Corporate Responsibility at Corning Incorporated

Transcription

Corporate Responsibility at
Corning Incorporated
Margaret B.W. Graham, PhD
McGill University
H i s t o r y o f C o r p o r at e R e s p o n s i b i l i t y P r o j e c t
Working Paper No.7
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®
CONTENTS
3
| Overview
4
| Introduction
6
| Taking Root in Upstate NY
Library of Congress, Prints & Photographs Division, National Child Labor
Committee Collection, [reproduction number, e.g., LC-USZ62-108765]
7 | Demanding Products Shape the Labor Story
11 | From Disaster Relief to Community Renewal
12 | The Antitrust Challenge
14 | Equal Opportunity
16 | Blending PhDs and Craft Workers
17 | Consumer Product Safety (The Percolator Recall)
18 | Corning and the Environment
19 | Coda
21 | Sources
Corporate Responsibility
at Corning Incorporated
®
®
Copyright © 2010 by the Center
for Ethical Business Cultures®
The CEBC History of Corporate
Responsibility Project
In mid-2008, the Center for
Our Approach
Ethical Business Cultures
The idea of corporate responsibility is not new; antecedents lie
in the 18th and 19th centuries. The 20th century, and particularly the last 60 years have witnessed dramatic social, economic, environmental and regulatory challenges to business. Two
volumes are envisioned: an initial volume focused on the U.S.
experience; a subsequent volume focused on the emergence
of corporate responsibility in countries and regions around the
globe. Pursuing a “double helix” approach, the project explores
the interweaving of the history of thinking about business responsibilities and the history of business practices. The interplay
of societal change and the emergence of the modern business
corporation provide the stage for exploring questions of purpose and responsibilities of business.
(CEBC) launched a multi-year
project to research and write
U.S. and global histories of
corporate responsibility. Funding for the project flows from a
major gift by Philadelphia entrepreneur Harry R. Halloran, Jr.
to the University of St. Thomas.
This grant followed earlier gifts
by Mr. Halloran to CEBC to
conduct preliminary research
and feasibility studies beginning in 2004 and convene a
national consultation among
scholars and practitioner in
November 2007.
1 | Corporate Responsibility at Corning Incorporated
To tackle the U.S. history, CEBC engaged a team of distinguished
scholars and supports their work with a series of working papers
and interviews with experienced business practitioners.
The Halloran Philanthropies
The Halloran Philanthropies, founded by Philadelphia entrepreneur Harry R. Halloran, Jr., is guided by Halloran’s belief that
business is one of the most powerful drivers for positive social
change. Halloran is the Chairman and CEO of American Refining Group, Inc., and founder and CEO of Energy Unlimited, Inc.,
both headquartered in Pennsylvania.
The Center for Ethical Business Cultures (CEBC)
The Center for Ethical Business Cultures (CEBC) at the University
of St. Thomas is a 501(c)3 nonprofit organization situated in the
university’s Opus College of Business. Working at the intersection of the business and academic communities, CEBC assists
business leaders in creating ethical and profitable business cultures at the enterprise, community and global levels. The center
was founded by Minnesota business leaders in 1978. Please visit
www.cebcglobal.org for more information.
About the Author
Dr. Margaret Graham
McGill University
Dr. Margaret Graham is a leading scholar of the history of industrial research,
innovation and entrepreneurship. Graham has been a member of the Faculty
of Management at McGill University since 2000, specializing in strategy
and organization, with emphasis on strategies for sustainability. She is also
a founding director of the Winthrop Group Inc. in Cambridge, Massachusetts and New York City, a group of business historians and archivists. Her
research and writing center on the social aspects of managing innovation. In
addition to decades of consulting with research-based firms, she spent four
years in R&D management as an executive at Xerox PARC, Xerox’s advanced
research center in Palo Alto, CA. Dr. Graham was previously a member of
the faculty at the Harvard Graduate School of Business Administration and
the Boston University School of Management. Graham’s books include RCA
and the VideoDisc: The Business of Research, R&D for Industry: A History
of Technical Change at Alcoa, co-authored by Bettye H. Pruitt, and Corning
and the Craft of Innovation with Alec T. Shuldiner.
Citation
This working paper may be cited as: Graham, Margaret. 2011. Corporate
Responsibility at Corning Incorporated.CEBC History of Corporate Responsibility Project Working Paper No. #7.Minneapolis, MN: Center for Ethical
Business Cultures located at the OpusCollege of Business, University of St.
Thomas - Minnesota. www.cebcglobal.org (Keyword: Graham). The views
expressed in this working paper are those of the author.
Overview
This working paper explores the evolution of Corning Incorporated (never
Corning Inc.) relating to corporate responsibility and the reasons behind
that evolution in management and practice. Over the nearly 160 years
of the company’s existence, Corning was not an unwavering paragon of
responsible behavior in all aspects of what is traditionally termed CSR, but
neither was it the kind of mimetic enterprise portrayed by institutional
theorists relative to its industry and competitors. Corning’s leaders were
becoming intentional in their attitudes toward some aspects of CSR even
before World War One. How they became concerned and intentional when
they did, and why they made the choices they made, is the substance of
this account. Most of the policies Corning adopted were “age-appropriate”
for the type of company it was at the time as the company grew from a
small niche producer in upstate NY to a global corporation.
Corporate Responsibility
at Corning Incorporated
Introduction
W
hen I first considered writing this “case” on Corning and Corporate Social Responsibility
I was motivated by a sense that Corning had conducted itself rather better with regard to
the core issues that fall under CSR rubric than most of the other companies I had either studied
or worked with. I had not previously focused on these issues directly, but I was impressed by
the Houghton family attitude towards following “uncluttered paths” not just in their innovation
practices, but also in their attitudes and behaviour towards business associates, alliance partners,
employees, and people in the communities where they were located. The Corning leaders I had
met were explicit about adhering to certain values and attitudes that were hardly universal among
business leaders in the last half of the twentieth century. They were intensely proud of produc-
ing products that they considered beneficial to society, but there was also an unusual degree of
modesty about the company’s achievements and a serious intentionality about debating mistakes,
failures, or ethical issues that came up in the ordinary course of business. Whether it involved the
failed casting of the first 200-inch mirror blank, or the recall of an unsafe Corning Ware percola-
tor, or the lapse in due diligence over an acquisition that resulted in illegal government billing
in the Corning medical testing business, these matters were treated with openness rather than
denial. There was far less to be found under the rug than I had seen in other companies. So with-
out having analysed the company or its leadership according to any CSR principles or theories I
believed that Corning was an unusually responsible company.
Pulling Corning’s CSR story together has been instructive, but I have also found it more than a
little puzzling. First is the matter of definition. Clearly a company is obligated to obey “the law.”
But further than that, is corporate social responsibility simply a matter of taking into account a
particular set of stakeholders immediate to the company — labor, working conditions, product
safety and efficacy, women and minorities, and the environment — or does it embrace a broader
set of concerns that considers the company’s contribution to the health and fairness of the econo-
my and society as a whole? Second, is responsibility a matter of social intent, or is it enough simply to pursue good business standards in industries where lesser standards would result in poorer
performance? Related to this question, does motivation matter? Do such episodes as Corning’s
relentless pursuit of colored glass standards for safety signals, or its significant innovation in pro-
ducing and improving substrates for catalytic convertors to reduce automobile emissions, count
as significantly responsible acts, or simply as enlightened opportunism? I have found in the CSR
literature very different interpretations of these matters. I have discovered that Corning was, for
instance, by no means a pioneer in its socially responsible acts, and I have also learned that most
of the policies it adopted were “age-appropriate” for the type of company it was at the time. I have
also learned that Corning matches very well the description of the independently owned niche
producer that according to theory can most easily afford and most easily benefit from, responsible
acts. According to this theory Corning would have been poorly managed if it had not adopted the
policies it did. “Uncluttered paths” notwithstanding (see below), the facts of the case that follows
do seem to affirm many of the findings in the literature on social responsibility.
