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Article
Publication date: 29 January 2021

Roshan Herath, Samanthi Senaratne and Nuwan Gunarathne

This paper aims to explore how the integrated thinking of a chief executive officer (CEO) impacts the management’s orchestration of the six capitals to create value in an…

Abstract

Purpose

This paper aims to explore how the integrated thinking of a chief executive officer (CEO) impacts the management’s orchestration of the six capitals to create value in an organization.

Design/methodology/approach

Following a case study approach, data was gathered on two business organizations in Sri Lanka through interviews, focus group discussions and documentary analyzes. Thematic and cross-case analyzes were used in analyzing the data based on an analytical framework that was developed using systems and resource orchestration theories.

Findings

The study finds that the integrated thinking perspective of the CEO determines which capitals to embrace in the pursuit of value creation by an organization. A broader perspective on the integrated thinking of the CEO can lead to a sustainable perspective for value creation focusing on integrated corporate responsibility. On the contrary, a constrained perspective of integrated thinking can lead to a business case perspective for value creation that focuses mainly on the key areas of responsibility extended for operational efficiency. These different perspectives result in differences in value creation in organizations over time.

Practical implications

The capitals embraced in the integrated thinking perspective of a CEO should be translated into objectives, strategies and performance measurement and implemented at every level of the company to create value. This perspective of a CEO can be institutionalized through the adoption of accredited management systems. To foster value creation, managers should use a variety of information technology platforms and internal networks.

Originality/value

This is one of the first studies that explore how the perception of integrated thinking of the CEO impacts value creation in an organization through a combination of resource orchestration and systems thinking theory lenses.

Details

Meditari Accountancy Research, vol. 29 no. 4
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 17 September 2020

Ruth Dimes and Charl de Villiers

This paper aims to examine how management control systems (MCS) can enable and constrain the successful adoption of integrated thinking in an organisation.

Abstract

Purpose

This paper aims to examine how management control systems (MCS) can enable and constrain the successful adoption of integrated thinking in an organisation.

Design/methodology/approach

The study adopts a case study approach, involving in-depth interviews and documentary evidence.

Findings

The case study organisation perceived trust to be critical to the successful adoption of integrated thinking, and informal social controls with strong endorsement from senior management frequently substituted for more formal technical controls in helping to develop a trust-based organisational culture. These cultural changes improved collaboration and brought economic benefits by encouraging outcome-based decision-making rather than capital-based decision-making, thereby enabling employees to identify and address poorly performing projects earlier. However, established performance measurement systems geared towards reporting and rewarding accounting profits created tension, constraining the potential benefits of integrated thinking by reinforcing business unit protectionism.

Practical implications

Integrated thinking can be seen as a form of management with the potential to improve organisational outcomes. An improved understanding of factors that might enable or constrain integrated thinking could facilitate its spread.

Originality/value

Despite several calls for research on the practical implementation of integrated thinking, this has not been studied extensively. To the best of the authors’ knowledge, this study is one of the firsts to contribute to a better understanding of the role of MCS in the successful implementation of integrated thinking in an organisation. The study also contributes to the MCS literature.

Details

Meditari Accountancy Research, vol. 29 no. 4
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 14 December 2020

Rayhan Arul, Charl de Villiers and Ruth Dimes

This study aims to provide insights into the poorly understood concept of integrated thinking by comparing and contrasting disclosures related to integrated thinking

Abstract

Purpose

This study aims to provide insights into the poorly understood concept of integrated thinking by comparing and contrasting disclosures related to integrated thinking provided in integrated reports in two different institutional settings.

Design/methodology/approach

The study uses content analysis of the narrative sections of integrated reports to explore similarities and differences in the way the concept of integrated thinking is portrayed. It uses a matched sample of financial services companies in two different institutional settings, South Africa (where integrated reporting (IR) is mandatory and IR practices are world-leading) and Japan (where IR is voluntary and interest in IR is still developing). IR adoption is viewed through the lens of institutional theory, focussing on isomorphic forces which affect companies’ structure, policies and practices.

