Corporation

A public limited company is one, which sells shares to the general public on the Stock Exchange. It has a separate legal existence as it can sue and be sued, own property in its own name and enter into contracts. The advantages of being a public limited company are it has limited liability. This means the owners and shareholders are limited to the amount of money they lose. They are only liable to lose the amount they put into the business. It can sell shares to the general public on the Stock Exchange. This means that there is more finance available to the business.

The business can also raise capital through venture capitalists, selling assets and large loans, for example. The employees can also specialise in specific areas of the business. They benefit from economies of scale because they buy in bulk. The disadvantages of being a public limited company are that it may be inefficient due to its size. The business is under the public eye that means it has to produce annul reports, which are seen by the public. It is difficult to set up, as it has to go to the registrar general to be issued with a certificate of incorporation to allow it to trade.

It is difficult to make decisions, as the shareholders have to be consulted. Communications are slow because of the size of the business. They are expensive. There could be disagreements between directors and shareholders. There may be takeover bids where another business buys all the shares in the business and the business has no choice over it. Examples of public limited companies are Marks and Spencer plc, British Airways plc and Aston Barclay plc. Co-operatives A co-operative is a business which main aim is for customer satisfaction, rather than to make a profit.

The advantages of being a co-operative are that anyone can join the co-operative just by buying shares. As many buy shares in the business there is capital available. The business can also specialise in a specific market which customer need support in. workers can also specialise. The disadvantages of being a Cooperative are that no matter how many shares are owned by one person, they only get one vote in meetings. The profits have to be shared between all shareholders and the business has wide aims as it tries to gain customer satisfaction. These aims can be difficult to meet.

Examples are retail outlets or services such as foster care. Franchises A franchise is the right given by a business to someone who has bought part of it to use its name when selling his or her product. A franchisee is the business, which buys the right to sell the other company’s product or service. The advantages of being a franchisee is that they have a recognised product, which almost guarantees immediate success. The franchisee gets support from the franchisor with problems such as quality control or tax problems. The franchisee gets a share of the profits, which he or she makes from the business.

There is also a reduced risk of failure as the product or service has been tried and branded a success already. The disadvantages of being a franchisee are that they do not have complete control. They cannot make decisions without the permission of the franchisor. Not all the profits are retained by the franchisee. A percentage of the profits must be given back to the franchisor. The franchisor can also end the franchise without giving a reason. A franchisor is the business, which sells its product or service to a franchisee in return of a share of the profits.

The advantages of being a franchisor are that the business can expand without having to pay out any money. They receive the money for the expansion. The franchisees are motivated to gain the largest profit possible, which means the franchisor has a greater payment in return. The franchisor still has some control over the franchisee because if the franchisor decides to sell the franchise, he or she can do so without a reason. The disadvantages of being a franchisor are they cannot have complete control as it is expanding externally. The franchisor does not retain all the profits for this reason. An example of franchise is McDonalds.

Sony Corporation is a public limited company. This means it sells shares to the general public on the Stock Exchange. It has a separate legal existence as it can sue and be sued. it has limited liability. This means that there is finance available to the business because it sells shares on the Stock Exchange. The business can also raise capital through venture capitalists, selling assets and large loans, for example. They benefit from economies of scale because they buy in bulk. It may be inefficient because of its size. It is difficult to make decisions, as the shareholders have to be consulted.

Communications are slow because of the size. The business is under the public eye that means it has to produce annul reports, which are seen by the public. Local, regional, national and international markets. Local markets are where a business is set up to receive custom from people living nearby. These are usually small business such as sole traders. Regional markets are where a business operates to targets consumers within a large area within a country such as a county. These businesses are usually relatively small but have more than one branch, such as a partnership.

National markets are those which are found throughout the country. These businesses are medium to large businesses such as limited company. International markets are ones, which are throughout a continent or the whole world. They are large businesses such as franchises. Sony Corporation is a business in the international market because there are offices throughout the world and their products are sold all over the world. Sony has offices all over Europe (UK, Austria and Germany for example), the USA, Japan, Asia-Pacific, Middle-East and Africa and Latin America. Change of ownership

Some businesses may decide to change ownership for one or more of the following reasons: * Limited liability- If the business has unlimited liability, the owner risks loosing personal possessions when in debt. The business may decide to change ownership to have limited liability so the owner(s) do not risk loosing personal possessions or assets. They will only be limited to the amount of shares they have in the business. The benefits of having limited liability are that the owner(s) is only liable to loose the amount they put into the business. They do not risk loosing personal possessions.

There are no disadvantages to limited liability. Assess to different sources of finance- Small businesses such as sole traders, are limited when choosing sources of finance. They can loan money from family or friends. They can apply for a grant from the government. They could get a loan from the bank or building society. It may also take out a mortgage. Larger businesses have wider sources of finance available. They can sell shares to family, friends and employees. If they are a public limited company, they can also sell shares on the stock market to the general public.

They may get a loan from banks and building societies as well as venture capitalists, such as HSBC. It could sell assets. For example, Kunick Ltd could sell Leisure Connections Ltd to another company. The advantages of having different sources of finance are that they have a wider choice. They can decide which suits the business best. They can also raise more money. The disadvantages of having different sources of finance are s  Control- As a business grows, control is lost. If a business is a sole trader, there is only one owner, who has complete control.

If it grows to a partnership, the control is shared between up to twenty people. If a business becomes limited, the control is shared between all shareholders. In a franchise the control is shared between the franchisee, franchiser and shareholders. When a business takes out a loan from a bank for example, the bank will also be considered to own part of the business. So, as a business grows, control is lost. The advantage of being a small business is that the owner has more control. Larger businesses have a disadvantage of being so large control is lost.

AN ANNUAL REPORT REVIEW

McDonalds Corporation:  2006 Annual Report

Introduction

As a totally encompassing narration of the overall health, efficiency and effectiveness of a business, an annual report provides both internal users (the employees and the executives) and external users (bankers, customers, shareholders, the general public) the complete picture of the company they are involve with.  This report is created, processed and published usually during the first quarter of a year.  The report covers the activities of the company and its financial performance for the preceding year.  Government institutions; banks; stakeholders; stockholders and customers want and need an annual report of companies for their guidance and information.

A company annual report generally contains the statements and reports of the Chairman of the Board and the Chief Executive Officer of the company.  It likewise carries a report on corporate governance by Auditors.  The statement of the company’s mission together with a statement of compliance of corporate governance policies are part of the report.   The financial statements carry the balance sheet, retained earnings, cash flow, income statement.  In addition, notes to the financial statements are reflected, together with an outline of the accounting policies of the company and the certification of the external auditor towards review of all financial statements reflected in the annual report.

The overall function of an annual report is to project the successful image of a company; to confirm and affirm the health of the company that stockholders invest in; to invite customers to share in the pride and growth of the company, the brand, the product they patronize – as such, customer loyalty is achieved.

The 2006 McDonalds Annual Report

The Cover

The 2006 McDonalds Annual Report carries a front cover and an inside flap cover that is extremely artistic and very colorful.  The cover automatically conveys an inviting and tasteful product and workplace and business undertaking.  The cover spread already emblazons what difference McDonalds does not only in the market place but to the overall global community.

Year’s Accomplishment Summary

The entire annual report is presented in 67 beautifully and artistically laid pages.  Right after the cover page, the annual report glaringly outlines the summary of the year 2005 accomplishments starting with the staggering $4 billion cash from operation consistently maintained for years 2004, 2005, 2006.  Most importantly, the earnings per share that consistently grows up to $2.30 in 2006 can even make a stockholder reading the report finally ends the reading because of the confidence and belief it shares with his company.

The Letter from the CEO

The letter to the shareholders with vivid and enthusiastic commentary was made and signed by Mr. Jim Skinner, the Chief Executive Officer of McDonalds.  It runs to 3 pages with very positive and proud summary in his statement:  “…..2006 was one of the most successful years in McDonald’s history” – because of a total of $9 billion returned to shareholders from 2003 to 2006.

Operations Statement

After the letter of the CEO come the six pages of exotic blown photographs and synopsis of how McDonalds invests in training and care for its human resources:  their employees.  The description of how the company provides premium concern and motivation to its employees is very descriptive and admirable.  The outline of skills development programs and work incentives seemingly create an extremely satisfactory working environment and such satisfaction is reflected in the photographs in the annual report.

Then comes the equally exotic blown up photographs of customers and products happily complementing each other – all shown in 11 pages.  The very alive and excellent photographs are excellent visual tools to denote contentment and success from the company to the customers.  The prime consideration that McDonalds place on its products and customers is truly convincing and comforting in the way the narratives and captions and photographs were created and laid out.  The very palpable joy of eating a Big Mac is so real in the photographs placed in the annual report.

