Legitimacy Theory: A Story of Reporting Social and Environmental Matters within the Australian Food and Beverage Industry

Presented to the 5th Asian Pacific Interdisciplinary Research in Accounting (APIRA) Conference, 8-10 July 2007, Auckland, New Zealand.

35 Pages Posted: 16 Mar 2009

See all articles by Suresh Cuganesan

Suresh Cuganesan

Swinburne University of Technology

Leanne Ward

Saint George Bank

James Guthrie

Macquarie University - Department of Accounting and Finance; University Of Bologna - Department of Management; Macquarie University, Macquarie Business School

Date Written: July 5, 2007

Abstract

This paper utilises legitimacy theory to explore whether a company's level of profile is related to the company's choice of legitimation strategies.

Prior applications of legitimacy theory are extended to the examination of CSR disclosure by focusing on a single industry and customising the disclosure instrument to include industryspecific issues. The paper examines both web-based and annual report disclosures in acknowledgement that the internet has revolutionised how companies disseminate information to their stakeholders.

The paper is based on two propositions. The first is that companies considered tobe more 'high profile' than others are likely to disclose more CSR information than those considered to be lower in profile. This was supported by the research data. The findings indicated that the level of company profile might influence disclosure levels.

The second is that companies with high profiles are likely to employ more disclosure strategies relating to changing public perceptions and expectations and deflecting attention. This was also supported by the research data.

The paper concludes that CSR is likely to be a feature of contemporary corporate reporting. This research provides some more evidence about why corporations voluntarily disclose. However, it also highlights possible policy implications and several possible future research issues.

Keywords: legitimacy theory, corporate social responsibility, disclosure, voluntary disclosure

JEL Classification: M4, M40, M41, M49

Suggested Citation

Cuganesan, Suresh and Ward, Leanne and Guthrie, James, Legitimacy Theory: A Story of Reporting Social and Environmental Matters within the Australian Food and Beverage Industry (July 5, 2007). Presented to the 5th Asian Pacific Interdisciplinary Research in Accounting (APIRA) Conference, 8-10 July 2007, Auckland, New Zealand., Available at SSRN: https://ssrn.com/abstract=1360518

Suresh Cuganesan

Swinburne University of Technology ( email )

Cnr Wakefield and William Streets, Hawthorn Victor
3122 Victoria, Victoria 3122
Australia
+61 3 9214 8388 (Phone)
+61 3 9819 2117 (Fax)

Leanne Ward

Saint George Bank ( email )

Saint George House
4-16 Montgomery Street
Kogarah, NSW 2217
Australia

James Guthrie (Contact Author)

Macquarie University - Department of Accounting and Finance ( email )

Sydney - NSW, 2109
Australia

University Of Bologna - Department of Management ( email )

P.Le Vittoria 15
Forli', 47121
Italy
+39-0543-374-621 (Phone)

Macquarie University, Macquarie Business School ( email )

New South Wales 2109
Australia

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