Unregulated Corporate Reporting Decisions

Association of different theories to the case study

The two important theories that can be associated to the case study on Rip Curl include the Legitimacy Theory and the Social Contract. The legitimacy theory refers to different principles that the business concerns need to follow in order to make it certain that the entity can perform the operations by abiding the norms as well as bounds of the community (Horngren et al.  2012). According to the legitimacy theory, the corporations intend to carry out actions that are conceived to be legitimate by the community (Weil et al. 2013). However, the business units follow the norms and bounds that are essentially dynamic and transforming (Deegan 2012). Furthermore, the legitimacy theory also depends on the social contract between business firms and the community (Deegan 2012). In this case, there are both the implicit as well as explicit anticipations on the part of both the society and the business units regarding the process of business conduct (Deegan 2012).

As per the case study, it can be hereby ascertained that the company Rip Curl has plainly breached the social obligations and at the same time the social contracts. The unethical practices conducted by the management of the Australian surf wear giant reveal the fact that the legitimacy or else the value system of the business concern is not congruent with the established value system of the community (Deegan 2012). The case study thereby aptly describes the situation of oppressing labor and manufacturing in South Korea and the plain breach of the lanour laws by the company (Horngren et al.  2012).

The preset section also draws special reference to the empirical evidences of stakeholder theory for evaluation of the given case study on the unethical business practices by the Rip Curl. The stakeholder theory can be categorically divided into two different branches that include the ethical or in other words the moral branch and the managerial branch of the stakeholder theory (Samkin and Deegan 2012).

Again, the stakeholder’s theory put forward the fact that the stakeholders of a business concern need to be treated in a fair manner where the stakeholders can transact with the firms in a proper manner and acquire benefits (Samkin and Deegan 2012). In this particular case, the employees and the worker of the company Rip Curl represent one of the most important stakeholders of the firm (Ronalds and Raper 2012). According to the normative division of the stakeholder theory states that there are several ethical issues that the stakeholder can face while carrying out the operations in the company (Samkin and Deegan 2012). Therefore, the company needs to ensure that the treatment with the stakeholders can follow the ethical principles that in turn can protect the human rights of the labors (Horngren et al.  2012). As per the managerial theory of the stakeholder’s principle, it can be hereby ascertained that there is immense need on the part of the management of different corporations to meet different requirements of the different stakeholders (Xiao and Cooke 2012). In this case, the management of the Rip Curl also need to devise strategies to minimize the violation of the social obligations and the oppressions of the labors working in the factories of the company. Therefore, special reference can be drawn to the managerial concept of the stakeholders for evaluation of the present case study.

References

Deegan, C., 2012. Australian financial accounting. McGraw-Hill Education Australia.

Freedland, M., Bogg, A., Cabrelli, D., Collins, H., Countouris, N., Davies, A.C.L., Deakin, S. and Prassl, J. eds., 2016. The Contract of Employment. Oxford University Press.

Horngren, C., Harrison, W., Oliver, S., Best, P., Fraser, D. and Tan, R., 2012.Financial Accounting. Pearson Higher Education AU.

Pocock, B., Charlesworth, S. and Chapman, J., 2013. Work-family and work-life pressures in Australia: advancing gender equality in “good times”?.International Journal of Sociology and Social Policy, 33(9/10), pp.594-612.

Ronalds, C. and Raper, E., 2012. Discrimination law and practice. Federation Press.

Samkin, G. and Deegan, C., 2012. New Zealand financial accounting. McGraw-Hill Education Australia.

Weil, R.L., Schipper, K. and Francis, J., 2013. Financial accounting: an introduction to concepts, methods and uses. Cengage Learning.

Xiao, Y. and Cooke, F.L., 2012. Work–life balance in China? Social policy, employer strategy and individual coping mechanisms. Asia Pacific Journal of Human Resources, 50(1), pp.6-22.