What's Wrong With Corporations?

[TheGlyphstone]

Fun trivia fact: According to the Guinness Book of World Records, the smallest union in the world is 9 people.

[Vekseid]

Unions exist across several businesses both big and small. The National Labor Relations Board points out that a union can exist with just one employee. All that is required is that the union is registered and recognized and it is no longer in the hands of the employees or the employers, and since employers cannot legally interfere with the creation of a union, then the matter would be out of my hands. I could be the best damn boss ever, but if 6 of those 10 employees (majority) demand a union, they have every legal right to create one.

I am not sure what your problem is here.

Does being forced to deal with humans on equal footing bother you in some fashion?

The same could be said for the $1 bill I have in my hand. The bill itself has no inherent worth, but it does have worth based on what I and the person I'm bargaining with says its worth. Financial capital is the same way, in that it is considered to be worth a certain value and thus can be used as a medium of exchange.

The only reason your dollar can be exchanged for anything, is because of other people.

People make the world work. Money is just a convenience, and it has become increasingly broken of late.

You could certainly do that and yes, it does happen. Or, the business could go bankrupt, or be required to downsize in order to stay afloat. There are tons of 'what ifs' out there, and this absolutely happens to businesses all the time. Just because it's entirely possible that an investor might buy up a company and sell it off again just to squeeze profit out of it doesn't mean that's all that investors do.

Not everyone murders, either, but we still have laws against it.

[GloomCookie]

I am not sure what your problem is here.

Does being forced to deal with humans on equal footing bother you in some fashion?

The only reason your dollar can be exchanged for anything, is because of other people.

People make the world work. Money is just a convenience, and it has become increasingly broken of late.

Not everyone murders, either, but we still have laws against it.

I don't know why you seem inherently hostile of me, because I'm not trying to paint myself as evil or you. My initial post was that if a union forms, and they come to me with an unreasonable demand, I can and will push back on it. But if they come to me with a decent proposal, I will negotiate in good faith. I don't have an issue with unions, but you seem to think I do, and I don't get why. I don't care if there's a union or individual employees, I've dealt with individual employees, I deal with bosses and fellow employees and I've also been a manager. I've dealt with the situation as it's presented. It's easy to say people are people but there are always power dynamics in every scenario such that if I am dealing with employees, whether one on one or via a union rep, both sides have power in their own regard. The employee can leave which will require me to find a new one which hurts the bottom line. The employee knows that I can turn down their request if it's unreasonable. There's a ton of back and forth so it's never truly equal, but I can negotiate in good faith because if we're both satisfied with an agreement, then we both win. Leveraging that power dynamic is why you hear about bad bosses.

As far as money is concerned, yes, it does take people. I've never denied that. Until that system breaks, it's what we have, and that's about all I can really say on the matter. You can claim it's all an illusion but that won't be true until it does actually break. Until that happens, it remains a viable indicator of resources available.

To your third point, trying to regulate who can and can't buy and sell interests in a company would do a lot more harm than good. For example, Koch Industries several years ago bought Georgia Pacific, the company my dad works for. They then bought all the shares and took the company private so they no longer had to deal with investors. How would you classify that move? Because a company entirely bought another company. Didn't destroy it, maybe did a little downsizing here and there, but overall the company remains intact and functional. Rules preventing major investors from purchasing a major corporation (and what would even define 'major' in this context?) would stop such transactions. Or would it be instead that investors can't shut down a company? How would that even work? If a company can't pay its debt, it goes bankrupt and more often than not it gets shut down because it's not profitable enough. That happens all the time.

I'm trying to point out the reality of the situation but I'm getting a lot of negativity and hostility, and I would appreciate that you ease up. Whenever you post, I get anxious because it feels like you're being openly hostile.

[RedRose]

So I don't have a personal opinion/experience, but my mom who worked as HR for decades claimed most of those who get rich either inherit or work their workers to death (in whatever limit their country allow) BUT those who have a better experience at work are those who treat their employees humanely, and this is what she always tried to do.

[Annaamarth]

I will push constantly for training but I have no authority over my fellow employees.

I maintain a similar stance ... except I absolutely claim situational authority any time a life-safety issue is at hand.  Which is frequently.  That's putting aside casual environmental mistakes - as Walmart earlier - or the occasional financial crime.  I will absolutely piss off my coworkers if they don't know their jobs, even if the reason they don't know their job is because the companies I work with fail to maintain good training environments and no fault of their own.

