Description
This paper focuses on social and environmental reporting (SER) and investigates, through
prolonged fieldwork with an Italian multinational company, the dynamics through which
SER, from its first introduction, has modified and developed to become institutionalized.
The empirical data has been interpreted through the lens of institutional theories to provide
a narrative of a three-step process which has brought about the institutionalization
of SER, namely: (i) the construction of a common meaning system around the concept of
social and environmental responsibility; (ii) practicalisation involving the emergence of
rules and routines; and (iii) reinforcement through the implementation of intra-organizational
managerial procedures and structures. The paper highlights that SER, as a result of a
recursive and progressive process, has become an established and taken for granted actuality
within the case study organization.
The institutionalization of social and environmental reporting:
An Italian narrative
Massimo Contrafatto
?
University of Bergamo, Department of Management, Economics and Quantitative Methods, Via dei Caniana 2, Bergamo 24127, Italy
a b s t r a c t
This paper focuses on social and environmental reporting (SER) and investigates, through
prolonged ?eldwork with an Italian multinational company, the dynamics through which
SER, from its ?rst introduction, has modi?ed and developed to become institutionalized.
The empirical data has been interpreted through the lens of institutional theories to pro-
vide a narrative of a three-step process which has brought about the institutionalization
of SER, namely: (i) the construction of a common meaning system around the concept of
social and environmental responsibility; (ii) practicalisation involving the emergence of
rules and routines; and (iii) reinforcement through the implementation of intra-organiza-
tional managerial procedures and structures. The paper highlights that SER, as a result of a
recursive and progressive process, has become an established and taken for granted actu-
ality within the case study organization.
Ó 2014 Elsevier Ltd. All rights reserved.
Introduction
In the past, social accounting scholars sought to exam-
ine issues related to Social and Environmental Reporting
(SER) by focusing predominantly on the pattern and con-
tent of social/environmental disclosures in annual ac-
counts or in stand-alone reports (see for example Adams,
2004; Adams & Harte, 1998; Buhr, 1998; Campbell, 2000;
Gray, Kouhy, & Lavers, 1995a, 1995b). Relatively speaking,
social and environmental accounting scholars devoted lit-
tle attention to the corporate processes underlying social
and environmental accounting and reporting (Adams &
Larrinaga-Gonzáles, 2007). In more recent years, however,
a greater focus on the examination of the organizational
dynamics and internal processes of SER has been seen.
Nevertheless, theoretical understanding and explanation
of the implementation, evolution and organizational
effects of social accounting practices still remain ‘‘under-
speci?ed’’ (Gray, 2005, p. 120. See also Adams, 2002). In
an attempt to address these criticisms, calls have been
made (e.g. Gray, 2002; Thomson & Bebbington, 2005) for
more in-depth, sustained and engaged ?eldwork aimed at
‘‘delving into the complexities of accounting [practices]
in action’’ (Hopwood, 2009a, p. 802).
Partly as a response to these calls, recent years have seen
anincreasing number of researchers engaging withorganiza-
tions to study different facets of SER (for further discussion
and speci?c examples, see Adams & Larrinaga-Gonzáles,
2007). Somestudieshaveconcentratedonthemotivesunder-
lyingSER(see for exampleAdams, 2002; Buhr, 2002; Contraf-
atto, 2009; O’Dwyer, 2002), others have analyzed the
in?uence exerted by internal organizational factors on the
nature, quality and signi?cance of social reporting (see for
example Adams, 2002; Adams & Mc Nicholas, 2007). Other
scholars have investigated the role of social accounting and
reporting practices in bringing about some kind of change
in organizations (see for example Adams & Mc Nicholas,
2007; Dey, 2007; Larrinaga-González, Carrasco-Fenech,
Caro-Gonzalez, Correa-Ruiz, & Páez-Sandubete, 2001).
Augmenting the aforementioned body of literature, the
present paper analyzes the complexities of social (account-http://dx.doi.org/10.1016/j.aos.2014.01.002
0361-3682/Ó 2014 Elsevier Ltd. All rights reserved.
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Tel.: +39 035 2052623; fax: +39 035 2052 549.
E-mail address: [email protected]
Accounting, Organizations and Society 39 (2014) 414–432
Contents lists available at ScienceDirect
Accounting, Organizations and Society
j our nal homepage: www. el sevi er. com/ l ocat e/ aos
ing) reporting practices not ‘‘at a distance’’ (Hopwood,
2009a, p. 802), but through engagement with organization
members in order to gain insights into what will be identi-
?ed as the processes of initiation, practicalisation and rein-
forcement of SER. While a number of previous studies have
focused on the analysis of SER reports and the reporting
practices or on the underlying processes, this paper, in con-
trast, explicitly focuses on the dynamics through which SER
and related practices have become institutionalized, i.e.
established and taken for granted actualities in a case study
organization. In particular, the empirical ?ndings have illu-
minated a recursive and progressive multi-step process
through which institutionalization took place, involving:
(i) the construction of a common meaning system around
the notion of social and environmental responsibility; (ii)
practicalisation, through which rules and routines were
adopted into the organization; and (iii) reinforcement,
whereby speci?c intra-organizational structures and proce-
dures were implemented. In doing so, this paper contrib-
utes to understanding how and why (Bebbington,
Higgings, & Frame, 2009; O’Dwyer, 2005; O’Dwyer &
Unerman, 2008) sustainability (and accountability) princi-
ples and practices may be introduced, constructed and
re-constructed in some organizations and eventually
adoptedinvarious norms of their corporatelife. It maybe ar-
gued that, a more in-depth and contextualized comprehen-
sion of these complex processes is a sine qua non for
appraisingthepotential and/or actual roleof social andenvi-
ronmental accountingtoact as acatalyst for ‘‘emancipatory’’
change (Gray, 2002, p. 689; see also Georgakopoulos &
Thomson, 2008), towards less unsustainable approaches to
guide human and corporate actions (Hopwood, 2009b).
The present analysis has been conducted via ?eld case
study methodology (see Ahrens & Chapman, 2006; Cre-
swell, 1998; Dyer & Wilkins, 1991). Data and information
were collected through a variety of sources such as: a ser-
ies of interviews with managers; participation in corporate
presentations; preparation and analysis of notes from
these meetings; and examination of social accounts and re-
ports. Insights from institutional theories have been
adopted to interpret and make sense of the empirical evi-
dence collected (e.g. Berger & Luckmann, 1966; Burns &
Scapens, 2000; DiMaggio & Powell, 1991a, 1991b;
Greenwood & Hinings, 1996; Lounsbury, 2008; Meyer &
Rowan, 1991; Oliver, 1992; Scott, 2001; Zucker, 1991).
The paper is structured as follows. In the next section,
the literature covering engagement research is brie?y re-
viewed and institutional insights are discussed, with par-
ticular reference to the notion of institutionalization. The
third section is devoted to the methodological and method
choices. In the fourth, the focus is on the analysis and inter-
pretation of empirical evidence. Finally, a summary and
conclusion section is provided.
Exploring the dynamics of SER: an analysis of its
institutionalization
Literature that has involved forms of academic engage-
ment in studying SER largely casts light on three funda-
mental questions (for a review of this literature see, for
example, Contrafatto, 2011). Firstly, what (internal)
organizational and contextual factors in?uence (i.e. insti-
gate, promote or inhibit) decision making underlying
reporting and have an impact on the quality, nature and
signi?cance of SER? Secondly, what are the motives that
drive some organizations to initiate, undertake and main-
tain practices of social and/or environmental reporting?
And thirdly, what are the actual or potential effects of
SER on different spheres of organizational domains: struc-
tures, practices, values and norm systems?
With regard to the ?rst issue (i.e. factors), previous
studies (see Adams, 1999, 2002; Adams & Mc Nicholas,
2007; Georgakopoulos & Thomson, 2008; O’Dwyer &
Unerman, 2008; and Bebbington et al., 2009) have high-
lighted the relevance, among others, of: (i) the role of orga-
nizational key representatives (e.g. CEO and senior
executives) and their attitudes; (ii) the presence of, and role
exerted by, public authorities and regulatory bodies (see
Georgakopoulos &Thomson, 2008); (iii) the extent to which
organizational behavior is in?uenced by the initiatives
taken by other companies (i.e. mimetic process); (iv) the
availability in the organization of resources, such as time,
?nances, know-how (see particularly O’Dwyer & Unerman,
2008), managerial experience and an active strategic atti-
tude (see speci?callyBebbingtonet al., 2009) without which
the decision making about SER would be hobbled (see par-
ticularly Adams & Mc Nicholas, 2007); (v) the degree of
stakeholder involvement in the process of accounting and
reporting; and(vi) whether, andthe extent to which, report-
ing activities are undertaken in accordance with speci?c
guidelines (e.g. the Global Reporting Initiative).
As to the second issue (i.e. motives), empirical evidence
suggests opacity (Contrafatto, 2009; Georgakopoulos &
Thomson, 2008) and in some cases an ‘‘occasional confu-
sion’’ (O’Dwyer, 2002, p. 411) about the (historical and cur-
rent) motives to voluntarily initiate, undertake and sustain
practices of social and environmental reporting. The deci-
sion to produce and publish the ?rst environmental (and
social) disclosures was, according to Buhr (2002), histori-
cally motivated by a major concern to ?ll ‘‘a legitimation
gap’’ (p. 25) and to attain social legitimacy
1
to operate.
On the other hand, in the analysis of more recent motives
for SER, ?ndings from other studies seem to challenge the
legitimacy theses
2
by proposing a more detailed, ‘‘complete
and complex’’ narrative of the ‘‘motives’’ for social and envi-
ronmental reporting and disclosure (O’Dwyer, 2002, p. 408).
O’Dwyer (2002), for example, found that, while most of the
executives in his study acknowledged that social disclosure
might have a relevant function in the process of acquiring
organizational legitimacy, some of them reported scepticism
about its effective possibilities for enhancing and maintain-
ing a state of legitimacy. O’Dwyer (2002) concluded, there-
fore, that there were not ‘‘any motives outside those of a
symbolic self-interested nature’’ (p. 427). In the same vein,
1
For a review of legitimacy theory see, for example, Dowling & Pfeffer,
1975; Suchman, 1995; Deephouse & Suchman, 2008; and O’Dwyer, Owen &
Unerman, 2011.
2
It is argued that the validity of legitimacy theory in explaining the
motives for SER may be due to a number of contextual and corporate
factors (e.g. country of origin, industry, size, etc.) whose analysis is beyond
the scope of this paper. For a more detailed review of the studies using
legitimacy theory see, for example, Deegan (2007).
M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432 415
Contrafatto (2009) found that the current motives for SER (in
contrast to the historical motives) were not related to
acquiring or maintaining legitimacy but rather they were
connected to an attempt to better manage the environmen-
tal and reputational risk (see also Georgakopoulos &
Thomson, 2008) and to create corporate culture.
Finally, with regard to the actual and potential effects
that SER may produce in different spheres of an organiza-
tional realm, the literature reports results that also appear
to vary over time and across contexts. Some of the early
works conducted in the 1990s dispute the role of social
and/or environmental accounting in producing profound
and structural change towards more environmentally
responsible ways of conceiving and conducting business
operations (Gray, Walters, Bebbington, & Thompson,
1995). Gray et al. (1995) and Larrinaga-González et al.
(2001), for example, did not observe structural modi?ca-
tions in the operations of the organizations whose ‘‘central
values remain[ed] unchanged’’ (Larrinaga-González et al.,
2001, p. 235). On the other hand, the studies conducted
by Adams and Mc Nicholas (2007) and Dey (2007)
evidenced more noticeable and impinging effects,
produced by social and environmental accounting, on
organizational structures, procedures and value systems.
Dey (2007), in particular, reports that the intervention of
social accounting contributed to profound, although
‘‘unforeseen’’, ‘‘unintended’’ and ‘‘undesirable’’ (p. 440)
changes in the value and norm systems of the studied
organization.
3
This aforementioned literature has largely considered
SER as either an outcome of multiple factors and drivers
(contextual and/or internal) or the catalyst for other orga-
nizational processes, including change. Relatively few
studies (see, for example, O’Dwyer, 2005) have explicitly
focused on the contingencies and processes of initiation,
implementation and embedding of SER into speci?c orga-
nizational contexts. The present paper, in response to the
calls for extending the boundaries of the existing literature
(Adams & Whelan, 2009), explicitly focuses on SER per se
and represents an attempt to explore the ‘‘black box’’
4
(Zucker, 1991, pp. 104–105) of the dynamics through which
SER has over time become institutionalized in the case study
organization. The exploration of such mechanisms and
contingencies is necessary to understand whether (or not)
social accounting, and accounting in a wider sense, can make
a real difference by affecting ‘‘the type of world we live in,
[. . .] the way in which we understand the choices open to
business undertakings and individuals [. . .].’’ (Miller, 1994,
p. 1). In order to better understand this potential ‘‘transfor-
mative’’ role it is important to explore, among others, the
mechanisms and ‘‘rationales’’ (i.e. vocabularies and mean-
ings) through which social accounting works and ‘‘calcula-
tive technologies of accounting’’ are marshalled and
‘‘mobilize[d]’’ (Miller, 1994, pp. 2–3; see also Miller &
Napier, 1993). It is through an understanding of how these
rationales are constructed and translated into practice, and
how practices are embedded and reinforced in organizations
(what in this paper will be identi?ed as processes of institu-
tionalization), that the nature and role of social accounting
to promote real ‘‘emancipatory’’ change (Gray, 2002, p.
689) in the way of thinking and doing business could be
evaluated.
The remaining part of this section discusses the notion
of institutionalization, and its constituent elements and
processes, as they relate to the case study organization.
In particular, the following discussion draws on the theo-
retical insights of two institutional theories.
5
the so-called
‘‘old institutional economics’’ and ‘‘new institutional sociol-
ogy’’ (Moll, Burns, & Major, 2006, p. 184).
Institutionalization: elements and processes
Old institutional economics and new institutional soci-
ology can provide an effective framework for ‘‘richer theo-
retical’’ investigation (Adams & Larrinaga-Gonzáles, 2007,
p. 344) of the complexities of social and environmental
accounting and reporting ‘‘in action’’ (Hopwood, 2009a, p.
802), because these theories, if adopted complementarily,
allow consideration of the different ‘‘pillars’’ (i.e. ‘‘regula-
tive, normative and cultural-cognitive’’) (Scott, 2001, p.
51) and related dynamics which constitute and character-
ize institutions and institutional life (see Table 1 for a sum-
mary of the institutional concepts which have been
referred to in this paper). As observed by Scott (2001) each
of these elements has been considered, by old institutional
economics and new institutional sociology theorists, as a
key aspect of institutions and institutional dynamics (see
as well DiMaggio & Powell, 1991a).
On the one hand, the relevance of the normative and
habitualized aspects (e.g. norms, conventions, rules and
routines) of institutions has been particularly emphasized
in old institutional economics. In general, old institutional
economics theorists (see, for example, Veblen, 1919) high-
light the predominance of habits, routines and rules to
drive agents in adopting and reproducing existing forms
of behavior (Burns & Scapens, 2000). While routines refer
3
The apparently inconsistent results reported by these previous studies
may be partly explained by considering the development of corporate
awareness and experience of SER over the intervening period, which was
one of rapid change. However, the contrasting ?ndings may also owe
something to the different institutional, contextual and organizational
circumstances that characterized these studies. Therefore, the empirical
analyses and related ?ndings may have been in?uenced by factors such as:
(i) the timescale of the analysis; (ii) the time-length of researchers’
involvement; (iii) the institutional and organizational context of the
empirical settings (including industry and type of organizations); and (iv)
the research methodology and methods adopted for gathering data and
investigating change processes. Thus, the inconsistent ?ndings, which
appear to emerge from the above brief review, should be considered as a
starting point for further and more detailed investigation of the dynamics
through which social and environmental accounting is implicated in the
processes of organizational change (Contrafatto, 2011).
4
The label ‘‘black box’’, which is often used by actor network theorists
(see Latour, 2005), is adopted here in a general sense without wishing to
refer to any particular theoretical framework, including actor network
theory.
5
Different traditions (theories), spanning and re?ecting speci?c theo-
retical assumptions (Lowndes, 1996), are part of the institutional frame-
work which concerns itself with the study of the speci?c social phenomena
represented by institutions. In particular, institutions have been concep-
tualized as resilient social phenomena ‘‘composed of [cultural]-cognitive,
normative and regulative elements that, together with associated activities
and resources, provide stability and meaning’’ (Scott, 2001, p.48) to
individual and social behaviour.
416 M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432
Table 1
Summary of the literature-based institutional concepts adopted in this paper.
The above Table provides a summary of the theoretical concepts which have been referred to in this paper. In particular, the Table synthesizes respectively:
(i) the institutional elements which may be subjected to the processes of institutionalization; (ii) the institutional forces and mechanisms which in?uence
and have an impact on the processes of institutionalization; and (iii) the processes and dynamics of institutionalization. With regard to the latter point, as
highlighted by the double line box, the focus of the analysis will be on the processes and dynamics of institutionalization that took place at the
organizational and intra-organizational levels, i.e. what have been identi?ed as meso and micro-institutionalism.
M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432 417
to ‘‘the patterns of thought and action which are habitually
adopted by groups of individuals’’, rules ‘‘can be de?ned as
the formally recognized way in which ‘things should be
done’. . .’’ (Burns & Scapens, 2000, p. 6). In other words, rou-
tines can be depicted as the procedures which are habitu-
ally and actually followed and implemented, whereas rules
comprise the formally-stated regulae which should be
‘‘applied in the enactment/reproduction of social life’’
(Giddens, 1984, p. 21; quoted in Scott, 2001, p.75). As
observed by Burns and Scapens (2000) the prevailing rules
and routines, despite being relatively stable and durable,
can be subjected to a process of change, including institu-
tionalization which can be fostered by agents in their pro-
cess of ‘‘enactment and reproduction’’ (Burns & Scapens,
2000, p. 19).
On the other hand, new institutional sociology (see, for
example, DiMaggio & Powell, 1991a, 1991b; Greenwood,
Oliver, Sahlin, & Suddaby, 2008; Scott, 2001), another rele-
vant perspective in organization theory (Lounsbury, 2008),
emphasizes the cognitive and cultural elements of institu-
tions and institutional life. The shift in focus from the nor-
mative and regulative elements (norms, routines, rules) to
the shared understanding of social reality (symbols, mean-
ings, beliefs) distinguishes new institutionalism from other
perspectives (Carruthers, 1995; DiMaggio & Powell,
1991a). For many new institutionalists, meaning systems,
symbols and cognitive beliefs are not just subjective and
individualized mental constructs but rather externalized
and socially constructed phenomena (Carruthers, 1995).
These provide organizational members with a ‘‘common
framework’’ for making ‘‘sense of the ongoing stream of
happenings’’ (Scott, 2001, pp. 57–58) and for adopting
organizational and individual actions. The cultural-cogni-
tive elements (values, meanings and symbols), in the same
way as the normative-regulative pillars (e.g. routines and
rules), can also be subjected to a process of institutionali-
zation. This can be conceptualized as the mechanism
through which different elements of institutional and so-
cial life, ranging fromconcepts, values, beliefs and meaning
systems (Jennings & Zandbergen, 1995) to socio-economic
practices and structures, become given, usual and taken for
granted (Larrinaga-González, 2007; Meyer & Rowan, 1991;
Zucker, 1991) in a speci?c context: society, cluster of orga-
nizations, organization and intra-organizational subsys-
tems (Scott, 2001). In particular, in this paper, following
Zucker’s arguments (1991), the institutionalization is con-
ceived as a cumulative and dynamic process through
which institutional elements acquire ‘‘different degrees’’
(p. 83) of taken for grantedness and giveness.
