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Article
Publication date: 25 October 2021

Emiliano Ruiz-Barbadillo and Jennifer Martínez-Ferrero

Sustainability assurance services are carried out in a competitive market where a wide range of assurance providers operate without the need for any specific professional…

Abstract

Purpose

Sustainability assurance services are carried out in a competitive market where a wide range of assurance providers operate without the need for any specific professional qualifications, competencies or skills. Assurance providers have heterogeneous professional backgrounds and experiences that lead to substantial diversity in sustainability assurance quality levels. This paper aims to provide an understanding of sustainability assurance quality. From a legitimacy perspective, the authors focus on the choice of assurance providers by exploring why a company voluntarily chooses an incumbent financial auditor to jointly provide audit and sustainability assurance services. The authors argue that to avoid the legitimacy threats undermining stakeholders’ confidence in the sustainability information disclosed, companies should only choose their incumbent financial auditors to provide sustainability assurance services when these auditors possess the professional attributes associated with sustainability assurance quality.

Design/methodology/approach

This study develops regression models for an international sample for 2007–2016, where the authors analyze why a company voluntarily chooses an incumbent auditor to jointly provide audit and sustainability assurance services from a legitimacy theory perspective.

Findings

Evidence confirms that the choice of incumbent auditors as assurance providers is more likely when these providers are more specialized in the industry. The authors also find that independence does not play a significant role in this decision. Therefore, an assurance provider’s industry specialization can be understood as an attribute that is associated with sustainability assurance quality and one which limits the legitimacy threats caused by a lack of sufficient sustainability knowledge.

Practical implications

Given that companies have complete freedom when choosing their assurance providers, the selection of a high-quality incumbent auditor is an indirect measure of social commitment and a mechanism to improve public trust. The results confirm that it is fundamental for firms to understand the situations when choosing an incumbent financial auditor to provide sustainability assurance services is the best way to ensure firm legitimacy while obtaining higher sustainability assurance quality due to the spillover effect. This paper provides useful evidence for firms and managers who can become aware that the legitimacy threat associated with the auditing profession’s questionable competence to conduct efficient sustainability assurance engagements can be reduced if they hire an incumbent financial auditor with greater industry specialization. For assurance providers, the results are especially useful, as they should know that companies will be more likely to choose their incumbent financial auditor when that auditor possesses certain professional attributes, like industry specialization. The ability to assimilate and exploit the knowledge gained through auditing activities can be improved even more by specialization, which enhances sustainability assurance quality.

Social implications

From a social perspective, stakeholders perceive industry specialization as an indicator of the professional skills necessary to increase both the real and perceived quality of sustainability assurance services, thereby limiting the legitimacy threat arising from a lack of sustainability knowledge. The evidence also provides valuable results for regulatory bodies, as it shows that firms are not able to address the legitimacy gap caused by stakeholders’ perceptions that incumbent financial auditors can easily be controlled by companies. Thus, doubts arise as to whether this joint provision undermines auditor independence. Precisely, these doubts about assurance provider independence can erode public confidence in assurance and devalue the quality of the service. The results of this paper highlight the need to strengthen regulation on sustainability reporting and assurance. The advances and relevance of sustainable development in recent years and in future agendas require a firm commitment to sustainability reporting and assurance of quality, reliability, integrity and confidence.

Originality/value

First, this study contributes to recent empirical studies that focus on the role of sustainability assurance services in the legitimation process of corporate sustainability reporting. However, while that research analyzes how the legitimacy theory explains the voluntary adoption of sustainability assurance, this paper adds to the literature by presenting evidence about why certain incumbent auditors are appointed to carry out sustainability assurance services. Second, this paper contributes to the sustainability assurance quality literature. Third, unlike previous studies that have regressed various client-specific and institutional factors that influence firms’ decisions to choose assurance providers, this study contributes to the research by providing knowledge about a set of professional features that may explain the decision model of assurance providers selection from a legitimacy perspective.

Details

Sustainability Accounting, Management and Policy Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2040-8021

Keywords

Content available
Article
Publication date: 21 September 2021

Asahita Dhandhania and Eleanor O'Higgins

The purpose of this study is to examine the ways that sin industry companies attempt to utilise CSR reporting for legitimation.

Abstract

Purpose

The purpose of this study is to examine the ways that sin industry companies attempt to utilise CSR reporting for legitimation.

Design/methodology/approach

Conventional and summative content analyses were carried out on annual CSR reports in UK tobacco and gambling companies, juxtaposed against analysis of the actual behaviour of the companies, collectively and individually.

Findings

The paper concludes that there is an ongoing tension between the business of sin industry companies and their attempts to establish and maintain any legitimacy, using CSR reporting in particular ways to try to prove their credentials to society and to engage salient stakeholder support. Ultimately, they aim to give themselves the scope for strategic choice to enable survival and financial flourishing.