Most companies that have major investors also have agreements in place on how and where large stakes in the company can be sold off. The bulk of companies don't have a presence on the stock markets of the world, and so assets are privately owned by the investors. Because such a large stake could absolutely cripple operations, usually the company will have some sort of safeguard in place to allow them to purchase the shares owned by the investors trying to depart, either by having another investor personally purchase the shares or having the company buy the shares and basically dissolve those shares, meaning that now you have a ~15% split of the company between the six remaining investors. You have to have such safeguards in place because what happens if an investor dies? Such contingencies are addressed in most investment agreements.

Sure, there are contingencies ... but again, the driving factor of infinite growth might mean a divestment could "just" be a 20% drop in short-term stock ... and that's still bad enough to be enormously impactful.

So all the anxiety that this kind of possibility could occur drives negative "preventative" measures that end up self-sabotaging.

You aren't wrong about the law, but this discussion isn't about what is legal - it is about what is right.  That was defined at the very first post when the question was asked "When did and why is 'corporations bad' a thing?"  That is inherently a value statement, which is necessarily a moral judgement - which may or may not have anything to do with a legal judgement.

Now, I know you're a ... nominal conservative, as I understand it - someone who thinks that the status quo is not perfect, but pretty close to as good as we can get, is my impression (with the disclaimer that summing up someone's political identity with such a gross oversimplification is something of a disservice so please forgive that).  That's fine and dandy, but I - and a lot of people - fundamentally disagree.  The status quo does not seem to be working - it's driving climate change and income inequality and voting inequality and so on ad nauseum.

There is a value to the corporate system, and I think I've recognized that - because I was also careful to say that corporations are not inherently bad, that C-level execs are not inherently evil, that the whole thing is kinda cyclic - circulating currents (if you're familiar with the phenomena in the utility sector) is actually a pretty good analogy, I think.

I'm trying to point out the reality of the situation but I'm getting a lot of negativity and hostility, and I would appreciate that you ease up. Whenever you post, I get anxious because it feels like you're being openly hostile.

I hope I haven't added to this anxiety.  I don't want to be bullying you - in fact, I have a lot of respect for you for being willing to engage on the topic and for being willing to get into specifics.  Unfortunately, the way the current system is working in the US, you see broad efforts trying to de-regulate a lot of those protections - from the business side to the personal liberties side - and a lot of people have their own fears and anxieties tied up in that.  I certainly do - but I hope I am keeping that in check and not projecting it onto you.

[Vekseid]

I don't know why you seem inherently hostile of me, because I'm not trying to paint myself as evil or you. My initial post was that if a union forms, and they come to me with an unreasonable demand, I can and will push back on it. But if they come to me with a decent proposal, I will negotiate in good faith. I don't have an issue with unions, but you seem to think I do, and I don't get why.

I apologize, I must have misinterpreted.

Your argument comes off as a strawman to me. Like every business owner has this axe looming overhead.

The economic purpose of unions is to balance the number of employee-negotiators with employer-negotiators.

I've been on the other end of unions. Usually what I've seen is them making charges of people 'doing their jobs' because they are often poorly trained in an area. Often bullshit, but when you bill at $120-$300 an hour, it isn't worth it to the company to spend a half an hour in these arguments, and they know this.

But this degree of job protection isn't really seen in smaller organizations. Usually in smaller union shops, the managers and owners were up-front and often even proud of it, in my experience.

Mileage may vary, of course.

As far as money is concerned, yes, it does take people. I've never denied that. Until that system breaks, it's what we have, and that's about all I can really say on the matter. You can claim it's all an illusion but that won't be true until it does actually break. Until that happens, it remains a viable indicator of resources available.

My point is. the people doing the work are the most important part of every business equation.

The idea they don't get a vote because their time and skill is not 'investment' is to me farcical.

Will it collapse? I don't know. Something or another has to break, and I think our current concept of money may end up being quite fragile if something could genuinely replace it.

To your third point, trying to regulate who can and can't buy and sell interests in a company would do a lot more harm than good. For example, Koch Industries several years ago bought Georgia Pacific, the company my dad works for. They then bought all the shares and took the company private so they no longer had to deal with investors. How would you classify that move?

Under an arrangement where employees are granted a minimum share in total, this would be Koch (or whoever) buying all tradable shares.

