Corporation and Society
Restoring Confidence
in the Corporation
Costas Kataras
Athens University of Economics and Business
AUEB, MBA International Program
14 December, 2009
Slide 1
Slide 2
Restoring Confidence
in the Corporation- Why?
Two Valuable Corporate Pillars are Collapsing..

Corporate Trust
(Corporate Confidence Erosion is Growing)

Brand Importance is Going Down
(The Death of the Brand is Near?)
Slide 3
Understanding the Root Causes of
Confidence Erosion..
..with a little help from Mathematics
Slide 4
What Happened to our Dream of Freedom?
The Fall of the Berlin War..
..but the Legacy Remains
Slide 5
From Cold War to…Cold Hearts!!
Creating a Mathematically Modeled Society
Slide 6
Characteristics of a Mathematically Modeled Society
The Rise of the “So Long Sucker” Attitude
Mathematically Modeled Society (ie data, statistics,
targets)
 Friderich von Hayek (No room for altruism )
 James Bucanan (No Public Interest, only Governing
Bureaucrats / only money matters)
 Richard Dawkins (Selfish Genes / no room for altruism
but human selfishness / Nice Guys Finish Last ?)


John Nash
FILM: The Trap: What Happened to Our Dream of Freedom ,BBC documentary ( By Adam Curtis)
http://www.youtube.com/watch?v=T_zk2X92kxY
Slide 7
Cold Hearts: “Hard” Implications- War Games and
Games Theory
John Nash, Nobel Winner/ “So Long Sucker”
and ”Fuck the Buddy ” Theories
Slide 8
Cold Hearts: “Soft” Implications- A TV Series
Dark and Cynical..
..dark and cynical…an example of the effects of corporate culture, marketing and the more individualistic strands of feminism
in presenting women's empowerment as mainly tied to achieving coupledom, beauty, and personal upward mobility,
rather than collective organization for progressive change
Slide 9
Using Mathematics to Understand
Business, Marketing and Societal Phenomena
The Battle between the Good and the Evil.. Graph
“Normal”/ Random Distribution
“Power” / Extreme/ Abnormal Distribution
Slide 10
From Mental Disorders to IQ: a “Normal” Nature
Depression By Age / IQ Scores in Population
Slide 11
Businesses after Globalization Have an
“Abnormal” , “Power”, Nature
Greece, ICAP (2008 :33.717 companies= 237 bil. Sales)
•Top 20 companies (or 0,06 %) = 49 bil (20 %)
•Top 500 companies (or 1,5 %) = 134 bil (57%)
•Top 200 corporations’ combined sales
are bigger than the combined economies
of all countries in the world, minus the biggest ten
•While sales of Top 200 are equivalent
of 27,5% of world economic activity,
they employ only 0,78 % of the world’s workforce
Slide 12
Introduction Key-Message 1:
We are living in a New World, Governed by
the “Power Law”, Producing Extreme &
Abnormal Corporate Behavior and Results
Slide 13
“Food” for Thought
Consumers are Threaten by the Growing Food Industry Power..
Source: McKinsey,2006 Global Survey
Slide 14
..and they are Right ! Example ?
Coca Cola and its Dasani Bottled (Tap !!) Water are Deceiving Consumers
It comes from the same source as local tap water
 Result :Coca Cola withdraws bottled water from UK (2004) and
admits that Dasani is nothing but tap water

Slide 15
Welcome to the Corporate Antisocial Era
Secrets of “Value Creation” by the Most Admired &
Valuable Brands / Corporations in the World
Deceiving, cheating, controlling, killing,
dehumanizing,
suppressing,
imprisoning our mind,
claiming ownership of natural resources,
owning our genes, etc
Slide 16
“Value Creation” Strategy(?) :
The “Power Way”
Media and other “Gate Keepers” Manufacturing
Consent in a “Business Sponsored” World
Slide 17
Introduction Key-Message 2 :
The situation is hopeless… but not serious !!
Slide 18
Understanding the Landscape
Slide 19
Understanding the Landscape (1/2)
Understanding the Landscape of Business Ethics can be Problematic