Also read: Scientific Management Examples McDonalds

List of Officers

A full page photograph and listing of the members of the management team of McDonalds reflect a viable teamwork and happy group of executives, leaders and managers.  The caption using the metaphor of a 3-legged stool describes the business and operational model that McDonalds sustain:  the three legs of the company are the operators; suppliers and employees.

Letter from the Chairman

Affirming “a clear and compelling strategic vision”, Mr. Andy McKenna, Chairman of the Board of McDonalds writes about the sustained outstanding growth and progress of the company in 2006.  Presented in one page, it likewise contains the list of its Board members.

The Financial Report

The later parts of the annual report are the very comprehensive and thorough financial report.  Presented in a total of 38 pages, these include:

1)      an 11-year summary from 1996 to 2006

2)      a stock performance graph

3)      the outline of the management’s discussion and analysis of the financial condition and results of operation

4)      consolidated statement of income

5)      consolidated balance sheet

6)      consolidated statement of shareholders’ equity

7)      notes to consolidated financial statements

8)      unaudited, detailed quarterly results

9)      management’s report

10)  report of Ernst & Young, the company’s independent registered public accounting firm

11)  report of  Ernst & Young, the company’s independent registered public accounting firm on internal control over financial reporting (McDonalds Annual Report:  2006)

Overall Assessment

The 2006 Annual Report of McDonalds more than meets the standards and requirement of a reporting medium of a company and its business.  As one of the tools of corporate communications that defines and illustrates company image and identity, this annual report of McDonalds is a very powerful marketing tool.  It is likewise an effective, impressive and strong confirmation of the soundness of the company that warrants the health of the capital investment of stockholders.  The 2006 Annual Report of McDonalds reaffirms that the government and all other stakeholders can sustain its trust and confidence on the company.  (Goodman, 1998:90)

Works Cited

McDonald’s Corporation 2006 Annual Report

http://www.mcdonalds.com/corp/invest/pub/annual_rpt_archives/2006_Annual_ Report.html.

Goodman, Michael B.  1998.  “Corporate Communications for Executives”

SUNY Press.  Page 90

Brand auditing is a diagnostic tool than helps an organization to understand and evaluated what its brand strategy is, what it stands for, how clearly it is delivering the message and how it is perceived at all consumer touch points. Holistically brand auditing is an endeavor to understand the brand identity of a product or organization and how it is living up to the desired positioning strategy. Sony Corporation Sony will be long remembered as the pioneering Japanese company.

For more than half a decade it stands for innovative quality, highly miniaturization of technology and delivery superior quality of products. The brand punch line ‘It’s a Sony’ suggest all the three attributes the company wants to convey – latest technology, innovative product & consumer friendliness. (Rothman, 2001) Sony today is in the field of making electronic products like – television, music system, MP3 DVD players, gaming consoles, Office products like Laptops, pen drives etc, Movie making by owning three of the biggest movie houses in the world, and financial services provider.

Apart from the financial services all the other three businesses are inter-connected. Sony started as a walkman company and slowly moved into other music system. From there the company positioned itself as home entertainment company by producing television and now defunct VCR’s. From home entertainment the company entered into gaming industry and today with PlayStation 3 it is the biggest gaming company in the world. Today Sony has filled the personal entertainment and communication space with new camcorders, camera’s and mobile phones.

Brand Auditing of Sony Corporation For years now Sony has been in forefront of innovation in the field of personal and home entertainment. Its products stand for latest in technology, consumer friendly features and delivering more in miniature products. Brand Positioning and Strategy The company for long has used umbrella branding strategy where all the products are Sony first and then their product brands for example – Sony Viera (LCD Television brand), Sony Cybershot (Camera brand), Sony Ericsson Walkman Series (Mobile phone brand) etc.

By using this strategy Sony wants to convey to the customers that each product from Sony they buy they will receive the core values of the brand – latest in technology, miniaturized products and consumer friendly instruments. (Rothman, 2001) PlayStation E-Toy Case Sony’s PlayStation 3 gaming console is arguably the best home entertainment system in the market but before launch the company was worried about it being perceived as just a gaming console rather than a home entertainment product too. To change this perception Sony went ahead with Stealth positioning of product.

With the console it provided a camera called ‘Eyetoy’ and game software called ‘Play’. The concept was simple; people can plug the camera and see themselves playing on screen. This not only help the consumers realize that they are interacting with latest technology but also that product is not only confined to hard core gamers. The product was huge success and reinstated Sony’s position of latest in technology, miniaturized solution as before this people can only play these games in the gaming zone with having large masks on face, and consumer friendly.

It sold 3 million units in first seven months of its launch. More importantly it exposed new customers to the console and people are purchasing PS3 for home entertainment rather than purely for gaming. (Youngme Moon, 2005) Similarly company has used its core competency and innovative know how in music and camera to produce walkman and cybershot series of mobile phones. Different segments of Sony products provide comprehensive coverage in home and personal entertainment, and they don’t overlap each other in terms of target market.

Even with his ranking in the company, Ron still insisted on a first name basis relationship with his employees and encouraged them to be involved in decision-making. Empowering his employees increased their value in the company and gave them a sense that their outcomes and input were important. I can only imagine that would have increased the respect and loyalty each employee had for him. Along with his expertise he still was humble enough to care for his employees, which Increased his referent power. Unfortunately, when things began to get shaky with the opening of the Dallas location shift in Iron’s power went to more of the coercive source. He initially replaced nearly the entire staff once beginning in Dallas and again fired 12 more staff members, whom he had hired within one year, to minimize loss. Within the next few months this trend continued which left the staff feeling insecure and questioning his leadership abilities. The excessive use of coercive power decreased the performance of the employees and Jeopardized the culture of the company.

Iron’s leadership style is democratic. He puts emphasis on the participative approach by allowing his subordinates to be involved in the decision-making processes. He has the ability to voice the goals and objectives that need to be accomplished, but implementing methods to help the employees achieve these goals Is not his strong suite. This can occur when a leader Is more focused In leader-member relations. As an Individual he Is task oriented, but overall as a leader he leans more towards having good leader-member relations.

The motivational theory in the New York office was predominately based on McClellan and Herbage’s theories on needs. The employees were required to have considerable Judgment and self-control, which supports the Idea their need for achievement, affiliation, and power were met. The motivator need was met due to the employees having autonomy and the responsibility to make quality judgments for the company. The fact that Ron allowed them to assist in making pertinent decisions fulfilled their achievement need and allowed them to develop their skills.

This gesture also assisted with giving them a sense of control within the company to fulfill their need for power. The New York office had good outcomes, a personable environment, and an Interactive model, which would satisfy the hygiene need. This Is behavior, in which they are motivated by reward or punishment. Iron’s approach in this office followed the operant conditioning theory. He focused on negative reinforcement and punishment primarily evident by the repetitive firings and his aggressive nature.

Due to the lack in motivation and ability at the Dallas office, Iron’s strategy would not be successful. Iron’s approach was usually task oriented, but as a leader tried to balance the interpersonal relations with the subordinates as well. When employees lack the ability and the will the best initial approach would be a high task and low relational strategy. This would have required Ron to be direct with his instructions, Lear on what tasks needed to be performed, and thorough with how to achieve them.

Because Ron was good at setting goals, but had poor methods of structuring tasks and instruction on how to be successful, the employees were not clear as to what goals needed to be accomplished within the company. This resulted in a low task structure, which the employees desperately needed in order to be successful. With out realizing this, Ron then began to focus on coercive power and fired several employees. The loss of trust from the employees and lack of direction from their leader would not reverse the absence of motivation, but would only worsen it.

Iron’s overall leadership style was a success in New York because of their desire to be intrinsically motivated, whereas the Dallas employees were not. This culture did not best suite his leader ship style because Ron lacked task structure, good leader- member relations, and position power. Ron could not make the necessary changes to make the Dallas office successful because the situation was not favorable to his leadership style and he could not make internal changes within himself to correct the situation.

This supports the Fielder Contingency Theory that effective leadership is nineteen upon the characteristics of the leader and of the situation. The next step with the Dallas office is to evaluate what level of ability and motivation the employees now have. Salvaging the employees who are willing to learn and move forward is still possible, although it may be too late for others. Once managers have met with all staff and have sorted through the employees unwilling to grow, a town hall meeting could be held to announce the plan the managers have for the company.

