Category: 

What is Corporate Responsibility?

Article Details
  • Written By: Garry Crystal
  • Edited By: Niki Foster
  • Last Modified Date: 20 July 2014
  • Copyright Protected:
    2003-2014
    Conjecture Corporation
  • Print this Article
Free Widgets for your Site/Blog
More bank robberies occur on Friday than any other day of the week.   more...

July 30 ,  1945 :  The USS Indianapolis was torpedoed after dropping off key components of the Hiroshima atomic bomb.  more...

Every company or business usually starts out with its own set agenda, which differs from business to business. A lot of businesses exist simply to make money. There are others who seriously wish to provide a needed service to a community or to the world. Each of these businesses has a corporate responsibility to the public, its shareholders and the world it trades in.

In its most basic terms, corporate responsibility can come down to the ethics of a business. Each company has its own set of core values, but the company’s values also touch everyone that the business deals with. Years ago, a company’s corporate responsibility was dictated by its government. There were set laws that had to be adhered to regarding financial and social responsibility. Today, however, corporate responsibility has to take into account the world that we live in on a much wider scale.

The public has become much more globally aware, and there are a number of groups that monitor corporations closely. These groups have the conditions of the world in mind. They think about the social issues of the world, such as labor laws and the exploitation of workers. They are also concerned with environmental issues, such as the rainforests disappearing.

Ad

Corporations are now held accountable not just by the government, but also by the public. Corporate responsibility must now take into account how dealings with customers, shareholders and employees are seen by the world. Large global corporations know that people are watching them and that any wrongdoing will not go unnoticed.

Many companies have a social conscience, treat employees fairly and try to do the best for their shareholders while trying to be socially responsible. There are, however, many other corporations who see nothing wrong with employing third world country workers to make their products. It is only due to groups who monitor such activities that these issues become public.

Many corporations have been forced into taking corporate responsibility. They know that it does not make good business sense to be seen as a company that is damaging the world that we live in. Huge penalties and fines also await corporations that break ethical and environmental laws.

Corporate responsibility has a huge impact not only on the local community, but also on the world. Its affects are social, economic and environmental. Bad and good corporate responsibility has effects that reach from the worker in the third world country to the air that we breathe.

A recent report stated that major investors are now more likely to invest in a corporation that has shown corporate responsibility. Investors are aware of the customer’s strength of opinion regarding unethical companies. The customer is now in a better position to shape corporate responsibility than ever before.

Ad

Discuss this Article

anon952959
Post 12

@JoseJames: Contrary to your belief that BP did a good job cleaning up the oil spill in the Gulfm I think they showed an absolute disregard for their corporate responsibility.

From the start of the entire mess, the BP public relations department was very difficult for journalists to work with. Very limited information was released and it was quite obvious that the information that was released was very filtered and modified to save face for the company.

anon146334
Post 6

BP's corporate responsibility is to their shareholders not to you, me, or Louisiana fishermen. In this it is clear they failed - the considerable expense of the Gulf oil spill will significantly impact on dividends. However it was presumably felt by BP that the risk was worth the potential reward and as such this could be seen as acting responsibly in terms of their obligations.

Do not believe an oil company like BP, RDS or Petronas would act responsibly to you the stakeholder. It is the job of the board of these companies to make a profit. They have no other obligation. And don't think that because you consume their product that somehow means they have a responsibility to you. We will use their products regardless of their actions, directly or indirectly - they have us over an oil barrel.

Oh and @jose james: BP hasn't been called British Petroleum for more than ten years.

NightChef
Post 5

@youbiKan, I think you are sadly mistaken about the damaging affects that the BP oil spill had on the local economy of fishermen in Louisiana. Many of the very old and most established fishing companies have now been shut down and ran out of business because of the contaminated waters in the gulf area.

If BP had simply taken the corporate responsibility to secure the system in which they use to extract oil then this loss of job and livelihood would not have occurred.