The process of institutionalization, which occurs at the
organizational level (i.e. meso-institutionalism), is in?u-
enced by the speci?c institutional environment and by
the presence of ‘‘powerful institutional rules which func-
tion as highly rationalized myths’’ (Meyer & Rowan,
1991, p. 44). Organizations, which operate in these highly
institutionalized contexts, are therefore subjected to the
in?uence of ‘‘powerful forces’’ (DiMaggio & Powell,
1991b, p. 65) to adopt organizational forms and structures
by isomorphically seeking to adapt to institutional-
ized rules (Meyer & Rowan, 1991). As observed by Louns-
bury (2008) this isomorphic behavior should not be
conceptualized as a blind and ‘‘mindless structurally deter-
mined’’ mechanism of response to the institutional pres-
sures but rather as an ‘‘effortful accomplishment’’
undertaken on the basis of ‘‘institutional logics’’ (p. 353).
According to DiMaggio and Powell (1991b), institutional
pressures for isomorphic change result from ‘‘three mech-
anisms’’: (i) ‘‘coercive’’, resulting from legal requirements
and regulations; (ii) ‘‘mimetic’’ that stems from ‘‘uncer-
tainty’’ and produces imitation; and (iii) ‘‘normative associ-
ate with’’ the existence of normative rules, including
primarily those emanated by professional bodies (DiMag-
gio & Powell, 1991b, p. 67, emphasis in the original). Under
the institutional in?uences of this macro context, speci?c
organizational procedures, practices and structures,
including (social) accounting, become institutionalized
when, over time, they ‘‘underpin’’ the usual, given and
‘‘[. . .]‘taken for granted’ ways of thinking and doing in a
particular organization’’ (Burns & Scapens, 2000, p. 5). As
a result of this process, several elements of the organiza-
tional structures, once institutionalized, become symbolic
and function as ‘‘myths binding on organizations’’ (Meyer
& Rowan, 1991, p. 45). As suggested by Oliver (1992), it
is possible to consider the ‘‘frequency and pervasiveness’’
(p. 567) of prevailing organizational patterns as proxies
for interpreting their degree of institutionalization with
greater increases indicating a higher level of
institutionalization.
In order to better understand the institutionalization of
structures and practices at the organizational level (i.e.
meso-institutionalism), it is essential to analyze the cogni-
tive elements (e.g. meanings, symbols, cognitive beliefs)
and related dynamics of institutionalization, i.e. ‘‘microin-
stitutionalism’’ (Zucker, 1991, p. 104).
Berger and Luckmann (1966), who conceptualize insti-
tutions as symbolic structures and meaning systems,
envisage the process of social construction of institutions
and the institutional world as consisting of three phases,
namely: (i) externalization; (ii) objectivation; and (iii)
internalization (for a discussion see also Scott, 1987,
2001). According to Berger and Luckmann (1966), exter-
nalization represents the anthropological tendency of the
human being to constantly construct through social inter-
actions ‘‘the world into which he externalizes himself. In
the process of externalization, he projects his own mean-
ings into reality’’ (Berger & Luckmann, 1966, p. 122,
emphasis in the original). Through this mechanism, human
beings (the producers), in social interaction with their fel-
lows, produce symbolic structures (their product) to which
meanings are attached (Scott, 2001). Objectivation is con-
ceptualized as the ‘‘process by which the externalized
products of human activity attain the character of objectiv-
ity’’ (Berger & Luckmann, 1966, p. 78). As a result of objec-
tivation, the symbolic structures and meaning systems
result in ‘‘something ‘out there’, as a reality experienced
in common with others’’ (Scott, 2001, p. 40). The processes
of externalization and objectivation, which are in a con-
stant dialectic relationship, are supported by the use of
language that provides coordinates for human beings’ so-
cial interaction and maintains, for example through typi?-
cations, the common objectivation of everyday life (Berger
& Luckmann, 1966). The third phase, called internalization,
418 M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432
is de?ned by Berger & Luckmann as the ‘‘immediate appre-
hension or interpretation of an objective event as express-
ing meaning’’ (p. 149). The term ‘‘immediate’’, it is argued
in the present paper, should be interpreted in its etymolog-
ical sense as something ‘‘in-mediated’’, i.e. direct, without
interposition and/or further explanation. Through the pro-
cess of internalization the ‘‘objectivated world is retroject-
ed into consciousness in the course of socialization’’
(Berger & Luckmann, 1966, pp. 78–79) and the ‘‘actor is
internally motivated to do what he has to do’’ (Zucker,
1991, p. 84). As a result of this process, the ‘‘objectivated
world’’ is recognized by the agents as a norm with which
to conform.
As observed by Scott (2001), the process of construction
of common meaning systems is regarded by Berger and
Luckmann (1966) as a process of institutionalization. As a
result, it is argued here, ideas, symbolic structures, values
and meaning systems, including accounting ‘‘rationales’’
(Miller, 1994), attain the status of ‘‘objective and exterior’’
(Zucker, 1991, p. 85; see also Zucker, 1987) social facts
embedded in societal and organizational domains (Oliver,
1992).
Although institutionalized elements, practices and
structures retain the tendency to persist, they can be sub-
jected to deinstitutionalization (Scott, 2001), i.e. ‘‘the pro-
cess by which the legitimacy of an established
organizational practice erodes or discontinues’’ (Oliver,
1992, p. 564). As noted by Zucker (1991) deinstitutionali-
zation, unlike institutionalization, ‘‘is seldom accidental’’
(p. 105). In an attempt to prevent or diminish the possibil-
ities for deinstitutionalization, therefore, established pat-
terns of behavior may be reinforced by different
strategies adopted at speci?c levels such as society, cluster
of organizations, organizations and intra-organizational
systems. Berger and Luckmann (1966), for example, assert
that ‘‘the construction of role typologies is a necessary cor-
relate of institutionalization of conduct’’ (p. 91). In particu-
lar, in the organizational domain initiatives such as the
creation of roles of responsibility and the implementation
of formal structures may be adopted to maintain and in-
crease the degree of institutionalization of prevailing
established practices.
Research methodology and methods
In this research, a qualitative ?eld case study methodol-
ogy (Creswell, 1998; Ahrens & Chapman, 2006; Silverman,
2011) was adopted to investigate the processes through
which SER became institutionalized. The theoretical in-
sights discussed in the previous section (see Table 1 for a
summary overview) have been used to structure the anal-
ysis of the empirical evidence and to construct a context-
bound and theoretically-informed narrative (Quattrone,
2006) of the dynamics which have brought about the
emergence, implementation and reinforcement of SER in
the case organization. Speci?cally, a multinational Italian
company in the energy sector was studied in-depth to
gather, through a progressive ‘‘immersion [in the case]’’
(Gunzenhauser, 2006, p. 624), a richer understanding of
the context in which SER took place and to interpret the
complex dynamics of organizational behavior (Dyer & Wil-
kins, 1991).
6
Authorization for access to the company and its data
was obtained with the proviso of guaranteeing anonymity
of the company and its personnel. A ?ctional name, BETA
and numbers (1, 2, 3, etc.) are therefore used to indicate
the company and the interviewees respectively. The inves-
tigation was conducted from mid 2003 to early 2005.
Although the research is not very recent, the reported data
and ?ndings relate to, and are relevant to, ongoing issues in
contemporary social and environmental accounting
change.
Data and information about the organization and its so-
cial and environmental practices were collected through:
semi-structured interviews with eleven junior and senior
managers; participation in corporate presentations and
preparation of notes following these meetings; observation
of the organizational dynamics in the ?eld; consultation of
the corporate web site; and analysis of social accounts and
reports (Health, Safety, Environment reports published in
2002, 2003, 2004, 2005 and other social brochures). Inter-
views were carried out, through the medium of the Italian
language, with personnel representing the departments di-
rectly involved in the processes of social and environmen-
tal accounting and reporting, which have been indicated
with the generic names of Environment and Safety, and So-
cial Responsibility.
The length of interviews varied from one, to one and a
half, hours for individuals to roughly 2 h for group inter-
views. In total approximately 14 h of interviews were con-
ducted. Each interview, except in two cases where
extensive notes were taken, was tape-recorded and fully
transcribed for the subsequent process of analysis. Quota-
tions from interviewees and other evidential sources,
which are reported in the following narrative, have been
translated from Italian to English by the author.
The interviews, transcripts and notes were rigorously
and systematically analyzed through a procedure which
involved the following phases: (i) listening to taped inter-
views before and after transcription; (ii) reading typed ver-
sions and notes at different times; and (iii) re?ection on
collected data through continuing scrutiny undertaken in
the pre- and post-writing process. In particular, attention
was devoted to the attitudes, commitment and ‘‘un-
prompted actions’’ (Ahrens & Chapman, 2006, p. 825)
shown by the interviewees during the meetings. These ele-
ments were used to ‘‘elaborate meaning’’ (Jones, 1985;
quoted in O’Dwyer, 2002, p. 414) and to gather an under-
standing of the unsaid and unstructured aspects of organi-
zational behavior (see also Larrinaga-González et al., 2001)
which are constructed, transmitted and re-constructed by
individuals in social interaction (Berger & Luckmann,
1966).
Each transcript was examined through a process of cod-
ing and all information collected was ?rstly categorized
into preliminary codes (code-identi?cation analysis) and
6
It should be noted that the empirical investigation is not a real-time
study per se but rather focuses on the managerial perspectives and
understandings of the processes involved in the initiation, implementation
and embedding of SER over the previous years.
M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432 419
then aggregated into thematic codes (code-reduction anal-
ysis) (see, in particular, Miles & Huberman; 1994; O’Dwyer,
2004; O’Dwyer & Unerman, 2008). This process was sup-
ported by the preparation of matrices and conceptual maps
that served the function of synthesizing and displaying the
information gathered during the investigation (see, partic-
ularly, O’Dwyer, 2004).
Analysis of the empirical evidence
In order to develop a deeper understanding of the pro-
cessual dynamics that led to the development and institu-
tionalization of SER in the case study, it is necessary to
consider the historical, social and organizational context
within which these dynamics occurred. As noted by many
institutionalists (see for example Scott, 2001), this context
provides resources, constraints and meanings to individual
and organizational behavior. These institutional and orga-
nizational aspects will be discussed in the following sub-
section.
The institutional and organizational context
The 1990s saw the advancement of interest in environ-
mental issues (Deegan, 2002) after the previous decade
when the debate about social and environmental responsi-
bility was con?ned to the margins of the political agenda
(Gray, 2004). In the early 1990s, due to the combined ef-
fects of several political, social and cultural in?uences
7
and in part as a consequence of environmental disasters
(e.g. Exxon Valdez in Alaska in 1989; see Patten, 1992), busi-
ness actors and in particular companies began to turn their
attention to the environmental aspects of their activities.
As a result, organizations and primarily those companies
operating in environmentally sensitive industries (e.g. oil
and gas; and chemicals), which had traditionally longer-
standing expertise in environmental issues, sought to adopt
different initiatives to manage and report environmental im-
pacts. The production of environmental reports was one of
these initiatives.
On the regulative-normative side, several initiatives
were undertaken by national and international regulatory
bodies. In 1993, for example, the European Council issued
Regulation No. 1836/93 to introduce EMAS (the Eco-Man-
agement and Audit Scheme). EMAS, revised in 2001, is a
management framework that companies and other organi-
zations can voluntarily adopt to manage, control and re-
port on their environmental performance (European
Council, 1993, 2001). Another management tool, the ISO
14001 environmental management system, was ?rst intro-
duced in 1996 (ISO, 1999). In addition, other initiatives
were undertaken by professional bodies to provide stan-
dards for reporting social and environmental performance.
In 1997, for example, GRI (Global Reporting Initiative), ‘‘a
network-based organization’’, was founded with the pur-
pose of providing guidelines for sustainability reporting
(GRI, 2009). The ?rst GRI sustainability reporting frame-
work was launched in 2000. In 1999, another standard,
AA1000, was issued by ISEA (Institute of Social and Ethical
AccountAbility), a global non-pro?t institution, to support
organizations in their process of accountability for social,
environmental and ethical issues (see, ISEA, 2009). In the
same period, GBS (Gruppo di Studio per il Bilancio Sociale),
a non-pro?t association of academics, practitioners and
consultants from different disciplines, was founded in Italy
with the purpose of formulating a series of guidelines for
the preparation of social accounts (see GBS, 2009).
Around the turn of the century, interest in social and
environmental issues from business actors (organizations,
corporations, etc.), governmental institutions (e.g. Euro-
pean Union), professional bodies and other groups (e.g.
academe and NGOs,) signi?cantly increased (Gray, 2004).
Various measures were undertaken by the European Union
and other national governmental bodies to stimulate, pro-
mote or regulate organizations’ activities for accounting
and reporting social and environmental impacts. In 2001,
for example, the European Commission proposed a Green
Paper for promoting Corporate Social Responsibility (EC,
2001). In a similar vein, other initiatives were undertaken
by the European Union such as the ‘‘Modernisation Direc-
tive’’ (EC, 2003; see Hibbitt & Collison, 2004, p. 2).
The aforementioned social and institutional conditions
provided resources and impetus for the diffusion of social
and environmental reporting. In particular, over the early
to mid 2000s, the number of organizations adopting prac-
tices for managing and reporting social and environmental
issues signi?cantly increased as shown by some of the
cross-national empirical research that had been conducted
in the preceding few years (see, for example, KPMG, 2005.
See also Milne & Gray, 2007 for further discussion).
In addition to this illustrative analysis of the macro con-
text in which BETA operated during 1990s and 2000s, the
organizational context will also be considered to provide
a background for understanding the SER-related dynamics
over time.
During the early 1990s, BETA was subject to a gradual
process of privatization, concluded by the end of the dec-
ade, after which BETA ceased to be an entirely state-owned
company. Contemporaneously, profound changes occurred
within the governance and structures of the organization.
The ?rst of these restructurings occurred in the second half
of the 1990s, followed by the second and the third in the
early 2000s. These transformations were regarded as sig-
ni?cant for their impacts on the visibility, branding, strat-
egies and operational activities of the company, including
the process of social and environmental accounting and
reporting.
BETA was among the pioneering companies in Italy to
produce a social and environmental report in the mid
1990s. This is an important aspect when it is considered
that in the Italian context a signi?cant adoption of social
and environmental reports by organizations did not occur
until the end of the 1990s (Contrafatto & Rusconi, 2005).
More speci?cally, as identi?ed by the empirical analysis
7
A signi?cant event promoting greater attention for the status and
prospects of the natural environment was the United Nations Conference
on Environment and Development, also known as the Earth Summit, held in
Rio de Janeiro in 1992 (see Bebbington, 2001). This represented a milestone
for the subsequent debate about issues such as climate change, sustainable
development and ‘‘limits to growth’’ (Meadows, Randers, & Meadows,
2004).
420 M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432
undertaken in this paper, the processes of initiation and
subsequent implementation of SER by BETA involved three
phases: (i) pre-reporting; (ii) diffusion within the organiza-
tion; and (iii) reinforcement. It is contended that, as a re-
sult of this multi-step process, SER became an
established and taken for granted (i.e. institutionalized)
actuality within the case study organization. The afore-
mentioned phases will be investigated in the following
sub-sections.
Pre-reporting phase: the construction of a common meaning
system
The pre-reporting phase began to evolve in the early
and mid 1990s and concluded with the publication at
group level of the ?rst environmental report. The docu-
ment comprised information predominantly about the
environmental impacts of the organization. To understand
the process leading to the initiation of the ?rst environ-
mental report the institutional (macro) and organizational
(meso) conditions that have driven part of this process
need to be taken into account.
The institutional context in which BETA operated during
the earlyandmid1990s, as seeninthe previous sub-section,
was characterized by a growing attention to issues concern-
ing the conditions and prospects of the natural environ-
ment. In particular, increasing in?uences were exerted on
business organizations to take into consideration the envi-
ronmental effects of their corporate activities and conse-
quently to adopt more responsible initiatives to manage
and report on these effects. As observed by an interviewee:
‘‘[. . .] [at that time] companies operating in industries
similar to that in which [BETA] operated were subjected
to increasing pressures, as expressed by public opinion
and other pressure groups, for considering the new
themes [related to environmentalism]’’ (Interviewee 1).
Thus, from the perspective of institutional theories (see
for example Scott, 2001) the institutional environment of
the early-mid 1990s, characterized by ‘‘increasingly high
demands and expectations’’ (Interviewee 1), represented
a major source of constraints for BETA. On the other hand,
however, it appears that such a context provided possibil-
ities for the emergence of new discourse and behavior. As
contended by Interviewee 8, this context represented ‘‘for
us [BETA] an opportunity’’ for innovating organizational
practices.
Whilst the institutional context was propitious for
experimenting with new organizational forms and prac-
tices, in BETA the decision to prepare and publish the ?rst
environmental report was the result of a complex intra-
organizational process. This process began to evolve when
a few in?uential employees introduced into the organiza-
tional discourse the generic theme related to corporate im-
pacts on the environment and communities, and it
concluded when a common shared consensus about the
concept of wider social and environmental responsibility
was constructed. As noted by an interviewee who worked
on the preparation of the ?rst environmental reports, a piv-
otal role was played by three organizational members (A,
B, C) who promoted the necessity of taking into account
the environmental impact of the organization’s economic
activities. As stated by Interviewee 11:
‘‘[...] this idea was brought to our attention by [A, B and
C] who with extreme charisma and commitment
stimulated the interest for this new (at least for us)
topic’’ (Interviewee 11).
In terms of Berger and Luckmann (1966), these dedi-
cated employees, who were working within the human re-
source department and were particularly involved in
environmental aspects (see below), acted as promoters of
the process of ‘‘externalization’’ (Berger & Luckmann,
1966). Through this process an idea of social and environ-
mental responsibility was constructed, produced and re-
produced in social interactions between members within
the organization. Before discussing the role of promotion/
championing of the process of ‘‘externalization’’ in more
detail, attention will be turned to the factors and condi-
tions that facilitated this role.
From the evidence gathered in the empirical setting, it
appears that this role of championing was facilitated by
three factors, which provided the necessary resources for
the individuals to act (Scott, 2001). First, was the role
played by a Foundation, an independent and in?uential
center of research that had been originally founded by
BETA, which, as explained by Interviewees 9 and 11, pro-
vided ‘‘stimulus’’, ‘‘support’’ and ‘‘ideas’’ for re?ection and
discussion. Second, was the department in which the three
employees worked and, in particular, the task which they
performed. For example, as explained by an interviewee
who experienced these events, they were involved in activ-
ities such as: (i) the assessment of environmental and
health impacts of economic initiatives on communities;
(ii) the evaluation of the safety and quality features of pro-
jects undertaken; and (iii) the management of hazardous
waste disposal. Working within the human resource
department and being particularly concerned with the
environmental aspects meant that these employees were
familiar with, and gained knowledge of, issues relating to
the safety, health and environmental conditions of the
communities and territories in which BETA and its staff
operated. In addition, their knowledge and expertise in
these issues, and in part their collaboration with the Foun-
dation, gave them authority and, in turn, some form of
legitimacy within the organization. Third, were the initia-
tives taken by other companies of which it appears they
were aware. In this regard, one of these employees empha-
sized the signi?cance of being conversant with ‘‘what other
companies were doing’’. From the perspective of institu-
tional theory, therefore, the initiative of the three members
was also in?uenced by a form of ‘‘mimetic mechanism’’
(DiMaggio & Powell, 1991b) through which the discourse
and behavior of other peers were taken into account to at-
tain knowledge (see also Adams & Mc Nicholas, 2007).
