Corporate Responsibility: Taking Care of Business
Levitt, Theodore
Corporate Responsibility: Taking Care of Business Despite the clamor of our so-called "public-interest" advocates, the modern corporation can pursue social responsibility only...
...It is true that Smith once wrote society paragraphs for the Chase Hotel in St...
...A listener these days to the sounds that fill the air where businessmen gather would think that instead of getting customers, he who builds a better mousetrap only runs into design difficulties, material shortages, patent-infringement suits, unauthorized work stoppages, collusive bidding, discount discrimination, confiscatory taxes, the Department of Justice, OSHA, EPA, the Equal Employment Opportunity Act, the Toxic Substances Act, HEW, exchange controls, currency fluctuations, environmentalists, the women's movement, and consumerists...
...Clearly, the idea is neither recent nor the invention of business' critics...
...their duty evenhandedly for local veterans' organizations and local industry...
...The company had a dozen autonomous operating divisions, each responsible for its own performance and normally responsible for proposing the plans for its own future...
...The words still arrange themselves on the page in perfect grace...
...The danger is not that government will run business, or that business will run government, but rather that the two will coalesce into a single power, unopposed and unopposable...
...The hero is the writer...
...1) In the ten years from 1948 to 1957, the Har_ yard Business Review, which in those days billed itself as "The Magazine of Thoughtful Businessmen," published an average of twoand-a-half articles a year dealing with essentially the same subject of busi- ness ethics and social responsibility, including the most famous and influential of all such advocacy pieces, " hooks' (With Special Implications for Monday Through Friday)," by O.A...
...It accounts for the enduring success of such classics as "Twilight Zone," "As The World Turns," "Guiding Light," and many others...
...After all that food sometimes you have trouble staying awake...
...One wonders if there is anybody not suffering from metabolic insufficiency or fiscal excrescence who does not at some time worry at least "somewhat" about most of these issues...
...The federal courts were loaded with cases and appeals from FTC decisions...
...It carried on in euphoric bliss, bothered by nobody except, occasionally, the Internal Revenue Service, which was in any case sensibly flexible about what constituted a legitimate business deduction, having been conditioned so by a Congress generous with depletion allowances and other inducements for getting the world's work done...
...And Theodore V. Houser, board chairman of Sears, Roebuck & Co., delivered the 1957 McKinsey Foundation Lecture under the title "Big Business and Human Values...
...The office is furnished with plumbing, books, and pictures of men and horses...
...As for the activists, in all cases they confirmed their activism...
...On which of the 16 problems should a corporate chief executive, from whom stockholders, pensioners, and employees still expect checks, have_ spent corporate money in 1966...
...Since lawyers often work for percentage fees contingent upon the outcome of such cases, the number of class-action suits quickly jumped in about the same proportion as the expected rewards for legal services...
...One of its 18 chapters is on "The Nature of Executive Responsibility," and it is devoted entirely to the subject of morality and responsibility...
...Examining the results, the authors concluded: Americans are greatly concerned about many different kinds of consumer problems...
...That they have traumatized today's business leaders with their high-decibel accusations is certainly true, but while they cry much about social benefaction they also buy much for personal gratification: all that expensive hi-fi equipment, all that costly hiking and camping gear, all that elegantly trashy industrial-look apparel, all those erotically clinging synthetic-fiber swimsuits...
...It included a list of "Social Demands and Pressures on Business in Different Subject Areas" —environment, consumer, and anti-trust...
...Business still resists with all the inertia it commands much of what the "reformers" ask...
...but they are much more satisfied with big business, or with any sized business, than can be inferred from Louis Harris and Associates...
...Four difficulties quickly surfaced...
...Thepublic clearly distinguished between what it thought of GM as a public citizen and GM's cars...
...T1,111, UNIONS NUMBER OF APPRENTICES IN -1611--t 4_ - pE_ -8 HOURS WORK AND 10 HOURS = IF THESE RULES AREI:idI' CARRIED OUT-AL WIL I STRIKE WHEN You ARE IN A TIGHT PLACE_ I IALFAtT YOU NAIST 130 Wg, 6.61^1 TRACT S---= TO--Fu_t:r I Lt.': ARC E- Mt-0-r--1 4---0-Ty AT -s-rAKE...
...The more disquieting and bizarre his findings, the more he sells...
...The audit would be the social equivalent of an annual profit and loss statement...
