Corporate Governance can be defined as the organizational structure of a company. It encompasses the overall processes, operations and policies by which a company is controlled and functions. Corporate governance is most often viewed as both the structure and the relationships which determine corporate direction and performance. Within the governing body of a corporation there are various stakeholders. Stakeholders are individuals which are of great importance to the company because they contribute directly or indirectly to its economic activity. Stakeholders retain different degrees of importance within an organization depending on their title or function which are some of the following: shareholders, the board of directors, employees, customers, creditors and suppliers. All together this group of individuals defines a corporate community in which day to day business is conducted and must be sustained in order for the company to survive. Similar to any other community, where there are conflicts of interests, Continue reading
Business Ethics
Case Study on Business Ethics: Avon Company Bribery Scandal in China
Avon incorporation is one of the leading door-to-door distributors of cosmetics. After a long period of successive trading in China, the internal audit of the subsidiary company indicated some form of misappropriation. This was attributed to management disregard to ethical management in financial decisions. The company, which engaged in direct sales of cosmetic products, exposed the malpractices of foreign officials. Although China prohibited the direct sale of products in the period prior to 2006, it allowed Avon to begin the direct sales on a limited basis. After February 2006, the act underwent amendment, which allowed for direct sales, but on strict regulations. As a result, it opened up the market for Avon. These subsequent events of the company lack of emphasis on ethical values led to the vulnerability of the company to employee malpractices. After the company realized the poor performance of its subsidiary in China, which was followed by Continue reading
Difference Between Corporate Social Responsibility (CSR) and Creating Shared Value (CSV)
Corporate social responsibility is a deliberate action taken by investors to ensure they participate in activities that promote positive development in the community around them. It involves the establishment of programmes that ensure a business pays back to the society through participation in community activities. This may include constructing schools, establishing sponsorship programmes, easing the implementation of environmental conservation policies and empowering local communities to safeguard their future. Creating a shared value involves the implementation of policies that ensure businesses get quality raw materials and offer awareness and education programmes to their suppliers to help them get better rewards for their participation in promoting businesses. CSR and CSV help organisations to create a good public image and avoid conflicts with local communities and authorities. Differences between Creating Shared Values and Corporate Social Responsibility CSV differs with CSR in the following ways. First, CSV focuses on improving the value of products Continue reading
Corporate Governance Models – Anglo-American Model and European Model
Corporate governance comes into play in cases where the management of the organization has to be carried out by a manager or a group of managers who are not the owners of the organization. In essence, corporate governance is implemented by a business’ financers in order to monitor and regulate the organization’s utilization of its investments. In this case, the individuals hired to manage the business are paid employees and are responsible for the effective execution of the organization’s processes. As a result of this arrangement, it is only natural for a separation to exist between the ownership of the organization and the management of the organization. While this may appear to be a simple concept, modern-day business models have allowed corporate governance models to develop rapidly over the last few years and this has led to the development of different corporate governance models. The implementation of these corporate governance Continue reading
Blending Spiritual Values with Business
The root for value is valor, which means strength. Values are sources of strength because they give people the power to take action. Values are deep and emotional and often difficult to change. Values are the essence of any organization and philosophy for achieving success. Values provide employees with a sense of common direction and guidelines for day to day behavior. The first step in creating an atmosphere of common commitment is to invite the hearts and minds of employees to join the purpose of the organization. Shared missions, values and vision bring people together. They unite and provide the link between diverse people and activities. People who share values or vision are more likely to take responsibility; they are more likely to challenge the limits of convention. Values provide guidance. Spiritual value is a way of expressing more humanity and recognizes each persons own beliefs. Traditional ways of achieving Continue reading
Case Study on Ethics: The Google Antitrust Case
Google Inc. started two decades ago as a Silicon Valley startup with an innovative way of accessing the Internet. The company is headquartered in Mountain View, CA, and came into the business world in 1997, one year after it was established with its shares offered to the public in 2004 in the most unusual online way. Currently, Google is one of the search engines that are frequently used around the world, which has enabled the company to further raise its market share. The main product of Google is the search engine, which has enabled it to have global dominance. In addition, the company has other products such as Google Maps., Chrome Browser, Google Drive, YouTube, Play Store, Gmail, and the Android operating system. However, it is worth noting most of the above-named products are offered free of charge to Google users, but customers have to pay to access premium product features. Continue reading