Self-regulation is another way to solve social problems for the corporations, although limitations are overwhelming. Self-regulation is defined as the corporations regulate its own behaviours. It is the ‘idea that would be better off if relying on the promptings of a corporate conscience to regulate corporate behaviour instead of the heavy hand of government regulation’ (Maitland, 1990, p. 509). There are three levels of self-regulations, but only one will be discussed; corporate social responsibility.
The main problem is, according to Mintzberg, (2001, p. 208) that regulation applies slowly and conservatively, usually lagging public sentiment. On the other hand, Maitland (1985, p. 509) states that the owners in the corporations ‘single-mindedly preoccupied with profit maximisation, which in turn, attributed to intellectual shortcomings. ‘ This means that owners fail to cope with the changing values and the society interest outcome, leaving to only the selfish interest outcome, in which is the profit maximisation.
For example, aerosol spray manufacturers were reluctant to abandon the use of fluorocarbon propellants, which destroy the ozone layer, although there was an alternative technology which was cheaper (Maitland, 1990, p. 511). However, because of their main purpose of profit maximisation, the owners would not want to lose market share if their competitors still offered the former product in which their customers valued. Government regulations are to help solve social problems, also as an alternate to self-regulation.
‘To the proponents of regulate it, the corporation can be made responsive to social needs by having its actions subjected to the controls of a highest authority; the government’ (Mintzberg, 2001, p. 208). For instance, customers, a section of stakeholder, regulations such as the ‘Australian Competition and Consumer Commission is generally portrayed in the media as the enforcer in Australia’s new competition regime as its mission is to pursue businesses that exploit consumers or do sweetheart deals with their rivals’ (Fells, 1996, p.
475). For example, the ‘Bendigo Building Society was obliged to introduce an internal committee for auditing advertisements after promoting its debit card in a misleading way’ (Fells, 1996, p. 476). Australian Securities and Investments Commission (ASIC) is also another type of regulation that can help customers in the financial market, if dealing with the corporations, ‘protection of laws for investments, life and general insurance, superannuation and banking throughout Australia’ (Harrison, 2001, p.
116). For example, the Ashanti Goldfields, a multi-national mining corporation in Ghana, ‘liquidated its Australian subsidiary leaving $6m in unpaid debts to local business and some $7m in outstanding entitlements to its employees, who subsequently received 20c in the dollar from liquidator Price Waterhouse. Following pressure from the ASIC, the parent company offered an additional sum which brought the miners’ payout to 70c in the dollar’ (Harrison, 2001, p. 118).
Another way that society can ensure that corporations comply with at least minimal standards of acceptable behaviours is to pressure the owners of the corporations. It is suitable when regulation fails. It is simply to ‘provoke corporations to act beyond some base level of behaviour, usually in an area that regulation misses entirely’ (Mintzberg, 2001, p. 209). Groups such as environmental groups, activist groups have pressured the corporations, which results in success as according to Mintzberg (2001, p.
209), mentions pressuring the corporation ‘as a means to change corporate behaviour is informal, flexible and focused. ‘ For example, back in the 1960s, President Kennedy ‘used it to roll back U. S. steel price increases in the early 1960s, and business leaders in Pittsburgh used it in the late 1940s by threatening to take their freight-haulage business elsewhere if the Pennsylvania Railroad did not replace its coal burning locomotives to hep clean up their city’s air’ (Mintzberg, 2001, p. 209).
In conclusion, many of the corporation’s main purposes are to satisfy their own needs, as well as their stockholders, which include shareholders. With such a problem that is growing and it affects the society, many laws and regulations have been acted out and given to corporations. This is intended to help reduce problems such as environmental damage, pollution etc. Another solution is to apply societal forces as ‘the best antidote to these forces is the ad hoc pressure campaign, designed to pinpoint unethical behaviour and raise social consciousness about issues’ (Mintzberg, 2001, p.
215). Today, corporations have co-operated with non-governmental organisations and governments. Working with these groups, the business community has developed principles and management methods for addressing a range of issues about which it would have been incapable of organising any systematic response even as recently as two decades ago (Mintzberg, 2001, p. 216). In future, there may be more and more corporations, but hopefully many will obey and achieve certain minimal standards of behaviour.