...Take the answers to Question 1. Only eight percent thought "Fighting for consumer interests" a matter of "highest concern and priority for the next [i.e., Carter] administration to do something about...
...Nor is this all bad...
...The April 18, 1959, issue of Business Week quoted "one of the older directors" of a large U.S...
...Usually a particularly noxious one...
...Consider the pollster...
...Most commonly, it is determined through the lens of our special interests, experiences, knowledge, personal values, and ideologies...
...Who would...
...EPA regulations also drastically reduced the amount of zinc-smelting capacity in the United States—a condition, along with other shortages, which led in many companies to the headquarters centralization of procurement, thus giving the larger corporations a new purchasing edge over the smaller...
...The idea that the modern corporation has social responsibilities actually came from the very depths of Corporate America itself...
...He added that writing newspaper stories about Seaver was the lowest calling in town, a brave claim which, if it stands at all, stands on Tuesday, Thursday, and Saturday...
...The Anti-Trust Division of the Department of Justice and the Federal Trade Commission were, if not quiescent, docile...
...Much of what is now being done by government and to business is widely approved, even by business itself (so long, especially, as it's required mostly of industries other than one's own...
...in 1972, twelve...
...All believe, even when agreeing with the rightness or justice of what they have had to do, that they are the special victims of an anti-business virus sweeping the nation...
...Through the Times News Service, Smith's column is syndicated to more than 400 papers around the world...
...It would be a mistake in spite of what seems to be unequivocal supporting data from the Harris polls and the "social indicators" surveys by Daniel Yankelovich and the Opinion Research Corporation...
...It is a highly complex document, offered "as a start," which did not itself define or describe "social responsibility...
...Among the problems were "Controlling air and water pollution," "Rebuilding our cities," "Enabling people to use their creative talents fully," "Giving a college education to all...
...The NAACP had a proper regard for the rules of civility in representing "its people...
...The first, and still in many ways the most definitive book on management, The Functions of the Executive, was published in 1938...
...For business the new legislation, the new controls, and the new intervening judiciary are a very big bother, entailing everywhere enormous new investments, huge new operating costs, and terrible headaches...
...Consider Question 22, which asked which of 27 "industries...the consumer movement should give most of its attention to in the future...
...These are always the times that try men's souls...
...It does so by offering goods and services people will want to buy from it rather than from somebody else—and doing so at a level of profit that will enable the enterprise to survive and keep its jobs secure...
...1. The author was Chester I. Barnard, president of the New Jersey Bell Telephone Company...
...In the automobile industry, the destruction of independent smaller-suppliers was so extensive that on February 20, 1975, General Motors established a Procurement Policy Group, with particular responsibility to deal with the resulting shortages of steel castings...
...Louis for the price of a hotel room, but that was in the Great Depression, a hungrier and more permissive era...
...Theodore Levitt Corporate Responsibility: Taking Care of Business Despite the clamor of our so-called "public-interest" advocates, the modern corporation can pursue social responsibility only by sacrificing its own success and our liberty...
...and it is presumed to have felt not the slightest complicity in their creation or perpetuation...
...Those are the days on which Red Smith, who writes about pitchers, horses, and prize-fighters for a living, does not grace the pages of the New York Times...
...Except that business didn't know it was the good life...
...This has happened just as some of the old-left intellectuals have renounced their faith in the meliorating possibilities of government, and embraced, now as neoconservatives, the greater possibilities of the market mechanism...
...In the 1950s, the Review published articles (generally authored by persons associated with business) urging business to do more about such social issues as the proper use of natural resources, population control, racial discrimination in business, business opportunities for women, and worker alienation—long before these issues became the fads of the activists, the intellectual classes, and the popular press...
...If they saw that the price might include their own freedom, not just the companies' money, they might for once stop to think...
...corporation: On the day of a...board meeting, the finance committee meets in the morning to pass on recommendations that the board will be asked to adopt....Then "they feed us a heavy lunch, and we go into the board room and they put out all the lights and show the economic position on slides...
...How much money, time, and for how many problems simultaneously...
...Businessmen generally approve of the goals of equal-employment legislation, but attack the arbitrary and bureaucratic enforcement procedures...
...The money recoverable suddenly skyrocketed from perhaps a few thousand to tens and even hundreds of millions of dollars...
...They know from their own first-hand experience that these companies are pretty reliable and trustworthy...
...That entertainment was a failure...
