ACCOUNTING - THEORY

Assignment - Financial Accounting Theory



Assignment - Financial Accounting Theory

Overview

Stakeholder theory is its inability to incorporate an dynamic (beaulieu and pasquero, 2002; jawahar and mclaughlin, 2001). First focused on identifying existing share holders and decryption of the environment of the company, stakeholder theory has proposed many types of hs, which are all tools of classification and analysis (see eg clarkson, 1995; mitchell et al., 1997), but it remains largely static. Tools offered help to explain ex-post, in a given situation are stakeholders, but do not understand the possible emergence of new sh. If jawahar and mclaughlin (2001) propose to build on the cycle theory life organizations to show that share holders relevant for a company vary throughout its development, their approach is simply to list without really theorize the process through which they are recognized by the company as relevant interlocutors.

Discussion

The theory

The empirical analysis of the management of legitimacy by the canadian institution accounting proposed by beaulieu and pasquero (2002) is much more convincing and invites to rethink the theoretical and epistemological stakeholder theory in in offering a more constructivist theory relied on the order negotiated and much more able to understand the dynamics of construction of sh (shareholders) a given social context. These efforts are still insufficient, as a description logic than prescriptive. In the first approach, the stakeholder theory claimed utility as heuristic tool that can help managers to inform their choice (wolfe et putler, 2002), although it is unable to capture the dynamics of cognitive processes through which hs constitute "category cognitive "in the mental models of leaders. In the second perspective, taking into account a dynamic dimension would realize how value systems up over time and deteriorate over interaction with shareholders. Highlighting its historical roots to better understand this that covers the stakeholder theory today.

Critical evaluation of information source

The original philosophy was to better understand the environment of the organization (and not to help the manager to better manipulate the environment). This relatively new approach draws numerous references in the older theories of organizations. The current diversity of frameworks, methodologies and perspectives is certainly a source of confusion and problems, but it contains significant opportunities for renewal and improvement of the stakeholder theory. The notion of sh to identify and organize multiple obligations of the company to the various groups that contribute, even if it generates complex issues unresolved:

According to williamson (1985), this risk-taking must involve the protection of their interests and legitimate their priority status. It should be noted that shareholders, however, have the opportunity to diversify their investments and sell their shares. Including the establishment of clearly defined property rights. Blair (1995, p. 60) points out, however, it is becoming more difficult due to the complexity of organizations modern. - the notion of hs is unclear. For the sake of simplification, it is often assumed that the categories of sh have homogeneous preferences (wolfe et putler, 2002)

Sstakeholder theory does not necessarily resolve ethical dilemmas, it does not indicate precisely ...