Corporate Social Responsibility and the Law - Case Study Example

Corporate Social Responsibility and the Law Introduction: Policies are a set of principles of action adopted or proposed by an organization. They are tools of management whose absence leads to consequences as severe as the collapse of the organization. Business organizations run on a primary objective of maximizing profitability. However, in doing this it is understandable that the organizations exist within the society and must therefore operate in accordance to the norms of morality and ethical provisions as set by the society. The organizations interact with the society on their everyday production endeavors, some of the key modes of organization- society interaction include, the recruitment of personnel. The people working in the business organization are all drawn from the society. This way, the society maintains a daily interaction with organization, which further implies that every factor affecting the societal wellbeing either directly or indirectly affects the stability of the organization, further affecting the achievement of its profitability objective. Additionally, the organization is located right within the society, this deduce that the organization shares a number of other resources with the rest of the society. Its usage of the rest of these resources affects the existence of the society and vice versa. The two: the society and the organization therefore need to come to a compromise on how to share the resources to avoid alienation or domination by either party. Some of the most commonly shared resources include land, electricity, and labor. More importantly, the products produced by the business organization normally target the rest of the society. The society provides market for most of these products, which further implies that the existence of the business organization primarily depends on the economical wellbeing of the society (Florian & Tony, 2012). The relationship between the two is therefore of paramount importance to the existence of the business organization. The two need each other mutual and must therefore strive to achieve a mutual working relationship. However, the business organization steers the direction and nature of the relationship it forms with the society. Failure to maintain a positive and working relationship with the society, the organization is more likely to fizzle out of existence. The organization must therefore maintain an ethically responsive relationship and conduct most of its operations ethically and in constant consideration of the social wellbeing of the society. A negative relationship frustrates the existence of the business organization always resulting in the collapse of most of such organizations. Enron was one such organization that failed to maintain a working relationship with the society. The types of policies managing the organization always regulate the relationship between organizations and the society. The absence of moral policies or the presence of weak policies results in the mismanagement of the organization thereby turning the relationships sour. The policies should effectively be formulated to govern the moral conduct of all employees both at the company premises and while out of the premises (Gerald, 2002). Every profession has a number of ethical principles that govern the conduct of all its practitioners. However, ethical principles just as the name suggest are not embedded on any written legislation and rely entirely on the behavior of the individual. Furthermore, the ethics refer to the ability to choose between right or wrong, good or bad. These definitions are relative to every individual and in most cases, ethics never regulate the conduct of employees at the place of work. the organization is therefore required to develop a set of codes of conduct. Unlike the ethical principles, thee codes of conduct have authority over the behavior of employees and provide effective ways of dealing with any cases of defiance of the very codes. These are written in the form of rules and policies. They therefore need to cover the entire scope of employee- employee, employee- organization, and employee-society relationship resulting a cohesive organization, one that is run seamlessly and peacefully with the cooperation and participation of all the stakeholders (Painter, 2012). Enron had a number of management malfunctions all of which were pointers to ineffective policies governing corporate social responsibility. The integrity of the employees of any company is of essence to the operations of the very firm. An organization checks the integrity level of all its potential employees right before recruitment. The recruitment process is normally a mandate of the human resource department. Before hiring an individual, the department must evaluate the obligations of the office and thereafter deduce a list of all qualifications required in the applicants. The recruitment process is therefore one of the most essential is the determination of the integrity level of the firm. A part from the academic qualifications, the recruiting team ensures that they identify all the desired traits for any of the openings at the firm. After recruiting the preferred officers, their conduct is thereafter checked and balanced by the set codes of conduct (Jiaming, 2008). These must elaborate on the importance of integrity. One of the main factors that led to the collapse of Enron one of the largest American corporations was the lack of integrity in the top management. Fraud is best defined as wrongful or criminal deception intended to result in financial or personal gain. This is the worst type of integrity lapse that an organization should ever face. Most of the top management of the company turned onto the resources of the company for their personal financial benefit. Their conduct therefore drove the company into bankruptcy leaving the company incapacitated. The firm could not thereafter pay the rest of its employees besides