Transparency and Clarity in Business Operations
Discuss About The Ethics Research Indian Journal Dermatology?
In the current commercial sector, in the global framework, with increase in the complexities and variability in the business operations of the enterprises, transparency has become one of the primary issues of concern among the participants in the commercial operations. Transparency and clarity in business operations are of utmost importance not only for stakeholders who invest on the companies, but also for the companies themselves as a lot of their goodwill and future prospects are dependent on the trust and loyalty of the investors and shareholders as well as their clients. A clear, inclusive and timely reporting of the financial and other business activities is therefore an important task on part of the commercial enterprise (Cohen et al. 2012). The research proposal takes into account the viability and appropriateness of integrated reporting mechanism in this aspect.
In any kind of business for proper and smooth running of the business operations and for achieving cost efficiency and economies of scale in production, to increase the sustainability and future prospects of the commercial enterprises, it is important to keep a clear monitoring tab on the financial and overall commercial operations of the enterprises. This can be done in the form of forming a comprehensive and all-inclusive compact report on a regular interval (Busco 2014). The reports, published by the enterprises are usually made available to all the stakeholders and they act as an important tool for the purpose of decision making on part of the stakeholders with respect to the amount to investment, where to invest and when to invest.
In this context, various forms of corporate reporting have evolved over the years, as per the needs and changes in the dynamics of the global business activities. These reports are of both financial and non-financial in nature. However, though corporate reporting has evolved a lot with time and has incorporated many of the complexities and changed nature of business operations, there are still several crucial gaps existing in most of the corporate reporting mechanisms (Ioana and Adriana 2013). Most of these reports, though take into accounting the major financial and corporate details, fail to mostly take into account the underlying economic insights and non-monetary aspects of doing business, which also play significant role in determining the prospects of the companies in short term as well as in long term. The reports also fail to take into account the externalities (both positive and negative) that occur in response to the activities of these enterprises (Brown and Dillard 2014).
Corporate Reporting Evolution
These gaps in corporate reporting, which causes problems in decision making process of the stakeholders, give rise to need for a more inclusive and versatile reporting, which in its turn indicates towards implementation of integrated reporting, which, in one document tries to make a holistic representation of the financial and non-financial aspects of the commercial enterprises. This form of reporting thus, poses as an effective method of communication and stakeholder management and thus, is an area of interest in the field of research regarding improving efficiency in accounting aspects (Eccles and Krzus 2014).
The concerned research deals with the primary question of the efficiency and viability of the mechanism of integrated reporting as a robust alternative to the existing conventional methods of accounting reports that are undertaken by the enterprises. The research emphasizes on the efficiency of this type of reporting in the field of transparency and sustainability of the business; operations of a firm and also tries to analyze the impact of such reporting on the stakeholders’ business behavior and there communication with the commercial enterprises. In simpler words, the purpose of this research is to see how efficient a tool this integrated reporting can become in the aspect of stakeholder management and accountability of the commercial enterprises.
Integrated reporting, as a alternative form of corporate and accounting report tool, came into existence in a very recent period. However, though this issue is getting considerable attention in the current period, not many literature and works are available in this aspect across the world. Nevertheless, several crucial and extensive research has been done in this aspect, which have considerable significance in developing this form of corporate reporting as a robust mechanism, taking into account its prospects, feasibility and limitations to work upon (Frias?Aceituno, Rodríguez?Ariza and Garcia?Sánchez 2014).
De Villiers, Rinaldi and Unerman (2014), in their extensive research paper on integrated reporting and its insights and gaps, takes into the importance of social and environment reporting in the business world and shows the historical path of transformation of the forms of commercial reporting. It also shows the , in this context, need and the emergence of integrated reporting as a different and potential form of a comprehensive corporate reporting in the contemporary business world. The authors take into consideration the different concepts of accounting and accountability research with regards to the fast expanding domain and increasing popularity of integrated reporting. They also stresses on the limitations of this comparatively newer form of corporate reporting and provides useful insights regarding the areas which need developments in this regard and the steps which can be taken for improvisation of integrated reporting (Parrot and Tierney 2012).