Thus, this analysis indicates that the aforementioned fac-
tors were somewhat signi?cant in explaining the role of
championing by these three actors because these factors
provided the necessary resources (e.g. legitimacy) to take
action and promote institutional change (Scott, 2001).
Turning now to the consideration of their role, it ap-
pears that the three committed employees were able to
M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432 421
comprehend and grasp the ‘‘opportunities’’ (see quotation
of Interviewee 8 above) created by outside discourses re-
lated to corporate environmentalism and make these dis-
courses identi?able and understandable in BETA.
Metaphorically speaking, they acted as ‘‘capturers’’ of the
messages in the external institutional context, which were
then brought into the organizational membrane. In this re-
gard, the three members played a pivotal role both in fos-
tering the process of translation of the ‘‘institutional
[languages and] rules’’ (Meyer & Rowan, 1991, p. 42) and
in facilitating their comprehension inside the organization
itself (see Larrinaga-González & Bebbington, 2001). From
the analysis undertaken in this section, it appears that this
process (i.e. translation and comprehension inside the
organization) was successful because the three members
had the resources, such as legitimacy, charisma and knowl-
edge, to do something that was not incompatible with the
new organizational needs and perspectives. As observed by
one of the respondents:
‘‘[. . .] during the early 1990s the expectations of public
opinion for more corporate social and environmental
responsibility were increasing. At the same time [BETA]
was experiencing signi?cant changes, when the law
that transformed [BETA] into a stock company was
passed [. . .]. I think the time was favourable for these
new types of discussions [about environmentalism]. . .’’
(Interviewee 5).
The initiative undertaken by the three key actors was
not hindered but rather accepted, and to a certain extent
supported (for example by the Foundation), because it
appeared to be the right thing (i.e. discourse), at the right
time, and carried out in the right way.
8
The analysis
undertaken in this section indicates that the existence of
these three conditions (right thing, at right time, and in
the right way) together with available resources (e.g. legit-
imacy, knowledge and charisma) represented a sine qua non
for the success of the process of externalization, through
which a notion of social and environmental responsibility
emerged.
In this phase, an important role was played by commu-
nication between employees. An interviewee, who person-
ally experienced this process, emphasized the signi?cance
that the ‘‘communication and interaction between mem-
bers within the [human resource] department [had] for
the diffusion of this new concept’’. From the perspective
of Berger and Luckmann (1966), it was through social
interaction and communication between members within
the organization, that the notion of social and environmen-
tal responsibility was subjected to a process of ‘‘objectiva-
tion’’, that is to ‘‘result in something out there, as a social
fact to be experienced in common with others’’ (Scott,
2001, p. 40). To this concept, a meaning, which appears
to have been the outcome of a process of social interaction,
came to be constructed. In particular, in BETA at that time,
as remembered by Interviewee 4, social and environmental
responsibility was understood as:
‘‘the responsibility to take into account the impacts on
the environment and communities of organizational
activities. . .’’ (Interviewee 4).
Through ‘‘objectivation’’ a shared cultural-cognitive
consensus about the meaning system associated with the
notion of environmental responsibility was constructed.
This consensus was an important element for the sedimen-
tation and consolidation of the notion of environmental
responsibility and its associated meaning. As a result of
the process of objectivation and related dynamics, the con-
cept of environmental responsibility became symbolic and
mythic (Meyer & Rowan, 1991) thus enhancing its signi?-
cance and relevance to guide action for organizational
members and in particular for those involved in this pro-
cess. As observed by an interviewee:
‘‘[. . .] this was (and still is) a symbolic borderline issue
through which to deal with the contradictions of a com-
pany: as a company, you operate to provide an eco-
nomic value but at the same time you can do it by
safeguarding the environment [. . .]. We are concerned
with environmental impacts and pollution. What is
our aim? [Our goal] is to reduce pollution, which has
a bene?t for the company, because it is less impacting,
but certainly for us as citizens as well. . .’’ (Interviewee
11, emphasis added)
In other words, environmental responsibility was envis-
aged as a symbolic concept through which to re?ect on the
complex relationships between economic and environ-
mental issues and to attempt to ‘‘reconcile’’, as contended
by interviewee 10, ‘‘what apparently seemed to be irrecon-
cilable’’. From this perspective, environmental responsibil-
ity and the subsequent process of reporting were perceived
in BETA as mythic means (see, Meyer & Rowan, 1991)
which provided a conceptual ‘‘common framework’’ (Scott,
2001, p. 58) for seeing, thinking and facing the controver-
sial aspects relating to the social and environmental im-
pacts of the organization’s economic activities. In doing
so, the notion of environmental responsibility and the
practices of reporting facilitated the process of making
these social and environmental impacts more identi?able
and visible, and thus more manageable, by shedding light
on, for example: (i) the levels of pollution produced in
the air, water and land; (ii) the amount of energy and re-
sources consumed; and (iii) the number of reportable inci-
dents occurring in production sites.
Finally, from the analysis of the case ?ndings, it appears
that through a process similar to that of ‘‘internalization’’
the concept of environmental responsibility with its mean-
ing system was ‘‘retrojected into consciousness’’ (Berger &
Luckmann, 1966, pp. 78–79) thus becoming part of the
internalized world of the individual subject. From the per-
spective of Berger and Luckmann (1966), through this pro-
cess the notion of environmental responsibility and its
meaning were ‘‘immediately [i.e. in-mediately] appre-
hended’’ (p. 149), as social facts to confront and conform
to. In BETA, these were recognized as the norms to ‘‘believe
in’’ and about which to develop expectations and hopes:
8
What would have happened if any one or more of these circumstances
had not occurred? Would the process of externalization have been
successful? Such interesting questions, given the data and information
collected, cannot be discussed further, other than to speculate that it would
have been less likely.
422 M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432
‘‘I believed in this. [. . .] I thought it could have changed
values and attitudes within the organization in more
concrete and quicker ways’’ (Interviewee 3).
Therefore, as a result of this multi-step process, which
has been regarded as a ‘‘construction of [a] common mean-
ing system’’ (Scott, 2001, p.40, in referring to Berger &
Luckmann, 1966), the concept of environmental responsi-
bility and its meaning system became institutionalized,
i.e. they became usual and established ‘‘ways of thinking’’
within the context of the organization (Burns & Scapens,
2000; p. 5; see also Larrinaga-González, 2007; Meyer & Ro-
wan, 1991). By becoming institutionalized, the idea of
environmental responsibility acquired ‘‘a semblance of
concreteness’’ (Hines, 1988, p. 257) and objecti?ed ‘‘exteri-
ority’’ (Zucker, 1991, p. 85), i.e. came to be a taken for
granted social fact (Zucker, 1987). In this ?rst phase, a cul-
tural- cognitive consensus, among the members of the
organizational sub-system, seemed to emerge about the
meaning and relevance to be attached to the ongoing orga-
nizational world and tasks. The notion of environmental
responsibility and its meaning system represented, by
paraphrasing Miller (1994), the ‘‘rationales’’ (Miller, 1994,
p. 3) on and through which the practices of social account-
ing were constructed and mobilized in BETA. The dynam-
ics, through which social accounting and reporting
developed, during what has been identi?ed as the practi-
calisation phase, will be discussed in the following sub-
section.
The diffusion of SER: practicalisation
As already mentioned, the ?rst environmental report
was published in the mid 1990s. It was a simple form of ac-
count prepared on the basis of the standards of that period.
As explained by an interviewee the report was seen as the
‘‘logical consequence’’ (Interviewee 5) of the initiatives,
and discourses, which had been previously undertaken in
respect of BETA’s orientation towards environmental
responsibility. In particular, as added by Interviewee 1,
the report represented ‘‘a ?rst attempt to put into practice
the concept of environmental responsibility [. . .]. Through
this document the performance in terms of environmental
impacts of the activities of [BETA] were recognized’’. Thus,
from the evidence gathered through the empirical analysis,
it appears that the process of preparing and publishing the
?rst environmental report was not a coincidental event,
but rather the natural (i.e. logical and expected) outcome,
and continuation, of the previous process whereby a con-
cept of (social and) environmental responsibility was con-
structed and established within the organization. The
report and related accounting practices, in particular, rep-
resented the ?rst structured initiatives that were imple-
mented to account for, and communicate, the
environmental impacts of the economic operations of
BETA.
Since its ?rst publication, the environmental report has
been produced on a yearly basis and has progressively be-
come more sophisticated and elaborate in the measure-
ment and reporting of environmental performance. In
particular, gradual additions were made to the range of
issues which were reported on (e.g. CO
2
and other hazard-
ous substances emissions; the amount of water consump-
tion) and re?nements were made to the methodologies
used to aggregate and calculate the various (social and
environmental) indicators. As indicated by one of
interviewees:
‘‘[. . .] obviously there is no way to compare the ?rst
report [published in the mid 1990s] and those pub-
lished in the subsequent years [. . .]. The report that
we now produce is more advanced from a methodolog-
ical point of view[. . .]. The attention to the methodolog-
ical aspects has become more important [. . .]. For
example with regard to the consolidated data, now we
are more precise and detailed’’ (Interviewee 11).
After the ?rst publications, the name of the document
was changed from Environmental Report to Health, Safety
and Environment (HSE) report. The new documents in-
cluded more social information about, for example, com-
munity involvement and the health and safety of
employees.
When the ?rst report was published, environmental
policy and (internal) guidelines did not exist. The initial re-
port included only ‘‘principles of behavior (conduct)’’ with
regard to environmental matters. As revealed by Intervie-
wees 1 and 11, the ?rst environmental policy and guide-
lines ‘‘were formally adopted and published’’ a few years
after the publication of the ?rst report.
With the publication of the ?rst report the process of
practicalisation commenced, whereby speci?c rules and
routines were progressively adopted and diffused into
the organization. The process of adopting increasingly
structured and formal procedures of reporting was facili-
tated by different factors both contextual and intra-organi-
zational. As discussed at the beginning of the empirical
section, the macro context of the second half of the
1990s was characterized by increasing concerns for corpo-
rate environmental responsibility and related issues (see
Deegan, 2002). This aspect was also emphasized by an
interviewee who noted that, at that time:
‘‘[. . .] companies were subject to increasing pressures
from the external world to be more responsible for their
impacts on the environment and communities’’ (Inter-
viewee 5).
In addition, the attention devoted to the behavior of
other relevant peers, whose initiatives were taken into
consideration to innovate the practices of reporting (i.e. a
mechanism similar to the mimetic one), was of some sig-
ni?cance (DiMaggio & Powell, 1991b). As stated by Inter-
viewee 1:
‘‘[. . .] an analysis of the initiatives undertaken by other
companies was made [. . .]. For example, we looked at
the report published by [name of a competitor] in
1997 that represented a signi?cant experience at that
time. [. . .] We were inspired by that report to improve
our report’’ (Interviewee 1).
The behavior and activities of other companies were
seen by those of BETA’s employees who were involved in
the process of social and environmental reporting, as an
M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432 423
important reference point for ‘‘seeing how the [reporting]
issues were developing’’ (Interviewee 5). However, as ex-
plained by the same respondent, the analysis of these ini-
tiatives was carried out ‘‘with a critical eye’’. The purpose
was to draw inspiration and to gather useful elements that
accommodated the operative needs of BETA. Thus, from
the perspective of institutional theory, it appears that the
mimetic mechanism (see DiMaggio & Powell, 1991b)
which in?uenced the reporting activities of BETA was not
an a-critical and ‘‘mindless’’ process of imitation of others
but rather it resembled a rational and ‘‘effortful accom-
plishment’’ (Lounsbury, 2008, p. 353) undertaken on the
basis of the institutional and organizational contingencies
in which BETA operated.
Furthermore, the practices of SER undertaken by BETA
were in?uenced by normative pressures (DiMaggio & Pow-
ell, 1991b; Scott, 2001) exerted by the standards and
guidelines (e.g. the Global Reporting Initiative) issued by
professional bodies. In particular, as asserted by an inter-
viewee, these guidelines were of some signi?cance for
the practices of reporting because:
‘‘[. . .] they provided a basis for improving how to
account, manage and report certain issues’’ (Intervie-
wee 8).
Contemporaneously with the institutional in?uences
other (intra-) organizational factors exerted a relevant im-
pact on the process of adopting increasingly advanced (so-
cial and) environmental accounting and reporting
practices. As reported by one of the respondents:
‘‘Our company was different from others [. . .]. In fact, at
the same time when the interest for these [environmen-
tal] aspects evolved, we experienced a Copernican Rev-
olution in our organizational structure [. . .]. As a result,
our company was completely re-structured. This Revo-
lution started in that period [mid and late 1990s]’’
(Interviewee 5).
By the second half of the 1990s, following a further
public issue on leading stock markets, the majority of BE-
TA’s shares were owned by private shareholders. In addi-
tion, in the same period, the ?rst subsidiary was
subsumed into the BETA Group. As a result of these
events, profound changes in the governance and organiza-
tional structure occurred. These transformations affected,
among others, SER practices that received fresh impetus.
In addition to the existing Environment and Safety Unit,
the Community Investment and Corporate Giving Unit
was constituted within BETA. Although this unit was
mainly concerned with the activity of corporate giving
and philanthropy, its formation was perceived by some
of the employees as ‘‘a signi?cant symbolic element’’
(Interviewee 5) which increased the attention of top man-
agement to managing and communicating the environ-
mental and social issues related to the economic activity
of BETA.
It was in the speci?c institutional (macro) and organiza-
tional contexts, brie?y described above, that the process of
practicalisation developed. The analysis presented in this
section indicates that this process was fostered by the
institutional and organizational conditions of the late
1990s, which provided a favorable context for improving
the existing practices of reporting. In particular, after the
publication of the ?rst report, more structured rules and
routines were increasingly adopted. In place of the existing
‘‘principles of conduct’’, for example the ?rst environmen-
tal policy and (internal) guidelines were formally adopted
a few years after the publication of the ?rst environmental
report. As explained by an interviewee, these guidelines
had been the ‘‘missing link’’ of the initial reporting. Thus,
their adoption was perceived as the ‘‘necessary act to close
the loop’’ in order to provide ‘‘a set of [principles and] rules
to be applied to the management of all [health, safety and
environment -related] activities’’ of the BETA Group (Inter-
viewee 1). The ?rst environmental policy and (internal)
guidelines were gradually subjected to a process of re-def-
inition with the purpose of providing, for example, more
precise guidance for collating and homogeneously assem-
bling information. As reported by one of the interviewees,
after their adoption:
‘‘the ?rst [internal] guidelines were amended and
extended to cover other issues related to health and
safety [. . .]. The new guidelines were called Guidelines
in Health, Safety, Environment and Public Safety’’
(Interviewee 1).
From the perspective of the institutional theories
adopted in this paper, the increasingly structured policies
and guidelines adopted by BETA represented the ‘‘rules’’
which were formally established to guide actions (Burns
& Scapens, 2000, p. 6) with regard to managing, account-
ing for and reporting social and environmental issues. For
example, the new health, safety and environment policy
and guidelines provided principles and instructions
about: (i) how to account for social and environmental
data; and (ii) how to consolidate these data within the
BETA Group.
In addition to these rules, speci?c routines emerged
(Burns & Scapens, 2000). In particular, as outlined by an
interviewee, the process of producing health, safety and
environment reports involved a few ad hoc routines includ-
ing: (i) compilation of worksheets with data about social
and environmental performance; (ii) preparation of the
?rst report drafts by all the entities of BETA Group
(subsidiaries and divisions), following the same format;
(iii) preparation of the ?nal Health, Safety and Environ-
ment reports by all subsidiaries of the BETA Group; (iv)
preparation of the ?nal Health, Safety and Environment re-
port for BETA following a consolidation process of all avail-
able data; and (v) distribution and publication of reports.
People involved in the process of preparing social and
environmental reports, at different hierarchical levels,
acted through these routines and on the basis of existing
rules. These routines, which re?ected the existing institu-
tional principles, norms and meanings, were ‘‘enacted
and reproduced’’ (Burns & Scapens, 2000, p. 14) by the
individuals in their daily activity. As a result of these
dynamics, SER and related rules and routines were sub-
jected to a process of embedding to become ‘‘standard
and institutionalized’’ elements in the organization (Inter-
viewees 7 and 10).
424 M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432
In summary, SER was envisaged as the ‘‘logical’’ (Inter-
viewee 5) initiative to be undertaken to ‘‘put into practice
the concept of environmental responsibility’’ (Interviewee
1). On the other hand, the ?ndings gathered through the
empirical analysis indicate the existence of a recursive
and re?exive process connecting the constructed meaning
system of the concept of environmental responsibility and
the social accounting practices which were developed on
this basis. Whilst the notion of environmental responsibil-
ity represented the ‘‘rationales’’ (Miller, 1994) and pro-
vided justi?cation for the initiation and development of
SER practices, in turn these practices contributed to the
embedding of the importance and relevance of the issues
related to environmental responsibility. As contended by
an interviewee:
‘‘the ?rst reporting helped [us] to set up this new
approach. . . [The reporting] triggered internal mecha-
nisms within the organization of greater awareness
[about these issues]’’ (Interviewee 1).
Inother words, the analysis has illuminateda formof cir-
cularity with SER being not only the ‘‘outcome’’ of the con-
structed concept of environmental responsibility, and the
actions undertakenonsuchgrounds,
9
but alsothe ‘‘medium’’
(Giddens, 1984) through which the meaning and signi?cance
of this concept could be re-considered and reinforced. Thus,
drawing from Berger and Luckmann’s arguments, SER acted
as aformal language throughwhichtotypify, categorize, quan-
tify and communicate the actions, and the results of these ac-
tions, undertaken under the aegis of environmental
responsibility. It was throughthese mechanisms (i.e. typi?ca-
tion/categorization, quanti?cation and communication) that
SERactedasapowerful ‘‘apparatusfor operationalising’’ (Mill-
er &Napier, 1993, p. 641) the notionof environmental respon-
sibility and thus enhancing its signi?cance and taken for
grantedness within the organization.
The process of reinforcement
In BETA, the third phase, namely reinforcement, began
to evolve from the early 2000s when highly formalized in-
tra-organizational structures and roles were constructed
(Berger & Luckmann, 1966) in an attempt to support the
activities connected to the management and reporting of
social and environmental aspects.
In the early 2000s, the existing organizational unit (i.e.
Environment and Safety), which had been in charge of
managing SER initiatives (e.g. the preparation and publica-
tion of Health, Safety and Environment reports), obtained
the status of Direzione Environment and Safety (i.e. Envi-
ronment and Safety Department). As a result, the Environ-
ment and Safety Department was elevated to the highest
level in the hierarchy and positioned under the direct con-
trol of the Chief Executive Of?cer, similarly to the other
more conventional departments such as Finance, Market-
ing and Human Resources. The decision to create an Envi-
ronment and Safety Department and to place it in a prime
position in the organizational chart gave its managers
more authority and resources to introduce managerial
innovations, as an interviewee who personally experienced
these transformations puts it:
‘‘it is the same as what is being said about quality sys-
tems: [in companies] quality comes from the top [. . .].
It is obvious that the closer you are to the top [manage-
ment] the more importance you acquire, along with
power to do and change things [. . .]. We had many pro-
jects [and ideas] in mind, which we had been keeping in
our drawer. When the [Department was constituted], I
realized that the right time had arrived to take them
out. Clearly, I played all my cards’’ (Interviewee 10).
Among these innovations, the introduction of an envi-
ronmental management system was one of the most
important. This system and the other initiatives described
below, in particular, produced a signi?cant impact on the
development and reinforcement of SER. As explained by
the same interviewee:
‘‘. . .[once we became Direzione] we have been able to
introduce, beside the guidelines on health, safety and
environment, a health, safety and environment man-
agement system to reinforce the activity of managing
and reporting environmental and social issues [. . .].