The employee-elected board members would be involved in making the recommendation to accept the deal, or not, and would influence the purchase agreement. It may make it more or less difficult to complete the purchase, as the employee shares probably make a significant portion of the company.

It would certainly be more complicated as employee-share conversion would be part of the agreement on both sides. It would be difficult to line up for private companies without very specific government mandates which are likely not proper for governments to be making.

I don't see hindering mergers as a bad thing, however.

Because a company entirely bought another company. Didn't destroy it, maybe did a little downsizing here and there, but overall the company remains intact and functional. Rules preventing major investors from purchasing a major corporation (and what would even define 'major' in this context?) would stop such transactions. Or would it be instead that investors can't shut down a company? How would that even work? If a company can't pay its debt, it goes bankrupt and more often than not it gets shut down because it's not profitable enough. That happens all the time.

Simply, every employee is also an investor. These things are altered, but they don't fundamentally cease.

For the cutoff I'd use the federal guideline. So, at 15 employees. To stop the obvious bullshit here, and to generate power from Ayn Rand spinning in her grave, bar general corporations from owning shares in other corporations unless they are specifically holding/investment companies owning shares in non-holding/investment companies.

I'm trying to point out the reality of the situation but I'm getting a lot of negativity and hostility, and I would appreciate that you ease up. Whenever you post, I get anxious because it feels like you're being openly hostile.

I'm not hostile to you personally. If you like I will send you a PM to try and reconcile more specifically. I don't want to cause more anxiety.

For this thread, your argument comes off to me as very... 'money over people'.

Tell a coal miner with black lung he hasn't sacrificed enough for his company. He should have invested his father's money into it.

That is where things are now legally. This does not make them appropriate or even morally defensible.

[GloomCookie]

A personal PM is not required, I just get very anxious because I could almost see the strawman from the other direction. That corporations are these big evil entities that absolutely hate their employees. The truth, on both sides, is somewhere in the middle.

I'm not corporate over people, far from it. I believe that people are the backbone of everything. But, I'm also of the opinion that corporations are not inherently evil. One of the reasons I took the time to invest in the company I work for is because I wanted to be the voice of people on the production floor who don't otherwise have a voice, even if it's a tiny one, because the bulk of people who are invested in the company are engineers and senior management, the people who already have a lot of power over the average hourly employee who designs the bulk of our product. I know what that's like, to be that voiceless cog in the machine working for corporate masters who can (and did) fire me based on reasons that I felt are absolute bullshit. But I don't hold the corporation itself responsible for it because of the decisions of lower management.

You see, I live on the edge of Bentonville, Arkansas. For those who don't know, that's where they have Walmart Home Office. I've been there, my sister worked in their legal department for about two years prior to running off to Canada. I personally know one of the lead mechanical engineers in their mechanical department, and my company does a lot of work with their Sams Club prototypes. There's a lot of interaction between our two companies. And because of that, I see a part of the corporate structure that a lot of people don't. I see a lot of the higher management as people who have reasonable policies in place trying to manage a corporation who is the single largest employer in several states.



For those of you visually impared, this map shows the largest employer by state. Of those states, Walmart is the largest employer in the following: Wyoming, Montana, Arizona, Texas, Louisiana, Arkansas, Oklahoma, Kansas, Missouri, Illinois, Indiana, Ohio, Kentucky, West Virginia, Virgnina, Tennessee, Mississippi, Alabama, Georgia, South Carolina, Florida, and New Hampshire. 22 states, with 1.5 million employees.

It's because of my unique perspective that I think big corporations can and do a lot. Within sight of my house I can see the Amp, a massive concert hall built by the Walton family, and I have plans to visit Crystal Bridges, an art gallery that's pretty famous. These are just two of the numerous things that Walmart has led to that have benefitted the people here, and there are countless others. That said, I am also aware that Walmart doesn't do all this out of the goodness of their hearts, since they get tax write-offs and other perks for spending all this money. But, they could have done absolutely nothing with that money as well. And there are other institutions by people with tremendous wealth that they didn't need to do. Just look at Bill Gates and Warren Buffet, people who have invested billions into charities or even made their own.

The point is that I'm trying to point out that corporations have their own agendas, and sometimes those agendas don't line up with what we the average people see as priorities. I'm basically advocating for them because otherwise this just becomes a place to rant about how evil the corporations are.

