THE CORPORATION

Source: The Corporation. (2005, May 10). Retrieved February 24, 2011, from Film Forum: http://www.filmforum.org/films/corporation.html

1. How can we ensure corporations are held accountable for their actions “ethically” and “legally”?

It’s not an easy task to make sure that corporations are held accountable for the harm they cause in a society or in a given environment. This is especially evident in poor countries where the government is absent and people, and even the government itself welcome multinational corporations as if they were the means to end the suffering. MNCs take advantage of that situation and can even challenge the sovereignty of a given country. In exchange of very basic needs (food and shelter) a MNC can have at its disposition a very strong labor force. But who can stop them if the government itself is absent and being threatened? CSR, ethical behavior and international law should be able to do the job, but ethical behavior has been lost to ambition and international law has proved itself inefficient. CSR should be enforced, but in the case of multinational companies harming other nations the last resource is for them to be held accountable ethically and legally by their HOME government via control of CSR. In this way, the industrialized nations from where most of the MNC’s come from, must stand up to the responsibility of watching the steps their companies take internationally.

2. Should individuals (directors, employees, shareholders) bear any responsibility for the actions of a corporation? If so, to what degree?

Individuals working in a corporation that harms societies and the environment should bear with the responsibility of the effects of corporate decisions. Corporations are legal entities and even if they are legal persons, they don’t think and therefore don’t have the ability to make decisions. It’s peoples’ decisions which set the path for corporate activity and they should be held accountable for the effects that those decisions have at every level. CEOs are there to give impressive reports on profits and benefit from their status, profits that result from their decision making, so in this same way, negative aspects should also be awarded to those so called wise decision makers. A strategy to determine the degree to which decision makers are to held accountable is to determine levels or corporate violations and according to the level sanctions will be set upon the company in monetary forms or upon the decision makers.

3. What are the benefits of the corporate form? Could an alternative model offer these as well?

The main benefit of the corporate form is that they are legally perceived as a person and in this way a corporation has is now entitled to have private property and make decisions; they are also responsible for their decisions and actions. In this way, the company becomes a person that interacts with customers in the market, but always with the sole objective of their own personal growth, which implies that might allow companies to become more strong and competitive.

Alternative models would be those that create a legal personality for the company different from its members and allows the company to act as a whole in the competitive market. The difference is mainly in the size, as the corporate form is the biggest of the existing models and others that imply limited responsibility like the LLC imply a smaller company size and thus less power in the market and business environment.

4. Search for a foreign multinational corporation that has operations in Colombia. Research if they are run under Colombian rules or regulations or if they have special regulations?

AVON is a multinational corporation with operations in Colombia. It’s penetration in the market has been significant due to the quality of its products, the brand recognition, and because of their effective marketing strategies and distribution channels. AVON has been recognized in the market because of its important work in social matters as they have given women around the country an option to work and be independent by selling AVON products. Additionaly, Avon and Prebel (Colombian company) have worked close in the manufacturing of beauty products. However, the company is ruled under the Colombian regulation, for which they have adapted their activities to the country’s political and economical environment even if the business model resembles the one that operates under the AVON brand worldwide.

5. Should economic efficiency (Main argument for privatization) be the primary concern for commons and public services? Are there other criteria to determine who should own or operate them?

Regarding public services I believe economic efficiency is important, but should not prevail over common welfare. Public services are supposed to reach the whole society because they constitute basic needs such as water and electricity. In this way, the primary goal of such companies should be to reach everyone. Nonetheless, economic efficiency in order to cut costs and be able to provide those basic services at lower prices is very important as it guarantees that everyone will be able to pay for such services and therefore have access to the service. Privatization, in order to reach economic efficiency, is a valid argument, but in the case of public services special follow-up should be performed in order to guarantee that the company’s efforts are going to still be focused on the common welfare over profit.  

Other criteria to determine who should own or operate companies that provide public services is the level to commitment to society, accomplishment of social goal, satisfaction of community needs, level of CSR and quality of the service provided.