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A Real Death: Is Corporate Evil to Blame?

August 5th, 2008 @ 5:16 am

8 Comments

Categories: Management

Tags: Accountability, Mortgages, Financial Accounting, Finance, Capital Structures, Sean Silverthorne

A Real Death: Is Corporate Evil to Blame?Can a Business Be Evil? asks Lew McCreary in an excellent, five-paragraph post on Harvard Business Publishing. If not, then who is responsible for the death of Carlene Balderrama, a 53-year-old wife and mother who killed herself hours before her house was to be sold in a foreclosure auction?

McCreary, an editor at Harvard Business Review, will get you thinking about your own social accountability for the seemingly private business decisions you make.

Certainly the actions of subprime lenders took on a moral dimension, says McCreary. But labeling these companies as evil, a loaded biblical term, may serve only to shut off meaningful discussion.

“The problem with accusing a business of evil is that the behavior of an enterprise is collective, consisting of so many individuals, engaged daily in myriad acts of omission and commission, that it is virtually impossible to fix moral accountability in a meaningful way. CEOs are not typically hired for their moral qualities…”

His readers offer a number of passionate opinions:

  • “Hitler’s Reich evolved from a kind of green-eyeshades consciousness that allowed people to invent, participate in and justify many machinations that added up to a massive horror. The mortgage preditors may fall into this class.” –Bronwyn
  • “I think to be evil means there is the intent to harm, or a clear awareness of harm that is not communicated to the customer. I think anyone involved in the sub-prime crisis who understand how bad the loans were and signed them anyway has something to apologize for. Yes, I believe in buyer beware, but I also believe people know what’s right, and generally feel guilty when they do what’s wrong.” –Scott
  • “No amount of shared responsibility makes any business evil more acceptable. It really is about the individual, the leader, the manager…” –Evelyn

What do you think? If you believe a business can be evil, what can society do to punish its behavior?

(Foreclosure image by gruntzook!, CC 2.0)

 
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  •  
    1

    d_user_name

    08/05/08 | Report as spam

    RE: A Real Death: Is Corporate Evil to Blame?

    I think we can go a long way toward determining what each of us should do about "evil" without getting hopelessly ensnared with a definition of evil. The first thing to note is, as someone pointed out above, the diffuse nature of responsibilty within a corporation. (The second thing is, don't get side-tracked by The Parity Principle, namely, that when given responsibility for "x," one should have commensurate authority to marshall resources for "x.") The best way to illustrate "Not my fault!" is to point out, "In an avalanche, each snowflake claims not guilty." Short of an equivalent of the Nuremberg Trials, ain't no way we're going to apportion such-and-such responsibility (guilt?) to Person A and such-and-such to B. I think my Logic prof would have identified that effort as "reuctio ad adsurdum." (sp?) So we resolve the first slippery slope by looking not at people but at the systems that pay them to do their bidding. (Note that I'm not advocating letting people off the hook because -- poor baby -- they are victims.) Now that we're looking at the behavior of the system / operating unit / division / whatever, a second quote illustrates the source of the difficulty of assigning responsibility (or blame or guilt, take your pick): "Men do not differ much about what things they will call evils; they differ enormously about what evils they will call excusable." Chesterton. The test for "evil" is this: do those inside (drumroll, please) The System react to charges from outside that system from either the active pole -- that would be "Yeahbut yeahbut yeahbut" -- or the passive pole -- that would be, "Yeah, so?" Then, yes, we have a strong indication that evil is afoot. To risk another reductio, evil is "ME FIRST!" (the "Screw you!" and "Tough sh*t!" are implied,as is, "You exist for me! Now gimme!") and goodness is, at least begins with, "We first," where "we" encompasses every stakeholder from the lowliest intern to Gaia. Whew. You think I might have a little juice around this one?

  •  
    2

    Ian P

    08/06/08 | Report as spam

    Why on earth should anyone to be at fault for this death.

