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 then re 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 Cartography (1 986), 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 Prestos 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 ABA In light of stakeholder theory, it will be reasonable to analyze ABA’ CARS report by illustrating implemented consideration for different stakeholder from 3 different division of the company in such diagram below to see to what Exeter ABA provide basis for its stakeholders’ interests to provide greater sustainability as it explained in detail under title Of sustainability & triple- bottom line theory.Sugar gradients Grocery Legitimacy theory primarily, legitimacy theory presents that the only way to continue existing for a business is that aim to achieve consensus between the society in which they are based cognizance the organization to be running to a value system and the criteria of public admission behavior in the larger social system, which is bigger than stakeholder theory (Mathews, 1993). Organizations would confront many challenges to their legitimacy.Limbo (1994) indicate that an organization may use four possibilities to face with different legitimacy threats: Educate public or their shareholders to develop their capability Pursue to change the perception of stakeholders instead of changing behavior Divert attention from the events concentrated to positive activities not essentially combined with the failure Change anticipation of external standards Legitimacy theory can be regarded as a general form for providing a deeply understanding of CARS practice.
Commonly, one or more of Limbo’s suggested legitimating strategies are pervaded in many CARS initiatives.For instants, without disclosing the negative factors, organizations emphasize the positive elements, which can be corresponded to changing the concentration n other active sides rather than focus on the bad effects. On the contrary, there are two variants of legitimacy theory. The first one is related to individual organizations.
For example, a business involved in a major oil spill, a charity trapped in a financial scandal. The second variant requires a board perspective, which based on Marxian thinking and create problem about the legitimacy of the system as all, e. . Capitalism. This may bring in a question that is why shareholders play a dominant role in public environment or why firms can be allowed to behave in ways while most people discover unreasonable in their private lives. Based upon the first perspective, many illustrations can be found that CARS used to employ to close a ‘legitimacy gap’ (Limbo, 1 994), which can be described as ‘expectancy gap’ that indicates an unconformity between an organization’s behavior and social expectations of businesses.As different to first perspective, in the second point of view, CARS is mostly applied in subtle way in which CARS is being used by organization (as example) to illustrate changing in nature of business – employee relationship in purpose of educating stakeholders in where however the illustration mostly perceived as interpretation is to avoid room trade union aggressive movements on legitimacy of organizations. Essentially CARS is used to help organization built the importance, which is creation of wealth and jobs.
As a social benevolence companies using CARS are trying to continue legitimacy of the system as a whole, leaving trade union under prevalence. As expectancy gap indicating a discrepancy between an organization’s actions and society’s expectations Of this organization. Legitimacy gaps can threaten an organization’s image and reputation, and ultimately its existence as a legitimate member of the business community and society;–;–;–; http:// www. Electromagnetic. Com/public/ The Triple Bottom Line and Sustainable Development TUB was a concept developed in the 1 ass’s, which consists of three AS: profit, people and planet. “Profit” implies company’s economic value, and “people” pertains to social accountability, “planet” refers to company’s environmental responsibility, which can be illustrated by graph below; (Lexington, 1 997) Reference http://www. Vanderbilt.
Du/sustain/who-we-are/what-is- sustainability/ As seen from diagram above, It refers that instead of focusing solely on company’s financial performance, business should also take social and environmental into consideration which point outs the intersection of those cycle above which is sustainability defined as “… Meets the needs of the present without compromising the ability of future generation to meet their own needs… ” By Borderland Commission Report (1987).
In respect to this, World Bank (2002) point out that in order to achieve strong competitive position in market in long term basis with highly meaningful social implementation, companies undertakes “CARS projects consider them as part of a regional or local development plan that addresses economic, social, and environmental issues not only during the operation but also after its closure” Along with the concept of the triple bottom line in relate to sustainability, in visionary basis, it may be possible to see implications of sustainability in ABA in section of agriculture where it mostly achieved compare to other division of the company which can be illustrated by such a diagram below; As conclusion, it can be said that, in reasonable basis, the implementation of several project with proper supplementary investment with consideration of social and environmental and economic factors gives sense of sustainability o Some extent where each of three factors contributes needs of different capital recognized in business structure. (I. E. Labor as being socially, shareholder as economically and local community as being environmentally in concept of triple bottom line). The costs and benefits analysis of CARS Cost Benefit Analysis (CAB) approach is widely used to evaluate alternatives in a firm’s expenditure patterns (Astray, 2012).
In this section, CAB will be adopted to estimate the costs of implementing Corporate Social Responsibility and the benefits generated from CARS performance, which associates with the reasons why companies engage in CARS. Costs of CARS According to Sprinkle and Amines (201 0), there are three types of costs associated with implementing CARS.Those are in turn; As those cost illustrated above seen as financially burdensome for the companies, it’s implications will be explained as one of the main generic drawbacks of CARS in section of cost and motivation with integration of ABA CARS report in detail. Benefits Of CARS There are several benefits for companies to engage in CARS which can be titled under three main points which are vision, cost saving and reputation. Firstly, the vision, CARS is a process for attracting, motivating and retaining talented staff within and without companies. European Commission (2008) reports that many potential job applicants are aware of socially responsible companies as it is granting to provide excellent labor practice, environment performance and human rights to employee.
As a supporting evidence, a study of founder of ‘make good’, a charity emphasis on environmental issues which made by different academic resources can be shown in such table below; HTTPS://www. Muskegon. Com/big/2009/08/12/interesting-cars-stats-and-facts/ Secondly, cost savings. There around 56% of business representatives accepted the states that cost saving is one of important drivers of CARS engagement (Grant Thornton, 2011 According to study of Gig, where analysis of cost reduction in operational basis within implementation of CARS practiced, types of cost saving can be shown in diagram below (Sprinkle & Amines, 201 0; Carroll & Shebang, 201 0) In addition to this, cost savings were also presented with examples, such as costs of labor disputes, compliance costs and Advertisement costs.