MACLEAN'S/CBS NEWS POLL

Haves and have-nots

Canadians look for the corporate conscience

JENNIFER WELLS December 30 1996
MACLEAN'S/CBS NEWS POLL

Haves and have-nots

Canadians look for the corporate conscience

JENNIFER WELLS December 30 1996

Haves and have-nots

Canadians look for the corporate conscience

MACLEAN'S/CBS NEWS POLL

Dilbert, the hapless, mouthless, eyeless white-collar worker with the perpetually windswept tie, would not be surprised. The creation of Scott Adams, himself a onetime worker drone, Dilbert has suffered through visioning exercises, reengineering, downsizing (“Knock-knock.” Who’s there? “Not you any more.”) and just about every bad management move to become a pencil-necked proxy for all workers caught in the corporate morass of the Nineties.

From Dilbert the character, Adams created The Dilbert Principle, a best-seller on the New York Times list, the Dilbert dialogue—the cartoon-inspiring e-mail that Adams receives from real live workers—and the Dilbert Zone Web site that registers an average of 1.5 million hits daily. “I routinely include bizarre and unworldly elements such as sadistic talking animals, troll-like accountants and employees turning into dishrags after the life force has been drained from their bodies,” says Adams in his book. “And yet the comment I hear most often is: That’s just like my company.”’

Or the CBC. Its pre-Christmas bloodletting capped a year of worker insecurity, bookending giant AT&T Corp.’s announcement 12 months earlier that it would chop 40,000 employees from its rolls. While chairman Robert Allen later scaled back that number by 10,000, the AT&T purge still stands as a defining moment in 1996: when Allen said he would

To: scottadams@aol.com Scott: Here’s one for your Dilbert cartoon. Two weeks before Christmas, the Canadian Broadcasting Corp.— that’s Canada’s publicly funded national television and radio broadcaster— eliminated close to 1,000jobs from its payroll. Everyone knew the cuts were coming. In preparation for the very bad day, certain representatives were prepped by their union on how to brief/console the terminated. On D-Day morning, those reps were provided with lists of pink-slip recipients who might seek counsel. Get ready for the irony. As one of the union reps scanned the list of the terminated, he came upon ... his own name! No kidding.

of respondents say corporate leaders should keep A their salaries in line with other employees; /U 22% say they deserve large salaries.

(including 64% of seniors) say it is unacceptable for profitable corporations to lay off workers.

continued on page 37

jettison all those bodies, the stock price jumped $9. In the months that followed, worker downsizing battled corporate outsourcing for headline space, while the stock market experienced an unparalleled bull run and some corporations posted their highest profits ever.

The supremacy of shareholder capital left politicians desperately trying to find corporate leaders who would speak, instead, about the importance of human capital. “We need to have a broader view of what the values are in society,” says Industry Minister John Manley. “How do these values interact with the free market corporate economy?” Manley wonders how we are to build a knowledge-based economy with so many being pushed out of work. “I think it’s part of my job to push the corporate sector and urge them to take into account the enormous damage it does when you cast people aside instead of retraining them.”

In the run-up to the U.S. presidential election, U.S. Labor Secretary Robert Reich repeatedly called for a new corporate contract, one that connects companies not jqist to the shareholders but also to the other so-called stakeholders—employees, customers, the community at large—to which businesses are wedded. But just a week after the

election, “Chainsaw AÍ” Dunlap, the newly installed head of the Sunbeam Corp., announced a staff slaughter, leaving just 6,000 workers where 12,000 once stood. Dunlap, too, has written a book, called Mean Business, sort of a management guide to how you, too, can become a corporate Caligula. Much of Dunlap’s advice comes from his 2V2 years as CEO of Philadelphia-based Scott Paper Co. There he canned 11,200 employees—a third of the workforce—chopped assets and outsourced like mad (another 6,000 workers moved from the payroll there). And watched the stock rise. When he left Scott, Dunlap took $135 million with him. The surgery had to be done, he said—“It was either me or Dr. Kervorkian----I’m more fun.”

One hundred and thirty-five million dollars. Dunlap points out that the sum represents less than two per cent of the wealth he created for Scott shareholders. And therein lies the rub—the common failure of corporations to be held accountable to any goals other than the maximization of shareholder value. Certainly, the rewards to Canadian executives have been blindingly rich. This year’s Maclean’s/CBC News year-end poll asked respondents if they think those payments are too rich. Yes, say three-quarters, corporate leaders should keep their salaries in line with other employees. Of the respondents who take the opposite view—that corporate leaders deserve their incomes—younger Canadians aged 18 to 24 make up a disproportionately large share.

But under the rubric of corporate responsibility, there are broader questions that are much tougher to call. Asked about the acceptability of profitable corporations pursuing worker layoffs, 58 per cent turn thumbs down. The rejection of staff cuts in good times is highest in Quebec (64 per cent) and the Atlantic provinces (66 per cent), the regions currently experiencing the greatest economic pain. But in Alberta, where the economy has been booming, that majority crumbles, with 51 per cent stating conversely that it is acceptable for profitable companies to lay off workers, reflecting

the view that only the most efficient companies will thrive and prosper. Similarly, Alberta weighs in most powerfully on the issue of outsourcing, with 67 per cent of respondents expressing the view that closing down in-house departments and buying instead from outside suppliers is acceptable. Respondents in Ontario—home to the country’s auto industry, where outsourcing was the year’s hot button—are least accepting of the trend, with just 46 per cent giving their approval.

Yet Canadians overall have gotten the message that the engine of economic renewal is supposed to be business, not government—perhaps simply because government has told them so often not to look to it for answers. Respondents overwhelmingly affirm the likelihood of private enterprise playing a larger role in society in the next millennium. But with unemployment

already far and away the biggest concern of the poll respondents, it is not clear how well corporate Canada is likely to carry out that responsibility. David Nitkin, president of consulting firm EthicScan Canada, says Canadians see business as “badly fumbling the ball,” a perception fed, he says, by the financial markets’ embrace of the “hatchet wielders.” Len Brooks, executive director of the Clarkson Centre for Business Ethics at the University of Toronto, says that executives should know that the “surgical strike” approach to downsizing, as he calls the practice of hacking through employee underbrush in the pursuit of profit maximization and improved cash flow, “is really a dumb idea.” Only a third of its practitioners achieve their financial objectives, says Brooks, while paying a huge price as employee morale craters.

Both Nitkin and Brooks take the broadest possible view of corporate responsibility, from environmental protection to human rights issues as they pertain to company trading practices. Brooks says the boardroom is getting the message that espousing corporate responsibility makes good business sense. “We’re clearly a long way ahead of where we were,” he says, pointing to trends in pay equity and workplace health and safety. And, he hopes, business will also evolve away from a “profit at any cost environment” as directors who grew up in that environment cede power to younger executives who are more aware of the need to be accountable to a broad range of stakeholders.

Nitkin is not so sure. He misses some of the voices of the old guard, those now-retired executives who felt at ease championing corporate responsibility. Brooks agrees there are few of those voices today. ‘Yes, I have run into executives who state their belief that the only thing that matters is the bottom line,” he says. “I think we’re going to have those for a long, long time.”

JENNIFER WELLS

Business is not just responsible to shareholders

GROWING INFLUENCE Despite their reservations about some current business practices, poll respondents overwhelmingly expect private enterprise to be playing a bigger role in society by 2005—and find the idea acceptable.

/ say it is acceptable tor companies to shut down departments and “outsource”—that is, buy those /U services and materials from other companies.

Those aged 18 to 24 are most likely to say that: • corporate leaders deserve their large salaries (32%) • outsourcing is acceptable (63%).