The writer (undergrad in mechanical engineering) says this of his story: "I wanted to write a paper that made the reader stop and think about the personal side of corporate malfeasance; how we are all the men in the machine, and at the same time, we are the machine itself. That perspective, and the system theory behind it, is enough for me to call this semester a success in my education."In a dirty and poorly lit makeshift compound near the heart of Jakarta, small children work late into the night; tiny callused fingers stitching the fragments of cloth that must come together to complete their task. Must finish, must not rest, must keep moving...hunger...can't think, must not think, must keep moving...And so it goes, night after night and day after day for these children with no home. Stitching clothes late into the night so they may wake with the sun to stitch once more. But, we say to ourselves as we watch from afar, these unfortunate souls, these are not our children; these unfortunate ones were not born to us, to our blessed culture. No, they were born where government and business enslave the vulnerable, exploiting the weak. Here, in our home where laws are enlightened and life sacrosanct, this would not happen, could not be so. Here in our world children play, happy voices singing songs. It's only when watching the evening's expose' where pathetic little children in their wretched conditions are revealed that our souls shudder and our defenses wither away. In those moments of flashing light and passing pictures, it's then that we glimpse the familiar pattern of thread, the zig and the zag of embroidered letters, the product of those tiny fingers working late in the night -- the same pattern that proclaims our personal wealth as we wear it, emblazoned across our chest, for the world to admire. And again we shudder at the new recognition that things are suddenly not as simple as they had been but moments before, just moments before when vague and distant notions of corrupt governments and evil corporations had been at fault and we ourselves lay beyond reproach. Eons ago, and yet moments before. With the flickering of light and procession of images the moments pass by. We raise our hand to slowly caress that same known pattern of threads, patterns which have long since left the child's grip, but have yet retained her mark, patterns now beneath our own soft fingers. And in that caress, in the touch of the each thread passing faintly under the sweep of skin, a connection is made that man is not isolated -- we are not isolated -- from the actions that we take, from the responsibilities we create, and from the consequences we face. The great barriers to responsibility we have erected, notions of governments and cold, corporate machines outside human capacity to control, fail to protect us from the devastating impact of each new filament passing gently under the ridges of our skin.
We want to believe the cold images of corporate machines, spewing edicts of profits above all else. We say to ourselves that machines conspired to deceive, that's how this happened. As our fingers twirl loose feathers of threads and haunting eyes stare blankly from behind the screen, we envision the cold and calculating machines which here, in our own home, have devoured the souls of men, permitting this to happen. It's the machines, machines have turned men into equally mechanical drones, incapable of seeing their own children's eyes in the faces of the young from Jakarta. Perhaps this thought can protect us from our responsibility. And yet we cannot escape the connection that it's the men in the machines, and not the machines themselves, whose souls have failed to shudder for the children of Jakarta. The machine is, after all, only a machine with no soul to offer, no shudder to give. It cannot be right to blame the machine.
Perhaps it is the masters responsible for the corporate machine who gave up their souls, and in doing so, created the machine in their image. The machine serves the masters' purpose in the image of the masters, and therefore the masters are to blame. We look back into the sunken eyes staring from the flickering box and think, "yes, the machine's masters are responsible for this." And yet before the statement exits our throats, the thread leads us further. Machine or not, master or not, the souls still belong to the men to give. The men in the machine must decide to give up their soul and accept the machine. The choice rests with the man, so neither the masters nor corporate machine can be wholly blamed. Perhaps the masters did not even shape the machine, perhaps the men within the machine gave up their souls and molded the machine in their image. But these men in the machine, the men without souls who have stolen the shirts we wear from the youth of Jakarta, these men are not an abstract notion, isolated and independent of us, these men are our men, from our home. As fingers complete their journey, touching the last filament of thread, we realize that we too are to blame, for we have emblazoned across our chest the proof of our guilt. Those responsible to these children, they are our fathers and mothers, our brothers, sisters, husbands, wives, and even our children. Those to blame, they are not abstract and isolated. They are you and they are me, responsibility is shared and responsibility demands an answer from us all.
Write a paper reconciling the view of Kyosei with the view that competitive markets can be relied upon to achieve the common good.One way to reconcile these two viewpoints is to view them as parts of the same system, with their fundamental difference being one of opposite perspective. Kyosei, with its foundation in Eastern moral thought, seeks to recover the individual in its traditional affirmation of the common good or the social whole, while the competitive market model seeks to provide for the social whole in its traditional affirmation of the individual.(1) The basis for bridging the gap lies in this complementary nature of the two views. Firms practicing kyosei, with its focus on cooperation and the common good, will reap competitive advantages from the unique strengths of the approach to market situations. The competitive market, with its focus on competition, will inspire kyosei behaviors in many firms, resulting in benefits to the common good. This is not to say that the competitive market will inspire this behavior in all companies, but the fact that it inspires it in many firms provides the basis for the compatibility of the views.
