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BBFA4033 ACCOUNTING THEORY & PRACTICE

COURSEWORK 2 SPECIFICATION

Question 2

On  15 March 2022, iBank announced that it would slash  1550 jobs while creating 550, a net loss of 1000. It planned to reduce inefficient operations, task duplication and some back office processing functions, but stated that it would not close more branches even where closures had been planned. The news received hostile reactions from both unions and consumer association.

Union officials said the job cuts were scandalous and that iBank staff were suffering from uncertainty following previous cuts and closures. According to the union official, ‘They have just shed 500 jobs, all from the retail network. Now we get this punch with another 1000 jobs. ’ The consumer association was equally unimpressed and quoted, ‘How much profit is enough for greedy banks like the iBank and how much further will it flout consumer and community demands before the Government acts?’

Required:

(a)         Read the article above, by pursuing a suitable unregulated reporting decision theory, explain whether iBank would or should respond to the concerns of the unions and consumers’ association.            (20 marks)

(b)        Assume   that   you   are   undertaking   a   research   project   that   is investigating how  a particular  adverse  environmental  event would negatively  impact the  legitimacy  of an  organisation.  Explain how would you determine that the legitimacy has been eroded based the output and input of the company resources perspective.     ( 10 marks)

[Total: 30 marks]