Engaging with organisations in pursuit of improved sustainability accounting and perance.doc

introductionengaging with organisations inpursuit of improved sustainabilityaccounting and performancecarol a. adamsla trobe university, melbourne, australia, andcarlos larrinaga-gonzalezuniversidad de burgos, burgos, spainimprovedsustainabilityaccounting333received january 2007revised february 2007accepted march 2007abstractpurpose the purpose of this paper is to present a case for research in ethical, social andenvironmental (or sustainability) accounting and accountability which engages with thoseorganisations claiming to manage and report their sustainability performance. in addition, thepaper reviews the contributions in this special issue.design/methodology/approach the paper provides an analysis and critique of the extent ofengagement research in the field of sustainability accounting and accountability. it draws on the fieldsof management, management accounting and critical accounting to present a case for further researchengagement with sustainability accounting and accountability practice.findings the paper finds that the extant literature in the field of sustainability accounting andreporting, in contrast to the fields of management accounting and management, has largely ignoredpractice within organisations. the lack of “engaging research” is found to be due to concerns aboutincreasing the breadth of participants in the social accounting agenda and “managerial capture”. thepaper argues that further research engaging with organisations is needed in order to identify howaccounting and management systems might reduce their negative sustainability impacts. the paperargues that such research can benefit from the methodological and theoretical insights of other disciplines.research limitations/implications the paper suggests where further contributions might bemade by future research endeavours engaging with organisations.practical implications engagement research in sustainability accounting and reporting has thepotential to improve theorizing, practice and the sustainability performance of organisations.originality/value drawing on the methods and theories of other disciplines and the papers in thespecial issue, the paper presents a way forward for researchers engaging with organisations practicingsustainability accounting and reporting.keywords accounting standards, economic sustainability, financial reporting, business ethics, organizational analysis, research methodspaper type general reviewintroductionmuch of the research in the field of “sustainability” accounting and accountability1has been motivated by a concern for the natural environment (see milne, 1991; gray,the authors are grateful to james guthrie and lee parker for their guidance in the preparation of this special issue (and for arranging the refereeing of this paper) and to those who supported the special issue by reviewing or submitting papers.accounting, auditing &accountability journalvol. 20 no. 3, 2007pp. 333-355q emerald group publishing limited0951-3574doi 10.1108/09513570710748535aaaj1992), the exploitation by rich nations of poor nations or peoples through the activitiesof multinational corporations (see arnold and hammond, 1994), human rights and20,3equity issues (see adams and harte, 1998, 2000; adams and mcphail, 2004). it is notour purpose here to make a case for this research. this has been done (see, for example,gray, 1992) and that case is overwhelming. what is in doubt is the extent to which theresearch to date can effect changes which address the concerns of those conducting it.334this concern led some scholars (see, for example, gray et al., 1987, 1988) to conceiveways in which social and environmental accounting research could be mobilized as a way of encouraging organisational change within the capitalist system. this intent raised severe critiques from a conflict-based perspective that accounting plays an important role in the perpetuation of exploitative social relations (see, for example, tinker et al., 1991).this dispute influenced some to research the process by which a growing body of social and environmental accounting research and practice could be used by companies to pursue their own agendas. the term “managerial capture” (see, for example, gray et al., 1997) was coined to conceptualise such processes. though we have in common with those who talk about “capture. a concern with the way sustainability accounting and reporting is being used (see, for example, larrinaga-gonzalez et al., 2001; adams, 2004), we will argue in this paper that there is a need to study the way in which it is used, in order to understand what factors drive or prevent changes towards improved sustainability and accountability performance.adams (2002) argues that social and environmental reporting theories have been developed without engaging organisations that do sustainability reporting despite finding that the reporting process, attitudes of participants and corporate culture play an important part in determining the extent of accountability discharged through corporate disclosures. parker (2005, p. 849) also notes that:. . . the majority of theorising has been deductively derived and that the sea social and environmental accounting field has yet to seriously attempt any significant inductive theorising from field derived data.considering the depth of the social and environmental crisis and the pressure to respond (flannery, 2005), new research avenues need to be opened urgently. while extant literature in the field has primarily focused on why companies report what they do, there is a lack of research on: why and how they fail to be accountable for some aspects of their sustainability performance (adams, 2004); and, the specificity of the setting that gives rise to this situation (larrinaga-gonzalez and bebbington, 2001). one of these research avenues might be to