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'''Corporate behaviour''' is the actions of a company or group who are acting as a single body. It defines the company's ethical strategies and describes the image of the company.<ref>{{cite book|title=Quality of life|year=1997|publisher=Philip Seed, Greg Lloyd|isbn=9781853024139|url=https://books.google.com/books?id=xPce-i2OO1AC&pg=PA171|access-date=8 Oct 2014}}</ref> Studies on corporate behaviour show the link between [[corporate communication]] and the formation of its [[corporate identity|identity]].<ref>{{cite journal |title=Corporate identity and corporate communications: creating a competitive advantage | year=2000 |url=https://www.emerald.com/insight/content/doi/10.1108/00197850010379811/full/html?fullSc=1&mbSc=1&fullSc=1&fullSc=1&fullSc=1&fullSc=1 |publisher=Emerald Insight | doi=10.1108/00197850010379811 |access-date=12 April 2023 | last1=Balmer | first1=John M.T. | last2=Gray | first2=Edmund R. | journal=Industrial and Commercial Training | volume=32 | issue=7 | pages=256–262 }}</ref> |
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{{Long NPOV}} |
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'''Corporate Behaviour''' is the behaviour of a [[corporation]] or corporations. |
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The corporate behaviour exhibited by profit driven ([[capitalism|capitalist]]) and [[Not-for-profit corporation|not-for-profit]] (non-capitalist) corporations can be seen to differ significantly due to the fundamental drive for [[profit]] in capitalist corporations, compared to the non-monetary goals often held by non-capitalist corporations. |
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== Role == |
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== The Characteristics of Capitalist Corporate Behaviour == |
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Not only does corporate behaviour play various roles within different areas of a business, it also enables businesses to overcome any problems they may face. For example, due to an increase in [[globalisation]], language barriers are likely to increase for organisations creating major problems as day-to-day business may be disrupted. Corporate behaviour enables managers to overcome this problem by improving flexibility. Also, many businesses are struggling to remain competitive in terms of quality and productivity due to intense competition within markets. However, corporate behaviour is able to fix this issue by allowing managers to empower their employees as they are the ones who are able to make a change. |
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Positive corporate behaviour can result in employees feeling happy and content at work providing their best outcome. This is beneficial for management as it could lead to effective teams being created thus resulting in innovative ideas which is beneficial for the business. It also helps to decrease [[labour turnover]] enabling the organisation to retain its most valuable employees.<ref>{{cite web|title=Corporate behaviour and political risk|url=https://openaccess.leidenuniv.nl/bitstream/handle/1887/15900/risksbehaviourPUTTEN.pdf?sequence=1|access-date=9 Oct 2014}}</ref> |
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== Importance == |
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There are rules that companies driven by the profit motive seem to follow. These rules are not cast-iron and some companies break them but they are a useful guide to behaviour. |
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Corporate behaviour is important in strengthening relationships within organisations between individuals, teams, and in the organisation as a whole. It is important as it reflects the values of the business and the extent to which it is ethical.<ref>{{cite book|title=Organizational Behaviour|date=January 2010|publisher=Hellriegel, Don & Slocum, John|isbn=978-1111787998|url=https://books.google.com/books?id=aSQFAAAAQBAJ&dq=importance+of+organizational+behavior&pg=PA4|access-date=7 Oct 2014}}</ref> Corporate behavior refers to the company values that defines it and makes it different and better than other companies. Portraying positive corporate behavior within a company facilitates strong [[brand]] image creation; consequently branding then strengthens the importance associated with corporate behavior.<ref>{{cite news|url=https://www.theguardian.com/media-network/partner-zone-brand-union/does-culture-define-brand|title=Does culture define the brand?|work=the guardian|access-date=9 Oct 2014}}</ref> |
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== Influential factors == |
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The proposed rules of corporate behaviour are as follows[http://dieoff.org/page12.htm]: |
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[[PESTLE]] factors influence corporate behaviour in many ways. They cause organisations to change the way they operate; however, the size and nature of change is dependent upon which factor is causing the change (political, economic, social, technological, legal, or environmental). External forces are a significant factor of influence over corporate behaviour, hence the term [[corporate personhood|corporate citizenship]].<ref name="CSR">{{cite web |title=Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility |url=http://www.guillaumenicaise.com/wp-content/uploads/2013/10/Strategy-and-Society-the-link-between-competitive-advantage-and-CR.pdf |publisher=Harvard Business Review |access-date=12 April 2023}}</ref> |
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=== Political === |
