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Friday, May 19, 2006

Individual motivation and corporate behaviour.


1

14 May 2006

Individual motivation and corporate behaviour.

One of the functions of words is to capture concepts, such as a series of causes and effects or a set of things or experiences, into a single linguistic expression. Thus the word, ‘personal computer,’ and I take noun groups to be a word as well, represents a whole series of objects and causes and effects that it would be inefficient and impractical to describe all of them every time we wanted to refer to this machine. Hence, ‘personal computer’ is a better and efficient way of referring about this machine.

A language that has an efficient method of naming things must, by implication, be an efficient language. This, of course, does not imply that the users of such a language use it efficiently. Nor does it mean that those who use this language won't unintentionally misuse the language. It just means that used properly, an efficient language would help us communicate better.

The word and concept ‘corporate’ is very prone to this unintentional misuse of meaning. By corporate I mean a limited type of company, including PLC's, Corporations, S.A.'s, Gmbh and so forth. I want, however, to exclude partnerships, unlimited partnerships, freelancers, and those who are professional self employed. This is just to keep things simple. So how do we misuse the word corporate?

Let's start by doing some blaming and shaming first. The media has a lot to answer for on this matter. Generally speaking, we have the impression that a company is something that is an independent entity in its own right. Of course, it is, but not in the everyday sense of what we mean by independent entity. Only in the legal sense of entity. The problem with this is that not everyone is up to date with legal matters. But we do not need to go that far since abstraction is also something we are able to do on our daily life. Furthermore, we use the word company without thinking about the difference between what is a normal everyday context and what is a special predefined context within a legal system.

As a consequence, we might use the term company in the everyday sense but refer to attributes that belong to a legal context. This might lead us to expect things from a company which might be impossible to obtain, and, on the other hand, the company might exploit to its own advantage our misunderstanding or ignorance about the difference.

To put this difference in context I will use the following three illustrations. Whenever we go shopping, say to a department store or an equally big establishment, we are greeted and served by a person. Depending on what we are buying we are either served by a shop assistant or a sales person. When we are looking for something to buy, we usually deal with an individual, an identifiable person. For all intents and purposes this person is the company in our mind. Of course, with on-line commerce and telesales business transactions are becoming less personal and more anonymous. But for the time being most people still do their shopping the old fashioned way: i.e. eye-balling a sales person.

However, should we have a problem with the goods we buy from this shop we find ourselves dealing with anonymous people who usually speak in terms of the company rather than individual or personal responsibility. Usually, they use expressions such as, ''it is not company policy .....,'' or ''our company policy is......,'' or '' department x deals with that.......'' In other words, the individual that in our mind was the company when we were buying the goods or services, has now become a department, a company policy or an operator in a call centre.

An other example is from the sphere of employment. In our day to day performance of our duties at work, we deal with individuals such as our bosses or colleagues. We have to adapt our work habits to accommodate the foibles of these identifiable individuals. In most cases we use first names to refer to each other and experience the effects of their high and low days. Sometimes, we help them out and sometimes they help us out with our work. However, when we need something from our employer, for example special holiday leave, or promotion or whatever, we are immediately referred to company policy or company procedure. We are immediately told by our bosses that it all depends of what the company thinks. In other words, the company stops being our colleagues and becomes a human resources department or a company policy.

The third example comes from a public relations context. When a company is promoting a new product launch or embarking on public relations campaign, we usually hear from all quarters of the company. Satisfied customers, satisfied employees and if that was not enough, the company is also endorsed by some famous personality. On the other hand, when the company is faced with a public relations disaster, we usually see presidents or chairmen, apologising and pr spokespeople explaining what happened. In other words, what was once a convivial relationships becomes an official affair.

This duality (individual person vs institutional entity) relationship we have with companies can lead to some serious misunderstandings to say the least. Just because we deal with an individual, when trying to buy something from a department store, it does not mean that that individual has the means to meet all or most of our demands. For example, if I want a domestic appliance in blue, the sales person depends on the supplier making domestic appliances in blue. He or she also depends on the imagination of the management to stock domestic appliances in blue, in the first place. And imagination is not sometime one can accuse some shops of exercising or possessing. In other, if we think we are being treated badly by the sales assistant, he or she might be in a worse position.

Of course, customer services have improved a great deal these past score years or so, nevertheless, there is always the nagging feeling that complaining to a company or just simply making an enquiry about one’s purchase is an up hill task. The impersonality of the company is used to effectively filter out complaints or discourage complaints in the first place. Serious companies realise that the customer service department offers good opportunities to maintain customer loyalty and some companies do put some effort on this side of their business.