Business Ethics / Integrity /Practices
(ie how to conduct business responsibly )

Corporate Compliance
( ie focused on complying with laws and regulations )

Corporate Governance
(ie policies and practices that stockholders, executive managers
and board directors use to manage themselves and fulfill their
responsibility to investors and other stakeholders )
Slide 20
Understanding the Landscape (2/2)
Understanding the Landscape of Business Ethics can be Problematic

Corporate Responsibility
( ie fulfilling the responsibilities or obligations that a company has towards
its stakeholders. For example profit vs environment )

Corporate Social Responsibility
( ie as above, but with greater stress upon the obligations a company has
to the community. Sometimes encompasses all responsibilities to
stakeholders-ethical, social and environmental )

Corporate Sustainability
( ie aligning an organization's products/services with stakeholder
expectations, thereby adding economic, environmental and social value)
Slide 21
Business Ethics:
The Definition Challenge
“ ..achieve commercial success in ways that
honor ethical values and respect people,
communities, and the natural
environment..”
(
Source: Business for Social Responsibility- nonprofit CSR Ass., US )
Slide 22
Restoring Confidence in the Corporation
Topics
-What Happened to Our Dreams of Freedom?
-Understanding the Landscape / Definitions
1.The Business of Business…
 2. The Rise of Corporatocracy
 3. Corporation and Society
 4. Restoring Confidence
 5. Social Issues Become Strategic
 6. Government and Society: A Larger Role
 7. “Nice” Capitalism ( Wanted !!)

Slide 23
1.The Business of Business…
Slide 24
The Long-Running Debate
Two Contrasting Ideological Positions
“ the business of business is… business”
vs
“ corporate social responsibility “
Slide 25
And the Winner is ..
…Prof. Milton Friedman & the School of Chicago
“ ..the business of business is business..”
“ ..social responsibility is a fundamentally subversive doctrine..”
“ ..managers that will invest recourses to deal with ethical issues
should be fired..”
Naomi Klein, in her book The Shock Doctrine, accuses Friedman of being complicit in military coups in
countries such as Chile and Indonesia that were used as a way to shock the population into
accepting unpopular neoliberal policies for the benefit of foreign multinational companies.
( Milton Friedman, 1912-2006 )
Slide 26
..Killing
Mrs Anderson vs General Motors (1980)
Chevrolet Malibu cars fuel tank, not sufficiently protected in
collisions
 GM cost- benefit analysis shows :

Repair cost : 8,59$ / per car
Anticipated fatalities (Human Life): 500
If pay the cost of each human life , ie 200.000$ /per life the average
cost is: 2,40$ per car

Result : Decide not to repair the cars !!!
Slide 27
..Cheating
Starbucks coffee 200% more expensive in Athens than NY
A cappuccino costs : 4,65 $ in Athens, 2,35$ in New York, +100%
 Average PP of an American : + 100%
 Result : +200%

Plus : Cheating and stealing the tips of personnel .”California court
orders Starbucks to return $100m in tips to baristas”
Slide 28
..Controlling
Monsanto’s Terminator Technology
Controls genetically engineered seeds (ie rice, corn, etc) for which
farmers pay high prices
 Terminator technology is used to sterilize crops, ie the seeds lose
their ability to reproduce
 Result : 80% of farmers committing suicide in India, are farmers
not able to pay off their debts / loans used to buy expensive GM
seeds

Slide 29
..Staff Suicide Machines
The ( Dead) Employee of the Month




a wave of staff suicides
23 employees killed themselves since February 2008(Sep
2009) or 1,2 per month
blaming job stress and misery at work
(Twenty-nine France Telecom staff took their own lives in
2002 and another 22 in 2003 )
Slide 30
..Plus