At that time announcements regarding additional education and training opportunities for the employees, a clear mission statement, and the new structure of he office would be crucial to ensure all employees understand the vision the company has. Specialty training for the employees to advance their knowledge and skillet will enhance their performance, increase positive outcomes, and allow them to find value in their input within the company. The task structure needs to be concise and high.

With additional training and processes in place the employees will not only have the proper tools to be successful, but will finally have a clear understanding on how to use them as well. This structure will also assist with building the security levels, belongingness, and safety needs of the employees based n Mascots Hierarchy of Needs. Motivation will increase by setting attainable goals with positive reinforcements such as a bonus program and recognition from upper employee encounters a fellow coworker being recognized for a Job well done it will increase the awareness of how well others are performing their own duties.

This will allow the employees to observe the proper behavior and then model it in order to get the same positive reinforcement given to their co-workers. Focusing on building the culture back in a positive direction, meeting the employees needs, and increasing motivation will be crucial to the overall success of the company. For Iron’s performance appraisal, based on the last 2 years, I would give him a 5. The feedback I would give Ron would be objective and factual. I would explain to Ron that this performance appraisal is a time to problem solve, find solutions, and learn from previous experiences.

I would then go over the facts with Ron. He was sent to Dallas with the goal to increase the revenue, educate the staff, and motivate the employees. Within one year he lost 2 very important clients, which decreased revenue. He also overturned the staff twice, which also decreases revenue due to hiring and training new employees is an investment and costly. He failed to analyze the situation closely and even after the first year of several set backs he continued with his same strategy. This is poor planning and decision-making Judgment.

I would ask Ron to explain to me his thought process at the time to have a better understanding and identify ways to improve his techniques. I then would give feedback on better ways Ron can train, reward, and motivate his employees to become an effective leader for similar situations he may be placed in in the future. Areas of improvement would be expressed as well. Ron needs improvement on identifying the needs of his employees to increase better outcomes, input, and overall performance. He also needs to use his strength in being task oriented as a part of his leadership style.

Employees usually want a good working environment with their boss, but having stability, a clear direction, and tools to be successful are Just as important. Ron also needs to ensure he works on methods of motivation. Not all employees are motivated the same; therefore, determining what motivates them will better serve him when deciding on strategies. I would recommend Ron read a managerial book about motivation to help with his growth and development. I would also highlight Iron’s strengths of being task oriented and his expertise in the business.

Showing Ron his willingness to go to Dallas has not gone unnoticed and I would thank him for his contributions to the company. Praising him for his strengths and areas in which he excels are extremely important during the performance appraisal as well to increase employee longevity within the company. I then would allow Ron to make any comments he would like as well. This also gives him the opportunity to express his opinions of the score and any evidence he may have in order for me to raise his score.

The Corporation is a documentary based on the book written by Joel Bakan entitled The Corporation: The Pathological Pursuit of Profit and Power. It explores the nature and the rise of the corporations – considered the most dominant institution at present. The documentary has been given 26 International Awards, 10 International Audience Choice Awards including the award from the Sundance Film Festival and the Best Documentary in the Genie Awards. It is directed by Mark Achbar and Jennifer Abbott (Achbar, par 2).

The documentary features 40 interviews with Chief Executive Officers, top-level executives and people who are the trendsetters in their field of expertise. The interviewees include:

1. Ray Anderson, Chief Executive Officer of Interface, world’s largest carpet manufacturer
2. Noam Chomsky, Institute Professor at the Massachusetts Institute of Technology
3. Milton Friedman, a Nobel Prize-winning economist
4. Sam Gibara, current Chairman, former Chief Executive Officer Goodyear Tire
5. Robert Keyes, President and Chief Executive Officer, Canadian Council for International Business (Achbar, pars.1,2,9,14,15,22)

The film features the sides of different corporations and views of different people. However, the corporation is focused mainly on the corporation as a liability rather than an asset to the society. Statements from the interviewees suggest so. Some examples are the following: • “It is never easy choosing the 10 Worst Corporations of the Year – there are always more deserving nominees than we can possibly recognize. ” – Robert Weissman, Editor, Multinational Monitor

1. “Fascism rose in Europe with the help of enormous corporations. ” – Howard Zinn, Historian
2. “The corporation is the prototypical psychopath. “- Dr. Robert Hare
3. “You can manipulate consumers into wanting, and therefore buying, your products. It’s a game. ” – Lucy Hughes, VP, Initiative Media (Achbar, pars 5,12,20,40) The basic premise of the documentary is that corporations are people. The corporations were recognized by law as legal “persons” but unfortunately, these “people” developed a “personality” of self-interest. In fact, these people may be considered psychopaths. Psychopaths hurt other people and have certain characteristics which are not good for the society.

That is what the documentary points out – corporations have now become harmful to the communities. The documentary starts by showing that the first corporations were created in Europe circa 17th century. These corporations were non-profit entities assigned to build institutions, such as universities, for the common good. They had laws and constitutions that describe, in detail, their duties and responsibilities and were administered by the government. Corporations that broke their constitution were punishable by law (Brown 23). Eventually, the concept of corporations reached America.

Similar to the original corporations in Europe, these were chartered to serve the common public. They also had laws and rules and were overseen by the government. But this changed in 1886. A United States Court recognized the corporation as a “person” under law. The 14th amendment to the Constitution – ‘no state shall deprive any person of life, liberty or property’ – became applicable to corporations. Hence, the context of corporations changed vastly and in the succeeding years, the corporations became one of the most dominant institutions in the world.

This change was pointed out early in the documentary (Henn and Alexander 14). Since corporations are “people” who have developed a “personality” of self-interest, the corporations created unprecedented wealth. As pointed out in the documentary, it is, in a way, bound by law to put its interest first, no matter what. And sadly, that interest is to create as much profit as possible. In the documentary, the “personality” of corporations was assessed by using the diagnostic criteria of psychiatrists and psychologists and that of the World Health Organization as a checklist.

One of the criteria considered in the personality assessment in the documentary was callous unconcern for the feelings of others. Are the corporations unsympathetic towards others? Yes. This was exemplified by the sweatshop in Honduras and the lousy pay being given by apparel brands such as Liz Claiborne and Nike. The workers are paid barely enough and their pays do not even amount to about a tenth of the selling price of the clothes. As was said in the film, these brands and corporations engage in the science of exploitation.

The workers know that they are being exploited but they cannot do anything about it. Worse, the corporations continue on using them. This definitely shows that corporations do not show callous unconcern for the feelings of others. Another criterion for the personality assessment of corporations was its capacity to maintain enduring relationships. However, corporations apparently cannot maintain standing relationships. This was given by the continuous change in the venue of their labors. It was implied that corporations employ people who are desperate enough to work given lousy pay.

Eventually, the level of living of these people and their wages increase and they won’t be as desperate for work or for pay as they were in the beginning. This would result to a loss in the profit of the corporation. So for the corporation, this means that they have to move to a place where the people would be desperate enough to work even with a lousy pay. The corporation interacts in a vicious cycle of moving wherever there are workers who would agree to work given low pays (The Corporation). Another criterion is the regard for safety of others.

The documentary showed that corporations have disregarded the safety of the public. Such corporations are those that synthesize and use chemicals to produce several products such as gas, oil, fertilizers and pesticides. Initially, the corporations showed the benefits of their products and warning labels for side effects went unnoticed. But eventually, some body of data accumulated and showed that the products had some harmful effect on the environment and on humans. It caused pollutions, illnesses such as cancer and birth defects.

One concrete example is the Du Pont Company’s fungicide that led to a boy being born without eyes. And what is worse about it is that they have known about the side effects yet they attempt to trivialize the hazardous effects of their products (The Corporation). Deceitfulness, repeated lying and conning was another criteria for the personality assessment of the corporations. This, again, was an evident trait of corporations. The Monsanto Company deceived the Food and Drug Administration (FDA) by claiming that it has no harmful effects on cows and humans.

Since it was FDA approved, the public assumed that the product is indeed safe for consumption. But data showed that it had chronic effects on the heart, lungs and even on the reproductive system. As said in the documentary, the Monsanto Company lied through their teeth. The capacity to feel guilty was another criterion for the assessment. Corporations show no signs of guilt regarding its actions. The Monsanto Company exemplified this character. Another Monsanto product, because it was deemed safe and feasible to use, was sprayed on Vietnam land.

This caused over 50,000 birth defects and hundreds of thousands of cancer in the people residing in the area. It settled out of court but it never admitted that their product was the cause of the damage to the environment and illnesses to the people (The Corporation). Corporations have also been found not conforming to social norms with respect to lawful behaviours. Conforming to social norms was another criterion for the personality assessment of corporations. Plenty of corporations have degraded the environment and did not follow the laws regarding environmental principles.