...It is useful to know that not until a.1935 amendment to the Internal Revenue Code could corporations deduct pre-tax income for charitable contributions...
...In 1950, a subcommittee of the House Judiciary Committee studying "monopoly power" was making headlines...
...Those whose oxen are being gored exhibit remarkably opposing conceptions of the public interest...
...In 1952, Clarence B. Randall, chairman of Inland Steel, published a widely-read book, A Creed for Free Enterprise, which advocated in great detail how to manage business for more socially benign purposes...
...Steel to rescind a price increase...
...It is, then, extremely difficult to decide which social problems should be addressed, to define what constitutes "the public interest...
...Here Smith writes his columns, including the headlines, and phones them in to a tape recorder at the Times...
...He summers in Martha's Vineyard, where he watches the Red Sox on TV, and maintains a year-around residence in New Canaan, a fashionable community even now beyond the financial reach of many major-league ball players...
...Nevertheless, that year GM sold more cars than ever before...
...Should the disciplines and operating efficiencies this system had fostered now be compromised by top-down directives on capital spending for pollution equipment, facilities location, and product-line policy (such as the use of recycled or degradable materials...
...Ralph Nader was a good little schoolboy from Winsted, Conn., sent off later for purification and acculturation in the melting pot of Princeton University...
...Interventionism has come not from their activism, but from entirely different sources...
...22 The American Spectator November 1977 The report resolutely avoids making systematic comparisons of the responses to its various questions...
...He insisted that business' first responsibility is social, and urged his colleagues to look less to their pocketbooks and more to their spirits...
...We never know when we are happy, only when we were happy...
...Something is fishy...
...Business is thought to have generally been oblivious to the social and economic unevennesses and injustices that were all around...
...The questionnaire invited dyspepsia...
...batted balls and galloping steeds are the props of Smith's stage...
...The new rules now defined a class as every shareholder who did not affirmatively withdraw from the litigation...
...Understandably, this has generated enormous caution among businessmen about almost everything they produce, do, and say...
...What exactly is "socially responsible" business behavior anyway...
...In many matters business leaders see things quite differently than do consumer activists or "the public...
...That's rational...
...That is the secret of their success, a "secret" first instituted at General Motors by Alfred P. Sloan, Jr., when he came over from DuPont in 1923 to rescue a company in shambles...
...Should a corporation have done less in 1970 than in 1969, and even less in 1971...
...Honest people, with no thought of personal advantage or special claim to truth, honestly disagree...
...Chemical companies say the Environmental Protection Agency, foundries say OSHA, banks say the Equal Employment Opportunity Act, drug companies say the new HEW rulings on product testing, multinationals say world currency fluctuations, and little retailers say "truth-in-lending" while big retailers say "the rip-off mentality" of consumers and employees...
...Environment got a 25 percent response in 1965, 20 percent in 1967, 19 percent in 1969, 42 percent in 1970, and 58 per cent in 1971...
...The recession that started in 1957 helped put Senator Kennedy in the White House, whence he sent the FBI into Pittsburgh one night to persuade Rodger Blough of U.S...
...The seasons still lead him from diamond to stream to gridiron, and none of it bores him...
...In 1966, five of the 16 questions received 70 percent or more positive responses...
...5. Nor do mitbestimung in Germany, employee cooperatives in Sweden, or nationalization in Britain (to mention only democratic nations) provide any reassurance that those who run the enterprise will act in the best interests of the public...
...Compared to today business is presumed—by both the uninformed public and many younger businessmen—to have operated back in the 1950s more confidently and securely, sure of its traditional expectations, values, and virtues, of consistently expanding opportunities, abundance, and growth, and helped by the widespread acceptance of the principle of merit...
...Nowadays, Smith is a stiff-squire...
...It is one thing to be a decent and good citizen, to expect of our institutions some civility, restraint, responsiveness, and good taste...
...What is certain is that the anti-business noise is loud, repetitive, transistorized, and highly effective...
...And when it travels abroad, out of the pollster's earshot, it praises American business as if it belonged to the NAM...
...The American Spectator November 1977 23 Raymond A. Bauer and Rikk Larson released a paper on "Trends in Public Expectations of Business...
...Western Union, he maintains, is incompetent with any message longer than ten words that doesn't end in "love...
...The art of Red Smith is half a century old and counting...
...Advice on "Management of Voluntary Welfare Agencies" appeared in 1964...
