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Even though a companys main existence is to earn a profit, a company that cares about the environment is less likely to be plagued with fraud and unethical behavior from its employees. This is because employees become more committed to a company who they believe is not only paying their salary but also trying to operate in the most environmental friendly manner as well as giving back to the society. In this research we are going to investigate the issues that concern the situation that appears to evolve amongst the world industries that claim to be environmentally friendly. There actually are many companies that are environmentally friendly nowadays, but if to compare with the overall quantity of the companies existing in the world this is only a minor portion. It is definitely better for the company to be environmentally friendly. This is because we have such a terrible ecological situation in the world now, that the companies that in any way effect the environment negatively, just make the overall global environmental situation terrible.
And if the world will continue to go in the direction that it is now going, the situation will probably become critical and eventually this may end up in a collapse. Therefore for any particular employee it is always better to join the company that is environmentally friendly. In this case the person is sure that he is not just taking from the environment the all good of it, but also protecting it by at least not terribly harming. The ethical behavior towards the company that the prospective employee works in is usually very kind, because the employees are in a deep trust for the leaders of the company, knowing that they are able to sacrifice the profit of the company for the welfare of the society. This is because we all know that to be environmentally friendly is somewhat expensive for many corporations. Over the past 120 years, state and federal governments have enacted volumes of laws and regulations to face the problem of corporate abuse of the public interest.
Examples include legislation to protect the environment, eliminate child labor, create equal opportunity, increase workplace safety, limit anti-competitive behavior and protect the public interest in numerous other ways which corporations have been unwilling or unable to do voluntarily. Being unable to withstand all this legislation, the damage that continues to be inflicted is actually now more extensive than ever. Part of the reason for this ongoing damage is that such legislation only addresses where and how much companies should be allowed to damage the public interest, rather than eliminating the reason why they damage it. I would say that this is totally unacceptable, taking into account the current situation that we have with the abuse of the environment by the corporations. The where and how much approach is a little like trying to cure a disease by treating the symptoms. The patient feels better for a while, but soon the disease returns, sometimes in a more severe form.
In order to cure the disease of corporate abuse of the public interest, its cause must be understood and either changed or eliminated. The cause of most corporate abuse is actually not a secret issue. The thing that keeps greenhouse gases pouring out of smokestacks and tailpipes is the same thing that is considered to result in vendors of designer sneakers that pay to the third world children terribly low wages. It is also the same thing that keeps tobacco companies marketing their products to children, fast food companies paying less than a living wage and meat packing companies maintaining dangerous working conditions. That thing is considered to be the dedication of the corporation to the chase for the higher profit. As an example of such a corporation we can probably view McDonalds Corporation that has its branches thought the world.
They claim to be environmentally friendly any time they have a slight possibility to do so. But let us look more deeply at those claims. The corporation usually pays low wages for its lower level employees, which is actually not so kind from their point of view. Also the food that is being served at McDonalds is always questioned of its quality and contents. Having enough money to settle the complaints and claims corporations forget about their moral obligations in front of the world as a whole and in front of the nature.
The nature usually never forgets the abuses that have been made upon it. Another prospect company that claims to be environmentally friendly is IBM. In this case I would say that this is truly so. This is because this company cares for its employees and the surrounding environment. But they have many difficulties in this aspect as well as the many other companies that support this notion.
Under the corporate law, corporations are established for one purpose, which obviously is to make money for shareholders. This purpose is included in the law as a duty imposed upon directors and is sometimes called the doctrine of shareholder primacy. Failure to satisfy this duty can result in directors being sued by shareholders. As a result of this duty, the purpose of the corporation becomes the marching orders for everyone who works for the corporation. Very little, if anything, happens in the corporation that does not have this goal in mind. Professor Lawrence Mitchell at George Washington University Law School has said that this dedication of the corporation to the pursuit of profit has the effect of requiring people who work for the corporation to give up a part of their personhood when they become a director, manager or employee.