Findings

Even though the conceptualisation of integrated thinking differs between South Africa and Japan, in both settings there is a strong association between integrated thinking disclosures and corporate governance practices, materiality assessments and the pursuit of an industry leadership position, suggesting a link between these concepts and the underlying level of integrated thinking. Japanese disclosures appear to mimic South African disclosures, highlighting South Africa’s leading role in IR, although Japan shows more varied interpretations of integrated thinking.

Originality/value

This study contributes to the growing body of literature on the poorly understood concept of integrated thinking, responding to calls from both academics and practitioners for more research in this area. It shows the potential for integrated thinking to develop through a process of mimicry and highlights South Africa’s leading role in the dissemination of best practice in the field. Its findings relating to the fluid conceptualisation of integrated thinking in different institutional settings will be of interest to regulators and practitioners. To the knowledge this is one of the first studies to consider disclosures relating to integrated thinking in the financial services sector. Focussing on the financial services sector, with its unique features and regulatory frameworks, allows for deeper analysis, free from the potential distortions inherent in studying a broader cross-section of industries. The study also highlights the importance of corporate governance to integrated thinking, suggesting future research avenues.

Details

Meditari Accountancy Research, vol. 29 no. 4
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 28 October 2020

Nicholas McGuigan, Ellen Haustein, Thomas Kern and Peter Lorson

This paper aims to introduce an analytical focus on an individual’s integrative thinking capacity to further understand integrated thinking within the organisation…

Abstract

Purpose

This paper aims to introduce an analytical focus on an individual’s integrative thinking capacity to further understand integrated thinking within the organisation. Integrated thinking is an elusive concept, gaining in prominence through its use by the International Integrated Reporting Council (IIRC), without specific guidance or a commonly understood framework. To date, the academic debate on integrated thinking addresses the organisational level only. However, thinking is a process occurring within the mind of an individual and therefore the prerequisites for integrated thinking at the individual level needs to be considered. Critical reflection is, therefore, provided on the interplay between integrative and integrated thinking.

Design/methodology/approach

This paper draws on conceptual systems theory and case site analysis to reflect how integrative thinking can be encouraged and supported within the individual and how integrated thinking can hence be fostered within organisations.

Findings

The paper analyses and discusses four sites of integrative thinking: the Athenian democracy; the Minangkabau community; the Quakers and consensus decision-making; and the Apis Mellifera and the hive mind. The findings from these different sites illustrate that integrative thinking can be supported by specific structural, organisational and individual contexts and stimuli.

Originality/value

Extending the context of integrated thinking analysis outside of the organisation and analysing these sites through components of integrative thought, this article provides further insights into how integrated thinking can be fostered within different organisations. The implications of these findings for accounting and professional institutions, organisations and the ongoing professional development of accountants are discussed.

Details

Meditari Accountancy Research, vol. 29 no. 4
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 2 October 2017

John Dumay and Tim Dai

The paper’s purpose is to investigate the concept of integrated thinking as part of the International Integrated Reporting Council’s (IIRC’s) Integrated Reporting (<IR>…

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Abstract

Purpose

The paper’s purpose is to investigate the concept of integrated thinking as part of the International Integrated Reporting Council’s (IIRC’s) Integrated Reporting (<IR>) framework. It explores integrated thinking as a cultural control and analyses how it operates.

Design/methodology/approach

The paper presents a case study of ResBank (a pseudonym), a small Australian bank, which is participating in the IIRC’s <IR> Pilot Programme Business Network. ResBank issued its first integrated report in 2012. Using semi-structured interviews, we examine whether integrated thinking develops as espoused by the IIRC.

Findings

In ResBank’s case, we find that the responsible banking culture that was in place prior to joining the Pilot Programme is a stronger cultural control, alongside personnel, results and action controls. The implication for the IIRC is that integrated thinking clashes with the existing organisational culture rather than driving a new organisational culture.

