CSR

Topics: Corporate social responsibility, Cost-benefit analysis, Sustainability Pages: 17 (2282 words) Published: March 1, 2015
Introduction
As the traditional theories indicate that the purpose of accounting is to inform the self-interested decision-taker to generate their wealth maximally and thereby guarantee the efficiency of the capital markets (Gray, Owens and Adams, 1996). However, nowadays, as the revolution of new technology, and high levels of accessibility of worldwide information for everyone, any tiny element from social and environmental aspects can have a major impact on the profitability of the company. Thereby this led to recognition of different types of capital including financial, human, natural and social capital, which has the effect on human living space. Within this sense, social and environment reporting can be described as process of communicating the social and environmental effects of organizations economic activities to particular interest groups within society at large (Gray, Owens and Adams, 1996). History of CSR

Social and environmental reporting has grown substantially since the early 1965s. According to study of CSR Sustainability Framework (CSR Quest, 2004), the history of the CSR can be consist of 3 phases which can be illustrated by such a diagram below with issues developed in each phase

Diagram 1.1
(Source: CSR Quest, 2004)

As a result, nowadays, the findings pointed out by Peter Utting (2005) revealed that more than 80% of the fortune-500 companies had CSR reporting on their agenda as prior item. (For the further details please look at the appendix)

http://www.csrquest.net/uploadfiles/1D.pdf (appendix) (History of CSR) http://vuir.vu.edu.au/15372/1/O%27Donovan_2000compressed.pdf (Appendix) (History of CSR)

Theoretical Explanation of CSR as Main Reason for Corporations with Integration of ABF There are some theoretical reasons for companies to present the contribution to their potential stakeholders who are interested in their performance. Stakeholder theory

Stakeholder theory involves the structure of business ethics and organizational management which contains principled values in the management of the company. Every corporation has stakeholders those can be defined as individuals and groups who get benefit or loss from, and whose rights are influenced by company’s activities. (R.Edward, 1983) For example, staffs, customers, investors, suppliers and they can make claims on the company as holding rights to demand. From the traditional view of the corporation, firms have duty to put stakeholders’ needs first which means increase value for them. However, stakeholder theory nowadays argues there are other parties involved such as government, political groups, trade unions, communities and even competitors. Next graph shows the framework of shareholders in a company.

From the aspect of Chakravarthy (1986), excellent performance of the company is related to good manipulation of multiple stakeholder groups. For instance, each group of shareholder’ benefits should be consolidated and decision-makers should take into account their benefits for the further interests of the company. What’s more, the stronger the stakeholder the greater the influence. Furthermore, in the opinion of Donaldson and Preston (1995), descriptive research pointed out how managers, firms and stakeholders interact. Also, Freeman (1984) claimed there are three levels of stakeholder theory which are rational, process and transactional levels.

Within ABF

In light of stakeholder theory, it will be reasonable to analyze ABF’ CSR report by illustrating implemented consideration for different stakeholder from 3 different division of the company in such diagram below to see to what extent ABF provide basis for its stakeholders’ interests to provide greater sustainability as it explained in detail under title of sustainability & triple-bottom line theory.

Sugar

Ingredients

Grocery

Legitimacy theory
Primarily, legitimacy theory presents that the only way to continue existing for a business...
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