Institutional Theory Perspective Research Articles

Exploring IFRS in Islamic finance: a bibliometric and coding analysis of emerging topics and perspectives

Purpose Emerging economies are increasingly benefiting from Islamic finance principles. The distinctive features of this unconventional form of finance are starting to be considered even in developed economies. Islamic finance operates under prohibitions on interest, gambling, speculation and complex derivatives according to the dogma in the Quran, Sunnah, Ijma and Qiyas. International financial reporting standards (IFRS) allow companies to attract global capital due to overcoming international borders. However, Islamic finance cannot apply all accounting standards. Therefore, this study aims to explore the implementation of international accounting standards in the Islamic finance context to present applications and future research fields. Design/methodology/approach Using a bibliometric and coding analysis, the study analyses 226 peer-reviewed journal papers extracted from the Scopus database. Using the bibliometrix package, the authors explored the literature’s intellectual, conceptual and social structures, categorising the findings into thematic clusters relevant to traditional and Islamic finance paradigms. Findings The results reveal new and interesting elements using the lens of the conceptual, intellectual and social structure. Additionally, the authors find out three main thematic clusters: (1) IFRS and Islamic finance: general principles; (2) IFRS and Zakat; (3) IFRS and Murabaha compatibility; (4) IFRS and Takaful; and (5) IFRS and auditing organisation for Islamic financial institution: governance strategies. Originality/value The contribution is original as the authors discover institutional theory perspectives and a diatribe between positivist and ontological approaches.

Exploring IFRS in Islamic finance: a bibliometric and coding analysis of emerging topics and perspectives

Purpose Emerging economies are increasingly benefiting from Islamic finance principles. The distinctive features of this unconventional form of finance are starting to be considered even in developed economies. Islamic finance operates under prohibitions on interest, gambling, speculation and complex derivatives according to the dogma in the Quran, Sunnah, Ijma and Qiyas. International financial reporting standards (IFRS) allow companies to attract global capital due to overcoming international borders. However, Islamic finance cannot apply all accounting standards. Therefore, this study aims to explore the implementation of international accounting standards in the Islamic finance context to present applications and future research fields. Design/methodology/approach Using a bibliometric and coding analysis, the study analyses 226 peer-reviewed journal papers extracted from the Scopus database. Using the bibliometrix package, the authors explored the literature’s intellectual, conceptual and social structures, categorising the findings into thematic clusters relevant to traditional and Islamic finance paradigms. Findings The results reveal new and interesting elements using the lens of the conceptual, intellectual and social structure. Additionally, the authors find out three main thematic clusters: (1) IFRS and Islamic finance: general principles; (2) IFRS and Zakat; (3) IFRS and Murabaha compatibility; (4) IFRS and Takaful; and (5) IFRS and auditing organisation for Islamic financial institution: governance strategies. Originality/value The contribution is original as the authors discover institutional theory perspectives and a diatribe between positivist and ontological approaches.

Public spending efficiency in the countries of the gulf cooperation council

PurposeThe Gulf Cooperation Council (GCC) countries have been increasingly investing in their economic and social development in recent years, yet the effectiveness of their spending remains unknown although they have been taking reforms to advance their spending efficiency practices.Design/methodology/approachThe study applies a quantitative approach to analyze panel data using a multiple regression model based on the World Economic Forum (WEF) reports of the global competitiveness index (GCI) from 2009 until 2018.FindingsThe results show that policies' strength has a positive and significant influence, while national infrastructure and workforce empowerment have a negative and significant influence over the extent of spending efficiency implementation in the GCC countries.Research limitations/implicationsGCI disclosure assessment criteria changed in 2019 and then stopped in 2020 due to COVID-19. A different version of GCI was published in 2020, which focuses on recovering from the COVID-19 pandemic, and no other issues have been published since then. This represented a barrier to recent data collection.Practical implicationsPractical contribution is the value added by this study to a minimal literature on spending efficiency in the GCC countries. This study’s theoretical contribution to knowledge is the integration of the new institutional sociology (NIS) perspective of institutional theory and the resource slack theory to investigate a set of factors rarely explored in relation to their impact on governmental spending efficiency.Social implicationsThis study provides the following recommendations for policymakers: The GCC government should direct government training bodies and universities (in business majors) to include mandatory spending efficiency subjects to enhance current knowledge. Also, the governmental-related bodies of spending efficiency should make agreements with universities and research centers to improve the diverse R&D aspects of government spending efficiency. Another important recommendation is to enforce the adoption of the GRC concept regarding spending efficiency practices for governmental employees to guide them towards implementing spending efficiency practices.Originality/valueThis study's theoretical contribution to knowledge is the integration of the new institutional sociology (NIS) perspective of institutional theory and the resource slack theory to investigate a set of factors rarely explored in relation to their impact on governmental spending efficiency. Also, the practical contribution is the value added by this study to a minimal literature on spending efficiency in the GCC countries. The research has established empirical evidence to support the findings above.