This working paper, then, explores the pattern of Corning’s evolution relating to Corporate
Responsibility, and the reasons behind it. Over the nearly 160 years of the company’s existence,
Corning was not an unwavering paragon of responsible behaviour in all aspects of what is tradi-
tionally termed CSR, but neither was it the kind of mimetic enterprise portrayed by institutional
theorists, when compared either to its industry or to its customers and competitors. The stance
most characteristic of the company throughout its history is what Harvard economist Joseph
Schumpeter would have called a “creative responder,” the kind of company that could be relied
upon to follow its own “subjective rationality,” or what the Houghton family itself liked to call
the “uncluttered path.” The highly innovative specialty glass business with its steadily rising pattern of profits that the Houghtons developed and led for generations beyond the tenure of most
founding business families in the USA was good to its shareholders to be sure; but it increasingly
committed to the welfare and interests of other stakeholders as well. Was this as a matter of prin-
ciple or a matter of policy? According to James Houghton, last of a long line of family CEOs,
Corning’s version of corporate responsibility was enlightened self-interest or “simply good business.” If this was so, why did certain policies with respect to community, workforce, and consumer
protection seem simply good business to Corning, while being beyond the limits of rational lawabiding management to many other companies?
Corporate Social Responsibility is a concept that is generally considered to be an idea origi-
nating with writers after World War Two. But Corning’s leaders were becoming intentional in
their attitudes towards some aspects of CSR even before World War One. How they became
concerned and intentional about different CSR categories when they did, and why they made the
choices they made, is the substance of this account. First, some general points as context. Corning was, and in some sense remained, a family company from its inception to the end of the 20th
century. Although it could be said to be professionally managed for most of the 20th century, it
was privately held until after World War Two. Because family and management were not divided
as they were in most large 20th century companies, obligation to shareholders could be taken
for granted, and attitude towards government was intimately connected with family political af-
filiations for much of the century. The first part of this account deals with attitudes and policies
toward Corning’s customers, employees and community. The second part deals with Corning’s
attitude, behaviour, and policies towards the general public and toward the government.
Taking Root in Upstate NY
Thomas Watson, Jr. of IBM begins his memoir (Father, Son and Beyond) with a sketch of his father
Thomas Watson Sr. tasting boyhood ambition as he watched Amory Houghton, Jr., Corning Glass
Works’ second generation CEO (1880s), being driven through the town of Painted Post, New York in
a horse-drawn carriage. A century later the second Amory Houghton Jr, to be CEO of Corning, and
thereafter five-term congressman from the state of New York, drove himself around town in a yellow
Volkswagen Beetle, ate lunch at “Donna’s” lunch counter and shopped in person at the local Wegman’s
supermarket. Over the course of a century Corning’s relationship with its community and its self-image
as a corporation changed profoundly, often in step with, but sometimes in ways that ran deliberately
counter to, the changes that were taking place in many other companies in the same period.
Though remote in the 21st century, when airports and superhighways determine the centrality of
location, for the first century of its location in the town of Corning, NY, the company rightly considered
itself in the mainstream of the rapidly developing post Civil War economy. In fact it was attracted to the
upstate NY location in the 1870s in part because it was an active industrial corridor served in the first
instance by the new canal system, and later endowed with several major railroad lines running through
town. Unlike the many small glass works that supplied glass to engravers, or containers to the food
business, Corning Glass Works while initially resembling these other companies, early formed close
relationships with some of the largest companies of the age — counting among its customers railroads
(for signal lamps and colored warning lights), electric companies (for light bulb envelopes) and companies that operated early research laboratories (for laboratory glass). The main stakeholders it took into
consideration in its early decades were its customers and its shareholders (family members and a handful
of other investors), and through technology licensing and shareholder agreements other, mainly larger,
members of its own glass industry. However, towards the end of the 19th century it acknowledged a
need to be more attentive to employees as well. In the period after World War One it also developed a
set of relationships (associations, as they were styled in the Progressive Era) with other companies that
helped it to maintain stability and innovativeness, and to deal with what the family regarded as a “growth
problem”. These associations, collaborative relationships akin in form to what were known toward the
end of the century as strategic alliances, were a vital part of Corning’s business model during much of
the 20th century. Vital as they were to Corning, their use was suspended in the middle decades of the
century when they ran afoul of certain interpretations of the antitrust law that outlawed technology
sharing as a form of monopoly behavior.
It took two generations for the company that escaped by barge from Brooklyn to upstate New York
in the 1870s, pursued by unhappy creditors and hostile labor union representatives, to evolve into the
firm that acknowledged a pragmatic commitment to its communities and its workers, as well as to its
customers and shareholders. During most of that fifty year period the company was family-directed,
family controlled, and privately held, save for one decade-long interregnum in the 1920s when former
CEO Alanson Houghton, the older Houghton of his generation, went into politics and diplomacy
(Ambassador to England and Germany) before the new generation (the second Amory Houghton
Senior) had gained enough experience to lead the company. The first seventy five years of the company’s existence seems to have focused the family’s attention on two things — maintaining control, and
keeping the company strong through repeated innovation. This emphasis on company survival through
purposeful change led the family to make choices that were often different from those of many company leaders of the time and may explain the pattern of responsibilities that Corning assumed during
the twentieth century.
Demanding Products Shape the Labor Story
The Houghtons’ original intention in moving to the Corning location in the 1870s had been to follow emerging trends in the glass industry. The idea was to produce the more economic form of glass
known as flint glass, which used cheaper inputs in labor and materials than the traditional lead glass
the company had been making to that point, substituting advancing technology for craft labor wherever
possible. But the local raw materials available in upstate New York, originally believed to be ideal for the
new cheaper glass, turned out to be unsuitable, and Corning departed from its original plan to become
a specialty glass, and later a specialty materials, company instead. For a time the family’s management
attitudes lagged behind those of the flat glass and container companies that were expanding beyond the
Allegheny Mountains. These high volume producers were combining the use of cheap immigrant labor
with the new long-distance rail transport to achieve serious reductions in cost. Corning, on the other
hand, having started operation on the East Coast where industrial relations were hostile at best, maintaining worker pay and conditions that were decidedly behind the times. As the company became more
specialized and developed a richer knowledge base, however, the specialty glass strategy entailed not only
creating a stream of high-technology niches that had to be defended, but also finding ways to partner
with technology-intensive companies in the chemical, pharmaceutical and electrical industries, which
were often many times Corning’s size. These companies were both demanding of and attentive to their
suppliers, and proved willing to eliminate those that did not maintain high product quality standards
and tight production control. Over time Corning’s new strategic choice caused the company to become
more consciously knowledge and craft dependent — first hiring a handful of professional scientists and
engineers to supply any needed expertise, but soon accepting the necessity of employing high-skilled
craftsmen as well. That this strategic shift was a choice, and not an obvious choice, was articulated in
1911 by one trusted advisor, Dr. Arthur Day of Washington’s Carnegie Institute, when he was asked
to advise Corning’s third-generation leadership (brothers Alanson and Arthur Houghton) on how to
handle the anticompetitive activities of the great merger movement. In a letter to Alanson Houghton,
Dr. Day wrote:
I wish to anticipate the fact that needs are constantly changing, growing if you will, and that the best
equipment with which to meet these changes, is a little broader knowledge than your contemporaries
happen to possess. . . Whether such knowledge is a more valuable asset than the limitation of competition, from the viewpoint of shareholders, I do not know. In the long run it should be.
