Corporations And Corporate Social Responsibility - 1140 Words

ÃŽ » Introduction With the development of economy and society, large corporations not only have responsible for make profit to their shareholders, but also taking environmentally responsible and undertaking corresponding social responsibilities as well as other stakeholders. This point of view could be involve in the corporate social responsibility (King and Lawley, 2013). Additionally, the definition of stakeholders are individuals or groups which affected by an organization and have an interest in its activities (Freeman, 1984). Moreover, Starik (1994) stated that those who potentially have impact on an organization may also is a stakeholder. However, according to Lynch (2006) argued that when a corporation involve many stakeholders, they†¦show more content†¦On the other hand, separation between ownership and control in a large corporation will cause conflict between the interests of owners and directors (Jensen and Meckling, 1978). For example, Sunbeam, which is a manufacturer of small ba ckyard and kitchen appliances had an accounting fraud in 1996 due to Dunlap, A. J. who is the CEO at Sunbeam corporation overstated revenue by  £62 million almost 33% of sales. This scandal caused Sunbeam filed for bankruptcy in 2001 because they can not cover the huge accounting fraud (BBC, 2005). Moreover, CNN NEWS (2001) also reported that Dunlap as a president was dismissed from Nitec Paper Corporation in 1976 and confronted with similar fraud allegations, â€Å"accused by the company’s owner of overstating inventory, fabricating sales and covering up a loss of $5.5 million.† These examples show that although not every large corporation’s executive directors will abuse their power to cover poor company performance and caused the damage of profit of other stakeholders, large corporations are more complex than limited company, thus they are easier be exploited by those who have power to control the company. ÃŽ » Suppliers Suppliers have a mutual relationship with corporations in a