Integrated Reporting as a Holistic Representation
In undertaking any kind of mechanism for forming a robust and inclusive report which reflects the performances as well as the prospects and sustainability of a company, it is necessary to focus on the construct of such report. What areas should be included and which aspects of the financial and non-financial operations and performances of the commercial enterprises are to be taken into account such that the report comes to use to the stakeholders of the concerned enterprise are important issues of concern. Abeysekera (2013), ventures into this arena in his scholarly works. In the research paper, the author gives an elaborate outline of the concept of the integrated reporting and also provides a proposed template of integrated reporting which can be taken into account by the commercial enterprises. This paper is one of the pioneers in the aspect of providing an impressive template regarding integrated reporting and is therefore, expected to be of immense contribution in the concerned research regarding the viability of implementation of this form of reporting in the business frameworks in the global scenario.
The impact of this form of reporting on the overall performance of the firms undertaking this type of reporting is seen in the paper of Lee and Yeo (2016). According to the authors, there are direct and mostly positive implications on the valuation of the enterprises, which are undertaking this form of reporting. The paper also asserts on the notion that if the integrated reporting is done appropriately, then it will not only benefit in making the performances of the enterprise transparent to the clients and the stakeholders but will also help in making the production process of the enterprise more cost effective. This is because, as the author suggests, a proper construct of integrated reporting helps to take into account the financial as well as the non-financial, external and the environmental factors which affect the commercial and production operations of the enterprises.
Churet and Eccles (2014), also takes into consideration the positive implications of integrated reporting on the overall increase in the efficiency and prospects of the business organizations and their improvement in performances. The paper categorically focuses on the implications of this type of business reporting on the communication aspects with the stakeholders and ventures in the arena of management of the stakeholders and increase in the accountability of the enterprises that can occur if this type of reporting mechanism can be endured by the commercial enterprises. Therefore, the arena of venturing of this paper is very close to that of the primary research domain and the research question of the concerned study and this paper can be of important reference for the same.
Limitations and Development of Integrated Reporting
Integrated reporting, being a very new concept in the corporate domain and still remaining unexplored to a substantial extent, there can be many areas of limitations or drawbacks in this aspect. Just like the papers asserting the positive aspects of this type of reporting, there are also scholars and researchers who are not quite optimistic regarding the viability of this kind of integrated reporting. In his paper, Steyn (2014) took into the perceptions of the primary potential users and makers of this kind of reports that is the chief financial officers, regarding the cost effectiveness of implementing integrated reporting in the business activities of the organizations. According his findings, the cost of implementation of such form of reporting can actually surpass the benefits that are to be accrued from these reports and thus, the author raises a vital question regarding the feasibility of such form of reporting for the commercial enterprises, especially those which are driven by profit motives. To make the research a robust interpretation regarding this form of reporting, this article can be of significant usage.
In this context, Flower (2015), talks in favor of the views put forward by Steyn (2014), but from a different perspective. In his paper, he takes the reference of the performance of the International Integrated Reporting Council from the time of its establishment in 2010. As per the findings of the paper, it can be seen that though the basic objective behind setting up this council was ensuring incorporation of sustainability in the accounting and overall reporting of the corporate performances of the enterprises, within a short span of time, the council got entangled in regulatory and constricting norms. This in turn caused a deviation of this body from its basic objective and purpose, as suggested by the author.
Thus, the literatures, reviewed above are relevant to the research objective and they can be referred to, while conducting the research, for the purpose of taking guidance and incorporating the ideas as well as the hurdles which are expected to be encountered while doing the same.
In the context of construction of integrated report and for studying the applicability of this kind of reports for the commercial enterprises, it is required to see their viabilities with reference of the theoretical framework and the existing accounting theories. Any measure or new implementation of any framework without a robust theoretical support can create problems, both anticipated as well as unanticipated. The research, therefore, tries to take into account several key accounting theories like agency theory, stakeholder theory and also the theory of stewardship and tries to analyze the working and implications of integrated reporting in the perspectives of these theories individually (Hahn and Kühnen 2013).