Before [then], such an initiative would have been
impossible’’ (Interviewee 10).
The introduction of a health, safety and environment
management system was accompanied by the adoption
of speci?c systems of control and auditing. The implemen-
tation of these systems allowed personnel of the Environ-
ment and Safety Department to better manage and
‘‘monitor’’ (Interviewee 11) the health, safety and environ-
ment performance of BETA and to provide more social and
environmental data to feed, among others, SER. In other
words, these managerial and control systems were rele-
vant for the existing reporting practices because they sup-
plemented more precise, detailed and analytic information
about the social and environmental performance to be in-
cluded in the external reports.
The Environment and Safety Department was also
responsible for managing, accounting and reporting all
the social and environmental performance of BETA at the
corporate level. Since its creation, the number of employ-
ees has gradually increased to over 40 individuals. The rise
of the Environment and Safety Department and the intro-
duction of new managerial systems required the employ-
ment of new staff and the introduction of new
professionalism. The increase in the number of staff and
the acquisition of new expertise, in turn, allowed managers
of this department to undertake further initiatives through
9
Several initiatives had been undertaken over time to improve the
corporate social and environmental performance. For example, more
structured procedures were implemented to: (i) reduce emissions of
sulphur dioxide (SO
2
) and mono-nitrogen oxides (NO and NO
2
) by
increasing the ef?ciency of ?ltering systems in the burning combustors
(in a three-year period at the end of the 1990s the acidi?cation potential of
the SO
2
and NO produced by BETA reduced by 20%); (ii) curb the use of
carbon fossil fuels by investing in renewable energy sources or reduce CO
2
emissions through investment in systems of bio?xation; (iii) increase the
safety and health conditions of employees working abroad through speci?c
on site projects (e.g. HIV prevention) or systems (e.g. telemedicine); and
(iv) support projects/campaigns aimed at improving the human rights
conditions of the communities in which BETA operated.
M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432 425
which to consolidate SER practices. For example, as
revealed by an interviewee, a new project regarding
accounting for ‘‘biodiversity’’ of BETA was launched (Inter-
viewee 11). In particular, this project was presented in var-
ious workshops organized with BETA employees. During
the presentation of the project, the other activities of the
Environment and Safety Department, including the manag-
ing and reporting of health, safety and environment perfor-
mance, were discussed. The launch of this project and its
presentation within the organization represented impor-
tant strategies of diffusion and, through this, consolidation
of SER practices.
The case study reveals that decision making about the
initiatives described above, including the design of the
managerial, control and reporting systems, was less signif-
icantly in?uenced, when compared with the two phases
previously described, by the norms and guidelines issued
by professional bodies or by the action undertaken by com-
petitors. Among some of BETA’s managers there was a
strong perception that what had been suggested and pro-
posed by consultants or professional bodies (e.g. the Global
Reporting Initiative) was ‘‘reductive’’ (Interviewee 11) and
to some degree ‘‘outdated’’ (Interviewee 1) for the new
managerial needs of BETA. Similarly, the behavior of other
peers was observed with either scepticism or explicit crit-
icism as shown by the following quotations:
‘‘. . .we look at [name of competitors] to see what they
have done and do [. . .]. But our current reporting
[needs] are quite different; what [our competitors] do
is preparing lea?ets rather than social and environmen-
tal reports. Instead, we are still interested in maintain-
ing a very strong managing and accounting focus’’
(Interviewee 11).
‘‘The choice by [name of a competitor] of adopting 130
indicators of sustainability [for its reporting] leaves me
quite puzzled’’ (Interviewee 1).
From the perspective of institutional theory, the analy-
sis indicates that the in?uences of institutional forces (i.e.
normative and mimetic) in the process of construction
and adoption of what has been identi?ed as reinforcement
strategies and initiatives were not signi?cant.
In summary, the transformation of the Environment
and Safety Unit into a department and the adoption of
more advanced procedures and systems of environmental
management, control and audit, along with the acquisition
of new staff and implementation of speci?c projects (e.g.
the biodiversity project), represented initiatives which
reinforced the practices of social and environmental
accounting and reporting.
Furthermore, in the same period another organizational
structure, previously referred to as the Social Responsibil-
ity Unit, was formally constituted in BETA. Within the
organization chart, the Social Responsibility Unit was posi-
tioned under the directive of the ‘‘Communication Depart-
ment’’, and therefore, not formally and hierarchically
connected to the Environment and Safety Department. As
reported by another interviewee, the creation of the Social
Responsibility Unit was another example of:
‘‘[. . .] increasing attention by our Company in dealing
with these issues [i.e. social and environmental] in the
best possible ways. . . [Social Responsibility] was cre-
ated in [the early 2000s] when I formally received the
job to review and assemble all the existing initiatives
with the purpose of identifying more structured proce-
dures to support our activities. . .’’ (Interviewee 5).
The Social Responsibility Unit consisted of four sub-
units and included the Community Investment and Corpo-
rate Giving Unit that had been created in previous years.
The Social Responsibility Unit had responsibility for man-
aging and reporting all other issues related to corporate so-
cial responsibility such as, for example, human rights and
community investment, in which the Environment and
Safety Department was not directly involved. Thus, the So-
cial Responsibility Unit, as contended by some of the inter-
viewees, was set up with the speci?c purpose of handling
these issues complementarily and in synergy with the
Environment and Safety Department.
10
In particular, the
Social Responsibility Unit had three main roles. First, the
unit had a responsibility for managing, in a more structured
and systematic way, the community investment projects in
which BETA was involved. In particular, the unit was in
charge of identifying ‘‘appropriate systems’’ (Interviewee
3) through which to manage, account and report the perfor-
mance of these projects. Second, the structure was speci?-
cally responsible for managing relationships with different
stakeholders of BETA and for providing information in re-
sponse to their requirements. Third, the Social Responsibility
Unit had a responsibility for recording and analyzing social
and environmental information, relating to the activities in
which it was involved, to feed the process of social and envi-
ronmental reporting. In particular, the unit was in charge of:
(i) the production of speci?c social brochures and pamphlets
for external dissemination; and (ii) the provision of relevant
information to be included in the social and environmental
reports.
The rise of the Social Responsibility Unit, and the adop-
tion of speci?c managerial systems (e.g. management of
community investment projects), were further signi?cant
initiatives through which BETA augmented social and envi-
ronmental responsibility issues that were managed and re-
ported upon. The constitution of the Social Responsibility
Unit required the employment of new staff. By the time
the ?eldwork concluded, over ten people were employed
in this structure. Similarly to what was observed within
the Environment and Safety Department, the employment
of new personnel and the creation, to paraphrase Berger
and Luckmann (1966), of new ‘‘roles of responsibility’’ rep-
resented important elements in the process of propagation
and embedment of SER within BETA.
In conclusion, the empirical ?ndings highlight that
since the early 2000s effective and appropriate strategies
and initiatives were adopted to reinforce the processes of
managing social and environmental issues and the prac-
10
The analysis of the reasons why the Social Responsibility Unit was
positioned under a different department and whether or not the activity of
these two structures was actually undertaken in a complementary way is
beyond the scope of this paper.
426 M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432
tices of producing social and environmental reports. In
addition to the creation (or transformation) of new (old)
organizational constituencies (i.e. the Social Responsibility
Unit and Environment and Safety Department), new man-
agerial procedures and systems (e.g. environmental man-
agement and control systems) were employed, along
with the acquisition of new staff and implementation of
ad hoc projects (e.g. the biodiversity project). These strate-
gies and initiatives were effective because they produced
the results that were expected, i.e. to support, consolidate
and extend the existing practices of social and environ-
mental accounting and reporting. In addition, such strate-
gies and initiatives were appropriate, from the
institutional perspective of the present paper, because they
acted as ‘‘a necessary correlate’’ (Berger & Luckmann, 1966,
p. 91) of the process of institutionalization of SER. From the
evidence presented above, it appears that these strategies
and initiatives, as part of the reinforcement phase, had an
essential role in cementing the entire process of institu-
tionalization of SER and in reducing the possibilities for
its deinstitutionalization. Indeed, these strategies and ini-
tiatives attracted increasing attention to social and envi-
ronmental issues with the result that the processes of
managing and reporting organizational performance be-
came more ‘‘established’’, ‘‘pervasive’’ and ‘‘frequent’’ (Oli-
ver, 1992) elements of organizational life: i.e. increasingly
institutionalized. As a result of the process of reinforce-
ment, SER acquired, to paraphrase Zucker (1991), a ‘‘fact
of life’’ (p. 86) status thus augmenting its relevance and
importance within the organizational realm by becoming,
in the words of two interviewees, ‘‘an indispensable part’’
(Interviewee 9) of BETA’s reality for the ‘‘management of
the critical areas of business operations’’ (Interviewee 1).
The following Table summarizes and synthesises the
?ndings, which have been generated through the empir-
ical investigation of the processes, forces and in?uencing
factors involved in the institutionalization of SER (see
Table 2).
Table 2
Summary of the empirical ?ndings from this paper.
M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432 427
Summary and conclusions
In recent years, several studies have been undertaken to
investigate the corporate processes of SER, its drivers and
organizational effects. However, the analysis of the contin-
gencies and mechanisms through which SER practices are
introduced, constructed and implemented remains largely
under-developed in the (social and environmental)
accounting literature. Most of the existing works have
not explicitly focused on ‘‘how and why’’ SER practices
and related concepts or ideas ‘‘reach [an] institutional sta-
tus’’ (Bebbington et al., 2009, p. 589) in speci?c socio-orga-
nizational contexts. The present paper has speci?cally
investigated the dynamics through which SER, from its ini-
tiation, has modi?ed and evolved to become over time
institutionalized, i.e. a taken for granted, usual and estab-
lished (Meyer & Rowan, 1991; Zucker, 1991) social fact
within the case study organization.
The empirical investigation has involved an Italian mul-
tinational company (BETA) operating in the energy sector
and has focused, in particular, on the practices and under-
pinning contexts of social and environmental accounting
and reporting. The evidence has been interpreted through
the lens of two institutional theories, i.e. new institutional
sociology and old institutional economics. Insights from
these two theories have been used to construct the analy-
sis in an attempt to provide a more context-rich and, in
Creswell’s words, ‘‘real’’ and ‘‘alive’’ (Creswell, 1998, p.
256) ‘‘narration’’ (Quattrone, 2006, p. 151) of how SER-re-
lated dynamics of institutionalization took place.
The empirical ?ndings have illuminated a recursive and
progressive multi-step process. In particular, three main
processes and related outcomes have been identi?ed: (i)
the construction of the common meaning system around
the idea of social and environmental responsibility; (ii)
practicalisation, whereby rules and routines were adopted
and diffused inside the organization; and (iii) reinforce-
ment through the adoption of intra-organizational mana-
gerial structures and procedures.
The ?rst phase, namely ‘‘the construction of a common
meaning system’’ (Scott, 2001, p. 40), developed in the
early to mid 1990s and culminated in the publication of
the ?rst environmental report. The analysis of this process
drew mainly on the arguments developed by Berger and
Luckmann (1966) who envisaged a three-step mechanism
(i.e. externalization, objectivation and internalization)
through which institutions (i.e. symbols and meanings)
are constructed and reproduced. In particular, as observed
previously, the processes of externalization and objectiva-
tion were spurred by three committed and motivated orga-
nizational representatives who acted as catalysts for
change. Metaphorically speaking, these employees acted
as interpreters of the institutional messages in the (macro)
external environment and promoters of the processes of
comprehension and translation inside the organization.
These observations largely concur with the extant litera-
ture about the relevance of key organizational actors in
promoting decision making about social and environmen-
tal reporting (see, for example, Adams & Mc Nicholas,
2007; Bebbington et al., 2009). While previous works have
primarily focused on the relevance of powerful actors, such
as the Chief Executive Of?cer, senior executives and own-
ers in the processes of initiation and sustainment of SER,
this study has highlighted the important role that some
in?uential employees, who need not necessarily be top
managers, can also play in the phases prior to these deci-
sions. In the analysis undertaken in the present paper,
three such employees undertook a pivotal role in the pro-
cess of making the social and environmental issues under-
standable, intelligible and, therefore, more acceptable and
adoptable in the organizational discourse of BETA (see Lar-
rinaga-González & Bebbington, 2001).
As a result of the process of construction of a common
meaning system, the concept of social and environmental
responsibility and its meaning system became institution-
alized: i.e. given and taken for granted elements within the
context of the case study organization (see Jennings &
Zandbergen, 1995). As observed above, the institutional-
ized idea of social and environmental responsibility and
its meaning system represented the ‘‘rationales’’ (Miller,
1994) on and through which the practices of social
accounting were constructed in BETA.
The analysis of this ?rst stage provides one major theo-
retical contribution to the literature of social accounting
and, more generally, of accounting. It unpacks some of
the early arguments of Berger and Luckmann and opens
up new developments in the way in which these can be
adopted to investigate some of the complexities and, to
echo Hopwood (2005), the ‘‘mysteries’’ (p. 586) of the gen-
esis and evolution of (social) accounting practices. While
Berger and Luckmann’s work is not a new theoretical
source in organizational analysis, indeed it is widely ac-
cepted (and ‘‘a given’’) in much of constructionism-infused
accounting research, its theoretical potentialities to inves-
tigate the dynamics and contingencies through which no-
vel (social) accounting techniques emerge still have scope
for further development. In the present paper, Berger and
Luckmann’s insights, and particularly those related to the
concepts of externalization, objectivation and internaliza-
tion, have been explicitly adopted to illuminate the pro-
cesses whereby ideas, concepts and meanings (i.e.
rationales) related to sustainability (and accountability)
were constructed to ‘‘become part of [the] organizational
discourses’’ in the case study organization (Bebbington,
O’Dwyer, & Unerman, 2007, p. 348). Hence, in illuminating
such processes the analysis of this ?rst stage helps to put
?esh on the work of Miller (1994) by providing an in-
depth, detailed and context-rich narrative of the dynamics
(i.e. how) and conditions/contingencies (i.e. why) through
which such rationales emerge, evolve and consolidate to
become a catalyst for accounting innovation and change.
The second phase, namely practicalisation, commenced
in the mid 1990s immediately after the pioneering ?rst
environmental report had been published. As a result of
the process of practicalisation, increasingly structured
rules and routines were progressively adopted in the orga-
nization, over time. These routines, which re?ected institu-
tional principles, norms and meanings, were ‘‘enacted and
reproduced’’ (Burns & Scapens, 2000, p. 14) by the individ-
uals of BETA in their daily activity. Through a recursive
428 M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432
process, these routines/rules became institutionalized in
the organization.
In BETA the initiation of environmental reporting
seemed to be the natural (i.e. logical and expected) result
of the internal initiatives undertaken in the previous years
rather than a ‘‘structurally determined’’ or ‘‘instrumental’’
mechanism to ‘‘strategically respond’’ to the pressures of
the external environment (Lounsbury, 2008, pp. 352–
353). This is not to say that the external context did not ex-
ert any in?uence on the implementation of the process of
reporting, but rather that these external factors, taken
alone, were not suf?cient to explain the complex dynamics
that led BETA to publish the ?rst report. In this sense,
therefore, the ?rst environmental report was the result of
internal organizational dynamics, which were spurred by
the in?uences (e.g. mimetic and normative) exerted by
favorable institutional factors. These results resonate with
the observations of Bebbington et al. (2009) who suggest
that the initiation of SER, rather than being merely a com-
pliance with external (institutional) pressures, represents
the ‘‘natural’’ (p. 613) outcome of a complex process where
‘‘what goes on inside organizations’’ (p. 616) (i.e. internal
dynamics) is determinant. In particular, this study has illu-
minated the existence of a re?exive and circular nexus be-
tween organizational practices (e.g. accounting) and the
cultural-cognitive frameworks (i.e. concepts, ideas,
meanings systems) on the basis of which these practices
were adopted. In BETA, the initiation of SER was ‘‘informed
by and bound up in’’ (Lounsbury, 2008, p. 357) the concept
of social and environmental responsibility and its related
meaning, which, as argued above, represented its ‘‘ratio-
nales’’ (Miller, 1994). On the other hand, the empirical
?ndings have revealed that the ?rst report was not only
the ‘‘outcome’’ of the process of putting into practice the
concept of social and environmental responsibility, but
also the ‘‘medium’’ (Giddens, 1984) through which to rein-
force and embed the previous process of the construction
of a common meaning system. In particular, SER acted as
a structured formal language (Berger & Luckmann, 1966)
which contributed, through the mechanisms of typi?ca-
tion/categorization, quanti?cation and communication, in
‘‘making’’ the notion of social and environmental responsi-
bility more ‘‘operable’’, recognizable and manageable
(Miller & Napier, 1993, p. 641).
The analysis of the second stage offers two main theo-
retical contributions. First, in response to Lounsbury’s
(2008) calls for more studies investigating the multifari-
ousness and novelty of organizational practices, this anal-
ysis provides in-depth empirical evidence of the ‘‘origins’’
of new (social) accounting practices by shedding light on
the complexities of the institutional dynamics involved in
the (un)-isomorphic change. In particular, the analysis
has revealed that the decision making about the initiation
and development of SER was not an instrumental and spas-
modic initiative, which is consistent with the ?ndings of
Bebbington et al. (2009), nor an automatic process of a-ra-
tional isomorphic adaptation to the institutional condi-
tions. To the extent that isomorphic behavior occurred,
this was not a blind (see Lounsbury, 2008) mechanism of
alignment to normative rules or an a-critical imitation of
other peers, but rather a rationally-grounded attempt at
gathering resources, for example in terms of ideas, models
and guidelines, to improve the organizational reporting
practices. Thus, in such a situation, the decision making
regarding SER was driven by the existence of a form of
rationality on the basis of which managers acted in dealing
with the existing institutional forces (e.g. mimetic and nor-
mative) and conditions. This rationality was not an ‘‘instru-
mental-type’’ (Lounsbury, 2008. p. 352, in referring to
Oliver (1991)) but rather it resembled the ‘‘institution-
ally-based’’ rationality that was envisaged by Lounsbury
(2008, p. 352), though strongly infused with a manifest
organizational-orientation. In BETA, this institutionally-
in?uenced and organizationally-oriented rationality was
less based on the idea of ‘‘?tting in’’, as suggested for exam-
ple by Bebbington et al. (2009, p. 612), and more grounded
on the idea of designing, cutting and sewing SER and re-
lated practices in such a way that was congruent with
the organizational needs and expectations.
Second, the empirical ?ndings of this stage provide some
insights into the role that institutionalization of cultural-
cognitive elements can have in increasing the degree of
institutionalization of (accounting) practices. In BETA, the
institutionalization of the concept of social and environ-
mental responsibility, metaphorically speaking, provided
not only fertile soil for the initiation of environmental
reporting but also stable and deep ground where SER, and
related rules and routines, could actually grow, propagate
and take root: i.e. become institutionalized. The practices
of SER developed and became institutionalized, because,
in a favorable institutional context, these could rely on the
existence of an institutionalized notion of social and envi-
ronmental responsibility (i.e. its institutionalized ‘‘ratio-
nales’’ (Miller, 1994)), which provided a stable and secure
basis. It is believed that these observations provide a
glimpse into the role that cultural-cognitive elements once
institutionalized, canplay, inadditionto their role of ‘‘mobi-
lize[r]’’ (Miller, 1994), in the processes of embedding and
fostering persistence (Zucker, 1991) of accounting prac-
tices. In other words, these empirical ?ndings provide in-
sights to better understand the possibilities and
circumstances under which it is feasible to enhance effec-
tiveness, pervasiveness and durability of organizational
practices, including social and environmental accounting,
and to reduce the potential for intended or unintended
decoupling (see Scott, 2001).
