Corporate Manifesto

Corpocracy Manifesto

James R. Fisher, Jr., Ph.D.
© November 2004


Nothing destroys authority so much as the unequal and
untimely interchange of power, pressed too far and
relaxed too much.

Francis Bacon (1561-1626), English philosopher

Justice without power is inefficient; power without justice
is tyranny. Justice without power is opposed, because there
are always wicked men. Power without justice is soon
questioned. Justice and power must therefore be brought
together, so that whatever is just may be powerful, and
whatever is powerful may be just.

Blaise Pascal (1623-1662), French philosopher

I am not a writer that “writes to please,” but to inform, and
(hopefully) to gain the attention and move the power brokers
of business, government and the professions to see things
more clearly.

James R. Fisher, Jr., author of this article


The American Disease

The “American Disease” of the complex organization is corpocracy. Many organizations suffer from this, but few realize it. They are too close to the problem.

Corpocracy is characterized by management being insensitive to the demands of employees, fixatedly involved in corporate politics at the expense of productivity, secretive to the point of paranoia, obsessed with planning at the expense of strategy, committed to endless meetings at the expense of timely decision making, governed by an internal focus at the expense of potential markets, short-term oriented because CEOs want to put the best face on their short-term watch, led by monolithic determinism at the expense of pluralistic initiatives, designed spatially to separate administration from operations, and covertly hostile to innovation while overtly praising it.


Corpocracy is prominent in government as well. We see it in the proposed power shift in the collection of intelligence, separate from the control of the Department of Defense.

We see it surfacing when a great pharmaceutical company becomes enmeshed in a controversy over a specific drug. Merck’s Vioxx has become the talisman of suspicion. An approved FDA painkiller, Vioxx is now alleged to be also killing people with histories of cardiovascular problems. Corpocracy is surfacing with such questions as when did Merck know Vioxx’s had dangerous side effects; why were studies initiated then dropped?

You see the pattern here. Suddenly, a well-intentioned company has its reputation sullied because somewhere along the line corpocracy blocked expeditious and prudent action. It happens so frequently that it has become endemic to American corporate business.

Corpocracy can turn moral executives into amoral practitioners, not because they no longer care, but because they are inured to the long-term consequences of their short-term decisions. No amount of rationale will satisfy a carnivorous ubiquitous media that senses failure wherever or whenever it may occur. It is rare to see a CEO embrace rather than run from the fray as is the case with Merck’s CEO. From the discipline of organizational development (OD), this is not only courageous but correct confrontation of a problem, and the antithesis of corpocracy.

The American disease has proven evident in the duplicitous operations of Enron, Viacom, WorldCom, and now Boeing and Neutraceutical Clinical Laboratories International, Inc. The SEC has filed a lawsuit against Nutraceutical for stock manipulation; while Boeing’s former CFO has pleaded guilty to a scam to gain a $23 billion contract to provide new refueling tankers to the Air Force. He hired an Air Force procurement officer handling the bids to a six figure executive position.

People in positions of power and trust are accused daily of scams, inside trading, stock manipulation, unsecured loans, and outright fraud. Despite being in a country in which you are innocent until proven guilty of any crime, corporations and executives are tried, judged, and sentenced in the media long before they have their day in court. Why is that?






This thing called “Control”!

Few would argue there is a shift in control. The most blatant evidence is from position power to knowledge power, from management to professional workers who are motivated to push the envelope of ideas. Peter Drucker has observed the first half of the twentieth century displayed surprising management restrain in awarding itself for success. This has changed in the second half of the twentieth century as control shifted to workers from managers.

The result has not only been chaos but confusion. It has spawned leaderless leadership and dissonant workers, where seldom are workers and managers on the same page, much less getting off on the same dime.1

Meanwhile, top executive compensation continues to grow to now being as high as 300 times that of the average American worker. What is unsettling about this disparity is that while the American worker’s compensation is tied to productivity, this is not always the case with CEOs. Drucker writes:

In the current version of business ethics in the United States, one side has all the obligations and the other side all the entitlements. This is compatible neither with the ethics of interdependence nor with a universal code of ethics. It corrodes the bond of trust that ties superior to subordinate.2

With corpocracy, the stock market has been allowed to become the arbiter of corporate destiny. This is a short-term perspective that is intolerable and destined to fail in the long run. It is the equivalent of playing a virtual reality game with a company’s destiny rather than being focused on the hard and exacting work of honest employment.

Greed is not new. What is relatively new is contempt for workers. Corpocracy as greed equates power to satisfy its will with impunity. Corpocracy as contempt for workers puts profits before their interests, failing to realize without people there are no profits.

Porter Goss, the new CIA director, has only been head of the agency a short time, yet the agency is in near total collapse due, in the main, to the imposition of his management style and “house cleaning” technique. He claims quite proudly, “I don’t do personnel,” as if he were a housecleaner who says, “I don’t do windows.”

As you can see, corpocracy is not interested in leading people but in managing things. People are meant to behave as things to be managed. People, as Porter Goss has confessed quite blatantly, are an irritant. Yet, top CIA operatives and directors are resigning, morale is low, directives are confusing, and this at a time when the agency represents the critical mass to deal with the terrorist threat.

