This unit provides the learner with an understanding of the effect of legislation and global integration on decisions, policies, processes and activities undertaken by organisations.
The internationalisation of markets and business activities, increased use of information and communication technology and the impact and consequences of the activities of organisations on many areas of life have meant that organisations need to be more aware of the contexts in which they operate. They have to assume greater responsibility for what they do.
Globalisation has meant that organisations need to understand the implications of operating in international markets and have had to develop their policies accordingly. Membership of economic and political unions requires accommodating the requirements of transnational laws and regulations within organisational policies and procedures.
Corporate governance is concerned with the arrangements for the management of an organisation and the regulation of the relationships between the organisation’s different stakeholders.
Good corporate governance enhances organisational activity and the perception of the organisation as a good corporate citizen. Poor corporate governance can result in negative perceptions and, more seriously, can contribute to the failure of an organisation. Consequently, a major focus of corporate governance centres on the accountability of individuals and organisations to their various stakeholders, including the wider community within which they operate. Organisations have to be concerned with the legal, regulatory, ethical, moral, cultural and environmental dimensions of their activities and the effect these activities have on others.
Corporate social responsibility ensures organisations incorporate these requirements in their procedures.
By examining corporate responsibility, learners will understand how consideration of the common interest in organisational decision making impacts on the triple bottom line – people, planet and profit – of organisations.