In order to demonstrate the competitive advantages of kyosei, it is important to note that kyosei, as described by Kaku (2), is a staged approach. Its use of cooperation and collaboration is applicable to small groups, as is typical in Kaku's early stages, to humanity as a whole in later stages. Firms must build upon success of previous levels in order to expand their scope of social responsibility to the next stage.
Stages 1 and 2 involve basic economic survival and cooperation between labor and management to secure profits, behaviors which are common to many firms and which are not unique to kyosei in business. The recent strike by UPS workers shows the potential negative consequences to firms experiencing collaboration difficulties, even in these early stages. In Stage 3, cooperation broadens as companies assume local social responsibilities that respect their own stakeholders and the local community. A firm is more likely to use its gains from market power in a proactive ethical and social manner where it can gain competitive advantage in terms of customer loyalty, preferential availability of factors of production, and a higher level of public trust and community goodwill. As an example of the latter, Cummins Engine has been able to leverage its community involvement in Columbus, Indiana to create long-term competitive advantage.(3) This stage (and the next two) also includes cooperation with competitors, an area in which Canon has been particularly adept. Canon uses its intense focus on innovation as a means of creating wealth, which not only provides the support for its ideals of distribution of wealth, but provides a position of strength in forming partnerships. Canon's fundamental ability to innovate, rather than imitate, allows it to adhere to an ideal of fair and legal competition while also providing a basis for leveraging its position with other innovative firms. Canon has developed beneficial partnerships with Eastman Kodak, Texas Instruments, Hewlett-Packard, Olivetti, Apple, Siemens, IBM and American venture capital firms.(2,4)
While many examples can be found of companies utilizing kyosei type behaviors as competitive advantage in the first three stages, there are fewer companies who have been able to expand to stages 4 and 5. It is in these two advanced stages that the concept of the kyosei firm is fully differentiated. In stage 4, the company begins to interact with foreign companies and has an opportunity to help correct global imbalances. Kaku speaks of imbalances of trade, imbalances of wealth between developed and developing nations, and imbalances in the natural environment. The competitive aspects of addressing these imbalances are less direct and more long-term, yet they are nevertheless identifiable. In this mode, a company seeks, with its kyosei partners, to ensure a stable world economic and political environment. In a broad sense, corporations will find it more difficult to do business unless the world enjoys peace and stability. As Kaku puts it, "for a corporation that operates globally, working to promote worldwide stability and prosperity corresponds to greater profits".(4 ) The company may also benefit in terms of image from its global efforts. As Margot Franssen, President and Partner of The Body Shop (Canada) states, "Mixing business with politics and cosmetics with human rights can be inexpensive and not that difficult, with huge rewards. People truly want to shop with and work for companies that share their values".(5) Also within the realm of stage 4, companies can seek to improve trade imbalances that will promote further business for them, or they can train local staff and reap competitive benefits from previously untapped intellectual resources.
Finally, in Stage 5, a company uses its power and wealth to urge governments to work toward rectifying global imbalances. Again, the company may enjoy a favorable image from its socially responsible behaviors, but the greater purpose at this level is to improve the overall state of the world. Companies with this magnitude of long-term focus will be rare, but by the time they have progressed to this stage, they will be well established in their ability to create wealth consistently. By forming partnerships with other powerful kyosei companies, they will seek to secure long-term stability required for their continued existence. Association among such groupings may be essential if the risks of unilateral adoption of kyosei ideals are to be minimized. The Caux Roundtable with its Principles of Business Conduct is an example of one such recent coalition of like-minded companies.(6) Companies at this level operate from a position of strength, form necessary partnerships, and seek long-term solutions. They recognize the increasing scope of power of multi-national companies and the ensuing advantages and responsibilities of that power.
In essence, the competitive market system itself is evolving, and as it does so a new kind of cooperative effort evolves with it. The inability of a purely profit-oriented competitive environment to provide for common social needs has necessitated the evolution of more complex relationships among like-minded corporations to ensure the foundations of the society on which success relies. Groups of kyosei companies, with their focus on the common good, ensure the ongoing existence of stable competitive markets. Competitive markets, with their focus on competitive advantage, provide a basis for companies to leverage their core competencies in cooperation and collaboration. It is the evolution of the competitive markets themselves that is allowing the complementary nature of kyosei and competition to be bridged and begin to flourish.
References
(1) Goodpaster, Kenneth E. "Bridging East and West in Management Ethics: Kyosei and the Moral Point of View." Papers to Be Presented at the First World Congress of Business, Economics and Ethics. Internet URL: http://www.nd.edu/~isbee/p_goodpa.htm. Oct. 5, 1997.
