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Audit society, organisational response and (de-)coupling: an Italian story

Massimo Contrafatto (Department of Accounting and Finance, University of Sussex Business School, University of Sussex, Brighton, UK)
Sara Moggi (Department of Management, University of Verona, Verona, Italy)
Daniele Gervasio (Department of Management, University of Bergamo, Bergamo, Italy)
Damiano Montani (Department of Management, University of Bergamo, Bergamo, Italy)

Accounting, Auditing & Accountability Journal

ISSN: 0951-3574

Article publication date: 30 September 2024

124

Abstract

Purpose

This paper examines “how” an organisation, over time, responded, and “what strategies” were mobilised, to conform to a specific audit society-inspired model introduced in Italy by the Decree 231 (D231). D231 requires implementing an internal control and audit model and performance accounting to oversee business activities and prevent misconduct.

Design/methodology/approach

A case study approach was adopted for in-depth analysis of the response strategies (i.e. avoidance and compromise) and related initiatives, which were mobilised in ITAGAS, a public organisation leader in the methane gas distribution sector in Italy. Participant observation, interviews and document analysis were the primary data sources. Theoretically, our analysis is informed by insights drawn from the institutional complexity perspective (Thornton et al., 2012; Pache and Santos, 2013a, b) and Oliver’s (1991) model concerning strategic responses to institutional pressures.

Findings

Adopting D231 generated institutional complexity in our case organisation. The analysis highlights two phases: the voluntary and compulsory adoption of the D231 model. The voluntary adoption occurred via a compromising strategy that involved forms of “selective coupling” (Pache and Santos, 2013a), which allowed the organisation to strategically adopt only those structures/practices that were seen as appropriate and consistent with its organisational logics. The compulsory phase was characterised by broader adoption of the D231 model through symbolic conformity. The case organisation adopted “avoidance” strategies (Oliver, 1991) and “co-habiting means-ends” decoupling initiatives to protect the basic organisational coherence from the regulative prescriptions.

Originality/value

The paper presents original insights into how the D231 model, an example of an audit society-inspired model, unfolded over time in a specific organisation to achieve the desired change towards more responsible and accountable practices. Our analysis suggests the compulsory phase was less effective than when the model was voluntarily adopted. The paper also reveals that, in contrast to the voluntary phase, decoupling strategies were mobilised in the compulsory phase to reach an organisational equilibrium, which facilitated corporate survival; decoupling was the only effective solution to the imbalance generated by the compulsoriness of the D231 model.

Keywords

Acknowledgements

We would like to thank David Collison, David Power and Jonh Ferguson, our reviewers and especially the editor Lee Parker for their constant advice and helpful comments on earlier drafts of this paper.

Citation

Contrafatto, M., Moggi, S., Gervasio, D. and Montani, D. (2024), "Audit society, organisational response and (de-)coupling: an Italian story", Accounting, Auditing & Accountability Journal, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/AAAJ-08-2022-5974

Publisher

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Emerald Publishing Limited

Copyright © 2024, Emerald Publishing Limited

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