INTRODUCTION TO ACCOUNTANT
In the organization, accountant plays a vital role in drafting financial statements according to the standard rules and regulations. Thus, they are the one who has the responsibility to present the business operations and functions in a fair manner in front of stakeholders. Moreover, shareholders of the firm undertake final accounts with the aim to satisfy their information need to the significant level. Financial statements contain information about the company's funds, solvency and aspects of corporate social responsibility. The present report is based on Magical Experience Ltd which will discuss the significance of corporate social responsibility. Through this, one can understand the extent to which business organization can fulfil its aims and objectives through the means of corpora
1. Stating the meaning of corporate social responsibility
Corporate social responsibility (CSR) is undertaken by corporate for building distinct image in the mind of stakeholders. In this, business organization makes effort to assess and thereby takes responsibility for contributing in well being of society. In this, company emphasizes on taking initiative which offers high level of benefit to the society. Charity, economical way of performing operations etc. are the main factors which are the part of corporate social responsibility. Now, every company focuses on CSR activities for enhancing their goodwill at the marketplace.
Company invests some part of their profit on children education, allocation of house to poor persons, focus on ensuring green environment etc. Further, ethical labour practices and organizing events are the main aspects of CSR activities which provide assistance to the organization in contributing in welfare of others. Looking at Magical Experience Ltd, company focuses on designing video games which offers more fun to the customers without affecting the beliefs of others. Moreover, society is one the main stakeholders of the company whose satisfaction highly matters for the firm. Through this, corporation can increase its market share and enhance brand image to the large extent.
Thus, CSR may be served as a self regulatory mechanism which helps the organization in monitoring its activities and operations in against to ethical standard as well as national and international norms. It enables the firm to determine the actions which they are required to undertake for the well-being of society. This in turn helps the enterprise in making positive impact on environment and other stakeholders. In the context of Magical Experience Ltd, business and legal risk can easily be reduced by the firm with the help of CSR activities. Through this, company can also enhance its long term profit and shareholders trust significantly. In this way, CSR activities are vital for growth and success of the firm in the highly competitive and strategic business arena.
2. Defining the ways in which CSR is associated with the strategic purpose of company
CSR activities of the firm are associated with the strategic purpose as well as mission and vision of the firm. Moreover, maximization of profitability is one of the main purposes of Magical Experience Ltd by offering the quality and effectual services to the customers. Moreover, quality is the important aspects which differentiate the product or services of one company from another. Along with this, organization also focuses on increasing customer with the aim to enhance their productivity and gross margin. In this regard, CSR activities are the tool which helps enterprise in attaining its strategic aims and objectives. Moreover, now customers prefer to use services of firm which contributes in the CSR activities.
In this, Magical Experience Ltd can enhance its customer base by conducting welfare activities for the society. For instance: Magical Experience Ltd can build effective image at marketplace by establishing hospital which will offer high medical facilities to the patients at concessional prices. This in turn also ensures economic growth and development by creating employment opportunities. Further, company can also attract large number of users by stating the aspect that the firm will contribute 2% of price on children education. This is also one of the main areas which influence the decision making aspect of customers to the large extent. In this way, CSR activities offer opportunity to Magical Experience Ltd to fulfil its strategic purpose. Moreover, when customer base of the company is enhanced then it may result into high level of profitability.
In the present scenario, the organization can attain success only when they have highly satisfied and loyal customer base. Thus, Magical Experience Ltd can built satisfaction among the customers by performing the CSR activities. This may turn into customer loyalty in the near future and thereby helps the enterprise in building competitive edge over others. For instance: Company requires lots of electricity for designing the video games. Moreover, heater and air conditioners are the main equipments which consume lots of energy. In this, Magical Experience Ltd places emphasizes on adopting the alternative and economical substitution of solar energy such as solar power etc. Further, business unit also provides training to its personnel about using electricity in an economical manner. This aspect shows the concern of business organization towards the society. Thus, by performing CSR activities Magical Experience can develop effectual image in the mind of customers in against its competitors.
3. Stating the application of CSR in the light of various stakeholders
Company performs CSR activities with the aim to build and maintain effectual relationship with the stakeholders. The main aim of the company behind CSR activities is to make effectual relationship and build trust among the stakeholders such as investors, customers, government, employees etc. On the given situation Magical Experience Ltd designs video games for entertaining the users . In this, company performs several responsibilities for reducing the environmental effects and offer benefits to the society. For instance: the organization who provides customers with the variety of video games needs to focus on saving energy and electricity by taking into account the number of ways.
For this purpose, the organization is required to use energy efficient lights and equipments. Thus, by saving energy, company can offer benefit to people of the society. Along with this, organizations which are operating in entertainment industry such as Magical Experience Ltd has responsibility to design games in such a way which do not place any bad impact on the society (Barnea and Rubin, 2010). From investigation it has been found that Boyd gaming fails to comply with the Discrimination Act to some extent. Moreover, enterprise has the accountability towards the personnel to do not discriminate them on the basis age, sex, religion etc. Hence, company should offer equal employment opportunity to the people who possess desired level of skills and qualities. It is one of the main ethical aspects which need to be followed by the organization in relation to their personnel.
