Sustainability Approaches in the Tea Industry: A Case Study

Accounting Theory: Case Study
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Contents
Introduction.................................................................................................................................................3
(a) Environmental and Social Issues Associated with the Tea Industry.......................................................3
(b) Impact of socio-political and economic context on the management, accounting and assurance
process of the company as per political economy theory...........................................................................4
(c) Strategic Imperatives of the Company...................................................................................................5
(d)Legitimacy gained by the company for its activities from the society.....................................................6
(e)Factors that drive the company to adopt sustainability measures as per the three isomorphic process
of coercive, mimetic and normative............................................................................................................7
Conclusion...................................................................................................................................................8
References...................................................................................................................................................9
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Introduction
The tea industry is associated with large number of social and environmental issues due
to complexity in the issues involved in its operational activities. Tea plantation often come across
variety of risky due to climatic changes, deforestation, lack of adequate water supply and labor
issues from the workers. Tea industry is proving to be a large source of income for many
countries but is also facing variety of issues due to its high sensitivity to both internal as well as
external environment factors. As such, the tea industry within Sri Lanka is also having a
significant impact on its economic growth and has become one of the major industries within the
country. In this context, the present report discusses the sustainability approaches used by a tea
company within Sri Lanka known as Paradise Plantations Ltd’ on the basis of the case study
provided.
(a) Environmental and Social Issues Associated with the Tea Industry
The major problems that have been faced by the tea industry of the country are social and
environmental issues that are restricting its growth and development.
Environmental Issues
The environmental issue that is being faced by tea industry is bad weather conditions
within the country. The fluctuations in the rainfall that is characterized sometimes by having
abundant of rainfall and in other time drought condition often negatively impact the crop
production and quality. The crops are highly sensitive to the environmental conditions and
therefore a slight variation in temperature can result in declining the quality as well as quantity of
tea produced (Carnazzi, 2014). Thus, it can be said that the environmental issues associated with
tea industry is negatively impacting its growth and development.
Social Issues
The major social issue that is associated with tea industry is requirement of huge number
of skilled labor for carrying out different operations associated with planning and growing at
crops. The industry is facing the issues of poor treatment of labor as the companies’ emphasize
on reducing the cost of labor and increasing the profitability margins (Munasinghe, 2017). This
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