Corporate Sustainability Summary Essay

Pages: 10 (2925 words)  ·  Style: Harvard  ·  Bibliography Sources: 15  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business - Management


This theory mostly concentrates on the fact that organizations have stakeholders who might not be legitimate. Relationships built on illegitimate terms will not only damage the organization but could be a waste of time for the organization that had been attempting to establish a better relationship with the employees and the rest of the stakeholders. An illegitimate stakeholder can turn from a good to a dangerous stakeholder and not only demeans the efforts of the management but could also pose danger to the organization (Santana, 2012, p.257). Legitimacy is a necessity for the establishment of healthy working and personal relationships.

Legitimacy Theory

The legitimacy theory is one of the most popular theories that is largely cited by organizations for a number of reasons. One of these reasons is the increment in environmental degradation in due to organizational irresponsibility. The new awareness on global warming and greenhouse effect have led a majority of organizations to take incentives in ensuring that the business activities have minimal degradation effect on the entire environment. The legitimacy theory of environment is a theory that calls for all organizations to disclose their activities pertaining to saving the environment. The theory calls for organizations to disclose their information pertaining to the environment.

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Legitimacy mainly revolves around the acceptance and authority that the society gives to people, communities and other forms of entities, seeing them as just and right. This theory once attuned to the organizations, in relation to the environment calls for the disclosure of all efforts and information pertaining to the environment as a strategy to avoid degradation. Resultantly, organizations are then pushed to reveal all information pertaining to the environmental safety issue, as this is the norm seen by the community as right, proper and the just way. Levels of legitimacy originate from the government, the religion, the society and overall the majority view (Deegan, 2009, p.357).

Essay on Corporate Sustainability Summary of the Assignment

This theory has one main disadvantage. Evidently, this theory is not only developed as a strategy to ensure that organizations are doing their best to conserve the environment but has led majority of organization to disclose their corporate social responsibility efforts to the world. As such, one weakness of this theory is the fact that the organizations could lie and offer falsified data pertaining to the environment and ecological care, as it is almost impossible to assess the progress and the damage made by organizations that are not direct environment polluters.

2. Google and Berkshire Hathaway reporting on economic, environmental and social aspects in their annual reports

Economic outlook

One of the most profitable organization known to date is the internet leader, being an organization that began in 1997, the organization has managed to develop into one of the biggest organizations of all times. The organization's financial capacity can be judged from its revenues and assets. According, the organization is currently worth 72.574 Billion U.S. dollars in assets with a $58.145 billion shareholder's equity. The organization realized a 9.737 billion U.S. dollars profit margin, 14% higher than the previous fiscal year's amount. The organization's last annual revenues totaled to $37.905 billion a 29.3% Increase from 2010-2011 fiscal years' revenue.

Berkshire Hathaway, under the leadership of Warren Buffet, is one of the largest investment companies in the world. The company made is worth $392.647 billion dollars, with the investor's capital summing up to $164.85 Billion. The 2012's profits for the company summed up to 10.254 billion U.S. dollars, a reduction by 20% from 2011's profits. The organization also made a $143.688 billion revenue, a 5.5% increase from the previous fiscal year. From these details it is evident that Google is better placed financially speaking as compared to Berkshire, although Berkshire is much bigger in size.

Environmental Aspects

Berkshire Hathaway is one of the investment organizations that has a lot of influence on the environment. Being an investment company that owns numerous plants and industries its contribution to environmental pollution is immeasurable. Regardless, in the year ended 2011, the organization managed to raise a total of 10 Million U.S. dollars, reduced pollution levels and increased promotion of awareness about the environment. The organization has agreed to raise up to 200 million U.S. dollars for Pacificorp to remove four dams by 2020, a promise made in 2008, with little being donated to the Pacificorp.

Google on the other hand, barely pollutes the environment. The organization does not manufacture much except software and thus barely influences the environment negatively. Regardless the organization has reported been investing heavily in china, with majority of its finances being directed to organizations that have been affected by the earthquakes and promoting peace and unity in such nations. In 2008, the organization managed to raise 18 Million dollars to fund the Quake Relief program developed by the company and has been contributing much more ever since. Its core focus is not on reducing pollution but rather improving the environment. Google was also rated one of the best and most innovative CSR companies in the entire world. In such a comparison, Google surely is still a notch higher than Berkshire Hathaway.

Social aspects

One of the core attributes that Google has enjoyed and is respected for is its social response to china and the aftermath of the earthquake. The organization has raised more than enough money, not to mention the dozens of schools that the organization has developed in these areas for the Quake relief program. Google also gives free advertisements for charitable organizations, has largely promoted, and financed HIV education throughout the world. Berkshire Hathaway also has been largely reputed for sponsoring schools, fundraising events as well as other suchlike events that promote social growth. Google is the best financer when it comes to social responsibility in the world, according to Lukovitz, (2008), but Berkshire is still reputable, with it scooping the top ten CSRI list.

3. Legitimacy and Stakeholder theory

Legitimacy is upheld by both organizations in a variety of ways. Disclosure and financing organizations openly is one such way. These organizations are some of the best known philanthropists and the role they play in their conduction of corporate social responsibility is not left unknown with the eminent publicity such organizations enjoy. Legitimacy is also reinforced by the release of annual financial results that can be easily accessed by the everyone online. This thus promotes transparency and advocates for better relationships for us as customers and to some stakeholders thus promoting healthy relationships at all times. Additionally, through the reflection of their CSR activities, transparency and legitimacy is reinforced.


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Berkshire Hathaway Inc. 2012, 2011 Annual Report. Retrieved on 10th September,… [END OF PREVIEW] . . . READ MORE

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