Corporations can be good citizens

Corporate responsibility--to employees and the community--usually pays off for companies, said Jeffrey Sonnenfeld, professor of organization and management at the Goizueta Business School, during a lecture sponsored by The Ethics Center on Oct. 7. Sonnenfeld's lecture, "Can Today's Corporations be Good Citizens," is part of a lecture series on professional ethics.

Sonnenfeld began by saying that the huge array of topics dealing with professional ethics is beyond the scope of one discussion, but that they all have similar roots. He said that one cause of the shattered trust of the American workforce could be the boards of companies, which [perhaps] suffer from "fattism, ego and mergers."

Sonnenfeld went on to address the issue of corporate responsibility, showing a video about and discussing the controversial former CEO of Scott Paper Co., Albert Dunlop. Dunlop earned the moniker "Chainsaw Al" while working at Scott because he laid off 11,000 workers while being paid $100 million. Sonnenfeld cited statistics that showed that during the past year, corporate profits were up 75 percent, hourly wage earners' salaries were up 16 percent and CEO salaries were up 96 percent, an obvious discrepancy in favor of the CEOs. Dunlop asserted that the only responsibility of the company board was to the shareholders, implying that the company had no responsibility to the workers because they hadn't invested money in the company.

Sonnenfeld then described the benefits of corporate responsibility, using Tylenol's 1982 poisoning crisis and Rich's and United Parcel Service's (UPS) community outreach programs as examples. The Tylenol problem was dealt with by being open with the public and pulling the product from store shelves after additional tampering was found. An entire revamping of the company's product was effected, and the company is stronger now than ever. UPS holds weekend events where company managers mentor inner-city children, and Rich's housed an academy of children in their downtown store for a time (they now fund a separate site, since the store has closed).

Often, the benefits of being a good corporate citizen are great. Sonnenfeld used as an example the Weyerhaeuser forest products company. George Weyerhaeuser, the founder, set a precedent for cooperation with the public and with government officials early on, which paid dividends later when they weren't criticized as much as other companies in related industries, and government officials were more lenient in dealing with investigations. In conclusion, Sonnenfeld said that citizenship is tough to define, but it "must be earned," in contrast to the strictly free-market theory of justice, which doesn't place any emphasis on community involvement or commitment to corporate responsibility.

Sonnenfeld's Center for Leadership and Career Studies at the Goizueta Business School brings together company heads to discuss the challenges they face, including the challenges of business ethics and corporate responsibility.

--Peter Mills

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