Finally, in the third phase, namely reinforcement, initia-
tives were undertaken in BETA to support and reinforce the
SER-related activities. In the early 2000s, two highly for-
malized structures were established: the Environment
and Safety Department and the Social Responsibility Unit
respectively. These structures contributed to sustaining
the legitimacy and social-fact quality of the established
practices of SER. In addition, effective and appropriate
management and control systems, along with the acquisi-
tion of new staff and implementation of ad hoc projects,
were also adopted. In particular, the empirical evidence
has highlighted the pivotal role that these initiatives
played in cementing and solidifying the entire process of
institutionalization of SER.
The results of this phase offer two main theoretical con-
tributions. First, the analysis sheds light on the different
M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432 429
bodyof strategies andinitiatives, inadditiontotheconstruc-
tionof roles of responsibility (see Berger &Luckmann, 1966)
and constitution of formal structures, which may be effec-
tively adopted in the organizational context to maintain, in-
crease and consolidate the degree of institutionalization of
existing accounting practices, such as SER. In particular,
the analysis has revealed the role that can also be played
by management, control and audit systems in this process
of consolidation. Second, the narrative of the third phase of-
fers insights toextendunderstandingof howthe process and
initiatives of reinforcement may impact on the nature and
role of SER. As an outcome of the process of reinforcement,
SER became, by referring to Zucker (1991), a ‘‘fact of life’’,
i.e. a central component of the organizational reality beyond
its technical reporting characteristics. In doing so, SER and
related practices augmented their relevance and impor-
tance to become, in the words of an interviewee, an ‘‘indis-
pensable part’’ of the management and control of the
organization’s operational activities.
In summary, this paper has focused on the black box of
the processes and dynamics through which SER has over
time become an institutionalized actuality in the case study
organization. In particular, a three-step process leading to
the institutionalization of SER has been identi?ed from the
empirical analysis. Through this three-step process it has
been possible to investigate how the ‘‘rationales’’ (i.e. con-
cepts and meanings) (Miller, 1994, p. 3) of (social) account-
ing have been constructed and translated into practice, and
howthese practices have beenreinforcedinto the case study
organization. Theunderstandingof thesecomplexdynamics
represents a sine qua non in appraising the actual, realistic
and potential role of social and environmental accounting
and accountants to promote any substantial changes (see
Georgakopoulos & Thomson, 2008; Gray, 2002) in business
and organizational realms towards a more harmoniously
balanced‘‘relationshipbetweenhumanandnatural worlds’’
(Hopwood, 2009b, p. 434). However, toevaluatethis roleit is
essential to extend understanding of how accounting prac-
tices are constructed, implemented and consolidated to be-
come institutionalized. Only inthis way wouldit be possible
to ascertain how, when and to what extent accounting
researchers may participate, directly or indirectly, in the
processes of making accounting interventions more benign
(Adams & Larrinaga-Gonzáles, 2007; Adams & Whelan,
2009). Inthis regard, theempirical analysis of this paper pro-
vides some suggestive insights for understanding how and
to what extent many interventions (e.g. by academics,
NGOs, practitioners, charity activists and opinion leaders)
could in?uence the process of construction and institution-
alization of SER at the different identi?ed phases. With re-
gard to the ?rst phase (i.e. construction of a common
meaning system) academics, for example, couldact, directly
or indirectly, as promoters and educators for more societal
understandings of social and environmental responsibility
(Adams & Larrinaga-Gonzáles, 2007). Similarly, researchers
could be involved in the second and third phases respec-
tively by providing guidance for: (i) the implementation of
appropriaterules androutines; and(ii) theadoptionof effec-
tive systems and structures to manage and report social and
environmental issues. However, whether, and if so how, so-
cial and environmental accounting interventions are actu-
ally generating these desirable outcomes is something that
requires further research and investigation.
In conclusion, the focus of this paper has been on a sin-
gle case whose practices of SER (and its processes of insti-
tutionalization) have been studied through extensive
?eldwork. The choice of studying a single case has pro-
vided detailed and in-depth insights for understanding
how and why sustainability principles and practices are
constructed and implemented in various norms of organi-
zational life (Bebbington, O’Dwyer, & Unerman, 2007). On
the other hand, this also constitutes an important limita-
tion given that the explanations and considerations
reported are very much spatially and contextually con-
strained. Moreover, a second limitation is that this paper,
while taking into consideration the in?uences exerted by
the macro institutional context, does not speci?cally ad-
dress the complexities of the interlinks between macro-
institutionalism, which for example may take place at the
level of sector or industry, and meso-micro institutional-
ism related to SER. Finally, this paper has explicitly focused
on the ‘‘how’’ and ‘‘why’’ institutionalization of SER took
place rather than its effects on organizational changes.
Therefore, more research should be encouraged to en-
hance the theoretical understanding of the dynamics, con-
tingencies and complexities of organizational behavior
related to the institutionalization of SER. It would be valu-
able, for example, to extend the analysis to involve multi-
ple case studies in similar institutional and contextual
settings in order to ascertain patterns of convergence or
divergences between cases. Similarly, research may be car-
ried out to study SER practices of individual cases in differ-
ent contexts (e.g. countries or sectors) in order to
investigate the in?uences of different institutions and
institutional forces (e.g. regulative and normative) across
contexts. In addition, a particular issue that could be fur-
ther investigated is how and to what extent the interweav-
ing of the different macro and meso-institutions, and
related dynamics, drive, in?uence and shape social
accounting practices over time. Finally, it would be bene?-
cial to conduct more in-depth and longitudinal research to
investigate the effects of the institutionalization of SER and
the role that this process may (or not) play in promoting
signi?cant changes in organizations towards more socially
and environmentally responsible practices.
Acknowledgements
I am very grateful to Jan Bebbington, John Burns, Gius-
eppe Delmestri, Carlos Larrinaga-Gonzáles and Lee Parker
for many helpful comments and advice during the writing
of this paper. In addition, I wish to especially thank David
Collison and Rob Gray for their helpful and supportive sug-
gestions during the revision process. Also, I would like to
immensely thank the two anonymous reviewers and the
editor in chief, Chris Chapman, for their comments, sugges-
tions and assistance in developing the paper. Finally, I
would like to thank participants at the: 9th ENROAC Con-
ference held in Dundee in 2009; the 21st International
CSEAR Conference held in St. Andrews 2009; and the 7th
Spanish CSEAR Conference held in Las Canarias in 2009.
430 M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432
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432 M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432
doc_339502997.pdf
This paper focuses on social and environmental reporting (SER) and investigates, through
prolonged fieldwork with an Italian multinational company, the dynamics through which
SER, from its first introduction, has modified and developed to become institutionalized.
The empirical data has been interpreted through the lens of institutional theories to provide
a narrative of a three-step process which has brought about the institutionalization
of SER, namely: (i) the construction of a common meaning system around the concept of
social and environmental responsibility; (ii) practicalisation involving the emergence of
rules and routines; and (iii) reinforcement through the implementation of intra-organizational
managerial procedures and structures. The paper highlights that SER, as a result of a
recursive and progressive process, has become an established and taken for granted actuality
within the case study organization.
The institutionalization of social and environmental reporting:
An Italian narrative
Massimo Contrafatto
?
University of Bergamo, Department of Management, Economics and Quantitative Methods, Via dei Caniana 2, Bergamo 24127, Italy
a b s t r a c t
This paper focuses on social and environmental reporting (SER) and investigates, through
prolonged ?eldwork with an Italian multinational company, the dynamics through which
SER, from its ?rst introduction, has modi?ed and developed to become institutionalized.
The empirical data has been interpreted through the lens of institutional theories to pro-
vide a narrative of a three-step process which has brought about the institutionalization
of SER, namely: (i) the construction of a common meaning system around the concept of
social and environmental responsibility; (ii) practicalisation involving the emergence of
rules and routines; and (iii) reinforcement through the implementation of intra-organiza-
tional managerial procedures and structures. The paper highlights that SER, as a result of a
recursive and progressive process, has become an established and taken for granted actu-
ality within the case study organization.
Ó 2014 Elsevier Ltd. All rights reserved.
Introduction
In the past, social accounting scholars sought to exam-
ine issues related to Social and Environmental Reporting
(SER) by focusing predominantly on the pattern and con-
tent of social/environmental disclosures in annual ac-
counts or in stand-alone reports (see for example Adams,
2004; Adams & Harte, 1998; Buhr, 1998; Campbell, 2000;
Gray, Kouhy, & Lavers, 1995a, 1995b). Relatively speaking,
social and environmental accounting scholars devoted lit-
tle attention to the corporate processes underlying social
and environmental accounting and reporting (Adams &
Larrinaga-Gonzáles, 2007). In more recent years, however,
a greater focus on the examination of the organizational
dynamics and internal processes of SER has been seen.
Nevertheless, theoretical understanding and explanation
of the implementation, evolution and organizational
effects of social accounting practices still remain ‘‘under-
speci?ed’’ (Gray, 2005, p. 120. See also Adams, 2002). In
an attempt to address these criticisms, calls have been
made (e.g. Gray, 2002; Thomson & Bebbington, 2005) for
more in-depth, sustained and engaged ?eldwork aimed at
‘‘delving into the complexities of accounting [practices]
in action’’ (Hopwood, 2009a, p. 802).
Partly as a response to these calls, recent years have seen
anincreasing number of researchers engaging withorganiza-
tions to study different facets of SER (for further discussion
and speci?c examples, see Adams & Larrinaga-Gonzáles,
2007). Somestudieshaveconcentratedonthemotivesunder-
lyingSER(see for exampleAdams, 2002; Buhr, 2002; Contraf-
atto, 2009; O’Dwyer, 2002), others have analyzed the
in?uence exerted by internal organizational factors on the
nature, quality and signi?cance of social reporting (see for
example Adams, 2002; Adams & Mc Nicholas, 2007). Other
scholars have investigated the role of social accounting and
reporting practices in bringing about some kind of change
in organizations (see for example Adams & Mc Nicholas,
2007; Dey, 2007; Larrinaga-González, Carrasco-Fenech,
Caro-Gonzalez, Correa-Ruiz, & Páez-Sandubete, 2001).
Augmenting the aforementioned body of literature, the
present paper analyzes the complexities of social (account-http://dx.doi.org/10.1016/j.aos.2014.01.002
0361-3682/Ó 2014 Elsevier Ltd. All rights reserved.
?
Tel.: +39 035 2052623; fax: +39 035 2052 549.
E-mail address: [email protected]
Accounting, Organizations and Society 39 (2014) 414–432
Contents lists available at ScienceDirect
Accounting, Organizations and Society
j our nal homepage: www. el sevi er. com/ l ocat e/ aos
ing) reporting practices not ‘‘at a distance’’ (Hopwood,
2009a, p. 802), but through engagement with organization
members in order to gain insights into what will be identi-
?ed as the processes of initiation, practicalisation and rein-
forcement of SER. While a number of previous studies have
focused on the analysis of SER reports and the reporting
practices or on the underlying processes, this paper, in con-
trast, explicitly focuses on the dynamics through which SER
and related practices have become institutionalized, i.e.
established and taken for granted actualities in a case study
organization. In particular, the empirical ?ndings have illu-
minated a recursive and progressive multi-step process
through which institutionalization took place, involving:
(i) the construction of a common meaning system around
the notion of social and environmental responsibility; (ii)
practicalisation, through which rules and routines were
adopted into the organization; and (iii) reinforcement,
whereby speci?c intra-organizational structures and proce-
dures were implemented. In doing so, this paper contrib-
utes to understanding how and why (Bebbington,
Higgings, & Frame, 2009; O’Dwyer, 2005; O’Dwyer &
Unerman, 2008) sustainability (and accountability) princi-
ples and practices may be introduced, constructed and
re-constructed in some organizations and eventually
adoptedinvarious norms of their corporatelife. It maybe ar-
gued that, a more in-depth and contextualized comprehen-
sion of these complex processes is a sine qua non for
appraisingthepotential and/or actual roleof social andenvi-
ronmental accountingtoact as acatalyst for ‘‘emancipatory’’
change (Gray, 2002, p. 689; see also Georgakopoulos &
Thomson, 2008), towards less unsustainable approaches to
guide human and corporate actions (Hopwood, 2009b).
The present analysis has been conducted via ?eld case
study methodology (see Ahrens & Chapman, 2006; Cre-
swell, 1998; Dyer & Wilkins, 1991). Data and information
were collected through a variety of sources such as: a ser-
ies of interviews with managers; participation in corporate
presentations; preparation and analysis of notes from
these meetings; and examination of social accounts and re-
ports. Insights from institutional theories have been
adopted to interpret and make sense of the empirical evi-
dence collected (e.g. Berger & Luckmann, 1966; Burns &
Scapens, 2000; DiMaggio & Powell, 1991a, 1991b;
Greenwood & Hinings, 1996; Lounsbury, 2008; Meyer &
Rowan, 1991; Oliver, 1992; Scott, 2001; Zucker, 1991).
The paper is structured as follows. In the next section,
the literature covering engagement research is brie?y re-
viewed and institutional insights are discussed, with par-
ticular reference to the notion of institutionalization. The
third section is devoted to the methodological and method
choices. In the fourth, the focus is on the analysis and inter-
pretation of empirical evidence. Finally, a summary and
conclusion section is provided.
Exploring the dynamics of SER: an analysis of its
institutionalization
Literature that has involved forms of academic engage-
ment in studying SER largely casts light on three funda-
mental questions (for a review of this literature see, for
example, Contrafatto, 2011). Firstly, what (internal)
organizational and contextual factors in?uence (i.e. insti-
gate, promote or inhibit) decision making underlying
reporting and have an impact on the quality, nature and
signi?cance of SER? Secondly, what are the motives that
drive some organizations to initiate, undertake and main-
tain practices of social and/or environmental reporting?
And thirdly, what are the actual or potential effects of
SER on different spheres of organizational domains: struc-
tures, practices, values and norm systems?
With regard to the ?rst issue (i.e. factors), previous
studies (see Adams, 1999, 2002; Adams & Mc Nicholas,
2007; Georgakopoulos & Thomson, 2008; O’Dwyer &
Unerman, 2008; and Bebbington et al., 2009) have high-
lighted the relevance, among others, of: (i) the role of orga-
nizational key representatives (e.g. CEO and senior
executives) and their attitudes; (ii) the presence of, and role
exerted by, public authorities and regulatory bodies (see
Georgakopoulos &Thomson, 2008); (iii) the extent to which
organizational behavior is in?uenced by the initiatives
taken by other companies (i.e. mimetic process); (iv) the
availability in the organization of resources, such as time,
?nances, know-how (see particularly O’Dwyer & Unerman,
2008), managerial experience and an active strategic atti-
tude (see speci?callyBebbingtonet al., 2009) without which
the decision making about SER would be hobbled (see par-
ticularly Adams & Mc Nicholas, 2007); (v) the degree of
stakeholder involvement in the process of accounting and
reporting; and(vi) whether, andthe extent to which, report-
ing activities are undertaken in accordance with speci?c
guidelines (e.g. the Global Reporting Initiative).
As to the second issue (i.e. motives), empirical evidence
suggests opacity (Contrafatto, 2009; Georgakopoulos &
Thomson, 2008) and in some cases an ‘‘occasional confu-
sion’’ (O’Dwyer, 2002, p. 411) about the (historical and cur-
rent) motives to voluntarily initiate, undertake and sustain
practices of social and environmental reporting. The deci-
sion to produce and publish the ?rst environmental (and
social) disclosures was, according to Buhr (2002), histori-
cally motivated by a major concern to ?ll ‘‘a legitimation
gap’’ (p. 25) and to attain social legitimacy
1
to operate.
On the other hand, in the analysis of more recent motives
for SER, ?ndings from other studies seem to challenge the
legitimacy theses
2
by proposing a more detailed, ‘‘complete
and complex’’ narrative of the ‘‘motives’’ for social and envi-
ronmental reporting and disclosure (O’Dwyer, 2002, p. 408).
O’Dwyer (2002), for example, found that, while most of the
executives in his study acknowledged that social disclosure
might have a relevant function in the process of acquiring
organizational legitimacy, some of them reported scepticism
about its effective possibilities for enhancing and maintain-
ing a state of legitimacy. O’Dwyer (2002) concluded, there-
fore, that there were not ‘‘any motives outside those of a
symbolic self-interested nature’’ (p. 427). In the same vein,
1
For a review of legitimacy theory see, for example, Dowling & Pfeffer,
1975; Suchman, 1995; Deephouse & Suchman, 2008; and O’Dwyer, Owen &
Unerman, 2011.
2
It is argued that the validity of legitimacy theory in explaining the
motives for SER may be due to a number of contextual and corporate
factors (e.g. country of origin, industry, size, etc.) whose analysis is beyond
the scope of this paper. For a more detailed review of the studies using
legitimacy theory see, for example, Deegan (2007).
M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432 415
Contrafatto (2009) found that the current motives for SER (in
contrast to the historical motives) were not related to
acquiring or maintaining legitimacy but rather they were
connected to an attempt to better manage the environmen-
tal and reputational risk (see also Georgakopoulos &
Thomson, 2008) and to create corporate culture.
Finally, with regard to the actual and potential effects
that SER may produce in different spheres of an organiza-
tional realm, the literature reports results that also appear
to vary over time and across contexts. Some of the early
works conducted in the 1990s dispute the role of social
and/or environmental accounting in producing profound
and structural change towards more environmentally
responsible ways of conceiving and conducting business
operations (Gray, Walters, Bebbington, & Thompson,
1995). Gray et al. (1995) and Larrinaga-González et al.
(2001), for example, did not observe structural modi?ca-
tions in the operations of the organizations whose ‘‘central
values remain[ed] unchanged’’ (Larrinaga-González et al.,
2001, p. 235). On the other hand, the studies conducted
by Adams and Mc Nicholas (2007) and Dey (2007)
evidenced more noticeable and impinging effects,
produced by social and environmental accounting, on
organizational structures, procedures and value systems.
Dey (2007), in particular, reports that the intervention of
social accounting contributed to profound, although
‘‘unforeseen’’, ‘‘unintended’’ and ‘‘undesirable’’ (p. 440)
changes in the value and norm systems of the studied
organization.
3
This aforementioned literature has largely considered
SER as either an outcome of multiple factors and drivers
(contextual and/or internal) or the catalyst for other orga-
nizational processes, including change. Relatively few
studies (see, for example, O’Dwyer, 2005) have explicitly
focused on the contingencies and processes of initiation,
implementation and embedding of SER into speci?c orga-
nizational contexts. The present paper, in response to the
calls for extending the boundaries of the existing literature
(Adams & Whelan, 2009), explicitly focuses on SER per se
and represents an attempt to explore the ‘‘black box’’
4
(Zucker, 1991, pp. 104–105) of the dynamics through which
SER has over time become institutionalized in the case study
organization. The exploration of such mechanisms and
contingencies is necessary to understand whether (or not)
social accounting, and accounting in a wider sense, can make
a real difference by affecting ‘‘the type of world we live in,
[. . .] the way in which we understand the choices open to
business undertakings and individuals [. . .].’’ (Miller, 1994,
p. 1). In order to better understand this potential ‘‘transfor-
mative’’ role it is important to explore, among others, the
mechanisms and ‘‘rationales’’ (i.e. vocabularies and mean-
ings) through which social accounting works and ‘‘calcula-
tive technologies of accounting’’ are marshalled and
‘‘mobilize[d]’’ (Miller, 1994, pp. 2–3; see also Miller &
Napier, 1993). It is through an understanding of how these
rationales are constructed and translated into practice, and
how practices are embedded and reinforced in organizations
(what in this paper will be identi?ed as processes of institu-
tionalization), that the nature and role of social accounting
to promote real ‘‘emancipatory’’ change (Gray, 2002, p.
