ACCT1046 - Accounting in Organisations and Society

This document provides information on the nature of Aristocrat Leisure Limited, its products and services, and its corporate social responsibility (CSR) approach. It also identifies stakeholder groups and discusses the CSR approach and value creation for each group. Additionally, it explores the management information system (MIS) for the identified CSR approaches and the significance of these MIS initiatives to the organization. Finally, it identifies the benefits of the CSR approaches and analyzes them in detail.

ACCT1046 - ACCOUNTING IN ORGANISATIONS AND SOCIETY

Table of Contents
1.0 Requirement 1............................................................................................................................3
1.1 Nature of Organisation...........................................................................................................3
1.2 Products and Services of the Organisation............................................................................4
1.3 Corporate Social Responsibility (CSR) Approach of the Organisation.................................4
2.0 Requirement 2............................................................................................................................7
2.1 Identification of Stakeholder Groups.....................................................................................7
2.2 CSR Approach and Value Creation for Identified Stakeholders Groups...............................7
3.0 Requirement 3..........................................................................................................................10
3.1 Management Information System (MIS) for the Identified CSR Approaches....................10
3.2 Significance of Identified MIS to the Organisation.............................................................12
4.0 Requirement 4..........................................................................................................................13
4.1 Identification of Benefits from Identified CSR Approaches...............................................13
4.2 Analysis of Benefits from Identified CSR Approaches.......................................................13
5.0 Requirement 5..........................................................................................................................15
5.1 Price Identification of Product of the Organisation.............................................................15
5.2 Cost Identification of Product of the Organisation..............................................................15
References......................................................................................................................................17
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1.0 Requirement 1
1.1 Nature of Organisation
Aristocrat Leisure Limited (hereinafter may be referred to as “Aristocrat” or the company or the
firm as the case may be) is an Australia based gaming technology company specialised in
manufacturing and distributing gambling machines. Aristocrat is a public company and hence the
shares of the company are listed in the Australian Stock Exchange (ASX) and the financial
performance of the company has been steadily increasing on a yearly basis. in the last five years,
the company had achieved significant growth in terms of top-line as well as market share in the
relevant segment. In the year 2018, the company earns total revenue of $3,550 million
approximately with a net profit of $543 million approximately. for the same year. The total base
of the company stands at $5,847 million (Aristocratleisurelimited.gcs-web.com, 2019).
(Aristocratleisurelimited.gcs-web.com, 2019)
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1.2 Products and Services of the Organisation
The primary offering of the company is the games and system related to gaming and gambling
technologies. The principal activities of the business, therefore, may revolve around the
manufacturing and distribution of such technologies and machines across the world with the
major base in Australia, New Zealand and the USA. The annual report of the company shows
that the major reportable segment of the company is three-fold out of which majority of the
revenue is generated from gaming operations. Digital segment stands second and international
class III operations also contributes towards the top-line of the business
(Aristocratleisurelimited.gcs-web.com, 2019).
1.3 Corporate Social Responsibility (CSR) Approach of the Organisation
CSR may be viewed as a sustainable approach which may help the management business to
become responsible towards the society at large and thereby comply with the social and moral
requirements towards the stakeholders of the business. The concept of CSR has derived from the
shift of corporate objective of wealth maximisation to value maximisation. In earlier days, the
bottom-line of the business was given due priority and as a result, the societal aspects were
neglected (Saeidi et al, 2015). In dough so, different businesses have earned profitability but
have lost brand reputation by way of air pollution, customer or employee dissatisfaction, non-
compliance with legal requirements etc (Grougiou, Dedoulis and Leventis, 2016). Therefore, the
researchers have identified that apart from profit, people and planet also plays a critical role in
developing a business and its growth in the market in the long-run. In the consideration of
Schrempf-Stirling, Palazzo and Phillips (2016), the concept of CSR has been broadened through
3Ps which are jointly termed as Triple Bottom Line of the business namely –
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 Profit People and Planet
(University of Wisconsin Sustainable Management Degree, 2019)
With reference to the CSR, the conceptual framework “sustainability:” has been developed that
denotes the long-term existence of the business in the market. In simpler terms, sustainability
referred to the process which management must adapt to secure the place of the business in the
industry for a longer period. If these 3Ps are considered while framing the broader corporate
objectives, the business should be able to satisfy the stakeholder associated and hence, brand and
reputation will achieve a desirable value in the market as a result, the business will attain the
sustainability to compete with other plates in the aggressive corporate playground of innovation
and value proposition (Leung and Snell, 2017).