Dehumanizing- Labor Camps (ie Nike, Gap)
Suppressing – Military Coups (ie United Fruits )
Imprisoning our Mind- PCs controlling Users (ie Microsoft
Defender /Kill Switch
Claiming Ownership of Natural Recourses-Privatizing the
Rain in Volivia (ie Bechtel and Mrs G.Shultz,
C.Weinberger )
Owning our Genes – A Nation’s Genetic Code for Sale (ie
Iceland and deCODE/Hoffman La Roche) , plus
the case of Mr Moore vs University of California
Slide 31
Corporations Disregard all Human Laws
Carl Marx was Right
“ ..companies with 10% profits feel secure
enough.. with 50% became adventurous.. with
100% disregard all human laws and with 300%
can even take the risk of committing crimes ”
( Carl Marx )
Slide 32
2.The Rise of Corporatocracy
Slide 33
Corporatocracy
Towards a Definition
“The accumulating corporate power and the evolution, and
finally transformation, of the corporation to a social
institution ( pseudo- authority ) dominating the civil society
and nations, with the support of banks, the financial
establishment, powerful elites and powerless governments”
(Kataras)
Slide 34
Corporatocracy
The Meteoric Rise..

1720 : The creation of a corporation, as a legal
entity, constituted a serious crime in the West
(England) entailing serious punishment

2000 : Of the 100 largest economies in the world,51
are corporations and 49 are countries (in GDP and
sales terms)
Slide 35
Corporatocracy
.. of Corporate Global Power






Of the 100 largest economies in the world, 51 are corporations and
only 49 are countries
Top 200 corporations’ combined sales is equivalent to 27,5% of
World GDP (from 25% 15 years ago )
Top 200 corporations’ combined sales are bigger than the combined
economies of all countries in the world, minus the biggest ten
While sales of Top 200 are equivalent of 27,5% of world economic
activity, they employ only 0,78 % of the world’s workforce
U.S. corporations dominate the Top 200, with 82 slots (41%),
followed by Japanese firms with 41 slots
Almost 50% of U.S. corporations in Top 200, did not pay the full
standard 35% federal corporate tax during 1996-1998. Seven
actually paid less than zero ( ie Texaco, Chevron, PepsiCo, Enron,
Worldcom)
Source :Institute for Policy Studies, 2000
Slide 36
Corporatocracy
.. in Numbers
General Motors
 Exxon Mobil
 General Electric
 Shell
 IBM
 Nestle

(GDP/Sales, 1999)
> DENMARK
> GREECE
> PORTUGAL
> IRAN
> IRELAND
> HUNGARY
Source :Institute for Policy Studies, 2000
Slide 37
Corporatocracy
The Global Pyramid of Power
Slide 38
Corporatocracy
How Corporations Became so Powerful ?




Arrogant, Selfish, U.S. Capitalism and the School of
Chicago creating inequality in the society
(Disaster vs Nice Capitalism books, Naomi & Costas)
Gate Keepers (Media) manufacturing/ engineering
consent (The Century of the Self )
Technology / Globalization/De localization/Export of Jobs
(Lou Dobbs, etc )
The “Other Hollywood Effect”-Weak Political Leadership
(Myth of the Powerless State / Nation)
Slide 39
Corporatocracy
Two Prophetic Books..
June 24, 2008
July 22, 2008
Slide 40
Topology of Factors Undermining the Future of
the Corporation
Brands’
Overdose (5)
Loss of
Entrepreneurial
Spirit (6)
Extreme Market
Polarization (8)
Increased
Complexity &
Unpredictability
(1)
Frenetic Time
Acceleration
(4)
Scarcity of
Human
Attention (9)
Information
Economy
Arrogant
Corporation
Rise of
Eclecticism (11)
Violent Emotional
Detachment from
Brands (12)
Collapse of
Information
Asymmetry (3)
Explosion of
Brands’
Consumer –
Insignificant
Generated
Dramatic
Impact
on
ROI
Personal Media
Erosion of
&
Parent
(10)
Middle Class
Company
(7)
Stock Price (2)
ECONOMY
Slide 41
Mega – Trends : A Synopsis
Corporations in a New, Hostile, Terrain
Complexity
 Society
 Technology

plus
 Corporate Confidence Erosion
Slide 42
Complexity
The Butterfly Effect
Have you ever been wondering how the current
bank and financial crises started?
 Have you been aware of a company Fanny Mae
or Freddie Mack ?

