Is There a Relationship between Corporate Governance and Social Responsibility - Assignment Example

Name Professor Course Date 1. Is there a relationship between corporate governance and social responsibility? Corporate governance deals with the holding of a balance between the social and economic goals and also between the communal and individual goals. It also encourages the use of resources and accountability for the resources (Jamali, Safieddine and Rabbath 444). CSR on the other hand is more concerned the stakeholders in a socially responsible and ethical manner. Over time CSR have over time become an essential part of the conventional corporate governance since it has been recognised that in future companies will not be able to operate when the isolates themselves from the wider society upon which they operate. This is supported by a broader definition of CSR which states that a continued existence since of the already existing companies is dependent on the implied agreements that exists between the society and the business (Cadbury Sir Adrian 67). At the same time the fundamental nature of the contact between the business and the society is that the companies should not only pursue their objectives such as profit making but they also need to take consideration of the long term interests in the community. 2. Should a company be concerned if some of its suppliers in developing countries are abusing their workers, employing child labour, and paying near starvation wages? Companies irrespective of the industry needs to be concerned if their suppliers in the developing countries are abusing the workers, paying lower wages and employing child labour since it is likely to affect their business. When this happens people can take action and avoid sweatshops and thus such kinds of businesses are more likely to make great losses. Additionally, the workers may ultimately turn to making poor quality goods (Viederman 1). Companies which are not careful on the above mentioned issues are likely to experience a lot of difficulties in repairing their reputation of watchdog groups in anyway link them to such kind of injustices. For example, Apple had a rough time rebuilding their reputation after it was discovered that some of their factories were making using of child labour and engaging in other forms of injustices against their employees (Moore 1). What’s more, the most desirable and qualified employees look for organisations that shares the same values as them, this is similar to the idea that most consumers want to make purchases from companies that places value into their practise. Therefore, companies need to monitor their suppliers to them to attain the associated benefits. 3. Why is environmental uncertainty an important concept in strategic management? Environmental uncertainty is seen as a critical concept in strategic management (). Though it is seen as been critical, it suffers from a lack of agreement on the operational and conceptual definitions. Environmental uncertainty is of great importance since its understanding ensures the survival of the business in future (Gerald and Rabin 204). Based on the fact that change is constant in all aspects such as in the business and in its operating environment, the survival of an organisation depends greatly on the anticipation of the environment in future and thus makes changes and adapt to the ever changing environment. Through strategic management managers are able to anticipate the future environmental conditions, come up with a long term vision that the organisation should follow and put into practice changes in the organisations so as to achieve the stated objectives, goals and vision. This will enable them to survive and overcome the environmental uncertainty in the future. For that reason, the connection between the environment and organization are seen as essential components of strategic management. Through strategic management managers are able to scan the environment and interpret the collected information into meaning in action (Gerald and Rabin 204). 4. Describe the importance of entry barriers in an industry. Provide an example. Barriers of entry are termed as the obstacles that make it very difficult for new entrants to enter the market. For instance, new entrants in a market may require large amount of investment in terms of the capital equipment or at the same time the existing organisations may have gained strong loyalty from their customers making it difficult for new entrants to gain customers. Barriers of entry are of great importance to already existing firms since they are able to make and maintain their customers and sales since no new players are allowed into the market (Landoli, Landstrom and Raffa 64). Another importance is that barriers of entry offer absolute cost advantages. Without a doubt, the incumbent firms have a number of advantages over new entrants in the industry. The advantage can be real in that the incumbents have superior skills and resources. At times the advantages may be artificial in that it may be created by the government through policies or by the incumbents engaging in competitive actions against new entrants with the aim of deterring them. Another importance is the already existing businesses are able to gain access to various key resources for example getting a good location for their business premises. Through barriers of entry firms are able to obtain and sustain a competitive advantage. This is done by coming up and implementing strategies that aim at exploiting the internal strengths and responding to the various opportunities that may arise. At the same time, they try to neutralize the external threats and taking care of the internal weaknesses (Landoli, Landstrom and Raffa 65). 