Some corporations have violated the anti-trust laws. The following are examples of the said corporations and the fines that they paid:

1. Exxon paid $125 million due criminal fines
2. General Electric was found guilty of defrauding the federal government and paid $9. 5 million dollars
3. Chevron paid $6. 5 million due to environmental violations
4. IBM was found guilty of illegally exporting products and paid $8. 5 million Using these criteria and case histories, the corporations were identified as self-interested, devious and insensitive “people”.

They seem to show several human qualities such as selflessness and empathy when needed, yet these “people” do not suffer guilt. It also winds its way through the legal and social standards and tries to find loopholes to obtain its goal and to get its own way. The corporations were also recognized as having a highly anti-social “personality”. In fact, it was shown in the documentary that the diagnosis from the said assessment shows that the corporations are psychopaths. This was stated by Dr. Robert Hare, consultant to the FBI on psychopaths (The Corporation).

This is very unfortunate since corporations show to be as selfish as any human being can get. At the very heart of the documentary is corporate social responsibility (CSR). Basically, the documentary is suggesting that corporations should know their social responsibility and that the corporations should act based on that responsibility. The documentary implies that there is a growing public opinion that organizations have a responsibility to assess the impact of their decisions on different subsets of the society involved and minimize, or at the very least, compensate for the harm they may cause on the society.

But what truly is corporate social responsibility? What are the guidelines for CSR? The CSR is not a concept that can instantly be grasped or understood. Furthermore, it is hard to define. There are plenty of definitions for it but all the definitions differ and the resulting definitions are frequently debatable. In fact, the use of the term CSR is brilliant. No one can fully describe what it is. It suggests something, but it does not always mean the same thing; it depends on the circumstance in which it is used. It may express the idea of legal responsibility or liability.

It could also mean being socially responsible, based from an ethical point of view. It can also imply simply being responsible for an action done, whether it is good or bad (Mallin 253). Theoretically, CSR should be good for the society. Frequently, corporations have the capacity to be so, given their size and reach, to act as agents of social progress. If corporations are socially responsible, they would know that they owe the society. They would act for the betterment of the society. If companies practiced CSR, the companies would care more about sustainable development other than profits.

Given that organizations frequently have more resources than governments, CSR implies that they should return something to the society and allocate part of their resources to carry out beneficial projects and help the less fortunate members of the society. To practice CSR, initially, a corporation will identify a societal need, whether it be related to their practice or not. This includes areas such as education, infrastructure, healthcare, housing, etc that may require certain amounts of funding, which cannot be provided by the government or the private sector.

Instead, the corporations would be the ones to provide or at least enable the institutions that continue providing goods or services available (Kahn 97). For example, consider a corporation that uses the waterways such as rivers as a means for their transport and to dilute some toxic liquid wastes. If this corporation knows that they should be socially responsible, the corporation would conduct water treatment projects. They would also help in preventing the water from being polluted and being considered as biologically dead.

This is good, considering that the corporation would shell out money to give back something to the society, or more importantly, to return to the society what is rightfully theirs. There are organizations that incorporate social and environmental considerations into their decision-making, policies and practices. A socially responsible corporation would put the interests of shareholders on equal footing with that of parties concerned with the social, community and environmental interests of the society. These companies aim at economic, social and environmental performance that will enable them to attain their overall goal of development. (Mansley 87).

If corporations were to practice CSR and they would opt to operate for sustainable development, corporations would be greatly beneficial to the society. They would be providing jobs to the community. They will be bringing economic growth and development to the area. They will also be helping the environment and the social aspect of the individuals residing in the vicinity of the corporation, either directly or indirectly (Berle 1365). Corporate social responsibility, being at the heart of the documentary, is the reason why the documentary also highlighted externalities.

As defined by Milton Friedman in the documentary, externalities are unintended consequences of a transaction between two policies on a third body. These externalities have resulted to countless abuse such as cases of poverty, pollution, exploitation and illness. Externalities are one of the dangers of corporations. Corporate transactions may not include the deal’s effect on the environment. The project between the corporate and its transaction partner may inadvertently harm the people in the community. There should be people liable to the externalities that arise from corporation activities.

Since externalities are unintended consequences, who should shoulder these penalties? Is the corporation, as a whole, or the individuals within it are responsible for the consequences of the corporations’ actions? These are questions presented in the documentary. If corporations are socially responsible, the externalities resulting from their practices would be dealt with by the corporation themselves. Corporate social responsibility would make the corporations accountable for what they do, whether it was a result of only one man’s action, a man who represents the corporation or made the decision for them.

Another question is posed by Mark Kingwell, a cultural critic and author, with his question – “The primary question is: how do we make corporations democratically accountable? ” Unfortunately, the answer seems to be none of the two. Milton Friedman, a Nobel Prize-winning economist is of the same opinion. This can be inferred by his statement – “Asking a corporation to be socially responsible makes no more sense than asking a building to be. ” There seems to be too many individuals in the company and they may point out that they are simply doing their job.

The people who work for corporations may be basically good people. They may even be outstanding citizens. But once they enter the corporation, their views and outlooks change and their act to differently than they normally would, just for the corporation. This is pointed out in the documentary by Sam Gibara, former Chairman and CEO of Goodyear Tire through his statement, “If you really had a free hand, if you really did what you wanted to do that suited your personal thoughts and your personal priorities, you’d act differently. ” And the corporate is considered as the “person” who does the action.

However, the corporations seem to point out that the resulting consequences are unintended and it is only done so as to achieve the corporation’s purpose – that is to gain profit. It is reasoned out that their reactions are inevitable (Shonfield 231). The society also had no choice once the corporations enact on their decision. Corporations rarely change their decisions, even if the people encourage, even demand, them to (Riahi-Belkaoui 81). But the problem is that corporations, as said in the documentary, are profit driven. Would corporations want to spend their profit? Of course not.

Corporations would prefer to invest on something that would spell out more profit for them. This is the very unfortunate thing with corporations. They are not bound to give back something to the society nor are they programmed to help society. Sadly, as pointed out in the documentary, corporations are psychopaths that are bound to act just to get more and more money from people, without necessarily thinking about giving back to those people nor considering their surroundings (The Corporation). Also, corporate social responsibility also acts as a smokescreen for corporations.

This should not be the case but this what some corporations do. Although theoretically, it should be for the good of the society, sometimes it ends up as a mere propaganda. This happens would the corporation openly shows how they good they are to the society. This is the case when they show their efforts to their target market, using their efforts and their so-called social responsibility-related practices. They use this as a marketing strategy, something for profit gain. This is what is done by some gasoline companies.

These corporations distract their audience by showing them that they are helping the people living in the areas where they drill for oil. They set up scholarship funds for those who are in need. But the problem is that this does not take away the fact they are drilling for non-renewable resources and that they are destroying the environment in one way or the other. The supposedly CSR related efforts that they are providing provide a facade for them. And since their audience sees that they are a “good corporation”, they will be more entertained and valued by their market, which could in turn lead to more profits.

As said in the documentary over and over again, the corporation’s goal is to get as much profit as possible. This underlying principle of profit gain has produced externalities. Yes, business is intended to generate money for the owner/s and corporations do tend to do business (Ballantine 151). But profit generation should not be done on the expense of the people who are directly or indirectly involved. It can be implied from the documentary that the things that make the corporations psychopaths are exactly the same things that should be changed or removed from companies.

Several of the criteria that were used to assess the “personality” of corporations should be the same criteria to be used to guide a corporation if they are doing good business or not. If a certain corporation do not fit the criteria, they are not doing good business at all. The corporation has and still is an overpowering psychopath in the society. Corporations should not be insensitive of the feelings of others. Corporations should monitor their employees, whether their employees may be in one company or in several different ones.

Several corporations are callous of the feelings of their employees in sweatshops. The corporations give workers lousy pay and place them in rough working conditions. This has been the reported case of Disney. A group of Hong Kong students and scholars claimed that factory workers in Dongguan, Zhongshan and Shenzhen were being abused by their employees. Disney responded by saying that they are taking the report seriously and they did not know that this was happening in the factories (Leung, pars. 2-3). It is very unlikely that no person knows about the harsh working conditions in the factories.

Corporations ought to change being callous towards employees for the employees are necessary to gain much profit. Regard for the safety of others is necessary in a corporation. The safety of the corporation’s employees should be guaranteed and noted. Workers should not be placed in unnecessary danger. If it is necessary that workers are to be placed in dangerous situations, safety precautions must be done. The safety of the consumers and the public must also be in mind when producing goods and providing services. The consumers would not want a product that is defective.

