Business and Accounting Strategy for Disney Corporate Social Responsibility

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<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”><b>Executive Summary</b><b> </b></p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>Many companies apply corporate social responsibility as a business strategy to benefit from the society. Some of the reasons for corporate social responsibility is that companies want to engage in a sustainability methods of doing business which would result in cost saving. Also, the reason for corporate social responsibility is the brand differentiation. Companies that get involved in social responsibilities would have their brand differentiated or more recognized in the market as compared with their competitors that does not practice corporate social responsibility. CSR is also a method of looking at the long-term interest of the firm by ensuring that the organization&#39;s future is sustainable. Engaging customers through corporate social responsibility is also another easy way of marketing the firm. However, there are business strategies as well as accounting strategies that are involved in corporate social responsibilities.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>The purpose of this paper is to assess the business and accounting policies that are applied by Disney Company in their corporate social responsibility. It will look at how each of the company plans is in line with its corporate social responsibilities as well as how CSR forms part of the company&rsquo;s business and accounting strategies.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>Activities that comprise corporate social responsibility of Disney will be evaluated to establish how they form part of the company&rsquo;s business strategy. Also, the accounting techniques of the firm would be used to assess how they support both the business strategy of the firm as well as the CSR.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>The conclusion would be made based on the result of this evaluation. The information from the analysis would be used to make a final description on how accounting and business strategy are supporting te corporate social responsibilities as well as how CSR forms part of the strategy of Disney Company.</p>
<p><b>1. Introduction</b><b> </b></p>
<h2><i>1.1 Background</i><i> </i></h2>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>Nowadays, companies make Corporate Social Responsbility(CSR) in the context of their business strategy. It is a way of surviving the stiff competition in the market. Disney is recognized as one of the world&rsquo;s companies with the strongest social responsibility reputation. The firm is also a successful business in the entertainment and media enterprise thanks to its CSR reputation. The company has applied CSR successfully to gain significant market share. It made it part of its business sustainability strategy(Berg and Kim 12). The accounting methods were also implemented in this approach. The firm has five business segments which are, the media networks, resorts, studios and consumer products and interactive media as well as parks all for entertainment. The company through its CSR has planted over three million tresses in Brazil&rsquo;s endangered Atlantic Forest, protected over forty thousand coral reefs in the Bahamas and also conserved more than fifty thousand acres of Savanna wildlife corridors in the continent of Africa((Torugsa, Wayne, and Hecker 483).</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>According to 2013 data, Disney Company &nbsp;gave out three hundred and seventy million dollars to charity and spent over six hundred thousand hours in volunteering activities in various regions across the globe(Chen et al. 84). This positively impacted over four million families and children around the world according to the report on their charitable activites(Chen et al. 84)</p>
<h2><i>1.2 Purpose</i><i> </i></h2>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>The purpose of the paper is to assess the CSR and how it is linked to the firm&rsquo;s accounting and business strategy.&nbsp; The accounting policy applied in corporate social responsibility is referred to as social accounting. It involves the communication of environmental and social effects of a firm&rsquo;s economic action to a given interest group within the society as well as the society as a whole where it operates. It stresses the need for the identification of the socially applicable behavior and determining those practices that a company is accountable for its engagement in social performance.</p>
<h2><i>1.3 Limitation</i><i> </i></h2>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>Disney Company&rsquo;s corporate social responsibility was last evaluated three years ago, 2014. Since the last time thi assessment was done, a lot have chanaged in the market and thus using past data like this one might not give the real picture as it is now. lack of updated market challenges and changes as far as CSR is concerned(Torugsa, Wayne, and Hecker 483).</p>
<h2><i>1.4 Disposition</i><i> </i></h2>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>First, the paper introduces the background information on corporate social responsibility and Disney&rsquo;s case, looking at some of their social engagements and as well as expenses regarding dollars and time spend and impacts of such activities.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>Secondly, it explains the theories relating to corporate social responsibility and review of the literature on social responsibilities of firms. The result of the evaluation would be in written format.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>Eventually, it concludes with a summary of this paper on the business and accounting strategy and the firm&rsquo;s corporate social responsibility. It then makes recommendations as far as the business and accounting strategy is concerned with relations to the corporate social responsibility of Disney Company.</p>
