Introduction
The documentary identifies that corporations often apply some potentially harmful techniques in their production system as they seek to increase their profits. There has not been a lot of interest in identifying the potential harm that some production processes in corporations pose to ordinary people since most people have not been affected directly.
The documentary goes ahead to give real life examples of how corporations are overlooking even basic human rights in their quest to grow and increase their competitive edge in the market. While it is identified that corporations are participating in unethical practices, apparently the liability cannot be placed on one specific person. The growth of corporations as it is explained in the documentary, promises a not so rosy picture of our future.
The most unfortunate part is that we are all responsible for the unethical practices of these corporations since we fuel their greed by buying their products (Gevurtz, 2010). After identifying the inefficiencies that are inherent in corporations, the documentary raises the question of how we can manage the behavior of corporations to ensure that there are no innocent people who are being hurt by their activities.
Among the issues identified as the major motivators of corporations and their behavior is the particular aspect identified as the corporate veil, corporate person-hood and the priorities of corporations in their production processes (Abbott & Springer, 2010).
Argument
The documentary outlines some major issues that have to be addressed to stop the corporate irresponsibility, but these issues can only be solved if the particular motivators to corporate action are identified. It is identified that most strategic managers often make decisions based on the particular well-being of the company as opposed to the well-being of the people that the company serves.
This is worsened by the fact that there is always a monetary attachment to every decision made as it is identified that the number one driver behind corporate conduct is profit maximization. On the other hand, there is the compulsion to behave and produce their goods and services responsibly and this can only stem from legal liabilities (Kraakman, 2009). It has been identified that the legal system is weak and inefficient in attaching some form of responsibility to corporate actions.
Limited Liability
It is identified in the documentary that the main reason why corporations do not feel compelled to act responsibly is because there is no one in particular to take responsibility for the decisions made. While the owners of the corporation may be identified as the major beneficiaries of these unethical acts, they are not liable for any negative repercussions as their liability in the corporation is limited to their stake in the company.
This is quite unfortunate as it is identified in the documentary that some of the repercussions of unethical corporate conduct often end tragically (Gevurtz, 2010). This should warrant quite some substantial amount of liability, but it is often identified that the company is fined a particular amount of money, which is sometimes identified as quite negligible considering the huge capacity of these corporations.
The corporate veil, as it is sometimes identified, often shields the owners of a company from any major responsibilities even though they are often the powers behind most of the corporate actions (Kraakman, 2009).
While human nature dictates that one has to want more out of his or her investments, this should not justify some of the actions that corporate shareholders take. While it may be allowed to take advantage of resources that are available in the market, it is important to identify that there are some repercussions to such actions (Macmillan, 2004).
The ethical thing to do would be to take responsibility of those repercussions and seek to mitigate the negative effects. It is, however, identified that since most owners of these corporations are absolved by law from taking any personal responsibilities of the actions of their corporations, they do not feel compelled to mitigate the negative effects.
This is perhaps the reason behind the recurrence of the negative actions as it is identified in the documentary. While some corporations may be erred in a particular country for employing children as it is identified in the case of sweat shops, they will continue with similar activities in another country even though they have already identified that it is wrong (Greenfield, 2006).
All over history laws have been made to tame the wild nature of humanity as it is identified that our selfishness has the tendency to make act irrationally. There is, therefore, a need to evaluate the particular aspect of liability in as far as corporations are concerned to as to identify any new solutions to corporate irresponsibility (Abbott & Springer, 2010).
The fact that some of the liability extends to the particular strategic managers in a company serves to at least manage their behavior. It is often identified that when monetary liability is attached to a person, he or she may not be too serious in avoiding negative repercussions as he or she knows that there may be more money to be made through the same corporation.
Personal responsibility on the other hand serves to deter people from making unethical decisions. This is because of the particular fear of serving a prison term or losing their family property. The solution to the particular corporate greed and irresponsibility that is identified in the documentary may, therefore, lies in the attachment of the shareholders as well as the particular strategic managers responsible for these negative decisions, personal property (Gevurtz, 2010).
It is identified that in countries such as China, companies that make products that are injurious to the health of the general population are often fined heavily and the owners as well as the managers serve some prison time. This ensures that such cases do not recur and the rest of the population is advised against such acts. This is common especially in the construction industry.
