Corporate Responsibility and Governance Stakeholders

Question: Discuss about theCorporate Responsibility and Governance for Stakeholders. Answer: Introduction Corporate Social Responsibility is one of the most important duties of an organization. It is important for organizations to look after the interests of various stakeholders of an organization. Thus, it becomes very important that a company adopts fair measures and applies true and genuine measures in its daily practices. Malpractices and unethical practices go against the principles of corporate governance. The aim of the report is to highlight issues that are prevalent and is practiced by organizations. It is a cause of concern for various stakeholders of an organization (Terry-Armstrong, 2016). The incorporation of ethical practice and implementation of corporate governance principles is critical for any organization. The organization chosen for this report is 7-eleven, a famous retail organization. No1: Australian Financial Review August 31, 2015 Article: 7-Eleven head office involved in wage fraud cover-up 7-Eleven is one of the most reputed and famous retail organizations. It is a global name and enjoys goodwill and reputation in the market. However, the organization finds itself in the grips of controversies and issues that lament the efficiency and the approach and strategies that the company employs. The company was affected by the vicious incidents of scandals and controversies that occurred in the labour department of the company. The company had committed fraudulent activities in the labour department (Flammer, 2013). Labour force is one of the most important element in an organization and an indispensable element that an organization possesses. It is seen that the company was involved in exploitation of workers and unfair treatment was meted out to the labour force. It was alarming signs for the company. Thus, it can be seen that the company was duping employees and consequently was increasing the profitability index. News and reports highlighted the issues and controversies th at surrounded the company. 7-eleven had a dark aspect in terms of the labour market of the company (Cheng, Ioannou Serafeim, 2014). It was estimated that 1.3 million of labours were settled in Australia on the basis of visa. Thus, exploitation and indulging in fraudulent activities regarding wage payments would yield catastrophic consequences for the company. It could lead to adverse economic conditions and issues. The manipulation of financial statement due to false data on wage payment would help the company to evade tax payment and it would help the company to pile on the profit for the company, which was majorly unethical in its very sense (Aguinis, Glavas, 2012). By indulging in exploitation of workers and scandals in terms of wage payments, the company was able to evade taxes and rob the Australian Taxation Office. The exploitation of workers include on students on visa who work to meet their ends. Such workers are prone to abuse by the unethical practice of the company. According to The Fair Work Ombudsman, the raids that are conducted on the company have yielded deplorable practices and inferences that d epict the high intensity scandals and fraudulent activities occurring within the company, which has grown with every passing year (www.7-Eleven.com, 2016). The company has indulged in underpayment of wages and in cases it has duped the payments of workers of the company. This scrupulous practice has tarnished the image and the goodwill of the company and has put it under the radar of regulatory bodies. The issues regarding the payroll in the company has escalated at a rapid scale. The internal scrutiny of 225 stores by the head office of the company depicted that the two-thirds of the stores had issues regarding compliance of corporate governance. The company was accused of underpaying and in extreme cases, of non-payment issues. In addition to this, there were accusations and allegations based on falsification of reports and payroll sheets. As per the records of the meetings between 7-eleven head office and franchisees, it was seen that the company indulged in unethical practices, where the company depicted the payment of wages to 7 employees, which in reality were given to only 4 employees. This was a major example of exploitation of employees and an attempt to evade taxes and indulge in scrupulous activities. The company was accused of not paying the staffs in a fair and true manner, the company did not requisite penalties payments, and manipulated with the records and data of the company. The franchisees of the company had to suffer because of this issue. The company had been making a lot of profit based on such scrupulous practices prevalent in the company. The company does not have a proper business model and in such sce nario, the companys unethical practices can lead many employees of the company to become broke and face severe financial crisis. There was an establishment of specialist Overseas Workers Team by Fair Work, with a view to curb and combat the growing incident and episodes of fraudulent activities and wage payment issues that was prevalent in the organization (Lee et al. 2012). Such circumstances and incidents required timmediate action from the regulators and politicians so that corporate social responsibility could be better enacted in the organization. More light needs to be thrown on this issue and necessary actions have to be taken to abolish such practices. No2: The Australian Newspaper September 2, 2015 Article: The buck stops with us: 7-Eleven The chairman of the company 7-Eleven had accepted the incidents of underpayment of wages and manipulation of records that existed in the company but denied the extent of manipulation and exploitation of workers. The chairman of the company had vowed and promised to pay off the balance and the disputed amount to be paid to the employees, who were deprived of fair and true payment. It is viewed that the attempt and the effort of the company to pay off the balance of wages to the employees would come at a severe cost to the company. This cost would revolve around the fact that the company would have to suffer millions of dollars, in order to pay the compensations and the disputed amount to the employees (Briton, 2015). It would severely hamper the prospect of the company to increase its profitability index and could lead to a hindrance in the growth and expansion of the company. The necessary changes made by the company was done with the intention of satisfying the stakes of the stakeholders of the company and in the process, it intended to increase the morale and motivation of the employees in the process. This in turn, would increase the motivation and morale of the employees. The interview with the chairman had highlighted the fact that the incidents of underpayment of wages was small in scale and the company was still actively involved in fair and ethical practices in the organization. The company had intended on conducting review and internal audit on the processes of the company to scrutinize the processes and strategies adopted by the company. This was done with a view of incorporating fair and true practices within the company with a view to implement corporate social responsibility within the organization. The chairman was unaware of the causes and reasons for the fraudulent activities and malpractices that existed within the organization and in the light of these events, it becomes important for the company to abolish such incidents and the roots of such evils that existed within the organization. The company was obligated to make remedial changes and provide compensation to the employees who bore the brunt of the malpractices and fraudulent activities that the company had adopted. The necessary adoption of corporate social responsibility and governance principles were important for the company to adopt to incorporate ethical practices and encourage fair and true treatment of employees within the organization to avoid future controversies and scandals that had tarnished the image of the company (www.7-Eleven.com, 2016). The company has been answerable to a lot of stakeholders and necessary remedial measures had to be taken to satisfy the stakes and interests of the stakeholders of the company. Conclusion The research study depicted the importance of corporate social responsibility and governance principles in an organization. The research study highlights the importance of ethical practice and duties of the company to act in a true and fair way. The research study highlights the adverse impact of the fraudulent activities of the company and the impact of such activities on the stakeholders of the company. The company had indulged in underpayment of wages to the employees and consequently duped the interests and the rights of the employees. The falsification of the records of the company was another cause of the issue and controversy that gripped the company. The company has to make necessary changes and remedial changes to compensate the employees and to make sure that the company practices and implements ethical practises and treats the employees in a true and fair way. Reference List 7-Eleven: Wage abuse claims puts scrutiny on Fair Work response. (2015). Financial Review. Retrieved 8 September 2016, from https://www.afr.com/business/retail/fmcg/7eleven-wage-abuse-claims-puts-scrutiny-on-fair-work-response-20150830-gjavxh Aguinis, H., Glavas, A. (2012). What we know and dont know about corporate social responsibility a review and research agenda.Journal of management,38(4), 932-968. Brammer, S., Jackson, G., Matten, D. (2012). Corporate social responsibility and institutional theory: New perspectives on private governance.Socio-Economic Review,10(1), 3-28. Briton, B. (2015). 7-Eleven scandal: The tip of a low-wage iceberg.Guardian (Sydney), (1705), 1. Cheng, B., Ioannou, I., Serafeim, G. (2014). 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