Punish Companies That Play Dirty

Leadership Strategy

The tech giants are doing very little to walk their talk on their commitment for Corporate Social Responsibility. Google watchers say the company’s corporate culture has changed beyond recognition: the supposed freedom of expression that protects every citizen has been curtailed to the point that the government itself has to step in to try to secure it. Says Professsor Enrique Dans,The old principles that guided corporate social responsibility managers, who were often looking for pompous formulations to pretty up the annual report don’t work anymore. ​ Consumers need to look for more than generic statements and to look for quantitative indicators and metrics to check compliance, rather than swallowing fine words and grand declarations. The things the consumers can do is to vote with their pockets, and only buy products and services from those companies whose principles fully convince us. As elsewhere big tech is involved in deep controversy in India as well. This has forced the government to intervene in a big way

By Enrique Dans

The US Business Roundtable’s  realization that companies must do more than simply maximize shareholder profits is monumental blow against a crude interpretation of neoliberal capitalism (which puts Adam Smith and Milton Friedman among the most misquoted and misunderstood economists in history) and in favor of so-called stakeholder capitalism. But as with any transition, it is one thing for the CEOs of the most important corporations in the United States to agree to say something, and quite another for them to put their money where their mouth is.

​The present could mark the moment when big business begin to show some real intention to change its practices, to stop believing that the market fixes everything, and to embrace the interests not only of the shareholders who finance their activity, but also of their suppliers, their workers, society and the environment.

​So far, only a few companies have made any effort to do so. It’s hard to see the tech giants doing much. Google watchers say the company’s corporate culture has changed beyond recognition: the supposed freedom of expression that protects every citizen has been curtailed to the point that the government itself has to step in to try to secure it, while some workers claim to have been retaliated against for demanding action from the company on certain issues or for supporting certain positions. 

​The same company that claims to be giving up certain tax engineering practices for good seems to have become a monster capable of sacking workers who express their opinion on certain issues. Is Google worried it won’t be able to attract talent? Apparently not: despite its worsening image, the company attracted 3.3 million job applications in 2019.

​The same seems to be true for another technology giant: Amazon. The company has received complaints for threatening to fire workers who had spoken out about the climate emergency, leading Bernie Sanders, who has stated, among other things, that if elected President of the United States, he would make the company’s founder, Jeff Bezos, pay over $9 billion in taxes, to try to make these cases and their claims visible.

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According to some analysts, this type of response by the large technology companies to its workers’ activism could see a strong increase this year in union activity, which has traditionally been minimal in this environment, and which both Google and Amazon are trying to fight. But fighting against basic employment rights or retaliating workers for expressing their opinions doesn’t suggest much of a change.

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​How do we know whether companies are really embracing a kinder capitalism, pursuing environmental goals or the interests of their stakeholders, rather than simply those of their shareholders, or simply going through the motions? The old principles that guided corporate social responsibility managers, who were often looking for pompous formulations to pretty up the annual report don’t work anymore. In fact, Larry Fink, the founder and chief executive of BlackRock, the world's largest asset managers, announced Tuesday that his firm would make investment decisions with environmental sustainability as a core goal. Is the business world finally changing?

​Consumers, will have to look for more than generic statements and to look for quantitative indicators and metrics to check compliance, rather than swallowing fine words and grand declarations. The best thing we can do as consumers is to vote with our pockets, and only buy products and services from those companies whose principles fully convince us.

 If you want to change the world, a good place to start is your pocket. From

Professor Enrique Dans, Professor of Information Technologies and Systems,IE Business SchoolFirst Printed on FORBES  https://www.forbes.com/sites/enriquedans/.