Firm ownership structure and voluntary carbon disclosure: a systematic review and meta-analysis

Purpose This study aims to systematically consolidate and quantitatively integrate the mixed empirical results on the association between ownership mechanisms and voluntary carbon disclosure using meta-analysis and further propose potential country-level moderators of this relationship. Design/methodology/approach The authors apply meta-analytic procedures on 55 empirical studies conducted during 2008–2022, covering 13 countries, 85 effect sizes and 226,473 firm-year observations. To gauge the significance of the estimated mean effect size, a random-effects Hedges and Olkin meta-analysis procedure is adopted, followed by a restricted maximum likelihood based meta-regression, to test the effect of possible moderators. Findings Aligned with agency and stakeholder theories, the results highlight institutional and state ownership (SO) as having a significant positive impact on voluntary carbon disclosure. On the other hand, ownership concentration, managerial and foreign ownership have an insignificant effect on voluntary carbon disclosure. Based on institutional theory perspectives, the authors confirm the impact of institutional ownership on voluntary carbon disclosure to be more prominent in civil law countries and those countries that have implemented an emission trading scheme (ETS). Practical implications The finding that institutional and SO in firms can translate into higher voluntary disclosures deems investors and the government as crucial stakeholders in achieving carbon neutrality. Furthermore, the finding that the effect of institutional investors on carbon disclosure is heightened in ETS-implemented countries provides evidence to the regulatory authorities in favour of this scheme. Social implications The positive impact of institutional and government ownership on voluntary carbon disclosure highlights that these ownership structures not only have the potential to transform corporate decisions but also have implications for the wider society. As firms owned by institutional investors disclose their carbon information, it provides access to critical information about their environmental practices to the public. This fosters an environment of transparency and trust between the firm and its stakeholders (the community), leading to an overall well-informed society. Originality/value While prior meta-reviews studied the impact of corporate governance on voluntary disclosures, the meta-literature, as of 2024, has yet to address its influence specifically on carbon disclosures, which are pertinent amidst the ongoing global climate change crisis. The findings inform policymakers about the pivotal institutional factors that can amplify the impact of effective ownership structures on voluntary carbon disclosure. Future scope exists for investigating the effects of ownership mechanisms on firm-level sustainable investments. Furthermore, future empirical analysis could consider the moderating influence of “culture” and “ease of doing business” on the ownership-carbon disclosure relationship.

The Role of Transglobal Leadership Intelligence in Improving Good Governance Through The Tri Hita Karana Indigenous Culture and Transglobal Leadership Behavior