But, again, I do not intend to brush away the horrendous practices that have been done in the past trying to curtail unions. I'm well aware of events like the Battle of Blair Mountain (which, incidentally, is where the term redneck comes from due to the union employees wearing red bandanas around their necks) and how groups like the Pinkerton Detective Agency was used to hunt down and harass union organizers. How companies worked to fight off the unions and do what they could to shut them down. That kind of behavior is deplorable.

I'm very much pro-worker, but if we want to have a productive discussion we need to hear both sides of the story. I'm sorry if I came across as being pro-corporate anti-worker, because that was not my intention.

I maintain a similar stance ... except I absolutely claim situational authority any time a life-safety issue is at hand.  Which is frequently.  That's putting aside casual environmental mistakes - as Walmart earlier - or the occasional financial crime.  I will absolutely piss off my coworkers if they don't know their jobs, even if the reason they don't know their job is because the companies I work with fail to maintain good training environments and no fault of their own.

To kinda go back to what I was talking about earlier, I'm in electrical power distribution at my job. I've sorta fallen into the old vet on the floor who knows how the job is done and remembers the history of where stuff came from and why we do things a certain way. Here recently, one of our former employees returned and has taken on training for our new employees, but I'm also a QC'er and officially listed as mentor. The two of us have become pretty proactive trying to make sure that our new employees get OJT on how to do this stuff, because one of the things that absolutely scares the shit out of me is knowing someone can and will cut corners to save some money and point at us if we screw this up.

I was about 15 when my grandfather told me a story about when he was a boy and they were first putting in electric lines to his neighborhood. Four men standing around a power line scratching their heads on what to do next because their OJT training consisted of "Here's a shovel, dig a hole, put up the pole, string the wire". They didn't know a damn thing. Unsurprisingly, the four men were in a hole during a rainstorm, one of them dropped the line, and next thing you know there's four funerals. Electrical safety is something I absolutely will not shirk on when it comes to doing things to code. I've had screaming matches with contractors about following the code to the letter, because it's not going to be him who pays for it, it's not gonna be Walmart or Starbucks or Planet Fitness who pays for it. It's going to be John Doe the poor bastard working minimum wage at the front counter who gets told to run to the back and because something's not done right he puts his hand on something and it's energized and no one thinks to go looking until they smell cooked meat wafting from the back and his manager Tony gets pissed thinking John went for a break and finds him dead on the floor.

[TheGlyphstone]

Walmart might not have been the greatest counter-example, admittedly, considering how notorious they are for illegal union-busting and general maltreatment of employees.

As a general question, though, to anyone who can answer, what is the 'average' size of a union? I was under the impression that even small unions were high-double-digit or triple-digit groups, and that the idea of a single-digit union is technically possible but absurd in practice since the pressures that lead to a union's formation are much less prevalent in small businesses to begin with. When even one worker is 10% of your total staff, there is both enlightened self-interest in making sure your staff are satisfied and regular interaction with them as people, whereas if one worker is 0.5% of your staff, they stop being people to the boss and start being spreadsheet entries.

[Vekseid]

Even ignoring what corporations like Amazon and Walmart get up to with their workers, there is the issue of having singular retailers becoming so overwhelmingly dominant.

Walmart was a part of driving Vlasic to bankruptcy with its antics. One story, among countless such stories of the shit they or Amazon have pulled.

Economies function best when there are infinite suppliers and infinite buyers. When someone gets to the point where they are a near-monopoly, they wreak havoc on economies.

No retailer should be on that map in any state, much less twenty of them. It means that one retailer holds the power of life or death over a great many businesses, because it acts as a sort of monopoly in its own right. There is nothing remotely healthy or positive there, and any individual good works cannot account for the economic damage they inflict on places.

No one organization should be able to make threats like Apple, Amazon, or Walmart do.

[Oniya]

No retailer should be on that map in any state, much less twenty of them. It means that one retailer holds the power of life or death over a great many businesses, because it acts as a sort of monopoly in its own right. There is nothing remotely healthy or positive there, and any individual good works cannot account for the economic damage they inflict on places.

Mathematically, due to the data that map represents (the 'largest employer'), someone is going to be on that map.  The question is whether they're the company that employs 86% of the people on a severely skewed curve, or if they happen to have hired 2% of the people where 98 other companies only have 1% apiece.  I suspect that the states showing universities have a much flatter distribution, for example.  (Google tells me that the University of Wisconsin employs 40,000 people statewide, and the state population is 5.8 million according to the Census Bureau.)

