Issues in Accounting Theory - Erawan Company Limited - Assignment Example

Issues In Accounting Theory BY [Name of the organization] [Author’s name] [Date of fulfilment] Acknowledgments Summary This paper is about an Australian company which provides voluntary corporate social responsibility disclosures. This paper is an analytical speculation over the legitimacy theory and stakeholder theory. The idea is to use the legitimacy theory and stakeholder theory in order to explain the disclosures that are related to the company. This is a very formal kind of proceeding I am dealing with and is making an attempt to find out the relevance in reference to an Australian company. Table of Contents Acknowledgments Summary Table of Contents Executive Summary The REPORT Conclusion Recommendations Appendix Bibliography Executive Summary In this paper the chief focus is on an Australian company, called ERAWAN COMPANY LIMITED. The target of the paper is to make a speculation over this particular company in reference to check out its participation regarding voluntary corporate social responsibility disclosures. With an analytical point of over the legitimacy theory and stakeholder theory, the paper is going to make some assessment. The application of legitimacy theory and stakeholder theory over the ERAWAN COMPANY LIMITED is what the crux of this approach. My attempt is to explain the disclosures that are related to the company. introduction This is a paper basically dealing with voluntary corporate social responsibility disclosures. This is the paper that can very well make it an effort to understand the speculative aspects related to the chosen topic. As a matter of selection I have picked up Erawan Company Limited. The purpose of the paper is to give a full fledged analytical elaboration about the proceedings that are related to their voluntary corporate social responsibility disclosures. On the other hand the attempt has also been taken to find out the legitimacy theory and stakeholder theory as has been used to explain the disclosures by this company. In this paper there are many aspects that are dealt with in order to have some very dynamic exposure. The social and environmental participation and the involvement of sharing responsibility are going to be of great use. This is what the chief way of explanation in this paper. ABOUT Erawan Company Limited Erawan Company Limited is an innovative investment company that is into the field of managing manages. All its managers are into diversified range of projects. The expansions of these projects are in Australia as well as in most of the places in Hong Kong. Erawan Company Limited follows the philosophy of focusing into the links of capital and intellect in order to appropriately get sourced with all kinds of researched and managed opportunities in every possible situation for business management. This is a company that is into the act of growing projects and in taking it to maturity. The effort is also in the assessing of critical mass by the available resources and predominant resources. All kinds of expertise and infrastructural needs are well met to turn ideas and innovative practices into growing and profitable investments. Erawan Company Limited has got strong presence and contacts with well organised system. The investment of the capital with dynamic economies at Hong Kong and Australia confirms that the company is being able to build in some sort of bridge and intermediary between China and Australia. The Board of Directors of Erawan Company Limited is comprised of William TIEN, Joe LIU and Michael. Very strongly this company is committed in building long term value for all its shareholders all around the business territory (Cici, Carlos; Federica Ranghieri 2008). As Erawan Company Limited has been listed on the ASX it is very particular about providing best practice ever in the domain of reporting and disclosure. All the services of this domain get well structured and there is the provision that the shareholders get the necessary services of fulfilling appropriate corporate governance measures and requirements (Kytle, Beth; John Gerard Ruggie 2005). voluntary csr disclosures Corporate social responsibility or CSR is also known by various ways. It is also called corporate citizenship, corporate responsibility, responsible business and corporate social opportunity. This is the basic concept that brings in the system whereby the respective organizations can consider the interests of society. It also keeps the track of the responsibility for the impact of their activities on suppliers, customers, shareholders, employees, communities and other stakeholders. The responsibility is also well shared and delivered in terms of better environment1. The obligations as has been initiated by corporate social responsibility are statutory in nature. They are also some kind of obligation that needs to comply with legislation ( Habisch, André; Jan Jonker, Martina Wegner, R. Schmidpeter (eds.) 2005). As a matter of fact it considers