Corporation Power over Society - Coursework Example

Corporation Power over Society Introduction With the changing business environment, companies felt the need of performing efficiently in order to ensure maximum sustainability in the global competitive business arena. However, with the ever changing environment of business in terms of conducting operations as well as handling customers, one approach of the companies is seen to be stable over the years. In this regard, the approach of the companies towards attaining maximum profits has been immovable since the inception of business or corporations. A corporation is a large legal entity or a group, which acts as a separate and segregated unit. It operates on a wider scale in mostly multinational approach. Its impact on the society and other stakeholders is quite considerable and needs a comprehensive explanation (Stanford University Press, 2014). In this regard, Joel Bakan, an author, holds the perception that corporations are powerful entities that impose negative impact on the society owing to extreme focus laid upon profit making rather than addressing and mitigating environmental or societal issue. Thesis Statement This particular research paper will mainly analyze the role of the corporations and their attitudes as well as powers over the society in the contemporary context. In the process of attaining this particular feat, the paper accompanied with a critical analysis of the arguments made by Joel Bakan in his book “The Corporation.” Part I Corporate Power in Contemporary Context: Critically Analyzing Bakan’s Perspective As previously mentioned, corporations have been much concentrated towards gaining power as well as enhancing profitability over the years of their operations. It is crucial to comprehend that whatever a company’s position is in the global arena, their primary goals is to operate in an effective and efficient manner in order to gain sustainability, ultimately resulting in high profitability and growth. Contextually, Bakan (2012) believes that each and every corporation in the process of conducting their operations have noteworthy implications over the society and the societal members. Their ultimate goal while conducting their operations in the society is to balance the interest of the stockholders with that of the interest of the society, which is also amid the major stakeholders for any form of business. As stated earlier, a corporation is a particular institution with a unique arrangement, which directly or indirectly holds relevancy with the approaches and the conducts of people associating with it. In legal terms, this can be presented as an institution, which operates uncompromisingly forth interests of the stockholders irrespective of the negative impact that the company impose over the environment, society and the political environment of the nations where it operates (Bakan, 2012). Correspondingly, based on these facts, Bakan (2012) holds a firm perception towards the approaches of corporations in the contemporary context. Accordingly, the author holds the belief that a corporation is a dangerous possessor of extreme power, which it exercises over the societies and the people living in the same. The views of Baken (2012) with regard to the concept of corporate power can be ascertained deeply from his description on analyzing the roles of corporations in the book “The Corporation: The Pathological Pursuit of Profit and Power”. Notably, Bakan (2012) briefly demonstrated through his study about the rise of corporations in the contemporary scenario. Bakan (2012) criticized the approaches of the corporations and depicted that they operate only with the motive of profit maximization overlooking all the other consequences that are accompanied by their approaches. The arguments of Friedman (n.d.) might act in support of the perceptions hold by Bakan (2012) towards the rise of the corporate power through profit maximization. Friedman (n.d.) affirmed that corporations in today’s context are much attracted towards profit making and considers it as among their major goals irrespective of comprehending their significant responsibility towards the society and the people residing in the same. The study also stated that the corporations are quite far away from their ‘social conscience’ and further fails in promoting social wellbeing in a wider level (Friedman, n.d.). However, there also exists certain facts, which might prove to be against the thoughts and the perceptions of Bakan (2012) and Friedman (n.d.) concerning that corporations only concentrates on profit making through the use of their power rather than contributing positively towards the society. According to the report published by The World Bank (2013), the contribution of the public sector or the non-profit corporations has been quite considerable in terms of developing societal perspectives one way or the other. The report depicted that non-profit corporations often develop products or services in order to meet the needs of the societal members, who are not involved by privately held corporations or the state of national government in decision-making procedure. Additionally, non-profit organizations also emerge with the plans to assist the governments in ensuring the accomplishment of developmental needs through providing them with valuable resources and necessary competencies. With these approaches, non-profit corporations indirectly contribute positively towards ensuring the wellbeing of the society and the people living in the same (The World Bank, 2013). These facts further contradict the viewpoints of Bakan (2012) and Friedman (n.d.) regarding corporations power usage in the society today. Hence, it is apparent that there are both profit making corporations as well as non-profit corporations that have their distinct approaches towards excising power over the development of the society Part II Influences of Corporations on Society It is worth mentioning that the contributions made by the corporations towards the society largely rely on their respective operational approaches and business objectives. In this regard, corporate social responsibility (CSR) is regarded as one of the major aspects, which impact the operations of the companies in today’s scenario. There are certain boundaries that the companies required to be considered in accomplishing effective CSR goals. The first boundary that can be depicted towards the accomplishment of CSR goals of companies is the approach of policy makers in this particular segment. Notably, it is often argued that the approaches of the governments in making the CSR policies for corporations are mainly observed when there lays the necessity for the same in deteriorated condition of the societal environment. Again, the policies of the governments towards the formation of CSR policies also have major influences from corporates in the form lobbying, which is widely seen in various scenarios. This is again a potential boundary in ensuring positive impacts on the society from the end of the corporations. Again, it has been analyzed that corporations mainly act positively with regard to their approaches made towards the society only in certain necessary cases. Notably, certain companies are reluctant towards complying with the CSR based regulations and others move beyond regulations to deal with the CSR issues. However, it is largely believed that most of the corporations are reluctant towards fulfilling their respective CSR goals, as they do not consider these as strategic tools that would enhance profitability for their business operations. In such scenarios, corporations are deemed to fulfill their CSR responsibilities only in case of mitigating any risk towards their reputation or in case they are bound to fulfill the CSR regulations set by the governments (Gainet, 2008; Herman, 1981). These approaches of companies might also act as boundaries with regard to the approaches of the companies made towards ensuring wellbeing for the people in the society. Another potential boundary in the sphere of influence of corporations on the society is that legitimate corporations do not need to be necessarily a socially responsible unit. Notably, since any corporation is entirely owned by shareholders, its only aim is towards profit maximization to ensure good return on investments (Stout, 2013). It is believed that legitimate corporations might not necessarily have any specific commitment towards the social issues. They do not intend to affect their reputations by involving in other activities that might halt the profitability objectives of the business (Gainet, 2008; Herman, 1981). This is also a potential boundary, which hinders the positive influence of corporations towards the society. These boundaries can also be considered relevant with the study conducted by Bakan (2012). According to the study of Bakan (2012), corporations are mainly concerned of profit making and they act accordingly without analyzing their operational impact towards the society. Contextually, the view of Gainet (2008) reveals that corporations possess legitimate powers that need not necessary be a socially responsible concern but they need to ensure maximum return of money for the shareholders. This is relevant with the viewpoints of Bakan (2012) as per his study in “The Corporation: The Pathological Pursuit of Profit and Power”. The above discussed boundaries that exist in the sphere of influence of corporations over the society eventually raise certain continuous issues and challenges. With such prevalence of boundaries, corporations show least transparency in their approaches towards the society and people living in the same. The aforementioned boundaries also have major noteworthy impact on the social reporting of corporations in the contemporary context. Owing to the prevalence of certain boundaries in CSR approach, corporations develop social reporting, which fails to provide a comprehensive analysis of the business in terms of their social performance (Unctad, 2004; Trigilia, 2002). Again, it has also been noted that owing to less concern towards the society and utmost focus on profit maximization, corporations seek to exploit the labor market through acquiring maximum low wage labor. This again indirectly affects the living standards of the people of the society. Again, large corporations are also involved in outsourcing their business services to gain maximum effectiveness in their operations, which again affects the employment sector and social wellbeing by a certain extent (Friedman, 1962). This aspect also further reaffirms the perception of Bakan (2012) that corporations are dangerous power that negatively affects the modern day society. Part III Corporate Social Responsibility and Corporations It has been apparent that the approaches of the corporations might act negatively concerning the welfare of the society. However, it is often argued that corporations revealing positive attitude towards the society are also able to determine noteworthy results in terms of their