Analysis of Woolworths Wage Scandal and Public Interest Theory

This report analyzes the Woolworths wage scandal, focusing on the underpayment of employee wages and its implications for public interest theory. The report begins with a summary of the news article, which details the scandal and the concerns raised by the Australian Shareholders Association regarding the company's actions and the large bonuses paid to senior executives despite the wage underpayment. The report then explains the public interest theory, its descriptive, instrumental, and normative approaches, emphasizing the importance of protecting stakeholders, including employees, investors, and the community. The analysis section discusses how Woolworths violated this theory by underpaying employees, violating Australian labor laws, and prioritizing the interests of higher management over employees. The report concludes that public interest theory is closely related to the issues raised in the news article and can influence the development of guidelines to prevent future wage scandals. References to supporting literature are also provided.

accounting theory and practice
Article 2. woollies chairman faces grilling over wages scandal
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Total words: 640

Article 2 woollies chairman faces grilling over wages scandal
Financial review, Sue Mitchell 5 Nov 2019
Article 2 woollies chairman faces grilling over wages scandal
Woolworths group is one of the famous retail stores in Australia recently faced a serious
issue regarding underpayment of wages. The chairman of the company Gordon cairns is
going to be grilled by the representatives of the Australian shareholders association about the
fact that when the company came to know about such underpayment of wages that values
approximately $300 million dollars. Further queries have been asked by the representatives
regarding the issue that when million of dollars has been paid to the senior executives
including the chief executive brad Banducci and managing director Clarie Petersa.
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Public interest theory
The public interest theory has several distinct aspects which are supportive on mutual basis.
The three approaches of the public interest theory are the descriptive, instrumental and
normative. The descriptive approach is utilised to explain the nature and the features of the
firm including the factors that how the management is controlling the affairs of the
organisation, how the board of directors follow the guidelines and rules of corporate
activities, and the process of thinking of the managers about managing the affairs of the
company. The instrumental approach uses various data to detect the link that prevail between
the management of the stakeholders’ group and the board of directors. The main concept of
the stakeholders is that the management should give priority in protection of the stakeholders.
The main stakeholders of the organisation are the employees, investors, customers supplier’s
government and the society (Vargas-Hernandez & Gonzalez 2018 P.55-57).
This incident shows the necessity of strict laws in protecting the interest of the stakeholders
and the organisations should not take a casual approach regarding the payment of wages of
the employees. The trade unions all around Australia have take a nationwide campaign in
order to prevent the occurrence of such wage theft in future and they claimed that this
problem should be solved in a systematic manner.
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Analysis
In this article it is mentioned that Woolworths by underpaying the wages of the employees
has violated the public interest theory of protecting the interest of the stakeholders. The
employees play the major role in carrying on the operation of the business and help the
organisation to achieve its goal. Woolworth by not paying the correct wage to the employees
violated the rules that are related with the labour laws of Australia (Mudawi & Timan 2018 P
56-70).
According to the article the Australian shareholders association add pressure to the
management to show the reason of such underpayment. The association also raised the
question that, why during such underpayment the organisation paid million of dollars as
bonus to the higher management including the chief executive officer and the managing
director. This kind of bias activity by the management clearly indicates that the management
deliberately reduces the payment of the employees and give more emphasis on protecting the
interest of the higher management (McCarthy & Muthuri 2018 P 131-173).
This scandal also highlighted the facts that though the organisations provide that they are
focusing more in the protecting the interest of the stakeholders but in reality, the management
does not do so and take unfair means to exploit the employees from their actual wage rate.
The public interest theory can effectively influence the development of a proper guideline for
all the organisations following which the occurrence of such wage scandal can be prevented.
The guidelines will reduce the power of the higher management and will give more
opportunity to the employees so that they can claim their actual rights (Domingue et al 2017P
292-301).
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Conclusion
From the above discussion it can be said that the public interest theoryis closely related with
the assumptions that are taken in the news article.
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Reference
Domingues, A. R., Lozano, R., Ceulemans, K., & Ramos, T. B. (2017). Sustainability
reporting in public sector organisations: Exploring the relation between the reporting
process and organisational change management for sustainability. Journal of
environmental management, 192, 292-301.
McCarthy, L., & Muthuri, J. N. (2018). Engaging fringe stakeholders in business and society
research: Applying visual participatory research methods. Business & Society, 57(1),
131-173.
Mudawi, O. M., & Timan, E. (2018). Does the Concept of Enlightened Shareholder Value
Succeed in Bridging the Gap between the Shareholders and Stakeholders Value
Theories?. Business and Economic Research, 8(2), 56-70.
Vargas-Hernandez, J. G., & Gonzalez, D. C. (2018). The Discussion on Stakeholders in
Contrast with the Shareholders Theory: Reconciliation to a Conscious
Capitalism. SAMVAD, 14, 55-57.
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