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The Corporation According to Jon

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The Corporation v Small Businesses

The Corporation is a nasty old institution. They only care about profit maximization with any other concerns being secondary. With all the negative things the Corporation does, there are many advantages to working for one. Working for a corporation generally means that you will never have to interact with the owners of the company. There is a managerial hierarchy that creates a separation from managers and profit. The managers are generally concerned about things other than exactly how each worker is performing. Working for a small business where the owner is constantly breathing down your back is less preferable to a manager. Managers do not have a large vested interest in the company when an owner definitely does and this causes them to be much more controlling than a manager. Corporations, because they are so large, normally are able to offer employment to many more diverse groups of people. Corporations have more assets to train unskilled labor where a smaller company may only want to employ skilled labor. Corporations have many benefits to work for, but small privately owned businesses offer advantages as well.

Working for a large corporation it can be difficult to get noticed. Promotions and raises can sometimes be very hard to come by. Target Corporation gives $0.05 - $0.10 raises every year to their cashiers and floor staff. A $0.05 raise over the course of a year does not cover cost of living increases. When working directly with the owner of the company, employees can be more easily noticed.

The Corporation

Corporation is defined by the OED as “A body corporate legally authorized to act as a single individual; an artificial person created by royal charter, prescription, or act of the legislature, and having authority to preserve certain rights in perpetual succession”. This definition is a very, complex and wordy definition. Essentially a corporation is a business that is recognized and supported by the state and has the legal rights of a natural person. A natural person is a human being, as opposed to an artificial legal person. A corporation’s main function is profit. Profit without regard for the cause and effect. Soon after the Civil War and ratification of the 14th amendment, corporate lawyers claimed that they should be treated as a person and thus earned the rights of a person, e.g. the ability to own property, buy other businesses, sue and be sued.

Corporations are protected by government and financed by banks. The owners, shareholders and other interests in corporations are not directly responsible for their actions. It is the corporation, the single entity, which is responsible. Therefore no human individuals are at fault legally for any of the corporation’s actions. Justice Louis Brandeis called corporations “Frankenstein monsters”. Frankenstein after he was created destroyed his creator. The people created the corporation and the corporations soon turned against the people. Corporations do not care about the people or any negative effects that they may have on them. They care only about increasing their own profits.

People generally do not ask what corporations are. Corporations are involved in our daily life. They own almost every aspect of our lives. They own or produce the news, media, automobiles, food, water, et cetera. It is nearly impossible to go through a full day without once seeing an advertisement by a corporation either to sell their goods or create a better name for them. They have a larger influence on daily life than people realize. It is interesting why more people do not actively realize the influence corporations have. Corporations work very hard to make sure that their name is not slandered and people do not question them. They spend large amount of money in things like philanthropic work and environmental sustainability, and make sure it is well known. Plus how could someone who works forty hour weeks to have enough money to feed a family ever have anytime to philosophically question anything.

Para-Universities

Para-university is higher education that specializes in certain areas. The OED defines ‘para’ as “beyond or distinct from, but comparable to”. Para-universities, like the University of Phoenix Online, offer certifications and degrees to many people who can either afford the time needed to earn a degree at a traditional university or are looking for something more tailored to them and their work. One of the benefits of these para-universities is that they teach skills that can instantly be applied on the job.

These para-universities are for-profit academic institutions. This driving factor of profit may change the more traditional public and private colleges. The incentive of profit means that the para-universities will tailor their programs and services to best meet their customers. The para-universities will have to innovate in order to compete and distinguish themselves from traditional universities. Offering specific training and real world knowledge and skills could possibly eliminate the need for a traditional education for some jobs.

Some claim that if these para-universities were to gain a larger market share that funding for traditional institutions could suffer and thus their education would suffer. If the para-universities come up with a way to “steal” students from the traditional universities then they would also be forced to innovate new ways to education in order to compete with the para-universities. Adding competition to the market generally does not cause terrible things. If para-universities are the future then the market will dictate it.