By 1917 when Corning proudly advertised itself in The Saturday Evening Post as the “scientific
glass company,” it seemed that Corning’s products themselves were leading the company to advertise
the socially constructive directions its business was taking. Poorly made glass was unattractive, unsafe,
and unreliable — a poor reflection on the entire industry. As a competitive necessity, but also a result
of its early ventures in industrial research, Corning’s trademarks and later its patented materials like the
strengthened glasses Nonex and Pyrex were coming to stand for durability, reliable color, and products
that rarely needed to be replaced; meaning that continuing the business required finding a constant supply of newer, higher performance product offerings. The nature of Corning’s business, supplying superior performance for which customers were willing to pay extra, also tended to associate the company
name with socially desirable causes — strong glass and colored glass for railroad safety lanterns leading
to other safety glasses, heat resistant glasses, light bulb blanks for home and commercial lighting, transparent glasses for sanitary food storage and cooking, glasses for microscope lenses, operating room lights
for light therapies and improved surgical facilities, glasses strengthened for thermometer tubing and for
test tubes and laboratory glass of all kinds, headlamps that refracted and directed light for ambulances
(and eventually other motor vehicles), and specially-cast astronomical mirrors for observatories. Such
products brought Corning into enduring relationships with customers who were oriented toward social
betterment (often smaller companies) or driven to adopt these products by regulation (typically larger
customers). (Graham 2010)
Though it was a specialty glass company and tended to supply low-volume, high value products for
customers with special needs, Corning did periodically find higher volume products promising longer periods of more stable demand. Light bulb blanks, produced on a high volume specialty purpose
machine called the Ribbon Machine, and later the glass housings for radar, radio and television tubes,
black and white and later color, were “bet the company” products for Corning. The search for similar
products to supply to the mighty automobile industry, and others to supply the construction industry
with agricultural glass, was a perennial ambition, but never fully realized.
While arriving at its chosen product strategy the Houghton family learned certain lessons in management the hard way. Very early in its history, it learned the difficulty of keeping financial control of
the company within the family. Owing to excessive debt and mismanagement, the first Amory Houghton Senior, who had already made and lost several fortunes before going into the glass business, lost
control of the glass business to his creditors. While his sons Amory Junior and Charles managed to
regain control of the company in less than a year, the absolute necessity of maintaining control through
sound management and continuing innovation in product and process impressed themselves on the
entire family.
Chief among the other lessons learned early was the necessity of valuing the contribution of a highly
skilled and loyal workforce as a critical and enduring part of any success the company was likely to
have. One obvious stable source for the workers Corning needed in the early decades after the company
moved to its new location was the Irish railroad workers who followed the construction of the railroad
lines. When construction of the tracks was complete they settled in the area of town called Irish Hill
and sought semiskilled work in Corning’s expanding glasshouses (where they were employed on the task
of blowing glass bulb blanks into molds).
Before long union organizers for the Flint Glass Union from the firm’s old Brooklyn location found
the company in its new location and interested the younger, often second generation, workers in its
workforce to consider voting for the union, partly because the threat of new glassmaking machinery was
in the air. In 1890 a bitter strike against the company split the workforce along generational lines, often
dividing families. When Corning hired replacements for the striking younger workers they banded
together and sought work in the new higher-paying “western” glass companies in the Ohio Valley. Their
move for independence ended in tragedy. In July 1891 a trainload of these younger workers returning
to Corning from Findlay, Ohio for July 4th celebrations were killed in a terrible wreck. Many older
employees and townspeople lost family members and naturally the company bore part of the blame.
When the company still refused to pay higher wages, its retrograde policies resulted in alienating the
town from the company leadership. The labor action also cost the company a significant share of its market, for one large customer for lamp blanks, the General Electric Company, thenceforth awarded forty
percent of its requirements to the Libbey Glass Company of Toledo which had developed a successful
bottle-making machine, making it less vulnerable to possible labor actions.
Corning’s opposition to unions did not let up until World War Two. But under the influence of two
respected outsiders, the company and its owners began both to innovate in process equipment and to
place a higher value on its employees, resulting in union-like pay and conditions coupled with heightened respect and recognition for workers. Mechanical Engineer David Gray from MIT, who was hired
to form Corning’s mechanical development department, and Dr. Arthur Day from the Carnegie Institute in Washington both urged Corning’s leadership to take a more proactive and conciliatory attitude
towards its workforce. On the one hand they saw the need to mechanize as much of the high-volume
process of bulb-making as possible to achieve uniform quality (of which more later). On the other hand,
they saw the inventiveness and flexibility of the kind of American worker that Corning employed as
an important asset. David Gray predicted accurately that some of the best ideas and inventions related
to mechanization were likely to come from employees if they were allowed to develop their skills, and
rewarded as they deserved. Gray’s attitude evolved into a longstanding Corning policy to encourage
technology development through personal reward and recognition, as well as the encouragement of
knowledge sharing between plants. Gray and his colleague in invention William Woods, a former glassworker himself, advocated deploying new machinery in such a way that valued workers would not feel
threatened with possible layoffs or outright job loss. Gray and Woods, who together invented Corning’s
high-volume Ribbon Machine, recognized that machines could be introduced in ways that might limit
further growth in new employment, but stabilize existing employment levels at the same time.
In 1923 Arthur Day, by then a Corning Vice President living in Washington, DC, sketched out
Corning’s philosophy towards mechanization and labor for a post-war cadre of rising young managers
as standing in sharp contrast to that of most larger glass companies producing containers and flat glass.
Because Corning’s workforce at its home plants consisted mainly of skilled workmen, Day noted, Corning could not augment its workforce simply by adding immigrant unskilled or semiskilled labourers,
as other larger glass companies using mass production techniques were doing in Pittsburgh. Corning
needed workers who were willing to try new things, and in this respect, Day maintained, American
workers were far superior to European immigrants. Improved work organization aiming at labor productivity such as the American system techniques that Corning was adopting in the 1920s would help
certainly improve reliable capacity, but these alone would not be sufficient to create the kind of operations Corning’s specialty work would require. The challenge was to perfect appropriate machinery and
to train and retain a skilled and motivated workforce able both to operate it and to coexist with it.
The mechanized equipment to which Day referred was developed in the first instance to counter
Libbey Glass. Beginning as early as 1912 machine development was funded by an independent set of
investors that included the Houghton brothers, Day, Sullivan (head of Corning’s research organization) and other Corning managers, under the name of the Empire Machine Company (later Hartford
Empire). Starting with the equipment they financed and licensed, this group of investors came to control machine patents worth several millions of dollars in annual licensing royalties. The Ribbon Machine
in particular gave Corning and GE, which joined forces after having been engaged in parallel equipment
development, such an advantage in the bulb-making business that they effectively eliminated all but the
most-established competitors for decades. Much of the equipment Hartford Empire came to control
by this means was used not by Corning itself, but by other more highly mechanized and usually larger
companies making glass containers. Hartford Empire investors saw their efforts as organizing the glass
industry in such a way that costs would diminish in an orderly manner, and that companies that lacked
the necessary resources or methods to meet the standards of the industry would be kept from conducting
business in a way that would harm the rest of the industry. This philosophy was very much in line with
the “associationist” and cooperative precepts of successive Republican administrations during the 1920s.
