Assignment Synopsis 1

Assignment Synopsis 1 - The world is in crisis! People are...

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The world is in crisis! People are becoming more interested and better educated in environmental, social and financial issues. Companies prefer not to break even, but sustain themselves with a higher margin of safety. Correspondingly, we need to sustain ourselves for many, many years to come. Unfortunately, we are not leading ourselves towards that path. It is crucial that we, well-informed and conscientious, take action now in order to save the world. Companies are being held responsible for not only their financial performance but also on their impact on the environment and society. No more can an organisation take into account just its stakeholders and its financial profits! Organisations, who wish to succeed and grow, need to look outwards on the bigger picture. While the goal of a company or firm is sustainability, the goal of the human species is to sustain themselves as well. Sustainability is a state of being that can be maintained indefinitely. Sustainable development meets the needs of the present without compromising the ability of future generations. Although social and environmental reporting is covered by limited statutory regulation, most disclosure is on a voluntary basis. What are the motivations in play that bring about the varying levels and aspects of disclosure? Can Legitimacy Theory show that the company is complying with the expectations of society? Can Stakeholder Theory explain the expectations of powerful stakeholders if the managerial perspective of stakeholder theory is taken on? Will organisations accept particular practices due to Institutional Theory? Whilst there is a general framework accepted for financial accounting, there is no formal framework for environmental and social reporting. However, the Global Reporting Initiative has developed the “Sustainability Reporting Guidelines” that set out doctrines and indicators that can be used to measure and report economic, environmental and social performance. The institutional theoretical perspective Institutional theorists are concerned with understanding why organisations are similar, and why there is homogeneity in organisational forms and practices (e.g. DiMaggio and Powell, 1983; Meyer and Rowan, 1977; Powell and DiMaggio, 1991). DiMaggio and Powell (1983) indicate that varieties exist in organisational forms and practices in the early stages of the life cycle of an organisational field3, but homogeneity will eventually occur once a field is established. The process of becoming homogeneous is called isomorphism, which is described as “a constraining process that forces a unit in a population to resemble other units that face the same set of environmental conditions” (Hawley 1968, as cited in DiMaggio and Powell, 1983, p. 149). It is supported that this homogeneity would in turn stimulates, or hinders, adoption of new organisational practices, including accounting (Bansal and Roth, 2000; e.g. Bouma and van der Veen, 2002;
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Jennings and Zandbergen, 1995; Modell, 2002; e.g. Moll, 2003; Rikhardsson
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This note was uploaded on 09/21/2011 for the course CMA 203 taught by Professor Simonmorris during the Three '10 term at Charles Darwin.

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Assignment Synopsis 1 - The world is in crisis! People are...

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