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Strategic responses to institutional pressures for sustainability: The role of management control systems

Chaminda Wijethilake (Department of Accounting and Corporate Governance, Faculty of Business and Economics, Macquarie University , Sydney, Australia)
Rahat Munir (Department of Accounting and Corporate Governance, Macquarie University , Sydney, Australia)
Ranjith Appuhami (Department of Accounting and Corporate Governance, Macquarie University , Sydney, Australia)

Accounting, Auditing & Accountability Journal

ISSN: 0951-3574

Article publication date: 16 October 2017




The purpose of this paper is to examine the role of management control systems (MCS) in strategically responding to institutional pressures for sustainability (IPS). Drawing on institutional theory (DiMaggio and Powell, 1983) and strategic responses to institutional pressures framework (Oliver, 1991), the study argues that organisations strategically respond to IPS using MCS.


Data were collected by interviewing sustainability managers of a large-scale multinational apparel manufacturing organisation with its headquarters in Sri Lanka.


The study finds that organisations actively respond to IPS using acquiescence, compromise, avoidance, defiance, and manipulation strategies. The results not only reveal that formal MCS play a critical role in complying with IPS, but also in more active responses, including compromise, avoidance, defiance, and manipulation. The findings highlight that organisations use MCS as a medium to respond strategically to IPS, and in turn, the use of MCS has important implications for organisational change and improvement.

Practical implications

The study has implications for Western organisations, finding that suppliers committed to sustainability in Asia strategically respond to IPS as a means of strengthening outsourcing contracts, instead of blindly accepting. Findings indicate that organisational changes and success seem to be a function of strategically responding to IPS rather than operating an organisation by neglecting sustainability challenges. The organisational ability to use MCS in strategically responding to IPS has the potential for long-term value creation.


This study provides novel insights into the MCS, strategy and sustainability literatures by exploring different uses of MCS tools in strategically responding to IPS. More specifically, it shows how the use of MCS tools varies in supporting strategic responses, and with respective IPS. In doing so, it enhances our understanding of the importance of the use of MCS in dynamics of institutional change and practical variances in strategically responding to IPS.



This paper is based on Chaminda Wijethilake’s PhD thesis. Earlier versions of this paper were presented at the Critical Perspectives on Accounting Conference (CPA) in July 2014, Toronto, Canada; the Emerging Scholar Forum of the Global Management Accounting Research Symposium (GMARS) in June 2014, Sydney, Australia; and the Environmental Management Accounting Network’s (EMAN) Conference on Sustainability Reporting to Sustainability Management Controls in March 2014, Rotterdam, the Netherlands. The authors would like to thank the AAAJ Editor Professor Lee Parker, two anonymous Reviewers, Graeme Harrison, and Elaine Evans for their insightful comments and suggestions.


Wijethilake, C., Munir, R. and Appuhami, R. (2017), "Strategic responses to institutional pressures for sustainability: The role of management control systems", Accounting, Auditing & Accountability Journal, Vol. 30 No. 8, pp. 1677-1710.



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