There are various factors surrounding the issue of management policy in contemporary organisations. One of the significant aspects of management policy involves handling the expectations and perceptions of the various stakeholders involved in the running of the organisation. The stakeholders include, among others, business owners, employees, and clients. The leadership is especially concerned with the management of the stakeholders’ perceptions towards the effects of the business on the natural environment. The views of the stakeholders are crucial to the performance of the company and its survival in today’s competitive global market.
Several companies have made efforts aimed at improving their public image by abandoning activities that have deleterious impacts on the social and physical environments. The companies have taken to publicising, with varying levels of accuracy, their successes. There are various social and environmental ranking agencies that operate with the major objective of making the company’s environmental impacts more transparent. The ranking agencies evaluate the company’s environmental track record, as well as its management operations.
The agencies also concentrate on the company’s future outlook. To this end, they analyse the ecological management strategies and investments put in place by the company. The ranking agencies especially focus on those strategies that appear to improve the organisation’s future ecological performance (Chatterji 2007, par. 3).
The current research paper is written against the background of the impacts that contemporary organisations have on the environment. In the paper, the author focuses on two organisations, BHpBiliton and Westpac. The author analyses whether or not the two, which are some of the largest ‘diversified’ public firms in Australia, divulge social and environmental information to the public. The focus is on the disclosure of such information in reaction to specific social expectations, which normally vary with time.
The current paper also examines the research work carried out by Guthire and Parker in 1989. The research work examined the annual reports of the BPH Ltd. for one hundred years, ending in 1985. BHP Billion is an Anglo-Australian international petroleum and mining firm with headquarters in Australia. It is regarded as the third largest firm in the world in terms of market capitalisation.
The research paper evaluates the level and kind of corporate social and environmental reporting evident in the two firms mentioned above. The author goes further and examines the relationship between social disclosure and ‘the level’ of concern raised by members of the public. By undertaking the research, the author seeks to find out whether or not there are discernible transformations in the companies social and environmental disclosure over time. It further examines whether it is possible to associate particular social and environmental disclosures with particular social matters or not. The study is guided by the authentic theory as it relates to social and environmental disclosures (Hodge 2010, par. 4).
A Critical Analysis of the Various Issues Covered in the Article
As already indicated in this paper, the research conducted by Guthrie and Parker in 1989 focused on the social and environmental disclosures at BHP Ltd. between 1885 and 1985. The researchers recorded a period of growth, decline, and transformation in the company’s social disclosure. According to the findings made in the study, the major concern of BHP’s social disclosure was human resource. However, the researchers noted that the focus on this aspect of the organisation was somewhat inconsistent. The company lacked any form of ecological disclosure until around 1950. There was a recurrence at the beginning of the 1970s and during the 1980s. However, the intensity of the disclosure during these periods was very low (Chatterji 2007, par. 5).
The researchers sought to find out whether or not the company’s disclosures were in line with the provisions of the legitimacy theory. They compared the disclosure exercises conducted by BPH Ltd. with key events and matters affecting the company throughout its existence. The researchers indicated that the peak in ecological disclosures in the 1970s was linked to a time when mining, oil, and steel industries were fiercely criticised in the society. The criticism was, to a larger extent, associated with the various emerging conservationists.
The provisions of the legitimacy theory were, however, not met in relation to ecological operations. Initially, the disclosures were rare. In addition, the disclosures were not elicited by public pressure or the various occurrences in the external environment (Hodge 2010, par. 5).
Another research conducted by Brown and Deegan in 1998 addressed the use of media coverage as an alternative form of expressing societal concern. The research findings were in support with the provisions and assumptions of the legitimacy theory in relation to corporate ecological disclosures. In some industries analysed in the study, the approaches adopted by the management in ecological disclosure were linked to the level and kind of media coverage dedicated to the particular ecological matter.
Various scholars have conceptualised legitimacy theory differently. Many agree that the theory involves a model that is applied in the social and environmental reporting literature. The theory may appear as simplistic to some. The perception notwithstanding, the theoretical foundation is mostly used by scholars to elaborate corporate social contracts. It is also widely used in explaining the ‘retained’ assumption that corporate managers will adopt certain approaches in given situations. It is inclusive of disclosure approaches that prove to the members of the community that the firm is making efforts to comply with societal expectations as envisaged in the social contract (Chatterji 2007, par. 7).