It concerns me when individuals defend the actions of such large global conglomerates as if they have the safety of our soul in mind. These corporations were designed with one intention in mind, money. Energy companies are especially famous for making sacrifices of both human life and the environment to turn a profit.

While human error might have contributed to the massive oil spill in the gulf, it is ultimately the corporate responsibility or the lack there of it that is to blame for the damages caused in this situation.

youbiKan
Post 4

@CoffeeJim, I understand your disappointment in BP's response to the oil spill but I actually think they did a rather good job and showed excellent corporate responsibility.

Much of the public that saw images of oil-covered birds should know that those instances were isolated and the spill is very insignificant in the grand scheme of the ocean that it happened in.

People should not overreact and appreciate that BP did anything at all to help those birds, after all, who is more important, some seagulls or the huge amount of energy, jobs and economy that comes from Louisiana's oil industry. I think it is a fair trade off and people should reconsider their criticism.

Sometimes companies suffer greatly from the mistakes or perception of mistakes that the mass media bestows upon them. A good example of this is the issues with Toyota's hybrid electric car, the Prius.

Recently there has been stories in the news about how people have driven wildly out of control because of the cars malfunctions

Mass calls for the auto company to take some corporate responsibility and fix the issues led to recalls of millions of vehicles and wasted man hours of operating dealers.

It is very odd to me that the bad press Toyota got over the situation almost seemed unequal to the issues that happened. No on yet to this day has been able to identify a bug or malfunction in the Prius' brake and electrical system yet the reputation of its dangers have been established by journalists and their media mongering organizations.

CoffeeJim
Post 3

As a journalist that covered the BP oil spill, I can tell you that the efforts by BP and the Coast Guard to open up information availability to the public did not come with open arms. This was a situation where mass media and the public demanded the corporate responsibility of this organization and required the release of valuable information.

Insignificant but very visible methods that the company took to show transparency were met with disappointment by myself and my colleagues.

One example of this is the use of a live video stream from the bottom of the ocean floor. This video connection might have given the impression of corporate responsibility but the reality is that a visual guide to the workings of robot arms is not at all the vital information that the public needs to know.

For one, society wants to know why the spill happened in the first place. Was BP taking proper precautions and exercising corporate responsibility in a preemptive fashion or do they only jump to the cause when something major like this spill happens?

My guess is that like most companies, they only become responsible for their actions and take cautionary steps if a mistake is visible to the public. That is one of the many reasons that it is important that we have government regulate certain industries and insure that these corporations are protecting the human race, environment and their profits, not just the latter.

ronburg44
Post 2

@JoseJames, contrary to your belief that BP did a good job cleaning up the oil spill in the gulf I think they showed and absolute disregard for their corporate responsibility.

From the start of the entire mess, the BP public relations department was very difficult for journalists to work with. Very limited information was released and it was quite obvious that the information that was released was very filtered and modified to save face for the company.

I can understand why they would want to do this as covering up a major environmental disaster such as this is the best course of action for a company that has the sole purpose of creating profits.

That is where the problem lies with corporate responsibility. The organizations are profit driven like and capitalist business. The desire to compete in the market economy and the motivation from stock holders to get a return on their investment results in a lack of proper protection and safety systems to avoid situation like what happened in the gulf.

While there are some legal measures in place to hold corporations accountable it is not enough. With the decision in 2010 by the U.S. Supreme Court to give corporations the same rights as individual humans we will see a continuation towards the path of corporate irresponsibility.

I have no desire to hinder these companies from making money and contributing the employment of millions but when they have a complete and udder disregard for the sanctity of our environment, something has to change.

JoseJames
Post 1

A prime example of corporate responsibility is the situation that happened in the Gulf of Mexico with the British Petroleum oil spill. Whether or not the response was up to the task of the natural disaster is subjective but there is no doubt that BP undertook an extensive public relations campaign in an effort to demonstrate corporate responsibility.

I do not think the general public would tolerate a global corporation not paying for and diligently fixing any kind of problems they have caused.

Post your comments

Post Anonymously

Login

username
password
forgot password?

Register

username
password
confirm
email