Abstract Globalisation has allowed for the rise of major corporations and the increased pervasion of unethical corporate behaviours, such as child labour or harming the environment. Therefore, it is crucial to explore the fundamental driving forces of these unethical behaviour. By taking a rational organisation approach, the paper examines how the rational decision making process is affected by various factors of the market and lead to unethical behaviour. I argue that profit and sustainability are the two primary goals of corporations and unethical decisions are geared towards these goals. Firstly, I identify the Introduction Schulman (2002) mentions that rationality in business is kindred to professionalism.
Corporate Social Responsibility is embedded with a variety of multitude of business actors. With the call for sustainability and its new role of business in society, Corporate Social Responsibility has increased expectations and new rules, methods and leadership must come to contact and conflict with main stakeholders in the area of responsible business. In the business and academic literature, the shareholders are re-named as main stakeholders, and they are considered as competing for influence with its employees, customers, trade unions, suppliers, competitors, consumers etc. and the society at large. Two main relationship models help to explain how leaders can interact with multiple and diverse stakeholders.
By applying their unknown comparative strengths, Tesco’s resources and capabilities reinforce the company’s active performances. However, for the suppliers and communities, Tesco is a corporate bully robbing the community. Like the pilgrims and Native Americans changed the culture of America. Tesco’s growth comes at the expense of small businesses while diverting trade and wealth from local economies. On the other hand, the clarity of Tesco’s vision of continuous growth via diversification supports the organizational effectiveness in the marketplace (Pitt&Koufopoulos,2012).
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.
According to Tingchi Liu et.al (2014), the disadvantages of corporate social responsibility in the company are associated to the world’s development in order to save society from the environmental and economic issues. It is examined that NGO’s and government co-operation produce the better ways to solve corporate social responsibility issues and put the pressure on Tesco in order to integrate its CSR objectives and initiatives. Another disadvantage of CSR is a new policy that has been implemented by the company in order to take part in something new for the business. It can be said that CSR policies of the company have to pay for new training for staff, invest in effective waste systems with new marketing and new technology strategies. According to Vazquez-Carrasco and Lopez-Perez (2013), the stakeholder’s expectations are one of the disadvantages for the company because of the investment of them in the business.
Worldwide integration, competitive pressure, and probe for productivity have been a main driver for change in today’s business world. Different activities of people in the business world have led to many problems and interest within business cycle. Several companies used Corporate Social Responsibility (CSR), Philanthropy or Charity, and Corporate Social Value (CSV) as frameworks to consider the interest of all stakeholders in the business industry. Countless of people desired to change the word, to be a better place for people. Changing the world is not an easy work.
The information age has contributed considerably to this increase in importance of social pressure as word spreads rapidly when companies fail to follow social standards. Leveraging the ability to mobilise quickly, societies have been able to arrange boycotts in certain conditions to force businesses to reconsider social or environmental decisions. Some businesses, for example, have changed certain procedures to better preserve the environment built on pressure from environmental watch groups and the public in
When we look at the main drivers behind this kind of business models, the first is ever changing technology, with new innovative technologies that allow us to connect with more people and find more things to share. Secondly, paradigms shift towards values that embrace openness, humanness and connectedness. Third is the economic realities which the 2008 financial breakdown brought home and finally environmental pressures like the population growth, limited natural resources and growing awareness of the effects of climate change. Sharing brings two changes; a radical reduction of resource consumption and it increases access to the resources at the same
Schumpeter (1942) describes a process of “creative destruction” where wealth creation occurs through disruption of existing market structures due to introduction of new goods and/or services that cause resources to move away from existing firms to new ones thus allowing the growth of the new firms. Accordingly, Schumpeter calls innovation the specific tool of entrepreneurs, the means by which entrepreneurs exploit change as an opportunity for a different business or a different service. Schumpeter (1942) stressed the role of entrepreneurs as primary agents effecting creative destruction, and emphasized to the entrepreneurs the need to search purposefully for the sources of innovation, the changes and their symptoms that indicate opportunities for successful innovation; as well as their need to know and to apply the principles of successful innovation. This Schumpeterian vein of thinking has been carried forward by successive scholars and researchers (Drucker, 1985; Lumpkin and Dess, 1996; Shane, Covered and Westhead, 1991). On his part, Drucker (1985) held out the entrepreneur always searching for change, responding to it, and exploiting it as an opportunity, and engaging by this means in purposeful innovation.
Managing (ethical) behaviour in business: Jacqueline Süral, Insa Tönnemann, 17/11/14 Principles of Service Operations & Organization, BUS110, Dr. Andreas E. Wagner Introduction “Business ethics was generally known to be an oxymoron” (Newton, Ford 2002, p. x). Milton Friedman asserted once that “a company’s only social responsibility was to make as much money as possible for its stockholders”. But in consequence of the latest corporate scandals caused by moral hazard, this point of view has fundamentally changed and there have been numerous proceedings of managing (ethical) uour in business. Hence, companies today not only focus primarily on their employee’s behaviour but also develop techniques concerning the management’s social responsibilities.