Information about Impacts of the Every Day Activities to the Functioning of an Organization - Essay Example

Running header: Accounting Student’s name: Instructor’s name: Subject code: Date of submission: CORPORATE SUSTAINABILITY REPORTING A sustainability report can be defined as a report of an organization which gives detailed information about economic, social, enviromental, political and the performance of the governing structure of the organization. A corporate sustainability report conveys information related to the sustainability of an organization in a form which can be compared to with the financial reporting information. Corporate sustainability reporting shows the impacts of the every day activities to the functioning of an organization. Its development has been fostered by the effort made by many organizations and companies to the achievement of sustainable performance and development. It is crucial in organizations in tahat it helps them in the undersstanding, measurement and communication of the economic, social, enviromental and the performance of the overall governance. The rerm sustainability as contained in the topic refers to the long lasting ability of an action deed or a service. If well organized, systematic sustainability aids the companies and firms in the measurement of the impacts the cause on the set organizational goals, experience and in the change management process. In order to be up to date with the sustainabilit reports, different firms develop and put in place a cycle on reporting. This aids them in that; they are able to monitor the progress of their sustainability performance over an ongoing schedule. The senior decision makers in organizations can haave an up to date provisioon of data on the progress of the firm, the policies and strategies in use and on the improvement of performance of the organization. This in a way helps a lot in the reduction of backlogs of activities and of data. Sustainability reporting also involves the measurement, accountability and the disclosure of information to both the internal and the external stakeholders of an organization in a bid to the achievement of sustainable organizational development. It should be a component feature of all effective sustainability reports that a balanced and a very well reasonable representation of the sustainability performance of the organization reporting it. Some attributes and purposes of sustainability reporting have been identified. They include among others; a. The role of demonstrating- this deals with the identification of the influence of the organization towards the society at large and how the organization is influenced by the expectations placed about the sustainable development and its achievement. b. The purpose of benchmarking- this seeks at identifying the sustainability and the performance of an organization with respect to the norms, laws, codes, ethics, performance standards and the voluntary initiatives it develops in the society. This also focuses on the checking on whether the practices carried out by the organization are in line with the societal ways of life of those in and around the organizational set up. c. The purpose of comparison- this purpose seeks at comparing the performance of the organization with respect to that of the other organizations. It seeks at identifying the application of different strategies and their purposes as compared to those of similar organizations and of the competitors. A combination of the above listed purposes namely benchmarking, comparison and demonstration helps give the organization an upper hand in the application of corporate sustainability reporting. The organizations should hence focus on their development so as to achieve their long term goals. Some systems oriented theories have been raised in a bid to explain the motivators for corporate voluntary sustainability reporting practice. They include; a. Political economy theory In the theory a definition of political economy is given. It states that this is the political, social and the economic framework within which the life of human beings takes place. It also; relied on the assumption that the society, the economies and the politics are inseparable traits (Global Reporting Initiative, 2014). It also goes ahead to state that the issues in the economy cannot be investigated in a meaningful manner without the inclusion of the political, institutional and the social basis in which the events take place. It also states that the reports on the corporate scene cannot be neutrally considered as unbiased documents but rather as products of interchange between the organization and its environment and attempt to bring to a consensus and accommodate the varieties of sectional interests given. b. The political economy theory This theory is classified into two broad categories. They are; 1. Bourgeois political economy- this theory ignores the element raised and in turn it focuses at the perceiving of the world as pluralistic. This theory does not explicitly considerthe structural conflicts and the struggles within the classes. It rather is concerned with the analysis of the interaction between the groups in an essentially pluralistic world. 2. The classical political economy theory- this theory sees to it the placing of interests, inequity and structural conflict and the state of the heart of the analysis. It also perceives the accounting reports and the disclosures as a means of the maintenance of the favored positions of those who have control of the scarce resources in the environment such as capital and as a means of depression the position of those who lack the scarce capital. Its interest is hence on the structural conflicts affecting the society at large. c. The legitimacy theory- this theory goes ahead to assert that organizations or a continual basis aim at ensuring that their operations are within the cultures, traditions and the norms of the societies in which they operate. Through this, they try their best in seeing to it that their activities are considered legitimate by the members of the societies in which their operations are based. The traditions are however flexible and are hence subject to changes over certain periods over time. Through this, the organizations are hence prone to respond to the changes taking precedence. However, a distinction is given between legitimacy and legitimation. This distinction is that legitimacy is a condition or a status, while legitimation is the process through which the operations of an organization are classified as legitimate. This theory is dependent on the assumption that there is the existence of a social contract between the organization and the society in which its operations are based. It is thereby a containment of the expectations of the society as to the carrying out of the operations of the organization in the society. Another assumption raised by the theory is that the society allows the organization to continue with the activities it undertakes to a level that it generally meets its expectations. The organization is also assumed to consider the rights of the public at large and rather not those of the investors and those with vested interests. If the organizations fail to comply with these expectations of the society, they are prone to receive sanctions by the society. These sanctions include the lack of the society to use the products of the organization. This leads to the organization making losses attributed to reduced revenues from sales. d. The legitimacy theory- this is another theory developed to these effect. It seeks at identifying the actions taken by the organization in order to cope with legitimacy. It is assumed that the organizations will put in place various strategies in order for their operations to be termed as legitimate. Through this, an attempt will be placed in a bid to establish a similarity between the activities undertaken by the society and the norms and the traditions acceptable in the societal scene. Various steps are given through which a firm can use to legitimate its activities. Some of the steps include the attempts through communication in order to change the definition of social legitimacy so that they can match with the practices of the organization and the outputs it produces in its production cycle. Another step is the adaptation of the goals and the outputs of the firm to the prevailing definitions of legitimacy. The last step is a communication attempt on the identification of symbols, values or institutions that possess a strong sense of legitimacy. In the theory also, the various courses of action which an organization can put in place in order to attain legitimacy are listed. They include; 1. Coordination of education activities in a bid to inform the members of the society of any changes in the organization performance of its activities. 