Corporate social reporting Essay Example | Topics and Well Written Essays - 2500 words

Corporate social reporting - Essay Example In a similar manner, disclosing the information associated with the corporate social responsibility activities is an important part of the daily functioning of organizations. Importance of CSR Reports The importance of CSR reporting has emerged because of the lack of dependence on the information provided by organizations, as opposed to their actual contribution towards the society. From the academic point of view, there is an accepted theory that discusses the factors responsible for motivating companies in disclosing their CSR information. Most of the information disclosed in the CSR reports was previously considered as the activities or decisions belonging to the private domain of corporations. The theoretical evidences suggest that companies disclose information associated with CSR activities to the public, in order to satisfy their prime needs and reflect an extremely responsible image towards the society. The legitimacy helps organizations in achieving the main purpose of attai nment of sustainable profitability as an important goal of the business. The corporate sector gives huge economic profit to the environment and society. However, in spite of the advantages, there remains an increasing concern related to the wastage or abuse of resources in the society. The society offers huge benefits to the corporate sector, which is why, it has the right of seeking information associated with what the organization returns to the society. The increasing awareness concerning the natural resources is responsible for the decision of legitimacy of companies, which in turn increase the necessity of disclosing CSR information. Stakeholder’s theory According to P.A. Stanwick & S. D. Stanwick (2006), the business relationship must be occupied with a large number of managerial researches (Tilt, 1997; 2007). The stakeholder’s theory addresses to questions where stakeholders require special attention. Approaches to this kind of question are determined by the rel ationship between organizations and the stakeholders. It is done on the basis of exchange transactions, legitimacy claims, power dependencies and various other claims. The researchers have integrated the stakeholder’s theory with the help of various managerial perspectives, mainly the theories belonging to governance and agency. The stakeholders theory have been an useful frame, being both normative and instrumental, for measuring the role of NGOs in developing and adopting environmental standards. The stakeholder management offers theoretical base for proper understanding of the necessities of the stakeholders and function accordingly. Legitimacy Theory According to Brennan & Merkl-Davies (2013), Legitimacy theory can be explained in the following manner: Every organization seeks legitimacy from the public by ensuring the fact that their value system is congruent with the value of the community, within which it is performing its business operations Deegan & Rankin (1996) hav e identified four different strategies with the help of which the organizations improve their self-image, thereby gaining legitimacy. They can seek legitimacy from the public by informing them about the real changes in the behaviour, followed by bringing a change on the perception of general public, without causing any change in the actual behaviour,