What is the relationship between corporations and corporate social responsibilities? Should companies really take the time and energy to promote the responsibilities of societies? Will these endeavours provide a better business model for corporations or will they not make a difference at all? In this essay these questions will be answered by looking at the different views on corporate social responsibility and relate them to that of the views on a corporation. In this essay, there will be four points to look into that are beneficial in order to understand. First there will be a look at exactly what is a corporation, second we will be looking at what exactly corporate social responsibility is and the different views in corporate social responsibility. Third we will be looking at into why corporations should consider investing in corporate social responsibility and lastly on why companies should not bother using corporate social responsibility. After reviewing all these points I will show in my essay that companies should not use corporate responsibility as the benefit is not enough to warrant using it. What exactly is a corporation? There are many aspects to a corporation and they are more complex than just a company, as they can global behemoths in the marketing world. There are essentially five main points when looking at a corporation: limited liability, legal personality, transferable shares, investor ownership and delegated and centralized management under a board structure. The first aspect of a corporation is that of a legal personality. A corporation under a legal personality is essentially that ““A corporation has the capacity and…the rights, powers and privileges of a natural person” (Glasbeek 22). This is a great way to understand what exactly a corporation is because when we think of a corporation, we generally think that it is a faceless business. Essentially this is true for small businesses and partnerships but a corporation is different than those. A corporation has to abide to the laws set by it and it is itself seen as a legal personality just like you and me, basically a corporation is like a person in a sense. The second aspect of a corporation is transferable shares. Transferable shares are that it, “permits the firm to conduct business uninterruptedly as the identity of its owner’s changes, thus avoiding the complications of member withdrawal that are common in other businesses” (Hansmann, Hansmann, Reiner 36). What makes this different from other types of businesses is that the shares of a company can be automatically changed and new owners can step in without stopping the business altogether. The third aspect of a corporation is investor owner. Investor ownership is, “firms in which both elements of ownership are tied to investment of capital in the form…the right to participate in control, and the right to receive the firm’s residual earning, or profits” (Hansmann, Hansmann, Reiner 40). What this states is that those that invest in the company have the right to participate in votes of control of the company and take in the profits of the company. This could essentially mean that anyone who has a share in a corporation can do this, it is just that the amount of shares that they have dictates how much say they have. Those with more shares have more say than others.
The fourth aspect of a company is delegated and centralized management under a board structure. This is what makes a corporation different from a partnership or other types of business because the investors are separate from the daily duties of the company, “principal authority over corporate affairs in a board of directors or similar committee organ that is periodically elected…by the shareholders…the board is distinct from the firm’s shareholders” (Hansmann, Hansmann, Reiner 38-9). All the investors have a say in is the direction of the corporation.
The fifth aspect of a corporation, which could also be the most important aspect,