[Vekseid]

Someone is, but there is no reason it has to be a retailer. They buy stuff from others and sell it at a markup. If there is only a few of thm, they possess an insane amount of control over their suppliers and customers.

[GloomCookie]

Holy shit I didn't know they'd put Vlasic out of business :( My mom loved their dill pickles.

Walmart and Amazon are working two become both sides of the same coin. On one hand, they want to become the monopoly when it comes to purchasing retail, while on the other hand become a monopsony when it comes to selling to consumers. For those of you unaware, a monopsony is the inverse of a monopoly, and is where there are numerous suppliers but only one buyer. The US military is an example of one where numerous companies like Boeing or Lockheed-Martin compete for the right to be exclusive suppliers for certain items like warplanes.

The two are basically battling it out to be the only name in town when it comes to getting items bought and sold to consumers, which is a terrifying prospect. Amazon is also targeting other avenues like Prime Video and their digital services for business, which sound great on paper but then you realize just how horrible it would be if they owned the majority share of that kind of business. If Amazon became the largest supplier of digital cloud storage for example, then unless you wanted to buy your own servers and databanks and host your own local equipment, you would be forced to go to them. If that then happens, they could charge whatever they want since who else would you go to? And on the flip side, they'd be one of the only organizations purchasing servers for cloud-based storage, thus having huge leverage on manufacturers, leading to a similar situation with Vlasic and Walmart. Amazon no longer pays what the manufacturer says, the manufacturer gets whatever Amazon offers or nothing at all.

Cookie going off on stuff that's related to the conversation but might be boring to most people

And it's going to get worse, unfortunately. Since I work in the industry, I know it's getting harder and harder each year for businesses because of the current global supply shortages and whatnot. I was copied on an email several months ago (around March or so) that basically said "We're going to be ordering rooftop HVAC units because we need to lock in an order before the manufacturer fills up capacity through the end of the year." Again, this was in March and companies like Trane and Carrier have already capped production through the end of the year, and has led to (what is to me) a hilarious situation where we're no longer specifying equipment based on what we need but based on what we're given.

Jo-Ann Fabrics and Crafts is one of the clients I work on, and one of their things was what is called an Integrated Facilities Switchboard (IFS) that is basically all their panels and equipment in one large box that comes wired from the factory and they just drop it, bolt it in place, wire it up, and go. Eaton, the manufacturer, has already filled all their capacity into 2023. We're basically being told to reuse everything possible and to just hope for the best.

The reason all this is a big deal is because big companies like Walmart already throw their weight around when it comes to this type of equipment. They purchase equipment in huge batches all at one time. Coupled with increasing costs for things like solar panels and other renewable sources by energy codes and it's becoming harder and harder for small businesses. A big company like Walmart and Amazon can soak the increased costs of this equipment, but smaller businesses are increasingly starting to feel the hurt and are being forced to reuse equipment that isn't always in the best of shape.

I'm not going to get into the specifics but I saw a Federal Pacific transformer on a job recently. That gave me a mild heart attack and thankfully, we weren't keeping it. I've seen equipment that was last manufactured in 1964 still in use today. Hell, I had a phone conference discussing whether to reuse equipment from an old Kroger turned Planet Fitness that was last upgraded in 1987! Thankfully, we all agreed we're not reusing equipment that old on a new store, even assuming I could find replacement breakers >.<

So yeah, we're running headlong into a situation where this is becoming a reality, and it's not going to end well.

[Annaamarth]

Someone is, but there is no reason it has to be a retailer. They buy stuff from others and sell it at a markup. If there is only a few of thm, they possess an insane amount of control over their suppliers and customers.

I think Oniya's point is that when the "biggest" employer is a much smaller cross-section of the state populace, you have a much healthier and more diverse business environment.

Walmart absolutely murders business diversity.

[Oniya]

I think Oniya's point is that when the "biggest" employer is a much smaller cross-section of the state populace, you have a much healthier and more diverse business environment.

Walmart absolutely murders business diversity.

Exactly, on both statements.  If, for example, a retailer like the now-defunct Sears was substituted into the place of the University of Wisconsin, and was still the 'biggest' employer, you'd almost have to have the same flattened distribution of employers, just based on the fact that those 40,000 employees are only 6% of the total population.  There could still be a sharp peak, but the other employers would have to be below that and still make up 94%, so there would be more of them.  When you have a mega-corp like Walmart, there's less percentage remaining to divide up between other employers, and a higher 'possible percentage' for number two.