Research limitations/implications

Further research on CSR on other sin industries and in other jurisdictions with different regulatory situations could shed further light on the achievement or denial of different types of legitimacy. Studying different time periods as industries change would be of value.

Practical implications

On a practical basis, the study offers guidelines to stakeholders on the use of CSR reports from sin companies, and suggests the establishment of objective external CSR reports, overseen by accounting regulators.

Social implications

The paper provides an overview of the role of sin industries in society, and mitigating their harms.

Originality/value

This study allowed for a comprehensive, dynamic and inclusive understanding of the interplay of CSR reporting and legitimacy by addressing conflicting interests between sin companies' social effects and inherent activities at the industry level. The methodology of multiple case study design in two sin industries combined content analysis of CSR reports, juxtaposed against analysis of behaviour in context. Previous research included the juxtaposition of actuality in analysis of only single case studies or particular issues. Thus, this research allows for a broader industry understanding. On a practical basis, the study offers guidelines to stakeholders on the use of CSR reports from sin companies, and suggests the establishment of objective external CSR reports, overseen by accounting regulators. At the social level, the paper provides an overview of sin industries in society, and mitigating their harms.

Details

Accounting, Auditing & Accountability Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0951-3574

Keywords

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Article
Publication date: 13 September 2021

Ruoshi Geng, Ruijie Sun, Jie Li, Fan Guo, Wangshuai Wang and Gong Sun

This paper examined the relationship between firm innovativeness and consumer trust in the sharing economy. In addition, the authors examine the mediating effect of…

Abstract

Purpose

This paper examined the relationship between firm innovativeness and consumer trust in the sharing economy. In addition, the authors examine the mediating effect of organizational legitimacy and the moderating effect of social worth.

Design/methodology/approach

To examine the hypotheses, the authors collected data from 276 users of a sharing platform (Didi) in China to conduct empirical research. The “lavaan” packages in R and SPSS were used to analyze the data and test the proposed hypotheses.

Findings

The results reveal that sharing platforms' innovativeness is positively related to consumer trust, and this relationship is mediated by organizational legitimacy. Furthermore, sharing platforms' social worth moderates the relationship between firm innovativeness and organizational legitimacy as well as the indirect effect of firm innovativeness on consumer trust via organizational legitimacy.

Practical implications

This article proposes strategies that enable sharing platforms to increase consumer trust, which can also better promote the development of the sharing economy.

Originality/value

This paper contributes to the literature by focusing on the social attributes of the sharing economy. By building a more detailed model of consumer trust, this paper adds to the knowledge on the influencing mechanism of consumer trust in the sharing economy.

Details

Asia Pacific Journal of Marketing and Logistics, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1355-5855

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Article
Publication date: 20 August 2019

Chong Wang and Peter Wilson Cardon

In recent years, scholars, business practitioners and consultants frequently talk about building the networked enterprise. The purpose of this paper is to examine the…

Abstract

Purpose

In recent years, scholars, business practitioners and consultants frequently talk about building the networked enterprise. The purpose of this paper is to examine the connections between networked enterprises, organizational legitimacy and organizational performance.

Design/methodology/approach

A survey was developed that measured the following aspects of a networked enterprise: employees who network and communicate extensively via internal digital platforms across their organizations; leaders who actively use internal digital platforms to communicate with employees; leaders who actively communicate with stakeholders via external digital platforms; and an innovation culture. The survey measured the following forms of legitimacy judgments: moral; instrumental; and relational. Altogether, 501 executives and managers were surveyed (207 executives, 147 senior managers and 147 managers) in mid-to-large sized (over 500 employees) companies.

Findings

The analyses showed strong statistical significance for nearly all relationships. Internal communication on digital platforms, networked employee communication and an innovation culture all contributed to moral, instrumental and relational legitimacy. Leadership communication on external digital platforms (social media) was not a significant contributor to moral or relational legitimacy but was a significant contributor to instrumental legitimacy. Higher organization legitimacy was correlated with higher profit growth.

Practical implications

Leaders and communicators should prioritize a networked enterprise in several ways. They should actively communicate with employees on internal digital platforms. To be absent on internal digital platforms is a significant missed opportunity by leaders to build organizational legitimacy. Further, leaders and communicators should actively promote networked communication among employees as much as possible. Finally, leaders and communicators should communicate, model and reward an innovation culture.

Originality/value

There are no known scholarly studies that accomplish the following: empirically examine a model of networked enterprises comprised of vertical and horizontal communication and an innovation culture; and make connections between leadership communication on digital platforms in networked enterprises with legitimacy judgments. The large sample of contemporary executives and managers bolsters the strength of the findings.

