Corporate Governance - Literature review Example

? Take-Home Exam Affiliation: Question Part A Kohlberg’s identifies six stages ofmoral development within three levels, namely: preconventional, conventional, and postconventional levels.1 The six stages of moral development are: The Punishment and Obedience Orientation, The Instrumental Relativist Orientation, The “Good Boy - Nice Girl” Orientation, The Law and Order Orientation, The Social-Contract Legalistic Orientation, and The Universal Ethical Principle Orientation.2 Every two of these six stages fall within each of the identified levels respectively. In the first stage, the context of the bad and the good is set. This setting influences the behaviors or actions that deemed/treated as right or wrong. For example, the consequences of corporate directors pursuing their own interests determine whether this move is right or wrong subject to the good or bad factor that the move carries with it. The second stage of moral development intensifies the right/wrong and good/bad practices to encompass the notion of satisfying own needs. Based on the implications of the decision made by the decision maker, Weber argues that aspects of fairness and equal sharing can be interpreted in that context.3 For example, the above move by directors would have a consequential implication to organizational shareholders and the firm at large. Stage three is primarily based on personal behavior. Specifically, members of any given society are expected to behave and conduct themselves in a certain way. In so doing, participants derive behavior-based satisfaction with respect to that which is naturally acceptable to the society. Here, the rules of the majority are essentially in play. On the other hand, the identified fourth stage of moral development deals with societal perspectives of generalized morals. For example, bakers are generally held to be trustworthy and their behavior in and out of work should reflect this expectation. However, this many not always be the case with regard to both the third and fourth stages of moral development. Any given society in its entirety accords rights to its members. In this respect, stage five defines the right and the wrong based on the rights accorded to the members of the society. On the same note, a society’s standards are upheld through the said rights, subsequently influencing the moral factor in that society. When it comes to the final stage of moral development, the definition of what is right is personalized. In other words, an individual’s ethical and moral principles drive the right/wrong definition. In this respect, what is rightfully, ethically, and morally accepted by one individual or society may not necessary be accepted by another subject to the provisions of the last two stages of moral development. Part B Translating theory into practice takes diverse and dynamic approaches. This is because organizational operations, strategies, goals, and objectives differ from one organization to another. For this reason, the operationalization of Kohlberg’s model within an organization requires a strategic approach. On the same note, the taken approach must be aligned and consistent with organizational short term and long term prospects. The practice of Kohlberg’s model would, therefore, require managers to be sensitive to the organizational culture and operations in play. To start with, managers do not necessarily have to implement every aspect of Kohlberg’s model. This is because some of the aspects of Kohlberg’s model may or may not be relevant for some organizational practices. In this respect, managers need to evaluate the organizational culture in play against the Kohlberg’s model. In so doing, managers would note ineffective areas within the organization as far as Kohlberg’s model is concerned. Once this has been done, the chosen provisions of the model can now be implemented. For example, an organization’s definition of right and wrong may be primarily built on the general societal perspectives. When the individualization of such definition is considered subject to the provisions of the Kohlberg’s model, then the managers get a chance to operationalize the model based on the model’s insights that are most relevant to the desired organizational culture. In so doing, the theory dispensed by Kohlberg’s model informs an organizational change that primarily builds on the model. This move is an actual translation of theory into practice in the organizational setting. Part C Relativist approach to ethics is critical to the definition of what is good. Being good is a broad, diverse, and dynamic factor. On the same note, the differentiation of business, family, and global ethics has had its effect and influence on being good. Furthermore, the line of difference between business, family, and global environments has intensified the consideration of and approaches to ethical practices across the aforementioned environments. The business, home, and diverse cultures contexts in relation to business ethics, family ethics, and global ethics respectively is a flawed approach as far as being good is concerned. This is because the three identifiable environments are relatively intertwined and what happens in one of them highly influences the other. In this respect, the ethics factor in business, family, and diverse cultures cannot independently hold without the influence, interaction, and relation among the three. For this reason, the existence and practice of ethics is general, but ethics categorization into business, family, and global ethics follow the respective environment within which ethics are observed and practiced. Question 2 Part A Approach to ethics by different philosophers sheds lights into the diversity and dynamism surrounding the concept of ethics. On the same note, the observation, definition, and actual practice of ethics vary from one societal setting to another. Notably, philosophers’ arguments and points of concern relative to ethics differ across the societal line. In the process, perspectives of the right thing vary and are at the same time informed by people’s beliefs, cultures, relations, interactions, governing laws, and the uniqueness of people’s morality as defined within a community or society setting. In the light of the above argument, it can be held that the approach of different philosophers to ethics and morality enhance the practice of the right thing as defined by an individual, community, or society.4 Over and above that, the issues, concerns, and arguments raised by Aristotle, Kant, and Weber in relation to morality, its development, and the underlying ethics factor inform the identification of the right, wrong, good, or bad. In the process, an individual, community, or