<h1><b>2.0 Definition of Terms</b><b> </b></h1>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>Corporate social responsibility CSR is defined as initiatives taken by the companies to engage in a social environment for the purpose of social wellbeing. It involves incurring some short-term costs that cannot provide the firm with immediate financial benefit. However, the long-term benefits of corporate social responsibility are much better and significant fo the business of the company(Jo and Haejung 441). Companies get involved in social responsibilities to promote positive social and environmental changes that are desired by the members of such society. It is also a way of saying thank you to the society that has given then business.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>Business strategy is described as the means by which a company sets itself out to achieve its mission, goals, and objectives. It is the long-term planning of business firms to help them realize their goals given the market challenges and uncertain market conditions in the future.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>Accounting strategy is the language of business that creates the foundation for discussions of the firm&rsquo;s financial capability and performance in a given market. It is the means used by businesses to gather, record and analyze their financial information(Schaltegger 95). It is aimed at providing business and managers reasonable expectations for their future engagements in the market.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>The paper will focus on the application of business and accounting strategy on the corporate social responsibility as practiced by Disney Company.</p>
<h1><b>3.0 Literature Review</b><b> </b></h1>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>Tang, Clyde, and Sandra (2012) in their work titled <i>How Corporate Social Responsibility Engagement Strategy Moderates the CSR&ndash;Financial Performance Relationship</i> claimed that corporate social responsibility enhances the financial results of the company. When corporates engage in social responsibilities, society would give back to the company by supporting the business of such company. In other words, CSR is a way of advertising the brands of the company by reaching out to customers that would buy their products or services. Also, corporate social responsibility reporting strategy is seen as a technique of strengthening the relationship between firm managers and stakeholders. Strong relationship between the frim and society would ensure working together for the purpose the business and society. Moreover the relationship between society and the company will benefit both the business and community. Where the firm incurs some costs in their engagement in social responsibilities there is a long term benefit in that the company would have an edge in the market.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>The society that the business is assisting would form the larger market for the firm (Tang, Clyde, and Sandra (2012). It means that the company would be preferred in the market over their competitors. Also, Tang, Clyde, and Sandra (2012) state that corporate disclosure provides a company with the opportunity to spread vital information mainly to financial stakeholders such as stock analysts, as well as investors and the firm also get evaluated on the financial measures. The link connecting a company&rsquo;s financial performance and corporate social responsibility is that it raises the firm&rsquo;s value. Tang, Clyde, and Sandra (2012) further stated that better financial results improve a company&rsquo;s corporate social performance CSP which can later improve the implementation of the budget. According to the research done by Tang, Clyde, and Sandra (2012) also found out that companies with better corporate social responsibility report tend to have higher stock returns and thus the improvement in financial performance. Their work also found out that firms that were not involved in corporate social responsibility had low financial performance because the investors are shunning away from them. People do not want to invest in companies that they are not supporting the society in solving the various problems that they are facing daily.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>Similarly, Michelini and Daniela (2012) claimed that corporate social responsibility is a strategy of connecting the business and the society. It seeks to get community&rsquo;s participation in the firm. It makes the community to take the company as one of their citizens and would help whenever necessary if the firm asks for assistance. This ensures going concern of the enterprise. It also ensures that the company develops sustainable business practices. Michelini and Daniela (2012 further states that corporate social responsibility requires some business and accounting strategy that would ensure that both interests of the organization, as well as those of the society, are balanced. Also, Michelini and Daniela (2012, claimed that Balanced Score Card could be used in managing corporate social responsibility. The balanced scorecard helps the organization to balance their internal aspects and the external aspect in the way of measuring their performance. It will look at the activities they have engaged in with the society and also the performance to know how those activities relate to their performance. In using balanced scorecard, the business would be able to point out or demonstrate the value-adding activities of corporate social responsibility.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>Also, Idowu, Nicholas, and Liangrong (2013) stated in their work <i>Encyclopedia of Corporate Social Responsibility</i>, that business strategy such PESTEL analysis can be used to establish the needs of the business that relates to the needs of the society.&nbsp; Thus companies will solve society needs in a way that the company would benefit in the long run. It means that the PESTEL analysis would point out the areas of focus in balancing the interests of the firm to those of the society in which they operate.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>Bocken et al. (2013) also indicated that there are various business strategies that organizations can use to integrate their social responsibilities with the operational requirements to ensure greater performance. The article recognized CSR as an investment that has sly benefits to companies and such benefits would only be realized if there are a proper and appropriate business and accounting strategies such as balance scorecard, competitor&rsquo;s analysis, SWOT analysis and even the five competitive forces. All these would be incorporated in the business operations as well as engagement in corporate social responsibility to achieve a maximum benefit from those activities.</p>