They must play roles where the only thing that matters is making more money. Corporations act through their employees. Let us try to consider the likely result of dozens if not hundreds of employees acting together under pressure to produce a profit and with no concern for the public interest (other than not doing what their legal departments tell them is specifically prohibited). We also must keep in mind the factor of millions or billions of dollars of capital that is backing up this collective action.
The natural result is shortcuts being taken that increase the corporations bottom line, but damage the public interest on a grand scale. As long as directors, managers and employees are guided only by the doctrine of shareholder primacy, their companies will continue to do damage to the environment, human rights, the public health and safety, the dignity of employees and the welfare of their communities. As long as companies continue to grow in size, such damage will become more extensive right along with it. Corporations play a great role in todays society's life. They enjoy every privilege that an individual has but sometimes they forget the duties that every individual carries and admits. The main purpose of the corporation is obviously to make profit and sometimes this appears to be the sole purpose of the corporations, which is wrong.
Corporations should have more than one purpose. They also owe something to their workers and the communities in which they operate and should sometimes sacrifice some profit for the sake of making things better for their workers and communities. It is surprising, but the estimated 95 percent of the companies chose the second proposition. In other words, they rejected the doctrine of shareholder primacy (which is the current law) in favor of a system where profits should be sacrificed in order to protect the interests of workers and communities (which, reasonably understood, includes both the environment and people outside the corporation such as customers). Corporations only exist because state legislatures, the elected representatives of the people, have passed laws allowing corporations to be formed and be recognized.
These laws can be changed. The special Code of Corporate Citizenship was designed to protect the interests of the society and the environment in their not equal struggle with the power of the worldwide corporations. I would say that this is some kind of the proposition for the leaders of nowadays society for the improvement of the situation with the environmental abuse. By addressing why corporations damage the public interest, the Code works quite differently from where and how much legislation. Rather than prohibiting specific behavior, the Code imposes open-ended duties on corporate directors that require them to ensure their companies do no damage to the environment and four other elements of the public interest. In addition, because it is imposed as part of the corporate law, it governs the corporation (and its subsidiaries) worldwide, not just on a case-by-case basis in local jurisdictions where the company has its various operations.
Until now, the public and employees have borne the cost of anti-social corporate behavior. Externalized costs do not appear on the corporations profit and loss statement, so they do not have to be addressed by corporate directors or managers. For example, as long as a company is able to comply with where or how much environmental laws, it can pollute as much as those laws allow. The cost of dealing with that pollution becomes a social cost that the public has to deal with, but not the company. The Code will bring these costs inside the corporation. There obviously will be complaints that this will decrease corporate profits, but that is not necessarily the case.
In order to increase their competitiveness, corporations will look for ways to reduce these costs. This will create a necessity for the increase of investment in research and development designed to find ways that less expensively protect the environment, improve product testing and enhance management practices. Although not contemplated by the Code, government incentives and subsidies could be provided to offset the cost of such investment. Rather than be considered as a restriction on corporate management, many managers will find the Code liberating.
At last, they will be empowered to operate their business in a way that is more in line with their own behavior away from work- protecting the public interest, not destroying it. The Code does not destroy the profit motive, but it does eliminate the doctrine of shareholder primacy. It proposes for the corporations to behave the way the large majority of the public want them to- sometimes sacrificing the interests of shareholders in order to protect workers and the community. No one should feel bad for shareholders in supporting this idea.
Ultimately, all shareholders are people. The financial institutions (e. g. , mutual funds, 401 (k) plans, insurance companies, etc. ) that hold most of the shares in U. S. companies do so on behalf of real people. Imagine a world 15 years from now where corporate pollution has been eliminated, every employee is paid a living wage and human rights are fully respected.
By finally addressing the reason why corporations abuse the public interest, the Code can be a first step towards making these things happen. From the conceptual standpoint we must admit that, unless we, as individuals, had the personal integrity to address the larger problems of society through anticipatory design rather than through these old-fashioned institutions, then we would either destroy ourselves as a species or condemn ourselves to a so called Dark Ages world of unconscious crowd following mass psychology... for another a eon. The corporation is a creature designed by laws.
