Corporations are not like people and don’t act the way that people do, and the most stark distinction you can make in this regard is that corporations lack a conscience. It is almost impossible for a corporation to recognize that an action it has decided to take in pursuit of its short-term interests might be evil or harmful in some other sense. It is important to note that this is not a deficiency in an individual corporation, but part of the nature of all corporations.
One of the best illustrations of this can be found in this PBS News Hour story:
The story is slightly worse than you might think from the headline. It is not that colleges aggressively recruit large numbers of students knowing they will have to choose only a small fraction of applicants to admit. The more pointed problem is that colleges spend enormous sums of money to pester and harass specific high school seniors to get them to apply to the college. The college does this specifically for students who they already know won’t be admitted to the college if they do apply. A college may specifically target a list of tens of thousands of high school seniors, carefully selected to be ineligible for admission. For this to work, recruiters and recruiting materials have to actively mislead the students to make them believe they have a chance of being admitted, a chance that the college knows isn’t there. The college is just chasing numbers; it is oblivious to the way its actions are affecting the lives of real people. It is the elite universities that do this the most because they can most easily absorb the cost, which runs into millions of dollars.
Why do colleges do this? It is to build their brand. The more applicants a college turns down, the more “selective” it can claim to be. But viewed from the outside, this is no more ethical than lining up a dozen dates for the prom, when you have no intention of attending the event at all. Obviously, a person who did this would ruin their reputation quickly. But we cannot hold corporations or colleges to the same standards of conduct that we hold people to.
Obviously, each of the people who work for a college has an individual conscience, but the college can get around this by splitting up the admissions department, so that the people who do recruiting are not the same people who decide which applicants get admitted. This way, the people in one office can say with a straight face, “We want you here,” while the people in the next office over, four months later, are the ones who say, “Get lost!” This process of division of labor is the same one any corporation uses to avoid having any individual conscience turn into a semblance of a corporate conscience.
There is another headline this week that shows a corporation acting with what at first might look like a conscience. Marriott last year got caught red-handed jamming radio frequencies to prevent its customers from using wi-fi in or near its facilities. It did what any unrepentant corporate criminal would do in the same circumstances: it petitioned the government to change the law so that its radio-frequency jamming would be legal. This week it had second thoughts about this and withdrew its petition, saying publicly it now believes its customers will be better off if permitted to use wi-fi. This story at CNNMoney:
A corporation with a conscience? Well, not exactly. The hotel chain acted only after it had been lampooned in the media and its reputation had taken a measurable hit. Marriott is a corporation that realizes it has a reputation, and that is a good thing, but it is not really the same as having a conscience. To demonstrate this distinction, Marriott may be withdrawing its petition to have its radio-jamming activities legalized, but it is continuing to press its case, now asking the FCC to “clarify” situations in which it can ignore the ban on radio jamming. That pretty well fits the picture of “unrepentant.”
Corporations may not have consciences, but they do understand the law, eventually if not immediately. This is why it is so important for the law to hold corporations to higher standards than it holds individuals to. Law must step in and fill the gap where conscience is absent.
