Over the past week, the new
CEO of General Motors, Mary Barra, has been in Congress. Unlike most occasions
on which a CEO goes to Congress, she is not there to lobby for lighter
regulations or to ask for a bail out because of the financial crisis. Instead,
she is having to explain to Representatives and Senators why the company did
not recall a large number of cars that have since been show to have potentially
fatal safety faults. Barra (and it should be noted that she was not in charge
when these events occurred) has not really had an answer beyond trying to
deflect the blame away from any individual person. Essentially, her argument is
that the right information never made its way up to the C-suite, and therefore
the executives at GM could not be expected to act.
As the American website
Gawker has argued, this seems to be a direct blow against the 'myth of the CEO'
– the idea that corporate executives are supernaturally talented people whose
work fully merits the multi-million dollar salaries they receive. CEOs are
supposedly paid all of this money because of their leadership and their ability
to make tough and correct decision. As the Barra testimony shows, they're
mostly leading in the dark and making decisions without the correct
information.
This isn't necessarily to
say that CEOs are bad at leadership – it's something they have been trained in,
and have probably shown some talent for at lower levels. But today's
corporations are a totally different proposition from most management roles.
They are behemoths, enormous entities with turnovers the size of many nation
states' GDPs. They are incredibly complicated logistical operations, with
branches across the globe, hundreds if not thousands of lower managerial roles,
an equally large number of chains of command through which information must
travel, and hundreds of millions of variables, any one of which could go wrong
at any time and create a situation like the one Barra now faces. Basically, the
modern corporation is too big to assume that any small group of directors can
effectively lead it – even if they are being paid millions.
Although there is a general
trend towards 'bigness' in the corporate world, we would actually very much
benefit from having smaller companies rather than larger ones. A smaller
company that was more focused on its core business would have noticed the flaws
in their cars sooner, and would have been able to communicate the problem more
quickly. But smaller businesses are often better for us in other ways too –
they are likely to be more concerned with ensuring jobs stay in the local
community, to be more environmentally friendly, to be fairer to their workers
and to provide better pay and benefits. Generally speaking, they are less
likely to see profit as the only benchmark of success, as the companies of
corporate America do. A company with this 'small is beautiful' mindset would be
less likely to see worker deaths and injuries, less likely to send out faulty
cars, and less likely to encourage the inequality of wealth that America
currently suffers from.
To this end, it might be
time to start arguing for new corporation laws and regulations to limit the
overall size of businesses and to encourage the rise of medium- and small-scale
businesses that can better bring some humanity back to the world of work and
make things fairer for employees. Legislation that encourages worker-owned
cooperatives would be even better – as such businesses inevitably have the
interests of the poorer workers at their heart – although it may be some time
until we see such a thing in the US. Either way, as the case of GM shows, it's
time for the corporate giants that have dominated America for so long to be
brought down in favor of a new model of business.
corporate giants, General motors, Marry Barra, financial crisis, C-suite, GDP, management roles, logistical operations, environmentally friendly
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