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The management of Aristocrat has devised the CSR policy quite effectively and the same has
been strictly monitored to assess whether the same meets the broader corporate objectives, on a
regular basis. A perusal of the sustainability reporting of the company may reveal that the
company has been involved in the CSR activities through various approaches, which have been
detailed in the subsequent sections of the paper. Such approaches are listed herein below:
 Responsible Gaming (RG)
 Diversity and Inclusion (D&I)
 Community and Society
 Energy and Environment
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2.0 Requirement 2
2.1 Identification of Stakeholder Groups
Every business has a stakeholder group who may significantly influence the operations and
therefore it becomes the responsibility of the management to assess the impact of the
stakeholder's groups on the business, evaluate their expectations and frame policy for the
effective stakeholder management. In the case of Aristocrat also, it has been observed that the
company has a number of stakeholders associated with the business and the researcher has
identified four of them, which are listed herein.
 Employees
 Community
 Customers and
 Regulators
In the subsequent sections, the researcher has attempted to evaluate the CSR approaches
undertaken by the company against each of these identified stakeholder groups, in details.
2.2 CSR Approach and Value Creation for Identified Stakeholders Groups
Employees
The corporate policy towards the workplace also establishes the fact that the company puts due
emphasis on the “Diversity and Inclusion” and therefore, the HR policy of the firm has been
designed to attract the best talent irrespective of cast, gender, race, religion or any other
parameters. The figure below shows the D&I framework of the company which depicts that the
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company has been socially responsible towards the community in terms of creating an inclusive
workplace for the employees for the purpose empowerment, sustainability and excellence.
(Aristocrat, 2019)
Community
The company has been responsible towards the community and society through its program
called “Global Volunteer Week” in which employees participate and perform towards a social
cause and thereby contribute to the community at large. The corporate website of the company
reveals that in the year 2018, almost 487 employees participated in 44 different global causes by
contributing 1931 hours to the community and the company donated $477,000 AUD to the
registered charities (Aristocrat, 2019). Such initiatives towards community development surely
create a strong value proposition for a company in the industry in the long-run.
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Customers
Aristocrat has coined a concept called “Responsible Gaming” (RG) which focuses on the
sustainability practices and fosters players empowerment which is consistent with the \vision of
the vibrant and sustainable gambling industry. The company has already developed player-
specific information approach which may help the individuals to understand how the gaming
process works and how to get the return through random number generation etc. is a member of
American Gaming Association (AGA), the company contributes to focus on RG as a priority for
the industry by solidifying the AGA through policy formulation and regulation measures
(Aristocrat, 2019).
Regulators
The company pays due emphasis on the environmental guidelines set by the regulators in this
regard and therefore gives strict vigilance on developing relevant environmental disclosure in the
corporate reporting framework. In addition, the Board oversees the environmental controls on the
manufacturing and maintaining fuel-efficiency of the vehicles of the business (Aristocrat, 2019).
Moreover, the company is ASX listed and hence, Listing Rules are applicable for the firm which
the member follows with utmost priority. The corporate governance regime includes formal
Charter and provisions towards the compliance with the Listing Rules. It has also been observed
that the company has been complying with the General Data Protection Regulation (GDPR)
post-May 2018, after the EU legislation introduced GDPR for the companies (Aristocrat, 2019).
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3.0 Requirement 3
3.1 Management Information System (MIS) for the Identified CSR Approaches
Stakeholders MIS Approaches
Employees  The initiatives of D&I may be enforced within the workplace and a
periodic follow-up in the feedback may be undertaken wherein the
responses from the employees may be collected. Such an effort will
help the management to assess the efficacy of the D&I initiatives
undertaken by them.
