Integrated Reporting: A Question of Balancing the Needs of Different Stakeholders

Running head: INTEGRATED REPORTING
Integrated Reporting: A Question of Balancing the Needs of Different Stakeholders
Name of the Student
Name of the University
Author’s Note

1INTEGRATED REPORTING
Table of Contents
Introduction......................................................................................................................................2
Benefits of Integrated Reporting.....................................................................................................2
Limitations of Integrated Reporting................................................................................................5
Conclusion.......................................................................................................................................7
References........................................................................................................................................9

2INTEGRATED REPORTING
Introduction
The main aim of this report is to analyze and evaluate different aspects of integrated
reporting in order to discuss the major benefits and limitations of integrated reporting in the
business entities (de Villiers, Rinaldi and Unerman 2014). Integrated Reports can be considered
as a concise communication that shows how the business organization’s strategy, governance,
performance and prospect cane contribute towards the creation of value over the long, medium
and short term. Thus, it can be said that integrated reporting (IR) assists the business
organizations in enhancing the organizations’ way to think, plan and report the story of their
business. Most importantly, the implementation of IR helps the business organizations in the
communication of the needs of different stakeholders so that their needs can be fulfilled in an
effective manner (Adams 2015). Business entities of all size can use IR in order to build trust and
understanding within the business. The importance of trust is paramount among the managers,
customers, suppliers, shareholders and others; and the implementation of IR helps in building
trust by highlighting what drives values.
Benefits of Integrated Reporting
From the above discussion, it can be seen that IR has become an important aspect for the
business organizations as it helps the business entities in value creation. In this context, it needs
to be mentioned that an integrated report needs to be concise and should be able to highlight the
process of value creation in the organizations (Flower 2015). Business entities can become
majorly beneficial from the implementation of IR. The following discussion outlines the major
benefits of IR in the business organizations.

3INTEGRATED REPORTING
With the implementation of IR, business organizations become able to develop a better
and more concrete understanding about the elements that determines their ability for the creation
of value for long, medium and short term. For this reason, IR helps in the planning process of the
companies and helps them to develop a holistic view on the capital and resources important for
the business model (Abeysekera 2013). The implementation of IR helps the business entities in
understanding not only the financial capital of the companies, but it helps in gaining
understanding about the other capitals for their better management. As per IR, there are six types
of capitals in the companies; they are financial capital, manufactured capital, intellectual capital,
human capital, natural capital and social and relationship capital. The involvement of IR can be
seen in the consideration of different implications for the conception between these capitals,
internal factors and external environment with the help of business model (Cheng et al. 2014).
The integrated reporting process plays an integral part in the development of a new a
communication tool for addressing the issues and demands of the stakeholders of the companies.
IR helps in the optimization of organizational reporting; for example, it can enable the
collaboration of multiple departments on an interdisciplinary level for the sharing of information
and creation of synergies (Cheng et al. 2014). This aspect helps in broadening the knowledge
and understanding of the organizational people about the organization. Thus, one aim of IR is to
strengthen the internal dialogue beyond the borders of individual departments that leads to the
increase in the efficiency of the resources (García-Sánchez, Rodríguez-Ariza and Frías-Aceituno
2013). For example, the integration between a sustainability report with the annual report helps
in saving both time and money of the companies as it is needed to design, print and distribute
only one report. Moreover, IR makes the decision-making process of the organizations faster in
the operational level due to the improvement in consistency in the value chain (Stubbs and