<h1><b>4. Methodology</b></h1>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>Data that shows the performance of various companies that are involved in social responsibilities and those that do not participate in CSR were retrieved from Hong Kong stock market and the results were compared. Disney is one of the companies that participates in CSR and thus the performance of firms that do not carry out CSR were compared with their performance.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>Corporate social responsibility performance for all these firms was measured using corporate social responsibility index. The financial and business performance was measured using the market book value (MBV), the size of the company, as well as return on capital employed (Idowu, Capaldi, and Liangrong 24). The method was aimed at measuring the performance in all aspects of the business given the fact that CSR requires a lot of funds and investment in terms of time and assets.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>Different business strategies, as well as accounting strategies that are used by Disney Company, was also compared with other companies so as to determine the reason why Disney is more successful in the market despite huge donations of millions of dollars to charity and other CSR activities.</p>
<h1><b>5.0 Results</b><b> </b></h1>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>The performance of Disney Company was higher as compared with the firms that were not involved in corporate social responsibility despite engaging in various social activities that required a lot of investments in terms of time and dollars. The corporate responsibility index showed that Disney was strong in CSR as compared to those companies in the listed in Hong Kong and China Stock market. On the return on capital, Disney still showed a better performance than other businesses. Also, the market book value of Disney was higher than these other companies. Disney&rsquo;s is bigger in size also which shows how the firm is growing and developing (Sakarya et al. 1710). This can only be possible if it is doing well in the market.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>Disney was found to be using several business strategies such as balance scorecard in measuring and balancing its market performance and in social activities.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>There was evidence of a relationship between corporate social responsibilities and the business performance of companies as those enterprises that were not involved or those that had a poor result on CSR showed poor performance also.</p>
<h1><b>6.0 Analysis</b><b> </b></h1>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>Corporate social responsibility helped firms achieve the best performance in the market because it enhances the relationship between companies and the society. This makes then brings the brand loyalty to the enterprise. It means that CSR is a form of advertisement and promotion which later result in better market results. However, there are those firms that practice CSR but still reports poor performance (Bocken et al. 482). This is because of lack on integrating their company&rsquo;s business and accounting strategy with the corporate social responsibility strategy. Firms will only receive more gains from social activities if they apply the right strategies that balance the interest of the society and those of the company. Some of the business and accounting strategies used by Disney Company in their social responsibility can be discussed as;</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>Balance scorecard</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>This is an approach to performance measurement that is used by organizations to keep track of the execution of activities to help monitor the consequence of each activity on their performance. This is accounting strategy of determining the cost and benefit of each activity that organization is involved in (Bučiūnienė and Rūta 21). The sustainability balance scorecard is used to determine the relationship between a company&rsquo;s performance and the corporate social responsibility.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>Disney has divided their business into five dimensions that are, customer, financial, internal operation, growth and learning and non-market activities, which is the corporate social responsibility (Tang, Clyde, and Sandra ). Some of the non-market activities practiced by Disney are the protection of coral reef in the Bahamas, funding P.L.A.Y program of the UNICEF that deals with children affair worldwide. In the year 2012, the company gave out about 12 million dollars to assist those who were affected by Hurricane Sandy (Tang, Clyde, and Sandra 1274). These are but just a few of the social activities that the firm carries out. Using balance scorecard, the firm would monitor their activities and make adjustments based on the consequences of their execution (Dey and Shouvik 36). For example, if more involvement on CSR brings more profit to the company, they will look into how to continue involving on such activities with a well calculated direct and indirect cost they will incur. This is compared with the calculated benefit so that both the interest of the firm and those of the society are covered in a balanced manner.