What Impact Has Corporate Power Had On The Social World - Essay Example

?What impact has corporate power had on the social world? Critically assess the relationship between corporations and one or more of the following: (i) the state; (ii) culture; (iii) the workforce Table of Contents Table of Contents 2 Introduction 4 Impact of corporate power on social world 5 Affluence and Education- 5 Increased awareness through internet and television- 5 News programs 5 Relationship between corporation and culture 7 A glimpse of organizational culture- 8 Culture relating to opportunity- 8 Culture relating to respect- 8 Culture for achieving business excellence- 9 Evidence of prevalent organizational culture- 9 Relationship between corporation and workforce 10 Collective bargaining- 10 Participation of employees- 11 CSR activity and workforce- 12 Conclusion 13 Reference 15 Introduction The businesses are essentially set up for pursuing economic goals but they are also responsible for achieving social objectives. The nonmarket as well as market stakeholders desire the business to function as a socially responsible entity. To meet this desire of the stakeholders most of the corporate houses have a specified set of social goals which is treated as a part of the overall business activities. Nowadays, the objectives of the business can no more be limited to achieving business profits. It cannot be considered as a ‘money generating machine’ set up with the sole purpose of profit generation. Previously, the businesses were established with some short term goals with little concern for the long term scenario. However, in the current environment the focus of the business has shifted from short term to long term perspective. This renewed focus is beneficial for the companies as well as the society in general. In fact the businesses now play a significant role in the society. They take part in a number of social activities. The companies direct a significant amount of funds towards achieving the social needs. The funds are used for the development of schools, institutions, parks, etc. The big corporate houses sponsor sports and cultural programs. The corporate actively indulge in functions other than pursuing their business interests. The companies thus play an important role in the development of the society. Impact of corporate power on social world Various factors in the society have led to the creation of a climate that foster the criticism and prosperity of the business. While some of these factors are inter-related yet again there are some factors that are independent. Affluence and Education- The two factors- education and affluence have developed alongside. The empowerment of the society has raised the expectations from institutions like the businesses. Affluence includes aspects like wealth level, disposable income and living standard of the society. The measures of standard of living in US suggest a continuous growth over the decades however this growth has curtailed in the last five years. Besides a rising standard of living an improvement in the formal education has also raised the expectations of the society. A combination of these factors has laid the foundations of a society that encourages criticisms of the business. Increased awareness through internet and television- Though the reach of the print media is limited, the electronic media i.e. television is accessible to a wider populace. The television facilitates transmission of the information to wider audiences thereby creating an environment of business criticism. News programs The business criticism appears on the electronic media in three ways. Firstly, this is through the news shows and investigative programs. A study conducted by the “Corporate Reputation Watch” senior executives highlights that media criticism and irresponsible or unethical behavior can be a serious threat to the reputation of a company. While a majority of the business leaders are of the view that the news programs are against them and therefore overstate the facts and exaggerate the issue but the journalist see it in a different light. The journalists argue that the senior executives are evasive and try to cover up crucial facts which they feel might distort the reputation of the company. There have been various criticisms of the business. The society is of the view that the businesses indulge in wrongful activities. Corporate power refers to the capacity or ability to create an impact or to influence the people or the situation. The power itself may be negative as well as positive. In the context of businesses it is perceived that the power is being misused. Undoubtedly the businesses have tremendous power but whether it uses or misuses its power is a serious issue. The main aim of the company management is not just limited to an ethical handling of the stakeholders groups but also to reconcile the interests between the stakeholders groups and the organization. Besides meting a fair treatment to the stakeholders the management is also entrusted with the task of fostering a climate where the decisions made by the employees incorporate the interests of both the public and the organization. Over the years the business has been facing the most intense scrutiny from the general populace. There is a growing concern about the responsibilities that a business has towards the society. Buoyed by these concerns the companies have framed the corporate social responsibility (CSR) framework. The concepts emanating from the CSR include corporate social performance and their social responsiveness. An examination of CSR practices shows that this program gives a serious consideration to the effect of the actions of the company on the society. As per an early definition social responsibility calls for consideration of actions of the individual on the overall social system making him or her accountable for the impact of the performed actions on the system (Carroll & Buchholtz, 2008, p.35). Relationship between corporation and culture Corporate culture is significantly affected by factors ranging from the nature of industry in which the corporate operates its demographics, historical events, attitude and employees personalities and the way they interact amongst themselves. The formal definition forwarded by Greenberg & Baron (1997) states that corporate culture is a framework comprising of values, attitudes, expectations and behavioral norms. Clemente & Greenspan (1999) define it as collective habits, thoughts, feelings, attitudes, habits and