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* '''[[Profit]]:''' Profitability is the ultimate measure of corporate decisions. Companies prefer higher profits to lower profits, at least in the long run. Profitability is not necessarily the same as community well-being, though a profitable company is more likely to, for example, employ more people than an unprofitable company. Conflicts can exist, however, between what's good for a company and what's good for the environment, for example, or its employees or even the good of the state. A company is a complex organism and there has been much debate about what drives it. There is an argument that the divorce of ownership from decision-taking means that profitability isn't the main drive - senior managers may have other imperatives like keeping their jobs and avoiding being taken-over (which might run counter to the interests of share-holders). Companies often like to grow, if only because they fear a bigger competitor having cost advantages. This is not always true, however: there have been cases where companies have been broken up into constituent parts. |
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Political factors such as [[property rights (economics)|property rights]], the rule of [[law]] and the status of [[central government|governments]] influence corporate and economic landscapes.<ref name="CSR" /> Examples of political factors could be changes in government legislation. This could affect an organisation's corporate behaviour as they would have to change the way they operate in order to implement these changes; some employees may not like the new changes made.<ref name="test">{{cite web|title=THE MACRO ENVIRONMENT & PEST ANALYSIS.|url=http://www.learnmarketing.net/pestanalysis.htm|access-date=6 Oct 2014}}</ref><ref name="test1">{{cite web|title=PESTLE Analysis.|url=http://www.cipd.co.uk/hr-resources/factsheets/pestle-analysis.aspx|access-date=7 Oct 2014}}</ref><ref name="test 2">{{cite book|title=Organizational Behaviour and Management|year=2005|publisher=Martin, John|isbn=1861529481|url=https://books.google.com/books?id=BUDMDCAuRIoC&dq=PESTLE+company+behaviour&pg=PA30|access-date=9 Oct 2014}}</ref> |
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* '''[[Amorality]]:''' Not being human, corporations as such do not have [[Morality|morals]] or [[Altruism|altruistic goals]]. Neither, though, does any other organisation. Companies are, though, run by people who are subject to law and rules of morality. * '''[[Hierarchy]]:''' Companies are usually hirarchical, though the structure of the hirarchy varies. Some are relatively flat with a wide layer of middle managers answerable to a few indiviudals while others are like a pyramid. A very few companies have a great degree of democracy to them. Ricardo Semmler owns companies in Brazil but allows all his staff to pick managers and decide strategy. He puts himself up for election as a chief executive. |
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=== Economic === |
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== The Characteristics of Non-Capitalist Corporate Behaviour == |
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Recession is an example of an economic factor. If the economy were to be in a recession, businesses may find they have to reduce jobs. This would affect corporate behaviour as business teams would be short of skills and ideas in order to operate effectively.<ref name="test" /><ref name="test1" /><ref name="test 2" /> According to the 2013 National Business Ethics Survey of the US workforce, economy and misconduct are not interdependent, which was the traditional view. The report suggested that even though the economy grew in 2011 and 2013, misconduct in businesses was at its lowest.<ref>{{Cite web|url=https://www.ibe.org.uk/userassets/surveys/nbes2013.pdf|title=National Business Ethics Survey|date=2013|website=IBE.CO.UK}}</ref> A [[mixed economy]] signifies intersections of interests between the private sector of corporations, and the public sector of government.<ref name="CSR" /> |
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=== Social === |
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As non-capitalist corporations such as [[NGO]]'s or [[charitable trust|charities]] are not driven by the fundamentals of profit and economic growth, these do not show many of the characteristics of capitalist corporations. The behaviour of non-capitalist corporations is however often influenced by these characteristics of capitalist corporations, in similar ways to the influence of [[Corporate behaviour#The Influence of Corporate Behaviour on Individuals & Society|corporate behaviour on individuals]]. Due to this influence non-capitalist corporations can sometimes be seen to exhibit the characteristics of hierarchy, competition and ephemerality. |
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Changes in trends and the market is a social factor which affects corporate behaviour. Organisations may have to change their products or services in order to keep up to date with new trends. In order to do this, employees may be required to learn new skills within a short amount of time to make these changes; relationships between employees and management could be at risk due to these changes.<ref name="test" /><ref name="test1" /><ref name="test 2" /> Moral imperatives and expectations are also taken into account. Where social issues are shared by many companies across multiple industries, it may often be addressed most effectively through cooperative models and initiatives.<ref name="CSR" /> |
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=== Technological === |
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== The Influence of Corporate Behaviour on Individuals & Society == |