Slide 43
Society
Society Dominates Corporations
The Coca Cola , Dasani case
Slide 44
Technology
The Trojan Horse ?
OPPORTUNITIES
 Productivity
 Globalization
 Delocalization
 Etc
THREATS
 Transparency
 Reduced Information Asymmetry
 Empowered , Educated, Never Satisfied, Distant, Unreachable
Consumers
 etc
Slide 45
Corporate Confidence Erosion
Route Causes





Increased Income Inequality / Power Distances in
Society
U.S. Losing Favor in the West
A Growing Sentiment Against Globalization in All
Rich Countries
Corporations: Lack of Trust in Business is Growing
Brands :Consumers are Falling out of Love with
Brands…a corporation’s most valuable asset (3080%)
Slide 46
Inequality: A Roadmap to Crisis
Source :PricewaterhouseCoopers, World Economic Forum, UNDP, World Bank (2007/8)
Slide 47
Inequality
US Income Data (Kevin Philips: Bad Money)
…το ετήσιο εισόδημα στις ΗΠΑ, μετά από φόρους, την περίοδο 1970 έως
1990 του χαμηλότερου πέμπτου (20%) του πληθυσμού, μειώθηκε από
9.300 σε 8.700 δολ.
..Του μεσαίου πέμπτου (20%) , από 31.800 αυξήθηκε ελάχιστα σε 33.200
δολ.
… Και του υψηλότερου και πλουσιότερου 1% του πληθυσμού από
2.560.000 δολ, έγινε 600.540.000 δολ.
Δηλαδή οι διάφοροι Μπιλ Γκέητς και άλλοι πλούσιοι που ζουν στο
¨Πλουτιστάν¨, την ¨νέα χώρα¨ που δημιουργήθηκε μέσα στις ΗΠΑ (βλ.
Robert Frank: Richistan ), έγιναν 300 φορές πιο πλούσιοι, ενώ από τους
φτωχούς έκοψαν και 600 δολ το χρόνο !!! (βλ. Kevin Philips: Bad Money)
Slide 48
US Losing Favor Across Europe and the West
Source :PricewaterhouseCoopers, World Economic Forum, Pew Global Attitudes Survey (2008)
Slide 49
The Growing Sentiment Against Globalisation in All Rich Countries
Source: Financial Times , Harris Research , 2007
Slide 50
Mistrust
The Lack of Trust in Business is Growing
% of the public that agreed that you could trust business leaders:



2002: 36%
2004: 31%
2006: 28%
(Source :D.YANKELOVICH, 2007 )
Slide 51
Brand Erosion
Brand Importance Goes Down in Recent Years





Brand Awareness : 20 %
Brand Esteem : 12 %
Brand Perception of Quality : 24 %
Trust in Brands : 50 %
Brand Loyalty : 9 % ( from 40 % !!!)
(Source: WPP, The Brand Bubble by John Gerzema )
Slide 52
3.Corporation and Society
Slide 53
Corporation and Society
New Issues
OLD ISSUES
 Growth
 Globalization
 Competitiveness
 Innovation
 etc
NEW ISSUES
 Regulation
 Environmental Sustainability
 Labor / Unions
 Civil Society
 Governments as Owners
 Consumer over stimulation and mental health
 Business Confidence Erosion
 etc
Slide 54
Major Periods of Corporate Confidence Erosion



1929: Great Depression
(Unemployment )
1968-80: Banana Republic
( Multinationals, Cynicism, UF syndrome , School of Chicago)
2001- : Antisocial
(From the Enron Scandals in 2001 to the Virtual Money
Game of Lehman Brothers in 2008)
Slide 55
The Antisocial Era of Corporations
Towards a Diagnosis



Failure to conform to social norms,( i.e. evidence by
repeated unlawful behavior)
Deceitfulness, repeated lying, use of aliases or
manipulating others for profit
Reckless disregard for safety of (self) or others
WHAT IS THIS ?
According to the DSM-IV-TR (Diagnostic and Statistical Manual for
Mental Disorders) this is the definition of a …..
Slide 56
The Corporation is a.. Psychopath !!!
(Antisocial Personality Disorder -APD )
A PSYCHOPATH ALSO CAN BE :
Charming, manipulating, focusing solely on selfgratification, deceiving and swindling the unsuspecting.
(Hare 1999, Black 1999)
Slide 57
Who ? In Managers /CEOs We Trust..
Ordinary, Good People Become Monsters in an Evil Place?