society can derive its basis of morality or ethicality. Part B People’s diversity creates different perspectives of ethics. On the same note, changing events and circumstances keep redefining ethics in relation to the factors and forces that influence that change. Personally, Kant’s approach to ethics best supports my idea of ethics. This is because his idea of the rationality behind moral law is plausible. Over and above that, the ethical duty and permissible actions that build ethics and morals are relevant points of argument that cannot be ignored as far as ethical practices at an individual, community, or society level is concerned. Part C The line of fit between doing good and feeling good is critical to consider. The idea of morality relative to doing and feeling good is diverse and dynamic. It is, at the same time, characterized by operational complexity in terms of just which between the two is the most appropriate. Personally, doing good best describes my idea of morality. Feeling good does not necessarily constitute an aspect of morality. This is because an actual amoral or immoral action could be overlooked just because there is the feeling good factor. However, to do good actually conforms to my definition of morality. Question 3 Part A Corporate responsibility is undoubtedly set within the societal context. Both Milton Friedman and Archie Carroll place organizational operations in the social setting. In so doing, the two differentiate between the firm, society, and business owners. Apparently, each of these parties play differentiated roles as far business in the social context is concerned. In this respect, the social responsibility of corporations is highly influenced by each of the said parties. Milton Friedman’s view of corporate responsibility does not encompass the entire society. Rather, Milton Friedman maintains that the responsibility of a corporation should only be directed towards its shareholders. In this view, the corporation does not owe the society anything as far as shareholders’ welfare is looked into. Although corporations operate within the provisions of the set laws and regulations, corporations are only responsible for their shareholders. On the other hand, Archie Carroll is of a different opinion as far as corporation’s responsibility is concerned. Carroll maintains that corporate responsibility should account for the society’s welfare. In this respect, Carroll identifies all the stakeholders that corporate social responsibility should account for.5 On the same note, the influence and subsequent effect of amoral, moral, and immoral organizational practices on key stakeholders is addressed. In the process, corporate responsibility goes beyond shareholders to encompass the larger society. In the light of Milton Friedman’s and Archie Carroll’s philosophies, Archie Carroll is more accurate. This is because Carroll’s philosophy looks into the many and different parties constituting organizational stakeholders. Shareholders are not the only interested parties as far as organizational operations are concerned. Carroll’s focus on the larger society, and in particular all the identified stakeholders, is an accurate highlight on the extent of corporate social responsibility. Part B Good corporate citizens exhibit five specific characteristics, namely: obeying relevant laws and regulations, contributing to the betterment of the community through effective and efficient programs, contributing to the lives of local communities through organizational operations, practicing economic virtues, and involvement in the political process by participating in the development of government regulations or industry-based self-regulation regimes.6 The rationale behind these characteristics is influenced by the need to create harmony and relate all organizational stakeholders effectively and efficiently. On the same note, there is need to ensure that business do not persistently pursue their profit motives at the expense of the larger society. Therefore, harmonizing individual, organizational, and societal interests becomes the basis upon which the value of corporate citizenship is set. Question 4 Part A The major role of board of directors include: Recruit, supervise, retain, evaluate and compensate top management, direct the organization, install a governance system that is policy-based, govern CEO-organization relationship, fiduciary protect assets and member’s investment in the organization, and undertake the monitoring and control function.7 The above identified role of board of directors constitutes the extent to which a board can be effective/efficient or ineffective/inefficient. In order to measure board effectiveness, the role of protecting assets and member investment is paramount. This is because the asset and investment factor becomes the primary ground upon which the entire organization is operationalized. Part B One major lesson for the future executive is that global diversity and dynamism will have to be critically accounted for as time goes by. As a matter of fact, this move has already began and it is upon the future executive to design functional ways through which global diversity and dynamism will enhance organizational operations amid the underlying cultural, social, economic, political, and environmental challenges. Part C Management and governance are undoubtedly two different concepts and practices. Management revolves around organized activities that are designed to achieve the set organizational goals and objectives. These goals and objectives may be short term or long term in nature. On the other hand, governance installs management in the organizational setting. Governance combines expectations, power, authority, and performance of an organization, whereas management addresses specific aspects of the said factors; expectations, power, authority, and performance. The organizational setting is undoubtedly diverse and dynamic, and this diversity and dynamism depends on the adopted strategies in the process of pursuing the set organizational goals and objectives. In this respect, management and governance are critical practices in the success of any given organization. As already identified, management and governance are two distinct practices. However, management is part and parcel of the governance process. All management operations constitute the governance practices of any given organization. With regard to management and governance, there are specific players that take part in governance and not in management. On the same note, management players do not necessarily pursue governance. However, this distinction allows for a critical connection and complementarity between management and governance. Endnotes Read More