The defect may risk the health, or even the life of a person. If for example a car was released by the corporation and the air bags were defective, the defect in the air bag may ultimately result to a loss of life (The Corporation). Truthfulness should be a criterion for a corporation’s practice. The corporation should be obliged to tell the truth about their products and/or services. Deceit would result to a loss of public trust. It would also result to endangering the consumers. In the documentary, deceit led to threats and illnesses to the general public.

A corporation should be obligated to the public to produce valuable and quality services and products. Corporations must also follow legal procedures and law, much like a regular person. Corporations ought to follow environmental and trust laws. They must also follow federal rules. And corporations should be responsible and take the consequences of their action. They ought to not look for loopholes in the legal system just so they can get away with their profit-generation schemes. But if corporations follow those criterions, it could possibly mean that they would have to spend to conform to those criteria.

They would probably be losing money in the process. For example, if they were truthful about their products, corporations would have to admit that their product is not that good, given that there are some defects in the product. The corporations would want the general public to think that their product is as good as it gets. The result would be more profit due to the good response from the consumers and sales would increase. If corporations are to be sensitive to the feelings of their workers, there would be no lay offs. The corporations would not be able to let go of incompetent laborers.

They would also be losing money if they cannot let go of unnecessary workers. The corporations would not be earning as much because the workers in the sweatshops would be paid enough and money would have to be spent to improve their working conditions. If corporations followed all the rules about trust and environment and federal laws, it may mean that they would have to spend more just to follow the laws. Ultimately, if the corporations followed the criteria that would make them not harmful to the society, it would mean less profit.

This opposes their ultimate goal of excessive profit gain. In this manner, the documentary outdid itself. It presented ways to “correct” the corporations. It suggested a vague manner of renovating and doing a compete overhaul of the corporations. More importantly, it showed that corporation should be socially responsible. The documentary showed the corporations’ “personality traits” that should be changed. But the shown ways conflict with the goal of the corporations. To change a corporation’s structure to do good business would not mean doing business at all (Henn and Alexander 38).

The society can only hope that the corporations would consider externalities, environmental concerns and laws in the same level as money-making. (Olsen 155). Bottomline is that corporations ought to practice CSR but they ought to do it honestly and not for anything else. As suggested in the documentary, corporations would be beneficial to the society, if only they would serve the society and practice for the betterment.

References

1. Achbar, Mark. : About the Film. Big Picture Media Corporation. 14 April 2008. http://www. thecorporation. com/index. cfm?page_id=2
2. Achbar, Mark. The Corporation Film: Who’s Who. Big Picture Media Corporation. 14 April 2008. http://www. thecorporation. com/index. cfm? page_id=3
3. The Corporation. Dir. Jennifer Abbott and Mark Achbar. 2004.
4. Video. Independent Documentary. 2004 Ballantine, Henry. Ballantine on Corporations. rev. ed. New York: Callahan & Company, 1946. 151
5. Bakan, Joel. The Corporation: The Pathological Pursuit of Profit and Power. New York: Free Press, 2004.
6. Berle, A. Corporate powers as powers in trust. 1931. Harvard, 1049 Brown, Bruce. The History of the Corporation. Vol. 1.
7. Washington: BF Communications Inc, 2003. 23-25 Gower, L. Principles of Modern Company Law. 4th ed. London: Sweet & Maxwell, 1979 at 20-26
8. Henn, Harry and Alexander, John. Hornbook on Laws of Corporations and Other Business Enterprises” St. Paul: West Publishing, 1983 . 13-14, 38.
9. Howard, John. “The concept of the corporation. ” The Advocate. 1 January 2002. http://www. encyclopedia. com/doc/1G1-82612447. html
10. Kaysen, Karl. The Corporation: How Much Power? What Scope? in E. Mason (ed. ), The Corporation in Modern Society. Cambridge, Mass. : Harvard University Press, 1966. 85, 103.

This type of entity will provide the control of a sole proprietorship while placing liability on the business rather than the individual. Fireworks have the potential to be dangerous, causing serious damage to both people ND property. The potential for liability associated with the use and/or manufacture of fireworks is unavoidable. “Any one of the following defects may expose the man effectuate to liability for injuries that are caused by their product: design defect, manufacturing defect and defect in marketing,” (McLaughlin, & Laurite, 2014).

Liabilities associated with these defects include intentional torts, negligence and strict liability. The first step to avoiding an attack on personal assets is relocating operations to an area zoned for the manufacture of fireworks. No matter what the entity, the manufacture of explosives in a residential area will enable a liability protection to be pierced. An intentional tort will occur when the manufacturer sells a product that he knows is defective or dangerous of which injuries are certain to occur. In such cases, ACME has a duty to warn the consumer of potential harm.

If ACME fails to provide warnings or recalls on its products, it can be held liable for battery to anyone injured by its products. According to a 1903 product liability case, a company is liable for failing to notify the buyer that the product is potentially dangerous, is effective, or negligence in the manufacture or sale of a dangerous product. See House v. J. I. Case Threshing Mach. Co. , 120 F. 865 (8th Cirri. 1903). Should a mishap occur during the manufacture, sale or storage; a sole proprietor will be liable for any and all property damage incurred to both himself and/or his neighbors.

With a sole proprietorship there is no legal distinction between the owner and the business thus, he is at risk of losing personal assets in a lawsuit against the business. Should injury, death, or damage to property occur from intentionally manufacturing or selling a ungenerous product, both the manufacturer and suppliers can be sued for unintentional injuries. This risk extends beyond the manufacture and supply of the fireworks; it also includes care in design and use. For instance, should a consumer purchase defective ACME Fireworks from a retailer and sustain injury to him and others, ACME can be sued.

See Boeing Airplane Co. V. Brown, 291 F. Ad 310 (9th Cirri. 1961). “Strict liability in tort arises when someone suffers an injury not from anyone’s willful negligent act, but rather by engaging in some intrinsically dangerous activity or, under certain resistances, through the manufacturing of unsafe products,” (Rogers, S. 2012). Courts today, rationalize strict liability by establishing the fact that manufacturers are better positioned to prevent risk of loss than, that Of the consumer. As such, it is the responsibility of the manufacturer to ensure their products are safe.

In order to be strictly liable for a product, the plaintiff must demonstrate that there is a defect, the defect was caused by the manufacturer and in turn, was the cause of injury. See Kerr v. Corning Glass, 169 N. W.. Ad 587 (Min. 1969). In order to determine Contract Viability, it s important to review the agreements between ACME and the retailers. Examine each contract carefully ensuring it contains five essential elements. The legitimacy of the agreements is dependent upon it containing an offer, acceptance, consideration legality and capacity.

To further explain, an offer is an invitation to enter into a contract. If a company agrees to the terms outlined in the offer, they have then accepted the agreement. Once an agreement has been recognized, it must be established that both parties have intentions to enter into a legal binding contract. The considerations of his agreement are legal exchanges for services or products. For ACME Fireworks, this will include the prices paid for the fireworks and the amounts desired. In order to be legally binding, the cost of doing business must not be illegal and, the ability to perform must not be impossible.

Finally, it must be determined that both parties have entered into the contract freely without coercion or duress. Additionally, the law prohibits contracts made with persons of diminished mental capacity and minors. The contract probability concerns itself with the performance specifications and acquirement of the agreement. Though the agreement appears to be viable, if it lacks a specific performance strategy, it will not have a future. The probability Of the agreement to remain in force will be dependent upon the period of performance and quantities desired during that period.

Fireworks are seasonal whereby; a retailer agreeing to order large quantities on a regular basis is not realistic. There is no guarantee the quantities will remain consistent throughout the contract period. Additionally, ACME is concerned about failing to meet its contractual obligations should it not hire enough people. The basic questions that need to be addressed are: how and when to order, amounts to order and what happens if ACME fails to deliver? The owner is concerned that there will not be enough work for the additional employees once the initial orders have been filled.

The terms and conditions of the contract will determine the type of employees ACME will hire. At-will employment provides no obligation of continuous employment once the orders have been filled. For this reason, the law allows an employer to terminate without just cause or reason. Generally, this rule is applied for seasonal work. ACME Fireworks has several options to consider in meeting contract demands, performance and productivity. By hiring temporary full-time associates, ACME can readily meet demands however; there is no incentive to maintain a standard of quality or productivity.