 The management, on the other hand, may also initiate a formal review
of its HR policy towards D&I initiatives by the senior Board members
to evaluate the compliance with the policy charters and identify the
variances, if any. The variances may need to be mitigated by the HR
leaders in concurrence with the Board and thereby the company may
achieve the desired results.
Community  The efforts put through “Global Volunteer Week” may be measured in
terms of careful and systematic follow up with the different
beneficiaries. The productive hours extended by the employees may be
documented to asses the extent of such activity and thereafter may be
communicated the same to the owner groups through structure
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corporate reporting.
 In a similar manner, the amount given under charity may need to be
disclosed in the annual report of the company so as to communicate the
same to the stakeholders about the positioning of the company in terms
of its societal approach.
Customers  The extent of effectiveness of RG may be measured through a strong
communication system within the business through the establishment of
an operational manual and compliance framework. Management may
need to control the operation to assess compliance with care and caution
as against the pre-set benchmark.
 The feedback from the customers in terms of survey, proposal,
questionnaire on user experience may need to be collected based on
which the efficiency of the RG approach may be assessed.
Regulators  Compliance with ASX Listing Rules should be strictly monitored by
the Board against the pre-determined established Charter.
 Environmental impact may also be measured against the relevant
regulatory pronouncements and any deviations must be accounted for
within the corporate reporting in order to provide a transparent and fair
view of the operations to the stakeholder groups.
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3.2 Significance of Identified MIS to the Organisation
As stated earlier, the significance of these MIS initiatives has been significant to the success of
the company as the approaches may help the management to gather necessary information on the
extent of the efficiencies of the programs undertaken by the firm towards its CSR policy sets.
Employees Community Customers Regulators
Employee satisfaction
and growth and
development pave the
way of corporate
growth as well as
hence the efficiency
of D&I initiatives are
critical for the
management.
Community
development through
charities and
entrepreneurship may
help the management
to build a strong brand
reputation in the given
segment and thereby
provide a competitive
edge.
Customer satisfaction
may be considered to
be one of the most
success-critical
parameters for a
business and hence,
the RG approaches
and its effectiveness
towards building a
responsible customer
base in line with the
regulatory framework
is crucial for the
success of the
business.
Regulatory
compliance helps the
business to avoid non-
compliance related
risks by way of non-
compliance costs and
related penal
provisions. Besides,
the brand value of the
firm may also get
adversely affected on
account of such
breach.
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4.0 Requirement 4
4.1 Identification of Benefits from Identified CSR Approaches
The conceptual framework of the CSR does not only provides value to the stakeholder but also
generates a significant return on the part of the organisation as well. It is a two-way approach
which suggests that such CSR activities will satisfy the need of different stakeholders associated
with the business and thereby the business will, in return, achieve the sustainability in the market
through brand building, reputation generation, strong value creation and unique offering. Two
considerable benefits that may arise out of the CSR activities undertaken by Aristocrat may be
noted as below. The detailed discussion on each of these two benefits has been performed in the
next part of the paper.
 Brand value creation through a unique and sustainable offering and
 Innovation culture and competitive advantage
4.2 Analysis of Benefits from Identified CSR Approaches
 Brand value creation through unique and sustainable offering: The company
consistently focuses on the product development with unique value proposition enabled
with the latest technology that may reach out to the larger number of customer base
across the world and simultaneously satisfy the gaming need of people in congruence
with the regulatory parameters. As a result, the revenue of the company has been
increasing for the last five years considerably.
 Innovation culture and competitive advantage: The company focuses on the
employees for their growth and development in conjunction with the organisation which
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may result in the innovation coming from the employees. The organisational culture of
D&I allows the people from different cultural background and value and belief system
contribute jointly towards the concept development and hence, the management may be
able to create a disruption in the market through their innovative offering (Flammer,
2015).
