Thursday, February 10, 2011
How much responsibility should companies have?
Imagine you are in a deal with a woman named Gillian. Gillian is given $100 and must offer you a portion of that $100. If you decide to accept her offer, the two of you will split the money. However, if you refuse the portion she offers you, neither of you will get any money. Now, assume Gillian offers you only $5. Do you accept or reject?
Now, let’s say a number of oil companies are bidding on a piece of land in country X, which is a developing country. Often, in the developing world, governments are corrupt. A few top people in the government of country X are very rich and powerful, and neglect the needs of the country’s citizens. The majority of the winning bid money would surely remain with the top people in the government, while only a small portion of that money would benefit the citizens.
So I’ll ask again, would you accept or reject Gillian’s offer of $5? If you were a citizen of country X, would you be thankful for the small portion of the winning bid money that the government gives you? Would you think that something is better than nothing? Or, if it were possible, would you refuse that bit of money if it meant that the Government would also receive nothing? Some would argue that citizens would accept the money because, being poor, they will focus on satisfying their short-term needs. Perhaps they would receive an unfairly low portion of the money, but that bit of money would allow them to eat more than if they received nothing.
On the other hand, others would argue that the citizens would not accept the money in favour of the government receiving nothing. One reason is that the more money the government receives, the greater disparity that exists between the people and the government, which only leads to further problems and corruption due to enhanced power.
Now, let’s change viewpoints. You are the manager of one of the oil companies bidding on country X’s piece of land. You know that a few people at the top of the corrupt government will keep most of the money for personal use, and allocate only a tiny portion of it towards helping the poor citizens. Do you still decide to invest in this land? Is it your responsibility to worry about what is going to happen with your bidding money? Will you try to do something about the situation and, if so, what will you do?
I believe that while companies must focus on what will make them profit, they have responsibilities that extend beyond this. When a company enters another country, it should be aware of and show interest in the political and social environment. I think that this is especially true when a large company enters a developing country where it will have a large impact on the country’s GDP and thus could significantly influence the standard of living. So, I do not think the oil company should not merely run away from investing in country X due to corruption. This wouldn’t be a smart choice for the company financially, nor would it actually help the situation in country X. Rather, I think that the company should invest and use the power it has to enforce rules, open opportunities, and alter ways of life in order to help improve the citizens’ lifestyles.
GlassFrog blogger, Sherisse