DEFINITION
Corporations
A business firm whose articles of incorporation have been approved in some state
This topic has been given me a lot of trouble over the last few months. How would I start it? How could I make it balanced and not appear biased? How could I convey my view without criticising every company on the planet? I decided to leave it.
But as there are few topics left, I finally have to tackle it. So let’s go on a journey around the corporate world.
I’ve got an idea!
Let’s be fair. Corporations (or companies, depending on where you live), start as an idea. Not an idea of how to make as much money as possible and exploit all the world’s resources. On the contrary, they usually start as an idea of how to make something better, or how to make life easier and more pleasurable. And from that idea, usually grows something; probably small at first, but if it’s a good idea, then everyone will want the product or service. So let’s not demonise people as some “anti-capitalists” do, and instead, commend them on their innovation. That is what man is seriously good at, after all.
I want to talk to you about one idea which is now a well known product in our life. It is the mobile telephone.
I don’t have all the details of who invented it, but it first started out life in cars, and even in the eighties, was still a chunky bit of equipment in the boot, a hand held receiver in the car, and a big aerial outside. The reception was patchy to say the least. As the first companies in the market started to build more towers, coverage improved, but unless the person you were calling was in a populated area you would probably hear “the mobile you are calling is not available.” I know it used to frustrate me terribly when I would try to call my dad. “The mobile number you are calling, is switched off” was another message I would often hear because the phone only worked if the someone was in the car, and it was running!
After a couple of years, the transportable was introduced. It was portable (if you call lugging a huge piece of equipment attached to a phone portable), but only people who really needed it had one, such as people in engineering or building jobs where they were off site etc. But the phone companies worked hard, and so did the electronic chip and battery manufacturers to get the size down.
And so, the first truly portable phone was launched, and it looked like a brick!
Several years went past with the phones gradually getting smaller, the coverage improving, and the battery life getting longer. In about 1995, the first digital phones were launched in the uk, and that’s where the pace started hotting up. The screens were still small and the functionality was, what you would call, “basic,” but they now had the added option of text messages and voicemail. Wow! Is all I can say. You could send a short “sms” to someone, without having to talk to them, and if they were out of range you could leave them a message which would be replayed to them when their phone was back on. It was a fantastic revolution.
The problem was, they were expensive to run. But as more and more people bought into this revolution the price came down, the phones got better, they had colour screens, calculators and notepads, and the coverage was improving by the day.
Roaming was then switched on, and that meant you could travel abroad with your phone and be contactable on the same number. The dialling party didn’t have to know where you were, they just called your number and the magical cellular networks would bounce the call direct to you, whether you were at a business lunch in los angeles, or a product launch in tokyo. But it was still primarily a business tool.
I loved my mobile. It was a great way to keep in touch with people when I was overseas, or away from home; and the best thing was, the company picked up the tab. Let’s fast forward to 2008; where three months ago, I decided to stop using my mobile phone. What used to be a good idea had now turned into a menace. This is how it happened.
Over the last ten years, everyone bought a mobile. Some people even got rid of their landlines, and instead of calling, people would “text” (not a verb surely) each other.
Beep Beep “Hi whatcha up to?” Beep Beep “Not much watchin TV” Beep Beep “What ya watchin?” Beep Beep “Nothin”
Beep Beep “wanna go out for a bit” Beep Beep “where?”
Beep Beep “pub?”
Beep Beep “which one?”
Beep Beep “usual”
Beep Beep “C U L8TR” (a new language was being developed) Beep Beep “where are you?”
Beep Beep “nearly there” Beep Beep “C U in a minute”
And then they would meet up in the pub for a pint and a chat… but not for long
Beep Beep “where are you?”
Beep Beep “in the pub”
Beep Beep “who with?”
Beep Beep “just a mate”
Beep Beep “cool”
And then one of the people would “have” to call his girlfriend to say he was in the pub.
“Hi, honey, just in the pub, won’t be too late… Did you? … Really! …”
Meanwhile his other friend had to find something to do while his friend was talking on the phone: “HIYA what’ ya doin?” he “texted” another friend.
Beep Beep “not much, you?”
Beep Beep “In the pub with a mate.”
Beep Beep “COOL!”
They would then settle back to their pints, but guaranteed, the phones would soon be beeping with text messages and calls would be being made.
The epidemic was spreading quickly.
