JB Hi-Fi Accounting Reporting System | Assignment Help
Introduction
Accounting reporting systems have emerged over the years and aspect of social and environment reporting are considered as core perspectives of contemporary reporting systems. The underlying report has focused on investigating the integrated reporting system and CSR framework with respect to JB Hi-Fi. The company is considered as one the leading player of retailing sector of Australia and is recognized for its social as well as environmental contribution. Success of company is witnessed by the notion that it has expanded largely over the past few years and is now the 7th most successful retailer across the world. The integrated reports of company show sound financial position of JB Hi-Fi. The social and environmental statements of JB Hi-Fi also make important aspect of integrated reporting and provide information about social contribution and environmental sustainable of company. The report has chosen news story of Probono Australia which highlights that based on workplace giving program, company is saving around $8 million, based on the notion that its workers feel proud and become more engaged with their job, thus lowering training and motivational expenses of company. The report has focused on CSR framework by highlighting the economic, environmental, ethical and philanthropic responsibilities of organization. Moreover, to explain CSR framework legitimacy theory and enlightened self-interest theories are identified and news report of JB Hi-Fi is being analyzed in the light of these theories. The analysis has shown that company is well complied with these theoretical concepts and thus social reporting of company is effective.
Body of Analysis
Context of JB Hi Fi
JB Hi-Fi is considered a renowned retailing brand which is based in Australia and it serves Australia and New Zealand. JB Hi-Fi was established in Melbourne in 1973 and was sold by found in 1983 to Richard Bourus, who has expanded it to 10 stores in Melbourne as well as Sydney. The company was sold to private equity in 2000 and has listed in ASX in 2003 (JB Hi-Fi, 2019). The company has expanded substantially over the years and as of year 2018 it has 193 stores in Australia and 15 stores in New Zealand. JB Hi-Fi is also engaged in online sales, which makes it accessible for consumers in focused markets (JB Hi-Fi, 2019). JB Hi-Fi is considered as leading seller of consumer electronics, telecommunication products and services, home appliances, kitchen accessories, software and musical instruments. Based on this diverse product range, it can be considered that JB Hi-Fi is a complete solution for all consumer goods. Recently JB Hi-Fi has been announced as 7th largest seller of electronics and home appliances, across the world (JB Hi-Fi, 2019).
The retailing industry is highly competitive and sustainability has been considered as one of the most desired aspect of this sector. The results of Corporate Reputation Index from many years have indicated that JB Hi-Fi has remained the leading retailer in terms of CSR (corporate social responsibility) ratings. This evidence of CSR rating of company provides insight of the fact that JB Hi-Fi is maintaining effective relationship with its stakeholders (Bayne, Purchase and Tarca, 2019). Shareholders, community, customers, employees and environment are considered as core consideration by JB Hi-Fi and company maintains both internal as well as external communication with these stakeholders to keep them informed (JB Hi-Fi, 2019). Social and environmental reporting of company is considered as its core focus and company has formulated different social programs through which it is giving back. JB Hi-Fi’s helping hand program, workplace giving program, donation boxes in stores, fundraising campaign and employer leadership group are considered as some most famous program through which company is fulfilling its social responsibility (JB Hi-Fi Report, 2018).
Newspaper Story
The report has considered as recent story published by Carter (2018) in Probono Australia. The story has highlighted the workplace giving program of JB Hi-Fi, by stating that based on this giving back program JB Hi-Fi has saved $8 million on recruitment and training of its staff. The reason of this saving is linked with the notion that community contribution of company enables the staff to feel proud of JB Hi-Fi it leaves positive impact on overall work culture of company. Consequently, the engagement of workers improves which then leads to enhanced rate of return for JB Hi-Fi. Based on helping hand initiative of JB Hi-Fi, which was established in 2008, company offer opportunity to its workers for donating to nine different charity partners on regular basis (Carter, 2018). The news has furthered that this program of company not only develops a social case but also an economic case. The philanthropic contribution of company is thus acknowledged and this can be linked with aspect of social accounting, which is considered as core requirement for contemporary organizations to succeed within industry (Castka et al., 2004).
CSR Framework and its integration with JB Hi Fi Story
Corporate Social Responsibility (CSR) is highly acknowledged framework in social accounting paradigm, which states that organizations have substantial responsibility towards its stakeholders and thus it needs to fulfil responsibilities of them (Corrado, Demartini and Dumay, 2019). There are four components of CSR framework encompassing; economic aspect, environmental responsibilities, philanthropic responsibilities and ethical responsibilities. Economic components assures that business is profitable and it is in position to create long run value for corporation as well as for globally sustainable economy (Liu, Radhakrishnan and Tsang, 2018). The second component is focused on practices through which waste from activities of organization can be minimized and adverse consequences of organizational activities from environment can be minimized (Li et al., 2018). Environmental responsibility somehow contributes in combating the issue of climate change. Moreover, the third component is philanthropic through which organization moves beyond its necessary operations and thus lays hands in benefiting the community (Gödker and Mertins, 2017). The charity and funding can be considered as example of philanthropic CSR. Finally, ethical aspect of CSR focuses on the extent to which company fulfils its moral obligations, such as; fair wages and management of health and safety of employees (Duff, 2016).