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Article
Publication date: 19 August 2021

Vogy Gautama Buanaputra, Destri Astuti and Slamet Sugiri

This study aims to investigate the dynamics of legitimacy and accountability relationships in an Indonesian boarding school. It examines how the key actors improve and use…

Abstract

Purpose

This study aims to investigate the dynamics of legitimacy and accountability relationships in an Indonesian boarding school. It examines how the key actors improve and use accountability mechanisms in the school and how these practices contribute to the organisation’s legitimacy.

Design/methodology/approach

This paper uses a qualitative case study approach in an Indonesian boarding school and draws on Black’s (2008) notion of legitimacy and accountability relationships. The qualitative data were collected through face-to-face interviews, observations and documentary analysis.

Findings

Accountability mechanisms at Pondok Pesantren Wali Songo (an Islamic boarding school) were developed to alter the habit of conducting organisational affairs based merely on trust between the organisation members without any particular accountability mechanism, a common practice in Indonesian boarding schools. The mechanisms were believed to improve the public trust and bring convenience to the management of the school on the legitimacy (halal) of their doings, which in turn maintain their legitimacy as a provider of Islamic education services.

Originality/value

This study highlights the importance of accountability mechanisms in faith-based institutions context to maintain their legitimacy. It provides evidence of the mutual nature of accountability and legitimacy, which is often seen as contrasting concepts by previous studies, by drawing on Black’s (2008) legitimacy and accountability relationships.

Details

Journal of Accounting & Organizational Change, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1832-5912

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Article
Publication date: 6 September 2021

Gulizhaer Aisaiti, Ling Liang, Luhao Liu, Jiaping Xie and Tingting Zhang

This paper aims to propose a social enterprise legitimation mechanism by combining the established logic and transformational logic to test the validity of the conceptual model.

Abstract

Purpose

This paper aims to propose a social enterprise legitimation mechanism by combining the established logic and transformational logic to test the validity of the conceptual model.

Design/methodology/approach

The authors construct the theoretical framework based on integrating organizational identity theory, attention-based view and collected 128 social enterprises data during the post-pandemic period in China. The authors applied multiple hierarchical regression analysis and mediation analysis to test the research hypothesis.

Findings

The results show that strong organizational identity contributes significantly to the cognitive legitimacy of social enterprise. Besides, we found that social welfare logic and digital transformation can positively mediate the correlation between organizational identity and cognitive legitimacy.

Practical implications

Social enterprises enhance legitimacy significantly by social welfare logic comparing with commercial logic, which indicates that social enterprises should allocate more internal resources and attention to present the organization's social value through various distributions. More importantly, social enterprises should embrace digital transformation to enhance transparency and efficiency, decrease transaction costs, enlarge organizational social impact to strengthen cognitive legitimacy.

Originality/value

The paper first proposed and empirically tested that digital transformation is an important mechanism to enhance the social enterprise's cognitive legitimacy.

Details

Industrial Management & Data Systems, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0263-5577

Keywords

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Article
Publication date: 16 August 2021

Anna Che Azmi, Romzie Rosman and Normah Omar

The purpose of this study is to understand the reasons behind the different patterns of Sharīʿah non-compliant income (SNCI) disclosures amongst Islamic banks and, in…

Abstract

Purpose

The purpose of this study is to understand the reasons behind the different patterns of Sharīʿah non-compliant income (SNCI) disclosures amongst Islamic banks and, in particular, the extent to which Islamic banks make SNCI disclosures. The process involved in gaining and maintaining moral legitimacy forms the framework for this study.

Design/methodology/approach

Interviews were conducted with managers of Islamic banks involved in the reporting of SNCI in company annual reports.

Findings

The interview findings show that Islamic banks prefer to use procedures to gain and enhance moral legitimacy amongst their customers, business partners and staff. The constraints and challenges that Islamic banks face in SNCI reporting make this a popular means of securing moral legitimacy. However, these practices may not lead to enhanced and more communicative SNCI disclosures by Islamic banks.

Originality/value

To the best of the authors’ knowledge, this is the first study that explains the motivations behind SNCI reporting by Islamic banks and frames these motivations under the moral legitimacy framework.

Details

Journal of Islamic Accounting and Business Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1759-0817

Keywords

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Article
Publication date: 17 June 2021

Christopher Wilson and Devin Knighton

This study aims to examine the effect of publics' legitimacy evaluations on Arthur W. Page's conceptualization of “reasonable freedom of action” by breaking it into two…

Abstract

Purpose

This study aims to examine the effect of publics' legitimacy evaluations on Arthur W. Page's conceptualization of “reasonable freedom of action” by breaking it into two parts: (1) perceived organizational autonomy and (2) trust in the organization.

