External Reporting Issues for Legitimacy Theory- myassignmenthelp

Question: Discuss about theExternal Reporting Issues for Legitimacy Theory. Answer: Introduction. To start with, legitimacy theory puts into consideration on the management of the entire society and enacting various mechanisms of critically managing the whole society. On the other hand, stakeholder theory puts into consideration the various different cohorts of stakeholders within the society and as well devising ways to manage these groups. With the understanding of the two theories, it is possible to determine the disclosures of management of stakeholders and legitimizing activities. Disclosures. To begin with, the description of executive remuneration is a very important disclosure in any annual report. It is very clear that there are fixed components and aspects that clearly indicate consistency with stakeholder theory. By use of short term incentives, there is reward of various stakeholders over a period of one year and long term incentive for a period of over three years (Saloner, 2009). This disclosure indicates the remuneration of managing director remuneration structure, fixed remuneration and other executive remuneration that are clearly indicated in annual report of the company. Another disclosure is the financial target of the company in a given period of time. This assist the company in achieving the personal objectives. Disclosures are part of management of stakeholders and legitimizing activities so as to achieve personal objectives. This will enhance financial targets stipulated in the annual report of the company (Wild, 2014). The disclosure will help in achieving leading safety performance of management. It also ensure strategic growth and companys resources to be used in management of stakeholder and legitimizing activities. It also helps in constructing engagement of workers and embracing cultural aspects to deliver strategies. In legitimizing activities, disclosures will help management in developing group growth strategic plan and other formulations. This is also assist management in planning financial targets to have positive impacts on stakeholder and legitimizing activities. Limitation of my argument. The only underlying limitation of this argument is that, it is very difficult for a management to clearly analyze which disclosure to be applied in stakeholders theory and legitimacy theory. Conclusion. In conclusion, I accept the disclosures in the annual report of the company. My decision is that, disclosures have great use in helping management to conduct stakeholders and legitimizing activities so as to achieve financial targets and personal objectives in various groups and the whole society. References. Saloner, G. (2009). Strategic Management. Wiley Publisher. Wild, J.J. (2014). Fundamental Accounting Principles: Hardcover. McGraw-Hill Education.