In 1926 the courts seemed to ratify this approach when they found in favor of General Electric’s practice
of differential licensing only to companies of which it approved.
During the 1920s Corning began to adopt more enlightened policies toward its workforce, including
a range of social supports such as healthcare and pensions, insurance and social clubs. These policies
were undoubtedly adopted in part to keep unions at bay, but they nevertheless gave rise to a more proactive Corning stance towards community betterment. It was the beginning of a sea change, but it was
also revealing of how far behind the company had been. During much of the 1920s while the second
Amory Houghton Senior had not yet reached the level of experience to become CEO, Corning was
headed by two complicated caretaker leaderships involving Corning’s counsel, Andrew Falk, and its
head of research, Dr. Eugene Sullivan, neither one a family member. Neither felt empowered to invest
in what they considered frills and extras. When Corning first brought in insurance company representatives to estimate the cost in premiums for health and safety policies for all workers, the insurance
company report revealed to a surprised management group that the company’s conditions were woefully inadequate for all levels of employees. It served as the impetus for change. Only a few years later,
early in the Depression and soon after Amory Houghton became CEO, a young designer who arrived
in Corning observed in a letter home that “the Glass Works appears to be unusually enlightened in its
attitude towards its employees.” He described a company recreation center that boasted a swimming
pool, badminton courts and bowling alleys, as well as a labor-management panel consisting of elected
representatives who were invited to sit in judgment on corporate proposals that might affect the workforce, and comprehensive accident, health and life insurance policies for the entire workforce. There was
even, he noted, an “open door” policy that the youthful new CEO had initiated, inviting any employee
to make an appointment if he had something to “get off his chest.” By world standards, or even leading American standards there was nothing especially leading-edge about these policies. Henry Ford,
Thomas Edison and Harvey Firestone were known to advocate quite aggressive social welfare policies in
their respective companies even in the 1920s. Such tactics as the young Houghton adopted had to be
admittedly a form of catch-up, and they were likely recognized as a way of increasing loyalty among the
workforce to counter the kind of worker solidarity that had for so long strained relations in the period
after the infamous train wreck had affected so many Corning families at the end of the previous century.
By the mid 1930s, at the deepest part of the Depression, Corning had become so much more progressive that in the interests of workforce retention it took on experimental and risky new projects when
they barely broke even. These included producing sophisticated mirror blanks for telescope mirrors, and
keeping the Steuben art glass operation open even though it was unlikely to clear a profit more than a few
years in each decade. In both cases certain intangible benefits accompanied the business. These included
gaining experience in technology, craft, and design, and recognition that built Corning’s reputation in the
eyes of the world, even when the line of business itself contributed little or nothing financially.
It was World War Two, however, that brought about dramatic change in Corning and its workforce.
Corning was called upon to produce multiple kinds of demanding glass for military purposes, with a
workforce that was both changing and growing at the same time. Many Corning workers were called up
or volunteered before Corning could get its status changed to protect its workforce. Meanwhile the government was asking for high-quality optical glass to replace the glass no longer available from Germany
for binoculars and gun sights, and soon the need for housings for radar and all kinds of electronic tubes
augmented an already booming business in light bulbs used to illuminate factories operating around the
clock for war work. To meet the needs of new plants built by the government, and to increase the staffing of its own plants Corning had to add thousands of new workers.
Again the issue of unionization arose and this time there was no avoiding it. One plant at Charleroi,
recently acquired when Corning merged with MacBeth Evans in the mid-thirties was already organized
by the Flint Glass Workers. With more militant unions knocking on the door, Corning no longer
opposed the Flints holding elections at its various plants and organizing most of them. Within a year
labor negotiations had in fact increased pay, and brought in better pensions and insurance across the
board for a Corning workforce that had increased to 10,000 men and women.
By the end of the war Corning was ready and willing to invest in improving its workplace environment and its community. The company had after all benefited from the patriotic involvement of its
workers throughout World War Two. It had earned numerous E-Awards for its contribution to critical
programs like radar, and materials like silicone, and these would continue to bolster its case for high-performance military contracting after the war. But as the war drew to a close it was depressingly evident
that the kind of products the company would produce and the kinds of expertise it needed to employ
had altered to the point that something had to be done about the town as well.
From Disaster Relief to Community Renewal
Like many other industrial locations of its era, the town of Corning was first mainly recognizable for the
large number of bars, and other services catering to industrial workers, clustered between railroad tracks
and main streets. This character changed slowly: the town first added amenities important to the middle
and upper middle class employees of Corning and Steuben who were involved in management, research,
and design. In 1890 the Houghton family built an imposing Episcopal church with Tiffany windows
and a fine organ which served as a center of activity for the upper reaches of the town’s social and cultural
life. In the 1920s, in line with its more employee-centered policies, the company provided new recreational facilities and infrastructure improvements for its employees and townspeople in general.
The company’s direct community involvement picked up still further in the 1930s. In the aftermath
of one of the worst Chemung River floods that frequently inundated the area, the company helped to
rebuild the town, adding new facilities that were open to the general public. World War Two created
more compelling reasons to enhance the appearance of the town. Like other companies in the post-war
era Corning needed to attract well-trained and well-educated workers equal to the task of producing the
kinds of technology-based products it aspired to make the focus of its new product lines — including
electronic components and specialized glass housings for electronic devices, radar and television tubes.
With its streets lined with bars and the grime of round-the-clock war work on its factories and homes,
Corning was anything but the place where well-educated young newly-weds wanted to begin their postwar life. “My wife cried,” was the memory of more than one newly minted PhD who took a job at the
company’s research center in the 1950s. The town of Corning needed cleaning up and the company was
willing to take a leading role to see that this was accomplished.
At first the company pursued plans of its own, but in a few years, partly as a response to the presence
of federal funding for urban renewal, it reached out to engage community leaders to devise joint strategies. In an early project Corning funded a magnificent glass museum, designed by the noted architects
Harrison and Abramowitz containing one of the major collections of ancient and modern glass in the
world. The museum was an instant success, soon becoming the largest tourist draw in the state of New
York outside New York City. As a public relations move, which in some sense it was, it was quite understated. Typical of the family’s approach to such matters, the museum held no reference to Corning as a
company at all, although visitors frequently asked to know more.
Corning’s unfashionable upstate New York location caused some tension among the Houghtons.
Family members from the extended Houghton family often pushed for the company to relocate its
company headquarters to the New York City area, especially when nearby companies like Xerox and
IBM, chose to relocate their headquarters to Connecticut and Westchester in the 1960s. But despite
some clear disadvantages, Corning’s management had several good reasons to reject such a move. First,
they believed in the soundness of their plant location strategy, involving small to medium sized plants
in medium sized towns served by good transport where Corning could be the main or the leading
employer in the vicinity. Preferably these towns would be located near a recognized educational institution, like the Canton plant hidden in the northern forest near the Canadian border close to both
St. Lawrence College and later SUNY Canton. If suitable educational facilities were not available —
eventually including community colleges — Corning would encourage and sometimes contribute to
their development.
