THE HORROR story that terrifies us most is one which happens to the average man in a familiar place on an ordinary day.
A child possessed, a next-door neighbor turned serial killer, a young woman transforming into a scaly alien these are the stuff box office movies are made of. It sends chills of terror up the spine of the moviegoer and goads him to cheer for the hero who finally exterminates the monster.
A mother and her two daughters murdered in their own home, a young man shot in broad daylight in his car, a household help scalded to death by two sisters these are the news that make the headlines. It disturbs the sense of security of the reader and pushes him to join the public outcry for justice.
Unknown to many, there is a horror story happening in our homes, offices and communities. Commits mass murder, destroys families, introduces harmful substances to the human body and places people in death traps and killing machines. Apart from a momentary shock, the ordinary man has taken little voice of these mayhem’s and the villain has gotten away practically Scot-free.
The average man has not been placed under a spell or hypnotized into unconcern. He is immobilized because he has looked at the visage of the villain and found it without the face.
The villain is man’s own creation, an oddity that can perform all of man’s material actions but has no human body. It is a peculiar entity that is known as the corporation.
Corporations Gone Astray
Ralph Estes, a financial expert based in Washington, D.C., has written a book entitled “Tyranny of the bottom line” the presents a comprehensive research on the in comprehensive acts of some giants corporations that harm communities, employees, suppliers, customers and the general public. Estes says that these corporation justify these acts by invoking the unchallenged dictum that: “the business of business is to maximize profit.” However, by tracing the history of the corporation, Estes shows that it was originally crated for public interest and that this purpose was perverted through the years by too much focus on profits to the stockholder.
Estes recounts horrors perpetrated by corporation toxic wastes buried by a chemical company in love canal, Niagara falls, seeped to the surface inflicting on the unsuspecting residents serious respiratory ailments, epilepsy, cancer, genetic damage to unborn children and a host of other diseases the led to deaths. A canning company systematically fired hundreds of older workers in their Pittsburgh plat to avoid paying pension plans. Defective products were knowingly released in the market resulting in illness or death of their customer. Some of these products were IUDs that attracted pelvic infections, vaccines that damage the brain, tampons that released toxins in the body, trucks and cars that exploded in minor collisions. Suppliers have become bankrupt because of decisions of corporations to purchase raw materials elsewhere. The public suffers from the pollution, depletion of natural resources, commercial encroachment and congestion caused by corporations which disregard the environment.
Held Hostage to Bottom Line
Corporations are able to perform acts that are contrary to morality, ethics and decency because its managers are held hostage to the Tyranny of the bottom line, according to Estes. Because profit has long been erroneously held to be the reason for existence of the corporations, Managers have performed accordingly. As a CPA and former accountant of a leading consultancy firm, Estes has been able to look at the financial innards of corporations and has probably seen some of its waste. He writes: “…the corporation teaches us to place obligation to the company and to the job over obligation to family, friends and community.” This leads to a schizophrenic morality in which “corporate managers, whose personal morality, conscience or religion would prevent them as individuals from ever willingly placing others’ lives in jeopardy for a few dollars of profit, will do exactly that in the corporation. Good people end up taking such harmful actions because, when they enter the corporate environment, they come under great pressure to accept the corporate morality, to allow it dominate their personal morality.”
ROI for Stakeholders
Estes challenges the use of the bottom line as the measure of the company performance. He argues that return on the investment of stakeholders rather than just the stockholders, employees, customers, suppliers and communities are all investors in the corporation and as such should receive a fair return on their investment. Estes writes that employees bring their education, skills and experience achieved at substantial personal expense to the job. Customers invest in the corporation by buying its products at a value that is more than the value of the investment of the average stockholder of the company. Suppliers commit equipment and facilities to be able to produced the materials needed by the corporations. Communities invest in the corporation by providing the infrastructure and facilities which the corporation needs to operate.
Estes likens the corporation to a basket-ball team with its five players representing the stakeholders. He says that every player’s goal counts; the team benefits when anyone scores. Estes writes: “if coaches used the kind of system that corporations use, they would insist on the other four players always passing off to the stockholders; only stockholders goals would count.” Estes writes that “…business managers are now stuck with an irrational scorecard, the profit and loss statement. It shows only the return for stockholder interest above those of all other players on the team.”
How to Change Scorecard
The scorecard of the bottom line must be change, espouses Estes. And an effective way to change this is by changing the internal scoring system in the corporation. Estes believes that redirecting the goals of the manager to achieve returns to all the stakeholders will free the manager from the tyranny of the bottom line. Once the performance evaluation system is changed, behavior will follow.
While media exposes and regulatory legislation may help curb corporate abuses, Estes contends that what is needed is a corporate accountability act that will mandate corporations to disclose all relevant information needed by its stockholders, employees, customers, suppliers and community. For Estes, this is not an empty crusade for he is presently working in the Washington D.C. based nonprofit organization, the center for advancement of public policy, to bring out legislation in the united states and other parts of the world, on the stakeholders accountability act proposed in his book.
A Shocker of a Book
The “Tyranny of the bottom line” is a shocker of a book. It is a business book that attempts to reform business. It may even be seen as a capitalist book with is Marxist Slip showing. But whatever is label, it is a book worth reading even by a corporate executive who may rejects its well-researched accusation.
Legislators would do well to examine Ralph Estes’ book. While the wastes of industrialization have not yet fully engulfed our environment, it is time to hold corporations accountable for their corporate actions. We only have to smell the passing river, breathe in the carbon monoxide-filled air, look at the plastics that clog our sewerage system, read about overloaded passenger ships, or cry in anguish over fire trap discos with just a single exit to realize that our lives are being put in danger. With our lenient regulatory agencies, who knows what carcinogens are contained in the food that what we eat, what toxins are in the products we use in our households, what accidents are waiting to happen to us and our families due to defective products? For a little bit more profit, some corporations freely gamble with our live.
The book gives the villain a face. And the most terrifying fear is that the face may be our own.
Tyranny of the Bottom Line By Ralph Estes
Author: Regina Galang Reyes. First published in the Philippine Daily Inquirer September 8, 1997
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