Critics have pointed that the principle is inconsistent with principles of criminal law. Corporate criminal liability is based on the concept of vicarious liability which is incompatible with basic requirement of criminal law which is mens rea. And the incapacity of imprisoning a corporation further adds to incompatibility. Critics are of the view that this sort of liability distorts and weakens the criminal law. Reputational harm attached with it is excessive which is appropriate when offense is grave but unnecessary when offense is minor.
However his obsession to keep his stock price high led him to unethical behavior.His deviant behavior is demonstrated through different practices: -Inciting his top employees to falsify financial data to satisfy his own objectives is the major deviant behavior observed in Ebbers ' leadership. -Ebbers became arrogant, unpleasant with whoever going against his ideas; he had an overconfidence character expressed especially when talking with stakeholders and international competitors. -Another deviant behavior Ebbers shows is his unfair treatment of employee where he was favoring top managers by giving personal loan in his company with no written promises of reimbursing the loans. This can be understood as a tool of manipulation. He knew he would need their help in some fraudulent practices discovered later in the company.
It goes further to outline the need for workers to report cases of potential conflict to the Chief Legal Officer to prevent an escalation of any unpleasant situation (http://phx.corporate-ir.net...). Dishonesty and internal conflicts can negatively affect the overall functioning of the business resulting in a lack of optimal productivity. Management can eliminate acts of ‘nepotism’, ‘acceptance of bribery’, ‘dishonest transactions’ and ‘exploitation of the company’s assets for personal gain’ (http://phx.corporate-ir.net...) when stakeholders operate within the ambits of what is ethically and legally acceptable in the business. Failing the observance of these principles, a business can lose credibility and stability quite easily. It is important for the workers to be a unified body as each arm or branch of the workforce is equally important.
For example, commercial enticement, influence in stock market, bribery to public officers, larceny, mishandling of funds and so on are some of the examples of corporate crimes, which are performed by individuals or business groups in order to gain financially or socially. However, these transitions sometimes lead to business failure as people are not used to associate with the blemished business (Arlin, 2004). Moreover, once the business crimes are caught, it brings forth foul feelings for the company and other companies also hesitate to link to the tainted company. Similarly, misappropriation by individuals may cost the company commercially that disable the company to carry out the tasks with no trouble. For example, Medici Bank, Lehman Brothers, and Dynegy, Nortel are a few cases in
Having this organizational division between employees carrying out the operations, being morally and legally responsible for the company’s course of action, while being influenced by shareholders’ requirements for short term profit gains, drove the employees of VW to a point where they seem to have lost perspective of the consequences of making this tremendously risky move for the sake of growth and increased revenues. As VW have experienced massive financial losses and even more importantly, lost some of its stellar brand reputation and trust, in hindsight the focus of gaining unethically more market share proved to be a strategy that led to short sighted growth destruction instead of other way around. As Roger Martin argues in the article “The Age of Customer Capitalism”, if customers become top priority, even beyond the owners of the company, namely the shareholders, the strategic prioritization will eventually lead to greater gains for the shareholders themselves. In
Corruption in the public institutions Economic One of the most alarming problems in Egypt is Corruption in the government such as ministry of economic which causes in problems in many buildings such as education ,health care and business. This problem appears due to irresponsible persons have authorities in their position or uncooperative persons which do not make development in the public buildings. Robinson (1998) stated the violation of public laws for selfish interest. Corruption spreads when there is no moral criteria. Robinson (1998) stated it does not prove happiness to the community and financial economic.
Counterfeiting affects manufacturers in many ways, it is therefore as a results in the erosion of genuine brands, loss of sales and market share, the closure of production facilities and unfair competition from counterfeit goods, (Kenya Association of Manufactures: Policy briefing). This is because traders in counterfeit products do not pay taxes as opposed to genuine business people. Their goods will normally bypass the systems and those that are in the scheme of counterfeiting will benefit. Hanzaee, K. H. and Saeed, J. (2012) indicates that counterfeits are often at a lower price, the expectation of quality would not be equivalent to that of the genuine article.
A socially irresponsible act is a decision to accept an alternative that is thought by the decision makers to be inferior to another alternative when the effects upon all parties are considered. (citation to be inserted) The triple bottom line(people-planet-profit) helps businesses to measure their performance to ensure sustainability, however irresponsible management and its negative consequences has given rise to the people-planet-profit trade-offs, this is costly and unsustainable hence unsupportable. Irresponsible management leads to the failure of achieving our goals and encourages negative global effects, expenditure, thereby decreasing profit and sustainability. Unable to minimize negative environmental and socio impacts such as factories unable to reduce noxious emissions leads to air pollution and thus damaging the ozone layer, exposing the harmful ultra-violet rays from the sun, thereby increasing chances of skin cancer. Unable to provide health care benefits for employees leads to a poor workforce, thus a decrease in productivity, global goals such as good health-care and wellbeing of all are not successfully been
The worsening liquidity crisis, policy inconsistency and inadequate infrastructure continue to exert pressure on business operations. TNHL’s very existence is threatened by the adverse environment, which has had a massive impact on TNHL’s business model; that is, the provision of ‘capital’ goods on long term credit. 1.3 Problem Statement The adverse trading environment triggered the restructuring of the business and the need to implement new strategies aimed at creating lean manufacturing processes that supported prevailing market demand. However, what exacerbated reputational decline was the lack of effective communication on the part of management to ensure stakeholder buy-in and the reaffirmation of values and standards which lie at the heart of reputational risk. This lack of clarity from a stakeholder’s perspective created distrust and conflict between management and staff.