What is legitimacy theory in accounting?
Legitimacy theory posits that for a corporation to continue to exist it must act in congruence with society’s values and norms (Dowling & Pfeffer, 1975).
What is legitimacy theory CSR?
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. Legitimacy theory is based on the idea that a social contract exists between business and society.
What is legitimacy theory and stakeholder theory?
Stakeholder theory offers an explanation of accountability to stakeholders. Legitimacy theory, on the other hand, suggests voluntary disclosures are part of a process of legitimation.
Is legitimacy theory a normative theory?
Legitimacy theory helps to understand the organization’s behavior in implementing, developing and communicating its social responsibility policies. On the basis of a normative approach, it presents the author’s proposal of treatment of sustainable management accounting as a tool for sustainable business legitimacy.
What type of theory is legitimacy theory?
Legitimacy theory has a very rich disciplinary background based on management theory, institutional theory, and stakeholder theory. Strategically speaking, the sustainability of legitimacy theory is based on the management heritage that connects traditional norms and values with modern ethics.
What does the legitimacy theory and social contract have to do with an Organisation’s corporate disclosure policies?
Legitimacy Theory relies on the belief that a social contract exists between corporations and society. Such disclosures act as tools to educate or manage the perception of society, and thus disclosure policies are frequently established to meet society’s norms.
What is legitimacy theory PDF?
In our conception, the legitimacy theory is a mechanism that supports organisations in implementing. developing voluntary social and environmental disclosures in order to fulfil their social contract that enables. the recognition of their objectives and the survival in a jumpy and turbulent environment.
When applied to legitimacy theory the social contract is?
Legitimacy theory relies on the notion that there is a ‘social contract’ between a company and the society in which it operates (Deegan 2000; Deegan 2002; Mathew 1993; Patten 1991; 1992).
Who proposed legitimacy theory?
Dowling and Pfeffer
The legitimacy theory was developed by Dowling and Pfeffer in 1975 (Guthrie & Ward, 2006) .
What is a social contract and how does it relate to Organisational legitimacy?
A social contract is not necessarily a written agreement, but is what we understand society expects. While the relationship between society and business is explained by the social contract, organizational legitimacy describes the state in which an organization has met the terms of the social contract.
Who introduced legitimacy theory?
Legitimacy theory is derived from the concept of organisational legitimacy, which has been defined by Dowling and Pfeffer (1975, p. 122) as: … a condition or status which exists when an entity’s value system is congruent with the value system of the larger social system of which the entity is a part.
What is Rousseau’s idea of The Social Contract?
Rousseau’s central argument in The Social Contract is that government attains its right to exist and to govern by “the consent of the governed.” Today this may not seem too extreme an idea, but it was a radical position when The Social Contract was published.