Corporate Responsibility And Governance

Running head: CORPORATE RESPONSIBILITY AND GOVERNANCE
CORPORATE RESPONSIBILITY AND GOVERNANCE
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1CORPORATE RESPONSIBILITY AND GOVERNANCE
Introduction
Corporate Responsibility and Governance has been recognized as a highly imperative
area of concern for modern organizations. It is seen as a multifaceted and multidimensional
organizational phenomenon that has been considered as the extent for which and the ways in
which organizations has been consciously accountable for its actions and non-actions along with
the impact on its stakeholders. However, according to Breitbarth et al. (2015), the practice of
Corporate Governance does not primarily imply to any form of obligation to the society in
relation to social and environmental factors but further to workforce of a business or corporation.
Mason and Simmons (2014) have stated that a company has a responsibility towards its
functioning individuals in sustaining their aspiration and interest. Thus effective practice of
social responsibility by the management to the employees essentially serves as an example to the
organization. The following essay aims to focus on the issues which ShenCom Corporation
(SCC), a Chinese multinational company has been experiencing issues related to ethical actions
in employment and dismissal of workers and compensation and employee misconduct. In
addition to this, the paper will give importance to the perspectives revealed by different
stakeholders involved in the organization by focusing on relevant ethical theory and framework.
Discussion
Business organizations in recent times have been viewed as social institutions apart from
serving as economic entities. Firstly, business organizations primarily have their existence and
function within a social construction and require achieving certain social acceptance for their
survival (Breitbarth et al., 2015). Furthermore, organizations should act socially liable as they
typically implement an extensive influence on the society’s existence. Kim, Li and Li (2014)
have stated that corporations no longer function significantly for earning profits but further
attempt to accomplish various societal needs and demands. SCC being one of the leading
Chinese MNCs has been led by dynamic and charismatic leader who has developed an integrated
HRM system to reveal its core standards, principally based on its explanation of similar Western
approaches. However, the case has debunked the way different stakeholders engaged to SCC
have responded towards the issues related to unethical dismissal of tenured employees and
compensation and employee misconduct (Mason & Simmons, 2014). The shareholders of SCC
primarily undertakes an intricate and cognitively demanding role in deciding to punish the

2CORPORATE RESPONSIBILITY AND GOVERNANCE
company for its reduced employee compensation and amenities which resulted to the death of six
employees in protest to the adverse health effects of SCC’s mattress culture (Schwartz, 2017).
According to Campopiano and De Massis (2015), in order to determine an appropriate
punishment, few Human Resource managers of SCC have strategically evaluated not only the
attributes of the unlawful acts related to staff accommodation standards but further focused on
the temperament of the actors. However, Glavas & Kelley (2014) have argued that stakeholders
not only have liability towards organizations’ past philanthropy but for its overall corporate
social performance along with its past records of socially liable and irresponsible activities while
evaluating its character and further settle on the way to respond towards these acts. At this
juncture, Öberseder et al. (2014) have stated that individual employees have the capability to
shed light on a particular portion of the unbounded setting by creating a restricted field of vision.
Thus stimuli that have been positioned outside the sphere of awareness have been unlikely to be
noticed. Thus, when SCC forced over 5000 of its tenure employees to leave their jobs and rejoin
on temporary employee contracts, a significant portion of newly recruited employees focused on
others matters and completely disregarded the act. Thus, in terms of such acts of misconduct this
involves determining the act comparative to the firm’s account of good and appalling acts.
Öberseder et al. (2014) at this juncture have shed light on the importance of maintaining a
high set of ethics in business resulting to the generosity of not only the leaders and subordinates
but also to the organization as a whole. SCC in contradiction to several other MNCs in China
essentially believed in ethics but recently has been encountering severe loss of trust and
engagement after the forceful dismissal of more than 5000 long-term employees after the
proliferation of the Labour Contract Law in 2005. Thus, drawing relevance to such an act of
misconduct, the CEO of SCC must pursue stringent work ethics in such a manner that ethical
principles successfully run in the fundamentals of the company. Studies of Campopiano and De
Massis (2015) have claimed that though Western virtue ethics has been incapable of generating a
widely established form of codified rules or ethics in order to resolve right acts. However,
Daoism conversely has offered abstract theoretical conceptions primarily based on
comprehensive value system which tends to permit leaders to promote virtue and guide
behaviour. In accordance to the Daoist model of leadership, managerial acts have to be reliable
on the rules of virtue principles in the countenance of revolutionize (Bai & Morris, 2014).