2. The move to change the perception of the society to activities and products of an organization. 3. The attempt to change the expectations of the external performance of a company or firm. One of the best strategies that can be put in place in order to achieve this is listed as the public disclosure of information through such outlets as annual reports from the organization. e. Another theory is the stakeholder theory This theory is given two broad categories which are the ethical or normative branch and the positive /managerial branch The ethical branch places its interest on the focus of the moral responsiveness to the stakeholders (Deegan, 2009). It argues that all the stakeholders have the right to be treated in a fair manner by the organization and that the issues relating to the powers of the stakeholders are not relevant in a direct manner. It gives the definition of a stakeholder as any recognizable individual or a group which can affect the achievement of the goals and the objectives of the organization. The theory also goes ahead to classify the stake holders as either secondary or primary based on their level of influence. Accordingly, the primary stakeholder is defined as one who offers continued participation to the continuity of the firm. Without a primary stakeholder, the firm cannot continue existing as a going concern. This illustrates the importance they bear to the survival of the firm. On the other hand, a secondary stakeholder is one whose effect is not crucial for the continued survival of the firm. They are not engaged in the dealings with the corporation. The positive or the managerial branch of the stakeholder theory seeks to give an explanation as to when the corporate management is likely tomeet the expectations of the particular stakeholders. This perspective is more of organization centered. It also classifies the organization as part of the wider social system. It also keys in on the management of the various stakeholders in order to achieve full business and organizational performance and survival (Sullivan, 2011). The main role listed of the corporate management is the assessing of the importance of meeting the demands of the shareholders in order to achieve the strategic objectives of the organizations. There is also a mention of the firm as a vehicle for the coordination of the activities of the stakeholders. It should therefore foresee the betterment of the interests of the stakeholders. Also included in the theory are the essence of the stakeholder support and the incorporation of the views expressed by the stakeholders in the organization. It also emphasizes the need to put into full use information so as to attain and achieve effective management and in order to also gain the support and the approval of the stakeholders. Samsung Electronics is a multinational organization based in South Korea which deals with the production of electronic goods. Its critical area of specialization is the mobile phone manufacture. It is recorded that in the year 2010, Samsung sold 280 million mobile phones which was a remarkable 23% increase as compared to the previous year 2009. It was also categorized as one of the few firms that made profits in the first part of the year 2011. Different strategies have been put in place to see to it that the company achieves the highest levels of sustainability in the social, the economical and the environmental sectors. The stakeholder survey of Samsung Electronics dealt with the creation of questionnaires which were asking the respondents to provide feedback which would be essential for the betterment of the standards of the company. This survey is usually carried out on the external stakeholders who include the customers, the suppliers, the employees and the expert groups. The environmental section of the survey focuses on the improvement of the energy efficiency by the company. It also focuses on the adoption of the use of renewable energy. The society section deals specifically with the improvement of the customer service relations and in the improvement of the customer health and safety. The firm also seeks to bring about innovations in the service and the products so as to attain both social and environmental benefits. The Toyota Motor Company is a motor vehicle production industry based in Japan. The company during the year2010 recorded sales of over 7 million units in the year 2010 which was also an increase of 21000 units as compared to the previous year in the emerging markets alone (Money.cnn.com, 2014). The Toyota Motors limited has put in place several measures to see to it that it has achieved sustainability and at the highest levels if possible. Some of the strategies which they have put in place include the initiation of environmental initiatives which see to it that the production of eco-friendly products is put in place. Their new products are hence built in such a way that they meet the environmentally hygienic standards and avoid traits such as pollution. The company has also developed high degrees of respect for human rights evidenced by the use of worker friendly production techniques and working hours. The company has also made much progress in the creation of thriving relations between it and the dealers and the suppliers of the commodities they use as raw materials. Through the fostering of a good relation, harmony is created. The company has also taken part in the creation of good interests with the society at large. This has been evidenced by the collaboration activities ongoing in order to improve the lives and the living standards of the society at large. Several company initiatives have been developed to foster the progress of this. In the environmental sector, the company has put in place strategies to see to it that recycling process has been boosted and there are little or no wastages in their production processes. It has also developed a tree planting initiative labeled the Toyota Forestry so as to see to it that there is a reduction in the deforestation and environmental degradation ills. The two companies have all put in place legitimacy cohesive techniques. This is through the production of products and commodities which are all fit for human use and which are friendly to the environment. These products are taken through sessions of through testing and scrutiny in order to see to it that they do not in any way act as harmful the environment. There has also been a development in their human relations parts so as to see to it that the working conditions are good and fit for use by the workers of the companies. The working standards are also maintained at very high levels. This is in order to foster the creation of good environments in and outside the companies and the respect for human rights. This brings about their similarity in the techniques used to see to it that the legitimacy levels are maintained. REFERENCES Global Reporting Initiative, 2014, Reporting, Retrieved on 20th May 2014, from; https://www.globalreporting.org/resourcelibrary/G3.1-Guidelines-Incl-Technical-Protocol Money.cnn.com, 2014, Global 500 companies in 2013, Global 500, Retrieved on 20th May 013, from; http://money.cnn.com/magazines/fortune/global500/2013/full_list/index.html Deegan, C 2009, Financial Accounting Theory, 3rd Ed, McGraw Hill . SULLIVAN, R. (2011). Valuing corporate responsibility how do investors really use corporate responsibilityinformation? , Sheffield, Greenleaf Pub Read More