Impact of Corporate Culture Corporate Scandals
Occasionally, when there are negative organizational culture, the impact are felt to only on the business but also the surrounding community and environment. This significantly undermine the efforts and gains made through corporate social responsibility. Good Corporate Social responsibility increase the likelihood of a business succeeding in the society hence helping it achieve it economic goals. Corporate Social responsibility has the effect of raising the organization brand or downgrading it. Apart from the Corporate Social responsibility policies, it is important to ensure the corporate culture matches the effort made by the Corporate Social responsibility. The sports apparel manufacturer was a leading figure in the fight against doping, racial discrimination, sexual harassment and gender empowerment within the sports industry as well as in society (Gugler and Shi, 2009 p.
20) These among other excellent corporate social responsibilities were adequate to ensure good reputation and brand image between its client base as well as attracting new members of the society. However, if focus on profit lead to demeaning and unethical labour practices with its subcontracted factories in Indonesia and other low labour countries (Nike News, 2018). With the key priority of the business being profit, Nike encouraged it subcontractors to relocate in low cost labour nation leading to the creation of exploitative sweatshop that underpaid and did not cater for the employee welfare (Csrwire. com, 2018). The company inflated profit reporting were directly linked to the autocratic leadership model which inappropriate undermined inputs of other stakeholders while giving the top management unparalleled influence in the operation and financial process of the company (Khondaker and Marc, 2016).
Before the outrageous incident, the company boasted of it elaborate governance structure and ethical culture. Toshiba was acknowledged in the industry, local and globally for its special responsibility initiatives such as client focuses products and community development initiatives, job creation, philanthropic work and promotion of social causes by sponsoring event that sought to enhance social education and awareness on issues affecting the society (Kolk and van Tulder, 2010). The accounting scandal negatively affected the company and almost brought the company to its kneel. The fraudulent transaction in the financial evaluations, the lack of transparency and compromised quality of leadership for the seven-year period highlighted the cancerous corporate culture and impact of failure of corporate culture within a business organization (Groysberg and Slind, 2012).
A well-formulated CSR was the reason for the high number of sales Volkswagen was making, (Dans, 2015). Honesty and transparency are the virtues that have to be followed by employees. Some of the business decisions have critical impacts on the company in that employees just have to embrace honesty and transparency. Some decisions may have good impacts in terms of business profit but at the same time have negative implications on the future status of the company (Kolk and van Tulder, 2010). It is the employees who make these decisions thus if they do not ascribe to a certain business culture, the company will be in a mess. The company developed a good corporate social responsibility framework in the early 1900s, which raised its reputation to be the leading proponent of capitalism welfare.
The company had the reputation of paying its employees good wages compared to other companies of that time. The company gave back to the society through it community activities such as paying its employee's good wages (Kolk and van Tulder, 2010). Through its community programs, Kodak was able to reach many needy people and helped them through its seeds of the change initiative. Its mission for doing good for all was seen in both its internal and external environment. This was during the Second World War period. It was used as a defense contractor and was regarded as the best innovator in the post-war phase. The company employed 21,000 people at its peak thus fulfilling its corporate social responsibility. Polaroid was unaware of the electronic imaging innovations that were being implemented by its rival companies.
This implies the culture of innovation was not instilled in the employees and stakeholders, (Kopp, 2015). It is evident that poor organizational culture impend economic and social growth and development of an organization despite the efforts to display a business as more friendly and social to the community through social responsibility initiatives. Moreover, good corporate values enable companies should be able to read the market and adapt to its needs accordingly. They should also use failed companies as examples to avoid falling into the same trap in future. References Csrwire. com. forbes. com/sites/enriquedans/2015/09/27/volkswagen-and-the-failure-of-corporate-social-responsibility/#618021ec4405 [Accessed 13 Mar. Dol. gov. Rebuilding the Social Contract at Work: Eastman Kodak. Khondaker, R. and Marc, B. Accounting Irregularities at Toshiba: An Inquiry into the Nature and Causes of the Problem and Its Impact on Corporate Governance in Japan.
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