    Personal accountability should be the prime suspect in reviewing any suicide, not the culpability of people trying to do their best for themselves and others.
    Get real America.
    Hundreds of thousands, possibly millions, of people have enjoyed the benefits of homes they couldn't afford, all payed for by a booming economy. Times get a little tight and suddenly the people who made all those little miracles happen are being incarcerated and villified because 'someone' has to be guilty of 'something'.
    What many of you and many in the UK are guilty of is a lack of self control and an unwillingness to wait and work for your future.
    Still, the compensation bandwagon will roll along and the taxpayer will end up footing the bill.

  •  
    3

    kirkdavis27@...

    08/06/08 | Report as spam

    RE: A Real Death: Is Corporate Evil to Blame?

    This is simple in my eyes. If you can'nt afford it don't buy it. If you did buy it find away to pay for it. We cann't blame a compnay for decisions we individuals make. I know when I purchased my house 2 years ago, We went through every piece of paper at closing and if I didn't understand it I asked a question. Now it took a little while longer than 1 hour to close but I was fully aware of my obligation.

  •  
    4

    IMLaughlin

    08/06/08 | Report as spam

    RE: A Real Death: Is Corporate Evil to Blame?

    When a business in Japan is found to have caused harm, the president resigns in shame ... sometimes even commits suicide.

    When a business in the USA is "caught" causing harm, the victims commit suicide ... and the president/management are rewarded, provided they enhanced the bottom line.

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    5

    arcin69@...

    08/06/08 | Report as spam

    RE: A Real Death: Is Corporate Evil to Blame?

    The article is pointless and illogical. It wants to hold business people responsible, but assumes private individuals cam't be responsible for their own actions. You can't have it both ways.
    The article claims predatory lenders took advantage of ignorant borrowers. If ignorance of the law is no excuse in criminal matters, shouldn't that principle also apply to civil matters like loans and foreclosures as well?
    The womans's suicide is tragic, but the article blithely ignores her and her family's complicity in taking the loan.

  •  
    6

    kurtsouthwind

    08/06/08 | Report as spam

    RE: A Real Death: Is Corporate Evil to Blame?

    This is not an either/or situation. Both parties are to blame for the mess we're in. Both parties agreed to each mortgage. Everyone needs to take RESPONSIBILITY for their own actions. The lenders knew they were giving loans to people that couldn't afford them. In many instances income was never even verified. That's not only lack of responsibility for a fellow human being, but for your own company's interest since it is less likely the loan would be paid back. And borrowers are also at fault because they need to understand the responsibility they have to the institution lending them money for their home. People need to be realistic about what they can buy and build in a buffer in case things don't go as planned, instead of maxing out their budget. And while I'm at it, the Fed holds responsibility as well, because you can't tell me that the reason for this explosive growth was lost on the very people meant to oversee it.

  •  
    7

    Mike790

    08/06/08 | Report as spam

    RE: A Real Death: Is Corporate Evil to Blame?

    Because of the nature of corporations, they should not be afforded the rights of a person in the legal system - corporations are amoral entities, and should not be expected to behave morally. Their function is as a vehicle of economic efficiency. To the extent that this conflicts with other social goals as determined by a democratic process, they should be constrained by laws and regulations. As a member of a society of law, individuals within the corporation are morally required to refrain from breaking laws - that is where morality enters the picture.

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    8

    jenortonjr

    08/16/08 | Report as spam

    RE: A Real Death: Is Corporate Evil to Blame?

    Corporate America in general is to blame here, not necessarily the lender or the borrower (one should be neither according to Shakespeare). That lawyers need to be involved should be a big enough warning signal. But corporations will always have many more options to get out of a deal at their disposals than consumers ever will, including the art of selling loans amongst themselves (I made the 1st payment on my current mortgage to the 3rd owner of the loan). Nothing will change until consumers break their own addictions to buying on impulse or out of emotion. Corporations have no incentive to change as long as there is a profit to be made.

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