Practical implications

If integrated thinking is to prevail, it may become a source of inertia rather than change because it advocates that an entire workforce should think the same way. We also question whether breaking down silos, as advocated by integrated thinking, is necessary across all organisational functions, especially concerning material organisational risks and reputation, because these silos foster independent thinking.

Social implications

The problem with the arguments proposed by the IIRC is that they aim at a one-size-fits-all approach. Not every organisation has a disconnection between strategy, governance, past performance and future prospects nor do they all have disconnected departments that need reconnecting. Therefore, a fundamental problem with <IR> is that the IIRC argues ‘why’ companies need <IR>, not ‘how’ to implement <IR>, and especially not ‘how’ to operationalise integrated thinking.

Originality/value

The paper is a must-read because it contributes to the growing debate on the benefits of <IR> by examining and critiquing an early adopter’s practice.

Details

Meditari Accountancy Research, vol. 25 no. 4
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 31 December 2018

Rada Massingham, Peter Rex Massingham and John Dumay

The purpose of this paper is to present a new learning and growth perspective for the balanced scorecard (BSC) that includes more specific measures of integrated thinking

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3451

Abstract

Purpose

The purpose of this paper is to present a new learning and growth perspective for the balanced scorecard (BSC) that includes more specific measures of integrated thinking and value creation to help improve integrated reporting (<IR>). Practical, relevant definitions of these historically vague concepts may improve intangible asset disclosures (IAD) and increase uptake of the<IR> framework.

Design/methodology/approach

The paper is conceptual. The authors use organisational learning to theorise about the learning and growth perspective of the BSC, within the context of the practice of IAD.

Findings

Several criticisms of IAD, the<IR>framework and the BSC have acted as barriers to implementing the<IR>framework. The improved version of the BSC’s learning and growth perspective, presented in this paper, addresses those criticisms by redefining the concept of integrated thinking (learning) and more fully connecting that learning to future value creation (growth). The model is designed to be used in tandem with the<IR>framework to operationalise integrated thinking. A new BSC strategy map illustrates how this revised learning and growth perspective interacts with the other three BSC perspectives to create long-term shareholder value through the management and growth of knowledge within an organisation.

Research limitations/implications

Organisational learning is an important source of competitive advantage in the modern knowledge economy. Here, the authors encourage further debate on how to report and disclose information on intangible assets, driven by a new conceptual strategy for organisational learning that fully supports the BSC’s capacity to help integrated thinking and future value creation for the<IR>framework.

Practical implications

From its roots as a performance measurement system, the BSC has become a widely used strategy execution tool. The<IR>framework has struggled to gain traction, but still has value in exploring intangible assets and its disclosure from a systems thinking perspective. The model is designed to bring an explicit understanding of how to improve integrated thinking for the<IR>framework facilitating better measurement, management and reporting of human and structural capital. By doing so, the new model enables a firm to use the BSC to engage with<IR>more effectively, which should also be useful for practitioners given the widespread use of the BSC.

Originality/value

The analysis of the BSC’s learning and growth perspective reveals two dichotomies – one between resources and growth, and another between systems and capability. The revised perspective resolves these dichotomies with clear, forward-focused measures of learning and intangible asset growth, and multiple vertical and horizontal connections between the perspective’s four constructs. The authors demonstrate practical paths to value creation through a range of strategic impacts.

Details

Journal of Intellectual Capital, vol. 20 no. 1
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 2 October 2019

Abeer Hassan, Mahalaximi Adhikariparajuli, Mary Fletcher and Ahmed Elamer

This paper aims to examine trends in the content of reporting within 135 UK higher education institutions (HEIs). It explores the extent to which integrated reporting (IR…

Abstract

Purpose

This paper aims to examine trends in the content of reporting within 135 UK higher education institutions (HEIs). It explores the extent to which integrated reporting (IR) content elements, reflecting integrated thinking, are disclosed voluntarily and whether HEI-specific features influence the resulting disclosures.

