Case Study 2 LF02 PDF

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Assignment Case Study 2...

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Financial Accounting Theory Case Study 2

1) Summarize the main points in the article (Approx. ½ page) (2 marks). 2) Critically discuss the article with specific reference to one of the system orientated theories. 3) You should reference the case study article, the prescribed text, and any other sources you have in your answer. Summary This case study is discussing the expression of opinions from different firm’s staff regarding economic and social issues that existed in the corporate world, it supports employees should be expressing their views on the economic issues and social issues. Prime Minister Scott Morrison stated he wanted a conversation with the corporate sector about the economic issues, indicating discussing this issue was not evading the issues that have been brought up. Shane Wright (2019) has reviewed Ben Morton’s speech by targeting the businesses that spoke out on social issues but leaving out the economic issues such as tax relations that too were existing problems in the society although the BCA Chief Executive Jennifer Westacott has stated that there are no conflicts in expression of issues between the companies. Shane Wright (2019) stated how this discussion came about was due to a survey that had results of 4 in 5 believing that corporate leaders should express their opinion on those issues that existed, which might lead to bigger problems. It is also found that employees of large firms expected their firms to make a stand on issues of importance to the wider community. In the case study, Shane Wright (2019) has shared Jennifer Westacott’s speech stating that the firms are focusing on getting the balance between economic and social issues, indicating how the firms should be understanding the virtue of success by creating more jobs, paying people’s salaries and expanding the firm while expressing their views on economic matters. With the companies starting to express their views on economic and social issues, this would back up the government’s abandoned plan to cut the corporate tax rate. In conclusion, Shane Wright (2019) concluded by stating that it is legitimate that the chief executives express their opinions on these issues, while being successful in business and giving the contributions back to the communities by giving them wages and creating jobs for people.

Critically discuss the article with specific reference to one of the system orientated theories

From RMIT Lecture Notes, it states “Firms want their activities to be perceived as being ‘legitimate’ by society” (RMIT 2020, Lecture 6, Slide 8), indicating they are reliant on the society's view on whether they are legitimate or not. It is stated that firms are focusing on getting the balance between economic and social issues, indicating how the firms should be managing their operation with relevant “Social Reporting” information listed (RMIT 2020, Lecture 7, Slide 5). From Shane Wright (2019) citing BCA Chief Executive Jennifer Westacott’s speech regarding how there was no conflict between the firms opinions on economic issues and taxes reformation, this reflects her speculation of improving the economic and social matters between the government and the community by assessing on case-by-case basis to know what is important to them, their employees and customers with necessary listings as stated in RMIT Lecture Notes (RMIT 2020, Lecture 7, Slide 5). Managing their business ethically indicates that they will have to consider various aspects to resolve the problems, on how to give back to the communities and how they try resolve the matters based on the society’s expectations, as well as whether the claims are deemed as legitimate. Firms are required to maintain an social contract to be able to continue their operations in business, as stated in RMIT Lecture Notes “Possible consequences of breaching the social contract” (RMIT 2020, Lecture 6, Slide 10), indicating if they were to breach the social contract, they would face possible consequences. In RMIT Lecture Notes “Limitations on availability of resources (financial, labor, and other input factors)” (RMIT 2020, Lecture 6, Slide 10), the firms would be limited to resources, in this case, which is the labor, if they were to breach the social contract. As labor usage is one of the main resources that most companies needed for operating their business, if their claims were recognized as non-legitimate by the society, it could terminate their company from operating in the future. In this article, it was trying to address that the companies in the society was trying to find balance with economic and social issues. The increasing society’s expectations of big firms to manage ethically are to take responsibility for the availability of the resources, and to give back to the communities by giving people’s wages and creating jobs.

Reference

Shane Wright 2019: ‘Perfectly legitimate’ for business to speak out on social issues: BCA, Viewed on 22 August 2020

RMIT 2020: Financial Accounting Theory Lecture 6 and 7 Lecture Slides, Viewed on 25 August 2020...