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James Hinton was an effective CEO of a medium-sized public corporation specializing in kitchen equipment. He was also a committed Christian, and he tried to bring his faith to bear in the way he ran the company. As a result of his fairness and real concern for those who worked for him, the company had high morale and strong worker loyalty. Suppliers and retailers were glad to do business with it. Because he insisted that wherever his factories were located, management would be good citizens and environmentally responsible, the public relations of the company were excellent. He had also established a good record of profitability.
Nevertheless, he was under pressure from his stockholders. Competitors had increased their profits faster than he had. Some of his major stockholders were pressing him to close unionized factories in the United States and move production to Mexico. They also urged that new technology justified reducing middle management positions. Taking such steps would increase profits and raise the price of the stock.
Hinton had bent to the new realities. He had persuaded unions to moderate their demands because of the danger that factories would be closed if costs rose further. He had stopped replacing middle management who retired. But he resisted closing factories on which whole communities depended and laying off managers who had worked faithfully for the company for years. The human costs were simply too high.
Now, he knew, there was a good chance that he would be replaced. To most of his stockholders, higher profits and stock prices were more important than what happened to employees. Well, he decided, he would stand his ground and be voted out, if that was his destiny, with his principles intact. Sadly, he reflected, his good conscience would not help his employees.
A Profound Tension
The opening story illustrates a profound tension. Corporate leadership consists of all kinds of people. Many of them are persons of conscience concerned for the good of humanity and the future of the earth. But the present global corporate system exerts pressures of a different sort. Many corporations submit to these pressures and commit themselves to little else than the bottom line. A few resist in various ways. The behavior of corporations, and the system that presses them in a negative direction, play a large role in determining the future of humanity.
Indeed, corporations have, arguably, become the most important institutions in the world. Of the 100 largest economies in the world, half are nations, and half are corporations. Their role in the United States is enormous. Incorporated businesses account for well over two-thirds of the U.S. economy’s privately produced income. In manufacturing, transportation, public utilities and finance, corporations do almost all of the nation’s business. In trade and construction they do about half the total business.
Corporations exercise vast influence on public policy. While regarding regulatory bodies with suspicion, corporations support government policy and intervention consonant with their own interests. Corporations wield great political power through campaign donations and the provision of lobbyists and experts who assist understaffed legislators in drafting bills and providing analysis. The proverb fits: “He who pays the piper calls the tune.” Few of us—and few public interest organizations—can afford comparable resources to represent our interests.
Through their control of the media, corporations largely shape our knowledge of, and opinions about, what is going on in the world. Tens of millions of people work for them and have their lives profoundly shaped by the internal policies of corporations. Most middle class Americans have investments in corporations, and we collectively put pressure on these corporations to maximize profits and growth even at the cost of other values. It is past time for Christians to study and appraise these institutions, both their role in the larger society and their effect on the lives of those who work in them.
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