In 1971, Ford executives researched the cost of fixing the now infamous Pinto with the estimated lawsuit settlements from customer injury claims. They favoured the former, and over 900 people subsequently died in Pinto explosions (Birsch & Fielder, 1994). The company just announced its best ever quarterly profit.
In July 2015, BP PLC agreed to pay $18.7 billion (claimable as a business expense) for spilling 11 million litres of oil into the ocean (Keller, 2015). One year after the disaster, corporate profits grew by over $28 billion. In 2012, pharmaceutical giant GlaxoSmithKline admitted to bribery, falsifying evidence and deceitful behaviour. They paid a fine of $3 billion. Profits from the misrepresented drugs amounted to more than $28 billion (Whalen, Barrett & Loftus, 2012).
In A Decisive Decade, Robert McKersie details the aggressive and deceptive tactics of the Motorola Corporation, which used its power and influence to discredit, bully and manipulate individuals in order to protect its public image and profits. Reprehensible behaviour, yet Motorola continue to thrive to this day. America’s most prolific serial killer was convicted of murdering 48 people and is serving 48 life sentences. The Ford Motor Company knowingly allows, budgets for - the deaths of 900 customers, and remains an American icon to this day. Why?
A corporation is created, managed and directed by human beings. Its leadership makes decisions which affect the lives of millions of people. Yet, corporations are not subject to the severity of punishment individuals are exposed to. This allows greed, corruption and enormous harm to come to members of the public. Moreover, it sponsors an environment in which leaders are able to conceal their toxic and destructive behaviours (Lipman-Blumen, 2005) and in many cases, be rewarded for them (Kellerman, 2004).
The enforcement response is limited to civil sanctions for what in most cases are criminal actions of corporations. This invites deep questions of the notions of justice, transparency and fairness. Given corporations continue to grow in influence, power and revenue, the situation is sadly, unlikely to change in the near future. As Thomas Jefferson said, “those entrusted with power have, in time, and by slow operations, perverted it into tyranny”.
Birsch, D & Fielder, J (1994). The Ford Pinto Case: A Study in Applied Ethics, Business, and Technology, State University of New York Press
Keller, J (2015). The Maddening Silver Lining to BP’s $18.7 Billion Oil Spill Penalty. Retrieved from http://www.psmag.com/politics-and-law/how-come-bp-gets-to-treat-fines-like-business-expenses-but-i-cant-even-get-out-of-this-parking-ticket
Kellerman, B. (2004). Bad leadership. What it is, how it happens, why it matters. Boston: Harvard Business School Press
Lipman-Blumen, J. (2005). The allure of toxic leaders. Why we follow destructive bosses and corrupt politicians — and how we can survive them. Oxford: Oxford University Press.
Whalen, J, Barrett, D, & Loftus, P. (2012, July 3rd) Glaxo in $3 Billion Settlement. Wall Street Journal. Retrieved from http://www.wsj.com/articles/SB10001424052702304299704577502642401041730