Relationship between Employee and the Corporation - Essay Example

Topic: Lecturer: Presentation: Introduction Modern corporations in a capitalist society operate as free individuals driven by self-interest. The government has long since stopped intervening in the market leaving the corporations to self-regulate themselves ad as Bakan puts it, they have been doing do as the expense of employees, the community and all stakeholders involved (17). The sole purpose of the corporation is to increase profits and the corporation power. According to Balkan the corporation is a pathological entity as it is “singularly self-interested and unable to feel genuine concern for others in any context” (p. 56). The question that we need to ask ourselves is, what then is the relationship between the employee and this pathological entity as depicted by Balkan? To answer this question the paper will look at the responsibilities of employees to the corporation and vice versa, how the corporation shapes identity of an employee, the ethical relationships to another and how creativity is managed. Relationship between Employee and the Corporation The employee and the corporation are often assumed to have a psychological contract that governs the behavior of employees and the employer. In this contract, the employee has a responsibility to the corporation in terms of what/she puts in and in return expects compensation from the employer (Bakan, 59). The employee thus gives the corporation his/her expertise, experience, education, efforts and skills and expects to receive a fair remuneration for the efforts from the employer. The corporation on the other hand, expects outcome from employee in terms of loyalty, engagement, improved performance (i.e. increased revenues and profits). A breach of contract on either side may lead to detrimental consequences such as reduced productivity or high turnover rate. This was especially so in traditional organizations where loyalty to the employer was key. What happens today where organizations have become networked and operate in different geographical areas, where there is no direct contact between employee and employer? For today’s employees’ loyalty is of little importance as they move more towards independence and do not expect to work for one company for a long time. The employees give value to the corporation in terms of improved performance and productivity but if their efforts are not rewarded adequately, they move on to other corporations. In the other hand, the corporations have the responsibility to take care of their assets who are the employees. Today, due to increased tendency towards cost-benefit analysis corporations expect the highest returns from workers but do not reciprocate in terms of equivalent remuneration. Most corporations take advantage of geographical distance and the separation of ownership and control to operate with impunity and with no accountability (Bakan, 16). A good example is the sweatshops in which workers work in inhumane conditions and are paid poor wages. A Chinese factory Kathie lee which makes handbags subjects employees 14 working hours a day, seven days a week with a low wage of 3 cents per hour (p. 78). This enables the corporation to maximize profit at the expense of workers in these factories thus not fulfilling their obligation. It is not only the corporation that fails to fulfill its obligation to employees but also the employee may fail to fulfill his/her obligation. To enhance productivity and protect the corporation from competitors, an organization may require employees to keep trade secrets especially those who work in R&D department or are involved in public relations. However, some employees go ahead to divulge the secrecy to others thus jeopardizing the organization (Sussman, 333). One may argue that human beings are social beings hence unable to keep secrets (pp 333-334). However, this does not insulate the employee from blame and possible consequences such as termination of employment or any disciplinary procedure. Why would employee disclose secrets if they are prohibited to do so? This according to Sussman (333-335) is due to employee perception and level of motivation, changing socio-cultural norms as well as the changing organization design. On the other hand, it is the duty of the corporation to clearly communicate the rationale for such prohibitions and ensure they are in place only if it is a matter of necessity and not just to serve self-interest. This issue of communication prohibitions brings to light the ethical relations between employee and the corporation. One question of interest is whether employee should keep secrets even if he/she is aware it will cause harm to others or it is unethical. Bakan asserts that modern corporations concentrate much on cost-benefit analysis such that they externalize costs regardless of the harm caused to others (pp. 72-73). Most organizations have a corporate social responsibility policy but it is only in paper and its actions are only meant to blind the public about their unethical practices. Some corporations prefer to pay fines rather than put safety measures in place to protect employees as paying fines is less costly (p. 80). An example is GE which would rather allow an employee to die than redesign its vehicles not to explode on collision. Some corporations also prohibit communication so as not to unmask its unethical practices. In such cases, it is not the duty of the employee to keep such secrets if it is against their conscience. Any action taken for disclosing such details may be illegal and liable to a lawsuit if the employee so wishes (Sussman, 337). Another unethical behavior is to pay employees wages which are below market rate or incommensurate with their work or treating workers unfairly. The compensation procedures should be fair and equitable despite age, demographics or geographic distance (Bakan, 161-164). The employee on the other hand, has a duty to ensure productivity and produce value for the company. Wasting company time doing other things or for personal gain is unethical. Autonomy is encouraged in corporations as it leads to creativity and innovativeness but should not be taken advantage of. Lack of trust is one of the reasons why some managers fear taking risks in allowing employees to experiment new ideas (Amabile & Khaire, 107). There is great concern for many managers as to how to manage creativity of employees in a manner that fosters security and independence while at the same time protecting the integrity of the corporation and its intellectual property. When managed well creativity can move the corporation to greater heights. This can be achieved by allowing contributions from all employees, encouraging diversity in the workplace, creating an enabling environment for creativity by changing organization culture and structure, providing the necessary support and creating a filtering mechanism (pp 102-105). Motivating the workers towards creativity for example by giving them challenging work is also vital as well as giving them sufficient time and resources for exploration. These actions encourage creativity but what happens when an employee leaves with his creative ideas to another corporation? Though it is the individuals who innovate, they are working for the corporation and as such, the corporation reserves the right to patent rights so as to protect its intellectual property (p. 105). This is one reason why corporations enforce communication prohibitions to ensure its secrets are not divulged to competitors. Conclusion Modern corporation are propelled by self-interest of maximizing profit at all cost. However, this does not impede them from acting responsibly towards the employees and building a positive working relationship with them. Each employee has a duty to the corporation to ensure its goals are achieved and the corporation has a duty to ensure the employees are adequately compensated for their efforts. However, some organizations take advantage of the leniency of government or its non-intervention in its affairs to practice unethically thus denying employees their rights. Employees on the other hand are not free from blame for acting unethically by divulging company secrets or not being productive. A good relationship can be maintained if the corporation appreciated employees’ diversity and being socially responsible and the employees reciprocating by ensuring improved performance. References Amabile, Teresa and Khaire, Mukti. Creativity and the Role of the Leader. Harvard Business Review, 2008. Balkan, Joel. The Corporation: The Pathological Pursuit of Profit and Power. Free Press, 2005. Sussman, Lyle. Disclosure, Leaks, and Slips: Issues and Strategies for Prohibiting Employee Communication. Business Horizons, 2008 (51), 331-339. Read More