Safeguarding the brand image and corporate reputation has become important as markets all over the world have become very competitive and image has become more vulnerable. The reputational risk in consumer markets has also made the companies shift their role as only profit maker for shareholder. Today’s consumers know that if they boycott the brands they use, it works. Product boycotts are associated with negative stock market reactions for the company and hence affect the image of the company both directly and indirectly. An example: Nike in the late 80s and early 90’s faced considerable negative publicity for slave wages, forced overtime and arbitrary abuse.
They have greater concern on stakeholder well –being. A firm that decided to ignore the social issues may results in a loss of strategic opportunities ('Shareholder value or social responsiblity? ', 2007). Involved in CSR activities are proven to create good image and reputation for a company. In the long run, it helps a company to increase shareholders’ value and achieve sustainable business
5. CRITICAL ANALYSIS AND RECOMMENDATIONS 5.2 The Shareholder-Stakeholder debate There is no doubt that the shareholder and stakeholder theories are both dominant theories of corporate governance. Having already discussed the pros and cons of each theory, it is now important to analyse the debate arising to be able to determine which of the two will enable better corporate governance. First of all, it is important to highlight that this debate has emerged over the last decade and has always been a concern for most advocates of good corporate governance. Globalisation of capital markets, greater shareholder activism, rise of institutional investors and profitability and wealth maximization as the main objectives of corporation have always lead to the acceptance of the shareholder theory as an effective theory of corporate governance.
CSR is important for the multinationals to perform in foreign countries because of the growing competition and other challenges that are faced by an organization; the management theory is used as a tool to encounter such challenges ( Ismail, 2009). Donaldson (1989, cited in Secchi, 2007 :359) CSR also acts upon the firms managerial decisions when there are problems such as clashes, protests and strikes, these lay down the moral values, above profit maximization. Managerial theories performance depends on stakeholders trust, co operation and acceptance. Garrige and Mele ( 2004) Detomasi( 2008) were all of a view that social power drives the social responsibility as the corporation is a corporate citizen, who has investment in the community. Davies (1960) stated that CSR is a political power and therefore must be used responsibly as a business is social institution; its power comes from both within and outside.
1.0 Introduction The case study researches the converging and diverging of human resources practices in multinational companies. The report will analyze the decision making on interrelationships between national and global companies. International and comparative human resources are playing a major part in companies that decide to enter into the multinational global business. As opportunities arise to expand a company globally, CEOs and managers focus on issues associated with the culture, traditions, and training in different countries. In order to survive in the competitive market, human resources play a major part in the company’s success.
ABSTRACT The long term success of the investors not only depends on the narrow financial performance of the companies of whom share they buy but also on their efficiency to manage the ethical questions that will result in image of the company. Many organizations and business investors take this responsible investment as an obligation but with the changing industry scenario and with many Gen Y employees and owners entering the market this responsible investment is actually becoming the core value of the company and also the key reason for the sustainability and brand building of the company. The purpose of this paper is to view the following points: • Statistics on shareholders and investors preferring ethical/responsible investment • Instances of organization’s who invested in unethical industries and there consequences • How can ethical investment contribute to organizational sustainability The data collected and the analysis of the paper would be purely on the basis of secondary data. CHAPTER 1: INTRODUCTION What is Ethical
Unethical behaviour inside the company is frequently caused by unethical individuals. Managers tend to be unethical doing things to their own self-interest instead of providing the best interest of shareholders. For the business to be less likely to fail the corporate governance must be effective in the business and thus protect the interest of shareholders of the business. Corporate
Introduction The managers of corporate organization are expected to maximize return of investor while avoiding principal-agent conflicts of interest, complying with regulatory standards, and enhancing the reputational capital of their organization (Marcinko D J & Caplan D H, 2012). The recent resignations and arrests of top U.S. managers, however, point out an increasing level of corporate irresponsibility and managerial negligence on Wall Street and on Main Street that has eroded global and domestic trust in U.S. markets. In the Enron scandal, corporate irresponsibility has provoked unprecedented outrage and multiple lawsuits from a range of stakeholders with demands for democratizing improving managerial accountability, structures of corporate
A stakeholder is a party that has an interest in an organization, and can either influence or be influenced by the business. The primary stakeholders in a typical corporation are its investors, employees, managers, suppliers and customers. Nevertheless, the idea incorporated with the modern theory goes further than this original notion in including additional stakeholders such as a community, government or trade association. As per corporate social obligations majority of the organizations are especially concerned about stakeholder values rather than shareholder values. Because of this, stakeholder objectives such as better working conditions, salaries to employees, sponsorships and donations to the customers and potential customers, paying
In the above example, we saw the possible consequences that lack of emotional intelligence can cause. Moreover in as organizations carve out their businesses in global markets more, the degree of diversity in the organizations, it is more important than ever before that organizations and its employees become emotionally intelligent. Thus, emotional intelligence is a term being used more and more within human resources departments and is now making its way into corporate boardrooms where it enjoys one of the top agendas of top management. Emotional Intelligence Quotient can be defined as competencies that demonstrate the ability to recognize one’s behaviors, moods, and impulses, and to manage them best according to the situation. It involves emotional empathy; attention and discrimination of one's emotions; accurate recognition of one's own and others' moods; mood management or control over emotions; response to appropriate emotions and behaviours in various life situations.