Exposure, legitimacy, and social disclosure sciencedirect. Legitimacy, on these views, is only one of the many disguises 16 of raw power. Corporate legitimacy and environmental reporting deegan. In our conception, legitimacy theory has the role of explaining the behavior of organizations in. It would also be expected that disclosures would fall off again after the initial reaction suggesting a pragmatic approach to legitimacy theory. Legitimacy, democracy, and razian authority legal theory. Jan 01, 2011 the proposed theory extends research on cognitive and sociopolitical legitimacy, reputation, and status by advancing an evaluators perspective on these concepts as forms of social judgment, each addressing a different evaluators question about the organization. Despite of its importance, legitimacy has been an ambiguous goal for an organization. Islam, muhammad azizul, csr reporting and legitimacy theory. A story of reporting social and environmental matters within the australian food and beverage industry professor james guthrie discipline of accounting, the university of sydney associate professor suresh cuganesan macquarie graduate school of management and leanne ward cocacola amatil corresponding authorprofessor james guthriediscipline of accountingthe university of. This chapter explores the notion of organisational legitimacy and emphasises that organisational legitimacy can be considered as a resource upon which many organisations are dependent for. The role of theory in explaining motivation for corporate. Evidence from china changes in value of the chinese market are much lower than changes in the markets values of other countries legitimacy theory is the theoretical basis in this article. However, there are a number of gaps in the literature dealing with legitimacy theory, which have.
However, these theories discourse the cause and consequence of variables, such as the formation of board structure, audit committee, independent. Legitimacy is a license to operate in a society for an organization. Stock markets reaction to disclosure of environmental violations. The legitimacy theory has a very rich disciplinary background based on management theory, institutional theory, and stakeholder theory burlea and popa, 20, p. Consistent with the notion of legitimacy theory, companies seek to gain, maintain or repair their legitimacy by using social and environmental reporting. Legitimacy theory and environmental practices semantic scholar. Legitimacy theory, one of many social theories which is supported by the concept of the social contract, has been long been recognised as an effective explanatory tool regarding the motive of environmental reporting by business organisations odonovan, 2002. Stakeholder determination and reporting a thesis submitted in fulfillment of the requirements for the degree of doctor of philosophy mr kevin russell adams master of economics university of new england bachelor of business in accountancy rmit school of accounting college of business rmit university march 2011. Indeed, it is probable that legitimacy theory is the most widely used theory to explain environmental and social disclosures campbell, craven and shrives, 2003, p. With government, legitimacy is usually conceptualized in two main ways. However, little is known about current attitudes on this.
Aug 08, 2015 7 sacred sign posts from the universe revealed. Legitimacy theory versus signalling theory the question of managerial. Pdf to various researchers from the arena of business and economics. In our conception, legitimacy theory has the role of explaining the behavior of organizations in implementing and developing voluntary social. Some thoughts on future research agenda april 6, 2017. Among these has been legitimacy theory which posits that corporate disclosures are made as reactions to environmental factors and in order to legitimise. Abstract various rationales have been advanced to explain the phenomenon of corporate social reporting. Among these has been legitimacy theory which posits that corporate disclosures are made as reactions to environmental factors and in order to legitimise corporate actions. What does the notion of legitimacy and social contract have to do with corporate disclosure policies.
The legitimacy theory has a very rich disciplinary background based on management theory, institutional theory, and stakeholder theory burlea and. Through the lens of legitimacy theory abstract efforts to promote corporate social and environmental responsibility cser require an understanding of stakeholder attitudes toward enhanced responsibility. A comparison of these distinct approaches allows us to explain the process, both in implicit and explicit ways at different levels of analysis, through which a social object is construed as legitimate. Corporate social disclosures csd are primarily voluntary in nature and as such provide fertile territory for research into the motivational aspects for these disclosures. Studies on cer have tended to be more oriented towards socialpolitical theories gray. Various rationales have been advanced to explain the phenomenon of corporate social reporting. I describe how evaluators make their social judgments under conditions of bounded rationality. Introduction in recent years, corporations have increasingly used their annual reports to voluntarily report information relating to their social actions, particularly those concerning the natural environment gray et al.
What does the notion of legitimacy and social contract. Corporate social responsibility and tax aggressiveness. The relationship between sustainability performance and sustainability disclosure remains ambiguous, both theoretically and empirically. The argument for the legitimacybased theory of politics can likewise be made deductively. The legitimacy theory and csr disclosure accounting essay. Based on deliberations on the legitimacy of csr from the perspective of stakeholder and legitimacy theory on the one hand and the more critical view of milton friedman and michael jenson on the other hand, this paper analyses how major energy companies legitimise their csr activities in their annual reports and their csr reports.
Download limit exceeded you have exceeded your daily download allowance. Three mainstream theories, namely legitimacy theory, stakeholder theory and institutional theory all of which have been employed in the csr literature are integrated by considering theoretical predictive motivations of csr practices. Corporate social and environmental responsibility in an. Apr 28, 2012 legitimacy theory, one of many social theories which is supported by the concept of the social contract, has been long been recognised as an effective explanatory tool regarding the motive of environmental reporting by business organisations odonovan, 2002. Not only might legitimacy have autonomous effects variant 1, but it also may lurk in the fabric of economic, sociopolitical, or historical factors variant 3. The aim of this study is to explore the possibility of using the legitimacy theory as a plausible explanation for csr reporting practices by organizations within the context of developing nations. Legitimacy, democracy, and razian authority volume 9 issue 3 scott hershovitz. In terms of the future direction of the applicability of the legitimacy theory, there appears to be a number of subject areas or legitimacy.