Design/methodology/approach

This study conducted an online experiment using a 2 (legitimacy: low, high) × 2 (legitimacy type: institutional, actional) between-subjects design. Measured variables included perceived organizational autonomy and trust.

Findings

Organizations acting in their own self-interest while ignoring community norms and expectations were perceived to be exercising higher levels of organizational autonomy and have lower levels of trust. The interaction between legitimacy type and level had an effect on perceived organizational autonomy and trust.

Research limitations/implications

Public's view their relationships with organizations from a perspective that prioritizes responsibility and conformity to community norms and expectations. Also, organizations have more to lose by acting in their own self-interest to resolve institutional legitimacy concerns and more to gain by handling them in a way that includes the public interest than when they are managing an actional legitimacy situation.

Practical implications

Societal norms, values and beliefs, which may have accommodated, or even supported, an organization's approach to doing business in the past, can change over time, calling into question an organization's legitimacy and its ability to operate in the public interest. As a result, organizational leaders need the Chief Communication Officer to help them understand current societal norms, values and beliefs.

Originality/value

This study addresses a core assumption of the organization–public relationship paradigm that has not yet been studied empirically. It also expands the understanding of organizational autonomy from a public perspective and examines the effect of legitimacy on organizational autonomy and trust.

Details

Corporate Communications: An International Journal, vol. 26 no. 4
Type: Research Article
ISSN: 1356-3289

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Article
Publication date: 23 June 2021

Constance Elizabeth Kampf, Charlotte J. Brandt and Christopher G. Kampf

The purpose is to explore how the process of action research (AR) can support building legitimacy and organizational learning in innovation project management and…

Abstract

Purpose

The purpose is to explore how the process of action research (AR) can support building legitimacy and organizational learning in innovation project management and portfolio practices in merger contexts.

Design/methodology/approach

Meta-reflection on method issues in Action Research through an action research case study with an innovation group during an organizational change process. This case demonstrates an example of an action research cycle focused on building practitioner legitimacy rather than problem-solving.

Findings

Key findings include (1) demonstrating how AR can be used for building legitimacy through visualizing the innovation process, and embedding those visuals in top management practices of the organization; and (2) demonstrating how AR can work as an organizational learning tool in merger contexts.

Research limitations/implications

This study focuses on an action research cooperation during a two-and-a-half-year period. Thus, findings offer the depth of a medium term case study. The processes of building legitimacy represent this particular case, and can be investigated in other organizational contexts to see the extent to which these issues can be generalized.

Practical implications

For researchers, this paper offers an additional type of AR cycle to consider in their research design which can be seen as demonstrating a form of interplay between practitioner action and organizational level legitimacy. For practitioners, this paper demonstrates a connection between legitimacy and organizational learning in innovation contexts. The discussion of how visuals were co-created and used for building legitimacy for an innovation process that differs from the standard stage gate model demonstrates how engaging in AR research can contribute to developing visuals as resources for building legitimacy and organizational learning based on connections between theory and practice.

Originality/value

This case rethinks AR practice for innovation project management contexts to include legitimacy and organizational learning. This focus on legitimacy building from organizational learning and knowledge conversion contributes to our understanding of the soft side of innovation project management. Legitimacy is demonstrated to be a key concern for innovation project management practices.

Details

International Journal of Managing Projects in Business, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-8378

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Article
Publication date: 15 June 2021

Fei-Lin Chen, Ivan Sun, Yuning Wu and Shun-Yung Kevin Wang

This paper aims to assess whether internal procedural justice is directly and indirectly through self-legitimacy connected to external procedural justice among Taiwanese…

Abstract

Purpose

This paper aims to assess whether internal procedural justice is directly and indirectly through self-legitimacy connected to external procedural justice among Taiwanese police officers.

Design/methodology/approach

Survey data used in this study were collected from 316 Taiwanese police officers in 2019. Structural equation modeling was performed to examine the direct and indirect relationships between internal and external procedural justice.

Findings

Supervisors' internal procedural justice is directly related to the external procedural justice rendered to the public by police officers. Internal procedural justice also directly enhances officers' perceptions of internal legitimacy and external legitimacy. Greater senses of internal legitimacy are then accompanied by higher external procedural justice.

Research limitations/implications

Survey data collected from a non-random sample of officers limit the study findings' generalizability. Organizational justice in the form of supervisory justice is instrumental in promoting officers' perception of self-legitimacy and their delivery of fair treatment to the public.

Originality/value

The present study represents a first attempt to link two important veins of studies in recent policing literature, organizational justice and officer self-legitimacy. This study provides needed evidence to support the value of supervisory justice in policing in a non-Western democracy.

Details

Policing: An International Journal, vol. 44 no. 5
Type: Research Article
ISSN: 1363-951X

Keywords

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