I. Introduction
In the traditional sense, businesses have been pursuing the success and measuring it by means of gauging the profit that they acquire from sales or the amount that they have saved in terms of their operational costs. The truth is, there is not much that changed with regards to this view of companies. However, there is an added responsibility imposed on the modern organisation by society. Basically, the customers still remain to be the principal factors that influence the actions of the company. The acquisition of their favour thus remains the key ingredient on what companies regard as the realisation of their organisational goals. This does not only limit the organisation in their existing customers but also the potential customers in the market. Mainly, such acquisition of a larger market share has become one of the major intent of the modern organisation. With this in mind, there have been several known organisations that have set aside the pursuit of profit and find other means in making the market share of the company grow. At some point, organisations have realised that profit-seeking and gaining public support and favour have to be evened out and strike some common ground between them. This need to for harmony and balance between these two elements is solved by the creation of the concept of corporate social responsibility (CSR). This is the concept at which the company is required to carry out their roles in society. The following study will be providing an examination on the modern organisation, particularly with reference to individual accountability, executive liability, and corporate social responsibility.
II. Background
The study will be covering an examination of the modern organisation with particular reference with the elements surrounding a corporation, the importance of corporate governance, corporate social responsibilities of the corporation, roles of the executives of the corporation, and the existing international norms that corporations are compelled to follow. The discussions on these elements are to be based on academic and scholarly journals the directly tackle issues on CSR, executive liabilities, and corporate governance of modern organisations.
III. Aims and Objectives
This report intends to provide a detailed discussion and examination of the factors and processes involved in the operations of the modern organisation. Specifically, the study intends to look at the relationship of an organisation’s corporate social responsibility and the executive liabilities on which they execute. Thus, the study will be looking to answer the following questions:
1. What are the issues that the modern corporation encounters?
2. How important is corporate governance to both the public and the organisation?
3. What are the legal responsibilities of the common corporation in terms of dealing with their corporate social responsibilities?
4. How does the issue of executive liability affect the management of the company with references to its CSR?
5. How does the international community regard corporate social responsibilities of corporations?
IV. The Emergence of the Issues and Duties of the Corporation
As indicated in the introduction of this paper, the traditional and most stereotypical impression of the corporation is essentially bodies of organisation that pursue profit and revenue. However, recent studies on corporations indicated that these organisations are somewhat complicit to abuses of human rights and even degradation of the environment. (Bennett 2002, 393) These studies have pointed out that this phenomenon has been triggered by the intensity of globalisation in the commercial scene. This indicates that the emergence of the translational operations of the corporation have highly affected the implications of these types of organisations to society.
Other studies have indicated that the issues and social duties of the corporations often spawn from the demands of the community in which they operate. (Husted and Allen 2006, 838) Thus, for multinational corporations, they have to deal with both the local and global communities in carrying out their social responsibilities. Husted and Allen (2006, 838) mentioned that the local CSR of the multinational corporation tend to be based on the local community’s standards and norms whereas the global CSR of the multinational company tends to be a more generalised version of the local one. Specifically, the global CSR is a set of duties and responsibilities of the corporation that has the propensity to be applicable universally, as the said study placed it, applicable in all societies. (p 840)
V. Importance of Corporate Governance
A. Equal Treatment
B. Welfare of the Stakeholders
C. Efficient Performance of Duties of the Board
D. Requirements of Ethical Behaviour
E. Need for Transparency
F. Sub-Conclusion
VI. Responsibilities of Corporations: A Focus on Corporate Social Responsibility
Aside from the proper implementation of corporate governance in an organisation, it is similarly imperative that the company take on the demands of the public with regards to their corporate social responsibilities. The following discussions will be focusing on this aspect of the organisation with particular reference to the demands and possible implications of imposing the CSR initiatives.
A. Demands of Corporate Social Responsibility (CSR)
The demands of modern business culture have spawned the concept of corporate social responsibility (CSR). In the past decades, studies and articles have been published to determine the courses of action on which a company should undertake once they intend to carry out their CSR initiatives. To begin this discussion, it has been established in the earlier part of this paper that the modern organisation adheres to amassing the favour of the buying public. This also means that companies adhere to the engagement of their CSR as a result of their desire improve on their image as the public sees them. To a certain extent, there is an indication that the way that companies deal with certain real issues is equated to the way they treat their customers. Critics have maintained that companies employ CSR initiatives in order to entice the public into purchasing their products. However, this paper maintains that such malice could no be seen plainly on this aspect of the modern organisation. To some extent, it has been noted that companies that take on aggressive CSR initiatives tend to use it to compensate for some major implications of their operations against the welfare of the public. For instance, the use of CSR initiatives tends to have positive implications of the behaviour of their target market. (Mohr and Webb 2001, 45) However, it is also imperative for the companies to realise that they let the public become aware of what they are carrying out as a part of their CSR initiative. Without such actions, then the companies won’t be able to maximise the benefits of employing a CSR initiative. Therefore, along with the implementation of the CSR, effective marketing and advertising of the said programmes are imperative.
In the same regard, implementing such CSR imperatives are also related to the return of investment of the organisation. (2005, 215) However, the said study maintained that the reason of the implementation of CSR is to accrue what they claimed as social ROY. Thus, regardless of the efficiency of the CSR programme or how impressive the programme is to the public, there is a huge possibility that the returns of investment would not be readily seen. As indicated by (2005, 215) implementing a CSR programme basically intends to managing risk and reputation; protecting human capital assets; responding to consumer demands; and avoiding regulation.” The implications of such actions have been noted even in earlier studies on the organisation. With the public being aware of the social responsibility engenders a possibility of a greater market share for the company. (Owen and Scherer 1993, 11) This supports the claim that having an effective CSR creates an encouraging effect on the target market and with society as a whole.
B. Implications of Failing to have a CSR
As there are benefits that actually transpires after the implementation of the CSR programme, failing to implement such a programme could also spell trouble for the company. For instance, organisational studies have coined the term “consumer appreciation.” (Mohr and Web 2001, 48) This means that CSR programmes affects the level of appreciation that the consumer has on the company or the particular brands that it holds. Without these CSR programmes, companies may find it hard to rectify or modify an erroneous perception of the public regarding their reputation or even with the product or services that they provide. This is reinforced by the study of Fearn and Graham (2005, 305) as they indicated that corporate reputation is regarded by the consumers as among the key determinants of their buying decisions at the moment that they are shopping. This means that the company or a brand that leaves a bad taste to the consumers tend to choose its alternative or its direct competitor.
C. Sub-Conclusion
In any case, corporations need to carry out they CSR programmes for various reasons. As indicated above, they need to implement it to improve their market position and their market share. They also need it to improve their financial status and their performance. And finally, they have to take on these initiatives in order to change the behaviour of the public towards their organisation. Basically, the discussions above have emphasised the need for companies to take on CSR programmes as a tool for organisational development. The subsequent parts of this study will be taking on the legal side of the CSR topic, both in both local and international settings.
VII. Executive Liability
A. Recognition of Risks
B. Executive Liabilities and the Company’s Role with the Environment: Examples from the Real World
C. Sub-Conclusion
VIII. International Norms for Translational Corporations
IX. Conclusion
X. References
Credit:ivythesis.typepad.com
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