Introduction: This research aims to test theories and develop previous research models to determine the influence of Transglobal Leadership Intelligence on Good Governance which is mediated by Tri Hita Karana traditional culture and Transglobal Leadership Behavior. Theoretical Review: This research applies various theories, namely Transformational Leadership theory and Indigenous Institutional theory to explain the relationship between variables. This article contributes to testing these two theories in the context of the relationship between each variable and practically to improve good governance in Bali. Method: This research is quantitative research. The population in this research is ASN of the Bali Province Tourism Office. The unit of analysis in this research is a government organization/institution. This research uses a saturated sample or population sample. Result and Discussion: This article is important for the government and future research considering that not many previous studies have used the Transformational Leadership theoretical framework and Indigenous Institutional theory to test similar research models. This research has limitations in obtaining research that examines the government environment in Bali from the perspective of Transformational Leadership theory and Indigenous Institutional theory. Conclusion: This research brings a new framework that describes the contribution of Transglobal Leadership Intelligence, Tri Hita Karana traditional culture and Transglobal Leadership Behavior to Good Governance.

Path Reinforcer or Policy Accelerator? COVID-19 and Scandinavian Social Protection Reform Trajectories

A pandemic may change the use of social protection systems. In this article, we compare Scandinavian reform trajectories of unemployment benefits and sickness benefits following the COVID-19 pandemic. From an institutional theory perspective, we have analyzed official documents on regulations proposed in government bills, public inquiries, reports, and secondary literature published between March 2020 and December 2023, as well as interview data from key actors representing the state, the social partners, and related stakeholder organizations. The findings show that Denmark and Norway implemented mostly provisional reforms and thus ended in path reinforcement. In Sweden, on the contrary, numerous provisional reforms during the pandemic turned out to become permanent in the post-pandemic period. As the pandemic legitimized permanent changes that in some cases had been debated for a long time in Sweden, it thus came to act as a path-clearing policy accelerator.

Multinational enterprises' lobbying and foreign subsidiary performance: Evidence from the U.S. in the context of the global financial crisis

AbstractWhether corporate political activity (CPA) benefits firm performance is contested in the literature. However, the CPA‐performance relationship has been less explored in the international business context or in the context of macroeconomic shocks—notably the global financial crisis—during which multinational enterprises (MNEs) may be forced to revisit their market and non‐market strategies. In this study, we draw upon insights from the institutional theory and legitimacy perspectives to argue that the performance consequences of MNEs' lobbying in a host market are contingent upon the MNE's experience of operating in the host market, their lobbying frequency, and the subsidiary's technological intensity. The empirical analysis used to test our hypotheses is based on a panel dataset of 224 subsidiaries of foreign MNEs operating in the United States, spanning the 8‐year period 2005–2013, covering the years of the financial crisis. We find support for most of our hypotheses and contribute to the performance implications of CPA in international business contexts.

Quality management practices enhance the legitimacy of organizations through improved performance: a perspective from oil processing industries

