Question

1. What is a social contract and how does it relate to organisational legitimacy? (6 marks, maximum 300 words)

2. b) Explain two ways organisations can use corporate disclosure policy to maintain or regain organisational legitimacy? (4 marks, maximum 200 words)

Answer 1

Answer :-

Social Contract :-

Social Contract is generally refers to how the business has been interact with the society.

Social contract relate to organisational legitimacy :-

It is relates to implicit and explicit expectations of society. it means how the business should act to ensure for its continuance in the future.

There is no compulsion to make the written agreement with the business. Therefore, a social contract is not necessarily a written agreement, but is what we understand society expects.

A social contract explains the relationship between the society and business where as the organizational legitimacy shows the state in which an organization has complied the terms of the social contract

Therefore, we can say that this is the process by which the terms of a social contract is gained or maintained.

(B) Answer :-

Note:-

(In the question, it was asked only 2 ways. However, i have explained all the 4 ways to the benefit of student It is advisable to take 2 points as per their wish.)

Generally, there are 4 ways how the organization can us the corporate disclosure policy to maintain or regain organisational legitimacy :-

1. Seek to change the perceptions of society, but not actually change behavior
2. Seek to manipulate perception by deflecting attention from the issue of concern to other related issues.
3. Seek to educate and inform society about actual changes in the organisation’s performance and activities
4. Seek to change expectations of its performance.

Corporate Disclosure is used as a techinque in each of these 4 strategies specified above. In case any negative news available in the public, an entity might take the steps deliberately and provide the information to negate the negative news which is available in the society.

Coroprate Disclosure also use to draw the attention to strengths or to down play informtion about the negative activities. It is highly used to advertise the comparatives i.e actual changes in coroprate performance or its activities..