Same is true for part-time associates as their hours are usually dictated by the needs or demands Of a business. Consideration for casual and day labor employees might prove useful. Casual employees typically work on an as needed basis and usually consist of single parents, college students or applicants seeking extra money. Temp Agencies provide labor on a daily, weekly or monthly basis. Typically, temp agency employees that excel are offered permanent positions within an organization. Hiring regular employees on a probationary basis will allow ACME the ability to meet the quality, performance and productivity of the contract.

Generally a just-cause type of employment this employee is evaluated at the end of a specified period based upon certain criteria. If an employee fails to meet standards then they are usually let go. With the increase in business size and operation certain liabilities can raise concern. It is important to understand the differences associated with the different entities when choosing what best fits your organization. Whether choosing a Sole Proprietorship, a Partnership, a Corporation or a Limited Liability Company, it is important to assess all the risks associated with the nature of the business.

Currently, ACME Fireworks operates out of a garage and the owner enjoys complete autonomy over operations. Operating as a Sole Proprietorship, the business and the owner remain one and the same. This provides the highest risk of loss to personal assets. The disadvantage is that a sole proprietor has limited options for raising capital and no limits on liability for business debts; thus if the business does not fare well, the sole proprietor can face personal bankruptcy,” (Rogers, S. 2012).

As a partnership, ACME Fireworks will share ownership with two or more people. “Partners are automatically owners and managers of the business, and the law presumes equal rights unless the partners have specified otherwise,” (Rogers, S. 2012). In a partnership, taxes are assessed on the earnings of the partners and not that of the business. Should the company become party too lawsuit or is unable to fulfill its contractual obligations, the personal assets of all the partners can be used to satisfy a judgment by the court. Partners are not only liable for their own actions, but also for the business debts and decisions made by other partners. In addition, the personal assets of all partners can be used to satisfy the partnership’s debt,” (SABA. Gob, 2014). Should ACME Fireworks consider a Corporation, it will become an independent legal entity. The owner(s) will then become shareholders which will limit their liability and legal responsibility. In order to remain free of any personal liability, the company must operate according to state corporation laws. If the corporate form of business organization is used to defraud creditors, stockholders will lose the protection of limited liability and will be held personally liable for all debts of the corporation,” (Rogers, S. 2012). Since a corporation requires the filing of complicated forms, annual reports and fees, it can prove costly for a small company. Additionally, a corporation is double taxed whereby; the company pays taxes on its earnings and the shareholders pays taxes on dividends paid UT. A Limited Liability Company (LLC) provides the limited liability features of a Corporation but operates like a partnership or sole proprietorship.

A LLC “typically features easier formation (although filing under the statute is required) and lower filing fees, flow-through taxation where members of a LLC are taxed on their earnings, but the business itself is not taxed, the stability of a corporation (a member’s leaving will not dissolve the LLC), and limited liability, where the business is liable for its debts and the people who own it are not,” (Rogers, S. 2012). Since ACME Fireworks is a small business with a single owner, a LLC will provide a low cost alternative that provides limited protection of personal assets.

Unlike like a corporation, the taxes, profits and losses are passed through to each member of the LLC. Members are protected from personal liability for the actions and decisions Of the LLC. However, in the case of wrongful or illegal acts, the limited liability can be pierced and personal assets can be assessed. Additionally, it is important to separate business funds from personal funds. Should ACME use a personal ann. account to pay its creditors, they can in turn pierce the limited liability and seize the owners’ personal funds. The Federal Government does not recognize a LLC as a separate entity as in a corporation.

As such, the owner(s) of ACME Fireworks will file their shared earnings on their personal income tax. If the LLC is a single owner operation, income will be reported on a Schedule C just like that of a sole proprietorship. Should there be more than one member sharing in the profits and losses, a form 1 065 will be filed as is done in a Partnership. The entire net income of the LLC must be accounted or in the filings of all members involved. The owner of ACME Fireworks has asked for advices in choosing an entity that would provide the least risk to personal assets, should he fail to meet his contractual obligations.

It is important for ACME Fireworks to understand the risks associated with the nature of the business. In assessing the current operation, ACME Fireworks operates out of a garage and currently employs approximately 15 people. The liabilities associated with the manufacture of dangerous materials poses a high risk to personal assets should a mishap occur. Before engaging rather, ACME must consider relocating to meet both local and state zoning laws. Additionally, Federal OSHA standards must be in place in order to release the owner of allegations associated with safety, wrong doing, or negligence.

The law provides certain protections associated with All’s and Corporations. As a sole-proprietor, ACME Fireworks and the owner are one in the same. Should the company fail in its obligations or fail to warn and/or injure a consumer, the owner is held personally liable. If ACME is to pursue a partnership, the partners share in the personal liabilities of the company. For he production of what is considered dangerous materials (fireworks), the risks associated with injuries from product liability to manufacture are substantial.

The company IS liable for intentional torts, negligence and strict liability as such; neither a sole-proprietorship nor partnership is suggested. As a manager of ACME Fireworks, would recommend the company pursue a Limited Liability Corporation. According to the Small Business Administration, “Members are protected from personal liability for business decisions or actions of the LLC,” (SABA. Gob, 2014). Essentially, if the LLC becomes party to a suit or is unable to fulfill its obligations, members enjoy the same protections as that of shareholders in a corporation.

However, as a limited liability company, they are not exempt from litigation involving wrongful acts by its members or employees. In a LLC, the owner will retain control over the company as in a sole-proprietorship and lessens the risk of personal liability. The owner is also concerned with ACME’s ability to meet either contractual obligations or make payroll. The LLC would provide the protections it needs without relinquishing control to a Board of Directors, as in a corporation. Without knowing the specific terms and conditions of the agreements, it is difficult to ascertain viability and validity.

Prior to the World War II, the industrialists of Germany, Walter Urethane, declared that the corporations have turned out to be huge and that they have developed to be an important part of the community or the society. As said by Walter Urethane, although a corporation significantly intends to pursue the personal and individual interests and revenues for the owners or the leaders of the corporation they progressively bear the mark of a responsibility and to a growing degree, have consistently assisted the private interest of Individuals. Moreover, philosophers such as James H.

Tufts and John Dewey, explained in their book ‘Ethics’ published In the year 1908, they promoted the Idea that Is not adequate to sight the corporations as a virtuous economic machine and that corporations are supposed to e included in the duties and responsibilities of the general public or individuals Sustainability and Corporate Social Responsibility The concept of Corporate Social Responsibility (CARS) is not static. This concept remains in motion and its target continues to evolve, as stated by Merino Kennedy of the U. S. Council on International Business.

As per the statement of Kennedy, a concrete and pure definition for CARS does not exist. On the contrary, this term is not used in place of the role and responsibilities that a state government has to confront in order to maintain a sustainable growth and expansion of an economy. The concept of a sustainable growth in the endorsement of a business is rapidly increasing in a number of directions. A number of individuals comprehend the concept of corporate responsibility by means of the concept that what directions shall the corporation follow beyond the description of law.

Some individuals also think that, this concept should be authorized legally at the domestic or international level; individuals again acquire the significance that already exists to perform it, as explained by Kennedy. However, the scope of corporate responsibility fluctuates state by state, district by strict, and interest group by interest group. At the least stance, it involves the issues that concern the environment but it also considers the governance, social, health, ethical and certain other problems.

Probably, it is an extensive concept to protect and it is a challenge for the community of different businesses to work accordingly in order to maintain the environmental ethics. Corporate Social Responsibility in the Context of Regulation Rots explained, corporate social responsibility (CARS) is considered to be the point of reference to the business ventures that declares that an organization encompass more than merely being expansible and accountable to the leaders and shareholders of the business enterprise in order to maintain a sustainable economy.

It is certainly considered to be the social body that involve ethical obligations and the significance that goes above the legal and official compliance and its complete requirements. Most of the people in a society, and particularly the inhabitants of the business community do not consider CARS to be a good idea. For instance, Rots observed that Milton Friedman is well known for mentioning that corporate social responsibility (CARS) shall not be implemented, for the reason that, the restraints has to be provided by the government, so an organization can augment its earnings and revenues to the maximum extent.

However, the regulation and the law should provide the control and limitations. The advocate of this perspective of the argument over the corporate social responsibility (CARS) states that, a pressure exists among the economic dispute emphasize on the end product, to be precise, the value acquired by a shareholder. In contrast, ethical arguments are also discussed, and each individual corporation has o recognize and identify its ethical responsibilities that are moreover, going to be confined or a fragment of it definition as a corporation.

It was observed by Rots that, the Institute of American Law with respect to its principles of the corporate authority and governance recommended that the prime objective of a corporation is to generate profits for the owners and the shareholders, yet it has to deliberately follow the rules and regulation even though if it is not lucrative or gainful.

