Tuesday, September 12, 2006

Who's to Blame for Corporate Greed?

This Letter to the Editor appeared in the September 2006 edition of Industry Week.

I contend that we (that is the we that make up society) are getting what we ask for. We want lower-priced goods so we shop at Wal-Mart and Home Depot. We want immediate answers and solutions at no added cost, so Dell has a low-wage earner in India answer our questions 24 hours per
day, 7 days per week. We demand more Social Security benefits and more vacation time and a raise every year. We foster an atmosphere of entitlement and aversion to change. (How many workers at how many companies will say, "But this is how we have always done it" today?)

Are corporations greedy? Yes! But they are driven by what we demand and they are giving the customer (whether a consumer or worker) what they are asking for - either directly or indirectly. It is fortunate that most of us have two hands, one to point a finger at the infamous evil "them" and one to hold open to accept the latest hand o
ut we have demanded.

I think that the points made by bradintx are good, but that the issues go deeper than that. The mantra of the modern corporation is "shareholder value." And that means stock price. Anything will be done to improve the next quarter's profits in the hope that the stock price will rise. These include:
  • Layoffs take place even during times of record profits.
  • Customer service and computer programming get outsourced to India.
  • Plants are shuttered and production moved to China.
Who reaps the benefits of this "shareholder value?" Company executives, to be sure. But it's not just them, because we as workers and investors in stocks, mutual funds, and retirement plans also stand to benefit. If we manage to keep our jobs, that is.

Our drive to maximize the value of our stocks, mutual funds, and retirement plans therefore makes us party to the evils committed by greedy corporate executives. It comes back to the adage about pointing a finger at someone else without realizing that at the same time you have three fingers pointing back at yourself.


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