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Implementing technology within organisations could mean more virtual meetings and fewer face to face meetings. As a result, relationships between management and employees could weaken as a result of less face to face conversations.<ref name="test" /><ref name="test1" /><ref name="test 2" /> |
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=== Legal === |
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Due to the dominance of capitalist corporations in [[Western]] societies the behaviour of corporations can be seen to have significant impacts on individuals and society. A person or group of people can have links to a corporation or corporations that range from weak to strong, if a person or group of people exhibit corporate behaviour that does not mean the person or group of people is employed by a corporation or corporations. A person or group of people may show corporate behaviour for different lengths of time, for some people they exhibit this behaviour at their place of work; for others it exhibited at work, home and outside the home. Many people display corporate behaviour but do not agree with actions and outcomes that result from it. |
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Legislative rules such as tax may increase which would increase an organisations costs. Changes such as changing the way the organisation operates may have to be made in order to cover these extra costs.<ref name="test1" /><ref name="test 2" /> |
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=== Environmental === |
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The fact that individuals may not agree with the outcomes of corporate behaviour is central to the concept in itself, the characteristics of capitalist corporations do not reflect the characteristics of any individual or group of individuals but are the characteristics required for the survival of capitalist corporations ''due to the nature of the system within which corporations operate''. |
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[[Corporate environmental responsibility|Corporate Environmental Responsibility]] aims to create goodwill for corporations in various ways, with regards to society.<ref name="CSR" /> Environmental factors could be any factors which prevent damage to the environment. For example, [[remote work]] may be required to reduce the number of employees physically travelling to offices thus reducing [[greenhouse gas emissions]]. However, this may lead to isolation as communication is reduced, weakening corporate behaviour within firms.<ref name="test1" /><ref name="test 2" /> |
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==Ethics== |
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Businesses have many [[stakeholder (corporate)|stakeholder]]s who influence corporate behaviour. However, businesses who adopt the [[stakeholder theory]] are likely to appeal more to their stakeholders as they are showing their care and commitment towards them. This helps to strengthen the corporate behaviour within a firm and reduces the need for stakeholders to demand change.<ref>{{cite book|title=Strategic Management: A Stakeholder Approach|date=11 March 2010|publisher=Freeman, R.Edward|isbn=9780521151740|url=https://books.google.com/books?id=NpmA_qEiOpkC&q=stakeholder+approach|access-date=6 Oct 2014}}</ref><ref>{{cite book|title=Strategy for Sustainable Competitive Advantage|date=4 May 2012|publisher=Chaston, Ian|isbn=9781136325694|url=https://books.google.com/books?id=H6DcuJNr79YC&dq=stakeholder+influence+on+organisational+behaviour&pg=PA120|access-date=7 Oct 2014}}</ref> With the various factors affecting society and economy in modern times, stakeholders are increasingly showing an interest in [[Corporate Social Responsibility]] (CSR). ''Strategic CSR'' is also considered a [[marketing strategy]] and therefor a potential source of [[competitive advantage]].<ref name="CSR" /> |
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==See also== |
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Under the law, corporations are treated in many ways as persons. However, in other ways, they are not. One example is as follows. The thought of being put in [[prison]] acts as a powerful deterrent for most people: it prevents people from committing many [[crimes]]. But this powerful deterrent to harming people or society has no effect on a corporation, for a corporation cannot be put in prison. |
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* [[Normative ethics]] |
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* [[PESTLE]] |
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* [[Stakeholder concept]] |
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==Notes== |
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{{reflist}} |
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*[[Corporate social responsibility]] |
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{{Social accountability}} |
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== References == |
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{{Anthropogenic effects on the environment}} |
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Mander J (1991). ''In the Absence of the Sacred: The Failure of Technology and the Survival of the Indian Nations''. [[Sierra Club]] Books, San Fransisco. |
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[[Category: |
[[Category:Corporate governance]] |
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[[Category: |
[[Category:Corporate conduct]] |
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[[Category: |