the organizations for the purpose of voluntarily taking steps towards the process of improving the quality of life for the people who are serving it and their families. The concern is equally determined for the local community and in specification with society at large. The follow ups as has been maintained by CSR are always been controversial. There are though possibilities of having strong business case for CSR, yet there is also corporational benefit in multiple ways that functions in terms of operating with a perspective broader. Malloy, D.C. (2003 pp.59–79) makes it dominant that the functionalities are also long term investments as well as in some instances are immediate with short-term profits for the investor. CSR too has been well criticised in terms of the distractions that it pertains from the fundamental economic role of businesses. There are some points of views that determine these proceedings as superficial window-dressing. The criticism further gets analysed as an attempt to pre-empt the role of governments over powerful multinational corporations. The role as has been forwarded by Erawan Company Limited is prolific. Being a Hong Kong registered Company it also has got well listed in Australian Stock Exchange. The registration was accomplished on 14 February 1996. It targets towards a secured and complete profile building of all the contracting projects in Hong Kong, Macau and China. These projects are basically related to Fisherman's Wharf, Hi Fan Street - West Kowloon, Macau Ferry Pier, Cyberport - Hong Kong, Tsing Yi Hotel & Service Apartment, Kwai Chung Estate Phase 3 - New Territories, Pacific Forum – Wanchai, URA Project K2 – Mongkok, Police Headquarter – Wanchai, MRTC Kowloon Station and Las Vagas Sand – Macau. Erawan Company Limited has spread all through in search of new investment opportunities. It has been well able to configure itself well under the new management proceedings in order to improve the shareholders return with excessive satisfaction. In order to maintain the dominance in terms of CSR, Erawan Company Limited has opted for all those things that can bring in better stabilities of all its employees and the investors. In businesses though there can be some variations yet short-run financial returns that are very much developing in terms of the applicability of CSR strategy of Erawan Company Limited. Potential business benefits Erawan Company Limited is very much famous for its scale and nature of providing benefits of CSR to its parties. Though t sometimes varies yet its nature of being an enterprise are very much qualifying. According to Orlitzky, Schmidt, and Rynes there is he need of a correlation between social and the environmental performance and the determinant financial performance. The view point as has been considered by R.H. Gray, D.L.Owen & K.T.Maunders, for defining CSR of Erawan Company Limited there is a wide range that starts from strict "stakeholder impacts" including charitable efforts and volunteering participation of parties. CSR is also having a determining factor business development, human resources or public relations departments of Erawan Company Limited. It has been well discovered that there are separate units that are engaged to report the board of Erawan Company Limited. The potential business benefits get counted in term of human resources, risk management, brand differentiation and license to operate. For human resource purposes, Friedman, Andrew L.; Miles, Samantha (2002, pp. 1–21) discovers that the CSR programme as has been adopted by Erawan Company Limited is an aid to recruitment and retention, both in Hong Kong and Australia Potential recruits of Erawan Company Limited are the adopter of CSR policy during an interview and thereby pick up a comprehensive policy for all sorts of advantages related to the business (Williams, Cynthia A.; Ruth V. Aguilera 2008). There is also the privilege of improving the perception of Erawan Company Limited in staff. The task of managing with risk is the main strategy of Erawan Company Limited. It is because Erawan Company Limited is very particular about every instance that is related to its reputation. Environmental accidents and corruption scandals are its chief preparations. Along with them there is also well knitted strategy to get rid of political dominance and economic failures. Erawan Company Limited aims at genuine culture of 'doing the right thing' ay ‘the right time’ within a corporation to offset risks. There is a great dominance of crowded marketplaces thronged with companies to strive for a unique selling proposition. In case of Erawan Company Limited competition is well tracked in the minds of consumers. O’Donovan, G. (2002, pp. 344 - 371) brings in the insight and declares that it is here that the application of CSR by Erawan Company Limited helps in determining the customer loyalty of distinctive ethical values to stick to it. Erawan Company Limited avoids interference of other business in the periphery of their taxation or