689) in the way of thinking and doing business could be
evaluated.
The remaining part of this section discusses the notion
of institutionalization, and its constituent elements and
processes, as they relate to the case study organization.
In particular, the following discussion draws on the theo-
retical insights of two institutional theories.
5
the so-called
‘‘old institutional economics’’ and ‘‘new institutional sociol-
ogy’’ (Moll, Burns, & Major, 2006, p. 184).
Institutionalization: elements and processes
Old institutional economics and new institutional soci-
ology can provide an effective framework for ‘‘richer theo-
retical’’ investigation (Adams & Larrinaga-Gonzáles, 2007,
p. 344) of the complexities of social and environmental
accounting and reporting ‘‘in action’’ (Hopwood, 2009a, p.
802), because these theories, if adopted complementarily,
allow consideration of the different ‘‘pillars’’ (i.e. ‘‘regula-
tive, normative and cultural-cognitive’’) (Scott, 2001, p.
51) and related dynamics which constitute and character-
ize institutions and institutional life (see Table 1 for a sum-
mary of the institutional concepts which have been
referred to in this paper). As observed by Scott (2001) each
of these elements has been considered, by old institutional
economics and new institutional sociology theorists, as a
key aspect of institutions and institutional dynamics (see
as well DiMaggio & Powell, 1991a).
On the one hand, the relevance of the normative and
habitualized aspects (e.g. norms, conventions, rules and
routines) of institutions has been particularly emphasized
in old institutional economics. In general, old institutional
economics theorists (see, for example, Veblen, 1919) high-
light the predominance of habits, routines and rules to
drive agents in adopting and reproducing existing forms
of behavior (Burns & Scapens, 2000). While routines refer
3
The apparently inconsistent results reported by these previous studies
may be partly explained by considering the development of corporate
awareness and experience of SER over the intervening period, which was
one of rapid change. However, the contrasting ?ndings may also owe
something to the different institutional, contextual and organizational
circumstances that characterized these studies. Therefore, the empirical
analyses and related ?ndings may have been in?uenced by factors such as:
(i) the timescale of the analysis; (ii) the time-length of researchers’
involvement; (iii) the institutional and organizational context of the
empirical settings (including industry and type of organizations); and (iv)
the research methodology and methods adopted for gathering data and
investigating change processes. Thus, the inconsistent ?ndings, which
appear to emerge from the above brief review, should be considered as a
starting point for further and more detailed investigation of the dynamics
through which social and environmental accounting is implicated in the
processes of organizational change (Contrafatto, 2011).
4
The label ‘‘black box’’, which is often used by actor network theorists
(see Latour, 2005), is adopted here in a general sense without wishing to
refer to any particular theoretical framework, including actor network
theory.
5
Different traditions (theories), spanning and re?ecting speci?c theo-
retical assumptions (Lowndes, 1996), are part of the institutional frame-
work which concerns itself with the study of the speci?c social phenomena
represented by institutions. In particular, institutions have been concep-
tualized as resilient social phenomena ‘‘composed of [cultural]-cognitive,
normative and regulative elements that, together with associated activities
and resources, provide stability and meaning’’ (Scott, 2001, p.48) to
individual and social behaviour.
416 M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432
Table 1
Summary of the literature-based institutional concepts adopted in this paper.
The above Table provides a summary of the theoretical concepts which have been referred to in this paper. In particular, the Table synthesizes respectively:
(i) the institutional elements which may be subjected to the processes of institutionalization; (ii) the institutional forces and mechanisms which in?uence
and have an impact on the processes of institutionalization; and (iii) the processes and dynamics of institutionalization. With regard to the latter point, as
highlighted by the double line box, the focus of the analysis will be on the processes and dynamics of institutionalization that took place at the
organizational and intra-organizational levels, i.e. what have been identi?ed as meso and micro-institutionalism.
M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432 417
to ‘‘the patterns of thought and action which are habitually
adopted by groups of individuals’’, rules ‘‘can be de?ned as
the formally recognized way in which ‘things should be
done’. . .’’ (Burns & Scapens, 2000, p. 6). In other words, rou-
tines can be depicted as the procedures which are habitu-
ally and actually followed and implemented, whereas rules
comprise the formally-stated regulae which should be
‘‘applied in the enactment/reproduction of social life’’
(Giddens, 1984, p. 21; quoted in Scott, 2001, p.75). As
observed by Burns and Scapens (2000) the prevailing rules
and routines, despite being relatively stable and durable,
can be subjected to a process of change, including institu-
tionalization which can be fostered by agents in their pro-
cess of ‘‘enactment and reproduction’’ (Burns & Scapens,
2000, p. 19).
On the other hand, new institutional sociology (see, for
example, DiMaggio & Powell, 1991a, 1991b; Greenwood,
Oliver, Sahlin, & Suddaby, 2008; Scott, 2001), another rele-
vant perspective in organization theory (Lounsbury, 2008),
emphasizes the cognitive and cultural elements of institu-
tions and institutional life. The shift in focus from the nor-
mative and regulative elements (norms, routines, rules) to
the shared understanding of social reality (symbols, mean-
ings, beliefs) distinguishes new institutionalism from other
perspectives (Carruthers, 1995; DiMaggio & Powell,
1991a). For many new institutionalists, meaning systems,
symbols and cognitive beliefs are not just subjective and
individualized mental constructs but rather externalized
and socially constructed phenomena (Carruthers, 1995).
These provide organizational members with a ‘‘common
framework’’ for making ‘‘sense of the ongoing stream of
happenings’’ (Scott, 2001, pp. 57–58) and for adopting
organizational and individual actions. The cultural-cogni-
tive elements (values, meanings and symbols), in the same
way as the normative-regulative pillars (e.g. routines and
rules), can also be subjected to a process of institutionali-
zation. This can be conceptualized as the mechanism
through which different elements of institutional and so-
cial life, ranging fromconcepts, values, beliefs and meaning
systems (Jennings & Zandbergen, 1995) to socio-economic
practices and structures, become given, usual and taken for
granted (Larrinaga-González, 2007; Meyer & Rowan, 1991;
Zucker, 1991) in a speci?c context: society, cluster of orga-
nizations, organization and intra-organizational subsys-
tems (Scott, 2001). In particular, in this paper, following
Zucker’s arguments (1991), the institutionalization is con-
ceived as a cumulative and dynamic process through
which institutional elements acquire ‘‘different degrees’’
(p. 83) of taken for grantedness and giveness.
The process of institutionalization, which occurs at the
organizational level (i.e. meso-institutionalism), is in?u-
enced by the speci?c institutional environment and by
the presence of ‘‘powerful institutional rules which func-
tion as highly rationalized myths’’ (Meyer & Rowan,
1991, p. 44). Organizations, which operate in these highly
institutionalized contexts, are therefore subjected to the
in?uence of ‘‘powerful forces’’ (DiMaggio & Powell,
1991b, p. 65) to adopt organizational forms and structures
by isomorphically seeking to adapt to institutional-
ized rules (Meyer & Rowan, 1991). As observed by Louns-
bury (2008) this isomorphic behavior should not be
conceptualized as a blind and ‘‘mindless structurally deter-
mined’’ mechanism of response to the institutional pres-
sures but rather as an ‘‘effortful accomplishment’’
undertaken on the basis of ‘‘institutional logics’’ (p. 353).
According to DiMaggio and Powell (1991b), institutional
pressures for isomorphic change result from ‘‘three mech-
anisms’’: (i) ‘‘coercive’’, resulting from legal requirements
and regulations; (ii) ‘‘mimetic’’ that stems from ‘‘uncer-
tainty’’ and produces imitation; and (iii) ‘‘normative associ-
ate with’’ the existence of normative rules, including
primarily those emanated by professional bodies (DiMag-
gio & Powell, 1991b, p. 67, emphasis in the original). Under
the institutional in?uences of this macro context, speci?c
organizational procedures, practices and structures,
including (social) accounting, become institutionalized
when, over time, they ‘‘underpin’’ the usual, given and
‘‘[. . .]‘taken for granted’ ways of thinking and doing in a
particular organization’’ (Burns & Scapens, 2000, p. 5). As
a result of this process, several elements of the organiza-
tional structures, once institutionalized, become symbolic
and function as ‘‘myths binding on organizations’’ (Meyer
& Rowan, 1991, p. 45). As suggested by Oliver (1992), it
is possible to consider the ‘‘frequency and pervasiveness’’
(p. 567) of prevailing organizational patterns as proxies
for interpreting their degree of institutionalization with
greater increases indicating a higher level of
institutionalization.
In order to better understand the institutionalization of
structures and practices at the organizational level (i.e.
meso-institutionalism), it is essential to analyze the cogni-
tive elements (e.g. meanings, symbols, cognitive beliefs)
and related dynamics of institutionalization, i.e. ‘‘microin-
stitutionalism’’ (Zucker, 1991, p. 104).
Berger and Luckmann (1966), who conceptualize insti-
tutions as symbolic structures and meaning systems,
envisage the process of social construction of institutions
and the institutional world as consisting of three phases,
namely: (i) externalization; (ii) objectivation; and (iii)
internalization (for a discussion see also Scott, 1987,
2001). According to Berger and Luckmann (1966), exter-
nalization represents the anthropological tendency of the
human being to constantly construct through social inter-
actions ‘‘the world into which he externalizes himself. In
the process of externalization, he projects his own mean-
ings into reality’’ (Berger & Luckmann, 1966, p. 122,
emphasis in the original). Through this mechanism, human
beings (the producers), in social interaction with their fel-
lows, produce symbolic structures (their product) to which
meanings are attached (Scott, 2001). Objectivation is con-
ceptualized as the ‘‘process by which the externalized
products of human activity attain the character of objectiv-
ity’’ (Berger & Luckmann, 1966, p. 78). As a result of objec-
tivation, the symbolic structures and meaning systems
result in ‘‘something ‘out there’, as a reality experienced
in common with others’’ (Scott, 2001, p. 40). The processes
of externalization and objectivation, which are in a con-
stant dialectic relationship, are supported by the use of
language that provides coordinates for human beings’ so-
cial interaction and maintains, for example through typi?-
cations, the common objectivation of everyday life (Berger
& Luckmann, 1966). The third phase, called internalization,
418 M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432
is de?ned by Berger & Luckmann as the ‘‘immediate appre-
hension or interpretation of an objective event as express-
ing meaning’’ (p. 149). The term ‘‘immediate’’, it is argued
in the present paper, should be interpreted in its etymolog-
ical sense as something ‘‘in-mediated’’, i.e. direct, without
interposition and/or further explanation. Through the pro-
cess of internalization the ‘‘objectivated world is retroject-
ed into consciousness in the course of socialization’’
(Berger & Luckmann, 1966, pp. 78–79) and the ‘‘actor is
internally motivated to do what he has to do’’ (Zucker,
1991, p. 84). As a result of this process, the ‘‘objectivated
world’’ is recognized by the agents as a norm with which
to conform.
As observed by Scott (2001), the process of construction
of common meaning systems is regarded by Berger and
Luckmann (1966) as a process of institutionalization. As a
result, it is argued here, ideas, symbolic structures, values
and meaning systems, including accounting ‘‘rationales’’
(Miller, 1994), attain the status of ‘‘objective and exterior’’
(Zucker, 1991, p. 85; see also Zucker, 1987) social facts
embedded in societal and organizational domains (Oliver,
1992).
Although institutionalized elements, practices and
structures retain the tendency to persist, they can be sub-
jected to deinstitutionalization (Scott, 2001), i.e. ‘‘the pro-
cess by which the legitimacy of an established
organizational practice erodes or discontinues’’ (Oliver,
1992, p. 564). As noted by Zucker (1991) deinstitutionali-
zation, unlike institutionalization, ‘‘is seldom accidental’’
(p. 105). In an attempt to prevent or diminish the possibil-
ities for deinstitutionalization, therefore, established pat-
terns of behavior may be reinforced by different
strategies adopted at speci?c levels such as society, cluster
of organizations, organizations and intra-organizational
systems. Berger and Luckmann (1966), for example, assert
that ‘‘the construction of role typologies is a necessary cor-
relate of institutionalization of conduct’’ (p. 91). In particu-
lar, in the organizational domain initiatives such as the
creation of roles of responsibility and the implementation
of formal structures may be adopted to maintain and in-
crease the degree of institutionalization of prevailing
established practices.
Research methodology and methods
In this research, a qualitative ?eld case study methodol-
ogy (Creswell, 1998; Ahrens & Chapman, 2006; Silverman,
2011) was adopted to investigate the processes through
which SER became institutionalized. The theoretical in-
sights discussed in the previous section (see Table 1 for a
summary overview) have been used to structure the anal-
ysis of the empirical evidence and to construct a context-
bound and theoretically-informed narrative (Quattrone,
2006) of the dynamics which have brought about the
emergence, implementation and reinforcement of SER in
the case organization. Speci?cally, a multinational Italian
company in the energy sector was studied in-depth to
gather, through a progressive ‘‘immersion [in the case]’’
(Gunzenhauser, 2006, p. 624), a richer understanding of
the context in which SER took place and to interpret the
complex dynamics of organizational behavior (Dyer & Wil-
kins, 1991).
6
Authorization for access to the company and its data
was obtained with the proviso of guaranteeing anonymity
of the company and its personnel. A ?ctional name, BETA
and numbers (1, 2, 3, etc.) are therefore used to indicate
the company and the interviewees respectively. The inves-
tigation was conducted from mid 2003 to early 2005.
Although the research is not very recent, the reported data
and ?ndings relate to, and are relevant to, ongoing issues in
contemporary social and environmental accounting
change.
Data and information about the organization and its so-
cial and environmental practices were collected through:
semi-structured interviews with eleven junior and senior
managers; participation in corporate presentations and
preparation of notes following these meetings; observation
of the organizational dynamics in the ?eld; consultation of
the corporate web site; and analysis of social accounts and
reports (Health, Safety, Environment reports published in
2002, 2003, 2004, 2005 and other social brochures). Inter-
views were carried out, through the medium of the Italian
language, with personnel representing the departments di-
rectly involved in the processes of social and environmen-
tal accounting and reporting, which have been indicated
with the generic names of Environment and Safety, and So-
cial Responsibility.
The length of interviews varied from one, to one and a
half, hours for individuals to roughly 2 h for group inter-
views. In total approximately 14 h of interviews were con-
ducted. Each interview, except in two cases where
extensive notes were taken, was tape-recorded and fully
transcribed for the subsequent process of analysis. Quota-
tions from interviewees and other evidential sources,
which are reported in the following narrative, have been
translated from Italian to English by the author.
The interviews, transcripts and notes were rigorously
and systematically analyzed through a procedure which
involved the following phases: (i) listening to taped inter-
views before and after transcription; (ii) reading typed ver-
sions and notes at different times; and (iii) re?ection on
collected data through continuing scrutiny undertaken in
the pre- and post-writing process. In particular, attention
was devoted to the attitudes, commitment and ‘‘un-
prompted actions’’ (Ahrens & Chapman, 2006, p. 825)
shown by the interviewees during the meetings. These ele-
ments were used to ‘‘elaborate meaning’’ (Jones, 1985;
quoted in O’Dwyer, 2002, p. 414) and to gather an under-
standing of the unsaid and unstructured aspects of organi-
zational behavior (see also Larrinaga-González et al., 2001)
which are constructed, transmitted and re-constructed by
individuals in social interaction (Berger & Luckmann,
1966).
Each transcript was examined through a process of cod-
ing and all information collected was ?rstly categorized
into preliminary codes (code-identi?cation analysis) and
6
It should be noted that the empirical investigation is not a real-time
study per se but rather focuses on the managerial perspectives and
understandings of the processes involved in the initiation, implementation
and embedding of SER over the previous years.
M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432 419
then aggregated into thematic codes (code-reduction anal-
ysis) (see, in particular, Miles & Huberman; 1994; O’Dwyer,
2004; O’Dwyer & Unerman, 2008). This process was sup-
ported by the preparation of matrices and conceptual maps
that served the function of synthesizing and displaying the
information gathered during the investigation (see, partic-
ularly, O’Dwyer, 2004).
Analysis of the empirical evidence
In order to develop a deeper understanding of the pro-
cessual dynamics that led to the development and institu-
tionalization of SER in the case study, it is necessary to
consider the historical, social and organizational context
within which these dynamics occurred. As noted by many
institutionalists (see for example Scott, 2001), this context
provides resources, constraints and meanings to individual
and organizational behavior. These institutional and orga-
nizational aspects will be discussed in the following sub-
section.
The institutional and organizational context
The 1990s saw the advancement of interest in environ-
mental issues (Deegan, 2002) after the previous decade
when the debate about social and environmental responsi-
bility was con?ned to the margins of the political agenda
(Gray, 2004). In the early 1990s, due to the combined ef-
fects of several political, social and cultural in?uences
7
and in part as a consequence of environmental disasters
(e.g. Exxon Valdez in Alaska in 1989; see Patten, 1992), busi-
ness actors and in particular companies began to turn their
attention to the environmental aspects of their activities.
As a result, organizations and primarily those companies
operating in environmentally sensitive industries (e.g. oil
and gas; and chemicals), which had traditionally longer-
standing expertise in environmental issues, sought to adopt
different initiatives to manage and report environmental im-
pacts. The production of environmental reports was one of
these initiatives.
On the regulative-normative side, several initiatives
were undertaken by national and international regulatory
bodies. In 1993, for example, the European Council issued
Regulation No. 1836/93 to introduce EMAS (the Eco-Man-
agement and Audit Scheme). EMAS, revised in 2001, is a
management framework that companies and other organi-
zations can voluntarily adopt to manage, control and re-
port on their environmental performance (European
Council, 1993, 2001). Another management tool, the ISO
14001 environmental management system, was ?rst intro-
duced in 1996 (ISO, 1999). In addition, other initiatives
were undertaken by professional bodies to provide stan-
dards for reporting social and environmental performance.
In 1997, for example, GRI (Global Reporting Initiative), ‘‘a
network-based organization’’, was founded with the pur-
pose of providing guidelines for sustainability reporting
(GRI, 2009). The ?rst GRI sustainability reporting frame-
work was launched in 2000. In 1999, another standard,
AA1000, was issued by ISEA (Institute of Social and Ethical
AccountAbility), a global non-pro?t institution, to support
organizations in their process of accountability for social,
environmental and ethical issues (see, ISEA, 2009). In the
same period, GBS (Gruppo di Studio per il Bilancio Sociale),
a non-pro?t association of academics, practitioners and
consultants from different disciplines, was founded in Italy
with the purpose of formulating a series of guidelines for
the preparation of social accounts (see GBS, 2009).
Around the turn of the century, interest in social and
environmental issues from business actors (organizations,
corporations, etc.), governmental institutions (e.g. Euro-
pean Union), professional bodies and other groups (e.g.
academe and NGOs,) signi?cantly increased (Gray, 2004).
Various measures were undertaken by the European Union
and other national governmental bodies to stimulate, pro-
mote or regulate organizations’ activities for accounting
and reporting social and environmental impacts. In 2001,
for example, the European Commission proposed a Green
Paper for promoting Corporate Social Responsibility (EC,
2001). In a similar vein, other initiatives were undertaken
by the European Union such as the ‘‘Modernisation Direc-
tive’’ (EC, 2003; see Hibbitt & Collison, 2004, p. 2).
The aforementioned social and institutional conditions
provided resources and impetus for the diffusion of social
and environmental reporting. In particular, over the early
to mid 2000s, the number of organizations adopting prac-
tices for managing and reporting social and environmental
issues signi?cantly increased as shown by some of the
cross-national empirical research that had been conducted
in the preceding few years (see, for example, KPMG, 2005.
