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Strategic responses to institutional pressures for sustainability

Author

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  • Chaminda Wijethilake
  • Rahat Munir
  • Ranjith Appuhami

Abstract

Purpose - 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. Design/methodology/approach - Data were collected by interviewing sustainability managers of a large-scale multinational apparel manufacturing organisation with its headquarters in Sri Lanka. Findings - 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. Originality/value - 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.

Suggested Citation

  • Chaminda Wijethilake & Rahat Munir & Ranjith Appuhami, 2017. "Strategic responses to institutional pressures for sustainability," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 30(8), pages 1677-1710, October.
    • Handle: RePEc:eme:aaajpp:aaaj-07-2015-2144
    DOI: 10.1108/AAAJ-07-2015-2144
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    Citations

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    Cited by:

    1. Tiyas Kurnia Sari & Fitra Roman Cahaya & Corina Joseph, 2021. "Coercive Pressures and Anti-corruption Reporting: The Case of ASEAN Countries," Journal of Business Ethics, Springer, vol. 171(3), pages 495-511, July.
    2. Khan, Habib Zaman & Bose, Sudipta & Johns, Raechel, 2020. "Regulatory influences on CSR practices within banks in an emerging economy: Do banks merely comply?," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 71(C).
    3. Chaminda Wijethilake & Tek Lama, 2019. "Sustainability core values and sustainability risk management: Moderating effects of top management commitment and stakeholder pressure," Business Strategy and the Environment, Wiley Blackwell, vol. 28(1), pages 143-154, January.
    4. Farida Saleem & C. Gopinath & Amira Khattak & Saiqa Saddiqa Qureshi & Alawiya Allui & Ahmad Adeel, 2020. "Corporate Environmentalism: An Emerging Economy Perspective," Sustainability, MDPI, vol. 12(15), pages 1-17, August.
    5. Bárbara Galleli & Elder Semprebon & Joyce Aparecida Ramos dos Santos & Noah Emanuel Brito Teles & Mateus Santos de Freitas-Martins & Raquel Teodoro da Silva Onevetch, 2021. "Institutional Pressures, Sustainable Development Goals and COVID-19: How Are Organisations Engaging?," Sustainability, MDPI, vol. 13(21), pages 1-21, November.
    6. Thorey S Thorisdottir & Lara Johannsdottir, 2020. "Corporate Social Responsibility Influencing Sustainability within the Fashion Industry. A Systematic Review," Sustainability, MDPI, vol. 12(21), pages 1-64, November.
    7. Olivier Boiral & Marie‐Christine Brotherton & David Talbot & Laurence Guillaumie, 2022. "Legitimizing unsustainable practices: The institutional logics of pro‐pesticide organizations," Business Strategy and the Environment, Wiley Blackwell, vol. 31(5), pages 2284-2298, July.
    8. Leanne Johnstone, 2019. "Theorising and conceptualising the sustainability control system for effective sustainability management," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 30(1), pages 25-64, April.
    9. Cecília Carmo & Mercedes Miguéis, 2022. "Voluntary Sustainability Disclosures in Non-Listed Companies: An Exploratory Study on Motives and Practices," Sustainability, MDPI, vol. 14(12), pages 1-22, June.

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