regulations related to it. Erawan Company Limited is very particular about taking substantive voluntary steps, to pursue governments and public ( Patten, D. M. 2002, pp. 152 - 171.). Erawan Company Limited concentrates over the issues related to health and safety, diversity and in every case related to the environment more seriously that any other competitors of it. legitimacy theory and stakeholder theory Application of legitimacy theory and stakeholder theory in terms of Erawan Company Limited is very much well synchronised to have the benefits to the ultimate limit. The prime objective of Erawan Company Limited is to have the dominance to advance projects into income generating investment entities in all the aspects that it is a part of. The purpose of the company is to build shareholder value from these all the developments that it can incur. At the same time it is also keeping an eye on the facilities of supplying technology needs to all it Clients for better futuristic approaches. Kytle, Beth; John Gerard Ruggie (2005), declares that the publicly available data are very much clear and comprehensively enough all the assessments can be well derived from them. The company always plans its voluntary corporate social responsibility disclosures so that the investors are encouraged to make their own enquiries (Grayson, D. and Hodges, A. 2004). The updated data are all provided with up to the minute pricing information and it is very helpful in managing the accounts2. The press releases that are added in the web site are all for records and the purpose of it is to serve with information that has got releases with all accuracies at the time of issue. All the disclosure on the Company's web site alone is declared with specified explanation that it does not constitute adequate disclosure. This limitation, in terms of not being able to constitute adequate disclosure of undisclosed material information, is very much well handled by the company. In terms of the stakeholder theory the organizational management and business ethics of Erawan Company Limited addresses the inner morals and ethical values in the process of managing itself. It follows the thoughts as determined by R. Edward Freeman in ‘Strategic Management: A Stakeholder Approach’, and very adamantly identifies and models all the groups which are all related to its stakeholders. There is every provision for describing and recommending methods by which management shows interests of those groups over the investment procedures. Erawan Company Limited very professionally attempts to address "Principle of Who or What Really Counts" in its business module. From the shareholder point of view is very much appreciated by Erawan Company Limited and the company considers it to be the recognized strategic structure in terms of business law in both Australia and Hong Kong. The shareholders or stockholders of Erawan Company Limited are very legally considered as the owners of the company, has got the bindings of fiduciary duty to take care of all their needs and demands. By this means all their valuations are increased. As for the application of it in older version of input-output models Erawan Company Limited converts the inputs of employees, investors, and suppliers into very clear and better usable outputs. With the advantage of being bought by the customers the shareholders or stockholders are profited with the returning of capital benefit. There are many aspects that deal very predominantly with the Erawan Company Limited when the shareholders profit margins are counted. There are the scopes for all kinds of better being and thus there are so many things to be well prepared for it. One of these is the things related to the legitimacy theory. “Legitimacy is a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions” (Suchman, 1995, p. 574) By the follow ups of all these theories Erawan Company Limited has got the accessibility to address the needs and wishes of the parties, like those of investors, employees, suppliers, and customers. Erawan Company Limited is making all the particulars to have the smooth proceedings. However there are also the instances that state that the stakeholder theory also includes some other parties too in its list. Paluszek, John (2005) claims that these are the trade unions, governmental bodies, trade associations, political groups, communities, prospective employees, associated corporations, prospective customers and above all the public at large. The role as has been played by Erawan Company Limited is very appropriate as it maintains all the dominance over the parties as has been selected by the stakeholder theory. Added to all these Erawan Company Limited has also included its competitors in the list and that brings in great difference to its brand both in Hong Kong and Australia. Conclusion On the basis of the points decided by the legitimacy theory, Erawan Company Limited has become one of the most well recognised companies in social, political, economic and environmental stature