Not so many years ago the top ten CEOs of tobacco companies appeared before the U. S. Congress. A congressional panel asked each of them if cigarette smoking was harmful to the health of cigarette smokers. They, to the man, said it was not. Again, to the man, they denied damning research evidence to the contrary, and categorically denied second hand smoke was in anyway harmful to nonsmokers. Moreover, they claimed, to the man, that there was no evidence of a causal relationship to hundreds of thousands of deaths of smokers due to lung and thoracic cancer, heart disease, colon cancer, and many other complex aliments. Five million people died from cigarette smoking in 2000.

In most recent times, a number of conglomerates have used this stonewalling tactic to delay the impact of their critics rather than energizing their employees to come up with alternatives to secure company survival. Instead, corpocracy has led to a mania for merging with unintended consequences.


When Getting Fired is Economic Holocaust

There is always a danger when discussing sensitive issues that the readers you desire to engage stop reading. I hope this is not the case as I discuss Safeway and Wal-Mart. The Safeway leverage buyout (LBO) was done because it could. Wal-Mart has led the charge as we go from a manufacturing to a retail society. Corpocracy surely is involved in each instance, and were it not, problems we are experiencing would surely diminish if not vanish.

The leverage buyout (LBO) of this chain epitomized a new level of profits before people.
Working in a food chain used to give workers a sense of security as people had to eat. Safeway’s longtime motto was emphatic: Safeway offers security! After the LBO, management changed Safeway’s motto to: Targeted returns on current investment! The company philosophy went from people before profits to profits before people, while employees went from being people respected to things to be managed or discarded.3

More than 63,000 managers and workers were cut loose from Safeway Stores through store closings, sales, or layoffs. Workers, when they finally found work again in the grocery industry, went from an average of $12 to $4 per hour (1986 timeframe). Many lost their homes, went through divorces, developed serious illnesses, had to file for bankruptcy, or died; a few attempted suicide, some successfully.

The majority, however, took their misfortune on the chin without complaint as they watched three investment banks gobble up the cash. These banks received a total of $65 million (1986 dollars), with law and accounting firms sharing another $25 million. Peter Mogowan, CEO of Safeway, along with other Safeway directors and executives received $28 million for their company stock. Mogowan, alone, received $5.7 million for his part in the LBO. He and sixty other Safeway executives also received options to buy a total of ten percent of the new Safeway stock at $2 (1986) per share. In 1996, this amounted to another $200 million as the stock had risen to $25 per share.

Meanwhile, corporate raiders Herbert and Robert Haft managed to make $100 million by selling their Safeway shares to Kohlberg Kravis Roberts & Co. (KKR), the LBO specialists, who managed the reorganization. Incidentally, KKR charged Safeway $60 million in fees just to put the deal together.

Everybody made money, and continued to make money as the buyout group aggressively sold assets and consolidated profits, all at the expense of the long-term, loyal, and dedicated employees who remained out in the cold.

Safeway was an economic pogrom for these 63,000 managers and workers, no less psychologically damaging than survivors of the World War Two Holocaust.

* * *
If this seems wide of the mark, consider Wal-Mart that sells cheap because 80 percent of its suppliers are based in China, where many workers are paid 50 cents an hour or less. The irony is that these are mainly American companies forced to move there to compete. There are now literally hundreds of suits against Wal-Mart by blue-collar employees for discriminating practices. Few managers and executives have shown the inclination to take on the company. The fact is Wal-Mart has departed from the vision of its founder, Sam Walton, as the world has changed and America with it.

Walton’s philosophy was to have a store of diverse affordable merchandise in small communities that otherwise lacked such accessibility. Today, Wal-Mart has a computer tracking system that not only logs the history of every item in every Wal-Mart store in the world, but also tracks the size of that item and the day and hour of the week it sells best. Wal-Mart is not only driving mom-and-pop operations out of business, but it sells more toys than giant ToysRus, more jewelry than any giant retailer, is the third largest pharmaceutical company in the United States, and soon will challenge the largest food supermarket chains in the country for dominance. It is even thinking of competing with Penny’s, Target and other clothing retailers.

We all like a bargain. Who doesn’t like a $4 t-shirt or a $29.87 microwave oven? But is this good for the country when hundreds of thousands of workers lose their livelihood, if not directly, indirectly by their employers not able to compete?4

There are many international air lines in trouble with pilots and flight attendants, mechanics and service personnel being asked to take anywhere from 15 to 33 percent pay and benefit cuts in order to stay employed. Corporate executives blame the possibility of going belly up on deregulation, escalation in the price of crude oil, and international terrorism. Nowhere is there any acknowledgment to possible corporate malfeasance, mismanagement, or leaderless leadership. With corpocracy, there is never anticipation but always reaction, and usually this occurs too little and too late.


Soul & Substance of the Future

Professional workers have become the soul and substance of the organization. They are the organization! The only problem is that they think like children and not like adults. To mold the future to them as they now are would be madness. Why is that? And why are professional workers the future?

