Business Analysis Of GE, GE And CFC Case

Introduction

Management Accounting emphasizes on supporting managers of a company in their aim to improve both shareholder and customer value (Mongiello, 2015). In any case, companies are progressively recognizing the wider information needs of a broader array of stakeholders. For example, a triple bottom line reporting technique is being used by many Australian companies to communicate the social, economic and environmental aspects of their activities to the shareholders. A lot of information is required by companies to implement environmental management. Triple bottom line reporting takes 3 aspects into consideration when evaluating performance; Financial, Social and Environmental. The Triple bottom line reporting caters to many stakeholder

Costs are difficult to be measured in financial terms

In the GE and CFC case, it would have been practically impossible for engineers in the 1930s to quantify the damage in monetary terms of CFC, even if they had perceived the potential future ecological issues

Accountants record costs that have been incurred internally but EMA suggests that there are costs incurred externally. GE used CFC in refrigeration and air conditioning. They were the market leaders back then. But as soon as they realized that CFC is a harmful gas, it had an adverse effect on the society. GE were unable to realize the long term cost to the society, the damage they were causing by polluting the air and water, impact on the health of the public, diseases incurred by its workers and the poor corporate image it had unknowingly created of itself.

It might be hard to predict the future natural and social effect of current choices and operations, especially as we don't realize what may be valued in the future. Indeed, even now, there are most likely numerous work practices and operations that will have future ecological and social effects that we are not able to evaluate as of now.

Advantages of Recognizing Social and Environmental Impacts via

EMA not only helps in decision making that result in lower costs but also result in favorable social impacts. For instance, by distinguishing the expense of discarding waste from production, managers can consider approaches to lessen these expenses by creating a more efficient production process or reprocess the waste. EMA also helps in promoting competition. There are customers who would prefer to buy from companies implementing CSR practices and therefore improves the overall brand image and reputation of the