of Australia and Hong Kong. Though there are many unexplored peripheries that spread scepticism amongst many researchers and offers real insight into the voluntary disclosures of Erawan Company Limited. There are two specific concerns that can be well identified in terms of checking the legitimacy theory with Erawan Company Limited. As the company undertakes much larger projects in order to address issues associated with shareholders, it becomes its vital duty to have all kinds of specialisations for the same set up. Some of the more recent developments as has been initiated by Erawan Company Limited is in the management and ethical literature and the deals with its stakeholders on legitimacy and corporations ( Neu, D., H. Warsame and K. Pedwell 1998, pp. 265 - 282.). This is an added advantage that gets counted to the accounting table of the future business scenario of the company. The second is the determinant contribution forwarded by Erawan Company Limited in terms of contributions to the theory that have already been made in the marketing sector with all profitability. By the application of legitimacy theory, Erawan Company Limited offers very strong and equally powerful mechanism for the understanding of voluntary social and environmental disclosures3. These are the disclosures that come in from the corporational strategy of Erawan Company Limited. All these understandings provide a vehicle for engaging in critical public debate among the shareholders but the role of Erawan Company Limited cannot be denied in making positive impacts. References Blattberg, Charles (2004, pp.172–184) "Welfare: Towards the Patriotic Corporation", From Pluralist to Patriotic Politics: Putting Practice First. New York: Oxford University Press, ISBN 0198296886 Cici, Carlos; Federica Ranghieri (2008) "Recommended Actions to Foster the Adoption of CSR Practices in SMEs" , Inter-American Development Bank. http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=1353696 [retrieved on 17 oct. 2008] Friedman, Andrew L.; Miles, Samantha (2002). "Developing Stakeholder Theory". Journal of Management Studies 39 (1):. doi:10.1111/1467-6486.00280. Grayson, D. and Hodges, A. (2004) Corporate Social Opportunity! Seven Steps to Make Corporate Social Responsibility Work for your Business Habisch, André; Jan Jonker, Martina Wegner, R. Schmidpeter (eds.) (2005) Corporate Social Responsibility across the Europe. Heidelberg: Springer. ISBN 978-3-540-23251-3. Hemmati, Minu; et al. (2002). Multistakeholder Processes for Governance and Sustainability: Beyond Deadlock and Conflict. London: Earthscan. ISBN 1853838691. Kelly, Marjorie (2001). The Divine Right of Capital: Dethroning the Corporate Aristocracy. San Francisco: Berrett-Koehler. ISBN 1576751252. Kytle, Beth; John Gerard Ruggie (2005). "Corporate Social Responsibility as Risk Management: A Model for Multinationals" (PDF). Social Responsibility Initiative Working Paper No. 10. Cambridge, MA: John F. Kennedy School of Government, Harvard University. Malloy, D.C. (2003). "Understanding the Nature of Ethics, and Purposes of Business Health Care and Law", The Sport We Want (PDF), Canadian Centre for Ethics in Sport Neu, D., H. Warsame and K. Pedwell (1998) “Managing Public Impressions: Environmental Disclosures in Annual Reports”, Accounting, Organizations and Society, Vol. 23, No. 3 O’Donovan, G. (2002) “Environmental Disclosures in the Annual Report: Extending the Applicability and Predictive Power of Legitimacy Theory”, Accounting, Auditing and Accountability, Vol. 15, No. 3 Orlitzky, Marc; Frank L. Schmidt, Sara L. Rynes (2003) "Corporate Social and Financial Performance: A Meta-analysis" (PDF). Organization Studies, 24 (3), http://www.finanzasostenibile.it/finanza/moskowitz2004.pdfLondon: SAGE Publications. [retrieved on 17 oct. 2008] Paluszek, John (2005) "Ethics and Brand Value: Strategic Differentiation" (PowerPoint). Business and Organizational Ethics Partnership Meeting. Markkula Center for Applied Ethics, Santa Clara University. Patten, D. M. (2002) “Media Exposure, Public Policy Pressure, and Environmental Disclosure: An Examination of the Impact of Tri Data Availability”, Accounting Forum, Vol. 26, No. 2 R.H. Gray, D.L.Owen & K.T.Maunders, Corporate Social Reporting: Accounting and accountability (Hemel Hempstead: Prentice Hall, 1987) Suchman, M. C. (1995) “Managing Legitimacy: Strategic and Institutional Approaches”, Academy of Management Journal, Vol. 20, No. 3 Williams, Cynthia A.; Ruth V. Aguilera (2008) "Corporate Social Responsibility in a Comparative Perspective", in Crane, A., et.al.: The Oxford Handbook of Corporate Social Responsibility (PDF), Oxford: Oxford University Press. ISBN 0199211590 Bibliography Friedman, Milton (1970-09-13). "The Social Responsibility of Business is to Increase its Profits", The New York Times Magazine. Aquino, M.P., Nuestro Clamor por la Vida. Teología Latinoamericana desde la Perspectiva de la Mujer (San José, Costa Rica: Departamento Ecuménico de Investigaciones, 1992), et al Read More