As indicated by Rots, David Baron, Stanford University professor, made it clear that the ethical spite for the idea of social responsibility by means of differentiating among what he actually meant, when he used the term Corporate Social Responsibility (CARS) and the Corporate Social Performance (SSP). Authentically, corporate social responsibility includes an assortment of a company’s well being inclined towards the prospect of an individual product encouraged by the general standard sand the norms that in other words is referred to as the ethical values and principles.

The corporate social responsibility (CARS) that is planned strategically or an uncomplicated corporate social reference includes the performance that seems to be encouraged and endorsed by the social purposes at a higher level and are indeed, endorsed and encouraged by the profits generated, as observed and noted by Rots. Intense situations mostly amount to mere dishonesty, fraud or ‘Green-washing as explained and elaborate by Baron in the year 2001.

For that reason, when the term Corporate Social Responsibility (CARS) is discussed in the context of health and environment, we deliberately discuss the corporate social responsibility (CARS), Rots stated. In addition to it, Rots cited the book ‘The Ecology of Commerce’ by Paul Hawked, this book elaborates that business is an essential contributor in wiping out the world, and if the corporations continue the way they are currently working, the wild-life cannot sustain, however, an indigenous or a wild culture would remain at the rare back.

Numerous corporations in the present world identify that they are accountable and responsible for the forth coming of the world. In spite of that, they do not abide by the rule that the business of business is a business simple, stated and observed by Rots. The innovative principle regarding the business is, businesses are the leading establishments in the world at present. Corporation assist to address the issues concerning the social environment that has immense impact on the mankind.

This principle is eventually becoming the perspective that is ethically driven by means of numerous companies operating as multinationals. The process of globalization in the world associates and accuses the concept of citizenship in the global corporate world, in corporations that globally compose of the communal society and fetches the requirement for precision and simplicity concerning about how to implement distinctive set of laws and regulations.

This recommends the entity to which the multinational corporations are obliged to offer their loyalties to, whether the corporation is operated domestically or internationally as a global corporation. It further recommends the foremost responsibilities and obligations of a global company in an extensive prospect of a civil community. As indicated by Rots, the corporations are inhabitants of a global community and thus, be in debt of a Corporations are the dominant institutions on the planet today. Therefore, they have to help address social environmental issues that affect humankind. ? Eric Rots Numerous government s and official bodies in the world enclose prime abilities for dealing with the complicated challenges generally faced by a society. Global issues, for instance, the change in climate globally, depletion of the ozone layer, loss of the bio-diversity, running down the forests and the fisheries, the harmful waste, disposal of transportation, migration of microbes and the species that are invasive, in addition to, the pollution of air and water are the complex global problems and to encompass a constituent of health.

It is often not feasible for the governments to address them individually. Legal Reform Strategies to Enhance Corporate Social Responsibility Today, we live in a complicated society, where the government officials are not capable to answer the queries regarding the standardized regulations and rules to follow within the society. Corporations have to play a significant part in this process and develop innovative strategies that are officially authorized.

Rots indicate that the reflexive law is the law that goes above the approach of command and control. Regulation that is informational is the kind of a compulsory revelation of data and information akin to he lethal liberation of inventory that can be utilized to improve the concept of CARS. The concept of environmental agreement is that the corporations can have affiliations and work on their own with the Nags or with other management on certain problems. Rules and regulations can be agreed upon to assist and encourage this policy.

If a corporation makes an agreement concerning a certain problem, it may create more successive and creative outcomes to these issues rather, if it is solely dependent on the U. S. Congress or the Environmental Protection Agency, as indicated by Rots. Companies might select to be communally responsible and get concerned about a variety of health or social issues with accuracy and intense competition. Moreover, these selections have to be made with no loss of sight of the information that the prime concern for a corporation is its sustainable economy, concluded by Rots. Art B Corporate Social Responsibility (CARS) Report of McDonald’s The foundation of the complete venture of McDonald’s is that, it follows the principles of the code of ethical conduct, honestly, durably and ethically. However, establishing a good will in the fast growing market requires sufficient time so as to build a significant reputation. McDonald’s are not the motivators; they are individuals who are performing ethical business maintaining a permanent, solid, constructive and ethical agenda that will be the trend from today until it progresses.

Values Defined by McDonald’s in Relation to the Corporate Social Responsibility (CARS) McDonald’s value the experience of its customers significantly. They believe that their customers are the reason behind their subsistence and survival. They illustrate their congenial and CEO-friendly environment maintaining the higher level of the values and principles defined. The main objective of McDonald’s is to provide high standard of quality and values for every individual customer that is walling to get served by McDonald’s. Furthermore, McDonald’s is dedicated to its people.

They offer an assortment of choices and opportunities to develop the skills and abilities of individuals associated to McDonald’s and enhance their leadership skills. They have firm believe that the group of adequate individuals with distinctive experiences and upbringing and operational effectively in circumstances that encourage the aspect of respect and compels to high decrees of involvement, is important in the path to our achievements continuously. The stakeholders affiliated to McDonald’s believe in the structure of methods applied to carry out a business.

The business model followed by McDonald’s demonstrated the three legged stool of the operators and the managers, employees and suppliers of the corporation is the prime interest of McDonald’s. McDonald’s operate its venture and corporation ethically. Following the ethics firmly results in a good business. McDonald’s preserves itself and conduct its venture to superior standards of Justice and equality, truthfulness and candor. McDonald’s follows the motive that they are accountable at an individual level yet hey are responsible towards the society collectively.

McDonald’s believe that they owe to the communities associated to them. They consider their responsibilities critically in terms of being a person in charge. McDonald’s supports its stakeholders and the customers to establish an enhanced and improved society, they assist the ARMS and influence their distinctive dimensions, extent and sources to assist the associates to create the world in an improved place to live maintaining a congenial environment. McDonald’s develop their corporation valuably; they are considered a company that carries out its trade publicly.

They work to offer a sustainable profit and growth of the organization for the well being of the owners and the associated stakeholders. Although, this need to emphasize on the customers and the well being of the system followed and implied by McDonald’s. McDonald’s continuously struggles to improve and enhance their reputation. They believe in the process to learn about new innovations every single day and it maintains the core objective to predict and act in response positively to the customers who change every day.

The Standards of Business Conduct The standards, values and principles incorporated in the conduct of business, are noninsured to be an escort to the lawful and the ethical responsibilities that the stakeholders of McDonald’s contribute to the family of McDonald’s as a member of it. However, it is not the absolute and comprehensive book of rules that directs and deals with each problem that is considered ethical and that might develop.

It is not an extraction of all the policies and the laws that are implemented by McDonald’s in its business and corporation. It is ether not an agreement and it is not applicable to relocate a Judgment that is fairly decided. To a certain extent, the values and tankards provide guidance and direct its affiliates to take the appropriate decisions. The values, principles and the standards of the conduct of business that relates to the work force of the corporation of McDonald’s and the subordinates it owns throughout the world.

The affiliates of McDonald’s that are not included in its work force officially are considered to be the members of the board of directors of McDonald’s and that they should follow the codes and rules followed and implemented at the work place of McDonald’s as an ethical corporation. However, these values and standards is not functional for the executive, owners, purveyors, affiliates that are non controlled, or any of the leaders or an administrator associated to McDonald’s. Moreover, as the constituent of the family of McDonald’s they are presumed to have complete knowledge of the standards and conducts maintained by the corporation of McDonald’s.

They certainly motivate the stakeholders and other affiliates to expand and establish their own codes, strategies, methods of the code of conduct, the agendas for learning and development and the documentation that are reliable in accordance to the determination of the standards and the values maintained and to reinforce the work force in order to comply with standards and the codes of conduct. This obligation is however, communicated and will reinforce and assure that McDonald’s maintain its reputation as an ethical corporation that carries out the business and its corporation with the attribute of uprightness.

Corporate Social Responsibility and Sustainability McDonald’s always tries hard to expand its business and prove to become more progressive every next day. This is considered to be above everything that communicates the significance of McDonald’s as an ethical corporation. The main objective for the efforts incorporated by McDonald’s emphasizes on the constant and incessant growth and enhancement through the five different regions, the regions include, a sustainable chain of supply, responsibility towards the environment, the well being and nutrition, experience of the work force and most significantly the society.

Environmental Responsibility McDonald’s is dedicated and accountable to the environment that is it owes some obligations for its surroundings, and each individual associated to McDonald’s incorporate its significance for the purpose to stand by the commitments proclaimed. They emphasize and attempt to put their efforts in the areas where they can acquire and influence the crucial problems that take place concerning the environment around, these critical problems include the change in climate, the resources that are natural, management of the waste material and conservation.