(2) Kaku, Ryuzaburo. "The Path of Kyosei." Harvard Business Review July-August 1997: 55-63.
(3) Miller, J. Irwin. "The Rewards of Servant-Leadership." Aiming Higher. Ed. David Bollier. New York: American Management Association: 299-313.
(4) Kaku, Ryuzaburo. "Kyosei: The Guide for a New World Order in Business." Internet URL: http://www.rain.org/~origin/gethic/geth033. Oct. 5,1997.
(5) Franssen, Margot. "Globalisation, Trade and Human Rights: The Canadian Business Perspective, Summary Report." Internet URL: http://www.ichrdd.ca/PublicationsE/reposum.html. Oct. 5, 1997.
(6) Kaku, Ryuzaburo. "A Call for Global Principles for Business." Internet URL: http://www.smn.co.jp/opinions/0019o01e.html. Oct. 5, 1997.
Is the corporation or the corporation's managers responsible for organizational malfeasance? Traditionally the courts have identified the corporation as being "separate" from the shareholders, officers, and directors (Marsh) and have tended to hold corporations themselves responsible for legal violations. However, it is widely known that the courts have begun to recognize the individual managers' culpability in corporate wrongdoing. The reason for this change in the legal arena may stem from a moral basis (Dunn); however, the focus of this paper is primarily a moral or ethical analysis, and not an examination of legal reality.The view that the corporation is responsible follows from the assumption that managers act in a trust arrangement with the corporation. It is ultimately for the benefit of the corporation's goals (generally defined as maximizing shareholder wealth) that the manager acts. Based on this model, the individual manager has no identifiably unique goals, and therefore, responsibilities. Further, the corporation itself is deemed responsible for wrongdoing performed by the manager acting as an agent on behalf of the corporation. The managers operate with no censure by effectively operating behind a "corporate veil" (Dunn). Corporations benefit from this framework because it relegates managers to "tools" or means to the corporations' ends (Newton). If managers are mere tools, then it is certainly the corporation (and not the managers) who should be deemed responsible for wrongdoing. However, it also harms the corporation because they operate as a veil or shield, receiving the brunt of responsibility for malfeasance.
The view that the managers are responsible for corporate wrongdoing originates from the perspective that actions and control (Berle/Means) are only located in individual managers. In so far as the actions lead to malfeasance, the managers who perform these actions are responsible. Managers may also be considered responsible if they act unethically by pursuing their own self-interest; in contrast to the concept of trusteeship, managers are therefore more than mere agents serving the goals of the corporation. Also, the agent or trusteeship framework does not contradict the perception that it is indeed the managers who are actually performing the action, and that managers do have incentives to operate for reasons beyond just serving as agents for the corporation.
Problems arise in embracing one viewpoint to the exclusion of the other. The view that corporations themselves are the only responsible party fails to take into consideration the fact that corporations are comprised of individuals. Also, the individuals managers and others who determine the nature of the corporation have varied intentions, all playing roles in the functioning of the corporation. Because it is a mutual association between individuals and corporations, the individual can choose to associate himself or herself with the corporation (Newton). On the other hand, the view that it is the responsibility of the corporate manager to avoid wrongdoing fails to recognize that the corporation functions as a representation of the individual actors - an entity that comes into existence in a collective form because of the joint associations of the individuals (Newton). Furthermore, the view that only managers bear responsibility fails to recognize influence and impact of corporate environment and action stemming from group processes. Managers shape, and are in turn shaped by, the corporations in which they operate.
Therefore, it is incumbent upon both the system and the individuals to provide for an environment which supports responsibility (Paine). Additionally, existence of an integrity-rich and ethical environment does not and should not relinquish individual managers from their responsibility to act ethically. The links between individuals and groups are intertwined so complexly, with causation occurring simultaneously between and within multiple subset groups. Therefore, both the corporation and the managers should be jointly involved in ensuring ethical behavior and assuming responsibility for organizational wrongdoing.
References
Berle, A. A. and G. C. Means. The Modern Corporation and Private Property. New York: The Macmillan Company, 1932.
Dunn, Craig. "Are Corporations Inherently Wicked?" Business Horizons, Vol. 34, No. 4, July- August 1991.
Marsh, Barbara. "Suits Go After Personal Assets of Firm Owners." Wall Street Journal, 1994.
Newton, Lisa. "Agents for the Truly Greedy" in N. E. Bowie and R. E. Freeman's Ethics and Agency Theory, Oxford University Press, 1992.
Paine, Lynn Sharp. "Managing for Organizational Integrity." Harvard Business Review, March-April 1994. 2
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