Positive Implications of Integrated Reporting
Based on the Neo-Classical Framework, the theory deals with the notion that all the financial and non-financial activities and liabilities of the commercial enterprises are taken into account. It keeps into consideration that the main objective of any kind of business activity is to maximize the benefits and the welfares of the shareholders who are connected with the concerned enterprises (Ballwieser et al. 2012). Working on the assumption of disparity in information existing between the agent and the principal, the theory requires the construction of a wholesome information system. This system should be enabling enough to work towards ensuring transparency in business operations as well as maximizing the profits of the enterprise and the overall welfare of the agents attached to the concerned enterprise. Therefore, this theory indicates towards a form of reporting similar to the concept of the integrated reporting (Bosse and Phillips 2016).
This theoretical concept deals with the role of the presentation of the social information in building the communications and relations between the different agents involved in a particular commercial activity, including the shareholders, the government and the society as a whole. The model looks into the aspect of accountability of all the agents participating in the business activities. This therefore, also has relevance in the context of integrated reporting and thus will be taken into account in the research (Harrison and Wicks 2013).
According to this theory, the main purpose of the managers of the commercial enterprises is not to work towards the achievements of their personal goals, but to work towards the fulfillment of the organizational objectives, which are set to maximize the overall welfare in the broad spectrum, under the framework of the principles. Thus, for this purpose and for the fulfillment of the broad goals, as suggested by the Stewardship Theory, integrated form of reporting can come in handy as an important tool. Therefore, this theory is also incorporated in the concerned research regarding the integrated reporting as a whole (Segal and Lehrer 2012).
As the research is mainly on the viability of integrated reporting in the current business world, as a robust and better alternative to the existing reporting methods, it is important to take into account the theoretical as well as the practical perspectives regarding this scenario. The research therefore aims to form a strong theoretical construct the feasibility, need, applicability and areas of further development of integrated reporting management (Brinkmann 2014). Along with that the need to incorporate the views of the relevant personnel, who are directly or indirectly linked or affected by this kind of reporting, is also felt in this context. For incorporation of their views, the research aims to undertake comprehensive interviews of qualitative nature, of such personnel, in order to increase the strength of the study (Silverman 2016). The following are the several key questions, which are aimed to be put forward to these people in this context:
- What type of corporate reporting and accounting is best for the commercial enterprises?
- Why the method suggested by the person is the most appropriate one in his or her opinions?
- What are the benefits of the suggested form of reporting from the perspectives of the stakeholders?
- What are the drawbacks of such forms of reports?
- What is person’s idea about integrated reporting?
- Can integrated reporting be a better alternative to the existing conventional forms of reports?
- What are the prospects of integrated reporting regarding the accountability of the firms?
- Will implementation of integrated reporting increase the benefits of the stakeholders?
- What are the drawbacks of implementation of such form of reporting by the corporate organizations and what are the hurdles that they are expected to face in this context?
- What are the measures which can be incorporated to make integrated reporting a more robust and wholesome mechanism of presentation of the useful financial as well as non-financial information?
Negative Implications of Integrated Reporting
For undertaking and conducting any research, it is of immense importance to know about the ethical requirements that are needed to be met while carrying out the research, for which the following steps are to be taken:
- Ethical approval is required to be taken from the ethical body of the institute, for which the application will be done (Singh 2012).
- Cooperation regarding the risk assessment of the project, which will be done by the ethical body, is promised on part of the researcher.
- After the approval of the ethical body, the permissions should be sought from the persons who will be interviewed. The permission will be in a written format with their signature taken as a sign of their consent to give interview (Liamputtong 2013).
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Bosse, D.A. and Phillips, R.A., 2016. Agency theory and bounded self-interest. Academy of Management Review, 41(2), pp.276-297.
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