PurposeQuality management practices (QMP) have stood as one of the critical strategic differentiators for enhancing firm performance. The production and manufacturing industry is the main driving force of economic growth and social development for any developed or developing country. This study aims to focus on two primary dimensions of QMP: soft quality management practices (SQMP) and hard quality management practices (HQMP) from the socio-technical system perspectives. Based on institutional theory perspectives, the study explores the impact of SQMP and HQMP on quality performance (QP), innovation performance (IVP) and financial performance (FP) in Indian oil processing organizations.Design/methodology/approachA proposed research model is validated using 289 cross-sectional survey data collected from the senior officials of oil processing firms in India. Covariance-based structural equation modeling is used to verify the proposed theoretical model.FindingsSQMP, directly and indirectly, influenced QP and IVP while only indirectly to FP mediated through QP. HQMP directly impacted only QP while indirectly to IVP and FP mediated through QP.Research limitations/implicationsImpact of organizational legitimacy in proper utilization or application of QMP in achieving the firm sustainable growth. The future study may address the following Research Question (RQ) also: How do QMP enhance the legitimacy of organizations operating in the oil processing industries? Are there specific mechanisms or pathways through which improved performance contributes to enhanced organizational legitimacy? How does legitimacy impact the success and sustainability of organizations, particularly, within the context of the oil processing industries? Are there regulatory requirements or industry certifications that organizations must adhere to in order to maintain legitimacy?Practical implicationsSimilarly, manufacturing firms establish QMP of interaction and maintaining relationships with all the stakeholders, total employee empowerment and involvement, workforce commitment and workforce management, helping to control their reputations and maintain legitimacy (Li et al., 2023). Similarly, in the health industry, the health management information system (HMIS), which uses the DHIS2 platform, establishes that isomorphism legitimizes data QMP among health practitioners and, subsequently, data quality. Further, it was concluded that mimetic isomorphism led to moral and pragmatic legitimacy. In contrast, normative isomorphism led to cognitive legitimacy within the HMIS structure and helped to attain the correctness and timeliness of the data and reports, respectively (Msendema et al., 2023). Quality, flexibility and efficiency of Big Data Analytics through better storage, speed and significance can optimize the operational performance of a manufacturing firm (Verma et al., 2023).Social implicationsThe study provides the academician with the different dimensions of QMP. The study demonstrates how a firm develops multiple performance capabilities through proper QMP. Also, it shows how vital behavioral and managerial perspectives are to QMP and statistically solid tools and techniques. The study draws their importance to risk factors involved in the firms. Since the SQMP play a vital role, thus, emphasis on the behavioral dimension of quality requires more investigation and is in line with hard technological advancements in the quality field.Originality/valueThe study of the impact of HQMP and SQMP on performance is still not established. There are inconsistencies in the findings. The study of the impact of HQMP and SQMP in oil processing industries has not dealt with before. The effects of HQMP and SQMP on the firm’s FP have least been dealt. In context to the intended influence of QM implementation, QP has not been examined as a potential mediator between FP. Research carried out in the past is limited to American and European countries. However, a limited study was done in Asia, and no study has been conducted in the Indian context.

Factors influencing the evolution of information ecosystems: an institutional theory perspective

PurposeThe ecosystem concept has attracted attention in information system research to explain business competition, innovation and many other emerging phenomena. Existing studies focus more on a single ecosystem type or a single ecosystem goal and pay little attention to the ecosystem’s evolution. The objective of the study is to investigate the factors that impact the evolution of the information ecosystem (IE) to gain a better understanding of strategic thinking.Design/methodology/approachThe IE involves many actors, so the multi-case study approach is conducted with purposeful sampling to recruit all the significant ecosystem actors. The collected qualitative data are analyzed by coding data, exploring data relationships and structuring pattern steps; institutional theory is used as a theoretical framework.FindingsThe results demonstrate that industry practices, laws and regulations, new actors and the mimetic pressure of outsourcers drive the growth of the ecosystem. Strategy intention, cost pressure and normative pressure all contribute to the IE’s evolution.Originality/valueThe concept of ecosystems has attracted attention in information system research. The study investigates the factors contributing to the evolution of the IE from an institutional theory perspective. Our suggestion is that new players can find a niche in offering information technology (IT)/ information services (IS)-related solutions to survive in the ecosystem; however, they need to pay attention to the normative pressure.

The interplay of institutional pressures, digitalization capability, environmental, social, and governance strategy, and triple bottom line performance: A moderated mediation model

AbstractThis study seeks to elucidate the mediating role of environmental, social, and governance strategy (ESGS) in bridging the nexus between institutional pressures—specifically regulatory and stakeholder influences—and triple bottom line performance (TBLP), which encompasses economic, social, and environmental facets. Concurrently, this study examines the extent to which digitalization capability influences these dynamics. Utilizing a dataset from subsidiaries within China's retail and transportation sectors, we employed structural equation modeling alongside regression analysis to validate our hypotheses. The findings corroborate a partial mediating effect of ESGS on the TBLP in response to institutional pressures while highlighting digitalization capabilities' moderated mediation role in strengthening the relationship between institutional pressures and TBL through ESGS implementation. By weaving together institutional theory and dynamic capability perspectives, this study advances the understanding of strategic avenues that influence TBLP through ESGS and offers managerial insights for effectively leveraging ESG strategies.

