Companies and bad apples

Apr 22, 2016

By Andrew Hamilton
To a Catholic observer, the continuing revelations about the practices of big companies have been painfully familiar. The pattern is predictable. Bad behaviour is discovered (abuse/ripping off customers, avoiding taxation). A ritual response is made: ‘We have the highest standards’, ‘We were never told’, references to ‘bad apples’ etc. Further investigations show that the bad apples were known about.

The response is to launch and vigorously defend legal cases and excoriate the irresponsible media. Further examination shows that suspected bad apples have found a home in other companies. Again, assurances are given that the culture has changed.

Finally, a few undersized bad apples are prosecuted. Few — neither CEOs nor board members — go to jail. And finally, the government promises a cut in company tax.

Meanwhile, the public becomes thoroughly irate at what they see as the bastardry, effrontery and impunity of the companies. The more genteel describe it as reputational damage.

In this climate of judgment, it may come as a surprise to recognise that, in churches and companies, not everyone is a bad apple. Among company managers and board members, many good and generous human beings are to be found. So why does such antisocial and corrupt behaviour breed there?

I believe it can be traced to an economic ideology that is widely accepted in government as well as in business. The ideology sees the driving force of the economy to lie in competitive individuals whose work is motivated by the desire for economic gain.

The national good is defined by an increased GNP and economic activity. All significant relationships that compose a business are measured by their economic value, whether that value is expressed in salaries, bonuses or wages for employees and board members, or as dividends and share value for investors.

“In theory this apotheosis of the competitive individual may seem benign. But in practice it can look very grubby.”

If we see companies through that lens, every form of competitive action that is economically productive will be legitimate, provided that it is not illegal. And even legislative restrictions in the market that stand in the way of economic gain will be seen as regrettable.

So although regulations must not be disobeyed, they may be circumvented by means that are not actually illegal. It can readily be understood that relatively junior employees will travel close to the legal wind in competing with others to secure bonuses and higher paid positions. Senior executives, board members and investors will rejoice in the economic value so provided to the organisation and will ask no questions about how it is achieved.

Of course, the face we see is the urbane presentation of company spokespersons and lawyers. But the tune that people now hear in the mission statements, the assurance of high standards and the avowals of innocence is the song of greed. Behind the façade of corporate seriousness, people now see competitive individuals scrabbling to protect their wealth.

How do good people sink to this? The answer lies in the mutation of economic ideology: from the crude buccaneering spirit of doing whatever it takes to get rich into a more urbane form based on self-deception. People see themselves as competing, not only for their own economic benefit, but for that of the company in which they work.

Their identification with their company means that greed can mask itself as altruism in serving a larger good. They become the servants of their investors. Because the good of the nation is identified with its economic growth, too, they can also see themselves as faithful, profitable, servants of the nation.

The present scandals are the fruit of an economic ideology that recognises the importance of economic striving for human flourishing, but neglects its human context. The economy is the servant of national good, not its goal. Human flourishing is based on the respect for each human being, the interdependence of human beings and the natural environment, and the priority of the common good. --Eureka Street