Your are to present to the class using the case study provided, applying one of the accounting theories addressed throughout the semester.

Stakeholder Theory At British Petroleum (Plc)
British Petroleum (Plc) well established oil and Gas Company headquartered in London and United
States. The company is the third largest energy company and fourth largest company in world as per
revenue.
There are many accounting theories and lets us understand and discuss the Stakeholder Theory in
context with British Petroleum and consider a conflict (between BP and Greenpeace research) , and
understand the criticisms on the existing stakeholder theory has proven disastrous.
Defining Stake Holder Theory
The contribution of Freeman towards stakeholder theory is enormous and had presented the theory in
a graphical way to explain and understand the meaning of stakeholder theory. He defined stakeholder
“a group or individual, who may be affected by the achievement of the organization‟s objectives”
(Freeman 1984). Friedman (2006) once commented that organization should think of grouping the
stakeholders and should address the interests, requirements and viewpoints from time to time. It
would also be advised that every firm is able to classify the direct and indirect stakeholders and then
able to act accordingly. Managers should work and manage the corporation in order to derive the
benefits for the stakeholders and should ensure their participation and rights in the process of decision
making. It is the responsibility of the managers to work as the agent of each group of stakeholders and
always should make attempts for survival of the corporation in the long term.
Freeman‟s Stakeholder Theory can be criticized in the following ways:
i. The explanation regarding the process is not adequate – There is no such crystal clear defined
process, to be followed as per the stakeholder theory. Hence assessing the process may not
accurately.
ii. Failure to link the internal and external factors - We understand that, there will be many
variables (internal and external) under the consideration of stakeholder theory. But the theory
lacks in linking these variables and getting the result out of this.
iii. Lack of attention to the system, where the business operates – This theory does not pay
attention to the way the business operates in the organization and how the system moves from
time to time. Does the system take care of every employee and does the management do the
justice to them. This theory is silent about the system analysis and suggestions for system
improvement.
iv. Assessment of environment is ignored – There is no space for environmental assessment in the
theory, which may not be accepted. Reason being, every organization needs to assess the
environment, where it operates its business. Correct assessment of environment helps the
organization to sustain in the long run.
In the context of applying the stakeholder theory, all the managers are forced to articulate
initiatives for each and every action of the organization. As per this theory, every manager should
understand the purpose of the corporation, responsibilities the organization has to its
shareholders, different strategies to be initiated in order to achieve the vision of the organization.
All these activities get fructified while the application of stakeholder theory is ensured in the
organization enhancing motivation for corporate voluntary sustainability reporting practice
Feasible dialogues from the stakeholders help British Petroleum to establish a group. The
stakeholders engaged in BP decision process are presented below:
BRITISH
PETROLEUM
Employees
Contractors
and Partners
Non-
Governmental
Organisation
Shareholders
and Analysts
Local
Community Government
and Regulator
Customers
While discussing the stakeholder engagement by BP, there were many situations in history of the
organisation and the organisation becomes successful, when all the concerns can be handled very
tactfully. Let us discuss one of the key issues in the situation of the conflict between British
Petroleum and Greenpeace Research and the details of the same, is enumerated below. The...