Research Assignment Essay Example

  • Category:
    Finance & Accounting
  • Document type:
    Research Paper
  • Level:
    Undergraduate
  • Page:
    1
  • Words:
    584

STAKEHOLDER ACCOUNTING

Stakeholder Theory

Accounting:

September 21, 2013.

Telstra promises strong NBN asbestos measures

Summary:

Testra has come under intense pressure from different stakeholders over its management of asbestos in its infrastructure. The company now promises strong National Broadband Network asbestos controls and on this regard, it has outlined a broad raft of new strategies designed to make certain the safety of handling harmful asbestos in its pipes and pits. This development comes amid claims that the company has dumped over 80 trucks of untreated asbestos contaminated soil in Black Hill. (Words 75)

Accounting Theory:

Stakeholder theory implies that the purpose of a business is to generate as much value it possibly could for the stakeholders (Jones & Wicks, 2009). For companies to be sustainable and succeed over time, the executive must keep the interest of shareholders, communities, employees, contractors, suppliers, and customers aligned and moving toward the same direction. Innovations to maintain these interests aligned is very critical than the simply tactic of trading off the stakeholder’s interests against one another. (Words 77)

Analysis:

From analytical point of view, stakeholder theory can helps Teltra’s executives by promoting assessment of how the organization fits within its larger environment (Goodpaster, 2008), how the company’s standard operating processes affect the stakeholders within the organization (stockholders, managers, employees) and immediately outside the organization (suppliers, customers, financiers). Stakeholder theory in a normative sense strongly states that overlooking stakeholders is ethically unjustified, imprudent and unwise, and to this extent the company has outlined a broad raft of measures established to ensure safety concerning the handling of harmful asbestos substances in its pipes and pits even as issues continue to come pertaining to the issue exposed by the rollout of the NBN.

According to the article, the fundamental facet of the stakeholder theory is that the constituents who have stake on the functioning of the company consist of diverse and large group. Teltra’s stakeholders are seeking different benefits and goals from the company. Therefore, the company strives to undertake huge steps to ensure best practice for management of asbestos by its employees and make sure that all contractors fulfill the similar standards as provided in the Federal Code of Practice.

The theory sustains that these varying interests, in fact do control the company in their own rights and not a single one has a special right to be heard than others (Freeman, 1984). On this regard, the company has arranged meeting with various interest groups including Minister for Workplace Relations and Employment, NBN Co, union and Federal department to support a wider stakeholder interest approach to the management of asbestos in Australia. The company has also communicated to the stockholders through statement issued to the ASX. The company has also been managing asbestos risks within its networks for several years and it has systems in place for handling claims for any kind from the public and employees to make sure that such claims are managed expeditiously and sensitively (words 315).

Conclusion

Stakeholder theory argues that the rationale of a business is to produce as much value it possibly can for its stakeholders and broad raft of new measures that the company has designed to ensure the safety of managing harmful asbestos in its pipes and pits will exactly do that.

(Words 50)

References

Freeman, R. (1984), Strategic Management: A Stakeholder Approach. Pitman, Boston.

Goodpaster, K. (2008), ‘Business Ethics and Stakeholder Analysis’, Business Ethics Quarterly 1,

Jones, T & Wicks. C. (2009), ‘Convergent Stakeholder Theory’, Academy of Management

Review 24, 206-221.