The Power of the Institution
(ie Corporations larger than many Nations, are becoming Social
Institutions, Pseudo Authorities, etc )

The Power of the Situation
( ie Poverty, DFI, WTO, IMF, FED, Globalization, Labor Camps )

The Power of the Lucifer Effect
(ie How good people turn into evil / sadists )
(Film - Enron: The Smartest Guys in the Room)
Slide 58
Chilling Findings about People and Authority
“ Ordinary People, Doing their Jobs
can become Agents in a Terrible Destructive Process
under the Umbrella of a Legitimizing Ideology and Social Institutional Support”

Stanford Prisoners Experiment /SPE
(Prof. Philip Zimbardo, Stanford 1971)

The Milgram Obedience to Authority Experiment
(Prof. Stanley Milgram , Yale 1963)
Slide 59
The Lucifer Effect (1)
Demonstrates the impressionability (unaccountability) and obedience of people
when provided with a legitimizing ideology and social and institutional support

Stanford Prisoners Experiment /SPE
(Prof. Philip Zimbardo, Stanford 1971)
The Stanford experiment ended on August 20, 1971, only 6 days after it began instead of
the 14 it was supposed to have lasted. The experiment's result has been argued to
demonstrate the impressionability and obedience of people when provided with a
legitimizing ideology and social and institutional support
Slide 60
The Lucifer Effect (2)
Obedience to Authority :Chilling findings regarding the
weaknesses of human nature
The Milgram Obedience to Authority Experiment
(Prof. Stanley Milgram , Yale 1963)
Ordinary people, simply doing their jobs, and without any particular hostility on their
part, can become agents in a terrible destructive process. Moreover, even when the
destructive effects of their work become patently clear, and they are asked to carry
out actions incompatible with fundamental standards of morality, relatively few
people have the resources needed to resist authority.
When Good People Do Evil:
45 years ago, Stanley Milgram's classic experiments showed that, under orders, decent
human beings will do anything. ( at 90% level , while psychopaths are at 1%)
Slide 61
4. Restoring Confidence
Slide 62
Mission Impossible ?
Business is a (necessary ? ) evil in society … only the
worst sort of people are involved.. Plato, c. 340 BC
Slide 63
Towards a New Corporate Social Contract
Corporation and Society : Evolution Phases

Corporate Social Responsibility / CSR: The “Green Wash” Era
(ie Corporations react to pressures from NGOs, etc )

Triple Bottom Line / TBL :The Unfulfilled Era
( ie Charmy annual reports regarding CFP,CSP,CEP and no binding
promises)

Corporate Social Contract / CSC: The License to Operate Era
(ie Civil society and government take control through the license principle
and ensure that big corporations comply regarding CFP,CSP,CEP and CHP or
the “Corporate Quartet Principle/CQP”)
Slide 64
Corporate Social Contract / CSC
The License to Operate Era ,
and the “Corporate Quartet Principle”
for a Multiple “Corporate Zero Footprint”
Government and society could provide a license to corporations to operate ,
based on the approval of their annually submitted plans and performance
on the following :
1. Corporate Financial Performance / CFP
(ie Tax Equality- MS in Greece )
 2. Corporate Social Performance / CSP
(ie Humanity- Feminization of Man in US cities )
 3. Corporate Environmental Performance / CEP
(ie Sustainability – The Big Five oil companies )
 4. Corporate Health Performance / CHP
(ie Engaging the Brain-From over stimulation(2500 ads/day) to
Neuromarketing and the “Buy Button” in our Brain /BrightHouse studies )

