Vol 5 Issue 8 Sept 2015
ISSN No : 2230-7850
ORIGINAL ARTICLE
International Multidisciplinary
Research Journal
Indian Streams
Research Journal
Executive Editor
Ashok Yakkaldevi
Editor-in-Chief
H.N.Jagtap
Welcome to ISRJ
RNI MAHMUL/2011/38595
ISSN No.2230-7850
Indian Streams Research Journal is a multidisciplinary research journal, published monthly in English,
Hindi & Marathi Language. All research papers submitted to the journal will be double - blind peer reviewed
referred by members of the editorial board.Readers will include investigator in universities, research institutes
government and industry with research interest in the general subjects.
International Advisory Board
Flávio de São Pedro Filho
Federal University of Rondonia, Brazil
Mohammad Hailat
Dept. of Mathematical Sciences,
University of South Carolina Aiken
Hasan Baktir
English Language and Literature
Department, Kayseri
Kamani Perera
Regional Center For Strategic Studies, Sri
Lanka
Abdullah Sabbagh
Engineering Studies, Sydney
Ghayoor Abbas Chotana
Dept of Chemistry, Lahore University of
Management Sciences[PK]
Janaki Sinnasamy
Librarian, University of Malaya
Ecaterina Patrascu
Spiru Haret University, Bucharest
Romona Mihaila
Spiru Haret University, Romania
Loredana Bosca
Spiru Haret University, Romania
Delia Serbescu
Spiru Haret University, Bucharest,
Romania
Fabricio Moraes de Almeida
Federal University of Rondonia, Brazil
Anurag Misra
DBS College, Kanpur
Anna Maria Constantinovici
AL. I. Cuza University, Romania
Ilie Pintea,
Spiru Haret University, Romania
Xiaohua Yang
PhD, USA
George - Calin SERITAN
Faculty of Philosophy and Socio-Political
Sciences Al. I. Cuza University, Iasi
......More
Titus PopPhD, Partium Christian
University, Oradea,Romania
Editorial Board
Iresh Swami
Pratap Vyamktrao Naikwade
ASP College Devrukh,Ratnagiri,MS India Ex - VC. Solapur University, Solapur
R. R. Patil
Head Geology Department Solapur
University,Solapur
Rama Bhosale
Prin. and Jt. Director Higher Education,
Panvel
Salve R. N.
Department of Sociology, Shivaji
University,Kolhapur
Govind P. Shinde
Bharati Vidyapeeth School of Distance
Education Center, Navi Mumbai
Chakane Sanjay Dnyaneshwar
Arts, Science & Commerce College,
Indapur, Pune
Awadhesh Kumar Shirotriya
Secretary,Play India Play,Meerut(U.P.)
N.S. Dhaygude
Ex. Prin. Dayanand College, Solapur
Narendra Kadu
Jt. Director Higher Education, Pune
K. M. Bhandarkar
Praful Patel College of Education, Gondia
Sonal Singh
Vikram University, Ujjain
Rajendra Shendge
Director, B.C.U.D. Solapur University,
Solapur
R. R. Yalikar
Director Managment Institute, Solapur
Umesh Rajderkar
Head Humanities & Social Science
YCMOU,Nashik
S. R. Pandya
Head Education Dept. Mumbai University,
Mumbai
Alka Darshan Shrivastava
G. P. Patankar
S. D. M. Degree College, Honavar, Karnataka Shaskiya Snatkottar Mahavidyalaya, Dhar
Maj. S. Bakhtiar Choudhary
Director,Hyderabad AP India.
Rahul Shriram Sudke
Devi Ahilya Vishwavidyalaya, Indore
S.Parvathi Devi
Ph.D.-University of Allahabad
S.KANNAN
Annamalai University,TN
Sonal Singh,
Vikram University, Ujjain
Satish Kumar Kalhotra
Maulana Azad National Urdu University
Address:-Ashok Yakkaldevi 258/34, Raviwar Peth, Solapur - 413 005 Maharashtra, India
Cell : 9595 359 435, Ph No: 02172372010 Email: ayisrj@yahoo.in Website: www.isrj.org
Indian Streams Research Journal
ISSN 2230-7850
Impact Factor : 3.1560(UIF)
Volume - 5 | Issue - 8 | Sept - 2015
CORPORATE MANAGEMENT: A SOCIO-LEGAL
STUDY
Binayak Patnaik
Director, Shri Vaishnav Institute of Law, Indore
ABSTRACT
This paper makes a study of Corporate Management in socio-legal perspective – gives an
introductory idea on corporate management – discusses various facets like Corporate Governance,
Corporate Social Responsibility – highlights on ethics and
law
on
Corporate
Management - finally concludes with the message that Corporate Management is not a code but
way of life.