[[Category:Corporate personhood]] |
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[[Category:Management cybernetics]] |
Corporate behaviour is the actions of a company or group who are acting as a single body. It defines the company's ethical strategies and describes the image of the company.[1] Studies on corporate behaviour show the link between corporate communication and the formation of its identity.[2]
Not only does corporate behaviour play various roles within different areas of a business, it also enables businesses to overcome any problems they may face. For example, due to an increase in globalisation, language barriers are likely to increase for organisations creating major problems as day-to-day business may be disrupted. Corporate behaviour enables managers to overcome this problem by improving flexibility. Also, many businesses are struggling to remain competitive in terms of quality and productivity due to intense competition within markets. However, corporate behaviour is able to fix this issue by allowing managers to empower their employees as they are the ones who are able to make a change. Positive corporate behaviour can result in employees feeling happy and content at work providing their best outcome. This is beneficial for management as it could lead to effective teams being created thus resulting in innovative ideas which is beneficial for the business. It also helps to decrease labour turnover enabling the organisation to retain its most valuable employees.[3]
Corporate behaviour is important in strengthening relationships within organisations between individuals, teams, and in the organisation as a whole. It is important as it reflects the values of the business and the extent to which it is ethical.[4] Corporate behavior refers to the company values that defines it and makes it different and better than other companies. Portraying positive corporate behavior within a company facilitates strong brand image creation; consequently branding then strengthens the importance associated with corporate behavior.[5]
PESTLE factors influence corporate behaviour in many ways. They cause organisations to change the way they operate; however, the size and nature of change is dependent upon which factor is causing the change (political, economic, social, technological, legal, or environmental). External forces are a significant factor of influence over corporate behaviour, hence the term corporate citizenship.[6]
Political factors such as property rights, the rule of law and the status of governments influence corporate and economic landscapes.[6] Examples of political factors could be changes in government legislation. This could affect an organisation's corporate behaviour as they would have to change the way they operate in order to implement these changes; some employees may not like the new changes made.[7][8][9]
Recession is an example of an economic factor. If the economy were to be in a recession, businesses may find they have to reduce jobs. This would affect corporate behaviour as business teams would be short of skills and ideas in order to operate effectively.[7][8][9] According to the 2013 National Business Ethics Survey of the US workforce, economy and misconduct are not interdependent, which was the traditional view. The report suggested that even though the economy grew in 2011 and 2013, misconduct in businesses was at its lowest.[10]Amixed economy signifies intersections of interests between the private sector of corporations, and the public sector of government.[6]
Changes in trends and the market is a social factor which affects corporate behaviour. Organisations may have to change their products or services in order to keep up to date with new trends. In order to do this, employees may be required to learn new skills within a short amount of time to make these changes; relationships between employees and management could be at risk due to these changes.[7][8][9] Moral imperatives and expectations are also taken into account. Where social issues are shared by many companies across multiple industries, it may often be addressed most effectively through cooperative models and initiatives.[6]
Implementing technology within organisations could mean more virtual meetings and fewer face to face meetings. As a result, relationships between management and employees could weaken as a result of less face to face conversations.[7][8][9]
Legislative rules such as tax may increase which would increase an organisations costs. Changes such as changing the way the organisation operates may have to be made in order to cover these extra costs.[8][9]
Corporate Environmental Responsibility aims to create goodwill for corporations in various ways, with regards to society.[6] Environmental factors could be any factors which prevent damage to the environment. For example, remote work may be required to reduce the number of employees physically travelling to offices thus reducing greenhouse gas emissions. However, this may lead to isolation as communication is reduced, weakening corporate behaviour within firms.[8][9]
Businesses have many stakeholders who influence corporate behaviour. However, businesses who adopt the stakeholder theory are likely to appeal more to their stakeholders as they are showing their care and commitment towards them. This helps to strengthen the corporate behaviour within a firm and reduces the need for stakeholders to demand change.[11][12] With the various factors affecting society and economy in modern times, stakeholders are increasingly showing an interest in Corporate Social Responsibility (CSR). Strategic CSR is also considered a marketing strategy and therefor a potential source of competitive advantage.[6]