At times, the leaders may come to the realisation that, with regard to the expectations of the relevant publics, the company is not attaining the provisions laid down in the social contract entered into with the society. In such cases, the management will find it necessary to take measures to highlight the legitimacy and relevance of the organisation in the community. The aim here is to avoid possible sanctions and constraints riding on the failure to attain the provisions highlighted in the social contract (Chatterji 2007, par. 9).
Westpac & BHpBiliton: Current Social and Environmental Issues
The Westpac Banking Group is ranked as one of the most socially responsible firms in Australia and New Zealand. The company is rated AAA, an outstanding ranking. On the contrary, BHP Billiton Ltd. is rated AA, a satisfactory ranking. The improved rating in both companies is due to their focus on efforts aimed at improving the environment. The companies have continued to pay attention to their impact on the social and physical environment. The management have addressed the issue of corporate governance and workplace exercises. The organisation has formulated various programs, including flexible work policy and a favourable work-life balance (Apheda 2010, par. 3).
There are discernible transformations in the issues raised in the society over time. The transformations are indicated by changes in the themes of the media articles. They are also indicated by alterations in the social and environmental themes disclosed by the organisations. To some extent, the transformations are evident in the level of disclosure made by Westpac and BHpBiliton. An analysis of the disclosure gives rise to an overriding hypothesis. The researcher hypothesises that the level of media coverage, with regard to the social and environmental attributes of BHpBiliton, is positively related to the organisation’s level of social and environmental disclosures. The disclosures in this case are made in the company’s annual reports (Apheda 2010, par. 4)
The Approaches used in Australian CSR Ratings
The Australian Centre for Corporate Social Responsibility (herein referred to as ACCSR) carries out surveys that rank the performance of local companies in various fields. Among others, the survey analyses the effects of a global financial crisis on corporate social responsibility activities. It is aimed at unearthing the various issues that form the CSR agenda of the local firms. ACCSR’s rating report offers a proportionate analysis of organisational management capabilities in such areas as the participation of stakeholders, dialogue, integration of values, and ethical conduct. It also addresses the firm’s engagement in CSR activities (Chatterji 2007, par. 11).
With regard to the significance of CSR, ACCSR has identified a positive connection between performing well in the areas identified above and a profitable business. In other words, CSR improves organisational performance. The performance of a particular company indicates its ongoing dedication to the delivery of the fundamental aspects of its sustainability policy. To this end, the organisation focuses on the sustainability of its agents, its business, its facilities, as well as its external links.
Consecutive annual surveys indicate that the key issues remain fairly constant. Reduction in the business’ negative impacts on the environment remains one of the most crucial aspects of CSR among Australian firms. Another issue is the reduction of the level of corruption in business (Hodge 2010, par. 9).
Both Westpac and BHpBiliton have provided sufficient information to the public concerning their participation in social and environmental undertakings. The disclosure has improved their ranking. The positive rankings mean that Westpac and BHP Billiton have complied with the social and environmental requirements of a socially responsible organisation.
Companies improve their public image by, among others, doing away with activities that have harmful effects on the social and physical environments. They also seek to publicise, with varying degrees of accuracy, their level of success. The ratings of a company on social and environmental issues involve examining the firm’s previous level of participation in such issues and the publication of related information. Both Westpac and BHP Billiton are currently some of the most socially responsible companies in Australia.
They have improved their level of participation in social issues, corporate governance, and in environmental conservation. Their workplace practices are also rated highly. Their social and environmental rating has been increased because of their consistent disclosure of relevant information to the public through the media. Taking into consideration the ACCSR index, it is found that the two firms analysed in this paper are socially responsible. The two firms have made efforts to mitigate the negative impacts of their operations, as well as benefit members of the community.
Apheda, H. 2010. Westpac rated most socially responsible. Web.
Chatterji, A. 2007. How well do social ratings actually measure corporate social responsibility?. Web.
Hodge, K. 2010. CSR survey ranks Arup amongst top performers. Web.