Management is an art as well as science of getting things done through others tactfully and
technically. It requires skill, creativity and practice to do the work systematically and in a well
organized manner.
KEYWORDS :Corporate Management , A
Socio-legal Study
INTRODUCTION :
Management is goal oriented,
dynamic, continuous, pervasive, intangible
and it is the confluence of both effectiveness
and efficiency.
The basic functions of
management embrace planning, organizing,
staffing, directing, controlling, co-ordinating,
reporting and budgeting.
The general features and
functions of management are applicable to
every sector and nevertheless corporate
sector.
Corporate management helps a
business operate with instructions from top leaders directing the activities of staff members. It refers
to the actions taken by a company to lead the business in a positive direction. The tasks often
performed by corporate management includes strategic planning as well as managing company
resources- man, money and material- and applying them towards attaining the objective of the
company.
Corporate Governance is the system by which companies are directed and controlled. It is
related to governing and organization focusing on overall control keeping in view the approved goal. It
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1
CORPORATE MANAGEMENT: A SOCIO-LEGAL STUDY
is primarily concerned with striking a balance between economic and social goals and between
individual and communal interests.
Conflict of interest, particularly between individual and society has been in existence ever since
the dawn of human civilization and sustainability between the two has given rise to the concept of
social engineering in every sector, nevertheless in corporate sector. It is therefore necessary to resolve
the conflict between corporate interest and social interest. If corporate sector wish to give justice to the
people then the twin principles of transparency and accountability should be followed legally and
scrupulously. They must give justice in true sense.
The very important factor of every corporate sector is to ensure not only profitability but also
sustainability.
The most important function of Corporate Governance is to frame rules which should be based
on all sorts of disclosures which will lead to transparency and accountability.
But in true sense the Corporate Management is not a code but a way of life controlled and
guided in every step by the ethical norms.
Corporate Social Responsibility (CSR)
Corporate Social Responsibility is associated with variegated synonymous terms like corporate
conscience, corporate citizenship, sustainable responsible business, corporate social performance, etc.
The term Corporate Social Responsibility came into common use during late 1960s and early 1970s only
after many multinational corporations formed the term stake holder meaning those on whom the
activities of organizations have an impact. CSR is a form of self-regulation which is integrated and
synthesized into a business model. The CSR policy functions as a self-regulating mechanism by which a
business monitors and ensures its compliance and compatibility with the letter and spirit of law and
ethical standards. CSR is a process with an aim to take the responsibility for the actions of the company
and initiate and encourage a positive impact through its activities on different aspects namely
environment, consumers, employees, communities, stake holders and all other members of the public
who may also be considered as stake holders.
CSR stands as a symbol to help an organization’s mission as well as a guide to what the company
stands for.
ISO 26000 is the recognized international standard for CSR.
CSR is the continuing commitment by business to behave ethically, contribute to economic
development, improving the quality of life of workforce, local community and society, build a
meaningful relationship between the corporate sector and the rest of the society. The business
practices have to adopt those practices that ensure ethical, legal, commercial and public expectations.
Accountability and transparency, behavior in conformity with laws, business ethics, good work
places and labour relation practices, affirmative actions, customers loyalty and satisfaction, company
involvement with community, environmental benefits are some of the essential components of CSR.
Primarily, the CSR is the deliberate inclusion of public interest into corporate decision making
and conforms to triple bottom line- People, Planet and Profit.
The Corporate Ethics and Law
Ethics means a set of moral principles a system of philosophy of conduct to distinguish good
from bad.