After a 24 hour flight to australia I would notice that almost as soon as the plane landed, there would be various beeping tones going off, with people desperate to check their mobiles, just in case they had a message – just in case it was “important.”
We have to remember that just twenty years ago, these phones didn’t exist, and we have been doing without them for thousands of years! But now parents give their kids mobiles “just in case” they need to call, or something happens to them; and on every street, most young people are walking with their eyes down, looking at a screen, or have some stupid headset sticking out of their ears.
Mobiles have almost become attached to people’s bodies, and they get anxious if their phone is out of sight for more than a couple of minutes. Kids use them in class, people use them on trains, buses and trams, “YES I CAN HEAR YOU! I’M ALMOST THERE!”
People even have them beside them at the dinner table.
We are psychologically attached to them now (see attachment topic), and the whole world is ringing in different tunes and beeping constantly.
I just couldn’t understand what had happened. What was so important that it couldn’t wait until the end of the film? Maybe it is exciting knowing you may have received a text message?
So now we have the noise of the mobile phones, and people talking loudly. Great! Just what we need in an already overly noisy world.
I don’t know anyone who doesn’t have a mobile, and thanks to the incessant advertising by the phone companies about how cool you will look with their new phone (which after all is just a phone), they have become a fashion accessory. It’s all you ever hear people talking about: “Oh yes, did I tell you I just got a new phone, and I’ve got a new number. I’ll give it to you just in case.”
“This is absolute madness” I thought. In less than twenty years, we have become addicted to something we don’t even need.
I’m sure some people will be saying: “Yes, but in an emergency…”
All I can say is “Did we not have emergencies over the last million years?”
“Yes, but it is a dangerous world we live in now…”
But how does the mobile phone make it more safe?
All it does is creates fear when you don’t have it.
As an end note to the last section, I have had to hang onto mine for now, as I have no permanent address, and as I still use a laptop with a wireless connection which I can make calls with, I feel it is a bit hypocritical to tell you to give up your most favourite toy! But when I eventually settle I will have no need for it.
So as you can see, and probably hear, wherever you are in the world (people were even using their mobiles when they came for retreats at the island I was volunteering at), mobiles have gone from being a great idea, to an addictive nuisance the world over. But who’s fault is it?
Mr vodafone’s or mr nokia’s? Of course not. They had an idea, implemented it, and it worked. These corporations grew to global size, not because they were intent on world domination, but because of us! Do you understand?
So we are all responsible for mobile phones being everywhere; for the annoying ringtones, and kids not paying attention to anything anyone says because they’re chatting on the phone!
It’s not our fault they are addictive (or is it us, who are easily addicted?).
Who’s for a burger and coke? I said who’s for a… Oh, sorry you’re listening to your mp3 player
I am not going to bore you with any more examples of ideas turned into billion dollar corporations, but I’m sure you can all have a guess at some of the products.
Before we complain about these companies making billions of dollars a year, let’s not forget how they got so rich!
Because we made them rich.
The operating system I am running this laptop on is a prime example of a good idea by a couple of guys turned into a multi-billion dollar corporation. Made possible by… You guessed it! Us.
But what happens to these people who start with these good ideas and suddenly get rich and powerful?
Well one thing is for sure, they’ll do anything to hang on to it, whatever the cost. It’s a shame, but when people get power, they change.
Now they have responsibility for many employees, and they also have a responsibility to the shareholders (if, like most corporations, they are publicly quoted) to keep bringing in the money. I don’t want to talk about power or profit here, because if a company makes a profit (the excess of revenues over outlays in a given period of time, including depreciation and other non-cash expenses) it just means they are good at their business. So let’s not hassle them over something which is an essential part of trading.
You must have something to put back into research and development if you are to stay one step ahead of the competition, otherwise your business, the share price, and the employees jobs go down the tube!
Shareholders
Someone who holds shares of stock in a corporation
When I was younger, my dad ran a publicly quoted company, and he always made a point of telling us when the share price went up – I guess it made him feel proud that his hard work was being rewarded. He bought my mum and I shares in the company and my mum bought me shares in a telecom company, a bank, and the newly privatised gas company – not many, but I guess she saw it as an investment for later life for me.
I don’t own them now, not because I think it is ethically wrong to hold shares, but because I sold them when I was nineteen or so (probably to pay for my hectic social life).