See also Milne & Gray, 2007 for further discussion).
In addition to this illustrative analysis of the macro con-
text in which BETA operated during 1990s and 2000s, the
organizational context will also be considered to provide
a background for understanding the SER-related dynamics
over time.
During the early 1990s, BETA was subject to a gradual
process of privatization, concluded by the end of the dec-
ade, after which BETA ceased to be an entirely state-owned
company. Contemporaneously, profound changes occurred
within the governance and structures of the organization.
The ?rst of these restructurings occurred in the second half
of the 1990s, followed by the second and the third in the
early 2000s. These transformations were regarded as sig-
ni?cant for their impacts on the visibility, branding, strat-
egies and operational activities of the company, including
the process of social and environmental accounting and
reporting.
BETA was among the pioneering companies in Italy to
produce a social and environmental report in the mid
1990s. This is an important aspect when it is considered
that in the Italian context a signi?cant adoption of social
and environmental reports by organizations did not occur
until the end of the 1990s (Contrafatto & Rusconi, 2005).
More speci?cally, as identi?ed by the empirical analysis
7
A signi?cant event promoting greater attention for the status and
prospects of the natural environment was the United Nations Conference
on Environment and Development, also known as the Earth Summit, held in
Rio de Janeiro in 1992 (see Bebbington, 2001). This represented a milestone
for the subsequent debate about issues such as climate change, sustainable
development and ‘‘limits to growth’’ (Meadows, Randers, & Meadows,
2004).
420 M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432
undertaken in this paper, the processes of initiation and
subsequent implementation of SER by BETA involved three
phases: (i) pre-reporting; (ii) diffusion within the organiza-
tion; and (iii) reinforcement. It is contended that, as a re-
sult of this multi-step process, SER became an
established and taken for granted (i.e. institutionalized)
actuality within the case study organization. The afore-
mentioned phases will be investigated in the following
sub-sections.
Pre-reporting phase: the construction of a common meaning
system
The pre-reporting phase began to evolve in the early
and mid 1990s and concluded with the publication at
group level of the ?rst environmental report. The docu-
ment comprised information predominantly about the
environmental impacts of the organization. To understand
the process leading to the initiation of the ?rst environ-
mental report the institutional (macro) and organizational
(meso) conditions that have driven part of this process
need to be taken into account.
The institutional context in which BETA operated during
the earlyandmid1990s, as seeninthe previous sub-section,
was characterized by a growing attention to issues concern-
ing the conditions and prospects of the natural environ-
ment. In particular, increasing in?uences were exerted on
business organizations to take into consideration the envi-
ronmental effects of their corporate activities and conse-
quently to adopt more responsible initiatives to manage
and report on these effects. As observed by an interviewee:
‘‘[. . .] [at that time] companies operating in industries
similar to that in which [BETA] operated were subjected
to increasing pressures, as expressed by public opinion
and other pressure groups, for considering the new
themes [related to environmentalism]’’ (Interviewee 1).
Thus, from the perspective of institutional theories (see
for example Scott, 2001) the institutional environment of
the early-mid 1990s, characterized by ‘‘increasingly high
demands and expectations’’ (Interviewee 1), represented
a major source of constraints for BETA. On the other hand,
however, it appears that such a context provided possibil-
ities for the emergence of new discourse and behavior. As
contended by Interviewee 8, this context represented ‘‘for
us [BETA] an opportunity’’ for innovating organizational
practices.
Whilst the institutional context was propitious for
experimenting with new organizational forms and prac-
tices, in BETA the decision to prepare and publish the ?rst
environmental report was the result of a complex intra-
organizational process. This process began to evolve when
a few in?uential employees introduced into the organiza-
tional discourse the generic theme related to corporate im-
pacts on the environment and communities, and it
concluded when a common shared consensus about the
concept of wider social and environmental responsibility
was constructed. As noted by an interviewee who worked
on the preparation of the ?rst environmental reports, a piv-
otal role was played by three organizational members (A,
B, C) who promoted the necessity of taking into account
the environmental impact of the organization’s economic
activities. As stated by Interviewee 11:
‘‘[...] this idea was brought to our attention by [A, B and
C] who with extreme charisma and commitment
stimulated the interest for this new (at least for us)
topic’’ (Interviewee 11).
In terms of Berger and Luckmann (1966), these dedi-
cated employees, who were working within the human re-
source department and were particularly involved in
environmental aspects (see below), acted as promoters of
the process of ‘‘externalization’’ (Berger & Luckmann,
1966). Through this process an idea of social and environ-
mental responsibility was constructed, produced and re-
produced in social interactions between members within
the organization. Before discussing the role of promotion/
championing of the process of ‘‘externalization’’ in more
detail, attention will be turned to the factors and condi-
tions that facilitated this role.
From the evidence gathered in the empirical setting, it
appears that this role of championing was facilitated by
three factors, which provided the necessary resources for
the individuals to act (Scott, 2001). First, was the role
played by a Foundation, an independent and in?uential
center of research that had been originally founded by
BETA, which, as explained by Interviewees 9 and 11, pro-
vided ‘‘stimulus’’, ‘‘support’’ and ‘‘ideas’’ for re?ection and
discussion. Second, was the department in which the three
employees worked and, in particular, the task which they
performed. For example, as explained by an interviewee
who experienced these events, they were involved in activ-
ities such as: (i) the assessment of environmental and
health impacts of economic initiatives on communities;
(ii) the evaluation of the safety and quality features of pro-
jects undertaken; and (iii) the management of hazardous
waste disposal. Working within the human resource
department and being particularly concerned with the
environmental aspects meant that these employees were
familiar with, and gained knowledge of, issues relating to
the safety, health and environmental conditions of the
communities and territories in which BETA and its staff
operated. In addition, their knowledge and expertise in
these issues, and in part their collaboration with the Foun-
dation, gave them authority and, in turn, some form of
legitimacy within the organization. Third, were the initia-
tives taken by other companies of which it appears they
were aware. In this regard, one of these employees empha-
sized the signi?cance of being conversant with ‘‘what other
companies were doing’’. From the perspective of institu-
tional theory, therefore, the initiative of the three members
was also in?uenced by a form of ‘‘mimetic mechanism’’
(DiMaggio & Powell, 1991b) through which the discourse
and behavior of other peers were taken into account to at-
tain knowledge (see also Adams & Mc Nicholas, 2007).
Thus, this analysis indicates that the aforementioned fac-
tors were somewhat signi?cant in explaining the role of
championing by these three actors because these factors
provided the necessary resources (e.g. legitimacy) to take
action and promote institutional change (Scott, 2001).
Turning now to the consideration of their role, it ap-
pears that the three committed employees were able to
M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432 421
comprehend and grasp the ‘‘opportunities’’ (see quotation
of Interviewee 8 above) created by outside discourses re-
lated to corporate environmentalism and make these dis-
courses identi?able and understandable in BETA.
Metaphorically speaking, they acted as ‘‘capturers’’ of the
messages in the external institutional context, which were
then brought into the organizational membrane. In this re-
gard, the three members played a pivotal role both in fos-
tering the process of translation of the ‘‘institutional
[languages and] rules’’ (Meyer & Rowan, 1991, p. 42) and
in facilitating their comprehension inside the organization
itself (see Larrinaga-González & Bebbington, 2001). From
the analysis undertaken in this section, it appears that this
process (i.e. translation and comprehension inside the
organization) was successful because the three members
had the resources, such as legitimacy, charisma and knowl-
edge, to do something that was not incompatible with the
new organizational needs and perspectives. As observed by
one of the respondents:
‘‘[. . .] during the early 1990s the expectations of public
opinion for more corporate social and environmental
responsibility were increasing. At the same time [BETA]
was experiencing signi?cant changes, when the law
that transformed [BETA] into a stock company was
passed [. . .]. I think the time was favourable for these
new types of discussions [about environmentalism]. . .’’
(Interviewee 5).
The initiative undertaken by the three key actors was
not hindered but rather accepted, and to a certain extent
supported (for example by the Foundation), because it
appeared to be the right thing (i.e. discourse), at the right
time, and carried out in the right way.
8
The analysis
undertaken in this section indicates that the existence of
these three conditions (right thing, at right time, and in
the right way) together with available resources (e.g. legit-
imacy, knowledge and charisma) represented a sine qua non
for the success of the process of externalization, through
which a notion of social and environmental responsibility
emerged.
In this phase, an important role was played by commu-
nication between employees. An interviewee, who person-
ally experienced this process, emphasized the signi?cance
that the ‘‘communication and interaction between mem-
bers within the [human resource] department [had] for
the diffusion of this new concept’’. From the perspective
of Berger and Luckmann (1966), it was through social
interaction and communication between members within
the organization, that the notion of social and environmen-
tal responsibility was subjected to a process of ‘‘objectiva-
tion’’, that is to ‘‘result in something out there, as a social
fact to be experienced in common with others’’ (Scott,
2001, p. 40). To this concept, a meaning, which appears
to have been the outcome of a process of social interaction,
came to be constructed. In particular, in BETA at that time,
as remembered by Interviewee 4, social and environmental
responsibility was understood as:
‘‘the responsibility to take into account the impacts on
the environment and communities of organizational
activities. . .’’ (Interviewee 4).
Through ‘‘objectivation’’ a shared cultural-cognitive
consensus about the meaning system associated with the
notion of environmental responsibility was constructed.
This consensus was an important element for the sedimen-
tation and consolidation of the notion of environmental
responsibility and its associated meaning. As a result of
the process of objectivation and related dynamics, the con-
cept of environmental responsibility became symbolic and
mythic (Meyer & Rowan, 1991) thus enhancing its signi?-
cance and relevance to guide action for organizational
members and in particular for those involved in this pro-
cess. As observed by an interviewee:
‘‘[. . .] this was (and still is) a symbolic borderline issue
through which to deal with the contradictions of a com-
pany: as a company, you operate to provide an eco-
nomic value but at the same time you can do it by
safeguarding the environment [. . .]. We are concerned
with environmental impacts and pollution. What is
our aim? [Our goal] is to reduce pollution, which has
a bene?t for the company, because it is less impacting,
but certainly for us as citizens as well. . .’’ (Interviewee
11, emphasis added)
In other words, environmental responsibility was envis-
aged as a symbolic concept through which to re?ect on the
complex relationships between economic and environ-
mental issues and to attempt to ‘‘reconcile’’, as contended
by interviewee 10, ‘‘what apparently seemed to be irrecon-
cilable’’. From this perspective, environmental responsibil-
ity and the subsequent process of reporting were perceived
in BETA as mythic means (see, Meyer & Rowan, 1991)
which provided a conceptual ‘‘common framework’’ (Scott,
2001, p. 58) for seeing, thinking and facing the controver-
sial aspects relating to the social and environmental im-
pacts of the organization’s economic activities. In doing
so, the notion of environmental responsibility and the
practices of reporting facilitated the process of making
these social and environmental impacts more identi?able
and visible, and thus more manageable, by shedding light
on, for example: (i) the levels of pollution produced in
the air, water and land; (ii) the amount of energy and re-
sources consumed; and (iii) the number of reportable inci-
dents occurring in production sites.
Finally, from the analysis of the case ?ndings, it appears
that through a process similar to that of ‘‘internalization’’
the concept of environmental responsibility with its mean-
ing system was ‘‘retrojected into consciousness’’ (Berger &
Luckmann, 1966, pp. 78–79) thus becoming part of the
internalized world of the individual subject. From the per-
spective of Berger and Luckmann (1966), through this pro-
cess the notion of environmental responsibility and its
meaning were ‘‘immediately [i.e. in-mediately] appre-
hended’’ (p. 149), as social facts to confront and conform
to. In BETA, these were recognized as the norms to ‘‘believe
in’’ and about which to develop expectations and hopes:
8
What would have happened if any one or more of these circumstances
had not occurred? Would the process of externalization have been
successful? Such interesting questions, given the data and information
collected, cannot be discussed further, other than to speculate that it would
have been less likely.
422 M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432
‘‘I believed in this. [. . .] I thought it could have changed
values and attitudes within the organization in more
concrete and quicker ways’’ (Interviewee 3).
Therefore, as a result of this multi-step process, which
has been regarded as a ‘‘construction of [a] common mean-
ing system’’ (Scott, 2001, p.40, in referring to Berger &
Luckmann, 1966), the concept of environmental responsi-
bility and its meaning system became institutionalized,
i.e. they became usual and established ‘‘ways of thinking’’
within the context of the organization (Burns & Scapens,
2000; p. 5; see also Larrinaga-González, 2007; Meyer & Ro-
wan, 1991). By becoming institutionalized, the idea of
environmental responsibility acquired ‘‘a semblance of
concreteness’’ (Hines, 1988, p. 257) and objecti?ed ‘‘exteri-
ority’’ (Zucker, 1991, p. 85), i.e. came to be a taken for
granted social fact (Zucker, 1987). In this ?rst phase, a cul-
tural- cognitive consensus, among the members of the
organizational sub-system, seemed to emerge about the
meaning and relevance to be attached to the ongoing orga-
nizational world and tasks. The notion of environmental
responsibility and its meaning system represented, by
paraphrasing Miller (1994), the ‘‘rationales’’ (Miller, 1994,
p. 3) on and through which the practices of social account-
ing were constructed and mobilized in BETA. The dynam-
ics, through which social accounting and reporting
developed, during what has been identi?ed as the practi-
calisation phase, will be discussed in the following sub-
section.
The diffusion of SER: practicalisation
As already mentioned, the ?rst environmental report
was published in the mid 1990s. It was a simple form of ac-
count prepared on the basis of the standards of that period.
As explained by an interviewee the report was seen as the
‘‘logical consequence’’ (Interviewee 5) of the initiatives,
and discourses, which had been previously undertaken in
respect of BETA’s orientation towards environmental
responsibility. In particular, as added by Interviewee 1,
the report represented ‘‘a ?rst attempt to put into practice
the concept of environmental responsibility [. . .]. Through
this document the performance in terms of environmental
impacts of the activities of [BETA] were recognized’’. Thus,
from the evidence gathered through the empirical analysis,
it appears that the process of preparing and publishing the
?rst environmental report was not a coincidental event,
but rather the natural (i.e. logical and expected) outcome,
and continuation, of the previous process whereby a con-
cept of (social and) environmental responsibility was con-
structed and established within the organization. The
report and related accounting practices, in particular, rep-
resented the ?rst structured initiatives that were imple-
mented to account for, and communicate, the
environmental impacts of the economic operations of
BETA.
Since its ?rst publication, the environmental report has
been produced on a yearly basis and has progressively be-
come more sophisticated and elaborate in the measure-
ment and reporting of environmental performance. In
particular, gradual additions were made to the range of
issues which were reported on (e.g. CO
2
and other hazard-
ous substances emissions; the amount of water consump-
tion) and re?nements were made to the methodologies
used to aggregate and calculate the various (social and
environmental) indicators. As indicated by one of
interviewees:
‘‘[. . .] obviously there is no way to compare the ?rst
report [published in the mid 1990s] and those pub-
lished in the subsequent years [. . .]. The report that
we now produce is more advanced from a methodolog-
ical point of view[. . .]. The attention to the methodolog-
ical aspects has become more important [. . .]. For
example with regard to the consolidated data, now we
are more precise and detailed’’ (Interviewee 11).
After the ?rst publications, the name of the document
was changed from Environmental Report to Health, Safety
and Environment (HSE) report. The new documents in-
cluded more social information about, for example, com-
munity involvement and the health and safety of
employees.
When the ?rst report was published, environmental
policy and (internal) guidelines did not exist. The initial re-
port included only ‘‘principles of behavior (conduct)’’ with
regard to environmental matters. As revealed by Intervie-
wees 1 and 11, the ?rst environmental policy and guide-
lines ‘‘were formally adopted and published’’ a few years
after the publication of the ?rst report.
With the publication of the ?rst report the process of
practicalisation commenced, whereby speci?c rules and
routines were progressively adopted and diffused into
the organization. The process of adopting increasingly
structured and formal procedures of reporting was facili-
tated by different factors both contextual and intra-organi-
zational. As discussed at the beginning of the empirical
section, the macro context of the second half of the
1990s was characterized by increasing concerns for corpo-
rate environmental responsibility and related issues (see
Deegan, 2002). This aspect was also emphasized by an
interviewee who noted that, at that time:
‘‘[. . .] companies were subject to increasing pressures
from the external world to be more responsible for their
impacts on the environment and communities’’ (Inter-
viewee 5).
In addition, the attention devoted to the behavior of
other relevant peers, whose initiatives were taken into
consideration to innovate the practices of reporting (i.e. a
mechanism similar to the mimetic one), was of some sig-
ni?cance (DiMaggio & Powell, 1991b). As stated by Inter-
viewee 1:
‘‘[. . .] an analysis of the initiatives undertaken by other
companies was made [. . .]. For example, we looked at
the report published by [name of a competitor] in
1997 that represented a signi?cant experience at that
time. [. . .] We were inspired by that report to improve
our report’’ (Interviewee 1).
The behavior and activities of other companies were
seen by those of BETA’s employees who were involved in
the process of social and environmental reporting, as an
M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432 423
important reference point for ‘‘seeing how the [reporting]
issues were developing’’ (Interviewee 5). However, as ex-
plained by the same respondent, the analysis of these ini-
tiatives was carried out ‘‘with a critical eye’’. The purpose
was to draw inspiration and to gather useful elements that
accommodated the operative needs of BETA. Thus, from
the perspective of institutional theory, it appears that the
mimetic mechanism (see DiMaggio & Powell, 1991b)
which in?uenced the reporting activities of BETA was not
an a-critical and ‘‘mindless’’ process of imitation of others
but rather it resembled a rational and ‘‘effortful accom-
plishment’’ (Lounsbury, 2008, p. 353) undertaken on the
basis of the institutional and organizational contingencies
in which BETA operated.
Furthermore, the practices of SER undertaken by BETA
were in?uenced by normative pressures (DiMaggio & Pow-
ell, 1991b; Scott, 2001) exerted by the standards and
guidelines (e.g. the Global Reporting Initiative) issued by
professional bodies. In particular, as asserted by an inter-
viewee, these guidelines were of some signi?cance for
the practices of reporting because:
‘‘[. . .] they provided a basis for improving how to
account, manage and report certain issues’’ (Intervie-
wee 8).
Contemporaneously with the institutional in?uences
other (intra-) organizational factors exerted a relevant im-
pact on the process of adopting increasingly advanced (so-
cial and) environmental accounting and reporting
practices. As reported by one of the respondents:
‘‘Our company was different from others [. . .]. In fact, at
the same time when the interest for these [environmen-
tal] aspects evolved, we experienced a Copernican Rev-
olution in our organizational structure [. . .]. As a result,
our company was completely re-structured. This Revo-
lution started in that period [mid and late 1990s]’’
(Interviewee 5).
By the second half of the 1990s, following a further
public issue on leading stock markets, the majority of BE-
TA’s shares were owned by private shareholders. In addi-
tion, in the same period, the ?rst subsidiary was
subsumed into the BETA Group. As a result of these
events, profound changes in the governance and organiza-
tional structure occurred. These transformations affected,
among others, SER practices that received fresh impetus.
In addition to the existing Environment and Safety Unit,
the Community Investment and Corporate Giving Unit
was constituted within BETA. Although this unit was
mainly concerned with the activity of corporate giving
and philanthropy, its formation was perceived by some
of the employees as ‘‘a signi?cant symbolic element’’
(Interviewee 5) which increased the attention of top man-
agement to managing and communicating the environ-
mental and social issues related to the economic activity
of BETA.