Slide 65
CHP- A New Corporate Footprint ?
Physical and Mental Health/ Happiness and Depression
•
•
•
•
Depression the second largest killer, after heart disease, by 2020
15% of the population in developed world suffers severe depression
15% of depressed people will commit suicide
“..studies document that strong materialistic values (imposed by
persuasive advertising..) lead to low life satisfaction and happiness ,
to depression and anxiety and to personality disorders” ..(T.Kasser)
Slide 66
The Secret Paths to Depression in a Materialistic
Culture Cultivated by Corporations Through Brands
Brand
“Values”:
Imposed Values
of Success (State of
Discrepancy)
Atrophy of
Individual Values (State
of Permissiveness)
Isolation &
Receptiveness
to Brand Stimuli (State
of Apathy)
Affluenza
Oniomania
(ie Compulsive
Spending)
Feelings of
Inadequacy (Low
Self- Esteem )
Brand
Overstimulation:
BRAND
Brand
Overdose:
Brands’ Hedonic
Treadmill:
DEPRESSION
Decision
Paralysis
High Level
Expectations
Low Satisfaction /
Disappointment
Adaptation
(Hedonic
Treadmill)
Seek Higher
Satisfaction
(Satisfaction
Treadmill)
Comparison
Disappointment
(Comparison
Treadmill)
Slide 67
5. Social Issues Become Strategic
Slide 68
Issues Expected to Attract the Public Attention
Source: McKinsey,2009 Global Survey
Slide 69
Wanted: Transparency and Social Responsibility
Source: McKinsey,2006 Global Survey
Slide 70
Stakeholder Impact
Source: McKinsey,2007 CEO Survey
Slide 71
Performance Gap
Source: McKinsey,2007 CEOl Survey
Slide 72
A New CSR Model?
Source: EU CSR Alliance Lab, EABIS Project –Sustainable Value / Bocconi, Cranfield, Leveun-2009
Slide 73
When Social Issues Become Strategic
New Organizational Challenges for Corporate Leaders
The case for incorporating an awareness of social and political
trends into corporate strategy has become overwhelming
 Issues: privacy, obesity, safety, health, offshoring,
environment, etc
 Companies should look for signs of emerging hot topics and
be ready to respond to them early
 CEO’s must be willing to ensure a coherent approach, to
engage in external debate and to consider collaboration with
others

( Source :McKinsey)
Slide 74
Ensuring a Coherent Approach
Organizational Coordination- Reinventing Public Affairs
Slide 75
CR Delivers Improved Financial Performance
CR Index Outperforms FTSE by 3,3% to 7,7% pa
( Source : Ipsos /MORI , BITC , 2008 )
Slide 76
6. Government and Society: A Larger Role
Slide 77
Ensuring Corporate Treatability
Mission Impossible?
“Treatability” is questioned, according to top
psychiatrists …
Slide 78
“Treatability” is Questioned (2008)
Three Beggars and Their Private Jets

GM/Ford : Private Jets
(The three Detroit auto maker CEOs made the 1 hour flight from Detroit to
DC in three separate private jets to beg Congress for tax payers money, to
bail out their woefully mismanaged companies)

AIG : Spa

FORTIS : Monte Carlo
Slide 79
“Treatability” is out of the Question (2009)
Goldman Sachs: the same bonus culture has returned !!





A remuneration fund, much in bonuses, for employees has reached
$16.7bn for the year to date (Oct 2009)
Employees can look forward to an average year-end payout of more
than $700,000 each, the highest figure in the firm's 140-year
history
Together Wall Street banks are forecast to pay out a record $140bn
in bonuses in 2009
Inconceivable for a firm owing the US government $10bn !!
…”the same bonus culture has returned. The result must be that we
are being pushed to the edge of another crash."
Slide 80
Government and Society Take a Larger Role in
Shaping Business
The Powerless State Notion is a Myth
“ ..shareholder value is growing increasingly
irrelevant as government and society take a
larger role in shaping business and industry..”
( Ian Davis, MD , McKinsey )
Weiss, Linda: Globalization and the Myth of the Powerless State
Slide 81
Enforcement Actions Needed

Enforcement through the License to Operate Principle

Taxes to counterbalance the “extreme” (abnormal) corporate
behavior and damages to society
( ie Initiatives and self – regulating promises /tactics not acceptable)
(ie Tobin Tax , Power Tax, etc )

