Wednesday, 10 January 2007

Corporate social responsibility

The Age had an interesting article about declining sales of Australian produced cars. Due to some incompentent management decisions (neglecting the fact that more Australians favor more economical and fuel-efficient cars) their sales plummeted, and now they ask to
pump an extra $1 billion into the car industry.


In 2006, the same car manufacturers axed 1000 jobs, which equals to one million dollar as bonus from the government for each slashed job. Somehow, this begging for money from the government for multinational corporations doesn't fit IMHO into the idea of free markets, a credo propagated by the Liberal Party.

On the other hand, a lot of education instutions suffer from under-funding. And as neither Holden, Ford or Toyota are Australian companies, I wonder why the government should even consider bailing out this companies, who drove themselves into problems.

A billion dollars invested in the education system might help growing an educated workforce, which isn't as much distracted from the market reality as the management of these companies obviously is.

How free is the Australian market, and can subsidies for multinational companies really do any good for Australians? There are certainly markets, where home-made products could be sold worldwide, like environmental friendly technologies that reduce CO2 emissions or alternative energy generating technologies.

But those emerging markets don't have the same lobbying power as established industries. And probably will never have, as they don't follow the paradigm of one size (of gas-guzzling status enhancing vehicles) fits all, but require providing solution that fit into local conditions.

Does corporate social responsibility mean the government has to reward incompetent managers of non-Australian (ie multi-national) companies for slashing 1,000 jobs?

1 comment:

boy_fromOz said...

I thought we'd thrashed out the 'corporate social responsibility' thing over at Jeremy's blog. There's a basic tension in delegating policy to entities that exist to enrich shareholders (often not even them, these days). We shouldn't expect social outcomes from corporations beyond the classic invisible hand - relying on the flow-on effects of their activity to float other boats, enlarge the pie or whatever gratifying metaphor you prefer