...Four days out of seven, however, Jimmy Breslin is kidding himself...
...There is, of course, some truth in these perceptions, but we always tend to be somewhat hysterical about the worst of our present conditions...
...In 1949, Harvard Business School Dean Donald K. David published the influential article, "Business Responsibility in an Uncertain World...
...Yes, the economy had its ups and downs, but their amplitudes in the last 25 years are remembered largely as having been muted, and their periodicity almost predictable...
...Deeply troubled," of course, is the key phrase...
...He sells a service...
...in ten years time the costs came to be viewed as a normal part of doing business—and business did pretty well...
...James Grant is an associate editor of Barron's Financial Weekly...
...The next year, with the presidential election primaries fueling the fires with reminders of "Engine Charlie" Wilson's spectacular gaffe about "What's good for General Motors is good for the country," GM cornered the largest share of car sales in American history...
...Americans on the whole are ambivalent, as always...
...Of course, this is not an imminent danger...
...The lopsided differences between the public and the activists help to explain why we have gotten so fast so many new laws and so much more prescriptive regulation of business when the public, though openly invited by pollsters to vent its suspicions, worries, and complaints about business, is remarkably complacent even after all these years of adversary journalism...
...Letters-to-the-editor columns reflected the public's displeasure at the treatment of these noble small businessmen by the giants on whom they depended, again, especially General Motors...
...Yet despite the new legislation, the new jurisprudence, and the continuing activism against business, it would be a mistake to conclude that America today is suffused with an anti-business fever...
...In 1973, Professor ----NUM8EK OFjriGURS-:: — CDOU WORKMAN AND AN INECROR WORKMAN IS BORN FRFF AND E9UAL -AND HAS f ME SAME W ACES • RATE OF WAGES-YOUR SCiNS CAN NOT _WORK TOT SHOP: YOU MUST SUSTAIN OUR UNIONS: —ANELDISCHARCI ANY MAN WHO NITT PAY UP HIS DUES - YOU MOST ENilo_DY IIO 1171/11,1 KELP...
...It wasn't so long ago that not even the SPCA paid any attention...
...While inflation is their number one concern, they are also deeply troubled by the perceived failure of companies, products, and services...
...Instead of five people suing for recovery or damages for themselves, one person could file in behalf of hundreds of thousands...
...There is a bunch of new kids—the "public interest" advocates—on the block...
...There were no systematic means for generating these data, and nobody outside the company knew how to do it...
...First, the new pollution-control technologies required expertise that was not available in the company...
...Simultaneously, and for other reasons, the old patronage system of ward politics has been replaced by media politics—with the media fighting furiously for their own patronage by catering to the sensational and the outrageous, to the faultfinders and the accusers—so the legislator who wants to stay one must respond to the moralizers who know how to get media attention...
...And before his death last summer, Professor Bauer and his colleague Dan H. Fenn, Jr., who spent years on the subject and wrote a book on The Corporate Social Audit (1972), were not yet ready to prescribe what a workable social audit should look like...
...For example, though only five percent of the business leaders and only 19 percent of the public thought consumerism should look into nuclear power plants, 61 percent of the activists did...
...We have substantially more federal legislation and controls, multiplied redundantly throughout the land by state and local legislation seeking even greater stringency for local conditions...
...Today, many think that for business in the 1950s, it was the good life at the club...
...The freezing ennui of the 1976 World Series was transformed by a sentence of Smith's: "Looking like something that had been in the water for days and days, the Yankees went down for the fourth time last night...
...Well-intended though it may be, the persistent demand for socially-responsible behavior is a dangerous call to convert the corporation, managed by persons educated in little else but business, into the 20th-century equivalent of the medieval Church, ministering to the whole of man and molding him and society in the image of the corporation's essentially and necessarily narrow ambitions and needs...
...Had this been done we would see the inherent distortion of the whole enterprise...
...Is taking action on this basis what "social responsibility" means...
...Professor Robert W. Ackerman of MIT has made a career of studying this problem...
...Yet the most profound changes have come through court action...
...In 1961, three years before "Bull" Connor put down the Birmingham civil-rights marches with fire hoses, snarling dogs, and cattle prods, and long before "Black" had replaced "Negro," the Review published Henry Allan Bullock's influential articles on "Consumer Motivations in Black and White...
...and Congressmen did Theodore Levitt is professor of business administration at Harvard...