engage with organisations to examine processes of ethical, social and environmental (or sustainability) accounting and accountability and the manner in which these processes, the data collected and subsequent reporting impact on performance.we will argue that the lack of engagement with organisations in social and environmental accountability research might be a consequence of the critiques by and of earlier research in the area. we contend that this has inhibited theoretical and practical development, as parker (2005, p. 856) also notes:the risk for sea social and environmental accounting scholars is that preoccupation with sea capture, may sentence their discourse to be confined to the halls of academe and thereby distance them from any significant influence on whatever institutionalisation of sea occurs.this special issue was conceived in the understanding that engagement is a privileged research method to investigate ethical, social and environmental accounting and accountability at the level of the organisation and its impacts on, and interactions with, other organisational processes, organisational structures and other aspects of organisational behaviour, organisational dynamics and institutionalisation processes (larrinaga-gonzalez et al., 2001; adams, 2002; odwyer, 2002, 2003).in this article, which introduces the special issue, we will make the case for research which engages with those organisations which practice aspects of sustainability accounting and accountability. in doing so, we will appraise the extant literature in the field, questioning ideas that in our view have prevented the development of engagement research in the area and proposing conceptual frameworks that facilitate engagement research. section 2 draws parallels between the theme of this aaaj special issue and the debates in the management and management accounting literatures on the need for research to be more relevant to practice. then section 3 discusses the interplay between engagement research and notions, such as managerial capture, that have developed in the area and that, arguably, have prevented the development of engagement research. in section 4 we consider how to frame research engaging in sustainability accounting and accountability. in section 5 we outline the contribution of the authors of this aaaj special issue. the final section points to future directions in “engaging research” in sustainability accounting, reporting and accountability.improvedsustainabilityaccounting3352. engagement research in other disciplinesthe debate over engagement in (social) accounting could gain insights from similar debates that are taking place in other fields. for example, in management research there is a growing concern2 over the distance between management research and management practice (huff, 2000; grey, 2001; pettigrew, 2001; pettigrew et al., 2001; starkey and madan, 2001; mckelvey, 2006; van de ven and johnson, 2006). it is argued that research published in top-level management journals is of little relevance to practice. gibbons et al.s (1994) proposal of “mode 2” generation of knowledge has informed this debate in management research and has incited calls for research that, among other features, is more engaged with practice.more specifically, the elements of “mode 2” generation of knowledge have been described as follows (maclean et al., 2002). first, under “mode 2”. knowledge is produced in the context of application and, in these circumstances, an imperative to be practically useful drives choice of research questions and methods. this is akin with action research as is described and used in this special issue. second, “transdisciplinarity” involves the integration of different skills in a “framework of action” in which interwoven empirical elements and theoretical consensus give rise to practical solutions and theory building which cannot be broken into disciplinary parts. third, the generation of knowledge under “mode 2” requires heterogeneity and organizational diversity, as practical problems require heterogenous teams whose members come and go as the situation organically unfolds. fourth, “mode 2” involves accountability to participants/subjects and reflexivity. that is, researchers should be empathetic to the standpoint of participants and engage in an ongoing process of negotiation leading to a more reflexive form of research with a deeper understanding of the research process. finally, quality controls of “mode 2” research need to reflect aaaajbroader community interest than research in a single discipline and as such are moremultidimensional. the nature of the field of social accounting, reporting and20,3accountability would suggest that its scholars should have the aptitude and skills to adopt the elements of “mode 2”.in contributing to this debate some management scholars (huff, 2000; starkey andmadan, 2001) argue that the lack of relevance of research is causing a loss of legitimacy336of business schools. these scholars call for a response to the universitys stakeholders,limited in their conceptions to business and business managers. in this vein, pettigrew et al. (2001) contend that the aim of research is not just to know “what is”, but also “how to” and this requires a sophisticated and demanding engagement with practice, “a wider and deeper form of engagement between management and researchers and practitioners would entail experimentation with the co funding, co production and co dissemination of knowledge” (pettigrew et al., 2001, p. 710).this view of management research is challenged by grey (2001, p. s30), who criticizes aligned-with-business forms of engagement and brings forward issues (e.g. downsizing fads) that need from the researcher a “critical distance from relevance to industry” in order to identify such practices as destructive. while agreeing with the need for more engagement research, grey raises the question