It is interesting that the corporate design contained in each of the hundreds of corporate laws throughout the world is identical. Each jurisdiction makes a group of people responsible for managing the corporation- usually a board of directors. Officers are then directly responsible to directors. Other employees are then responsible to the officers.
Each law also dictates the responsibilities of these people. These can be summed up in three imperatives: make money, dont steal, and do not break the law. The weakness of this design is not obvious. Most would think that the third imperative, dont break the law, would keep corporations from violating the public interest.
Unfortunately, this is not so. Since the time that corporate laws were first enacted, corporations have collectively come to hold the first imperative, making money, in much higher regard than the third. Many corporations view obeying the law today as merely a cost that makes making money more difficult. As a cost, they do everything they can try to minimize it. This includes lobbying, legal hairsplitting and jurisdiction shopping.
Corporations to whether or not such actions are in the public interest give no consideration. The consequence of the corporate design is that too many corporations care only about making money and are willing to damage the public interest in order to achieve it. Take a moment and try to consider the damage corporations have done to our environment over the past 150 years. In addition to the environment, consider the human rights and labor abuses that are now occurring in the name of globalization and are the subject of protest of many citizens nowadays. Consider the injuries and deaths caused by defective products before their defects became publicly acknowledged, but well after the manufacturers knew the defects existed. Think of the hundreds of thousands of deaths caused every year by the tobacco industry.
Consider all the deaths that have resulted from dangerous working conditions. We must ask ourselves how we can continue to be following the actions taken by entities, which make correct decisions of their own self-interest, and will be able to maintain high standard of living for everyone on this planet? Personally I do not believe our fate is sealed. It is probably better to support the notion that by redesigning the corporate environment, we can change the way people in corporations behave so that they no longer damage the public interest in the pursuit of profit. Corporations already have all the rights of citizens; these rights can be balanced by obligations to the public interest that the majority of people recognize they should bear. However, if this is to be achieved, each of us will have to become better citizens ourselves.
In order to modify a design that exists is our laws, we must amend our laws. In our democracy this is accomplished either by electing representatives pledged to do this for us or, if this fails, by referendum. In order to make corporations more responsible to the public interest, the law that must be amended is the one that says the pursuit of profit takes precedence over protection of the public interest. The corporation was developed to serve mankind not so mankind could serve corporations. Furthermore, balancing the rights of shareholders with obligations to the general public is justified. Corporations would not even exist if the citizenry had not enacted laws that allow them to be organized and operate.
In this sense, they owe their existence as much to the public as they do to their shareholders. They should have obligations to both. This duty to balance the public interest with the pursuit of profit will significantly change corporate behavior. Directors, required by law to protect the public interest, will require their management to do the same. Officers and employees will change their behavior accordingly. New projects will not receive funding from lenders or shareholders unless they will meet the new standard.
The combination of these forces will not destroy the profit motive, only modify it. They will change the corporate purpose from merely making money to making money without damaging the public interest. These two goals are not mutually exclusive. According to the research by Business Week on organizations, the opinion of Americans upon the issue of which of the following two statements do they agree more strongly: Corporations should have only one purpose- to make the most profit for their shareholders- and pursuit of that goal will be best for America in the long run. Corporations should have more than one purpose. They also owe something to their workers and the communities in which they operate, and they should sometimes sacrifice some profit for the sake of making things better for their workers and communities.
The first statement actually reflects the corporate law. This is how corporations are designed. Each time corporate behavior that damages the public interest comes to your attention, realize that it occurs because of a law that says the duty of the people in that corporation is to pursue profit without regard to the public interest. Each of us is responsible for that law and only we can change it. To summarize the research it is necessary to say that every particular person actually needs to have a somewhat better change inside him. This change should be towards the vision of a brighter future for us and for our descendants as well.
Now we can only imagine or investigate informational concept of the vision of the environmental conditions that have been around some hundred years ago. In no way we can experience it now. If the human race wants to continue operating successfully we need to think more in global terms. And these terms require more friendly usage of the surrounding environment and natural resources as well.
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Research essay sample on Sacrificing Company Profit For The Welfare Of Society