Design/methodology/approach

Existing IR guidelines given by the International Integrated Reporting Council (IIRC) and the adoption of content analysis have provided the opportunity to examine the trend and extent of IR content elements associated in HEI corporate reports. The evidence was obtained from 405 UK HEI annual reports covering the period 2014-2016.

Findings

The results indicate a significant increase in the number of IR content elements embedded in HEI annual reports. The HEI-specific characteristics examined, such as the establishment of HEI (before or after 1992), adoption of IR framework and size of HEI, are all significantly and positively associated with IR content elements disclosure. This paper argues that institutional theory, isomorphism and isopraxism are relevant for explaining the changes in the contents of HEI annual reports. The findings also suggest that universities are beginning to adopt an integrated thinking approach to the reporting of their activities.

Research limitations/implications

The study is based on IR content elements only and could be extended to include the fundamental concepts and basic principles of the IR framework. There are other factors that have a potentially crucial influence on HEI core activities (such as teaching and learning research and internationalisation) which have been omitted from this study.

Practical implications

The findings will allow policymakers to evaluate the extent to which integrated thinking is taking place and influencing the UK HEI sector in the selection and presentation of information. A further implication of the findings is that an appropriate a sector-wide enforcement and compliance body, for instance, the British Universities Finance Directors Group (BUFDG), may consider developing voluntary IR guidance in a clear, consistent, concise and comparable format. Also, it may pursue regulatory support for this guidance. In doing so, it may monitor the compliance and disclosure levels of appropriate IR requirements. Within such a framework, IR could be used to assist HEIs to make more sustainable choices and allow stakeholders to better understand aspects of HEI performance.

Social implications

The research has implications for society within and beyond the unique UK HEI sector. Universities are places of advanced thinking and can lead the way for other sectors by demonstrating the potential of integrated thinking to create a cohesive wide-ranging discourse and create engagement among stakeholder groups. Specifically, IR builds on the strong points of accounting, for instance, robust quantitative evidence collecting, relevance, reliability, materiality, comparability and assurability, to explain the sustainability discourse into a “language” logical to HEIs organisational decision makers. Consequently, IR may generate better visibility and knowledge of the financial values of exploiting capitals (financial, intellectual, human, manufactured, social and natural) and offer a multifaceted approach to reassess HEIs organizational performance in various sectors that support the growth of integrated thinking.

Originality/value

This is the first known study to explore HEI characteristics and link them with the level of voluntary IR content elements disclosed in UK HEIs.

Details

Sustainability Accounting, Management and Policy Journal, vol. 10 no. 5
Type: Research Article
ISSN: 2040-8021

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Article
Publication date: 3 August 2021

Cristiano Busco, Fabrizio Granà and Giulia Achilli

This study aims to develop a framework to systematize the emerging literature on integrated thinking and offers empirical insights on how integrated thinking has been…

Abstract

Purpose

This study aims to develop a framework to systematize the emerging literature on integrated thinking and offers empirical insights on how integrated thinking has been practiced within an organization. The paper also introduces the contributions that compose the special issue “exploring integrated thinking in action: theoretical interpretations and evidence from the field” and outlines avenues for future research.

Design/methodology/approach

The paper critically reviews the literature on integrated thinking and proposes a framework that classifies prior studies into three areas, namely, integrated thinking and sustainable strategies; integrating thinking in practice; the concept and measures of integrated thinking. The study also provides an illustration of the ways in which integrated thinking has been adopted by a European energy company to shape and execute its purpose-driven strategy, as well as the benefits that have emerged. The paper uses the framework developed from the literature to introduce the contributions of the special issue and to suggest future research opportunities.

Findings

The study shows that while the literature on integrated thinking is still in its infancy, the evidence emerging from contemporary organizations supports empirical-driven research and stimulates a variety of theoretical and empirical contributions that will enable the academic debate to move forward.