Corporate Person-hood
It is identified that the corporate person-hood is quite distinct from the legal definition especially when it comes to acting ethically. While by law corporations may be treated as independent entities their owners are identified to enjoy being part of the corporations even though they are not held responsible for their actions. It is important to note that the particular aspect of person-hood serves to ensure that some form of responsibility is attached to the actions of a corporation.
The identification of who the corporation is in regard of unethical practices is, however, limited to the corporation itself and this often raises some problems when choosing to allocate responsibility for actions done. It is identified that this may be the reason behind the increase in court cases where monetary reprieves are offered to victims of corporate conduct (Macmillan, 2004).
The fact that corporate person-hood suggests that the company should be able to empathize with their particular customers as well as other stakeholders in their production processes may not be accurate. Corporations often take the selfish nature of the people who run them and while they may be seeking to serve the general population, they still have some personal goals that they have to achieve with no regard for the value of human life.
The current legal systems do not compel the corporations to act responsibly since they still treat them as financial entities and any form of legal recognition that they are given is based on their financial might (Greenfield, 2006). This is perhaps the reason behind the reduced activism to compel big corporations to act ethically. It is identified in the documentary that the bigger the corporation in terms if financial might, the more the complaints against its production processes.
It has also been identified that the bigger a corporation is, the less responsibility they take in regard to the injuries that they inflict on to the general population. The financial might is also responsible for the evidenced circumventing of legal structures such that they do not have to take responsibility on their actions. This is even worse for corporations that have their operations in some of the developing and poor countries of the world where it is identified that corruption is rampant.
Requirement to Maximize Shareholders’ Profits
It is identified that the requirement by most shareholders that corporate managers increase the overall profits often forces them to come up with cost cutting as well as profit maximizing techniques. These profit maximizing actions are often harmful to either the customers or other stakeholders in the production process. The need to produce cheaply is identified as one major drivers behind the production of substandard products that are injurious to human health (Macmillan, 2004).
Even though it is identified that most employees do not necessarily agree with some of the actions of the companies that they work for, they have to continue doing so since they depend on those jobs for their livelihood.
One of the cases identified in the documentary is that of a woman and her children who were injured and heavily scared after their car, which was involved in an accident, caught fire. It was later identified that the fire was due to a design flaw that GM had previously identified in its quest to reduce production costs (Greenfield, 2006).
The strategic managers at GM then chose to cut the total cost of producing that car by launching a product that had design flaws. In this case, the need to maximize profits resulted in physical harm, but the law in most cases is silent on cost reduction mechanisms citing coverage by the identified safety standards.
There is, therefore, a need to set up clear laws that define the particular limits of profit maximization strategies as sometimes it is identified that there is no particular limit as to whatever lengths that strategic managers in a corporation may be willing to go to increase their profits. Personal responsibility should, however, prevail when employees are faced with dilemma on ethical business practices (Kraakman, 2009).
Conclusion
The current legal guidelines that corporations subscribe to are still inefficient in terms of liability and even though it is identified that they were designed to ensure that corporations are self sustaining, there should be a limit in regard to the level of autonomy that they enjoy. It is identified that while many decisions are done by people who have a stake in the corporations, they do not seem to care what the effects of their actions may be since they have nothing to lose in case of a negative eventuality (Abbott & Springer, 2010).
There is, therefore, the need to ensure that corporations have a limit as to the particular actions that they can take to increase their competitive edge in the market as well as their profits. If legal structures are put in place they may be able to limit the amount of liabilities that are raised due to unethical corporate actions.
These may be tied to the particular liability of all the stakeholders in the organization or clear guidelines on industry practices in regard to the particular limits of production processes so as to reduce negative repercussions. This should also be able to reduce the current legal as well as the political might that corporations enjoy.
This is identified as one of the major reasons behind unethical practices since they know they can get away with anything that they do and there is not much that the victims can do and in case of legal liability they can just pay off the little fines that are imposed on them and continue with their unfair practices.
References
Abbott, H., S, & Springer, F., M. (2010). Corporation Law: A Comprehensive Treatise on Federal and State Legislation Relative to Private and Public Service Corporations and Interstate Commerce. New York: BiblioBazaar.
Gevurtz, F. (2010). Corporation law. New York: West.
Greenfield, K. (2006). The failure of corporate law: fundamental flaws and progressive possibilities. Chicago: University of Chicago Press.
Kraakman, R., H. (2009). The anatomy of corporate law: a comparative and functional approach. New York: Oxford University Press.
Macmillan, F. (2004). International corporate law, Volume 1. New York: Hart Publishing.