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Corporate arrogance: is there an antidote?

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 In an ideal world, successful private companies would distribute their wealth responsibly among stakeholders. Instead, many companies allow the unchecked pursuit of financial success to distort their thinking and their values, leading to extremes of wealth accumulation. In our materialistic society, displaying financial success is accepted, even overtly encouraged. However, many such habits lead to a deadly culture of arrogance and a (barely concealed) disdain for those who are less successful.

 

There is no doubt that some organisations in South Africa can be described as arrogant, in which a sense of superiority, entitlement and blame-shifting is allowed to pervade. The accompanying danger these organisations pose to society is that they do not feel bound by the normal rules of the game that give them their social licence to operate. They believe they can do whatever they want.

 

That is not to say that success should not be celebrated and rewarded. The question at hand is this: When does confidence, based on pride of achievement, cross the boundary to overconfidence and arrogance? And when is it ethically insensitive? There are a number of telling signs.

 

Corporate euphemisms

 

A clear sign of arrogance is the dehumanisation or depersonalisation of employees and others, who are treated as objects rather than as people. There is a tendency in the corporate world to refer to an organisation’s staff complement as its ‘headcount’. With this and other euphemisms such as ‘rationalisation’ or ‘restructuring’ or ‘getting rid of the dead wood’ frequently being used in reference to retrenchments or other major changes, it makes it easier to forget human lives are being severely affected.

 

Corporate opulence

 

Does a company need to erect new headquarters in an affluent CBD when its current premises are still adequate? Does it need to build a multi-story monument imposing itself on the landscape in an ostensible gesture of confidence that, in fact, is more likely to be read by competitors, the poor and the jobless as an insulting brag? Lest we forget: wrapping the company’s headquarters with a gigantic set of sunglasses to signify that they were the ‘coolest company in the world’ preceded the demise of Enron. Lavish expenditure on premises can be a red flag that an organisation’s priorities are misplaced; think, for example, of the (not uncommon) case where the price of the leather couches in the lobby is greater than the receptionist’s annual salary.

 

Evasiveness

 

When ethical failures occur in arrogant organisations, the first reaction is to either deny the wrongdoing or to refer to the incident as ‘a slight problem’ that ‘we’re attending to’. What they do not grasp is that ethical failures are often caused by the very mindset of arrogance that blinds organisations to the legitimate needs of all stakeholders, and vulnerable stakeholders in particular.

 

Excessive executive remuneration

 

Arrogant companies do not care much if their executives are compensated beyond reasonable and ethical limits. Inflated executive compensation manifests as post-wrongdoing golden handshakes or as bonuses to executives in spite of poor financial performance. South Africa’s Gini coefficient is the highest in the world, which implies that nowhere else is the income of the rich as disproportionate to the income of the poor as in this country. Excessive executive compensation is largely to blame for this.

 

Effects and a possible antidote

 

Corporate arrogance contributes substantially to the low levels of trust that society has in business in South Africa. Telling signs of arrogance send signals to society that reinforce the perceived chasm between the ‘haves’ and the ‘have-nots’. It projects an insensitivity to societal social concerns, particularly when accompanied by ’corporate monologue’ (speaking ‘at’ society and further reflecting executives’ detachment from reality). Sadly, often the first thing to be compromised when someone is promoted to executive level is empathy for others.

 

The fine line between confidence and arrogance needs to be recognised and managed. Embracing a sense of humility, which is a vastly underrated quality in the corporate world, may go a long way to managing the fine line. Humility, which is linguistically close to ‘humiliation’, is derived from the Latin word for ‘low’. Genuine humility, though, is far from ‘low’. It does not portray insecurity or weakness. It implies a respectful appreciation of the strengths of others, a lack of personal pretence and a comfortable sense of confidence that does not require constant recognition from others.

 

Can a ‘soft’ value like humility be a competitive edge? One organisation that has selected humility as a core value is the Kellogg Company. They describe this value in terms of being willing to learn from anyone anywhere, seeking and providing honest feedback, being open to personal change and continuous improvement, learning from mistakes and successes in equal measure, and never underestimating their competition.

 

If a successful organisation such as Kellogg can embrace humility in this way, it would be foolish to infer that humility implies weakness or insecurity. An appreciation of humility and translating it into organisational and employee behaviour can help in countering overconfidence and the sin of corporate arrogance, even in the wealthiest and most powerful companies. 

Professor Leon van Vuuren is Executive Director: Business and Professional Ethics at The Ethics Institute

 

FULL-LENGTH VERSION: The original article is available on The Ethics Institute’s website under Recourses > Articles > Lead opinion pieces.