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Legitimating reputation/the reputation of legitimacy theory

Article  in  Accounting Auditing & Accountability Journal · March 2008

DOI: 10.1108/09513570810863969 · Source: RePEc

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Legitimating
Legitimating reputation/the reputation
reputation of legitimacy theory
Jan Bebbington
University of St Andrews, Fife, UK 371
Carlos Larrinaga-González
University of Burgos, Burgos, Spain, and
Jose M. Moneva-Abadı́a
University of Zaragoza, Zaragoza, Spain

Abstract
Purpose – The aim of this paper is to respond to commentaries on Bebbington, Larrinaga-Gonzales
and Moneva, by Unerman and by Adams, published in Accounting Auditing & Accountability Journal,
Vol. 21 No. 3.
Design/methodology/approach – The paper reviews and discusses the points suggested/contested
by the commentary papers.
Findings – That given the current state of our understanding of corporate social responsibility
reporting in stand alone (and other) formats, openness to a multitude of theoretical perspectives is
appropriate. Further, that concepts of legitimacy and reputation can and should be distinguished from
one another.
Originality/value – The authors put forward their views, beliefs and reservations.
Keywords Corporate social responsibility, Corporate image, Risk management
Paper type Viewpoint

The emergence of corporate social responsibility (hereafter CSR) reporting in a stand

