A theoretical framework by thomas and lamm 2012, based on ajzens 2005 theory of planned behaviour and suchmans. The study of accounting from the outside, accounting can appear to be a purely practical subject. Financial accounting theory 4e legitimacy theory legitimacy theory is a widely used theory within legitimacy theory, organisations seek to ensure they operate within the bounds and norms of their respective societies that is, they want their activities to be perceived as legitimate bounds and. Application of social contract in legitimacy theory brings transparency in the system and helps the society as a whole in many ways as discussed above. Ramanathantoward a theory of corporate social accounting. When viewed as a process, however, legitimacy is not seen as the outcome of congruence but, rather, is a product of how that congruence is achieved. Let us make indepth study of the concept definition, features and benefits of social accounting. 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. Thus, the results reflect consistency between attitudes towards social accounting and actions, i. Abstract various rationales have been advanced to explain the phenomenon of corporate social reporting. Free accounting books download ebooks online textbooks. As social contract plays an important role in legitimacy theory. Download it once and read it on your kindle device, pc, phones or tablets. A very commonly used positive theory in the world of accountancy is the legitimacy theory.
E book or pdf edited book email encyclopedia article govt. Corporate social responsibility as a legitimacy maintenance strategy in the professional accountancy firm. Legitimacy theory is a political theory and has implications on several business activities including accounting. Legitimacy theory businessmarketing bibliographies. This subject guide is written for those of you who are studying principles of accounting. The cambridge handbook of stakeholder theory edited by jeffrey s. Encyclopedia of corporate social responsibility pp. Legitimacy theory and environmental practices semantic scholar. Legitimacy theory and stakeholder theory underpin the study. Social disclosure, legitimacy theory and the role of the state 2009 acc auditing accountability j.
Social values can be linked with economic actions with the help of accounting. 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. 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. Tsang 1998 use legitimacy theory to explain social and environmental reporting in china.
This essay explores recent trends in social and environmental accounting research sear. Environmental accounting disclosure practice of nigerian. Recent developments in social and environmental accounting. Legitimacy lies at the heart of all political discourse and determines much political competition in both developed and less developed societies. Financial accounting theory, 4th edition, mcgraw hill book company. The legitimacy theory posits that entities are bound by the social contract in which they agree to. This book covers the fundamentals of financial and managerial accounting. This study examines whether the voluntary social disclosures included by corporations in their. The unit is intended as a broad introduction to the subject, both for nonspecialist students, and as a foundation for further study in the area. A legitimation crisis is an identity crisis that results from a loss of confidence in administrative institutions, which occurs despite the fact that they still retain legal authority by which to govern. What is legitimacy and why does it matter for peace. A framework for social and environmental accounting research.
It should owe a responsibility towards solving many of the social problems. A rebuttal of legitimacy theory, accounting and business research 1976, 343352. The theory in effect claims that because corporations have the resources, they should engage in social ventures. But the legitimacy theory can be used in corporate report, suggested by woodward et al. Intraindustry environmental disclosures in response to.
Corporate communication and impression management new. The political economy paradigm suggests that the economic sphere may not be deliberated in separation from the political, social and institutional framework in which the economy is positioned gray et al. Changes in social and environmental reporting practices in an emerging economy 20042007. Legitimacy theory may provide useful insights for corporate social and environmental disclosures. A variable but significant pattern of social reporting is identified and compared with an earlier study of social reporting by us steel. An overview of legitimacy theory as applied within the social and. While legitimacy theory suggests csr disclosures are part of a process of. Legitimacy theory posits that businesses are bound by the social contract in which the firms agree to perform various socially desired actions in return for approval of its objectives and other rewards, and this ultimately guarantees its continued existence. 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. According to legitimacy theory, companies disclose social responsibility information to present a socially responsible image so that they can legitimize their behaviours to their stakeholder groups.
Sustainability accounting and accountability, routledge, new york, united states, pp. 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. The ultimate theories in corporate governance started with the agency theory, extended into stewardship theory and stakeholder theory and evolved to resource dependency theory, political theory, legitimacy theory and social contract theory. 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 their survival. 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.
This article offers a critical overview of the major normative theories of political legitimacy from the seventeenth century to the present day, with a special focus on the leading representatives of the social contract tradition. Wilmshurst and frost 2000 consider that legitimacy theory provides an. The results of this study fail to confirm legitimacy theory as the primary explanation for social reporting in the australian case. This study analyzes the perspectives of the institutional theory, the legitimacy theory, and the stakeholders theory in the accounting changing process and sustainability reports. In our conception, legitimacy theory has the role of explaining the behavior of organizations in implementing and developing voluntary social and.
