The Zero-Impact Corporation , by Chris MacDonald, Ph.D.

File this under “Food for Thought.”

Last month I blogged about a Starbucks ad telling customers “Everything we do, you do.” (See: You Are Starbucks.) The idea implied by that poster was that all the stuff Starbucks does (in particular, all of its “corporate social responsibility” activities) is actually done by its customers — after all, customers are the ones paying the bills. Without customers, Starbucks wouldn’t exist.

f_0130It’s long been acknowledged that there’s a sense in which corporations don’t exist. On the “nexus of contracts” view, a corporation is just the name we give to the intersection of a whole bunch of private contracts: suppliers, employees, managers, and customers, all linked together by this thing we call a “company.” (Example: you can think of Walmart as just a vehicle by which millions of Americans buy tons of products from millions of Chinese. Exxon is just a mechanism by means of which millions of car drivers hire to oil-rig workers and geologists to help each of them exploit a tiny bit of the earth’s petroleum reserves.)

So, from that point of view, consider this: since corporations (in some sense) don’t exist, they also don’t pollute. Nor do they have any social impact at all, either for better or for worse.

Seen this way, Shell Oil has never emitted any pollution. Sure, smokestacks bearing its name have, but that’s just a short-hand way of saying that millions of car-drivers (and folks who heat their homes with oil or natural gas) have each contributed, incrementally, to that pollution. Likewise, Exxon has never spilled a drop of oil in the ocean. And Walmart has never driven a smaller store out of business: if a smaller competitor went out of business, it’s because thousands of consumers chose to shop at Walmart rather than at the smaller store.

Now keep in mind that this is not intended as a way of letting corporations (or managers) off the hook for bad decisions. It’s a kind of thought experiment, to see where it gets us, ethically, if we look at the corporation as a conduit between people who want to sell things (e.g., garments sewn in China) and people who want to buy them (e.g., North American teenagers).

Of course, from this point of view, no company would get credit, either, for any of the good things it “does.”

So, is this way of thinking about things helpful, or dangerous? Does it make sense for some of the examples suggested above, but not for others? Why?

via The Business Ethics Blog, by Chris MacDonald, Ph.D..

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