Essays on The Involvement of Stakeholders in the Decision Making of a Firm Assignment

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The paper under the title 'The Involvement of Stakeholders in the Decision Making of a Firm' is a great example of a financial and accounting assignment. In accounting, the stakeholder’ s theory is an organizational management theory that addresses the values and morals in the management of an organization. The stakeholders of an organization include; the owners, who expect financial returns from the organization, the employees who have jobs and their livelihood relies on the firms, the suppliers who maintain the flow and materials, and the customers who exchange resources for the products of a firm. The involvement of stakeholders in the decision making of a firm is important for the success of the firm.

One of the reasons why the NAB would care about the small business sector and the regional business communities is to gain their trust. The NAB was the leading lending bank for many of the small businesses in Australia. However, following the internal restructuring under new management, the small businesses were adversely affected, causing the bank to lose their trust and hence lose the market share at the sole proprietor level. The application of the stakeholder theory would help the bank in ensuring that its quest for efficiency would be advantageous for the sole proprietors, who were the bank’ s largest lenders.

Under the new management, many of the bank staff were moved to the capital city offices with the notion of centrally managing small businesses. The result was the lack of face to face contact with the clients and business failures. The McMinns for instance had 16 different commercial managers in just five years. Additionally, the bank would care about the small businesses and the regional business communities by ensuring that staff restructuring is done in an orderly manner.

Although staff restructuring is a managerial role, there would be the need to assess their relations with the sole proprietors before the transfers. In this case, the staff restructuring caused the NAB to lose its market share on the sole proprietor end, which was the most important lending group in the business. The Positive Accounting TheoryThe positive accounting theory is a theory that deals with the prediction of actions such as the choices of accounting policies by the corporations as well as the response of corporations the anticipated accounting standards.

The positive accounting theory helps the financial institutions in integrating the securities market with economic consequences. The theory is based on the fact that corporate institutions will always act in a way that maximizes their profit. An important hypothesis of the positive accounting theory is the political cost hypothesis. The hypothesis states that the greater the political costs to a corporation, the more likely it is for the management to use the accounting policies to defer reported earnings from the current period to the future period.

The hypothesis brings politics into the choice of accounting policies. The highly profitable firms attract both the media and consumer attention, causing increased taxes and regulations (Whittington and Delany, 2010, p. 65-80).

References

Chandra, P. (2011). Financial management: theory and practice. New Delhi, Tata McGraw-Hill Education (p. 45-60).

Davis, M. K. (2012). Accounting for real estate transactions: a guide for public accountants and corporate financial professionals. Hoboken, N.J., Wiley (p. 28-53).

Whittington, R., & Delaney, P. R. (2010). Wiley CPA exam review 2011. Hoboken, NJ, Wiley (p. 65-80).

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