Originality/value

The theoretical and practical insights offered by this study, together with those provided by the papers of this Meditari Accountancy Research special issue, will foster future research on integrated thinking. In particular, the framework developed in this paper may be drawn upon by researchers to plan new research projects on integrated thinking and its adoption within organizations.

Details

Meditari Accountancy Research, vol. 29 no. 4
Type: Research Article
ISSN: 2049-372X

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Article
Publication date: 22 September 2020

Pilar Tirado-Valencia, Magdalena Cordobés-Madueño, Mercedes Ruiz-Lozano and Marta De Vicente-Lama

This paper aims to improve the understanding of integrated thinking, as it is a central concept in the integrated reporting (IR) framework that has implications for…

Abstract

Purpose

This paper aims to improve the understanding of integrated thinking, as it is a central concept in the integrated reporting (IR) framework that has implications for sustainability reporting, as the holistic view of integrated thinking clarifies the value creation process of organisations and facilitates the incorporation of sustainability issues into the corporate mindset. The study investigates whether there are contextual factors that may be influencing the way integrated thinking is reflected in the reports. The paper focusses on public companies because integrated thinking in this sector plays an important role in terms of sustainability reporting, as these organisations must address more complex and diverse relationships with their stakeholders.

Design/methodology/approach

The methodology is based on a content analysis of the IR reports issued by 21 public sector companies. For this analysis, this study proposed specific dimensions and variables that demonstrate this way of thinking. These allow us to develop an integrated thinking index (ITI) based on a frequency análisis. The influence of the country’s legal system, the sector of activity and the number of years of experience in IR is studied, by conducting t-test and ANOVA analyses and a correlation study.

Findings

The results demonstrate the existence of limited integrated thinking characterised by poor connectivity of information, lack of a clear link between materiality analysis and strategy and insufficient forward-looking perspective. The findings reveal that contextual and institutional factors have little influence on the levels of integrated thinking achieved.

Originality/value

The concept of integrated thinking has not been sufficiently explored to date, despite its importance in the IR conceptual framework. The study proposes specific dimensions and variables to be considered in preparing reports that exhibit this holistic way of thinking. The recommendations can help information preparers and improve the accountability and transparency of public sector companies.

Details

Sustainability Accounting, Management and Policy Journal, vol. 12 no. 2
Type: Research Article
ISSN: 2040-8021

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Article
Publication date: 10 September 2020

Irma Malafronte and John Pereira

The purpose of this paper is to add to the growing literature on integrated thinking and reporting by exploring the challenges of measuring integrated thinking in academic…

Abstract

Purpose

The purpose of this paper is to add to the growing literature on integrated thinking and reporting by exploring the challenges of measuring integrated thinking in academic research. It provides a review of previous studies, presents a proxy measure to quantify the level of integrated thinking and investigates companies’ approach towards integrated thinking in practice.

Design/methodology/approach

Firstly, this study proposes a measure to quantify the level of integrating thinking. Secondly, this study implements factor analysis to identify a parsimonious representation and explore the relevance of each variable in explaining the proposed measure of integrated thinking. Thirdly, this study implements cluster analysis to determine the natural grouping of firms with a certain level of integrated thinking and to identify the existence of distinctive companies’ approaches.

Findings

The findings suggest that the proposed measure of integrated thinking could be reduced into two main principal components that explain the current practices and the future direction. Firms’ integrated thinking practices can be clustered into groups denoting various practices among firms, and exhibit routine over time. Across clusters, firms reveal significantly different characteristics highlighting the existence of systematic demographic differences.

Research limitations/implications

This research does not endeavour to overcome all the measurement issues related to integrated thinking. It attempts to measure the level and companies’ approaches towards integrated thinking that can inspire further empirical studies in this field.

Originality/value

This study answers the call for an empirical investigation of the internal aspects of integration. This paper provides academics, companies, and policymakers with a proxy measure of integrated thinking that can inspire empirical studies and advance the understanding of integrated thinking practices.

Details

Meditari Accountancy Research, vol. 29 no. 4
Type: Research Article
ISSN: 2049-372X

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