Ethics is essential in an organization to define acceptable behavior, to promote excellent
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2
CORPORATE MANAGEMENT: A SOCIO-LEGAL STUDY
standards of practice, to provide a parameter for self evaluation, to establish a framework for
professional conduct and accountability.
Besides this the corporate ethics should also work to fulfil the redefined corporate laws in the following
lines:
1- Liberalizing India’s capital market.
2- Implement more robust bankruptcy laws.
3- Increase share holder activism which means examining and informing the rights of minority share
holders.
4- Cultivate a positive corporate culture for Board of Director.
5- Form minority share holder group.
6- Corporate Governance should be an integral part of Indian’s corporate culture.
7. Expanding the legal rights of the whistle blowers.
CONCLUSIONS
Management means the process of decision-making and the process by which decisions are
implemented or not implemented.
Corporate management concentrates on the implementation of the system, it is responsible for
ensuring that functions of the organization are effective and efficient. It ensures the implementation of
the policy and focuses on performance and results of the company.
Corporate management broadly refers to the laws rules and processes by which business is operated
regulated and controlled and as such India’s Corporate Governance is shaped by legislature, judiciary,
SEBI and Deptt. Of Company Affairs.
Good corporate management requires the evolution of a of social conscience and as such it can
be summarised that corporate management is not a code but a way of life which should aim to cultivate
the culture of social conscience perpetually and consistently. Thus ethics training inside corporations is
an important driver credited with changing the behaviour and culture of corporations. The aim of such
training is to help employees make ethical decisions when the answers to every problem are unclear.
The most direct benefit of such training is to reduce the likelihood of “Dirty Hands” & damaged
reputations from breaching the laws.
An action in corporate sector will be considered as good if it conforms to two rules i.e. the
proximate rules (conscience) and the remote rule (the law).
A good business is nothing but good ethics. According to Andrew Carnegi “Wealth concentrated
in the hands of one man alone is the result of the labor of an entire community and must go back to that
community in one way another”. Cultivating civic virtues is an undeniable task not only from the point
of view citizenship but also from the point of view corporate social responsibility.
The solutions of Corporate Management on all occasions are not in black or white but in many
shades of grey. We have all become predators. In troubled times we all try to prove our supremacy over
other.
In Corporate management the non alignment is a policy and non-alignment means to
differentiate between the right and the wrong and always to support the right. That ought be the basic
theory of Corporate Management.
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CORPORATE MANAGEMENT: A SOCIO-LEGAL STUDY
REFERENCES
1. Bajaj, R., Chairman, (1997), Draft code on corporate governance, Confederation of Indian Industry.
2. Beltratti A. (2003), “Socially responsible investment in general equilibrium”, Fond. E. Matteri WP,
Milano, Ottobre.
3. Evan, W., Freeman R.E. (1988), Ethical theory and business, Prentice Hall, Englewood Cliffs (NJ).
4. Fehr E., Fischbacher V. (2002), “Why social preferences matter. The impact of non-selfish motives on
competition, co-operation and incentives”, The Economic Journal, 112.
5. Friedman, M. (1993), “The social responsibility of business is to increase its profits”, in G.D.
Chrissides, J.H. Keler (a cura di), An introduction to business ethics, Chapman, London.
6. Good Paster, K. (1998), “ Business ethics and stakeholder analysis”, in AA.VV., Corporation person and
morality, Free Press, New York.
7. Posner, R. (1981), The economics of justice, Harvard University Press, Cambridge (Mass.).
8. Rostow, E.V. (1961), “To whom and for what ends is corporate management responsible?”, in E.S.
Mason (a cura di), The corporation in modern society, Harvard University Press, Cambridge (Mass.).
9. Salmon, W.J. (1993) “Crisis prevention : how to gear up your board”, Harvard Business Review,
January – February, P. 68-75.
10.Schlicht E. (2002), “Social evolution, corporate culture and exploitation”, IZA DP GS1, Nov.
11. Schlicht A. (2004), “Does Competition destroy ethical behavior?”.
12. Steinberg E. (2000), Just Business Ethics in Action.
13. Zingles S. (1998), “Corporate Governance”, New Palgrave Dictionary of Economics and Law
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