People all over the world own shares, don’t they? Some own only a couple of hundred, but some groups, such as pension funds own billions of dollars worth.
Shares are a good investment if you know what you’re doing. The small print says they could always go down as well as up, but if you play your cards right you are going to keep getting dividends (that part of the earnings of a corporation that is distributed to its shareholders; usually paid quarterly).
So corporations have to keep the shareholders happy, and a company that makes a lot of money means happy shareholders! This means the business cannot afford to stagnate. They cannot afford to rest easy when the share price is high; they have to constantly innovate and market new products to stay ahead of the game; and without realising it, the shareholders become responsible for the company’s actions.
Did this mean that companies were being forced to expand, create new markets, cut corners on environmental and social issues, just to keep the shareholders happy?
I had to find out; so I called a large pension fund to see what was going on.
Me: Hi, my name’s alan. I wonder if I might have a few minutes of your time to discuss shareholders and their responsibilities.
Fund Manager: Well, as long as you’re not a journalist, I can give you a couple of minutes.
Me: Thanks. Now, your pension fund manages millions of dollars right? And you invest some of that money in stocks and shares.
Fund Manager: Correct.
Me: Why do you invest money in shares isn’t it a bit risky?
Fund Manager: Not if it is done correctly. We are very careful about the sorts of companies we invest in.
Me: So what makes a good company?
Fund Manager: Plenty of capital, strong leadership, innovative products or services and a good long term strategy.
Me: So does it matter what market sector they are operating in?
Fund Manager: Not really. We generally tend to stay away from start up businesses and companies that are registered in any, shall we say, “unstable” political and economic environments.
Me: Are you concerned with environmental issues, or social issues?
Fund Manager: We have an ethics policy, if that’s what you mean, but we rely on the corporations to make sure they have their own ethics policy.
Me: Does that mean you will invest in companies that make weapons, or are involved in addicting the nation to things like cigarettes?
Fund Manager: I don’t think I like where this is going, but I will say this, we invest in blue chip (a common stock of a nationally known company whose value and dividends are reliable; (typically have high price and low yield) whose businesses are well known who have good brand loyalty) companies.
Me: So it doesn’t matter if what they make or do is damaging to the environment, or the people, only that the stock is reliable? Surely that is a bit unethical wouldn’t you say?
Fund Manager: It is not our job to judge businesses on their chosen markets we are only concerned with how the business is performing, but we wouldn’t invest in a business where there was likely to be social problems or protests, because then we could lose money and we have to protect our own investors pensions.
Me: But some of these businesses are causing havoc with the environment, and are causing social problems by addicting people to their products, and changing the way we interact socially, things like mobile phones, computer gadgets, and a host of other products, not to mention the companies that make defence products.
Fund Manager: Like I said, it is not our business to judge them, if there are any ethical or social problems, that is a matter for the government, or other agencies, not for us. We are merely trying to get the best for our investors.
Me: At any cost? Fund Manager: I’m sorry, I have to go now; this conversation is ended. Goodbye.
Me: Oh, thanks… Bye.
So before we start blaming companies, whose only job it is to make products, sell them, and make a profit so they can stay in business, let’s start looking to that elusive group of individuals behind the brand; the shareholders. People like you and me, wittingly and unwittingly investing money into organisations whose only goal is to please us! What do you think they would do to keep us happy? Anything?
Would they do what ever it took to make sure that the shareholders had a good dividend every quarter?
Would they carry on uprooting the environment, selling addictive products (not just nicotine, but all consumer goods),moving businesses to countries where the labour and production cost is lower, getting involved in markets that bring pain and suffering to people, like the defence industry? You betcha! And they’re doing it all for you. Because without people like you, these massive public corporations wouldn’t exist. Sure, the customers are to blame too, but you underpin the whole operation, just so you can get your greedy little fingers on your dividend cheque; hoping one day to sell the shares for a massive profit.
And do you care what these companies do? Not one bit. As long as you’re happy, the rest of the world can go jump!
There are of course, companies, whose work is only for the benefit of all beings on this planet, but I’m yet to find one. If you do, can you let me know, and I’ll be sure to amend this topic. But until then, remember that if you own shares in a company you are sanctioning anything and everything it does; all in the name of profit – yours.
So please be careful where you put your money; it could be affecting us all more than you know.