Not being located near a large urban area had the advantage of creating and retaining a loyal workforce with a strong internal culture. Still another reason, not openly discussed even now, but true for
many companies producing important military products during the Cold War, was that the out-ofthe-way location offered security advantages. In the town of Corning and the other middle-American,
semi-rural, locations occupied by the company it was possible to engage in top-secret production for
military and related agencies that would have been far harder to protect in urban areas.
A largely undiscussed rationale for staying put can be traced to the changes Corning made in its business practices in response to the Antitrust judgment concluded against Corning and its CEO in related
judgments during and after the World War Two. (See below Government – Antitrust) Having run afoul
of the US Justice Department because of its patent licensing policies in the late 1930s, Corning’s policies
and practices toward intellectual property changed markedly after World War Two. While the most
obvious effects of these changes had to do with the way the company shared technical information with
other companies, the part that related to its workforce had to do with relying heavily on trade secret as a
way of protecting its process technology rather than engaging in heavy patenting. Instead of following
the general post-war trend toward “scientizing” its processes, Corning elected to keep its glassmaking as
craft-based as possible, a business practice that proved to be an effective advantage for some time.
There was a more public justification for keeping the company headquarters in the town of Corning
as well: it was easier to discourage indifferently committed family members from working at the company if they knew they would have to spend many years working in and around small factories located
in the US industrial heartland. Whatever the reasons, the result for the towns in which its operations
were located was that the company maintained a strong interest in building and supporting the health
of vibrant manufacturing communities. At no time did this matter more than in 1972 when Hurricane Agnes devastated Corning’s downtown, as well as the company’s headquarters and main plant,
along with two other plants nearby just as the company was in the vital prototype phases of equipping
and manufacturing its new Celcor product, a delicate and demanding ceramic substrate for automobile
exhaust systems. By that time the company had discovered ways to leverage urban renewal funding and
provided critical resources and expertise supporting town officials to put together an extensive and successful redevelopment program. Later this was enhanced by the company’s own investment in the 1990s
in a handsome award-winning corporate headquarters — low profile, reminiscent of an old glass factory,
and featuring in each section large colorful art glass pieces from some of the world’s great glass artists.
The location strategy just described continued in force until the collapse of the telecommunications
industry in the early 2000s, when the balance of Corning’s manufacturing business followed its main
customers for display glass to the Far East. With more than 60% of its business located in Asian markets, most of Corning’s manufacturing facilities relocated accordingly, leaving mainly its headquarters
and technology center in the town so closely associated with the company for nearly a century and a half.
The Antitrust Challenge
As already discussed, World War Two proved to be a watershed for the company in ways that could
hardly have been foreseen by the family. Still another development at the time of the war, also unforeseen, had the most profound effect on the company where corporate responsibility was concerned. CEO
Amory Houghton Sr., who was already known as a prominent Republican following in the footsteps
of his father (who had represented Corning’s district in the House of Representatives), went to Washington to join the ranks of dollar a year men running the wartime economy as a member of the War
Production Board. Houghton withdrew suddenly from this visible position in August, 1942, when he
and Corning along with many other named defendants, individual and corporate, were hit by an adverse
judgment on a pending antitrust case against what was known collectively as the Glass Trust.
During a series of lengthy hearings before the congressionally formed Temporary National Economic
Committee, and thereafter in a costly and complicated set of trials, little Corning and its owners were
depicted as the small and deadly spider at the center of a vast and intricate web of conspirators controlling the entire US glass industry by means of their pooled machine patents and the way they licensed,
or refused to license, them. Given the way the TNEC and the courts passed over some of the same
practices by the giant companies in the auto industry, the ensuing judgment and the penalties levied
against the Glass Trust defendants were draconian indeed. At first the patent holders – including various Corning and GE executives and other private investors – were required to license all the patents in
the glass machinery pool royalty free. On appeal after the war this part of the judgment was reversed for
some of the key patents that Corning itself needed for its own operations, but the company was hit by
numerous lawsuits from small glass container companies, and its conviction as a notorious monopolist
kept it subject to regulatory surveillance and potential new lawsuits for over a decade.
The antitrust action against the Glass Trust was part of a much larger campaign headed by New Deal
Antitrust “tsar” Thurman Arnold. Arnold’s enforcement philosophy was to make antitrust convictions as
visible and as painful as possible so as to make an impression far beyond the companies directly affected.
This approach certainly had the desired effect where Corning was concerned. A company that had previously enjoyed a good reputation, especially with the publicity surrounding its production and shipping
across country of the 200-inch mirror for the Palomar Observatory during the depths of the Depression, now looked like a serious malefactor. Although many of the parties to the antitrust conviction
considered it extremely unfair, especially in view of the complete reversal of prior government policies
towards technology sharing, the Houghton family took action to bolster the company’s reputation, and
to conduct the company’s affairs in such a way that it was viewed as an unambiguous social contributor.
It helped that the country once again went Republican in the 1950s. By this time Amory Houghton,
Sr. had not only achieved status in the ranks of the party, but became one of a small group of informal
personal advisors to President Eisenhower during his eight years as president and later served as Ambassador to France. Corning sold stock on the stock exchange for the first time in the post-war era, partly
to raise money for inheritance taxes, but also to gain a broader public stake in the company’s welfare. It
also looked to create consumer brands that the broader public would recognize and identify with. Seen
in this context, Corning’s antitrust episode was a pivotal event in the company’s sense of itself and its
relations to the wider community as well as to the economy in general. The episode was also pivotal in
the way Corning conducted its business.
Some changes involved the way Corning shared technical information with other companies —
including foreign companies like Pilkington of England and Asahi of Japan. Other changes involved
the way it interacted with General Electric in particular, whose employees had been accustomed to
having free run of Corning’s laboratories before the two companies were jointly convicted in a common
suit. But probably the most important effect was that the company became extremely careful about the
way it managed its intellectual property. Corning was especially cautious about taking direct government funding for research in the post-war era. Unlike some of its former closely associated customers
like General Electric which devoted large parts of its increasingly diversified operations to government
contracting, Corning managed its government business with emphasis on avoiding government control
— especially control of its intellectual property. It took mainly small government funded contracts such
as delay lines in order to gain the technical experience and in some cases it invested company money
proactively. In some cases the orthogonal stance towards the government paid off, but in others it proved
to be costly. Corning was left behind in semiconductors, a field it wanted to enter, and it found itself
bearing alone the development costs for programs like Massive Glass for the Navy which it expected to
be more important for naval purposes than it turned out to be. To avoid patenting and therefore having
to share key parts of its process the company intentionally kept much of its intellectual property in the
form of trade secret, a practice that was only feasible for a tight-knit community that could be trusted
to guard the company’s secrets well. Many of the company’s post-war efforts were devoted to keeping
this community tight-knit.