behavior patterns. As per Ahmed et al (1999) the corporate culture refers to the arrangement pattern of material or behavior followed by a corporation as the generally accepted method of mitigating problems. A positive culture comprises various key elements. According to Queben (1999) the corporate culture is not merely a mission statement rather it presents a clear picture of the desired future of the company. According to Greenberg and Baron (1997) corporate vision can be most effective if it is clearly transmitted by the top management exhibiting strong values and charismatic personalities. A positive culture is based on corporate values that are in alignment with the company’s purpose and in line with the values of the members of the organization. In addition to this the corporate fostering a positive culture has employees with high values at various organizational levels. As per Greenspan and Clemente (1999) there exists an extensive interaction among the employees both within and outside their functional departments. A distinguishing feature of organization with positive culture is that they can easily adapt to any changes in the external environment (Dartey-Baah, 2011). A glimpse of organizational culture- The getting together of the various groups results in the formation of societies or communities which in turn creates the culture that has an influence as well as is influenced by their behavior. As per Timm and Peterson in an organization the culture refers to the insidious norms, values and attitudes. It sets the conditions in the workplace and influences the manner in which the employees interact amongst themselves and with the outside forces (Culler, 2010). Culture relating to opportunity- The culture of the company Cintas vests in the maximization of the shareholders value and its partners by outperforming the expectations of the customers. The company ensures that the decisions at all the levels are taken in the supreme interest of its employees and the overall company. The long term objectives are not compromised at the altar of short term business gains. There have been instances where the companies have been accused of manipulating profit and sales figures, of paying a huge chunk of the business profits as salaries. These companies are said to overlook the interest of the company to satisfy the interests of limited group of individuals (Farmer, 2005). Culture relating to respect- Some of the companies work with the aim of not just fulfilling the demands of the customers but also going the extra mile to make the customers a big fan. This leads to brand loyalty. The workers often work together sharing all the important aspects of their lives and give due respect and appreciation to the each other’s ideas. This helps a company to strive even during the most turbulent phases and avoid mistakes making the employees feel a part of the system. Culture for achieving business excellence- The companies now operate with a sense of competitiveness, enthusiasm and thoroughness. There is a continuous effort on the part of the employees to bring about an improvement in the systems, services and products. Evidence of prevalent organizational culture- The corporate culture at Disney is characterized by smiling, happy and helpful workers. By way of volunteer participation the company has been able to create a ‘helpfulness culture’ among the workers. Even the external people who come in contact with the company perceive the employees to be happy, helpful and friendly. The company sets aside a portion of its resources for the betterment of the individuals and the environment by designing suitable CSR programs. On the company’s website there are programs like volunteerism and philanthropy (Culler, 2010). As per Milton Friedman “The business of business is business”. The progressive companies revealed that the conduct of business activities with a social aspect in mind produces better results. To attain profitability in today’s age the companies have to focus on the corporate responsibility (Culler, 2010). Relationship between corporation and workforce The relationship between the corporation and the workers exist at two levels- individual relationships and collective relationships. The individual relationship refers to the employment terms and work related conditions. The collective relationship revolves around the employee groups and corporations. The body representing the British trade unions is called Trade Union Congress (TUC) and the body representing the employers is referred as “Confederation of British Industry (CBI)”. In UK the disputes are comparatively. This is evident from the fact that there has never been a strike. The representatives of the trade union ensure that the industry operates smoothly. In any activity involving a number of people working together there are bound to be grievances and disputes and things like new technology and complex payments systems and non-challenging works will add to the dissatisfaction. Most of these problems can easily be sorted by conducting meetings, open discussions and negotiations. Collective bargaining- The process of collective bargaining requires the workers and employers to get together and discuss. A most common arrangement is the short meetings held between the human resource manager and the trade union at the work place. This negotiation process may comprise small groups to nearly 20 representatives from each side. Here it is worth mentioning that discussion and talk form a major tool of worker relations. The reason for the healthy employers and worker relationship in UK is due to concerted efforts of the “Advisory, Conciliation and Arbitration Service (Acas)”. This is entrusted with the task of maintaining harmonious relations by encouraging the workers to develop the best possible practices in the field and by framing codes of conduct training guidelines for the corporations as well as the workers (The Times Newspapers Ltd and MBA Publishing Ltd-a, 2011). Participation of employees- The employee participation process relates to the involvement of the workers in the process of decision-making and their role is not merely limited to the execution of the orders. Therefore, employee participation forms a part of the empowerment process in the corporation. The term ‘empowerment’ is associated with delegation of power from the management to the individuals down the rung. Team work forms an essential part of the process of empowerment whereby the members of the team are motivated to take