Strong Watch Mechanisms in Place
Slide 82
Enforcement Action 1:
License to Operate and the “Corporate
Quartet Principle”
CFP + CSP + CEP + CHP = 0 (Corporate Zero Footprint)
(Apply, as necessary, appropriate damage tax and even
withdraw license , in cases of no “Corporate Zero
Footprint” Balance sheets )
Slide 83
Enforcement Action 2:
Taxes to Counterbalance the “extreme” ,
abnormal and greedy corporate behavior

The “Tobin” Tax – Barriers to the Casino Economy
( ie tax on all trade of currency across borders. Named after the economist
James Tobin, the tax is intended to put a penalty on short-term speculation in
currencies. The original tax rate he proposed was 1%, which was
subsequently lowered)

The “Power” Tax – For damages to Society from the extreme power of
corporations
(ie tax 1% to the 1%-2% Top companies in each country, to balance their
extreme power. Tax suggested by Costas Kataras, author of Nice Capitalism)
NOTE: But first put in place the prerequisites: Almost 50% of U.S. corporations in Top 200, did not pay
the full standard 35% federal corporate tax during 1996-1998. Seven actually paid less than zero ( ie
Texaco, Chevron, PepsiCo, Enron, Worldcom)
Slide 84
“All Power May Corrupt,
but Absolute Power Corrupts Absolutely”
(Lord Acton)
“Power” Tax revenues could be allocated to actions
that could have also a beneficial impact on businesses, such as:






Reduce inequality / power distances in the society
Improve transparency , fight corruption, address demographic
challenges, etc
Foster entrepreneurship
Fight monopolies
Support “watch mechanisms” established by society
Contribute to Well Being and Human Happiness
Slide 85
The “Power” Tax in Practice
(Example: Greece)
Applied to Top 500 companies (with total sales of 134 bil or
57% of total sales for 2008)
 Top 500 are representing 1,5% of total companies (33.717),
not including hundreds of thousands of family businesses
 “Power” Tax revenue: 134 bil x 1% =1,3 bil euro
 Almost equals all indirect taxation (1,6 bil) in the 2010
national budget for Greece, taxation that mainly affects low
income families and contracts demand

