Environmental and Social Issues in Tea Industry

ACCOUNTING THEORY
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Table of Contents
Introduction:...............................................................................................................................3
(a) Identifying environmental and social issues associated with tea industry:..........................3
(a.1) Key strategies used by the company to address these issues:........................................4
(b) Explaining the impact of socio-political and economical issues on company’s
management:..............................................................................................................................5
(c) Ethical and managerial branches of stakeholder theory:......................................................5
(c.1) Focusing on sustainability by strategic imperatives and the roles of sustainability
reporting:................................................................................................................................6
(d) Gaining legitimacy from society in respect to the six-capital model:..................................7
(e) The factors that have driven the company to embed sustainability measures using
isomorphic processes of Institutional theory:............................................................................8
Conclusion:................................................................................................................................8
Reference list:.............................................................................................................................9
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Introduction:
Pestle analysis a significant tool for identifying the external factors effecting management
activities of organisation. Mainly, social, economical, political and environmental issues are
important towards the continuation of external environment analysis of a company (Hilal &
Mubarak, 2016). Towards the continuation of this study, the researcher has critically analysed
the external factors influencing management activities of an organisation. Moreover, the
ethical and managerial factors related to stakeholders of tea industry. On the other hand, the
sustainability factors and legitimacy factors have been illustrated towards the continuation of
this study. Moreover, implemented strategies by the company Paradise Plantations LTD have
illustrated in respect of isomorphic processes in industrial theory.
(a) Identifying environmental and social issues associated with tea industry:
The tea producers of Sri Lanka are well known for their tea production and exports of tea
around the world. Towards the analysis of case scenario, it has found that Sri Lankan tea
industry has contributed foreign exchange around 30% in national economy. As per the
statement of Munasinghe, Deraniyagala, Dassanayake & Karunarathna (2017), tea industries
are fully dependent on atmosphere and labour force for tea production or cultivation. On the
other hand, national economical factors are also affected by the exports of tea. However,
there are different issues faced by tea industry in Sri Lanka. Therefore, it is necessary for tea
industry to upgrade their business practices for better result. The environmental and social
issues associated with tea industry are as follows:
Environmental issues:
a) Tea cultivation is dependent on atmospheric issues. Too much heavy rain can destroy
the tea plants or insignificant rain is also against of proper tea cultivation. On the
other hand, foggy weather is also necessary for tea cultivation. That means
environment should be proper for tea cultivation (Palihakkara & Inoue, 2018).
b) Along with this, tea cultivation is a continuation process; so, lack of fertile might
affect the tea plants. Therefore, it is necessary to provide fertilizers on regular basis
for better harvesting (Wekumbura et al. 2017).
c) Deforestation is a preliminary stage of tea plantation because without deforestation,
farmers cannot harvest tea plants. However, large area of deforestation creates bad
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