What is Corporate Responsibility?

When money gets tight you will see what a company truly believes. Chris Argyris, an Organizational Theorist, discusses the difference between espoused belief versus what he calls theories-in-use. The espoused beliefs are those that corporations say they hold, while theories-in-use are the actions a corporation will take in times of duress that reflect what is actual belief.

Let’s say a company states that people are its most important asset. That is an espoused value. However, lets say this company begins a campaign to eliminate all of its workers that are 50 and older, which is illegal, but will lower wage cost. The company’s theory-in-use is quite a bit different then what its says it holds dear. The goal of most companies would be, hopefully, to hold these two sets of belief in congruency.

What got me thinking about this was an article in Business Week called: Amazon Crusader. Corporate Pest. Fraud? It is an article that describes an attorney names Steven Donzinger who won an $18 billion pollution verdict against Chevron in Ecuador. Chevron stated they would fight this verdict until hell freezes over. Then fight it on the ice.

One of the tactics Chevron has chosen to use in this fight is to question the motives of Steven Donzinger. Chevron’s defensive actions are called the Donzinger Defense. Chevron lawyers are using a negative smear campaign attacking the character of Donzinger. Although some lawyers may believe facts do not exist, there are facts that should be discussed in this case.
Where does Chevron’s responsibility end? Chevron’s contention is that another company, Texaco, had already cleaned up any pollution in Ecuador, and the government of Ecuador and Petroecuador is now responsible for the current situation. Thus the battle.

When I first read this I was appalled at the tactic the Chevron lawyers were using. Forget the facts lets just crucify the messenger. However, I have thought long and hard about this. This lawsuit represents globalization. It reflects the reality of doing business internationally. There are responsibilities and risks. Thinking that you can expand overseas while racing to the bottom is not an option anymore. Corporations need a business model that is sustainable. Those corporations that navigate successfully through the morass of international politics will need solid values, absolutes if you will, to maintain their direction. These absolutes will keep them moving in a true north direction.

And that is my thought for the day!


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