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Double on the mechanism of the listing of corporate social responsibility

Author: HanJing From: www.yourpaper.net Posted: 2009-07-09 11:49:26 Read:
Abstract: With the development of large-scale socialized production, corporate social responsibility in the production operation Absence gradually increased, and contrary to our harmonious society advocated. Through incentive and control theory to study how to make the enterprise independent of corporate social responsibility.
Keywords: social responsibility; incentive; Control

Analysis of the characteristics of a listed company

Listed companies issued shares after the securities management department of the State Council, or authorized by the State Council approved the trading of shares in the Stock Exchange Limited
Division. Just more than 1,000 listed companies in China, but the listed company is capable of rapid economic development catalyst, the local financial income. Its remarkable features is that its capital is divided into equal shares, to attract a large number of investors. This feature makes the listed companies to broad social impact. The development of the concept of corporate social responsibility as a growing, should be implemented first in the listed company, and play an exemplary role in order to achieve a win-win situation for business and social. Another feature is that the management and ownership separation. More attention to sustainable development as the company's investors, shareholders themselves want to shoulder social responsibility to improve the company's image.

Balance theory

In real life, we often ignore national laws, and continue to damage the public interest to achieve their goal of profit maximization. So the companies, regulatory agencies and the public game began. Only "social responsibility" slogan, there is no control and incentives, then the realization of sustainable development and build a harmonious society's goal is difficult to achieve.
We can use a mathematical model to explain the relevant interest groups, the outcome of the game.
I.e.: F (X, Y) = AX-BY
X represents the income of social responsibility; Y said the cost of social responsibility; X, Y, said their probability. AX> BY autonomy to fulfill their obligations; AX Based on this simple model, the author believes that the government should play the role of macro-control groups really benefit those willing to take responsibility. Which in this model, the income can be seen as in the tax concessions given material reward, widely publicized so as to enhance corporate reputation. The cost is to fulfill the obligations of the price paid. Rewarded under must be brave husband, this income must greatly outweigh the costs.
From a business perspective, bounded rationality, the enterprise will take the initiative to take responsibility when investment returns.
From the government's perspective, the phenomenon in China "treatment after pollution" a lot in the process of governance consuming than to prevent it costs more. The money is taxable income by the business community. If the Government is able to control costs as material rewards, and institutionalize. It will greatly stimulate the responsibility of enthusiasm.
From this point of view, the day flat when the revenue side, the lack of corporate social responsibility phenomenon will be reduced.

3 incentive theory

3.1 shareholders of the management incentive
Shareholders as a business owner, their interests and the long-term development of the enterprise is closely related to, I hope to make the business bigger and stronger. But in such a society, the enterprise only by constant change, actively implement the basic spirit of the "Global Compact", establish a good image, its production out of the product in order to be recognized by the public. The 2006 list of the best corporate integrity, all enterprises to achieve a win-win situation, not only to achieve a sustainable development, and to obtain a high economic and social benefits.
Performance evaluation based on the separation of ownership and management, shareholders do not share price as the only factor to measure management performance, should social responsibility as an important indicator. To achieve a certain goal, apart from giving material reward, but also to give spiritual reward. In addition, it is possible for the management to have a certain amount of shares, truly a common destiny with the enterprise.
Another implicit incentive can also encourage the management's efforts to return to shareholders and society. For example, a certain company performance significantly improve the worth of senior management (Chairman, General Manager) will greatly enhance and be more welcome in the market managers. Or because of the job performance of senior managers is obvious, and was awarded many honors, titles, and be raised. 3.2 government incentive
Although some of the shareholders change their ideas, but because of the existence of information asymmetry, chasing short-term interests, the Company may deviate from the normal track, take the risk. For example, some chemical companies sewage index to reach the national standard. The government should play a role from the macro-control, issued a fixed target, such as the company's pollution index only allowed to meet the national quality standard. If the target is realized, given a certain amount of material reward. Otherwise, severe fines. Especially the government to give tax breaks on protecting the environment and conserving natural resources, actively support and participate in ecological protection enterprises.
3.3 media incentive
Media as the main information dissemination. We know that the media often tracking integrity, outstanding enterprise, its original purpose is to allow enterprises to play a leading role.
Listed companies to make their products known to the public, the media played an important role in which. We know that when companies advertise their products or services, marketing costs account for a large proportion. Listed companies by commitment to social responsibility, the return social initiatives to expand the visibility of the enterprise itself. 2006 Publication of list of outstanding corporate integrity, invisible let the public enterprises with a good impression, which recognized their products or services.
I believe that, whether social responsibility can implement, depends on such incentives have not been in place, incentives, enough. According to the balance theory, the effective incentive will encourage listed companies to conscientiously fulfill their obligations.

4 control theory

4.1 legal institutions
99% of the domestic enterprise through the the "responsibility network" learned not responsible corporate citizenship or corporate social responsibility department setting. However, corporate social responsibility mechanisms of Western countries has been the development of a large degree. We can learn from the initiatives of the Western countries - the implementation of a the country unified management and corporate management at different levels. The first countries to establish the appropriate department, is responsible for promoting the protection of environment, energy conservation, prevention of accidents and social responsibility. Must improve the legal system in order to make the implementation of laws to go. To track more than 1,000 listed companies, according to the industry specify different indicators, and then issued these indicators. Listed companies in the business when there is a framework. Secondly, the main business as a socially responsible. More enterprises to take in order to reduce the burden, you can increase the duties of independent directors and the board of supervisors. If it is a state-owned enterprise, it is necessary to increase the terms of reference of the workers' congress. Annually in when annual inspection by the company, the business administration department to evaluate the implementation of social responsibility.
4.2 the pressure of public opinion
The media should also actively follow the development trend of the listed companies. Once it is found that damage to the environment, wage arrears, a waste of resources, lack of social responsibility, providing false accounting reports to Securities News, etc. shall be published on the the authoritative newspaper or TV. This enterprise can increase the sense of urgency in the production run process always remind myself to avoid impact due to the lack of social responsibility to the company's image and the company's long-term development.
5 Conclusion
Order to the company's center of gravity tend to balance income side, I believe that, through constantly optimize incentive intensity, to form a good incentive cultural and incentives, to continue to improve laws and regulations, the formation of a strong enforcement system
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