decisions based on the frameworks and guidelines established by the self managed teams. The participation of the employees is essentially a response to quality management within the organization. The employees are inspired to assume quality related responsibility in performing activities for meeting the demands of the customers. The “internal customer” refers to the individuals within the entity receiving products and services from the suppliers. The “external customers” comprises the users and buyers from outside the system. The participation of the employees is also an important step in the direction of the development of human resources in an organization. The enabling of the employees to take key organizational decisions forms an important ‘tool for motivation’. The various forms of employee participation include- Forming project teams where the team members are given considerable responsibilities. Suggestion schemes by way of which the workers can contribute new business ideas to the managers of the organizations. The workers are sometimes rewarded for offering suitable suggestions. Consultations meetings are held where the workers are encouraged to give new ideas. In the modern organizational framework the workers operating at lower rungs are given sufficient responsibility as they interact with the customers on a daily basis. The workers must be trusted to make efficient decisions in novel situations. The process of making decisions across multi-channels is one where the decisions are not just delegated downwards but also arise from sidewards and upward communication (The Times Newspapers Ltd and MBA Publishing Ltd-b, 2011). CSR activity and workforce- The workers who perceive their corporations as the one acting with a social point of view show higher levels of commitment. This in turn exerts pressure on the organizations to improve the CSR activities with the purpose of recruiting and retaining top quality manpower. This is likely to enhance the performance of the firm as the workers regard a socially responsible corporation to be fair and therefore reciprocate it through loyalty, dedication and enhanced productivity. The role of the workers in the modern business environment is no more limited to “being a cog in the wheel” that facilitates the smooth functioning of the corporate machine. In fact the workers now look beyond their duties to identify opportunities so as to elevate their role from mere performance of their daily routine jobs. The corporate also facilitate the diversification process of the employees. This is done by arranging suitable training programs for the employees where they are imparted the necessary skills to adapt to any new and latest technology. By way of this the corporations are able to concentrate on retaining its quality and skilled workforce. It also gives a sense of security to the employees as they do not have to always live in the fear of loss of job. They appreciate these initiatives and thus develop a sense of commitment and loyalty towards their corporations. Conclusion From the above discussion it is clear that the activities of the corporate is not just limited to yielding business profits rather they now play an important role in the development of the society. The objective of the business is no more limited to attaining profitability. In fact they have to concentrate on various social issues as well. This includes the participation of the corporate in various social endeavors like setting up schools and colleges, establishment of parks, sponsoring the cultural and sports activities. To be successful the business can no more afford to concentrate on profit maximization rather they have to focus on achieving important social functions. This is the reason that the corporate have a separate corporate social responsibility framework in place that outlines the responsibilities of the company towards the society in general. Like a company may decide to pursue eco-friendly policies in the process of production or it may also undertake the infrastructural development program in an area of its ongoing project. All this forms a part of the social obligations of the companies. The inside partners i.e. the employees of the company are also allowed to partake in important business decisions. This makes the employees feel that they are a part of the overall business functioning and makes them more responsible in their efforts. By making the employees accountable for their duties the management saves the resources expended on strict monitoring of the work performance. The faith displayed by the employer encourages the workers. They reciprocate this move of the corporation by putting in their best efforts towards the achievement of the corporate goals and objectives. The integration of the interest of the workers and corporation leads to increased productivity. In the modern business scenario the activities of the business has therefore extended beyond the economic goals and objectives. Besides making profits the companies now have to work on their social image as well; as the external parties such as the customers and the internal parties including the workers attribute significant importance to this aspect. Reference Carroll, B.A. & Buchholtz, K.A. (2008). Business and Society: Ethics and Stakeholder Management. Cengage Learning. Culler, C. (2010). Good Works: Assessing the Relationship Between Organizational Culture, Corporate Social Responsibility Programs, and Weberian Theory. International Journal of Arts and Sciences. Available at: http://openaccesslibrary.org/images/HAR163_Connie_Culler.pdf [Accessed on May 4, 2011]. Dartey-Baah, K. (2011). Corporate culture. The impact of national cultures on corporate cultures in organizations. Available at: http://www.academicleadership.org/article/the-impact-of-national-cultures-on-corporate-cultures-in-organisations [Accessed on May 4, 2011]. Farmer, T.R. (2005). Corporate Culture Defines a Company and Its Future. American Journal of Business. Available at: http://www.bsu.edu/mcobwin/majb/?p=54 [Accessed on May 4, 2011]. The Times Newspapers Ltd and MBA Publishing Ltd-a. (2011). Employer-employee relations. Revision theory. Available at: http://www.thetimes100.co.uk/theory/theory--employer-employee-relations--193.php [Accessed on May 4, 2011]. The Times Newspapers Ltd and MBA Publishing Ltd-b. (2011). Employee participation. Revision theory. Available at: http://www.thetimes100.co.uk/theory/theory--employee-participation--310.php [Accessed on May 4, 2011]. Read More