From World War Two on there followed a nearly fifty-year period of substantial labor stability. Annual
recognition of long-serving workers became times for major celebration at Corning and recorded in the
company newspaper, The Gaffer. The Hultzman family, for example, were annually honoured for their
many years of service. Yank was recognized in 1956 for eighty years of service; his son Dutch died in
1962 in his sixty-fifth year with the company; and by the mid-1970s several of Dutch’s children had
passed the forty year mark. While these gestures could be dismissed as inexpensive ways of gaining
employee identification with the company, they were clearly meaningful to the employees and the community at large. One strike action at the Parkersburg, West Virginia plant was the exception that proved
the rule. In response to a disciplinary action against one employee, the plant went out on strike for
eight days in 1957, the first strike at the company since 1891. Amory Houghton, Jr. who had recently
succeeded his father wrote that the strike was taken in part because another more militant union had
been trying to invade the Flints’ territory. But he also recognized a distinct cultural difference between
the Corning labor culture, where workers had come to identify with the company and trust its management, and the highly individual culture of Parkersburg where workers were far less willing to trust management decisions without very careful and thorough communications. During this period Corning’s
leaders enjoyed a friendly relationship with a succession of union leaders. Best known was the visionary
George Parker who, to the surprise of Corning’s management, threw his personal support behind efforts
to promote a Japanese-style Quality movement, observing that in his opinion it was long overdue.
But in other ways all was not smooth sailing. Like many other US companies Corning enjoyed a
very profitable post-war period in the 1950s and 60s. As one of the few, for some time the only company in the color television tube business, Corning derived more cash from its business than it knew
how to deploy. All this came to a dramatic halt when one of Corning’s chief customers for television
tubes, RCA, tired of handing Corning most of the profits in television manufacturing, and integrated
backwards into making its own glass blanks for its highest volume products. Consequently, the 1970s
suddenly became a time of cost-cutting and management lay-offs for Corning, when management positions were combined and overhead was brought into line with national and industry norms. Though
the company was slow to react, management did come to the decision that it needed to make common
cause with other companies in and suppliers to the television industry and to seek US government action
against Japanese imports. When Zenith launched its campaign attempting to keep the consumer electronics industry in the US to save manufacturing jobs Corning acceded to union requests to support the
effort and lobbied for import tariffs. This must have raised more than a little internal conflict, however,
as Corning had been early to develop its own international business, and its leaders must have been
aware that its largest customer, still RCA at the time, was the single most important source of technology exports to Japanese electronics companies.
Equal Opportunity
Despite the hard times, CEO Amory Houghton Jr. and President Tom MacAvoy made special efforts
in the 1970s to comply visibly with new equal opportunity laws and to recruit minorities and women.
Numerous individual women could be and were fondly remembered for playing prominent roles at
Corning in earlier times. Lucy Maltby, a prominent home economist who hired a cadre of associates,
had been crucial in the interwar period when Corning was developing its lines of dinnerware and Pyrex
cookware. A succession of librarians and information specialists had played an important role in helping
Corning scientists keep track of technical records, recognizing the overlaps and relationships in scientific
work from different laboratories, and acquiring resources from beyond Corning. During the war there
had been women at all levels, especially among the ranks of tube assemblers, ably filling jobs that would
otherwise be filled by men, but recognized to have superior skills for the jobs. As with other companies
these women’s jobs had disappeared after the war. There had even been the rare woman research scientist, albeit the wife of another researcher. The post-war era had seen a large net diminution, but women
had not disappeared entirely from the ranks of Corning employees.
Now Corning went out of its way to find senior women as intentional role models, giving them the
support and the authority to make changes in the company culture. Marie McKee, one of the first
women hired into management, and a strong presence for decades in the personnel and other functions,
was encouraged to identify ways in which the company could make work/family life more tenable for
women employees. In 1979 Corning became one of the first large companies in the country to sponsor a
daycare center. When Corning carried out a large recall of Corning Ware percolators in the early 1980s
it took the opportunity to hire the former head of the Consumer Product Safety Commission, Susan
B. King, as another female Corning executive. In 1990 it hired scientist Eve Menger-Hammond to be
second in command at the Sullivan Park technology center. A distinguished chemist in her own right
Menger had previously left an academic career to be an executive at Allied Chemical. During her time
at Corning, Menger was supported to serve on the National Science Board in addition to her management duties.
In some of the companies that increased hiring of visible minorities and women in the 1970s and
1980s the newcomers were expected to “blend in.” At Corning, by contrast, they were expected not to
blend in but to broaden and enrich the mix. All of Corning’s women executives received encouragement to take initiative in areas they cared about. When Marie McKee, as head of Human Resources at
Sullivan Park, was involved in Corning’s high-profile innovation task force in the mid-1980s she made
a point of restoring the human perspective to representations and models of the Corning innovation
process that had become abstract and systems-oriented. Eve Menger’s particular interest was in public
education for science and technology, and she would likewise take a major role in overseeing the design
of the Innovation Center associated with the redesigned Corning Glass Museum in celebration of
Corning’s 150th anniversary.
Concurrent with the effort to recruit senior women, Corning set new goals to increase the number of
women and minorities in both its management and technical ranks. This effort went well beyond legal
requirements of any kind, but according to James Houghton who became CEO in 1983 for Corning it
was no longer simply a matter of compliance or cultural diversity. Assuming the continuation of current
demographic trends, only 15% of the available workforce would be white males by the middle of the 21st
century. He wanted to be sure that Corning had long since made itself a desirable place for women and
minorities to work. Attracting high level women and minorities was something for which nearby Xerox
was also known. But Xerox was in Rochester, more than an hour’s drive from Corning, and intensely
urban by comparison. Well-educated white males, and the occasional spouse researcher, who had been
attracted to work at Corning in the post-war era had been willing to forego urban surroundings for a
challenging and collegial work environment. When Corning sought out a critical mass of more diverse
employees, building on the few high-level women hired from government, academia, and other companies, Corning had turned itself into a tourist attraction with a good hotel and restaurants, a city center,
a new community college with a respectable rare book collection funded by Arthur Houghton, a hospital, and numerous recreation and cultural amenities. It also adopted an aggressive program of cultural
enhancement regularly importing theatre groups, sporting and cultural events; and weekend air service
on the company plane to New York City.
Blending PhDs and Craft Workers
Throughout the last half of the 20th century Corning’s policies toward encouraging craft and science as
mutually reinforcing parts of its work culture demanded unusual approaches both to management and
to people development. Whereas most companies in the postwar era with products and processes that
were technologically demanding simply shifted their hiring practices to a college educated and highly
credentialed workforce, Corning maintained a special kind of dual ladder. On the one hand it sought
to hire leading scientists in glass related specialties (physics, chemistry, etc.), but on the other hand it
continued to value, develop and promote skilled and inventive workers with on the job training and
experience who showed special inventiveness and initiative. This combination caused not a little tension, especially in Corning’s research laboratories and technology centers where a newly hired generation of employees fresh from their graduate institutions brought with them a heightened sense of the
importance of credentials in developing technology. Nevertheless some of Corning’s most important
technologies continued to come from people with little or no formal training. Chief among these craft
based inventors was Jim Giffen who developed numerous methods and devices for manufacturing nonstandard oddly-shaped television tube housing and process equipment for making laminated ceramics
among many other projects. Moreover, the process technologies shared most successfully among Corning factories were often the work of self-taught engineers with well-developed personal networks across
the company’s factories.
Corning paid a penalty for continuing to involve people like Giffen in the 1960s and 70s when R&D
laboratories were judged by the number of PhDs they hired and visiting committees regularly evaluated
research programs on that basis. Occasionally they found themselves ranked lower than their actual
achievements merited because of their unorthodox staffing practices. But Corning countered these
trends by sending newly hired PhDs like Tom MacAvoy, who would later emerge from the laboratories
to help lead the company, to intern with glass molders and line operators, and by insisting on an unusual
attitude of mutual respect between process workers, operators and researchers. This purposely egalitarian attitude in the workplace served Corning well in the 1960s and 1970s when many US companies lost
the ability to innovate in process terms and when US manufacturing fell behind Japanese and German
competitors. When RCA tried to make its own glass for television tubes it took three times as much
time, and nearly failed outright, because its engineers and scientists could not work the “black magic”
needed to produce good glass, and couldn’t communicate effectively with the glassworkers who could.
