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Healthy Skepticism Library item: 2039

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

 

Publication type: book

Estes R.
Tyrany of the bottom line: Why corporations make good people do bad things.
San Francisco: Berrett-Koehler 1996
http://www.bkconnection.com/ProdDetails.asp?ID=1881052753&PG=1&Type=BL&PCS=BKP


Abstract:

Description

Here is the story of corporate power gone awry-bringing injury and death to employees, financial and personal loss to customers, desolation to communities, pollution and hazardous waste to the nation. Estes shows that all of us are stakeholders in the corporation-with an investment, an interest in its performance, and a right to accountability-and lays out a plan to reform the corporate system to serve all stakeholders.

Synopsis

Tyranny of the Bottom Line tells how the corporate system, originally created to serve the public interest, has acquired immense power over the public. Largely unconstrained by a captive regulatory bureaucracy, corporations today exercise a silent dominance over much of our society. This dominion can produce substantial good, but can also bring injury and death to employees, financial and personal loss to customers, desolation to communities, poisonous pollution and hazardous waste to the nation.

In Tyranny of the Bottom Line , Ralph Estes tells the story of corporate power gone awry: permanent layoffs affecting millions of people while CEO salaries go through the roof; toxic waste poisoning the land, water, and air; unhealthy and dangerous products on the market; injury and death on the job; white-collar hustles in the S&Ls and on Wall Street that ultimately cost us all.

Citing numerous examples that dramatically support his case, Estes traces the history of the corporation and shows how the original purpose has been systematically perverted through an unbalanced focus on profit-and-loss.

Estes identifies the primary cause of the perversion of corporate purpose as a defective score-keeping system-the accounting measurement of profit and loss, or the bottom line. This system measures only the effects on stockholders and not the effects on other stakeholders-employees, customers, communities, and society. Tyranny of the Bottom Line then shows that this one-dimensional bottom-line orientation is the prime motivational factor that causes corporate managers to make decisions that harm stakeholders. Managers, it seems, are often required to subordinate personal morality to an impersonal corporate culture whose direction comes from this perverse score-keeping system.

Emphasizing the notion that all of us are stakeholders in the large corporation-with an investment, an interest in its performance, and a right to accountability-Ralph Estes offers proposals for creating more effective and humane companies, restoring the original public purpose of the corporate system, and allowing managers to make choices that effectively and ethically balance the interests of everyone. Estes lays out a practical, specific plan for the development of a new, fair score-keeping system that shows the effects of a corporation’s actions on all its stakeholders, not merely its stockholders, and then tells managers that they will be responsible for these effects.

Based on the author’s many years of research and experience, Tyranny of the Bottom Line lays out this prescription in an effective and workable program that can make corporations safer and more rewarding for all of us, and more enjoyable, more honorable, for the people who run them.

Endorsements

“A well-researched shocker that will make most readers re-think the mission of the nation’s corporate powers. It makes a strong plea for accountability but also equips the stakeholders to demand more by arming them with potent information. . . . Read it!”

Barbara Reynolds, Columnist, USA Today
“Tyranny of the Bottom Line will very quickly become a classic. It is profound, yet easily accessible. This is the most important book written on American corporations and their power since Berle and Means. It is in a great tradition, one which Estes shares with Galbraith and Barnet.”

Marc Raskin, Cofounder and Distinguished Fellow, The Institute for Policy Studies, and author of Doing and Being and Essays of a Citizen
“Only people who don’t read this book will preserve the possibility of remaining apathetic on this major issue!”

Lee Smith, former President of Travelhost, Inc., and Southwest Texas State University
“Reading Ralph Estes’ book is like eavesdropping in the break room, lunch room, and board room. The topic is what every employee is wondering: Why is the bottom line on top?”

Kim Talley, Sales Manager, Time Electronics
“Estes has been at the forefront of development in corporate financial disclosures and corporate social accounting for two decades. Here he links his research and prescriptions into a practical solution to the problem of the lack of disclosure of stakeholder interests. His book should prompt managers, regulators, and legislators to rethink the role of the corporation in society. Well worth reading.”

Marc J. Epstein, Graduate School of Business, Stanford University

Table of Contents
Contents
1. The Manager Held Hostage: Why Corporations Make Good People Do Bad Things
Part I: The Root of the Problem
2. The Perversion of Corporate Purpose
3. Power Without Accountability: Who Controls the Corporation?
4. The Dominion of the Corpocracy
Part II: Consequences of Unaccountability
5. The Harm to Our Communities and Our Nation
6. Expendable Employees, Disposable Suppliers
7. Customers Pay Twice
8. The Public Cost of Private Corporations
Part III: A Practical Prescription
9. The Solution: A Better Scorecard
10. What the Scorecard Should Contain
11. How Do We Get There?

 

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...to influence multinational corporations effectively, the efforts of governments will have to be complemented by others, notably the many voluntary organisations that have shown they can effectively represent society’s public-health interests…
A small group known as Healthy Skepticism; formerly the Medical Lobby for Appropriate Marketing) has consistently and insistently drawn the attention of producers to promotional malpractice, calling for (and often securing) correction. These organisations [Healthy Skepticism, Médecins Sans Frontières and Health Action International] are small, but they are capable; they bear malice towards no one, and they are inscrutably honest. If industry is indeed persuaded to face up to its social responsibilities in the coming years it may well be because of these associations and others like them.
- Dukes MN. Accountability of the pharmaceutical industry. Lancet. 2002 Nov 23; 360(9346)1682-4.