The impact of executive cognitive characteristics on a firm’s ESG performance: an institutional theory perspective

The impact of executive cognitive characteristics on a firm’s ESG performance: an institutional theory perspective

New institutional theory perspective: water safety plan implementations in Thailand, Australia, Indonesia and Nepal

ABSTRACT Water is essential for human life and is an increasingly scarce resource with global population increase and climate change. In recognition of access to water as a fundamental human right, the World Health Organization (WHO) formulated Water Safety Plans (WSP) to be used by water organisations globally to ensure safe and secure water for human consumption. Whether and how water utility organizations use WSPs varies globally, however. We use case study analyses and institutional theory to explore the difference between water utility companies that are forced by regulations to adopt the WSP and those that are not, across four different countries. Our results show variation in WSP adoption based on the country’s legal requirements. We suggest that government regulations are important for promoting the implementation of WSPs by utility organizations and to secure and supply clean water to customers. Such regulations would reduce conspiracy and avoidance actions by organizations that limit the use of WSPs.

Investigating the Antecedents of Green Manufacturing Practices Adoption in a Sub-Saharan African Country: An Extended Institutional Theory Perspective

Investigating the Antecedents of Green Manufacturing Practices Adoption in a Sub-Saharan African Country: An Extended Institutional Theory Perspective

Exploring the adoption of risk governance structures within the Turkish banking field: an institutional theory lens, 2006-2009

Purpose- The purpose of this study is to investigate the adoption patterns of transnationally imposed risk governance structures within the Turkish banking field employing an institutional theory perspective. Building on institutional complexity, which stems from the conflict between transnational and national institutional influences, our study examines two different periods where transnational and national institutional arrangements were in relative fit or misfit. Methodology- The methodology of this study includes the analysis of the publicly available panel data of banks. The annual reports of all 15 banks are used to gather the banks’ risk governance, risk management and performance indicators. All the reports are reached from Public Disclosure Platform (www.kap.gov.tr) or the corporate web sites of the banks. Findings- A risk governance index is constructed to measure the varying levels of adoption among the banks, covering the period from 2006 to 2019. According to the findings, the risk governance index may include the dimension of risk committee, the dimension of chief risk officer, the risk appetite framework of the institution, and corporate governance. However, the risk performance of the banks may vary on different indicators. Conclusion- It is uncovered that banks displayed a relatively homogenous adoption pattern during the 2006-2012 period when transnational and national institutional arrangements were in harmony. However, the adoption patterns diverged among banks when national institutional arrangements began to differ from transnational standards starting from 2013. It is also found that the adoption of transnational templates about risk governance did not result in significant performance increases in risk or corporate performance metrics, indicating a ritual adoption behavior by the majority of the banks, which fail or intendedly decline to entrench corresponding practices associated with these templates. Keywords: Risk governance, adoption, institutional field, transnational institutions, banking JEL Codes: D21, G21, G32, L20, M10

"Will the welfare state survive the future? - How people legitimize the welfare state."

Background: Legitimacy of the welfare state is a requirement for efficient functioning. In the current political climate of Norway creating new co-governance models under the umbrella of New Public Governance (NPG). NPG draws resources from the public, the private as well as the volunteer sector. In the European welfare states pressure is building due to demographic ageing, globalization and disturbances in the social order which affect the social contract between citizen and state. This article aims to explore how citizens legitimize the Norwegian welfare state drawing on perspective of institutional theory. Why do or don’t the participants support the current form of the welfare state?
 The interviews were analysed focusing on the assumptions and reasons on which the participants based their view of the welfare state. Although the method has been used on exploring the epistemic dimension of discretion, it allows for identification of the cognitive aspects of decision making, hence the ability to identify core assumptions and beliefs. The findings from the interview are analysed using Schuman’s analytical categories of pragmatic, moral and cognitive legitimacy create the framework for analysing the argumentation which the participants use to legitimize their current view of the Norwegian welfare state, and where it is heading. Contrary to most institutional research this paper does not attempt to see the big picture, but rather explore legitimacy through the informant’s perception of the welfare state.
 Methods: This is a qualitative study. We conducted individual interviews with one woman and one man in each 10-year, thus representing ages from 20 to 80. We also interviewed two senior experts at research centres and two politicians. These interviews were thematically analysed and coded in NVivo.
 In order to analyse the informant’s arguments further this paper utilizes Anders Molander’s interpretation and use of Toulmin which sees discretion as a process in which a person legitimizes their own argument statements through expressing core concepts, values and understandings.
 Results and Lessons learned: This is an ongoing study and the results will be presented and discussed at the conference. The preliminary analysis shows that moral legitimacy tends to outweigh pragmatic legitimacy. This implies that legitimacy is a key concept in achieving integrated services. This may indicate that cooperative models such as NPG in combination with people’s perspective of “what is the right thing to do” is key to reaching ideals promised in tailoring of services from people’s perspective.
 