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5.0 Requirement 5
5.1 Price Identification of Product of the Organisation
The price of the Slot Machine of Aristocrat is approximately $800 to $1200. The picture below is
of a Mario game Casino slot machine with touchpad facility. One machine costs approximately
$1500 AUD.
(www.alibaba.com, 2019)
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5.2 Cost Identification of Product of the Organisation
The annual report does not provide any evidence as to the different cost components of the
gaming machine as shown above. However, secondary research has shown that a gaming
machine in Casino may cost around $500 AUD. The components are listed below:
 Variable Cost: Cabinet, Power Supply
 Fixed Cost: Overhead, Supervisory Charges
 Direct Cost: Materials, Software and Hardware
 Indirect Cost: Administrative Expenses, R&D Costs (Quora.com, 2019)
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References
Aristocrat. (2019). COMMUNITY & SOCIETY - Aristocrat. [online] Available at:
https://www.aristocrat.com/sustainability/community-society/ [Accessed 8 May 2019].
Aristocrat. (2019). CORPORATE GOVERNANCE & CYBER-SECURITY - Aristocrat. [online]
Available at: https://www.aristocrat.com/sustainability/corporate-governance-cybersecurity/
[Accessed 8 May 2019].
Aristocrat. (2019). DIVERSITY & INCLUSION - Aristocrat. [online] Available at:
https://www.aristocrat.com/sustainability/diversity-inclusion/ [Accessed 8 May 2019].
Aristocrat. (2019). ENERGY & ENVIRONMENT - Aristocrat. [online] Available at:
https://www.aristocrat.com/sustainability/energy-environment/ [Accessed 8 May 2019].
Aristocrat. (2019). RESPONSIBLE GAMING - Aristocrat. [online] Available at:
https://www.aristocrat.com/sustainability/responsible-gambling-game-play/ [Accessed 8 May
2019].
Aristocratleisurelimited.gcs-web.com. (2019). 2018 Annual Report. [online] Available at:
https://aristocratleisurelimited.gcs-web.com/static-files/9527b2df-e411-4c49-8067-d2f391a0fbe0
[Accessed 8 May 2019].
Flammer, C., (2015). Does corporate social responsibility lead to superior financial
performance? A regression discontinuity approach. Management Science, 61(11), pp.2549-2568.
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Grougiou, V., Dedoulis, E. and Leventis, S., (2016). Corporate social responsibility reporting
and organizational stigma: The case of “sin” industries. Journal of Business Research, 69(2),
pp.905-914.
Leung, T.C.H. and Snell, R.S., (2017). Attraction or distraction? Corporate social responsibility
in Macao’s gambling industry. Journal of business ethics, 145(3), pp.637-658.
Quora.com. (2019). How much do machines cost for a casino?. [online] Available at:
https://www.quora.com/How-much-do-machines-cost-for-a-casino [Accessed 8 May 2019].
Saeidi, S.P., Sofian, S., Saeidi, P., Saeidi, S.P. and Saaeidi, S.A., (2015). How does corporate
social responsibility contribute to firm financial performance? The mediating role of competitive
advantage, reputation, and customer satisfaction. Journal of business research, 68(2), pp.341-
350.
Schrempf-Stirling, J., Palazzo, G. and Phillips, R.A., (2016). Historic corporate social
responsibility. Academy of Management Review, 41(4), pp.700-719.
University of Wisconsin Sustainable Management Degree. (2019). A Simple Explanation of the
Triple Bottom Line | University of Wisconsin. [online] Available at:
https://sustain.wisconsin.edu/sustainability/triple-bottom-line/ [Accessed 8 May 2019].
www.alibaba.com. (2019). Touch Screen Jackpot Aristocrat Casino Slot Video Machine Slot
Mario Game For Sales - Buy Jackpot Slot Machine,Touch Screen Slot Machine,Casino Slot
Game Machine Product on Alibaba.com. [online] Available at:
https://www.alibaba.com/product-detail/Touch-Screen-Jackpot-Aristocrat-Casino-
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Slot_62062490438.html?spm=a2700.7724857.normalList.1.e30c761ewdAQb9&s=p [Accessed
8 May 2019].
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