They constantly pay attention, identify and empower and authorize the inventiveness that can be used to enhance the surroundings and the footprint of the environment around us. McDonald’s develops association with other corporations to increase and expand the awareness and knowledge of the environment. They eventually work and function long with their chief providers to motivate the practices that are conducted in order to exercise their responsibility towards the environment.

McDonald’s is committed to reinforce its customers and their well being. They provide an assortment of distinctive choices to encounter the diversified needs and preferences of their customers and other affiliates. They certainly offer knowledge and information regarding the values and standards of their contributions; consequently, the customers are able to select the products that encounter the needs and desires of the customers considering their diet and the well being of their families.

Sustainable Supply Chain McDonald’s visualize the chain of supply that is profitable and produces products of superior quality that are safe and do not harm the environment and do not interrupt the supply of its products, whilst influencing their management instance to produce a total advantage by enhancing the outcomes that are obtained ethically, economically and environmentally. Part c Code of Ethics A code of ethics published by a business is a specific kind of policy proclamation.

A code that is appropriately structured, indeed, a form of legislation within a corporation made compulsory for its work force, along with the particular endorsements set for violation of the code. For instance, if such endorsements are not present, the code is Just a list of goodness. The most critical endorsement is in general a notice of dismissal, except till a crime has been committed. The concept of ethics in business came in to sight during the early years of 1960, at the time when ‘social responsibility was introduced and this progress was accepted by a number of gigantic corporations.

This progress itself was enthused by promoting the interest of general public concerning the aspect of environment and consumerism. A significant preference lies among the concept of law and ethics. Complying with the law is the least level of the ethical code of conduct imposed in the community. The concept of ethical conduct and performance involves more than Just a legal behavior. However, it is unethical to state an unauthentic statement, for example, telling a lie is in contradiction of the law only below certain situations, therefore, telling a lie under an oath is false swearing.

The literal and formal definition of the term Business Ethics and the Codes of Conduct is, that it always involve a constituent that goes above the agility that is strictly declared. They require devotion towards high values and principles. During the era of World. Com and Enron, the scandals regarding different corporations were heard, however, the codes of ethics have moved on to a different path.

In the year 2002 legislation was approved, the Serbians-Solely Act (“SOX”), need the companies who trade their stocks underneath the conditions of the Act of Securities Exchange approved in the year 1934, it is required to bring out the codes of ethics they follow, if these are present, and also distribute any amendments to hose ethical codes so as to win the confidence of the investor. A number of small businesses, obviously, are not synchronized by the Securities and Exchange not affected by SOX.

The well known and famous code of ethics in the history throughout is the oath taken hypocritically by all the individuals who tend to become a doctor. On the contrary, the general belief, the phrase that is not included in the oath taken is ‘First, do no harm. ‘ The original language, as mentioned in the third paragraph of the classical edition: “l will apply the measures to diet for the benefit of he ill people in accordance to my capability and decision; I will keep them from damage and prejudice”, as indicated by Bartlett.

An even more renowned statement is extracted from the epidemics of the Hippocrates; it says that an illness creates a habit of two effects, to support and assist and the second is to make no damage or harm to any individual. The Document The document of code of ethics is an official document; it is not only a surrounding, a comprehension, am agreement, a rule that is unwritten or merely a component of the culture of a corporate. At the least prospect it is a document that is officially published.

In a number of corporations the individual employees are also obliged to sign an official proclamation, that declares that they have gone through and acknowledged the obligations they are assigned. In huge corporations or to companies that respond to the scandals recently heeded, at certain instances only the officers of the company or only the officers that look after the finances are asked to sign the agreement. In various other situations, an assortment of codes of ethics might be present; they are eventually customized to certain operations as accounting, sales and purchasing, etc.

The codes of ethics are unconnected terminologies of the companies. These terminologies consist of a mission statement, a list of values and principles of the corporate and common strategies regarding the functions performed. Content The ethical codes in relation to the corporations are alienated into four different components: 1. A preamble or an introduction 2. A declaration that states values, mission and the purposes 3. Particularize regulations concerning the code of conduct, which is further divided in different procedures 4.

Execution of the code of conduct ethically, this execution certainly explains the development of managers, exposure and authorization. Introduction: Management Sponsorship The foreword to the ethical code of conduct preferably incorporates a proclamation by the officers of the higher levels in a company, where the officers indicate their individual allegiance to and for the assistance of the ethical code being carried out. Professionals and researchers of an ethical business never fall short to emphasize the significance of leadership at the top level of management.

The document released for the code of ethics, the possible frame work constructed for the scandals, notations minor influence along with the employees until the commitment of the business indicates concrete symbols related to the indications provided. The foremost division of the code conventionally offers a condensed statement declaring its mission pursued by the principles and the values. This segment defines the overall environment of the corporation, the work it does and the purpose of its existence.

The code preferably declares the financial objectives practically; in addition to this declaration the code will particularize the professional and social goals. The proclamation of principles and values will correspondingly start with declarations that are defined in a narrow perspective. Following all the applicable rules and regulations, the preliminary value; devoted to higher values of ethics will be implied in the next instance. Companies that are involved in a number of professions; the professions include medicine, engineering, law etc. Openly turns to the expert values and entities that situate in accordance to the values of that corporation. Rules of Conduct The rules and regulations of an ethical conduct are conventionally divided into different segments. The VIBE (Institute of Business Ethics), a corporation originated from London, offers a record that is adjustable without any difficulty even by a corporation that operates on a lower scale and maintains its own code of conduct ethically.

VIBE separates the fundamental appearance in to the codes of conduct approved by the corporations concerning its human resources, shareholders, customers and additional subsidy mediators, providers and afterward the broader community. In order to, deal with the employees with respect to different sections, an in effect code will additionally divide in to the conduct of the corporation in the erection of its stakeholders and individually, the conduct is anticipated from its individual employees.

Considering the language of business and corporations the employees, customers, mediators and the providers are collectively known as the ‘stakeholders’, it signifies the fact that, the individuals who encompass a stake in the welfare and success and in the ethical behavior as well, of a particular corporation is said to be the stakeholder of that business. The groups conventionally describe all the entities with which the corporation maintains its ethical affiliations. However, in numerous cases, everything depends on the variety of activities performed by the corporation.

Additional fields might acquire specific significance. Therefore, the regulations and the rules set in accordance with the code of conduct shall signify in correspondence to the environment physically, along with the significance of gender, ethnicity and relations in terms of race, in the respective areas of medicine, Justice and law. The codes of ethical conduct particularly describes and deals with the fields that are complicated, it includes contributions to the campaigns launched or observance and conformity with the particular rules.

Surrounded by the codes of ethical conduct the code particularly categorizes the issues, for instance, contradictory interests, submitting or accepting bribe, based favors and gifts as an alternate to bribe, etc. ; the rules and codes regarding the knowledge, for instance, confession, maintenance of the data, the trading conducted indoor and onwards. Harassing the opposite gender, solving the issues related to the conflict among quality and cost of the goods, and endless potential problems.

The codes of ethical conduct that are well executed are supposed to be to the point and as informative as Seibel, although it consists of vibrant instances to clarify each and every point in the rules of conduct. Implementation, Reporting, and Sanctions The concluding segment of a code of conduct will manage the organizational accomplishment of the code of ethical conduct and distinctive segments adjacent to the infringement of the code.

The most uncomplicated code of ethical conduct needs exposure for the breach of the code followed by the management of a corporation; this involves the selection of an action to consider if the code implemented in the other level is unsuccessful to perform the relevant action. In huge corporations, the work place or the operations conducted is particularly charged along with the purpose to deal and handle the breaches of a code.

The different segments will be enchanted along with the managers as described; it involves a crystal clear process for developing the knowledge, to consider the warnings that are issued, the counseling that is needed, outcomes from the offenses that occur frequently, capable to get released or either, if suitable, the proceedings would go on. For the reasons that are obvious, a code of an ethical conduct, encompassing no segments and a lanced procedure to get implemented will be considered by the stakeholders, only as a gesticulation with no teeth’.

On the contrary, the owner of the corporation must be aware of the fact that ethical breaches are not fundamental, be it authentic violations, thus, segments that include announcing the dismissal of an employee can result problematic in anticipation of the fact, if the corporation follows the policy of ’employment at will’ the policy of appointing and terminating an employee is implemented and supported by the federal and the state law underneath certain conditions. References