Conceptualizing legitimacy as a thing an asset or characteristic to be gained, increased and lost clearly emphasizes some attributes of a phenomenon at the. Discover the secret language the universes uses to send us guided messages and watch as your greatest desires manifest before your eyes. This question led to many interesting facts which will be listed below. Legitimacy theory is theory that, in the last decade, has become increasingly used by accounting researchers, particularly researchers working in the area of social and environmental accounting. Theories related to voluntary disclosure that are commonly used through the literature include agency theory, signalling theory, capital need theory, and legitimacy theory. The relationship between sustainability performance and. Corporate social responsibility and the legitimacy of the. Toward a theory of social judgments of organizations.
However, the stakeholder theory is better in explaining the role of corporate governance than the agency theory. Designmethodologyapproach a unique sample of 20 australian corporations accused by the australian taxation office of engaging in tax aggressive. Pdf legitimacy theory and its relationship to csr disclosures a. Examining legitimacy gap in issues management applying.
This paper reports the results of an historical analysis of social disclosures in 100 years of annual reporting by a. Introduction during the past fifteen years, the context within which non governmental organisations ngos work has changed considerably, and they have become important actors in national and international politics, a fact which has been accompanied by a rapid growth in the. A story of reporting social and environmental matters within the australian food and beverage industry professor james guthrie discipline of accounting, the university of sydney associate professor suresh cuganesan macquarie graduate school of management and leanne ward cocacola amatil corresponding. Since social performance could not be evaluated by business profit and the markets, the issue was addressed by public policy makers see the discussion in heard and bolce 1981, p. The proposed theory extends research on cognitive and sociopolitical legitimacy, reputation, and status by advancing an evaluators perspective on these concepts as forms of social judgment, each addressing a different evaluators question about the organization. Corporate social and environmental responsibility in an emerging economy. Corporate legitimacy and environmental reporting deegan and. The paper examines both webbased and annual report disclosures in. Dec 28, 2016 the aim of this study is to explore the possibility of using the legitimacy theory as a plausible explanation for csr reporting practices by organizations within the context of developing nations. The underlying assumption is that business is a social institution, which needs a societys acceptance for survival sethi, 1977.
In terms of the future direction of the applicability of the legitimacy theory, there appears to be a number of subject areas or legitimacy threatening incidents to be researched within the context of developing nations. Abstractvarious rationales have been advanced to explain the. This chapter explores the notion of organisational legitimacy and emphasises that organisational legitimacy can be considered as a resource upon. Legitimacy organizational, corporate social reporting csr. To do this, this study drew on the notions of institutional theory, legitimacy, and rhetoric, and explored propositions drawn from these concepts to.
Among these has been legitimacy theory which posits that corporate disclosures are made as re. This paper constructs an integrated theoretical framework for explaining corporate social responsibility csr practices by organisations. Legitimacy is a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions suchman, 1995, p. A comparison of these distinct approaches allows us to explain the process, both in implicit and explicit ways at different levels of analysis, through which a social object is. Exposure, legitimacy, and social disclosure 299 ered to be consequences of their activities see, e. The research question of this article, which drew my attention to explore into the theories of accounting area, is that how significant the impact of corporate social responsibility is associated to the legitimacy theory and stakeholder theory. Historical perspectives on sociological and psychological theories of legitimacy 2 theories of legitimacy 33 morris zelditch, jr. Legitimacy theory may provide usef ul insights for corporate social and environmental disclosures. Perhaps more than ever before, corporate governance reforms bear a much closer resemblance to institutional mechanisms typically found in government. Legitimacy theory and its relationship t o csr disclosures.
Voluntary disclosure theory would suggest that the relationship should be positive, whereas legitimacy theory points toward a negative relationship. Determinants of voluntary disclosure fall into motivations and constraints. An institutional and rhetorical perspective a thesis submitted in accordance with the requirements for the degree of doctor of philosophy at the queensland university of technology by bree devin b. Guthrie j and parker l 1989 corporate social reporting a rebuttal of legitimacy from acct 6002 at university of sydney. However, there is an argument that the theory is narrow coleman, 2008.
Guthrie j and parker l 1989 corporate social reporting a. Bushons school of advertising, marketing and public relations qut business school. An aspect of legitimacy theory, investigated in this research, is that in order to continue to exist a corporation will act to remain legitimate in the eyes of whom it considers is able to. A variable but significant pattern of social reporting is identified and compared with an earlier study of social reporting by us steel. Multitheoretical perspective of corporate environmental. I describe how evaluators make their social judgments under conditions of bounded rationality and how cognitive and social factors. The sme managers were found to have a neutral attitude towards social accounting and they all engaged in practical actions rather than social impact measurement or social reporting.
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