[Jerram]

To your third point, trying to regulate who can and can't buy and sell interests in a company would do a lot more harm than good.

You see no problem in allowing companies to vertically integrate industries?

[GloomCookie]

You see no problem in allowing companies to vertically integrate industries?

I actually don't, because in some cases it can be far more efficient to do so. Most won't, however.

To make sure we're on the same page, businesses can expand in one of two directions: horizontally and vertically. Horizontal expansion is what we think of when it comes to monopolies as a single industry takes over the entire market, such as Standard Oil or Walmart becoming the only company in that field. Vertical expansion is when a company moves to secure part of the supply chain to and from that industry. For example, let's use Apple. If Apple expanded horizontally, they'd have to acquire companies like Samsung and other big tech giants operating in the phone market, which isn't something they're likely to do anytime soon. Instead, they might look to squeeze competition by buying up companies in the supply chain that produce components in the development of their phones, making those parts cheaper to buy internally and more expensive if competitors want to buy them externally.

I don't have an issue in this regard for most cases as vertical expansion is becoming increasingly more difficult to do and when it does happen, it rarely has a major impact on the market as a whole.

To go back to my Apple example, Apple and Samsung and all the other manufacturers all use a lot of the same components, even if Apple tends to be an outlier with things like their lightning charger. Regardless, many components are shared between phones, and for this reason companies like Foxconn (which is a mess in and of itself) exist with production lines that supply many of the same companies, they just change what sticker they put on the box from one day to the next. After all, most phone chargers you plug into the wall look identical and probably are, the only difference is what color it is and whose logo is on the side. These companies are part of the vertical supply chain and are often large enough that they are just as difficult if not harder to expand into because they are vital to so many companies. If Apple started to make a move to purchase Foxconn or other similar companies, companies like Samsung would actively push against them, potentially buying enough shares to be a major thorn in Apple's side. In essence, Foxconn's position becomes more secure because of where they sit in the supply chain.

Very rarely do companies maintain a monopoly on the supply of a particular good or service, though there are some notable exceptions. For example, for the longest time executives from the De Beers diamond group could be arrested if they set foot on US soil because they maintained a near monopoly on diamonds around the world and were guilty of price fixing within the United States, and this was as recent as 2004. In this case, De Beers effectively controlled diamonds. We most often see only a handful of companies control major resources when they are incredibly limited, in this case diamonds but there are also strangleholds on resources like rare earth metals, which are almost exclusively coming from China. These industries are most at risk from horizontal expansion, since any company that is already operating in the area might expand to take over other mines to strangle supply, and since their product is needed by so many other industries it's difficult as hell to vertically expand into them.

In a few cases, companies will actually vertically shrink. I know around 2000 where I lived, the paper and plywood plant deliberately sold their timberland to a holding group because they no longer wanted to be directly responsible for purchasing and maintaining the land. Their main source of revenue was becoming expensive to maintain, while another company saw the opportunity to purchase the land and the markup would benefit them in the long run. By getting out of the supply, the company focused more of their attention on the final product. This makes some sense in that the additional markup is probably less than the department's upkeep, meaning the overall costs went down, and the new company already maintains timberland and so is specialized in that area as well.

That's also why you see large companies owning smaller ones constantly. The bigger corporation owns smaller companies because those smaller companies can focus on their product while still passing profit up the corporate ladder. This I wouldn't classify as vertical expansion but more specialized expansion, since a company may not even be related to that industry but still expands into it. Maybe... Diagonal expansion?

To give you an idea of what I'm talking about, let's look at Johnson & Johnson. They own companies specializing in six key areas: Skin care, pharmaceuticals, vision, consumer goods, medical devices, and consumer health. These are all centered more or less on medical applications, so you could say they expand horizontally into the healthcare market, but they aren't expanding all the way into a particular niche field, just setting up smaller companies to take advantage of those niche markets, hence the quasi-term diagonal expansion.

To get an idea of what I'm talking about, I'll break the companies out by industry and then by brand. This is just Johnson & Johnson btw, and they aren't the only ones to do this.

