Social Impact Reporting as Reputation Management: Effective Practice, Symbolic Adoption or Business-Washing?

Abstract

This paper examines the increasing use of business-style language by UK social purpose organisations (SPOs) over the last decade, focusing in particular on the use of social impact reporting (SIR). Using interviews with 21 staff at SPOs and an analysis of the websites of 128 SPOs, it reports three key findings and makes two theoretical arguments. First, it finds that SIR is primarily intended as a signal of financial competence to social investors, thereby serving as a tool for managing the reputation and legitimacy of the SPO in the eyes of its financial stakeholders (Neu et al., 1998; Ebrahim et al., 2014). Second, heterogenous styles and degrees of adoption of SIR were observed, often with limited, if any, internalisation of practice (Meyer and Rowan, 1977; Bromley and Powell, 2012). Some cases of this variation appear to result from semantic widening (Bloomfield, 1983) whereas others result from disingenuous reputation management activity, which I label ‘business-washing’. Third, it finds that impersonal statistical data is included on SPO websites somewhat incongruously alongside personal, emotional narratives. As my first theoretical contribution, I argue that the juxtaposition of quantitative and qualitative reporting may reflect attempts by SPOs to ‘gloss over’ what some stakeholders, such as staff or volunteers, may perceive as moral inconsistencies in the SPOs activities (Spence and Thomson, 2009). As a second theoretical contribution, I suggest that the use of business language and SIR by SPOs may open up a gap between practice and organisational objectives leading to a new form of decoupling that I label, language-means decoupling.