital skim off part of the value as profit. Profit is based on underpayment.
Capitalists argue that this is a fair deal, since both workers and the people who mine or farm the resources (usually in Third World environments) get paid. But this arrangement is inherently imbalanced. The owner of the capitalâ€”the corporation or the bank always obtains additional benefit. While the worker makes a wage, the owner of capital gets the benefit of the worker's labor, plus the surplus profit the worker produces, which is then reinvested to produce yet more surplus.
9. Ephemerality: Corporations exist beyond time and space: they are legal creations that only exist on paper. They do not die a natural death; they outlive their own creators. They have no commitment to locale, employees or neighbors. Having no morality, no commitment to place and no physical nature (a factory, while being a physical entity, is not the corporation). A corporation can relocate all of its operations at the first sign of inconvenienceâ€”demanding employees, high taxes and restrictive environmental laws. The traditional ideal of community engagement is antithetical to corporation behavior.
10. Opposition to Nature: Though individuals who work for corporations may personally love nature, corporations themselves, and corporate societies, are intrinsically committed to intervening in, altering and transforming nature. For corporations engaged in commodity manufacturing, profit comes from transmogrifying raw materials into saleable forms. Metals from the ground are converted into cars.
Trees are converted into boards, houses, furniture and paper products. Oil is converted into energy. In all such energy, a piece of nature is taken from where it belongs and processed into a new form. All manufacturing depends upon intervention and reorganization of nature. After natural resources are used up in one part of the globe, the corporation moves on to another part.
This transformation of nature occurs in all societies where manufacturing takes place. But in capitalist, corporate societies, the process is accelerated because capitalist societies and corporations must grow by extracting resources from nature and reprocessing them at an ever-quickening pace. Meanwhile, the consumption end of the cycle is also accelerated by corporations that have an interest in convincing people that commodities bring material satisfaction. Inner satisfaction, self-sufficiency, contentment in nature or a lack of a desire to acquire wealth are subversive to corporate goals.
Banks finance the conversion of nature insurance companies help reduce the financial risks involved. On a finite planet, the process cannot continue indefinitely.
11. Homogenization: American rhetoric claims that commodity society delivers greater choice and diversity than other societies. "Choice" in this context means product choice in the marketplace: many brands to choose from and diverse features on otherwise identical products. Actually, corporations have a stake in all of us living our lives in a similar manner, achieving our pleasures from things that we buy in a world where each family lives isolated in a single family home and has the same machines as every other family on the block. The "singles" phenomenon has proved even more productive than the nuclear family, since each person duplicates the consumption patterns of every other person.
Lifestyles and economic systems that emphasize sharing commodities and work, that do not encourage commodity accumulation or that celebrate non-material values, are not good for business. People living collectively, sharing such "hard" goods as washing machines, cars and appliances (or worse, getting along without them) are outrageous to corporate commodity society.
Native societiesâ€”which celebrate an utterly non-material relationship to life, the planet and the spiritâ€”are regarded as backward, inferior and unenlightened. We are told that they envy the choices we have. To the degree these societies continue to exist, they represent a threat to the homogenization of worldwide markets and culture. Corporate society works hard to retrain such people in attitudes and values appropriate to corporate goals.
In undeveloped parts of the world, satellite communication introduces Western television and advertising, while improvements in the technical infrastructure speed up the pace of development. Most of this activity is funded by the World Bank and the International Monetary Fund, as well as agencies such as the US Agency for International Development, the Inter-American Bank and the Asian-American Bank, all of which serve multinational corporate enterprise.
The ultimate goal of corporate multinationals was expressed in a revealing quote by the president of Nabisco Corporation: "One world of homogeneous consumption. . . [I am] looking forward to the day when Arabs and Americans, Latinos and Scandinavians, will be munching Ritz crackers as enthusiastically as they already drink Coke or brush their teeth with Colgate." Page 31
In the book, Trilateralism, editor Holly Sklar wrote: "Corporations not only advertise products, they promote lifestyles rooted in consumption, patterned largely after the United States.... [They] look forward to a post-national age in which [Western] social, economic and political values are transformed into universal values... a world economy in which all national economies beat to the rhythm of transnational corporate capitalism.... The Western way is the good way; national culture is inferior."
Form Is Content Corporations are inherently bold, aggressive and competitive. Though they exist in a society that claims to operate by moral principles, they are structurally amoral. It is inevitable that they will dehumanize people who work for them and the overall society as well. They are disloyal to workers, including their own managers. Corporations can be disloyal to the communities they have been part of for many years. Corporations do not care about nations; they live beyond boundaries. They are intrinsically committed to destroying nature. And they have an inexorable, unabatable, voracious need to grow and to expand. In dominating other cultures, in digging up the Earth, corporations blindly follow the codes that have been built into them as if they were genes.
We must abandon the idea that corporations can reform themselves. To ask corporate executives to behave in a morally defensible manner is absurd. Corporations, and the people within them, are following a system of logic that leads inexorably toward dominant behaviors. To ask corporations to behave otherwise is like asking an army to adopt pacifism.
Corporation: n. An ingenious device for obtaining individual profit without individual responsibility. â€”Ambrose Bierce, 1842-1914.
Excerpted from: IN THE ABSENCE OF THE SACRED: The Failure of Technology and the Survival of the Indian Nations, Sierra Club Books, 730 Polk St.. San Francisco, CA 94109.
from the Winter 1995, EARTH ISLAND JOURNAL which is published quarterly by , 300 Broadway # 28, San Francisco, CA 94133 Phone: 415-788-3666; FAX: 415-788-7324