Joel Bakan’s 2003 documentary The Corporation, based on his book of the same name, is not typically featured in HR and leadership development curricula. It should be. Whatever one’s view of the film’s political orientation, which is explicitly critical of corporate capitalism in ways that some business audiences find uncomfortable, it contains a specific analytical framework that is among the most intellectually rigorous accounts of the relationship between organisational structure, leadership behaviour, and institutional character available in the non-academic literature.
The film’s central argument, which borrows the diagnostic criteria of the DSM to apply a psychological profile to the corporation as an institutional form, is a thought experiment that is more analytically precise than its provocative framing suggests. The question it is asking is not whether corporations are malevolent, which would be both polemical and uninteresting. It is asking whether the specific structural features of the corporate form, the legal obligation to prioritise shareholder returns, the institutional personality that those structural features produce, and the specific governance mechanisms through which that personality expresses itself, tend to produce specific and predictable patterns of behaviour that are worth understanding for what they reveal about the relationship between institutional structure and institutional character.
For leadership development purposes, the film’s most valuable contribution is its analysis of how individual leaders of generally decent personal character can, and routinely do, produce institutional behaviour that neither they nor their stakeholders would individually endorse. This is a more nuanced and more practically useful account of corporate misconduct than either the bad apple theory, which attributes misconduct to the character failures of individual leaders, or the structural determinism that the film’s critics sometimes attribute to it.
The structural argument and its implications for HR
The film’s structural argument is this: the corporation, as a legal and institutional form, has specific obligations, primarily to shareholders, and specific protections, primarily limited liability, that create a distinctive institutional personality. That personality is oriented primarily toward the maximisation of shareholder value over appropriate time horizons, and it is expressed through the decisions and behaviours of the people who lead and work within corporations, regardless of those individuals’ personal values and character.
The implication of this argument for HR is specific and important: the institutional character of the organisation is not primarily the product of the character of the individuals who lead it. It is the product of the interaction between individual character and institutional structure, including the incentive systems, governance mechanisms, reporting relationships, and cultural norms that constitute the organisational context in which individual character is expressed. HR that focuses exclusively on individual character development, without attending to the institutional structures that shape how that character is expressed in organisational behaviour, is working on the symptoms rather than the conditions that produce them.
This is not an argument that individual character development is unimportant. It is an argument that it is insufficient. The organisation whose institutional incentive structures systematically reward certain kinds of behaviour will produce those behaviours regardless of how developed the characters of its individual leaders are, because individual character operates within an institutional context that shapes its expression. HR that understands this is better positioned to work on the institutional conditions that most significantly determine organisational character, rather than investing exclusively in the development of individuals within unchanged institutional structures.
What the film says about values and values systems
The film contains several sequences in which senior business leaders, speaking apparently candidly, describe the specific ways in which they personally hold values that are inconsistent with specific practices their organisations engage in, and the ways in which they navigate the tension between personal values and institutional obligations. These sequences are among the most valuable in the film for leadership development purposes because they give specific and honest voice to an experience that is both very common in senior leadership and very rarely discussed publicly.
The specific tension described is the tension between the authentic values of individual leaders and the institutional value system that the corporate structure produces and maintains. Most senior leaders resolve this tension through some version of the following cognitive architecture: their personal values are honoured in their personal conduct and their interpersonal relationships, while the institutional value system is accepted as an external constraint that determines the parameters within which personal conduct operates. This resolution is both understandable and, from the perspective of building genuinely values-driven organisations, deeply problematic.
For HR practitioners and for leadership development designers, this tension is one of the most important and least adequately addressed topics in the curriculum. The senior leader who can articulate a sophisticated personal values framework but who is not examining the relationship between those personal values and the institutional behaviour they are personally sponsoring is experiencing a values gap that individual character development does not address. The development work that addresses it requires exactly the kind of honest institutional analysis that the film is attempting: the willingness to examine how the specific features of the organisational context in which one operates are shaping the expression of one’s personal values in ways that may be both invisible and consequential.
Using the film in leadership development contexts
The film works most productively in REEL|Life facilitation contexts when it is positioned not as a polemic about corporate behaviour but as an analytical framework for examining the relationship between institutional structure and institutional character. The specific questions that produce the most generative facilitation conversations are: how does the institutional structure of your organisation shape the specific behaviours that it produces, independently of the personal character of the individuals within it? Where in your organisation is there a visible gap between the personal values that leaders bring to their roles and the institutional behaviour that the organisation’s structure and incentives produce? And what specifically could be changed about the institutional structure that would narrow that gap?
These questions are demanding and they produce uncomfortable conversations, which is precisely why they are valuable. The organisation that can conduct an honest examination of the relationship between its institutional structure and its institutional character, and that can use that examination to identify specific structural changes that would bring the two into better alignment, has done something more fundamentally important than any amount of values communication can produce.
The accountability question the film raises for HR practitioners
The most direct implication of the film’s central argument for HR practice is the specific accountability question it raises: what responsibility do HR functions have for the institutional character of the organisations they serve? HR designs the performance management systems that determine what the organisation actually rewards. HR shapes the culture through the specific cultural interventions it designs and deploys. HR governs the people processes through which the organisation’s relationship with its employees is expressed. Each of these functions gives HR specific and significant influence over the institutional character the film is analysing. The HR practitioner who accepts this responsibility honestly, rather than treating HR as a technical function that designs processes rather than shapes character, is accepting a form of professional accountability that most HR professional frameworks do not explicitly acknowledge. The film’s value is precisely that it makes this accountability impossible to ignore for those willing to sit with its central argument honestly.
The film works most productively in leadership development facilitation when participants are invited to apply its analytical framework to their own organisational context rather than to the fictional or historical examples the film uses. The specific questions that produce the most generative conversations are: what are the institutional pressures in our organisation that shape individual behaviour in ways that neither the individuals nor the institution would individually endorse? Where is there a visible gap between the personal values that leaders bring to their roles and the institutional behaviour that our structures and incentives produce? And what specifically would need to change about our institutional architecture to narrow that gap? These questions, asked honestly and with genuine analytical rigour, produce conversations of a quality that most organisational culture discussions do not achieve.
The Corporation is ultimately a film about the conditions under which otherwise decent people produce institutional behaviour that neither they nor their institutions would endorse if they were required to own it explicitly. That is a question every HR practitioner should be willing to sit with, not as a critique of the institutions they serve, but as an honest inquiry into the degree to which the systems they design are producing the institutional character that the organisations’ stated values are meant to describe.
The Corporation is not primarily a film about bad corporations. It is a film about the relationship between structure and character: how institutional structures shape the expression of individual values in ways that neither the institutions nor the individuals necessarily intend. That is a more important insight for leadership development than the political argument the film is making.