Social And Ethics Of The Legitimacy Theory Of Virgin Australia

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Legitimacy theory is a “positive theory” that asserts that businesses are bound by the implicit “social contract” that the corporation agrees to perform that are specifically relating to social and environmental issues (Rankin, et al. 2012, 142). To remain congruent with societal values in which it operates, a corporation can address attributes that relate to this theory through voluntary social and environmental disclosures made on platforms like its annual report (Coebergh 2011, 65).

Virgin Australia has various groups of important stakeholders who can affect or is affected by both the actions and activities of the corporation (Laasch and Conaway 2014, 97). They are namely, guests, employees, investor groups and shareholders, unions, non-government organisations (NGOs), as well as suppliers (Virgin Australia Holdings Ltd 2013, 161). The information disclosed in its annual report is aimed at assuring its stakeholders and the general public that the corporation is operating within social bounds, norms, and values of the society (Kivits 2013, 3).

Virgin Australia has addressed and disclosed areas such as safety, community and society, employees, environment, as well as other disclosures of importance in its report (Virgin Australia Holdings Ltd 2013, 160). The corporation recognises that it operates within the triple context of the natural environment, the economy, as well as the society, and that all three aspects can have an impact on its financial performance (Slaper

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