Corporate Governess and Business Ethics - Essay Example

The scope of corporate governance is quite wide. Corporate governance has its origin from a wide range of sources including stock exchanges and international organizations. There are certain commonly accepted principles about corporate governance. They are respecting and encouraging the shareholder rights, protecting the interests of all stakeholders, performing the board’s responsibilities properly, following integrity and ethics, and having transparency in transactions. Business ethics too has become an important subject at the academic level and also within major organizations. This interest in business ethics is visible in the big organizations’ evident emphasis on promoting non-economic social values. In simple terms, business ethics aims at handling situations where there is a possibility of business going unethical.

In other words, as businesses function in the social and natural environments, they are supposed to be accountable to the environment and society they exist in. In the present business climate where there are multinational giants, the paths chosen by these companies have a huge impact on the lives of people. Several subjects come under the purview of general business ethics. The first one is corporate social responsibility which deals with the ethical rights among companies and also towards society.

In addition, it deals with the moral responsibilities and rights that exist between a company and its stakeholders. Another matter is the relationship among different companies, especially during takeovers, and espionage. Another factor is the issues associated with corporate leadership, and political contributions by the company. A look into history will prove that the rise in interest in business ethics has its beginning in the 1970s. Before the world wars, the business world was full of unethical practices ranging from colonialism and slavery.

Corporate social responsibility (CSR) is the obligation of a company to be responsible to all of the stakeholders in its operation to achieve sustainable development, not only economically, but also in social and environmental dimensions. In other words, corporate responsibility means the responsibility of the company towards all its stakeholders ranging from owners, investors, employees, customers, government, suppliers, competitors, and the community. In the words of Kotler, and Lee (2008, p.3), corporate social responsibility is the commitment of a company to improve community well-being through its operations and contributions.

Nokia: The Company in Concern The company that is considered for analysis of corporate governance is Nokia. The company had its beginning in the year 1865 in South-Western Finland as a forest industry enterprise, and the founder was a mining engineer named Fredrik Idestam. By the beginning of 1989s, Nokia strengthened its hold on telecommunications and consumer electronics markets. As Parthasarthy (2006, p. 338) reports, there were a number of acquisitions ranging from Mobira, Salora, Televa, and Luxor.

In addition, it acquired parts of the German Standard Elektrik Lorenz, French company Oceanic, and Dutch company NKF; and in the case of corporate governance, Nokia follows Helsinki, New York, Stockholm, and Frankfurt stock exchange rules and recommendations as applicable (ibid).