Corporate Responsibility and Governance: Analysis of SCC Issues

This essay delves into the critical domain of Corporate Responsibility and Governance, examining the ethical challenges faced by ShenCom Corporation (SCC), a Chinese multinational company. The analysis focuses on issues of employee dismissal, compensation, and misconduct, considering the perspectives of various stakeholders and relevant ethical theories and frameworks, particularly Daoist virtue ethics. The essay highlights the importance of ethical leadership in mitigating these issues, emphasizing the application of virtue ethics to guide organizational behavior and improve corporate responsibility towards employees. It explores how the CEO of SCC can leverage ethical principles to align core values with employee conduct, enhance corporate governance, and foster increased employee engagement, drawing on existing research and theoretical models to support its conclusions. The study also includes a detailed review of how ethical leaders should make exemplary decisions regardless of organizational structures. The study concludes that ethical leadership is essential for long-term success and organizational sustainability.

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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

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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).

3CORPORATE RESPONSIBILITY AND GOVERNANCE
Meanwhile, Besser and Slote (2015) have claimed that though unprincipled leadership might be
accomplished by momentary economic achievement, organizations supporting any unlawful act
of employee dismissal or staff accommodation standards will in due course be penalized by
foundation and society in the extensive run. Thus, as the Daoist virtue principles support has
been developed for decades in China as a channel for humanizing leaders, it must be taken as a
relevant theory by the stakeholders to cultivate existing leadership beliefs and actions of the
current CEO of SCC (Bai & Morris, 2014).
Studies of Besser and Slote (2015) have claimed that theoretical concepts of virtue ethics
fundamentally have involved the foregoing decision-making concepts and further have
demonstrated a vibrant yin-yang series of managerial leadership. The theory moreover has been
sited at the five component positions for the five distinctive situations in an association.
Nonetheless it has been exposed that the representative qualities of ethical influential and the
way they fit in the diverse circumstances can successfully be demonstrated by investigating the
usual contexts and related Daoist principles to them. According to Xiao (2015) five fundamental
points have reproduced the majority distinctive contexts along with their individual leadership
qualities. Moreover, authors have stated that in the Daoist observation, discrepancy among
organizational situations and leaders’ qualities tend to be consequential to the inequality of the
internal forces and increase of unethical acts in an organization thus resulting to the severe
organizational or leadership failures. Similarly, the CEO of ShenCom Corporation although with
its focus on aggressive global contest through efficiency, innovation along with commitment
have been facing allegations of involving employees in long hours and exploiting employees
through the company’s ‘'mattress culture’ whereby several employees have been sleeping at their
workplace vicinities rather than returning home and have required amount of leisure time. Thus,
according to Bai and Morris (2014), leader’s affectionate and acceptance energy will have the
propensity to establish a significant charisma that helps in encouraging various kinds of talents
and give rise to innovation so that employees can perform with utmost agility and reduce
strenuous working durations.
Furthermore, in the view of Besser and Slote (2015), as long as leader reflects utmost
faithfulness towards the organization such as genuinely dependable to the position of leadership
and sincere with employees, organizations can successfully attain desired goals and objectives.

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The shared attempt of leader as well as followers has been the most imperative feature in
achievement. However, as influential tend to have considerable opportunity to generously
implement diverse strategies to run operations. In order to demonstrate the consequential model
of the qualities of ethical privileged the model of first and extensive framework for categorising
the significant modern theories related to ethical virtue and leadership. According to Xiao (2015)
similar to the importance of unlimited summits in the cycle of the model there can be identified
certain infinite mixes of virtues are characteristics for Ethical leadership. However the ethical
virtue theory comprising of five important categories have been identified as a constructive
theoretical model for acknowledging ethical actions in organisation be connected leadership
approaches along with the virtues used which might most efficiently guide the organisation to
establish corporate responsibilities towards its employees. Meanwhile studies of Bai and Morris
(2014) have revealed that in relation to Daoism the critical challenges towards leadership can be
observed in a constant internal as well as external flux. Furthermore the theoretical model of
ethical virtue focuses on the necessity and need for the virtues and ethical behavioral patterns of
leaders in order to fit significant modifications in the environment and circumstances of the
organisation and the bear something similar to contingency leadership theory (Besser & Slote,
2015).
Conclusion
Hence to conclude, ethical leaders with high moral standards In theoretical aspect should
be capable enough to apply exemplary decisions regardless of any organisational structures.
However even the most moral and ethical leader might encounter critical challenges with
conflicting demands similar to the case of SCC. The SCC CEO in order to compel with the
recent challenges of employee misconduct must follow unethical virtual leadership theory in
order to successfully align the company's core values and principles with employee conduct and
further improve corporate governance and responsibility level towards the employees and
increase employee engagement to the company.

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