...Full of years and honors, Smith still writes 3,000 words a week and says he would just as soon write 4,000...
...Should business have done less about the environment in 1969 than in 1965, only to have faced a steep demand for more the next year...
...Breslin called the pitcher a hero to a heroless city, ornament of the borough of Queens, and thus the most important man in all New York...
...Smith case that the New Jersey Superior Court upheld the right under common law of a manufacturing company to contribute funds to Princeton University...
...in 1971, nine did...
...5) If corporations come to believe that their long-run interests are served by their behaving, in some encompassing sense, socially responsibly—if they believe that what they are asked to do, and have tried for so long but with unpromising results to do, is not charity but in their own self-interest—then that much the worse...
...Few things characterize man's history so much as his persistent belief that he lives in the worst of times...
...It is quite another to seek by ever-expanding legislation, administration, and social pressure an 24 The American Spectator November 1977 unattainable goodness, an elimination of conflicts of interest, and in the process to risk destroying the pluralism that guarantees our liberties...
...But one goes too far to accuse it of Brobdingnagian insularity, insensitivity, or indifference...
...In the United States the active minorities are no longer limited to representatives of traditional business, labor, or farm interests...
...How desirable is it to have people who are in control of large pools of internally-generated capital, who have come up the hard way through the ranks as business achievers, and who often know very little else but business itself spend that capital on what they believe is socially desirable...
...Further, since we measure a company's success by its ability profitably to attract and hold solvent customers (who are generally prudent with their hard-earned cash), with how much confidence can we expect or should we ask the chief executive to dictate a different tune to his subordinates...
...Regarding corporate citizenship, persistent accusations of corporate indifference to social concerns, then and now, come largely from the utopian, the ignorant, and the unwise...
...3) In 1972, the Battelle Seattle Research Center published "Social Pressure and Business Actions...
...The monthly letter of The National City Bank of New York (now Citibank) complained that "critics, little concerned about being consistent, march out in all directions with their criticisms" of business...
...It was not until the 1953 landmark A.P...
...A purely administrative change in the Federal Rules of Civil Procedures in the mid-1960s precipitated an almost immediate flood of class-action suits...
...Of course, business has become much more governmentalized these last two decades...
...Conducted by Louis Harris and Associates and the Marketing Science Institute, it consisted of 1,510, eighty-minute personal interviews of a "representative national cross-section of adults" and of 500 members of "six leadership groups" in the nation...
...Some of the rashest words provoked by the trade of Tom Seaver to the Cincinnati Reds last summer were those of Jimmy Breslin, columnist for the New York News...
...These do not include Women's Wear Daily, which carried his stuff in the late sixties, between the demise of the New York The American Spectator November 1977 25...
...In September 1957, the president of the Prudential Insurance Company spoke somberly about "the cruel injustices" of inflation and its "threat to future prosperity...
...For if that is so, it puts much more apparent justification and impulse behind activities which are essentially bad for man, bad for society, and ultimately bad for the corporation itself...
...Prior to that, a "class," for judicial purposes, consisted of a group of people who affirmatively acted to belong to that class—say, a group of aggrieved shareholders of a mutual fund who hired a lawyer for recovery of losses on the grounds that the fund's management was negligent or fraudulent...
...A single shareholder of a mutual fund, or a single buyer of an allegedly faulty carburetor, or a single aggrieved minority employee of AT&T claiming systematic discrimination in promotional practices, or a single small-loan-company borrower claiming discrimination or usury, or a single rejected applicant for a home mortgage with a large savings association—any one of these individuals could now seek recovery of alleged prior financial damages in behalf of all persons similarly damaged...
...environmentalists (not yet so baptized officially) hiked the Appalachian Trail far, far away...
...2. "The Raw Materials Outlook" appeared in 1952, and "Population & Technology," in 1957...
...Business isn't what it used to be, and never was...
...When Evel Knievel announced last Christmas that he intended to soar above a pool of man-eating sharks in the glare of prime-time television, Smith made order of the chaos: The refined and discriminating taste of the American television viewer has been the subject of more than one treatise by students of behavioral science...
...All you need to do is watch what they do...
...The failure of the authors to compare or even to mention the two results in the same breath is instructive...
...This situation is reminiscent of the 1930s: The same bother, though with lower costs, attended the flood of New Deal legislation...