 
 Limitations and suggestions for future research: Legitimacy as a concept on the micro level may be a key element in understanding how to integrate services and increase quality of services from people’s perspective. Moral legitimacy tends to create support despite to achieving peoples wishes. To a certain extent, the upcoming results will be of relevance for a better understanding of the complexity of organising and supporting welfare services. 
 Keywords: Welfare state, legitimacy, NPG, Co-governance, integration, 

Institutional theory in accounting information systems research: Shedding light on digital transformation and institutional change

This article aims to shed light on digital transformation in the accounting sector from the perspective of institutional change. We performed a systematic literature review to understand how institutional change could be applied to research on Accounting Information Systems (AIS), using a quantitative method to categorize data through LSA (Latent Semantic Analysis) technique; and a qualitative method performed by hierarchical categorical content analysis as a basis for inferences. We reviewed 309 articles using Institutional Theory in accounting and AIS. The LSA results presented the main topics of study, subfields of research, and uses of Institutional Theory. Regarding accounting research, it is possible to identify the role of institutional forces in the IFRS adoption (in private and public sectors), XBRL adoption, and disclosure of information on organizations’ environmental, social, and governance, with a focus on analyses at the organizational level and regulatory pressures. A deep dive into AIS articles showed that Institutional Theory was applied to analyze the adoption of systems/technologies (mostly ERP and XBRL) through isomorphic processes (coercive, mimetic, and normative). We proposed to analyze digital technologies as an exogenous change for the digital transformation in accounting business using another perspective of Institutional Theory: institutional change. Institutional change analyzes the role of destabilizing elements in the change of an organizational field as a whole and not just in a few organizations. In this perspective, technology is the agent of change on a broader level, transforming organizations, individuals, customers, suppliers, and governments. The main contribution of this article is presenting suggestions for future AIS. This research agenda contributes to advancing Institutional Theory in AIS, using the lens of institutional change to analyze the new realities shaping accounting organizations, such as digital transformation.

Walk your reputation: The impact of corporate social responsibility decoupling on the hospitality and tourism firm value in the time of crisis

A growing body of research has tested the protective effect of pre-COVID-19 CSR reputation or during-COVID-19 CSR action for hospitality and tourism firms but has obtained inconclusive results. These inconclusive results may have been because of the decoupling of during-COVID-19 CSR action from pre-COVID-19 CSR reputation. From the perspective of institutional theory, we use a sample of Chinese hospitality and tourism listed firms during the COVID-19 pandemic and a cluster-adjusted panel data regression with robust standard errors to reveal that the decoupling of a firm’s during-COVID-19 CSR action from its pre-COVID-19 CSR reputation negatively impacts firm value, and the negative impact is amplified for firms under stronger stakeholder scrutiny. Our findings could contribute to institutional theory by proving that decoupling is under close stakeholder scrutiny during crises and by identifying a specific type of CSR decoupling, and could offer practical implications for firms to protect their firm values during crises.