Brands owned by Johnson & Johnson

Skin Care
Neutrogena
Aveeno
Aveeno Baby
Dr. Ci:Labo
Neostrata
Exuviance
Dabao
bebe
Genomer
Sundown
Rogaine
Women's Rogaine
Regaine
Clean & Clear
C&C by Clean & Clear
Labo Labo
Lubriderm
PizBuin
Le Petit Marseillais

Pharmaceutical
Janssen
Actelion
Cilag
Crucell
Novira

Consumer Goods
Lactaid
Splenda
Benecol

Vision
Acuvue
Abbott Medical Optics
Tear Science

Medical Devices
Acclarent
Biosense Webster
Cerenovus
DePuy Synthes
Ethicon
Mentor

Consumer Health
Tylenol
Moltrin
Zyrtec
Benadryl
Benylin
Bengay
Zarbee's
Imodium
Rhinocort
Visine
Nicorette
Pepcid
Sudafed
Listerine
Band-Aid
Neosporin
Polysporin
Caladryl
Johnson's
Desitin
Penaten
OGX
Maui Moisture
Carefree
Stayfree
Compeed
Rembrandt
Mylanta
Tucks

If this was more your question, then I'm on the fence. On the one hand, most mergers of major corporations like this often have to go before a court to get permission to perform a merger, which is to hopefully prevent a monopoly. In this case, there are laws in place, and I'm ok with them. They're preventing monopolies. My point was more that trying to limit who can and can't buy into a company is something that could lead to more harm than good from an individual investor. Warren Buffet for example probably has investment into every major corporation out there to some degree, meaning that in theory he benefits no matter who rises or falls. Now, if Warren Buffet were buying stocks to force the two companies to merge because he now has the shares to force this, then I have an issue because that could violate laws against monopolies. Basically, I don't care what individuals do with their money as long as they're not using it to break the law, even if they do invest in multiple competing companies.

[HannibalBarca]

I find that the primary problem with corporations is that with any large entity--the size creates impersonal relationships.  Empathy is removed when you don't have personal contact with employees or owners.  Everyone in the equation is a human being, but distance and disconnect can produce antipathy.  Add to that the research on anti-social personality disorders being found in greater percentages among management and leadership positions (sociopaths have no problem stepping on people on the way up the corporate ladder) and it makes you wonder how humanity gets over the hump of massive groups of people putting their trust in few people, and develop a concept of smaller groups of people who have a personal stake in one another, but use technology to tie themselves to other groups, thereby avoiding the "other-group-bad" mentality.

[GloomCookie]

I find that the primary problem with corporations is that with any large entity--the size creates impersonal relationships.  Empathy is removed when you don't have personal contact with employees or owners.  Everyone in the equation is a human being, but distance and disconnect can produce antipathy.  Add to that the research on anti-social personality disorders being found in greater percentages among management and leadership positions (sociopaths have no problem stepping on people on the way up the corporate ladder) and it makes you wonder how humanity gets over the hump of massive groups of people putting their trust in few people, and develop a concept of smaller groups of people who have a personal stake in one another, but use technology to tie themselves to other groups, thereby avoiding the "other-group-bad" mentality.

Couldn't the same be said of any government or similarly sized organization, not just corporations?

[HannibalBarca]

Yes.  It's a humanity issue, not just a corporate issue...but corporations hold a lot of power in the form of money, and because of that they possess undue influence on issues that should be the purview of all citizens of a nation.  History shows power imbalances don't tend to right themselves, and lead to greater social upheavals.

[Annaamarth]

I find that the primary problem with corporations is that with any large entity--the size creates impersonal relationships.  Empathy is removed when you don't have personal contact with employees or owners.  Everyone in the equation is a human being, but distance and disconnect can produce antipathy.  Add to that the research on anti-social personality disorders being found in greater percentages among management and leadership positions (sociopaths have no problem stepping on people on the way up the corporate ladder) and it makes you wonder how humanity gets over the hump of massive groups of people putting their trust in few people, and develop a concept of smaller groups of people who have a personal stake in one another, but use technology to tie themselves to other groups, thereby avoiding the "other-group-bad" mentality.

This is understandable, but I don't have this problem so often.

I can generally do well in a corporate environment.  I can relate to the people on the other side of the counter or phone and we can generally make progress on whatever shared issue we're dealing with.

I think my problem remains the decisions driven by the infinite-growth-to-make-stock-numbers-go-up spectre.

But that's me.  I can definitely understand your problem.