alone format is one of the striking features of corporate activity over the last 10 to 15
years and commands the attention of, inter alia, social and environmental accountants.
CSR reporting is a widespread (see Kolk, 2003, 2005), but by no means universal (see,
Erusalimsky et al., 2006 and Milne and Gray, 2007), phenomena that is under-explored
in terms of the characteristics of these reports, who produces them, how they sit within
organisational routines and how they are experienced by those outside of producing
organisations.
The aim of our paper was to examine one possible (but not exclusive) lens to
understand CSR reporting: that of reputation risk management (hereafter RRM). The
paper was exploratory in that it sought to define RRM, primarily drawing from a
literature outside of accountancy. We also sought to explore a heuristic (an image
restoration typology proposed by Benoit, 1995) that could assist the task of using a
RRM framework for examining reporting. Finally, we attempted to link the RRM thesis
to existing theorising about CSR reporting and suggested that the RRM thesis may be
part of what Parker (2005, p. 845) calls an “augmentation theory”, which would allow Accounting, Auditing &
for a more fine grained analysis of disclosures. Accountability Journal
Vol. 21 No. 3, 2008
The RRM thesis has elicited two responses (see Unerman, 2008; Adams, 2008), both pp. 371-374
reviewers of Bebbington et al. (2008). Unerman (2008) finds merit in the RRM thesis q Emerald Group Publishing Limited
0951-3574
and provides several pointers for how research could be developed that will further DOI 10.1108/09513570810863969
AAAJ explore the usefulness of this particular conception of motivation for and impact of
CSR reporting. We concur with his suggestion that our thesis on the “ethics of
21,3 narcissus” needs to be explored further.
Conversely, Adams (2008) rejects the RRM thesis as being nothing more than
legitimacy theory under another label and asserts that legitimacy theory provides a
sufficient and superior lens for understanding CSR reporting. Given this, RRM is
372 deemed to be an unnecessary diversion from legitimacy theory informed work. We
acknowledge that this is a major concern that has to be resolved if researching RRM is
likely to develop. Our response to this point would be to argue the case for retaining
theoretical openness and multiplicity at the present time as well as remaining open to
the possibility that a RRM lens may provide new insights into practice. In addition, we
would question some of Adams’ (2008) perceptions of RRM.
First, Adams (2008) suggests that an implication of our work is that it is appropriate
to rename legitimacy theory reputation theory. If this were the case we would agree
with her that it would do very little to improve corporate sustainability performance
and accountability. We would, however, argue that this is not the implication of our
paper.
There has been widespread use of legitimacy theory within social and
environmental accounting research (see Deegan, 2002 for a summary of the state of
the art in the field) and it has, we believe, provided evidence that has allowed aspects of
corporate activity to be understood. There is, however, recognition of its limitations.
For example, Parker (2005) suggests that legitimacy theory:
[. . .] suffers from problems that include apparent conceptual overlap with political economy
accounting theory and institutional theory, lack of specificity, uncertain ability to anticipate
and explain managerial behaviour and a suspicion that is still privileges financial
stakeholders in its analysis (Parker, 2005, p. 846).
Likewise, Deegan (2007, p. 145) documents various aspects that still need to be
developed within this theory. We would suggest that some of these problems arise
from the way legitimacy has been distinctively conceptualised within accountancy.
Deephouse and Carter (2005) make what we found to be a useful distinction between
legitimacy and reputation with the implication of this distinction being different from
changing the name of legitimacy theory to reputation theory. The concept of legitimacy
implies that the social contract between firms and society can be destroyed and if this
happens the company in question will cease to exist. The interpretation of legitimacy
theory within social accounting research, however, has tended to focus on a more
limited conception of legitimacy that is closer in nature to what we call the RRM thesis.
Even if the closeness of the concepts arise form the particular way social accounting
has used the concept of legitimacy, the work of Benoit (1995) still has value in that it
provides an indication of what particular discursive strategies are and could be used
by firms. We are not suggesting a change in the name of legitimacy theory, but our
concern is whether the legitimacy thesis deserves to be called a theory. We would
suggest that legitimacy should be reframed in broader institutional or resource-based
conceptions of corporations and that the RRM thesis may have better traction in
explaining the nature of disclosures. In this respect, legitimacy theory is a contested
terrain (see also, Neu et al., 1998; O’Dwyer, 2002).
Second, we would also argue for the retention of a plurality of approaches and a
multiplicity of lens through which to observe, explain and predict CSR reporting
practice. Possible additional approaches include institutional theory (Adams and Legitimating
Larrinaga, 2007; Larrinaga, 2007), regime theory (Bebbington et al., 2003), structuration reputation
theory (Buhr, 2002), contingency theory (proposed by Adams and Larrinaga, 2007) as
well as theories of organisation change processes (Laughlin, 1991). The RRM thesis, if
it proves to be useful, may join this list. In addition, theoretical perspectives informed
by, inter alia, Foucault, Freire, Gramsci, Habermas and Marx remain potent sources of
analysis of CSR reporting, albeit that these lenses have been utilised as overviews of 373
reporting rather than in specific organisational settings. Given explaining CSR
reporting is a long way from “normal science” one would expect this multiplicity to
continue for some time yet.
Third, Adams (2008) contends that we already know that reputation drives CSR
reporting. However, we would contend that ours is the first paper that has outlined a
framework that explains how a company may seek to manage its reputation risks and
to explore the consequences of this rationale. It would seem to us that it is important to
explore how a poorly-conceived notion (that of RRM) appears to drive public
explanations of practice. In this respect, our concern with legitimacy “theory” is
matched with our avoidance of the word “theory” in the context of RRM: we rather
conceive RRM as a thesis or as a “motive” (Unerman, 2008) that does not exhaust the
possible explanations of CSR reporting.
In summary, our view is that it is too early for theoretical closure in the analysis of
CSR reporting in favour of legitimacy theory. This belief is reinforced by the various
reservations expressed about legitimacy theory as a refined lens of analysis. Indeed,
Adams and Larrinaga-González (2007), p. 344) note with approval earlier work
drawing from an “impressions management perspective . . . [proposing] different
corporate disclosure strategies as a response to environmental pressure” that
augments legitimacy theory analysis (a position that may be seen as contrasting with
Adams, 2008). Where we agree wholeheartedly with both Unerman (2008) and Adams
(2008) is that no single paper (on RRM or anything else) can address the complexities of
CSR reporting practice and that an essential component of exploring CSR reporting
will be in-depth and sustained study of this phenomena. We would also suggest that
framing an analysis with those doing CSR reporting in the language of RRM is likely to
be beneficial given this is how many organisations are articulating their motivations
for reporting.

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Corresponding author
Jan Bebbington can be contacted at: jan.bebbington@st-andrews.ac.uk

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