Document on Financial Accounting
Added on 2020-02-24
5 Pages1406 Words37 Views
FINANCIAL ACCOUNTING
Financial accountingAnswer to 1Both stakeholder and legitimacy theory have been implemented in order to investigate corporate environmental and social disclosure practices in the developed countries. On one hand, the legitimacy theory primarily depends on the ideology of social contract wherein the organizations seek a positive interconnection with the society in order to make sure that resources are readily available to them. It can be regarded as a common assumption that the activities of an organization are proper, desirable, or effective within some socially established system of beliefs, values, definitions, and values. Furthermore, organizational legitimacy cannot be considered a steady state but instead it is a variable one. Besides, such variability is not temporary in nature but also spatial across cultural and stakeholder groups. Thus, relying on the perception of an organization of their level of legitimacy, an organization can adopt legitimation measures (Richardson & Eberlein, 2012). Nevertheless, such organizational legitimacy can be enhanced by the utilization of symbolic measures communicating a public image that is aligned with the primary objectives of an organization. On the other hand, the stakeholder theory primarily implies that the organization’s prime objective is to establish stakeholder value. The enhancement of the stakeholder value is the major concern of the organization. It is primarily engaged in finding the real stakeholders of the organization and the ways by which they interact and coordinate in order to leave an impact upon the organization (Richardson & Eberlein, 2012). In short, it can be commented as a method that will drive the organization and seek betterment ofthe entire organization. Furthermore, organizations operate with the prior assistance of social contracts that make the stakeholders accessible and eligible to several rights and responsibilities. Besides, it must be taken into consideration that the organizations that are capable in designing an efficient and adequate link with its stakeholders are more likely to succeed in the competitive market than the others must.Both the theories idealize an organization as a part of a wider social system wherein such organization influences, and is in turn affected by other groups prevailing within the society. While on one hand, the legitimacy theory explains about the anticipations of a society in general,the stakeholder theory on the other hand offers a wider resolution by referring to a specific groupin a society (stakeholders). Therefore, the reliance is on a specific group and not the community at large that raise question on the validity of the theory. Moreover, the stakeholder theory accepts2
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