Abstract
Institutional environment demands from organizations to be accountable for their social and environmental actions and to provide information allowing the assessment of their long-term prospects for profitability may lead organizations to adopt Impression Management (IM) tactics to manage perceptions. Consequently, organizations may provide accounts demonstrating that they are good corporate citizens and possess the intangible assets required for future good financial performance. Although organizations have increased their corporate social reporting, the quality and reliability of those reports have been questioned. The literature suggests that these disclosures tend to be selective and biased, and do not enhance corporate accountability. This study proposes a formal conceptual framework linking IM, social and environmental accountability, financial performance, and organizational legitimacy. The arguments in this study are of economic, societal, and ethical concern, as IM behaviors may undermine the transparency of social and environmental reporting, and the decoupling between the economic and social image offered by companies through reporting and the reality. These insights also point at the complexities for organizations in dealing with accountability to all stakeholders. The conceptual framework proposed is useful for future studies aiming at understanding how organizations use IM in their corporate social reporting in the accountability process.
Highlights
Relevant research in the field of Impression Management (IM) in a corporate reporting context highlights the importance that this instrument often has concerning organizational image, reputation, and legitimacy [1]
Organizations use IM to maintain an appearance of compliance with social values and expectations [3,9,10]
Corporate reporting on social and environmental issues might represent a tool aimed at controlling and manipulating stakeholders’ perceptions, both those pertaining to a companys social behavior and those concerning its prospects for financial performance
Summary
Relevant research in the field of Impression Management (IM) in a corporate reporting context highlights the importance that this instrument often has concerning organizational image, reputation, and legitimacy [1]. This study aims to develop a formal conceptual framework linking IM, social and environmental accountability, financial performance, and organizational legitimacy. The conceptual framework is expected to be useful in future research, helping researchers to expose how organizations manage their legitimacy, with a focus on social and environmental accountability and its relationship with financial performance, using IM tactics in a context of institutional complexity. Instead of increasing corporate accountability, it can be argued that these disclosures are selective and biased, and IM may be fostered in situations requiring accountability from an organization. This is followed by the discussion and conclusions. The paper ends with the contributions, limitations, and suggestions for future research
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