as to the need to define the “terms of the engagement” in management research. this challenge is addressed in this aaaj special issue: how to engage “inside” the organization to gain knowledge of the internal processes that lead to social, ethical and environmental accountability, while at the same time preserving some “critical distance” from the daily life of business managers and yet having enough empathy with the actors in a given situation to understand their motivations.the management accounting literature has also examined the ways in which management accounting influences, and is influenced by, organisations and their participants. for example, the contingency theory literature has examined how management accounting and control systems are contingent on organisational structures and characteristics (see gordon and miller, 1976; waterhouse and tiessen, 1978; bandury and nahapiet, 1979; otley, 1980). in addition, the management accounting literature has examined how accounting has consequences for decision making, change, power structures and the roles of organisational participants (see, hopwood, 1978; burchell et al., 1980). the literature has examined management accounting from varied viewpoints (baxter and chua, 2003). from an institutional theory perspective, the lack of rationality of management accounting (meyer, 1983; ansari and euske, 1987), its ritual and mythical nature (meyer, 1986) and its ability to mobilize and legitimise action (covaleski and dirsmith, 1986) have been highlighted. from a cultural perspective, the constitutive role of accountings symbolic meanings (dent, 1991) has been stressed. and from a foucauldian approach, management accounting is conceived as intertwined in broader construction processes of discourses that, through the exertion of control over individuals, enable the preservation of institutional structures (see, loft, 1986; miller and oleary, 1987).in the management accounting literature there have also been discussions about methodological approaches. jonsson and macintosh (1997, p. 373) argue that ethnographic research studies have been marginalised by critical accounting theory studies despite the superiority of ethnographic studies in gaining knowledge about “situated rationality of the actors mundane, every day social practices in order todescribe the sense-assembly equipment they use to construct and to sustain their daily procedures, practices and stock of social knowledge”. this is so because the methodological foundation of the ethnographic perspective is “the reflective recognition of a continuity between mundane and theoretical understanding of the social world” (power, 1991, p. 339). conversely, jonsson and macintosh (1997, p. 376) characterise critical accounting theory studies as “conducted in the researchers office at a comfortable and safe distance from the field” and as bringing the result “before the research starts because the research story is built around a pre-given theory”. jonsson and macintosh (1997) also point out that another advantage of ethnographic research is that it does not assume the existence of a monolithic capitalistic mode of production that works in the same way in different countries (see, for example, granlund and lukka, 1998).we will argue that a similar conclusion could be drawn with respect to the social accounting literature. we suggest that whilst the influence of critical theory has enriched social accounting (also acknowledged by parker, 2005), it has had pernicious influences on social accounting research with respect to the distance of the researcher from the research field and prevention of the emergence of theories from the field. further, in contrast to the management accounting literature, the social and environmental accounting literature has paid very little attention to either organisational influences on its practice, nor the impact of the practice of social and environmental accounting on organisations and their participants. research into social and environmental accounting and management systems has also paid little attention to assessing what types of accounting and management systems are most effective under different circumstances. we contend that social and environmental accounting and reporting scholars will not realise their desire to see organisational change towards greater social and environmental accountability and responsibility unless this gap in the research is filled.improvedsustainabilityaccounting3373. engagement and managerial capturethe way in which sustainability accounting and reporting is being used is of considerable concern among scholars interested in the social and environmental impact of business. the way some companies are defining the term sustainability has cast doubt on their commitment to protecting the planet for future generations. for example, barry stickings, president of the chemical industries association and chairman of basf contends:i see the continuing debate over sustainable development as an opportunity for responsible industries such as ours to rehabilitate the word, “profit” and bring the positive role of profits back to the centre-stage of public debate (stickings, 2001, p. 27 quoted in adams, 2004, p. 732).companies may use sustainability accounting and reporting to maintain the status quo (tinker et al., 1991) or pursue their own agendas (see, for example, adams et al., 1995; adams and harte, 1998; larrinaga-gonzalez and bebbington, 2001; adams, 2004). managerial capture could be conceived as the interpretation of corporate social responsibility by managers and the subsequent decision making, “in a constrained fashion consistent with corporate goals of shareholder wealth maximization” (odwyer, 2003, p. 548). odwyer contends that the existence of managerial captureaaajof corporate social responsibility implies that voluntary attempts to broaden corporatesocial responsibilities of b