Corporate Politics And Responsibilities Essays - Corporate Law

Corporate Politics And Responsibilities Corporate Responsibility As we moved into the 1990s companies became aware that social responsibility was essential to their corporate responsibility to make a profit. Companies are now discovering that high road practices such as working with unions, and treating the community and environment are often more profitable, and certainly more respectful than old style low road practices that companies used to use that often overlook the needs of the unions, community and environment. William Norris, the founder of Control Data Corporation sums it up well when he stated that, You cant do business in a society thats burning. What he meant was that if your community houses the poor and uneducated, you cant run a business. If your employee pool is uneducated, than your product will be poor, and if your community is poor, than no body will be able to afford your product. One step in being a responsible corporate entity is to better your relationship with your employees. One notable example of this is GMs Saturn division. Saturn is known for making managers partners rather than bosses, and during meetings, everybody has say. Other companies look to distribute stock to its workers, therefore making the workers the owners. This is usually done through the companies 401k plan. Another step to being a responsible corporate entity is to give back to their community. Organizations such as Levi Strauss, Honeywell, and Reebok encourage their employees to serve community service by working in soup kitchens, tutor in local schools, and give their time to other charitable organizations. While it may give these corporations a good image because they are acting socially responsible, there is also hard evidence that it also makes them more profitable. For example, the Council on Economic Prioritys (CEP), a prestigious resource council has found that the more socially responsible a company is, the more likely that a company is going to be financially successful. A Dickinson College study done in 1992 found the same results, and a 1993 Rutgers study found that the top 25 percent of firms rated by their social responsibility had an 11% higher gross rate of return on capital than their competitors. Corporations using self-managing or empowering their workers show fewer turnovers, less absenteeism, and a higher rate of productivity. This leads to a duel bottom line of achieving both higher financial gains, and valuing workers. Flaws in Corporate Responsibility Corporations still make huge profits from sweatshops and child labor that no socially responsible corporation could attain. Many of these corporations listed above still use the resources of El Salvador and China for their ultra cheap labor. For a company to be truly socially responsible, it must act in a responsible manner when profits are to be had, and it also must act in a responsible manner when it may indeed be more profitable to take the low road. Part of the flaw in corporate responsibility is that nobody defines the meaning of responsibility, and nobody has the power to decide the values of a responsible corporation. In todays corporate responsibility scene, there are many contradictions. Corporate Democracy Corporations have much power. With their money they are able to control the media, make political donations, and manipulate consumers. Many people believe that this is better than the other systems of government, most notably communism and socialism. One of the problems is that no institution willing gives up power. The irony of our system is that as corporate power grows, the more corporations rely on democracy. Some people believe that a form of democracy for business and society would benefit both businesses and social well being. There are five key ways that a form of democracy would effect a corporation. The first key is to create a national seminar on the role and morality of markets. The second key is to empower all stakeholders, not just the shareholders. The third key is to recharter the corporation into the public entity that it is. The fourth key is to develop new forms of ownership and networks of cooperative community based business. The fifth key is to rewrite rules of our current economic and political environment to increase democracy. The reason that people believe that corporations and our