"No Logo" by Naomi Klein: branding corporations

The ideas presented here are mostly from the quintessential subversive book of the decade, "No Logo" by Naomi Klein that I read almost a year ago. The reason I'm writing about it now is because I am inserting my own interpretation of what she presented based on my learnings about basic game theory and strategy.

Naomi Klein writes that there's been a fundamental shift in the way that corporations are increasingly structured. There are two big differences. First, companies are multinational, meaning that one country alone cannot enforce regulation on them. When a company is in one country regulations and consumer demands from that country's population can readily apply pressure towards change of various kinds. But as a company becomes increasingly multinational and decentralized, it loosens its grip from any one country or its population applying pressure, and can in some cases put pressure on whole countries to conform by threatening to shift its jobs or even its center overseas. This decentralization of a company is advantageous to a company because it makes it adaptable and less prone to the ups and downs of a specific market.

The second big difference is corporations become pure marketing machines that don't actually produce anything. The branding model severs a company from its own production, outsourcing literally everything to third-party companies that produce the goods, distribute them, do human resources and office management for them, and possibly even create and market their brand for them. The result is that many corporations are, in essence, only a boardroom of stockholders with almost all elements of a traditional company outsourced. This new structure is advantageous in the same way that becoming multinational is advantageous -- a company becomes more adaptable to change and can scale up and down and shift readily by simply changing outsourced contracts.

Both of these big changes relate to the decentralization of corporate structure on an external and internal level. The negative results that Naomi Klein points to with a whole book full of examples are all due to the increased inability of governments, individuals, or groups of individuals to enforce any sort of ethical restraint on these companies. The companies are, in fact, modeled strategically and specifically to avoid being susceptible to market or governmental pressure, but these same structures cut it loose from outside accountability. And it is a piece of common knowledge that corporations don't inherently have a code of ethics. Their structure is bent towards maximizing the profit of their shareholders, not promoting a common good. Ethical pressures always come from without, and that is why decentralization of corporate structure is dangerous -- it loosens the hold of accountability between a corporation and its consumers. It also makes it increasingly difficult for a corporation to control its own ethics, because much of its activity is outsourced and ethics becomes relative to the country. In any case, problems regarding intrusive branding, sweatshops, shifting jobs overseas, pollution are a direct result of decreased ethical accountability due to the decentralization of corporate structure.

Naomi Klein argues that any structure of corporation, by nature that it is selling something, will be susceptible to market pressure if that pressure comes on a large enough scale. Ultimately, companies will only behave ethically if people factor a company's ethical behavior into their purchasing choices and this happens on a global level. If nothing else, the concept of ethical consumerism is what she wants her readers to take away from her book.