Unlike Corning, RCA had forfeited most of its advanced manufacturing capability after the war by
handing all power to a corporate research staff dominated by PhDs in theoretical Physics.
Meanwhile the Corning workforce was changing in other ways as Corning experimented with finding more effective approaches to organizing its operations. In the mid-1980s union leader George
Parker helped to lead a cooperative effort with management in which newer Corning plants like the one
in Parkersburg adopted such innovative programs as goal-sharing and self-managed teams. As other
companies discovered at the same time, such programs worked well where the plant had been designed
and the workforce hired with good communication skills in mind. Many of the workers involved in
these experiments were college educated, and a few even rejected some PhD applicants. But the difficulty for company and union alike was that most of Corning plants were not staffed with workers who
had achieved a 12th grade proficiency, and the experimental programs were not workable without this
educational requirement as a minimum. More difficult was the situation in Corning’s overseas locations
– especially France, where more militant unions were accustomed to companies acquiescing in their
demands, and where Corning chose to distinguish itself by insisting on downsizing, and on changes in
certain work rules and practices to approximate the kind of flexibility in manufacturing management
enjoyed in the U.S. (Corning’s efforts in France did not escape the attention of its venerable French
competitor St. Gobain, which copied Corning’s methods of dealing with recalcitrant unions and succeeded in increasing the efficiency of its own operations.)
The position of hourly workers in the US became more complicated after the late 1980s when Corning opened a highly automated non-union optical fiber plant in Wilmington, NC. Soon after that
the company sold off its signature businesses of dishware and ovenware to private equity investors on
the condition that they commit to maintaining the plants in the town of Corning. Except for the still
very highly automated and skilled Celcor (producing catalytic convertor substrates) in the nearby town
of Erwin, most of the company’s remaining facilities in Corning refocused on research, technical and
headquarters functions.
Consumer Product Safety (The Percolator Recall)
On top of the many challenges that afflicted most companies in the 1970s — high cost of energy, growing Japanese competition — came an activist consumer movement, focused among other things on
consumer product safety. In the mid-1970s Corning was struggling with such issues as the downturn
of its core television glass business, the costs of financing and introducing new products — Celcor and
Corelle — in two different markets, the growth of “Big Box” stores that disrupted its customary channels
of distribution and put pressure on its margins, and the enormous development costs of optical fiber.
Simultaneously, the company discovered that it had a problem with its popular Corning Ware percolator. The 1974 model E-1210 was the best-selling percolator of its type, and one of the most profitable,
and there were 360,000 units in distribution. A redesign involving the substitution of a new adhesive
to attach the handle had caused coffee pot handles to separate after repeated washings in dishwashers,
and several hundred customers had reported incidents, of which twelve had required medical attention.
The numbers were small, and no pattern was discernible, but notice was duly given to 90,000 retailers
and ads were run, resulting in an initial return of around 15,000 coffeepots. All seemed well at first,
and the Consumer Product Safety Commission praised the company’s “outstanding effort,’ but later
reversed its opinion, claiming that Corning had been slow to respond and levied the largest fine it had
ever meted out, which was $325,000 against Corning. To avoid further publicity the company simply
paid, although they believed the penalty was unfair. Then more coffeepots started causing trouble as
they aged. By 1979 many millions of Corning Ware coffee pots were in consumer hands and there
were reports of 7,000 incidents, with 1,250 injuries, some followed by lawsuits. As further reports of
the accidents began to circulate through the Corning community, Tom MacAvoy as president decided
to conduct a full-scale recall. He took the matter to CEO Amory Houghton, estimating a cost of ten
million dollars, and Houghton agreed. Both men explained later that having a dangerous product that
caused harm to consumers would not only have been terrible for the company’s reputation in consumer
products, but even worse for company morale. It was the largest recall of its kind ever performed. It
proved to be a logistical nightmare, especially as many consumers refused to return their coffee pots,
though they were offered either a cash payment or a choice of other products from a special catalogue.
The new recall involved placing advertisements in thousands of publications and in all major broadcast
media, and it cost $14,000,000. In the end it preserved the company’s reputation with consumers and
employees, even winning over some previous government critics. It was in 1982 with the recall behind
it that Corning hired Susan King to help improve and standardize Corning’s policies and procedures in
its consumer business. To coordinate its various and growing activities in Washington with regulatory
agencies and government procurement officers, Corning had already set up one of the earlier Washington offices when dealing with regulatory agencies around automobile safety and emissions standards.
Though as the Houghtons were later to explain it, their policy when dealing with any issue involving
the Federal government was not to rely on lower level managers or lobbyists but to send senior execu17 | Corporate Responsibility at Corning Incorporated
tives to talk directly. With respect to its dealings with the government Corning had come full circle
since the painful events surrounding World War Two. Although the memory of the antitrust conviction remained, Corning chose to adopt a proactive stance towards government. Indeed shortly after his
retirement as CEO in 1983, Amory Houghton, Jr. resigned from Corning’s board and was elected to
represent Corning’s district of upstate New York, filling the congressional seat previously occupied by his
grandfather and serving until 2001.
Corning and the Environment
Before the late 1960s Corning was largely unaware or unconcerned about the effects its processes and
energy use had on the environment. As former President and Vice Chairman for Technology Tom
MacAvoy explained, the Cold War focus on defense technologies seemed to perpetuate a wartime attitude about the low priority nature of issues like pollution. When Corning developed its processes for
large sophisticated mirrors, and found that it involved emissions of toxic gases into the atmosphere,
it simply located the Canton plant that produced them as far away as it reasonably could from major
population centers. This served the dual purpose of isolating the emissions and enabling extra security
for a plant that produced top-secret products. In the 1970s, however, the government began putting
pressure on its suppliers to limit polluting run-off and air pollution. Corning acted quickly to comply,
spending $60 million on these efforts in the decade of the 1970s. It also made the agreeable discovery
that the redesign of its furnaces and melting tanks for the energy-saving measures it was required to
make improved its melting processes considerably.
One of the best and most enduring products Corning is known for producing is its Celcor substrates
for catalytic convertors that first went into production in 1974 to satisfy the regulatory requirements for
auto emissions beginning with autos produced for model year 1975. Despite its prominent and continuing role in producing this environmentally important product, Corning’s leadership cannot be said to
have extended to environmental issues. Celcor was the ultimate opportunistic product, arising less out of
an interest in innovating for environmental purposes, than out of a strong desire to maintain an opening
in the auto industry after its ten-year project aimed at safety glass for automobile windshields fizzled in
1971. Indeed catalytic convertors were originally expected to sell for a scant five years before alternative
engine designs that had been worked on for some time by auto companies and independent inventors
took over the market. The anticipated short time horizon for this particular market niche may well have
helped create an opening for Corning, as other better resourced and more visible companies like 3M
might have been expected to compete more fiercely for the business, had they taken it seriously. Ironically the ceramic substrate (Celcor), which originated with Corning’s earlier experiments with ceramic
heat-exchangers for racing cars, can now be seen to have helped the auto companies to have prolonged
the life of the standard internal combustion engine by nearly forty years.