Implementing the European Union Green Taxonomy: implications for small- and medium-sized enterprises

ABSTRACT This research investigates accounting practitioners’ perceptions of the feasibility of implementing the EU Green Taxonomy (“the Taxonomy”) for Small- and Medium-Sized Enterprises (SMEs) and assesses the reporting challenges, supports required and SME benefits from the provision of Taxonomy disclosures. We approach our study from the perspectives of institutional theory and legitimacy theory. We adopt a novel methodology to explore our research questions using two case studies to engage 192 SME accounting practitioners in completing a survey questionnaire. We differentiate respondents in terms of “performers” and “conformers”. Our findings suggest that accounting practitioners believe the Taxonomy requirements to be feasible. From a legitimacy theory perspective, the data suggests both symbolic and substantive actions may be taken in providing Taxonomy disclosures. We also find evidence to suggest that where implementation costs are substantial, accounting practitioners believe that SMEs will only align with the Taxonomy when coerced to do so, consistent with institutional theory. Our findings add to the growing literature on the Taxonomy by showing that the quality of disclosures is contingent on targeted provision of government funding and resources to SMEs and their accounting practitioners. Highlights Surveyed SME accounting practitioners on the feasibility of the EU Green Taxonomy. Novel methodology using two case studies to engage SME accounting practitioners. SME Accounting practitioners believe the Taxonomy requirements to be feasible. Resource constraints may lead to meaningless disclosures and potential greenwashing.

Digitalization & Covid-19: An institutional-contingency theoretic analysis of supply chain digitalization

Black Swan external contingencies like the COVID-19 pandemic or Suez Canal blockage have a significant impact on the technology adoption decisions in firms. At a firm level, supply chains are the segments that are most prone to disruption due to these shocks. Hence the need to study the role of these contingencies in enabling digitalization in supply chains. Modern supply chains operate in a strong institutional environment that influences various aspects like technology adoption and digitalization. In this study, we bring these two aspects together by applying an institutional and contingency theory perspective. We investigate the institutional forces and the effect of environmental contingencies on the digitalization of supply chains. We propose a generalizable model to investigate digitalization readiness independent of the technological artefact being implemented. To achieve the same, we identify the forces of digitalization in the supply chains from the review of the extant literature. We then model the forces of digitalization into a Bayesian Belief Network (BBN). The study finds that organizational readiness and people readiness are critical elements of digitalization readiness. Our study reports the importance of top management's involvement and employees' training as the critical forces aiding digitalization.

Do environmental scores become multinational corporations' strategic “greenwashing” tool for window‐dressing carbon reduction? A cross‐cultural analysis

AbstractOwing to the urgency of the climate change crisis and the emerging greenwashing issue that companies face, greenwashing in companies' carbon reduction is exceptionally important in the progress of global carbon reduction and the achievement of the Paris Agreement goals. Therefore, this study focused on multinational corporations (MNCs) listed on the 2021 Fortune Global 500 list (2001–2020) and used institutional theory to theoretically discuss and empirically test the relationship between MNCs' environmental scores and carbon emissions/intensity, as well as the moderating effect of national culture. Our results demonstrate that the environmental scores of MNCs positively affect their carbon emissions and intensity, meaning that managers tend to use high scores to hide their poor carbon reduction, showing a typical “talk” more and “act” less (i.e., greenwashing) behavior. Meanwhile, the moderating effects of individualism, masculinity, and uncertainty avoidance were negative. These revealed that the balance of MNCs' “talk” and “act” can be influenced by the domestic national cultural characteristics. Further analysis showed that the Paris Agreement did not prevent MNCs' greenwashing in carbon reduction. Such greenwashing behavior has become even worse in societies with power distance characteristics after the Paris Agreement. To the best of our knowledge, this is the first study to investigate companies' greenwashing in terms of carbon reduction. The goal is to enhance our understanding of why and how greenwashing occurs based on the institutional theory perspective, extend the application of institutional theory, enrich the literature on companies' greenwashing and national culture, and offer insight into interdisciplinary research between national culture and green transition management. Finally, suggestions for policymakers on how to prevent MNCs' greenwashing in carbon reduction, considering national cultural influence, were provided.