Management accountability to stakeholders first requires consideration of who those stakeholders are. When considering financial accountability, the primary defined stakeholders for annual reports are the shareholders or owners of the firm (Elliott and Elliott, 2013). Therefore, this establishes the need for management accountability towards this group of stakeholders, the process which is satisfied not only for annual accounts, but also from quarterly earnings as well as other statements. However, there are other stakeholders which will have a direct impact on the firm, and either directly or indirectly influence their performance. This includes, but is not limited to, government, customers, and suppliers.
Government accountability requires a firm to demonstrate for compliance with regulation, and where governments are not fully satisfied that firms are acting in an appropriate manner, they are likely to introduce more legislation. Customers will have needs regarding the products and services they purchase, this will not only be related to the product's features and characteristics, but the perceptions of the firm and way in which they provide those products. For example, when Shell chose to dispose of the Brent Spar oil platform in the North Sea, the company faced a backlash from customers refusing to buy their products believing the company was acting in an irresponsible manner, causing environmental pollution (Chyssides and Kaler, 1999). Therefore, management accountability can extend to aspects such as corporate social responsibility, firm values, as well as firm image, and the way in which this is displayed to and demonstrated to all stakeholders, including customers.
Part B
An organisation such as GDC needs to ensure they keep the most important stakeholders happy, otherwise they will suffer. However, it should be noted that not all stakeholders will have an equal level of influence over the firm's operations and performance. To retain sales, it is essential that the organisation satisfy customer needs, regarding products, as well as values and operational decisions (Chyssides and Kaler, 1999). To continue operating, it is essential that the organisation is able to satisfy government requirements and regulations, otherwise they will face significant financial consequences such as fines, and may even be shut down (Mintzberg et al., 2008). If the company does not satisfy supplier needs, they may lose a supplier, but here there is also the potential for the organisation to use their own power, as this is a bilateral relationship, and suppliers may also need the company. Secondary stakeholders, such as local residents, may be able to exert influence over the organisation, but it may be less direct, for...
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