...Similarly, the Clean Air Act of 1970 imposed such heavy research, development, and investment costs on small gasoline and diesel engine manufacturers that only the larger ones with better access to credit and equity markets survived decently...
...The critics of business (and even some of its practitioners) want their own kind of utopian perfection without understanding the difficulties or considering the price...
...And the modern corporation will do a much more effective and efficient job than the Church: shades of the Corporate State...
...Because people know their money is hard to get, scarce, and transient, they buy from whoever offers the cheapest combination of what they want, regardless of the seller's social behavior...
...First, to the Congress itself, we are indebted for great piles of legislation to improve our health, safety, environment, and access to jobs, and to protect us against bad foods, bad medicines, and bad merchants: Meanwhile, the old agencies like the FTC, SEC, FPC, CAB, and FCC have become more feisty (only the ICC remains somnambulant), and the courts more precipitant...
...Third, how was the chief executive to know where the problem areas lay in the organization, what progress was being made to solve them, and how much this would cost...
...Ohmann, an executive of the Standard Oil Company of Ohio...
...Walter Reuther proposed to do something about it: cut car prices $100 across the board, which, according to his high-powered publicity campaign, the rapacious auto companies could easily afford...
...Second, who was to implement the chief executive's wishes...
...Yet, on only two of the 17 "concerns" they were asked about did more than half the respondents say they "worried a great deal" ("The high prices of many products" and "The high cost of medical and hospital care...
...In 1955, with very little else to seize upon, newspapers constantly made headlines out of lengthy congressional hearings airing the complaints of automobile dealers about the demanding and repressive practices of their suppliers, especially General Motors...
...The suddenness and inflexibility of the Environmental Protection Act and of the Occupational Safety and Health Act drove a lot of low-productionvolume steel foundries out of business...
...James Grant "Just A Newspaper Stiff" The art of Red Smith is half a century old and counting, and though life as a sportswriter is filled with temptation, Smith retains his innocence...
...evidently, this is because business leaders usually buy more of such services than the rest of the public...
...What the report did not do was compare these answers with those to its other questions...
...Some vanished altogether...
...Joseph P. Duggan lent a hand in the research for this article in St...
...And the results are always disquieting...
...and he wrote it himself, with the acknowledged encouragement of Dean Wallace B. Donham of the Harvard Graduate School of Business Administration...
...Ralph J. Cordiner, chairman of General Electric, did much the same in his 1956 book, New Frontiers for Professional Managers...
...The same applied to donations to help improve community education, health, recreation, and cultural facilities...
...Nor is it entirely clear that the idea of socially-responsible business behavior is itself a socially-desirable idea...
...Ever entrepreneurial, to sell more he publicizes its results...
...Offending legislators and regulators are accused of acting punitively or wrongheadedly in the service of admittedly good causes...
...Philip Murray was taking his steelworkers out on extended strikes...
...Where there's more smoke there's often less fire...
...Though a life in newspapers is filled with temptation—press agentry, bad fiction, and, at last, social security—Smith retains his innocence...
...Business today finds that it cannot adapt so easily and smoothly to such massive legislation and regulation...
...It showed the public's responses in 1966, 1971, and 1972 to a list of...
...Everybody at the Cincinnati Club is for a cleaner, sweeter-smelling river, though the mills and chemical plants upstream scream about unrealistic EPA standards and confiscatory compliance costs...
...In a 1974 article on "Putting Social Concerns Into Practice," he cites the case of the president of a $2 billion American corporation who sought to do something about the effects of its activities on the environment...
...Yogi Berra loiters in pen and ink and huntsmen harass a fox on the wall above Smith's typewriter, an Olympia manual...
...Occasional ritual sniffs at "concentration" in the steel industry and at the advertising artistry of hemorrhoid-remedy manufacturers confirmed their somnambulism...
...Now board members suddenly changed the procedures, took notes furiously, asked unseemly questions of management, talked more about "the interests of the stockholders" and "our liabilities as a corporation and as individuals" and "the reaction of the public...
...The results showed business leaders to be almost as much concerned about hospitals as the general public, and substantially more concerned about garage mechanics, home builders, and lawyers...
...Nor is it surprising, in light of these developments, that meetings of corporate boards of directors took a dramatic turn...
...Articles advocating "Opportunities for Women at the Administrative Level" appeared as early as 1953...
...A milestone in theatrical history was passed a couple of summers ago when thousands bought tickets for a closed-circuit TV show on the promise that if all went well, they would see Evel Knievel disemboweled on the rocks at the bottom of the Snake River Canyon...