operations. Contextually, the concept of CSR, corporate governance and externalities will be vital to consider in this regard for acquiring a comprehensive understanding about how corporations might create a favorable impact on the society through their respective approaches. Accordingly, CSR is regarded as one of the approaches of corporations based on which they ensure the compliance of all governmental laws, ethical standards and better operations ensuring environmental as well as social sustainability. Corporations can contribute positively towards the society through providing maximum employment opportunities for the local citizens wherein they operates. Corporations should also need to ensure the deliverance of appropriate wages or employment conditions to the employees enabling them and their family to lead a better life. Furthermore, involving in philanthropic activities such as helping the poor people and donating money as charity to the needy individuals will certainly ensure that corporations are contributing positively towards the society (Nace, 2003). Corporate governance is another important aspect, which is directly linked with the approaches of the companies made towards the society and its wellbeing. It is a particular system along with the rules that bind the operations of any corporation together. Observably, this system would broadly include balancing the interests of various stakeholders at large. In this context, corporations must need to ascertain that they disclose the facts of the business and present performance status so that people can obtain a comprehensive understanding about the corporations and invest in the same accordingly. Externalities are other aspects that corporations need to consider while framing their approaches towards the society. Notably, externality is regarded as the cost or the benefits of a corporation’s approach that might not directly reflect in the price of product and services of the business. The negative impact of corporations towards augmenting pollution through their operations is an example of externality associated with their business. In this regard, corporations can enhance their operations and ensure that their operational acts do not harm the society and the people living in it negatively. In this context, Bakan’s standpoint might be crucial to state (Bakan, 2012). According to Bakan (2012), governments have a major role to play in such scenario as they can emerge with proper and effective policies with regard to gain control over that of corporations and their operational approaches. This approach of the governments as mentioned by Bakan might also act positively for corporations as they will be able to balance the aspect of profitability with that of social conscience further eliminating the viewpoints of Friedman (n.d.) that have been mentioned earlier. Conclusion As per the above analysis and discussion, it can be comprehended that in the modern day scenario, the impact of corporations on the modern day society is deemed to be quite considerable. The impacts of corporations on the society and the people can be positive or negative depending upon their approaches towards attaining their desired goals and objectives. In this context, the perception of Bakan presented in his book has been taken into concern in the discussion. His study showed a criticizing approach towards the corporations and their role in developing the society. These perceptions of Bakan were further analyzed in this paper through considering various noteworthy literatures and journals. The results depicted from the discussion affirmed that the approaches of corporations have become quite negative towards the societal issues mainly because of their profit making behavior. However, the research paper also highlighted the factors that create certain boundaries for corporations to attain their respective CSR goals. This aspect was proved vital in attaining a comprehensive understanding about the arguments made by Bakan. References Bakan, J. (2012). The corporation: the pathological pursuit of profit and power. United Kingdom: Constable & Robinson. Friedman, B. (n.d.). The social responsibility of business is to increase its profits. McGraw Hill, 173-178. Friedman, M. (1962). Capitalism and freedom. The University of Chicago, 1-166. Gainet, C. (2008). Corporate Social Responsibility Boundaries. Retrieved from http://www.aderse.org/docatelecharger/congres_aderse_2008/actes/Articles/Session%203.3/Corporate%20Social%20Responsibility%20Boundaries.pdf Herman, E. S. (1981). Corporate Control, Corporate Power. Cambridge University Press, 1-51. Stout, L., 2013. The shareholder value myth. European Financial Review, pp. 1-9. Nace, T. (2003). The rise of corporate power and the disabling of democracy. New York: Berrett-Koehler Publishers. Stanford University Press (2014). What is the corporation? Retrieved from http://www.sup.org/html/book_pages/0804743045/Chapter_1.pdf The World Bank. (2013). The role of non-profit organizations in development: the experience of the world bank. Retrieved from http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTSOCIALDEVELOPMENT/EXTPCENG/0,,contentMDK:20507529~menuPK:1278313~pagePK:148956~piPK:216618~theSitePK:410306~isCURL:Y,00.html Trigilia, Carlo. (2002). Economic sociology: state, market, and society in modern capitalism. UK: Blackwell Publishers. Unctad. (2004). Disclosure of the impact of corporations on society current trends and issues. Retrieved from http://unctad.org/en/docs/iteteb20037_en.pdf Read More