It has been highlighted in the literature that CSR framework is supported substantially through different theoretical perspectives, such as corporate legitimacy theory, enlightened self-interest theory and stakeholders’ theory among others. Legitimacy theory focuses on the social contract between an organization and society, stating that when organization complies its operations with values of society then the legitimacy and long run survival of organization are assured (Cuganesan, Ward and Guthrie, 2007). On the other hand, enlightened self-interest theory focuses on the extent to which organization takes initiatives to work in the best interest of society (Deephouse et al., 2017). For instance, the company incurs cost which are not directly linked with profitability of organization but advance interest of society and then in turn offer benefit to organization as well. Finally, stakeholder’s theory assert that organization is in lasting relationship with multiple and diverse stakeholders and organization can thrive by addressing the interests of those stakeholders in effective manner (Liu, Radhakrishnan and Tsang, 2018). An organization can take any of these approaches with an aim of supporting its CSR initiative and thus corporate CSR can be analyzed by any of these theoretical perspectives.
The helping hands campaign of JB Hi-Fi which is part of workplace giving program, has considerable linkage with CSR framework. As mentioned in news report, JB Hi-Fi is making substantial contribution towards wellbeing of community by generating funds from employees and then distributing the same to vulnerable people of community (JB Hi-Fi, 2018). This is aligned well with philanthropic responsibility of company which allows JB Hi-Fi to offer donation to the community (Carter, 2018). It can be considered that news report is showing that social responsibility of JB Hi-Fi is fulfilled in effective manner. The analysis of news report shows that company’s sustainability is not criticized and mainly the practices of JB Hi-Fi are well aligned with CSR framework. The main focus can be maintained on corporate legitimacy theory to assess the CSR aspect of company highlighted in news story.
Theoretical Analysis
Legitimacy theory and its relevance with news story of JB Hi-Fi
The corporate legitimacy theory is widely studied in the content of social and environmental disclosure of organizations and is linked with adoption of socially responsible behavior by organization to seek approval of community in which it operates. It has been noted by Maon, Lindgreen and Swaen (2009) that presence of social contract enables the organization to fulfil legitimation purpose. The social contract is mainly based on exchange between organization and community, through which organization provides resources to individuals while company generates goods and services for community and also generates and disposes waste. Therefore, the community expected from organization to not only comply with regulations but to fulfil the interest of community as well. It has been highlighted by Matten and Moon (2008) that when terms of social contract are breached then serious threat is brought to legitimacy of the corporation. Extensive research has been carried out on the ways through which legitimacy of organization can be developed and it is found that formulation of social reporting system and usage of that system to disclose social and environment contribution of organization is crucial for fulfilment of organization’s legitimacy.
The relevancy of legitimacy theory with the news story is linked with the notion that story has highlighted helping hands initiative of JB Hi-Fi and it is showing that company is abiding by social contract with society (Carter, 2018). Additionally, the information about helping hand program of JB Hi-Fi can be obtained effectively from annual reports of company, which shows that 6200 employees of JB Hi-Fi Australia are offering donations through this program and in 2018 company has generated $ 2,400,000, which is substantial amount for helping community (JB Hi-Fi, 2018). This program of company was awarded by Workplace Giving Awards. Likewise, social statement of JB Hi-Fi also provides details of all charity partners through which JB Hi-Fi is helping community (JB Hi-Fi Report, 2018). These evidences show that complied with news story, JB Hi-Fi is making an effective reliance on social reporting, which helps in maintaining the legitimacy of company in long run.
The studies have also highlighted the link between legitimacy of the organization through social reporting and attention of media on social and environmental disclosure of the organization (Maon, Lindgreen and Swaen, 2009). As highlighted in reports of JB Hi-Fi, company has received recognition for its sustainability and CSR, which has maintained substantial legitimacy of organization. This has grabbed attention of media on company and current news report has assured that JB Hi-Fi has developed significant legitimacy within retailing industry of Australia.
Enlightened Self-interest Theory and relevance with news report of JB Hi-Fi
Enlightened self-interest theory assures that when organization fulfils the interest of community then it consequently becomes able to meet its own interests (Radhakrishnan, Tsang and Liu, 2018). The theory addresses that social contribution enables the organization to work for wellbeing of community and when social contribution is reported then benefit is witnessed in the form of enhanced wellbeing and reputation of the organization (Radhakrishnan, Tsang and Liu, 2018). Enlightened self-interest theory can be linked with news report of JB Hi-Fi which states that company is taking benefit of giving by saving cost of employee training and hiring. These aspects clarify that when workplace giving program’s information is reported then prestige of organization enhances and employees feel proud to become part of such organization, which fosters their engagement and saves cost on motivation and training programs (O’Toole, 2019). Enlightened self-interest theory thus has substantial linkage with news report on JB Hi-Fi. The news story indicates that company is paying core attention to fulfilment of interests of others, based on its workplace giving program (Carter, 2018). This approach of company meets the social responsibility of company, by addressing its philanthropic obligations towards society and community in which it operates (Carter, 2018). Thus, when JB Hi-Fi meets the interests of others, then positive consequences are experienced through fulfilment of organization’s own interest, such as cost saving and reputation development. Therefore, the news story shows association with not only legitimacy theory but also reflects linkage with enlightened self-interest theory and indicates that social reporting makes up core aspect of JB Hi-Fi’s accounting reporting system.