...The Anti-Trust Division of the Justice Department was seeking to break up A&P into seven parts and Western Electric into three, and to make GE sell half of its lamp-producing capacity...
...But what constitutes socially-responsible business behavior in any given circumstances is not rationally determinable...
...4. In 1973, John Humble, director of the international consulting firm, Urwick Orr & Partners Ltd., described in detail how an organization might conduct a continuing audit of how it performs its social responsibilities (Social Responsibility Audit: A Management Tool for Survival...
...To be sure, there were a few officially regulated industries—interstate transportation, broadcasting, electric utilities, and the like—but the regulators were widely advertised, not entirely without justification, as being in the hip pockets of the regulatees...
...The concept of "blue collar blues" was anticipated in a 1952 article on "Man on the Assembly Line...
...Presumably, business controlled its internal affairs pretty much without outside intrusion, save for the labor unions who had, certainly by the 1960s, become moderately tractable, and in some cases active partners in fleecing the public...
...The established corporation has the unique power to create its own capital...
...Which in 1972...
...A pair of drumsticks lies on a table (Smith isn't sure where he got them...
...Many of the new laws thus represent the rule of multiple, noisy minorities...
...Talk to different businessmen at different times and you get different answers about what has affected them most...
...16 problems "businessmen and companies should give some leadership to...
...Still, there is both a quantitative and a qualitative difference between then and now...
...Even if that could be done, however, the structure of the modern corporation itself poses obstacles to effective socially-responsible business action...
...So, also, with the world of business...
...So the claim that there is a pervasive anti-business fever abroad in the land seems highly dubious...
...It doesn't make good copy...
...The public behaves rationally, and spends its money wisely, with its head not its headlines...
...qualified," "Eliminating religious prejudice," "Controlling crime," "Raising moral standards," "Reducing threat of war," and "Eliminating racial discrimination...
...the air smells of books and summer...
...But when it comes to buying from big established companies like their own (food manufacturers, car manufacturers), business leaders aren't nearly as concerned about "consumer protection...
...Louis...
...Finally, if the division managers were to focus attention on environmental issues, how would this affect their commitment to conventional performance measures, and how should their performance now be audited and measured...
...Though the legal staff might be able to monitor the rapidly changing regulations, it was in no position to make recommendations involving technical, financial, or operating decisions...
...All I ever wanted to be," he told the Pulitzer Prize people a couple of years ago, "was a newspaper stiff...
...3. Socially responsible big-business behavior requires a publicly-owned corporation to spend money for non-corporate purposes...
...They are worried about poor quality, dangerous products, misleading advertising and labeling, and the apparent lack of concern shown by companies for legitimate consumer interests...
...It's just a different kind of fire...
...Textile, steel, and electronics companies The American Spectator November 1977 21 want stronger "anti-dumping" enforcement against overseas importers...
...Smith's office in Connecticut is in a converted barn, set back from a winding, narrow road much frequented by Mercedes Benzes, and a white clapboard house, where he lives with his wife, Phyllis...
...2) Elsewhere, the idea of socially-responsible business behavior was much in currency, starting with business-sponsored seminars at the University of California and a whole spate of American Management Association colloquia...
...Enforcement agencies and courts are more vigorously active than in the 1930s, when the whole idea of administrative law was relatively new and when there were none of the numerous marauding social activists who these days coalesce behind every issue that surfaces in the public press...
...In both institutions and societies the active minority generally wins out over the inert or indifferent majority...
...Nor is the idea very well-defined...
...Subsequent SEC requirements for more detailed financial disclosures only confirmed what had already begun to happen...
...4) These are not unique problems...
...Consumer issues got a 22 percent response in 1965, 53 percent in 1967, 52 percent in 1969, 31 percent in 1970, and 21 percent in 1971...
...Last spring there appeared a long-winded study called Consumerism at the Crossroads...
...The SEC hadn't been heard from since William 0. Douglas left to put on his judicial robes in 1939...
...If people are "deeply troubled" as consumers, why does this issue get only eight percent of the action...
...Understandably, this makes them less indifferent...
...judges (men of property to the core) were strictly strict constructionists...
...Nearly 80 percent of Fortune magazine's list of the 500 largest American manufacturing firms are organized on a decentralized division basis...
Vol. 11 • November 1977 • No. 1