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>Business Strategy for Disney corporate social responsibility</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>Some of the business strategies that are applied to incorporate CSR into business plan by Disney are: PESTEL this is an economic tool that is used to analyze the macro environment of organizations. It is used to analyze political, economic, social, technology, legal and the environmental factors that may affect the business operations. Through this analysis, the firm would be able to examine the needs of the society, through environmental analysis, and linked those needs with the business processes so that they can determine how they solve the societal problems while deriving benefits from such activities (Rangan, Lisa, and Sohel 24). For example, Disney gave out millions of funds in supporting those who were affected by Hurricane Sandy in 2012. After the assistance, various investors then felt obliged to invest in the stocks of Disney Company as they think it is another way of helping the society through Disney. The company gained a lot more than the amount they spent on such charitable action. They analyzed the environment and recognized that by assisting the people of Hurricane Sandy disaster, they would gain more favor from investment and even the society as a whole.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>Another strategy used in integrating CSR into business plans and performance is the driving forces the industry. Ecological sustainability is one of the driving forces of industry. It is in the interest of the firm to protect the environment for the sustainable future (Michelini and Daniela 561). Disney Company is involved in a lot of environment protection activities such as protection of more than fifty thousand acres of Savanna wildlife corridors in the continent of Africa. It is a way of securing the future environment in which they will operate in. Engaging in environmental protection would involve engaging the local communities that would also gain through the provision of employment. With that they have secured loyalty with such locals and their brands would be well known and preferred over those of their competitors. This later leads to higher financial performance.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>Additionally, Disney uses competitor analysis to establish what competitor&rsquo;s strategies in the market to determine their weakness, strength as compared to their strategy. In so doing, the firm realized that the competitors did not have strong CSR (Zhao 439). This is after they have proven that CSR enhances the relationship between the business and various stakeholders in the market. They then incorporated CSR in their strategies of activities with the aim of gaining more market base than their competitors(Chen et al. 84). They succeeded in this plan and became the best firm in their industry. Their competitor realized when it was already too late, Disney services and products already was a household in the society.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>Moreover, the firm used SWOT to determine their strength, weakness, opportunities and threats in the market. One of the possibilities they realized was engaging in various corporate social activities in the way of promoting their products and services(Lamberti and Giuliano 402). This would later increase their corporate social performance and later increased their financial results.</p>
<h1><b>7.0 Conclusion</b><b> </b></h1>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;line-height: 200%”>In conclusion, it is right to say that before engaging in corporate social responsibilities, there is need to involve various business and accounting strategies so that the company&rsquo;s effort in solving society problems would not be in vain but benefit them in the long run. Disney Hong Kong applied various strategies in determining ways in which they would benefit from their engagement in various social activities. They later became the well-known firm with a brand believed to be strong and thus better market performance.</p>
<p style=”margin-bottom:0in;margin-bottom:.0001pt;text-indent: .5in;line-height:200%”>Disney Company has been involved in various charitable activities especially in environment conservation. What the firm has done is incorporate its business plan and corporate social responsibility to form a strategy that would ensure it is on top of the market when compared with its rivals in the industry. They use accounting strategies such as balance scorecard to balance the interest and gains from engaging in social activities with the help they are offering to the society. The more the benefit from participating in charitable activities, the more the company funds such activities. This technique of incorporating their business strategy with CSR has worked in their favor. The investors are buying more of their stock in the market due to their environmental conservation efforts which are seen as a way of helping the world curb the effects of climate change. Disney also used PESTEL in analyzing their external environment. This helped them in identifying some of the activities that need attention of big companies and also assessing the benefit they would derive from involving in helping the society solve such problem. Also, the firm used social activities to strengthen its relationship with the stakeholders in the community with the aim of solidating their market base. The society forms its largest market, and by enhancing their relationship with them, the firm would become part of the community, and thus its problems would be seen as society problems, and thus they would help the business wherever their assistance would be needed apart from being its loyal customers.Zhao, Meng. CSR-Based Political Legitimacy Strategy: Managing the State by Doing Good in China and Russia. <i>Journal of Business Ethics, </i>vol. 111, no. 4, 2012, pp. 439-460.</p>

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