Slide 86
Enforcement Action 3:
Strong Watch Mechanisms in Place
“ ..people are basically honest. And they
are even more honest when you are watch
them..”
( Alan Greenberg, ex Chairman Bear Sterns )
Slide 87
7. Nice Capitalism (Wanted !!)
Slide 88
“Nice” Capitalism and “The Nice Way” Strategy
Nice Capitalism/Corporations/ Nations are Interrelated
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Democracy , Justice , Transparency ( no Corruption )
Equality ( narrow income gap, Scandinavian Model )
Responsibility , Honesty,
Human Centric Attitude , Human Improvement
Sustainable Development
High Standards of Governance
Human “Ethos”
Focus on Well – Being , Happiness , “Eudemonia”
“Metron” (Human Measure )
Slide 89
“The Nice Way” Pyramid
Corporations will Embrace the “Nice Way
Strategy”, realizing the interrelatedness of
“organisms” in ecosystem (Biology, von
Bertalanffy, GST)
Level 1: Human Happiness
Enforcement: The “GNH” Principle for the Benchmarking of Governments
Level 2: A New Social Contract
Enforcement: The “Quartet” Principle Contract between Business & Society
Level 3: Inequality
Enforcement:” Extreme Power” Taxes Principle, to Reduce Power Distances
Slide 90
Corporate Adaptation “Ante Portas” ?
Not for Altruistic, but for Survival Reasons
In an unequal system (ie society), are loosing not only the weakest, but also the strongest
(The Spirit Level: Why More Equal Societies Almost Always Do Better, by Richard Wilkinson & Kate Pickett)
Slide 91
A Corporate / Brand Retrospective
Pattern of Migration in the Business Ecosystem
High
ENTERPRENERIAL ECOSYSTEM
CREATIVE ECOSYSTEM
BRAND’S LIFE BEGINS HERE..
Trademark
Era
Craftsman's
Era •Fidias
•Alexander the Great
•Deawars
•Michelin
•Levis
•Augustus /Octavius
…AND CONTINUES HERE !
Brand in Fragments
QUALITY
AND/ OR DEMASSIFICATI GREED ECOSYSTEM
ON
Arrogant
Era
Low
Low
…AND / OR ENDS HERE !
Dead Brands
TURBULENT ECOSYSTEM
Bifurcation
Point
Reactive
Era
•Microsoft
•Coca Cola
•Wal Mart
•McDonalds
•Nike
•GAP
•J.P.Morgan
•Exxon Mobil
•Fidelity
PRICE
•P & G
•Golgate Palmolive
•Unilever
Slide 92
High
Evolution and Corporate Darwinism
The Emerging Corporate Ecosystem
“Nice”
• Ikea (EU)
• Lego (EU)
• Zara (EU)
“Fair Trade”
• Body Shop (EU)
• Ben & Jerry (EU)
• Black & Green (EU)
“You”/”Me”
• YouTube (US)
• Facebook (US)
• Current TV (US)
“Stars”
• B.Clinton
• J.Lopez
• M.Jordan
“Monopolistic”
“Cultivated”
•Microsoft (US)
•Intel (US)
•Google (US)
•Bottega Veneta (EU)
•Paul Smith (EU)
•Jo Malone (EU)
“ Narcissism “
• Leiber (Bags,US,$5,595)
• Daslu (Exclusive Stores ,BR)
• Hammer (Automotive,US)
•Tiffany’s (US)
“Patent”
•Monsanto (US)
•Geron (US)
•DuPont (US)
“Political”
• Halliburton
• Bechtel
• Enron
“Arrogant”
• Wal-Mart
• Coca Cola
• Exxon Mobil
“No-Label”
“e-Graftmans”
“Gatekeepers”
•CNN (US)
•Disney (US)
•Time Warner (US)
•News Corporation (US)
Slide 93
The “Nice Way” Strategy in Practice
New Corporate Species are Already Here !
•All are the same : Aigle, Millet, North Face and Patagonia. The
only difference is in Values…
•Will repair your jacket.. help you trade-in or give it away.. recycle it..
•Allocate 1% of turnover to environmental initiatives/groups/activism
Slide 94
The Pendulum Swings
The Meaning of … no Meaning
¨Η κορυφαία Αρχαία Ελληνική ιδιαιτερότητα δεν είναι η Αρμονία, το Μέτρο, η Αλήθεια… είναι
το ζήτημα του μη - νοήματος, του μη όντος.. Η συνείδηση πως τίποτε δεν αξίζει όσο η Ζωή..¨
(Κορνήλιος Καστοριάδης, Η Ελληνική Ιδιαιτερότητα- Από τον Όμηρο στον Ηράκλειτο)
Slide 95
“Man the measure (of all things)”
Πάντων χρημάτων (πραγμάτων) μέτρον εστίν άνθρωπος
( Protagoras )
Slide 96
“Happiness is the meaning and the purpose of life,
the whole aim and the end of human existence”
( Aristotle )
Slide 97
Welcome Mr Gauss.. Goodbuy Mr Pareto
Welcome Mr “Normal Distribution” (Gauss)
Goodbye Mr “Abnormal / Power Distribution” (Pareto)
Slide 98
The End of Business as we Knew it?
“… this is not the end.
It is not even the beginning of the end.
But it is, perhaps, the end of the beginning."
(Winston Churchill)
Slide 99
Thank You
Slide 100
More Info
(Available in Amazon.com)
www.costaskataras.org
http://kleisofthought.blogspot.com/
http://thehappinesslab.blogspot.com/
Slide 101
The Nice Way Strategy
Kataras Related Lectures
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A New Paradigm: The Application of “Chaos Thinking” to Strategy
The European Effect: Is Corporate Europe Beginning to Surpass
America?
Restoring Confidence in the Corporation: Rethinking the Business
of...Business
The Uncertain Future of Brands: The Next Colossal Corporate
Challenge?
The Economics of Happiness: Mastering the New Competitive
Advantage
The Revenge of the Psych: Is Consumers’ Dominance Over
Corporations Near?
Rethinking Marketing: Surviving in a New, Polarized, World
Slide 102