Besides this sector, automobile is another industry which focuses on employing CSR practices. Moreover, business operations and functions of automobile sector impact on the environment and thereby society as well. This industry is the one which generate wastage which may cause environmental pollution. Such sector is accountable for making effectual management in relation to disposal of waste. Hence, company is required to perform their activities in the best possible manner by using alternative ways of production. Through this, organizations which are operating in the auto-mobile sector become able to reduce air, water and pollutions to the great extent.
Volkswagen has provided training to personnel about the ways through which they can make optimum and economical use of the energy. However, Volkswagen fails to perform CSR practices in an effectual manner. In the financial year 2015, Volkswagen came into light due to its environmental emission scandal. In this, company made its cars in such a manner which turned into high level of environmental pollution. Due to this, high level of health issues was suffered by the people of society. This scandal has developed awareness among people of society about the aspects of environmental pollution and its effect. In this, brand image of the firm has been negatively affected due to the irresponsible act performed by the company.
Hence, now a day’s corporate social responsibility is the vital part of business which helps them in strengthening their brand image.
4. Presenting the reasons which encourage Board of Directors to adopt CSR practices
Corporate social responsibility is one of the forms of corporate self-regulation that is integrated into a business model. These are the activities which support the society as it also bestows its useful resources to fulfil all its requirements. CSR policy functions as a self-regulatory mechanism whereby business enterprises monitors and ensures its active compliance with the help of external business environment rules and regulations. They are required to use credible measures to support the society to achieve its desired goals and objectives without any barriers in the path of the success. CSR professionals have the opportunity to take initiative to integrate the importance of trust across the business. This method helps the organization to improve its brand reputation and business image. The improving image in the market helps business to increase credibility among its shareholders and various stakeholders.
The focus of the business is on three angles of a triangle which includes reputation, relationship and responsive attitude:
It is one of the important need and demand of every business to survive for longer period in the business market. In today's highly complex and competitive environment, brand reputation increases loyalty among various consumers which help them to stay connected with the company (Four Types of Corporate Social Responsibility, 2016). It can be increased by several objectives like taking each and every demand of the customers, moulding business according to needs and expectations of the purchaser.
In every business, success plays an important role in determining the favourable conditions of the organization. The owner uses appropriate tools and techniques to maintain its friendly relationship with the customers, business clients, shareholders and various sponsors and investors (Mishra and Suar, 2010). In today's competitive business environment, relationship with the buyer is important as the consumers are regarded as a king of the market.
The essential quality and characteristics which every customer look for is its personal security and safety. The products and services offered by the company will not affect any customer's emotions, feelings and especially its health. The manufacturer's are under obligation to deliver quality products or services according to the different needs and expectations of the customer. The diverse needs of the customer include price affordability, ozone-friendly products, maintaining sustainability, health and safety measures adopted (Orlitzky, Siegel and Waldman, 2011). The society will determine the success of the industry if the demands are fulfilled by the company on time than the situations are favourable for the organization and vice-versa.
From the above report, it can be concluded that by performing CSR activities Magical experience can enjoy benefits in terms of both financial and non-financial aspects. Moreover, perception of customers is one of the main aspects directly impact on the business performance. In this, CSR activities are the strategies which help Magical Experience Ltd in enhancing its gross margin level. Further, it can be revealed from the report that CSR is a key which offers assistance to the business unit in achieving its strategic aims and objectives. It also has been articulated that company is required to satisfy the needs of various stakeholders by performing CSR activities. Through this, business unit can enhance its productivity and profitability.
- Aguinis, H. and Glavas, A., 2012. What we know and don’t know about corporate social responsibility a review and research agenda.Journal of management.
- Barnea, A. and Rubin, A., 2010. Corporate social responsibility as a conflict between shareholders.Journal of business ethics.
- Bénabou, R. and Tirole, J., 2010. Individual and corporate social responsibility.Economica.
- Carroll, A.B. and Shabana, K.M., 2010. The business case for corporate social responsibility: A review of concepts, research and practice.International journal of management reviews.
- Carroll, A.B., 2015. Corporate social responsibility.Organizational Dynamics.
- Dhaliwal, D.S. and et.al., 2011. Voluntary nonfinancial disclosure and the cost of equity capital: The initiation of corporate social responsibility reporting.The accounting review.
- Du, S., Bhattacharya, C.B. and Sen, S., 2010. Maximizing business returns to corporate social responsibility (CSR): The role of CSR communication.International Journal of Management Reviews.
- El Ghoul, S. and et.al., 2011. Does corporate social responsibility affect the cost of capital?.Journal of Banking & Finance.
- Gainer, B., 2010. Corporate social responsibility. In Third Sector Research. Springer New York.