Just as we are moving from a manufacturing to a retail economy, we are moving from making products to providing services and disseminating information to the rest of the world. The world has become one large corporation. Professional workers hold all the keys to this because knowledge is power, and power controls commerce. They are the leadership of our technocratic society.

Throughout history without exception the possessors of pristine knowledge ruled the ignorant. Knowledge has always possessed the tools of power. Power has always exercised control, and control has always been a manifestation of the will of the powerful. That said we come to our present conundrum.

Professionals, owners of knowledge power, continue to fail to demonstrate the will to power, which is to lead. They continue to relinquish this power to managers, caretakers of position power, who don’t know how to lead because they do not know the way. Position power is anachronistic as managers are atavistic.

Corpocracy has been driven so deeply into the soul that professionals are incapable of appreciating much less managing their destiny. They wait for instructions like the dependent children corpocracy has programmed them to be, suspended in terminal adolescence with the mindset of the dependent twelve-year-old child. Most workers have been programmed to be polite, obedient, obsequious, conforming, submissive, passive, non-threatening, cooperative, compliant, dutiful, punctual, appreciative, non-rebellious, trustworthy, loyal, non-confrontational, honorable, predictable, and reactive, in other words, interchangeable parts in the god of the machine.

Now that that god is dead they want authority without responsibility; affluence without risks; freedom without accountability; success without failure; pleasure without pain, privilege without obligation; growth without anxiety; esteem without embarrassment; good without evil; status without struggle.

As gloomy as this picture is, professional workers have no choice but to grow up and become mature adults facing the world as it is. This means they cannot continue to treat life and work as a virtual reality television game show.

Overcoming Corpocracy

For professional workers to take hold of their power, they must:

(1) Overcome their counterproductive culture. This means protesting frequently and politely rather infrequently and violently when wrongs are experienced.
(2) Deal with the Achilles' heel of traditional education. School is mainly a factory that programs students to be compliant tools to a mechanistic society.
(3) Overcome their passive conditioning. Sheltered in presumed powerlessness, they bring problems not solutions to their bosses, complaints not adjustments to things beyond their control.
(4) Become consultants to leadership because they are not ready nor mature enough to assume leadership. This is mentoring in reverse.
(5) Think as both leaders and followers, taking and giving orders, making decisions and carrying them out; being focused on what is wrong and what can be done about it, avoiding the stormy arguments of who is wrong.
(6) Learn to deal with dread. Some leaders embrace fear and ride it to control; others run from it with reckless abandon. Both fight and flight exist in the heart of every man. Professionals should take note of this and deal accordingly.
(7) Understand the spiritual nature of organization. A company is not simply bricks and mortar. Nor is it only people and jobs, products and services, but a living thing with a soul held together by its collective will.
(8) Appreciate that damage to one part damages all. Nor can any part succeed at the expense of another. System researcher Russell Ackoff expresses this poetically:

If you take a system apart to identify all its components, and then operate those components in such a way that every component behaves as well as it possibly can, there is one thing of which you can be certain. The system as a whole will not behave as well as it can. Now that is counterintuitive to Machine Age thinking, but it is absolutely essential to systems thinking. The corollary to this is that if you have a system that is behaving as well as it can, none of its parts will be.5

In this scientific age, it is so easy to discount this. Yet, an organization has a psychology, and when people enter it, they adapt to that psychology, are badgered by it, or leave. An organization also needs a philosophy, not simply a chart of values, but a reason to commit.

What is missing in corpocracy is continuity between people, pervading trust, the sharing of a common soul, and a synergistic drive to a common goal. An organization’s wellness recognizes everyone is a leader and a follower, and that there is no rigid formula in the daily dynamic of organizational life. Corpocracy believes there is, which is the reason it is dead but not yet buried.




A brief biography of the author:

James R. Fisher, Jr., Ph.D. is a specialist in organizational development psychology or OD. The client in OD is not the individual as with the clinical psychologist, but the organization. Dr. Fisher’s working life has been dedicated to identify chronic behavioral problems that prevent organizations from realizing their collective goals. His background has been an iterative process building to this acumen. Trained first as a chemist, he started out in R&D for Standard Brands, Inc.; then joined Nalco Chemical Company as a chemical sales engineer, rising to a corporate executive. His corporate work with Nalco took him to South America, Europe and South Africa. In South Africa, he facilitated the formation of a new conglomerate. After attaining his Ph.D., he did OD consulting work across the United States in both the public and private sector. He also was an adjunct professor to several universities and colleges. Later, he joined Honeywell, Inc. as an OD psychologist creating an educational program in technical education, which became a university-on-campus. He also worked at MIT with its designers at its Charles Stark Draper Laboratories in liaison with Honeywell’s production workers in Clearwater, Florida. Later, when Honeywell Europe, Ltd. was converting its European facilities to be in sync with the EEC, he was promoted to director of human resources planning and development for Honeywell Europe, working out of Brussels, Belgium. He is author of eight books in the genre of OD and more than 300 published articles. He may be reached at this email address: TheDeltaGprFL@cs.com
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