Safety glass for windshields was, of course, a product consistent with longer term product themes for
Corning — like the headlamps arising out of the earlier period of concern for vehicle safety and night
driving. But it was the Celcor project, challenging as it was organizationally and technically, that nevertheless attracted Corning’s attention to the opportunities created by doing work in conjunction with
regulatory action by the government. However frustrating and difficult this kind of project might be
to launch, given the normal delays and retractions of the regulatory process, projects related to regulatory compliance had certain tremendous advantages. The inevitable hearings helped to get the state of
technology out into the public domain at a time when according to mid-century antitrust policy companies in the same industry were prohibited from sharing information. Moreover, when the product
was introduced the entire market had to comply. From Celcor Corning learned to improve its lobbying
efforts not only with US government regulators but also with other industrial and government bodies in
Europe and eventually in Asia. In China, for instance, where auto exhaust joins other serious pollutants
to create major urban health hazards, Corning eventually gained government sponsorship not only for
its Celcor catalytic convertors, but for other related types of filters to help control pollution.
Coda
At the beginning of the 21st century, as Corning celebrated its 150th year in business the company came
very close to failing dramatically when the telecommunications industry, its major customer for the huge
fiber optics business in which it held a dominant share, simply imploded. Fortunately the company had
only recently turned down flat the proposal to merge with high-flying Nortel which emerged as one of
the major malefactors in the telecoms debacle and would certainly have taken Corning down with it.
For reasons that had more to do with stock prices and options than actual demand, many of the leading telecoms companies had projected need for optical fiber far beyond their actual orders, and Corning
as the core supplier had had to produce for that projected demand. In some ways this was a parallel
situation to the earlier downturn of the television tube business. But reports in business media to the
contrary, Corning had taken to heart its near demise with the television glass business, and did not have
all its eggs in the fiber optic basket. Nevertheless, because it was identified with telecommunications in
the financial markets, it had serious problems gaining access to working capital to support the several
other growing businesses on which it could rely to survive and recover. To help deal with the crisis,
James Houghton, who had recently retired, returned as chairman and stayed for several years to lead the
company out of the predicament not of its own making.
In a speech to a company strategy conference delivered in 2004 Houghton laid out the seven Corporate Values that Corning adopted when developing formal values became important to companies that
were expanding globally. When correctly interpreted, Houghton explained, the seven values — Quality,
Integrity, Performance, Leadership, Independence, Innovation, and the Individual — form the context
of all that Corning does. The content for this particular conference might be the company’s strategy,
but at any given time the values must be understood to form the context. He stressed Corning’s pride
in its reputation for many distinctive attributes including collaboration, risk-taking, long-term thinking,
expertise in chemistry, and above all the care and feeding of major stakeholders — especially customers
and employees.
Corporate values statements have an undeniable sameness about them. Read in the aftermath of the
near collapse of the world financial system in 2008, these values take on the character of truisms. Even
the Managing Director of McKinsey and Company has recently called on companies to reform capitalism with long-term thinking. But Corning’s formal values were developed before the financial collapse,
at a time when short termism was rampant, and shareholder value had become the professed obligation
of most companies, and even a legal requirement according to some scholars. The path was certainly not
cluttered with companies stressing the long-term view and commitment to all stakeholders, especially
employees. Interpreted in connection with the actions and behaviors covered briefly in this case, the
seven values highlight Corning’s steady commitment to philosophies that for most companies have at
best gone in and out of fashion. While Nortel was being picked apart in the courts, and ended up leaving little more than a collection of patents to be fought over by other Canadian companies, Corning
emerged from its crisis renewed and strengthened, a global business in which 60-70% of the manufacturing activities are located in Asia, a leading supplier of the more energy-efficient, durable and safe form
of displays for IPhones and IPads, the supplier of modern versions of catalytic convertor substrates, all
forms of ceramic filters and information bearing glass labels used in biomedical research. In all of these
products, and in all of the formal values too, echoes of Corning’s evolutionary path can be heard loud
and clear. Clearly, without the innovation there would have been no other businesses to fall back on.
Without the long-term commitment there would have been no display glass business and especially no
Corning Gorilla Glass which is the direct descendant of the failed chemically strengthened autosafety
glass first invented in 1960. (An ad for which went unintentionally viral on YouTube.) There would also
have been no portfolio of opportunities, for which Corning’s stock price was consistently downgraded by
the financial community in the 1990s. Without the independence and the integrity showing up in due
diligence there might well have been only a few promising pieces of Nortel that were formerly Corning
businesses up for sale. Without the performance there would have been no comeback, and how many
companies would have performed so well and so steadily in such a crisis without the leadership and the
belief that Corning valued all its individuals?
Will the values transfer to Asia? I asked Jamie Houghton. Will they survive the departure of the
family, this time likely for good? Will they mean the same things and translate into the same policies
and behaviors? Houghton says the values have been embraced in Asia, easier to sell in some cases than
they have been in Corning’s domestic operations. He believes they are embedded in the company’s
DNA, with or without the family.
As for me, I have become convinced that the best form of Corporate Social Responsibility or as
Houghton maintains, Corporate Responsibility, does equate for the most part to “simply good business”
or “enlightened self-interest.” But it has to be said that Corning’s sense of what good business is, and the
reality of its mainly constructive behaviour, has been shaped by constant interaction with its customers,
its local communities, the US government, and many other governments. It is necessitated by its choice
of strategy as a specialty materials company, and that it could never have prospered without the creativity and loyalty of a committed workforce. It is also worth noting that despite its pride in products that
have strong environment-friendly characteristics — the non-disposable dishware that never broke and
that remained inert in the microwave, the catalytic convertor components, the superior qualities of glass
over plastic — it did not follow naturally that Corning would emphasize concern for the environment.
Despite the prominent emphasis on the individual in the values, the “self ” in self-interest actually represents a highly developed collective identity, which may or may not survive the inevitable transformations
that have recently taken place and will continue without letup in the foreseeable future.
Sources
Corporate Social Responsibility Index, 2009. St James Ethics Center, UK
Davis Dyer and Daniel Gross, The Generations of Corning, Oxford University Press, 2001.
Margaret Graham and Alec T. Shuldiner, Corning and the Craft of Innovation,
Oxford University Press, 2001.
Margaret B.W. Graham, Innovation and Standardization: Henry P. Gage and Colors for Safety
Lighting, Entreprise and Histoire, 2009.
Henry Mintzberg, The Case for Corporate Social Responsibility, Journal of Business Strategy, Fall, 1983.
Bert Spector, “Business Responsibilities in a Divided World”: The Cold War Roots of the Corporate
Social Responsibility Movement.” Enterprise and Society, Volume 9, Number 2, June 2008.
Interviews in October 2010 with former Chairman and CEO, James R. Houghton, former Manager
of Chemical Research, Eve Menger-Hammond, Board Member, John Seely Brown.
For Further Information
Please contact either executive editor Kenneth E. Goodpaster,
Koch Endowed Chair in the Opus College of Business at the
University of St. Thomas or contact project director David
Rodbourne, Vice President of Center for Ethical Business Cultures.
Center for Ethical Business Cultures
1000 LaSalle Avenue, TMH331, Minneapolis, MN 55403
www.cebcglobal.org
Goodpaster: 651.962.4212 | [email protected]
Rodbourne: 651.962.4122 | [email protected]
Business Partnering with the University of St. Thomas
®
®

Corporate Responsibility at Corning Incorporated

Transcription

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