Jan 7, 2007

do corporations have only one goal?

Continuing the discussion of the current LD resolution, one of the arguments I repeatedly heard this past weekend was that corporations exist only to make a profit, or, in a broader generalization, that they have only one goal. The affs I watched either didn't bother to refute, or had weak responses to, either claim.

The first is rather easily defeated by pointing out the existence of not-for-profit corporations.

The second also strikes me as defeasible. Is the only--or primary--goal of McDonald's, for example, to earn a profit? Could it be argued that McDonald's profit-making is a means to a different end: political power, world domination, social transformation, or other goals I can't imagine? Do we take corporations at their word, and look at their mission statement for their goal(s), or do we apply a functionalist framework to all corporations regardless of their stated aims? Or, even further, do we treat corporate mission statements--and even the profit-seeking motive--as false consciousness?

In other words, do we take a descriptive stance--corporations actually act this way, so that's what their goals are--or a normative stance, claiming that corporations all act in the way Milton Friedman says?

According to a new LA Times article as distilled through the Seattle Times, corporate actions can belie their intentions, and even undermine other actions of that same corporation.
At the Gates Foundation, blind-eye investing has been enforced by a firewall it has erected between its grant-making side and its investing side. The goals of the former are not allowed to interfere with the investments of the latter. With the exception of tobacco companies, asset managers do not avoid investments in enterprises whose activities conflict with the foundation's mission to do good.
Is the goal of the Gates Foundation to save the world or to maximize its wealth?

Yes. Or no. Or "false either-or." What do you think?

Update: Jason Kuznicki responds.

9 comments:

Anonymous said...

Does it truly matter what the goal of the corporation is?

For example, the aff could just argue equal rationality, categorical imperatives, deontology-stuffs, et al. without having to talk about motives. After all, isn't a corporation just a tool, a means to an end decided by the individuals in ownership/power of it? Thus the motive of a "corporation" would be the same as an individual.

Also, on the Neg, is it really necessary? Now, granted, my Neg is terribly weak, but I think that you could argue that certain differences (intrinsic value, its very lack of individuality and thus operative moral calculus)mean that the actions of the corporation have built-in differences just based on decision-making structure in general? Just my two cents.

P.S. I'm new here and to debate. Also, you have very well researched posts, thank you.

Jim Anderson said...

anonymous, thanks, and thanks for stopping by.

I agree that it's weak to claim that corporations have one goal--and possibly irrelevant, depending on the value structure. However, I'd like to see an argument *why* a corporation is just a "tool," a "means to an end." Remember, a corporation is made up of multiple humans with multiple points of view, and, more often than not, varying motives. Boards of directors are rarely unanimous, so their decisions can't be seen as having the same motives as the individuals who collectively make them.

Your "two cents" in the third paragraph are how I'd go about making a neg case. If you're new to debate, you're obviously not new to deep thinking.

Mitch said...

I agree with the proposition, but would like to introduce a couple of complications:

1. Timing. A corporation may forgo current profits for future profits, or vice versa. This is often seen where the company is trying to increase market share or enter a new market. Other companies, "cash cows," have no realistic chance of increasing market share or sales volume and instead seek maximum current profits.

Some corporate activities like charitable contributions or political support can be considered an investment of current funds in anticipation of future returns. The investment may or may not be a wise one.

The actual owners of the company, the shareholders, usually see share price as the key measurement of success. Profitability is obviously one of the drivers of share price, but only one. Long term growth in profits is usually more important, since investors are essentially buying a set of cash flows.

2. Agency issues. Managers of the company seek to enhance their own earnings. Incentives can help align the interests of management and shareholders, but the investors always operate with less information and cannot always know when the managers are serving their own interests rather than the company's. Managers may also look to use company resources for their own benefit, including status in the community and future employment prospects. If this goes on long enough, the shareholders can fire the management by selling the company to another, sometimes after having driven the share price down by dumping it.

Sometimes it's hard to see, but the profit-making motive is always there.

Jim Anderson said...

mitch, do you deny the existence of not-for-profit corporations, then?

Anonymous said...

Jim-

You state in your response to anonymous:
"Boards of directors are rarely unanimous, so their decisions can't be seen as having the same motives as the individuals who collectively make them."
It seems to me that one of the key components to government is majority rule, and what you said seems to say that corporations are run by majority rule. If this is true, wouldn't that mean that corporations are more moral than individuals?

-Brad, Oklahoma

Jim Anderson said...

Brad, I'm not sure if majority rule is any more moral than any other kind of rule. It might add moral responsibility, through the extended possibility of deliberation, but there's no guarantee that the decisions themselves are any more (or less) right.

Brad Crofford said...

But if there is more deliberation as a result of majority rule, leading to greater moral responsibility, wouldn't that lead to higher moral standards?

For example, we wouldn't expect a two year old to make only moral decisions; they can't deliberate, weigh pros and cons. We would, however, expect a teenager to. Since the Board for a corporation would be made up of many people who can deliberate, wouldn't we be inclined to judge them by a higher standard? ("They should have known better..." "Someone could have stood up against it")

Jim Anderson said...

Brad, I see what you mean now by "more moral"--more morally responsible (rather than "more morally correct"). And if I were on the NEG, that's one thing I'd argue.

Anonymous said...

fuck you guys.