I submit that this duality of meaning to what we understand by the word company or how we use the word company, is fundamental to the kind of relationship individuals and companies have between them. However, the word company is still an efficient word to use in a neutral context or even as a good identifier, say, between customer and supplier.

When we speak of individual motivation we have to limit this to the context of our relationships with companies. What motivates me to keep a pet gerbil is different from what motivates me to buy a certain pet food brand for my gerbil. Of course, companies are very good at figuring out what motivates individuals in the market place. And those that make a bad job of it will soon go out of business.

One of the reasons why some companies are very good at figuring out what we want, or what motivates us to want their products, is because most of us behave in a predictable way when deciding a course of action in a given situation. Companies have enough information about the market place to know a certain type of person would buy a certain type of product or product with given features. Darwinianism will take care of those companies that get it wrong, and for those who get it right, the number game is king. Our predictability serves companies very well when marketing and selling goods to us. But our predictability can also serve companies in a different way.

Knowing how clients and other stake holders will react to a given policy or business plan means that companies know what kind of behaviour they can indulge in. In other words, knowing what motivates individuals helps companies know what they can get away with.

When we speak of corporate behaviour, we immediately start to think of bad behaviour. There is no reason why this should be the case, but it is. For my purposes I want to focus on two types of bad behaviour: bad behaviour that affects customers and bad behaviour that affects the community in general. I won't therefore be considering such things as tax or stock exchange irregularities. It's not that these do not affect us, but that they would complicate our task at hand.

although the impression we have about corporations is that they are out to make the maximum possible profits whatever it takes, reality is more complex than that. Companies can get away with a lot of things, but they do not get away with everything. There are two celebrated cases that illustrate the limits beyond which companies did not get away with.

The first case is about a big chain of high street shops (Ratner) that sold jewellery in Britain in the 1980’s. They were quite successful except one day the chairman-owner of the business described his products as ‘crap’. The company soon went out of business after this unbelievable confession. The importance of this case for us is that, in general, people do not like to be cheated. Telling them that your goods are crap does not exactly help your cause, but that’s a minor detail.

The second case is the Nike story from a few years ago. They were accused of exploiting child labour in Pakistan. The details are not important for us, but what is important is that after the story appeared the company had a big public relations disaster on their hands. They had to do something fast to stop customers deserting the brand. In general, people do not relate well to prima facie injustices.

Notice how these two examples also illustrate the duality I talked about: in the one case, the chairman represented the company and in the second example people identified the brand (company) as the one doing the exploiting.

It is time to bring the individual and the company together. Whether it is a blessing or a curse, our ability to abstract concepts from the world around us affects how we interact with each other and the world round us. I suggest that as long as we are operating in an abstract mode we are prone to becoming desensitised to unacceptable corporate behaviour. Or any unacceptable behaviour, for that matter, by governments, religions, football teams, employers and so on. However, once we see pictures of children stitching trainers we stand a good chance of waking up to the injustice. And once we hear the chairman telling us that his products are crap, we stand a good chance of realising how gullible we have been.

What this tells us is that once we have enough information and knowledge about a situation not only our perspective on that situation changes, but maybe also our motivation. In effect this confirms how important information and knowledge are to us. Of course this is the first place companies, as institutions, have the advantage over us: they have control over the information and knowledge of what they do and how they do it. but for information to make sense, not only do we need to have the right sort of information, but we also need to know how to interpret it.

Today, after Enron and after many other numerous financial scandals the authorities saw fit to pile discloser legislation over even more discloser legislation. But how does all this bureaucracy help companies with their mission statement? Are we better off at knowing whether we are being sold crap or whether we are being exploited?

There might be something even more basic than information that could affect individuals and corporations. I seriously believe that we have to examine the issue of duality even closer. Dualism, as we all know, is an important issue in metaphysics. The question we have to ask ourselves is how justified are we in considering a corporation as an institution? Of course, I realise that this question is the closest one can get to blasphemy in business, but like metaphysical dualism we can cope with that.

The argument is that there is nothing in a company other than people. The idea that a company is somehow something different from the people that work there is just that: an idea in our mind. I realise that it is not as simple as that. For example, one of the issues we have to account for is the fact that the dynamics of a group of people working in unison is different than what they would do as individuals. However, just because group dynamics is different than individual dynamics, it does not mean that somehow this group is different than a human beings. Just because this group of human being are together it does not make them something other than human beings. We don’t usually think of a hundred holy men or women as something different from just that, a hindered individuals.

I would say, therefore, that once we scratch the surface, what we call corporate behaviour is none other than individual behaviour, and what is individual motivation is none other than corporate motivation. The question is can we get rid of the distorting effect of dualism? And how long will it take society to get rid of dualism in business life?

Take care

Lawrence

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