[Oniya]

So, I used to work at a call center for a major Internet provider that has now become part of a major media conglomerate.  Back when I started, you could be walking to your desk and you'd know everyone on the route.  Every other Friday, the break room had a social on the company's dime.  The CEO was addressed with 'Hi, Steve.'  Getting a problematic case on line was a point of pride.  We were small.  It was a BIG THING when we crossed a million members.  The CEO made sure that we got actual leather jackets 'just like his' when we hit 10 million - not just some cheap rip-off.

Then, we got big.  Call metrics were introduced.  Get 'em off the phone as quick as you can.  Call volume in the red most of the time (except when the OJ verdict was coming down - that was actually freaky.)  New call centers were opened, and those of us in the 'original' center got frustrated when we got calls that had been speed-handled by agents who had hit the ground with the instructions of 'get 'em off the phone as quick as you can' - and hadn't even followed basic troubleshooting.

Near the end, I'd been shifted to QA (sorting bug reports, answering emails) and we were a tight group (We got plaques for our work on the Windows 3.1 version).  But the call centers were collectively anonymous.  You walked into the building, and most of the time you wouldn't know anyone along your route, even by face.  When they announced that QA was being shifted to Tuscon, and we had the choice of relocating or going back to the phones - I took option three.  I'd already seen someone who got relocated from the Tuscon area get dropped like last week's coffee grounds. 

So, yeah - I've seen the effect that size has on an organization's collective empathy.

[Dashenka]

From a human point of view I can see the downsides to that. I personally wouldn't mind being 'a number' as it means I can stay low and work under the radar. Do my thing and go home. No calls from colleagues to join them for lunch or stuff but I'm not the most social person so that might be just me.


From a business point of view, it makes sense though.


It's easier to lay off 1000 individuals than James, Diana and Ruth who all have a partner, a mortgage and kids.

It is incredibly difficult to balance the business needs and the personal needs of your staff. The way I see it, and it might be a simplified version of a reality, is that corporations have to survive in what is currently a very tough climate. In order to do that, they sometimes have to make ruthless decisions.

Best to lay off 100 staff and cut everybody on their wages, than to go down and have 1000's of unemployed.

It is in the end impossible for any large corporation or business to keep all employees happy.

[GloomCookie]

From a human point of view I can see the downsides to that. I personally wouldn't mind being 'a number' as it means I can stay low and work under the radar. Do my thing and go home. No calls from colleagues to join them for lunch or stuff but I'm not the most social person so that might be just me.


From a business point of view, it makes sense though.


It's easier to lay off 1000 individuals than James, Diana and Ruth who all have a partner, a mortgage and kids.

It is incredibly difficult to balance the business needs and the personal needs of your staff. The way I see it, and it might be a simplified version of a reality, is that corporations have to survive in what is currently a very tough climate. In order to do that, they sometimes have to make ruthless decisions.

Best to lay off 100 staff and cut everybody on their wages, than to go down and have 1000's of unemployed.

It is in the end impossible for any large corporation or business to keep all employees happy.

I agree with most of your points to a degree, in that it's easier to just lay off a bunch of folks than take the whole thing down, but more often than not when a corporation gets that kind of mindset in place, they squeeze existing employees to their breaking point without giving them any incentive beyond a paycheck and a few benefits. They basically push as far as they can trying to keep their own bonuses and metrics high at the cost of employees.

I listen to a lot of Karma Comment Chameleon on YouTube and the number of stories of people who basically get fed up with being over worked, under valued, and basically shit on by upper management because they are just a number is rather disturbing. I know I'm happy at my current job where I do see our CEO every day and know him on a first name basis. Hell, I know every manager above me on a first name basis and can go in and casually talk to them if an issue occurs. But, that's not always the case. I know that even with our small company, some of the junior employees feel intimidated just talking to their direct manager, let alone a more senior manager.

Even so, I don't think I could stand working at another company that doesn't respect me and my knowledge as a person. Unfortunately, I'm all too aware such companies exist.

[Vekseid]

Boeing took up a bunch of Welch's proteges and started burning bridges with engineers very quickly. I heard personal accounts of them dicking people over while in school.

Later, they wondered why they had trouble finding engineers.

Amazon is running out of people to hire. They've burned so many bridges so quickly.

Corporations naturally work to externalize costs, and this is going to get more prominent the bigger the corporation.

[Jerram]

. Horizontal expansion is what we think of when it comes to monopolies as a single industry takes over the entire market, such as Standard Oil or Walmart becoming the only company in that field..

Standard Oil is a classic example of vertical integration.  This is really, really basic stuff.