5. How can value chain analysis help identify a company’s strengths and weaknesses? Irrespective of the kind of business that one is in, the services and products need to create value to their consumers. Value may incorporate aspects such as offering quality services and products, commendable customer service, reasonable prices and on a timely basis. The value chain analysis can be used to make certain that all the business activities creates some value to the consumers and help in identification the strengths and weaknesses of a company. By understanding the weaknesses and strengths is integral when it comes to forming a favourable and lasting customer experience for the customers. Managers make use of the value chain analysis to examine all the activities that create a positive experience for the customers. organisations need to pay close attention to the clues offers by customers in their blogs, in person and also in other social media sites and take a close consideration of the reason why customer use the company services and products and this are likely to the strengths. It is also essential to look at the weaknesses and seek for ways to make improvements for example offering more options to the customers (Raphael and Mike7). The improvements expose certain weaknesses that may crop up if companies fail to make any kind of improvements over some period of time. The improvements also play an essential role in determining the various ways companies can improve their business by focusing more on the aspects that add value to the customers. 6. What are the pros and cons of management's using the experience curve to determine strategy? A major pro of management through the use of the experience curve is that the network is not complicated and the management is able to introduce cost reductions early and this mainly leads to a strategic advantage. Another pro is that the experience curves play an essential role in improving shared experience as well as value. Furthermore, by use of the experience curve there is improved use of the plant and equipments since the total production of firms mainly increases. As organisations gain the required level of experience they are bound to change their resource mix. The basic advantage to the organisation by the use of the experience curve originates from the fact that the employees are able to learn about short cuts and places where improvement is needed (Chase 10). This mainly leads to advancement in the production process, standardization as well as greater specialization. Despite the above mentioned pros management by the use of the experience curve has a number of cons. A major con is that it triggers off price cutting and it focuses more on the products as opposed to customer value. Additionally by the use of the experience curve companies are likely to become less responsive and flexible to the market needs and this is likely to be a great disadvantage since the needs of the consumers are not meet adequately (Chase 19). 7. Is it possible for a company or business unit to follow a cost leadership strategy and a differentiation strategy simultaneously? Why or why not? Some companies make use of the low cost strategy so as to achieve the economies of scale and efficiency while others make use of the differentiation strategy with the aim of differentiating themselves from their close competitors other than just using price. Based on my assumption it is possible for companies to make use of cost leadership strategy and a differentiation strategy simultaneously but at times it do not work for some companies and they fail terribly (Kiechel 56). A good example of a company that applies both strategies simultaneously is Toyota. The company produces quality cars but at very low prices and this is also coupled with a differentiation strategy. A more precise example is through the introduction of the Lexus so as to compete with other luxury brands such as the Mercedes Benz and BMW. Additionally, the success of the Japanese companies that focuses on motorcycles, consumer electronics and cars is mainly based on the fact that they have the ability to bring together high quality with low costs and technological advancements and thus they enjoy twofold competitive advantages. References Cadbury Sir Adrian. Corporate Governance and Chairmanship: A Personal View. Oxford: Oxford University Press, 2002. Print. Chase, Richard. Operations management for competitive advantage. United States: McGraw Hill/ Irwin. 2001. Print. Jamali, Dima, Safieddine, Asem, and Rabbath, Myriam. “Corporate Governance and Corporate Social Responsibility.” Synergies and Interrelationships 16. 5 (2008). Print. Kiechel, Walter. The Lords of Strategy. Harvard: Harvard Business Press. 2010. Print. Landoli, Luca, Landstrom, Hans, and Raffa, Mario. Entrepreneurship, Competitiveness and Local Development. Cheltenham: UK, 2007. Print. Moore, Malcolm. “Apple admits using child labour.” The Telegraph 27 Feb. 2010. Web. 23 Oct. 2015. . Rabin, Jack, and Miller, Gerald. Handbook of strategic Management. Boca Raton: CRC Press, 2000. Print. Raphael, Kaplinsky, and Mike Morris. A Handbook for Value Chain Research. Canada: International Development Research Centre. 2001. Print. Viederman, Daniel. “Overseas Sweatshops Are a U.S. Responsibility.” Business Week n.d. Web. 23 Oct. 2015. . Read More