An overview of legitimacy theory as applied within the social and environmental accounting literature deegan, c 2014, an overview of legitimacy theory as applied within the social and environmental accounting literature in jeffrey unerman, jan bebbington, brendan odwyer ed. Exposure, legitimacy, and social disclosure sciencedirect. Normative legitimacy and the state oxford handbooks. Exploring the relevance of stakeholder and legitimacy theories. The relationship between legitimacy and resources attracted and still attracts the attentions of social and accounting researchers lindblom 1994. Pdf legitimacy theory in management accounting research. Ncert books pdf free download for class 12, 11, 10, 9, 8, 7, 6, 5, 4, 3, 2, and 1 april 14, 2020 by kishen 16 comments there are many books in the market but ncert books. An overview of legitimacy theory as applied within the social and environmental accounting literature. Legitimacy theory is described by richardson 1987 as a means by which social values are linked to economic actions, in order to achieve harmony between corporate practices and the legitimacy of their existence. Keywords social accounting, disclosure, corporate strategy, automotive.
The principal objective of this paper is to expand the scope of legitimacy theory lt through a detailed analysis of the links that exist between the legitimising strategies of firms and the characteristics of the political environment in which they are developed. An overview of legitimacy theory as applied within the. Business is a socioeconomic activity and it draws its inputs from the society, hence its objective should be the welfare of the society. Normally the legitimacy theory is used to explain social and environmental reports disclosure. The objective is to explore how these theories are used in corporate social responsibility csr disclosure.
Legitimacy is about social, economic and political rights, and it is what transforms coercive capacity and personal influence into durable political authority. Ncert books pdf download 2020 for class 12, 11, 10, 9, 8. Legitimacy theory legitimacy theory has its foundations in the theoretical paradigm of political economy. This in turn requires the adoption of a csr strategy affecting various areas of activity, including in particular management accounting. In addition, legitimacy theory maintains that larger firms have a greater responsibility than smaller firms. Tilling flinders university, south australia the author wishes to acknowledge the valuable support provided by the cpa australia in funding this research through their research grant scheme. Legitimacy theory is based on the idea that a social contract exists between business and society.
The main assumption of legitimacy theory is fulfilling the organizations social contract, which enables the recognition of its objectives. Pdf refinements to legitimacy theory in social and. According to gray 2000, a broad definition of social accounting might be. Through this analysis, it is provided a better theoretical understanding of these theories, which. This article presents the findings of an analysis of the role of internal social responsibility accounting sustainable management accounting in the light of legitimacy theory. The legitimacy theory has a very rich disciplinary background based on management theory, institutional. Email your librarian or administrator to recommend adding this book to your organisations collection. Legitimacy theory overlapped stakeholders theory, intuitional theory and positive accounting theory which are discussed above. Use features like bookmarks, note taking and highlighting while reading social compliance accounting. If social accounting is anything, it is the opening up of new spaces, of new accountings, not. This book is specifically designed to appeal to both accounting and nonaccounting majors, exposing students to the core concepts of accounting in familiar ways to build a strong foundation that can be applied across business fields. Prestoncorporate social accounting reporting for the physical environment. Social disclosure, legitimacy theory and the role of. Social disclosure, legitimacy theory and the role of the.
Legitimacy theory may provide useful insights for corporate social and environmental. Theoretical perspectives on sustainability reporting. Legitimacy theory businessmarketing bibliographies in harvard style. These theories, it is argued, explain the limitations of the role of social and environmental accounting in terms of. Islam, azizul 2017 csr reporting and legitimacy theory. 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. Refinements to legitimacy theory in social and environmental accounting matthew v. As given in the assignment, it is stated that organizations sometimes voluntarily provide information in their annual reports which is not mandatory. Positive accounting theory and normative accounting theory. Strategically speaking, the sustainability of legitimacy theory is based on the. 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. The basis of the social contract either expressed or implied on. This chapter provides an overview of legitimacy theory as applied within the social and environmental accounting literature.
The portrayal of accounting and accountants following the enron collapse garry d. Refinements to legitimacy theory in social and environmental accounting. A combination of different theories like legitimacy theory. Preston university of maryland the stakeholder theory has been advanced and justified in the man agement literature on the basis of its descriptive accuracy, instrumen tal power, and normative validity. Legitimacy theory is derived from the positive approach to the development of accounting theory and helps in explaining and determining the legitimacy of the behavior of organizations. Concepts, evidence, and implications thomas donaldson georgetown university lee e.
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