Risk management Research Paper Example | Topics and Well Written Essays - 2000 words

Risk management - Research Paper Example Demand for transparency has increased and expectations are rising for companies to evaluate report and improve their environmental, social, and economic performance. Corporate Social Responsibility (CSR) does not have intricate definition. According to McWilliams and Siegel (2001) â€Å"actions that appear to further some social good, beyond the interest of the firm and that which is required by law† (McWilliams and Siegel, 2001, p. 117). CSR is more than compliance with the law. Frooman (1997) exemplifies CSR as â€Å"An action by a firm, which the firm chooses to take, that substantially affects an identifiable social stakeholder’s welfare† (Frooman, 1997 p.227). In the light of these definitions, CSR can be viewed as a comprehensive set of rules, practices, programs, and policies that are incorporated into supply chain, business operations, and decision-making processes of the company. CSR usually include community investment, business ethics, governance, envi ronmental concerns, human rights, workplace, as well as the market place. When it comes to Business performance, this is an area where companies pay great deal of attention since it provides integral information about the success and position of the company as well as development and future standpoint. All business operations, in one way or other, revolve around the targeted goal of an organization that is contributing to the success of the business. Business performance provides a neutral description of the efficiency and effectiveness of the company’s action. It can be characterized with attributes such as poor or well. Business performance is considered as vital area of interest for the top management of firm. Several elements contribute to the success or failure of the company. CSR is one such variable that contributes to the well-being, reputation, and financial performance of the company. This paper seeks to investigate the impact of CSR practices on firm’s perfo rmance. A critical analysis of prior literature conducted in the same field will be provided in order to evaluate the causal relationship between the two variables. Impact of Corporate Social Responsibility (CSR) on Financial Performance Ways in which companies implement practices of corporate social responsibility differs from one another. These differences are based on factors such as respective industry involved, size of company, demands of stakeholders, business culture of the firm, and historical progress of company while dealing with CSR. Numbers of studies have been conducted in order to test the relationship between ethical and social performance of corporation and its impact on financial performance. Erhemjamts, Li, and Venkateswaran, (2012) conducted a study to investigate the determinants of CSR and its implications on the organizational strategy, investment policy, and performance of the business. Erhemjamts, Li, and Venkateswaran, (2012) found that firms having higher R &D intensity, better performance and financial health are more likely to engage in Corporate Social Responsibilities (CSR) activities, whereas riskers firms are less likely to involve in such activities (Erhemjamts, Li, and Venkateswaran, 2012). Stanwick, and Stanwick, (1998) conducted a study to investigate the relationship between corporate social responsibility of a business with financial perform

Management accounting Essay Example | Topics and Well Written Essays - 2500 words

Management accounting - Essay Example 20-25, 2003). The type, number, or volume of the products does not directly drive these costs. Several costs even within a factory are questionable for the same reason. Moreover, substantial material vendors and customer also impel quite a few costs. â€Å"In fact there is no single correct (product) cost figure† (Walker, 22, 1999). Costs centers hold records of the financial transactions of the organizations, which they use to calculate their product costs. Several methods for this exist where different organizations may employ unique methods. The simplest of the aforementioned methods for product costing, employs only direct costs. Earlier, labor costs received greater importance. Companies carried out everything manually. The number of employees involved dictated the output volume. Then came the time when machines began to substitute labour in production. This progress posed a problem to the prevailing costing method because most of the machine costs are depreciation costs and are not comparable to direct labor costs (Fritzsch, pp. 83-89, 1997). Organizations and experts highlighted several more weaknesses of the traditional accounting system because it was not compatible with the development of the new business methods. To overcome the weaknesses of the simple product costing method, accounting experts introduced standard costing. Standard costing method uses Bill of Material (BOM) and the capacity demand of the product to calculate the product cost. To calculate direct costs, the accountant considers raw material costs and labor costs, as incurred per unit of production. Whereas, to calculate indirect costs, they use the product of multiplier factors (predetermined rates) and the direct costs (Broadbent et al., pp. 31-37, 2003). Although standard costing is an easy and appropriate way for actual cost follow-up, it may lead to inappropriate decisions when used erroneously in future planning. The basic issue with standard product costing is that it do es not provide sufficient information to facilitate the user to control the overheads and other indirect costs related to the product. For instance, accounting experts express the production overheads multiplier as an additional percentage of the product direct cost. Recursive calculations from past accounting figures drive this value and it usually allows a rising trend for overheads when managers use it as a standard for a new product (Shank & Fisher, 77, 1999). Having seen the drawbacks of simple and standard costing systems, experts in the field have been attempting to formulate generic costing methods since decades. For example, traditional costing methods include only the manufacturing costs in the total unit cost of each product. However, the new concepts in cost management require the accountants to cross the usual limits of product costing methods by applying all organizational costs in a more applicable and informative way and attaching them to cost objects such as a proce ss, product, customer etc (Broadbent et al., pp. 41-48, 2003). The design of such advance cost management system (ACMS) requires companies to integrate the new concepts practically in the business processes and operating systems (Schnoebelen, 52, 1993a).  Ã¢â‚¬ËœActivity-based costing’ is one of such advance cost management systems. Activity based costing technique is a way of assigning