Outsourcing and the Job Market

Specialization in trade, efficiency, and profit maximization are what outsourcing is about. Outsourcing is the shifting of internal activities of a firm to an outside company. Since the early 1990s, many U.S. firms have outsourced some of their functions in order to improve efficiency. Outsourcing has enabled these firms to improve their efficiency by specializing on activities that maximize their profits. Labor costs are also lowered through outsourcing which drives down the costs of products for consumers.

Economic and technological development throughout the years has allowed for more efficient methods of production. Outsourcing domestically is not directly causing the declining job market, rather outsourcing is a side effect of other factors. Saying outsourcing is causing job loss domestically is like saying that a bullet is what killed a man. It was not the bullet that killed a man but the gun the fired the bullet and the man that pulled the trigger. Firms want to operate where they will maximize profit and efficiency. There are many factors domestically that drive up labor costs, e.g. unions, safety regulations, price floors, taxes, labor laws. Foreign governments, having more lenient labor laws, allow for firms to reduce the cost of their labor by outsourcing offshore.

A person losing their job and not being able to find work in their field domestically is not necessarily a good thing. However, in time the economy will shift towards different industries for workers to partake in. Farming used to be a large industry for many U.S. workers. With technological advances many farmers were forced to leave the industry and seek jobs elsewhere. The same thing has happened with manufacturing industry. A bachelor’s degree is now the minimum education level needed to be competitive in the job market. Where in the past a high school diploma could suffice now higher education, more than four years, is almost necessary to be competitive.

Taylorism in the Workplace

Two years of my life were spent working for Frisch’s Restaurants, Inc.  Working as a Drive-Thru attendant I held a very low end, service oriented position.  I was as Stuart Tannock calls it, on the front lines of the Service Sector.  Each and every day I expected to be ridiculed, underappreciated and yelled at by customers and managers.  I was expected to perform better than anyone in the position could.  Irate customers always were able to find the smallest flaw in the service we were providing and made sure we knew about it.  I once had a customer throw their order at me from their car, utter a few colorful metaphors, and drive off as if they were in a race.  Not only did customers expect the best out of us but managers expected that and more.

From our managers it was always expected that we follow each guideline to the letter.  To achieve maximum efficiency a bible of drive-thru was created for us.  The guidelines applied Taylorism, or scientific management, to achieve maximum efficiency.  Depending on how many people were in the Drive-Thru we were each assigned different tasks.  Different divisions included, hot side, cold side, order taker, cashier and runner.  Guidelines described the responsibilities of each of these divisions and explicitly stated how each would operate.  A standard method was created for performing each task and they were expected to be performed exactly.  Every step down to how many condiments go with each sandwich was planned out.  Managers, at the beginning of each shift, assigned people to different divisions based on how well they performed.  At the end of each shift managers were able to grade us based on how well we performed. 

The strict guidelines inhibited innovation and personality within the workplace.  The order taker and cashier had a script that had to be read exactly for each customer.  The hot and cold side workers had no room for changing how they did things to improve their individual efficiency.  I thought that most of the guidelines were written by someone who had never set foot in a Drive-Thru.  At my Frisch’s we were able to deviate from the rules.  As long as we were under the 2:15 goal for average time per car they left us alone.  Occasionally the cashier would receive tips for excellent service, something that would not have happened if they stuck to the script.  It did not take long for me to learn to bend the rules to improve our efficiency.  The rules did not state what to do when certain items were missing.  One of our managers had no idea what to do when we ran out of ice cream blocks for a desert.  He frantically called other locations to try to get more ice cream blocks.  A simple solution that the Drive-Thru came up with was to use the normal ice cream instead.  A manager was unable to realize this simple fix because he too strictly followed guidelines. 

My overall experience with Frisch’s and the service sector was interesting.  It allowed me to appreciate service sector jobs and the level of stress that is involved.  Taylorism was used in the workplace to an extent, though we deviated often from the written guidelines.  Individuals are different and the most efficient way for one person may not be the most efficient way for another.  Taylorism attempts to achieve maximum efficiency by scientifically controlling every aspect of production.  It fails in that it allows for little innovation, personality and causes hostility towards higher ups.