HR style: Corporate patriotism vs transaction

[ar81]

I have noticed many companies used to have any of the two approaches in terms of workforce management.

CORPORATE PATRIOTISM

Some of them create a sense of "corporate patriotism". When you belong to a country (in this case a company) you may expect your country to take care of you and you would take care of the country.

This emotional approach towards the company implies loyalty towards the company, and people behave as if the company was the family, the tribe, the country.

This is often present with corporate values, where people are required to adopt a general set of values to make sure people get along. People would sacrifice themselves for the tribe, and the tribe would care about employee welfare.

This is an ideal that the founders of some companies and some organizations have achieved, usually led by really good leaders. Working environment becomes challenging but protective, innovation becomes a directive, creativity is deeply appreciated, and people give more than an extra mile.

History of war proved that the key for victory in combat is leadership. War experts who have studied how to war took place in the past, have acknowledged leadership as something more important than technology.

US inherited the old british leadership model, where a bloodthirst and educated person, seeking for adventure was appointed to command troops. But those were times where leadership was just to march with your squad, only to get hit by bullets. There was no real leadership implied.

Russian model was more oriented to make people to pass tests, so they had the most brilliant minds (from a an intellectual point of view), but not necessarily leaders.

Unfortunately, after leaders are gone in a company, university financial geeks, with impressive CVs, take the command of the company, and the company starts to go towards short term numbers and turn the company into a transaction based company, aimed at one single number: short term profit.

There are many tricky ways to make short term profit, not produced by the core business itself, including personnel lay offs and cannibalizing companies and/or to sell their assets. Some others will use accounting frauds to show better numbers before stock holders.

They say they are making the company to be "more efficient" because the indicators of efficiency they use are financial, so they aim for financial "efficiency". So when people suffer a lay off, people in the company get a strong message that leads them to adopt a transaction based culture, and corporate patriotism is destroyed. There is no reason to be loyal and go beyond the call of duty.

When those changes happen, those who feel bad are those who felt their patriotism was betrayed. But those who understood that corporations are not nations, and understand that corporate policy rely on the leadership of people at the top, should understand that it was all about money.

TRANSACTION

If you are a consultant, you exchange time for money. It would be absurd to give "an extra hour" or to "go beyond the call of duty" for a customer. Any extra has a price tag.

Transaction based companies do not rely on loyalty or patriotism. It is all about money. It is like hiring Pancho Villa gunmen. They are together because of the money and they do the job, with no extras for free.

MARKET AND COMPANIES

A small problem that comes from the current design of the system is that from a macroeconomical point of view, the market is composed by people. People get their money from a salary.

So basically lay offs are like cutting trees. Every company is cutting trees. But the forest gets smaller and no one feels the responsibility of planting trees, or in this case, human welfare.

Lay off cause short term profit, but it reduces the economic size of the market. Reduced market justifies production cuts and more lay offs.

So a big problem is created. People participate of capitalism when they get a job, but the system is designed to encourage job cuts.

It seems that 2 things ned to be revised, if capitalism is to be restored:

1.Responsibility of companies in terms of job creation (plating trees in the forest of market).

2.Transaction based employment creates a culture of corporate mercenaries. Employees can't be trusted when it is about company plans or secrets. Trained personnel will go to the highest bidder, increasing the costs, as people do not stay because of loyalty, but because of money.

Unless the system is revised and reformed, market economy goes towards Pancho Villa organizations that will lose competitive advantages in the long term.

Governments can't solve crisis, because government has control over a tiny fraction of people: government employees. The rest of people are to be educated by companies. After all, people stay most of their lives at work.