financing its operation. This was a result of ineffective financial management policies (Elizabeth & Michelle, 2008). Henry Fuyol, the father of modern day management offered an explanation that viewed an organization as a system with various components. Each of these components acts as a check for the other thereby limiting harm emanating from any. To curb fraud and to limit financial mismanagement, an organization system should form bureaucracies thorough the creation of departments and offices. This process improves accountability in those entrusted with the finances of the organization; it also increases ease of operation since every department has its own mandate in the entire production process. This thus makes it hard for the top management to collude with an aim of squandering the resources of the company. The extensive fraudulent behavior portrayed by the management of the company was a clear pointer to the evidently lacking financial management policies. The selfishness portrayed by the management pointed to weak policies governing the recruitment process of employees into the company, which is a direct failure of the human resource department. The department evaluates all the employees coming in to work in the facility, in doing this; it evaluates the behaviors of all the applicant s and their previous employment histories. An effective study on the potential employees of the firm should reveal some inconsistencies in those hired into the firm. Enron had possible failed to look into the employment and integrity histories of all the employees it recruited especially into its management. This resulted in the inclusion of the fraudulent managers most of whom convinced their colleagues to defraud the company (Joseph & Robert, 2003). Additionally, the conduct of employees at the work place is regulated by a number of factors key among which is the level of motivation of the employees. A motivated employee is faithful and patriotic to his or her employer. Such employees therefore never collude to steal or engage in a derogatory undertaking while at the company’s premises. The history of Enron Corporation reveals a demeaning work place one riddled with delays in payments and a relaxed management that never looked into the issues affecting the wellbeing of her employees. Employees work better when encouraged to, Henry Fuyol on his study of employees asserts that employees are generally lazy and will always evade work. They therefore require effective supervision and constant encouragements from their employers. Encouragement and motivation add up to motivation. Remuneration is the greatest motivator to most of the employees; an employer must ensure that all the employees are paid fairly and in accordance to their obligations at the company. However, financial reward is not the only motivating factor that an employer can manipulate to develop a positive working mentality from his or her employees. The work environment needs to be made as competitive enough, the competition results in the employees trying to outsmart one another all at the benefit of the company. The employees need to perfect their skills from time to time while on their positions in the company. The organization therefore needs to provide its employees with on job trainings. This keeps them relevant to the means of production thereby safeguarding the future of the company. The Enron environment was not conducive enough for most of its employees, before the complete collapse of the company, a majority of its employees had quit their positions citing a number of issues. A motivated employee never quits his employer. A motivated employee never steals from his employer, as was the case with the Enron Corporation (Bowers, 2009). The motivational factors and their subsequent mean and ways of manipulation should always be elaborated by the policies governing the operations of the company. A company should list all the motivational factors available for every employee and have subsequent policies ensuring that they are all rolled out as stipulated to the employee at his time of recruitment. Seemingly Enron had not listed any of these and never had effective policies monitoring the execution of the motivation process. This resulted in dejected work force moist of who never kept relevance to the current means of productions. This resulted in reduced profitability, coupled with other portrayals of mismanagement; the company had no choice but to stall its operations. In brief, integrity of employees at the organization is the key influencer of the financial performance of the same. Integrity affects every aspect of human life. a business organization such as Enron should safe guard its operations by maintaining a highly integral work force. The integrity of employees is safeguarded by the policies governing the operations of the firm. Lack of effective policies to elaborate on the employee behavior and the punishment of wrongdoing resulted in the development of a relaxed working environment, one in which accountability was never withheld. The managers therefore easily misappropriated the resources of the company well aware of the absence of the responsibility mechanisms. This eventually led to the collapse of a once very prosperous firm (Gerald, 2002). References Bowers. J, 2009, A Practical approach to Employment Law, Oxford, Oxford University Press. Elizabeth, B & Michelle, C, 2008, Definition of Social environment, New York, Mc GrawHill. Florian, R & Tony B, 2012, Mind mapping for dummies, New York, John Wiley and sons. Gerald, V, 2002,"The corporate governance lessons of Enron", Corporate Governance, Vol. 2 Iss: 4 pp. 4 – 9. Jiaming, Y, 2008, Computer Supported Cooperative Work in Design, Melbourne, Springer. Joseph, A. P. & Robert F. S., 2003,"The Enron Scandal and the Neglect of Management Integrity Capacity", American Journal of Business, Vol. 18 Iss: 1 pp. 37 – 50. Painter, R. et all., 2012, Cases and Materials on Employment law, Oxford, Oxford University Press. Read More