Corporate Social Responsibility Issues in Blackmores

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ACC706
Assessment 2
Group Assignment

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Executive Summary
The purpose of the report is to identify corporate social responsibility issues in
Blackmores. News article linked with Blackmore corporate social responsibility issues has been
reviewed and accounting theories linked to such issues will be used to explain the issue in detail.
The report will make use of accounting theories, motive, impact of company CSR disclosure and
effectiveness to address the issues found in the newspaper article. The news article is available
on ABC News and it is linked with one of the major deal that Blackmore has made with the
pharmacists to promote the company’s product in addition to the certain prescription drugs. It is
called as negative promotion with proper doctor’s prescription. In the eyes of Australian Medical
Association (AMA) the act of Blackmores appears to putting the commercial interest ahead of
patients needs and it is very serious offense on the part of corporate social responsibility.

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Contents
Introduction.................................................................................................................................................4
Analysis of CSR (Corporate Social Responsibility) Issue in Blackmores........................................................4
Examining the effectiveness and impact of the CSR firms’ disclosure in addressing the issue with the use
of accounting theories.................................................................................................................................6
Recommendations on CSR Reporting at the Corporation and Regulatory Level.........................................8
Conclusion...................................................................................................................................................8
References...................................................................................................................................................9

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Introduction
Blackmores has been founded by Naturopath Maurice Blackmores in year 1932 and this
company has become the pharmaceutical giant in Australia due to its decades of hard work and
research & development process taken up by the company. The main motive of Blackmore is to
combine traditional naturopathic knowledge with modern era scientific knowledge to produce
the medicines and supplements to help people to achieve the good health and wellbeing for long
term. Blackmore is committed to develop the innovative natural health product and services of
superior quality that serves to the society through providing best supplement needed daily to
fulfill basic body requirements. Blackmores has reached to more than 17 countries and it has
employed more than 1000 employees in Australia, Asia and New Zealand. Blackmore has also
received the award for Australia’s most trusted Vitamin and Supplement from the Reader’s
Digest in year 2016. Toward sustainability and social responsibility, Blackmores is committed
for long term relationship with their stakeholders and also aims to promote wealth maximization
instead of profit maximization (APCO, 2016).
The news article selected is related with social issue that has taken place due to the action
of Blackmores. The news article named “Doctors hit out at pharmacists' deal with Blackmores”
written by Barbara Miller in year 2011 and this article critically highlighted the impact of
Blackmores deal with pharmacists to promote and supply goods to customer alongside with
doctors prescribed medicines (Miller, 2011). When this practice has come under notice of
doctors, they have objected it and AMA has argued that Blackmores has put the commercial
interest in front of patient needs and their health.
The accounting theories that are relevant to the news story are agency theory as company
has chosen profit maximization instead of wealth maximization, stakeholder’s theory as
company has failed to keep the commitment given to the stakeholders and legitimacy theory as
company commitment towards the corporate social responsibility has been harmed through the
deal with pharmacists to supply products without proper prescription. It has been learned from
this story that even a small action of the company can give rise to major social issue and so it is
highly important that the company should take responsibility of each action they perform and