It was in the speci?c institutional (macro) and organiza-
tional contexts, brie?y described above, that the process of
practicalisation developed. The analysis presented in this
section indicates that this process was fostered by the
institutional and organizational conditions of the late
1990s, which provided a favorable context for improving
the existing practices of reporting. In particular, after the
publication of the ?rst report, more structured rules and
routines were increasingly adopted. In place of the existing
‘‘principles of conduct’’, for example the ?rst environmen-
tal policy and (internal) guidelines were formally adopted
a few years after the publication of the ?rst environmental
report. As explained by an interviewee, these guidelines
had been the ‘‘missing link’’ of the initial reporting. Thus,
their adoption was perceived as the ‘‘necessary act to close
the loop’’ in order to provide ‘‘a set of [principles and] rules
to be applied to the management of all [health, safety and
environment -related] activities’’ of the BETA Group (Inter-
viewee 1). The ?rst environmental policy and (internal)
guidelines were gradually subjected to a process of re-def-
inition with the purpose of providing, for example, more
precise guidance for collating and homogeneously assem-
bling information. As reported by one of the interviewees,
after their adoption:
‘‘the ?rst [internal] guidelines were amended and
extended to cover other issues related to health and
safety [. . .]. The new guidelines were called Guidelines
in Health, Safety, Environment and Public Safety’’
(Interviewee 1).
From the perspective of the institutional theories
adopted in this paper, the increasingly structured policies
and guidelines adopted by BETA represented the ‘‘rules’’
which were formally established to guide actions (Burns
& Scapens, 2000, p. 6) with regard to managing, account-
ing for and reporting social and environmental issues. For
example, the new health, safety and environment policy
and guidelines provided principles and instructions
about: (i) how to account for social and environmental
data; and (ii) how to consolidate these data within the
BETA Group.
In addition to these rules, speci?c routines emerged
(Burns & Scapens, 2000). In particular, as outlined by an
interviewee, the process of producing health, safety and
environment reports involved a few ad hoc routines includ-
ing: (i) compilation of worksheets with data about social
and environmental performance; (ii) preparation of the
?rst report drafts by all the entities of BETA Group
(subsidiaries and divisions), following the same format;
(iii) preparation of the ?nal Health, Safety and Environ-
ment reports by all subsidiaries of the BETA Group; (iv)
preparation of the ?nal Health, Safety and Environment re-
port for BETA following a consolidation process of all avail-
able data; and (v) distribution and publication of reports.
People involved in the process of preparing social and
environmental reports, at different hierarchical levels,
acted through these routines and on the basis of existing
rules. These routines, which re?ected the existing institu-
tional principles, norms and meanings, were ‘‘enacted
and reproduced’’ (Burns & Scapens, 2000, p. 14) by the
individuals in their daily activity. As a result of these
dynamics, SER and related rules and routines were sub-
jected to a process of embedding to become ‘‘standard
and institutionalized’’ elements in the organization (Inter-
viewees 7 and 10).
424 M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432
In summary, SER was envisaged as the ‘‘logical’’ (Inter-
viewee 5) initiative to be undertaken to ‘‘put into practice
the concept of environmental responsibility’’ (Interviewee
1). On the other hand, the ?ndings gathered through the
empirical analysis indicate the existence of a recursive
and re?exive process connecting the constructed meaning
system of the concept of environmental responsibility and
the social accounting practices which were developed on
this basis. Whilst the notion of environmental responsibil-
ity represented the ‘‘rationales’’ (Miller, 1994) and pro-
vided justi?cation for the initiation and development of
SER practices, in turn these practices contributed to the
embedding of the importance and relevance of the issues
related to environmental responsibility. As contended by
an interviewee:
‘‘the ?rst reporting helped [us] to set up this new
approach. . . [The reporting] triggered internal mecha-
nisms within the organization of greater awareness
[about these issues]’’ (Interviewee 1).
Inother words, the analysis has illuminateda formof cir-
cularity with SER being not only the ‘‘outcome’’ of the con-
structed concept of environmental responsibility, and the
actions undertakenonsuchgrounds,
9
but alsothe ‘‘medium’’
(Giddens, 1984) through which the meaning and signi?cance
of this concept could be re-considered and reinforced. Thus,
drawing from Berger and Luckmann’s arguments, SER acted
as aformal language throughwhichtotypify, categorize, quan-
tify and communicate the actions, and the results of these ac-
tions, undertaken under the aegis of environmental
responsibility. It was throughthese mechanisms (i.e. typi?ca-
tion/categorization, quanti?cation and communication) that
SERactedasapowerful ‘‘apparatusfor operationalising’’ (Mill-
er &Napier, 1993, p. 641) the notionof environmental respon-
sibility and thus enhancing its signi?cance and taken for
grantedness within the organization.
The process of reinforcement
In BETA, the third phase, namely reinforcement, began
to evolve from the early 2000s when highly formalized in-
tra-organizational structures and roles were constructed
(Berger & Luckmann, 1966) in an attempt to support the
activities connected to the management and reporting of
social and environmental aspects.
In the early 2000s, the existing organizational unit (i.e.
Environment and Safety), which had been in charge of
managing SER initiatives (e.g. the preparation and publica-
tion of Health, Safety and Environment reports), obtained
the status of Direzione Environment and Safety (i.e. Envi-
ronment and Safety Department). As a result, the Environ-
ment and Safety Department was elevated to the highest
level in the hierarchy and positioned under the direct con-
trol of the Chief Executive Of?cer, similarly to the other
more conventional departments such as Finance, Market-
ing and Human Resources. The decision to create an Envi-
ronment and Safety Department and to place it in a prime
position in the organizational chart gave its managers
more authority and resources to introduce managerial
innovations, as an interviewee who personally experienced
these transformations puts it:
‘‘it is the same as what is being said about quality sys-
tems: [in companies] quality comes from the top [. . .].
It is obvious that the closer you are to the top [manage-
ment] the more importance you acquire, along with
power to do and change things [. . .]. We had many pro-
jects [and ideas] in mind, which we had been keeping in
our drawer. When the [Department was constituted], I
realized that the right time had arrived to take them
out. Clearly, I played all my cards’’ (Interviewee 10).
Among these innovations, the introduction of an envi-
ronmental management system was one of the most
important. This system and the other initiatives described
below, in particular, produced a signi?cant impact on the
development and reinforcement of SER. As explained by
the same interviewee:
‘‘. . .[once we became Direzione] we have been able to
introduce, beside the guidelines on health, safety and
environment, a health, safety and environment man-
agement system to reinforce the activity of managing
and reporting environmental and social issues [. . .].
Before [then], such an initiative would have been
impossible’’ (Interviewee 10).
The introduction of a health, safety and environment
management system was accompanied by the adoption
of speci?c systems of control and auditing. The implemen-
tation of these systems allowed personnel of the Environ-
ment and Safety Department to better manage and
‘‘monitor’’ (Interviewee 11) the health, safety and environ-
ment performance of BETA and to provide more social and
environmental data to feed, among others, SER. In other
words, these managerial and control systems were rele-
vant for the existing reporting practices because they sup-
plemented more precise, detailed and analytic information
about the social and environmental performance to be in-
cluded in the external reports.
The Environment and Safety Department was also
responsible for managing, accounting and reporting all
the social and environmental performance of BETA at the
corporate level. Since its creation, the number of employ-
ees has gradually increased to over 40 individuals. The rise
of the Environment and Safety Department and the intro-
duction of new managerial systems required the employ-
ment of new staff and the introduction of new
professionalism. The increase in the number of staff and
the acquisition of new expertise, in turn, allowed managers
of this department to undertake further initiatives through
9
Several initiatives had been undertaken over time to improve the
corporate social and environmental performance. For example, more
structured procedures were implemented to: (i) reduce emissions of
sulphur dioxide (SO
2
) and mono-nitrogen oxides (NO and NO
2
) by
increasing the ef?ciency of ?ltering systems in the burning combustors
(in a three-year period at the end of the 1990s the acidi?cation potential of
the SO
2
and NO produced by BETA reduced by 20%); (ii) curb the use of
carbon fossil fuels by investing in renewable energy sources or reduce CO
2
emissions through investment in systems of bio?xation; (iii) increase the
safety and health conditions of employees working abroad through speci?c
on site projects (e.g. HIV prevention) or systems (e.g. telemedicine); and
(iv) support projects/campaigns aimed at improving the human rights
conditions of the communities in which BETA operated.
M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432 425
which to consolidate SER practices. For example, as
revealed by an interviewee, a new project regarding
accounting for ‘‘biodiversity’’ of BETA was launched (Inter-
viewee 11). In particular, this project was presented in var-
ious workshops organized with BETA employees. During
the presentation of the project, the other activities of the
Environment and Safety Department, including the manag-
ing and reporting of health, safety and environment perfor-
mance, were discussed. The launch of this project and its
presentation within the organization represented impor-
tant strategies of diffusion and, through this, consolidation
of SER practices.
The case study reveals that decision making about the
initiatives described above, including the design of the
managerial, control and reporting systems, was less signif-
icantly in?uenced, when compared with the two phases
previously described, by the norms and guidelines issued
by professional bodies or by the action undertaken by com-
petitors. Among some of BETA’s managers there was a
strong perception that what had been suggested and pro-
posed by consultants or professional bodies (e.g. the Global
Reporting Initiative) was ‘‘reductive’’ (Interviewee 11) and
to some degree ‘‘outdated’’ (Interviewee 1) for the new
managerial needs of BETA. Similarly, the behavior of other
peers was observed with either scepticism or explicit crit-
icism as shown by the following quotations:
‘‘. . .we look at [name of competitors] to see what they
have done and do [. . .]. But our current reporting
[needs] are quite different; what [our competitors] do
is preparing lea?ets rather than social and environmen-
tal reports. Instead, we are still interested in maintain-
ing a very strong managing and accounting focus’’
(Interviewee 11).
‘‘The choice by [name of a competitor] of adopting 130
indicators of sustainability [for its reporting] leaves me
quite puzzled’’ (Interviewee 1).
From the perspective of institutional theory, the analy-
sis indicates that the in?uences of institutional forces (i.e.
normative and mimetic) in the process of construction
and adoption of what has been identi?ed as reinforcement
strategies and initiatives were not signi?cant.
In summary, the transformation of the Environment
and Safety Unit into a department and the adoption of
more advanced procedures and systems of environmental
management, control and audit, along with the acquisition
of new staff and implementation of speci?c projects (e.g.
the biodiversity project), represented initiatives which
reinforced the practices of social and environmental
accounting and reporting.
Furthermore, in the same period another organizational
structure, previously referred to as the Social Responsibil-
ity Unit, was formally constituted in BETA. Within the
organization chart, the Social Responsibility Unit was posi-
tioned under the directive of the ‘‘Communication Depart-
ment’’, and therefore, not formally and hierarchically
connected to the Environment and Safety Department. As
reported by another interviewee, the creation of the Social
Responsibility Unit was another example of:
‘‘[. . .] increasing attention by our Company in dealing
with these issues [i.e. social and environmental] in the
best possible ways. . . [Social Responsibility] was cre-
ated in [the early 2000s] when I formally received the
job to review and assemble all the existing initiatives
with the purpose of identifying more structured proce-
dures to support our activities. . .’’ (Interviewee 5).
The Social Responsibility Unit consisted of four sub-
units and included the Community Investment and Corpo-
rate Giving Unit that had been created in previous years.
The Social Responsibility Unit had responsibility for man-
aging and reporting all other issues related to corporate so-
cial responsibility such as, for example, human rights and
community investment, in which the Environment and
Safety Department was not directly involved. Thus, the So-
cial Responsibility Unit, as contended by some of the inter-
viewees, was set up with the speci?c purpose of handling
these issues complementarily and in synergy with the
Environment and Safety Department.
10
In particular, the
Social Responsibility Unit had three main roles. First, the
unit had a responsibility for managing, in a more structured
and systematic way, the community investment projects in
which BETA was involved. In particular, the unit was in
charge of identifying ‘‘appropriate systems’’ (Interviewee
3) through which to manage, account and report the perfor-
mance of these projects. Second, the structure was speci?-
cally responsible for managing relationships with different
stakeholders of BETA and for providing information in re-
sponse to their requirements. Third, the Social Responsibility
Unit had a responsibility for recording and analyzing social
and environmental information, relating to the activities in
which it was involved, to feed the process of social and envi-
ronmental reporting. In particular, the unit was in charge of:
(i) the production of speci?c social brochures and pamphlets
for external dissemination; and (ii) the provision of relevant
information to be included in the social and environmental
reports.
The rise of the Social Responsibility Unit, and the adop-
tion of speci?c managerial systems (e.g. management of
community investment projects), were further signi?cant
initiatives through which BETA augmented social and envi-
ronmental responsibility issues that were managed and re-
ported upon. The constitution of the Social Responsibility
Unit required the employment of new staff. By the time
the ?eldwork concluded, over ten people were employed
in this structure. Similarly to what was observed within
the Environment and Safety Department, the employment
of new personnel and the creation, to paraphrase Berger
and Luckmann (1966), of new ‘‘roles of responsibility’’ rep-
resented important elements in the process of propagation
and embedment of SER within BETA.
In conclusion, the empirical ?ndings highlight that
since the early 2000s effective and appropriate strategies
and initiatives were adopted to reinforce the processes of
managing social and environmental issues and the prac-
10
The analysis of the reasons why the Social Responsibility Unit was
positioned under a different department and whether or not the activity of
these two structures was actually undertaken in a complementary way is
beyond the scope of this paper.
426 M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432
tices of producing social and environmental reports. In
addition to the creation (or transformation) of new (old)
organizational constituencies (i.e. the Social Responsibility
Unit and Environment and Safety Department), new man-
agerial procedures and systems (e.g. environmental man-
agement and control systems) were employed, along
with the acquisition of new staff and implementation of
ad hoc projects (e.g. the biodiversity project). These strate-
gies and initiatives were effective because they produced
the results that were expected, i.e. to support, consolidate
and extend the existing practices of social and environ-
mental accounting and reporting. In addition, such strate-
gies and initiatives were appropriate, from the
institutional perspective of the present paper, because they
acted as ‘‘a necessary correlate’’ (Berger & Luckmann, 1966,
p. 91) of the process of institutionalization of SER. From the
evidence presented above, it appears that these strategies
and initiatives, as part of the reinforcement phase, had an
essential role in cementing the entire process of institu-
tionalization of SER and in reducing the possibilities for
its deinstitutionalization. Indeed, these strategies and ini-
tiatives attracted increasing attention to social and envi-
ronmental issues with the result that the processes of
managing and reporting organizational performance be-
came more ‘‘established’’, ‘‘pervasive’’ and ‘‘frequent’’ (Oli-
ver, 1992) elements of organizational life: i.e. increasingly
institutionalized. As a result of the process of reinforce-
ment, SER acquired, to paraphrase Zucker (1991), a ‘‘fact
of life’’ (p. 86) status thus augmenting its relevance and
importance within the organizational realm by becoming,
in the words of two interviewees, ‘‘an indispensable part’’
(Interviewee 9) of BETA’s reality for the ‘‘management of
the critical areas of business operations’’ (Interviewee 1).
The following Table summarizes and synthesises the
?ndings, which have been generated through the empir-
ical investigation of the processes, forces and in?uencing
factors involved in the institutionalization of SER (see
Table 2).
Table 2
Summary of the empirical ?ndings from this paper.
M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432 427
Summary and conclusions
In recent years, several studies have been undertaken to
investigate the corporate processes of SER, its drivers and
organizational effects. However, the analysis of the contin-
gencies and mechanisms through which SER practices are
introduced, constructed and implemented remains largely
under-developed in the (social and environmental)
accounting literature. Most of the existing works have
not explicitly focused on ‘‘how and why’’ SER practices
and related concepts or ideas ‘‘reach [an] institutional sta-
tus’’ (Bebbington et al., 2009, p. 589) in speci?c socio-orga-
nizational contexts. The present paper has speci?cally
investigated the dynamics through which SER, from its ini-
tiation, has modi?ed and evolved to become over time
institutionalized, i.e. a taken for granted, usual and estab-
lished (Meyer & Rowan, 1991; Zucker, 1991) social fact
within the case study organization.
The empirical investigation has involved an Italian mul-
tinational company (BETA) operating in the energy sector
and has focused, in particular, on the practices and under-
pinning contexts of social and environmental accounting
and reporting. The evidence has been interpreted through
the lens of two institutional theories, i.e. new institutional
sociology and old institutional economics. Insights from
these two theories have been used to construct the analy-
sis in an attempt to provide a more context-rich and, in
Creswell’s words, ‘‘real’’ and ‘‘alive’’ (Creswell, 1998, p.
256) ‘‘narration’’ (Quattrone, 2006, p. 151) of how SER-re-
lated dynamics of institutionalization took place.
The empirical ?ndings have illuminated a recursive and
progressive multi-step process. In particular, three main
processes and related outcomes have been identi?ed: (i)
the construction of the common meaning system around
the idea of social and environmental responsibility; (ii)
practicalisation, whereby rules and routines were adopted
and diffused inside the organization; and (iii) reinforce-
ment through the adoption of intra-organizational mana-
gerial structures and procedures.
The ?rst phase, namely ‘‘the construction of a common
meaning system’’ (Scott, 2001, p. 40), developed in the
early to mid 1990s and culminated in the publication of
the ?rst environmental report. The analysis of this process
drew mainly on the arguments developed by Berger and
Luckmann (1966) who envisaged a three-step mechanism
(i.e. externalization, objectivation and internalization)
through which institutions (i.e. symbols and meanings)
are constructed and reproduced. In particular, as observed
previously, the processes of externalization and objectiva-
tion were spurred by three committed and motivated orga-
nizational representatives who acted as catalysts for
change. Metaphorically speaking, these employees acted
as interpreters of the institutional messages in the (macro)
external environment and promoters of the processes of
comprehension and translation inside the organization.
These observations largely concur with the extant litera-
ture about the relevance of key organizational actors in
promoting decision making about social and environmen-
tal reporting (see, for example, Adams & Mc Nicholas,
2007; Bebbington et al., 2009). While previous works have
primarily focused on the relevance of powerful actors, such
as the Chief Executive Of?cer, senior executives and own-
ers in the processes of initiation and sustainment of SER,
this study has highlighted the important role that some
in?uential employees, who need not necessarily be top
managers, can also play in the phases prior to these deci-
sions. In the analysis undertaken in the present paper,
three such employees undertook a pivotal role in the pro-
cess of making the social and environmental issues under-
standable, intelligible and, therefore, more acceptable and
adoptable in the organizational discourse of BETA (see Lar-
rinaga-González & Bebbington, 2001).
As a result of the process of construction of a common
meaning system, the concept of social and environmental
responsibility and its meaning system became institution-
alized: i.e. given and taken for granted elements within the
context of the case study organization (see Jennings &
Zandbergen, 1995). As observed above, the institutional-
ized idea of social and environmental responsibility and
its meaning system represented the ‘‘rationales’’ (Miller,
1994) on and through which the practices of social
accounting were constructed in BETA.
The analysis of this ?rst stage provides one major theo-
retical contribution to the literature of social accounting
and, more generally, of accounting. It unpacks some of
the early arguments of Berger and Luckmann and opens
up new developments in the way in which these can be
adopted to investigate some of the complexities and, to
echo Hopwood (2005), the ‘‘mysteries’’ (p. 586) of the gen-
esis and evolution of (social) accounting practices. While
Berger and Luckmann’s work is not a new theoretical
source in organizational analysis, indeed it is widely ac-
cepted (and ‘‘a given’’) in much of constructionism-infused
accounting research, its theoretical potentialities to inves-
tigate the dynamics and contingencies through which no-
vel (social) accounting techniques emerge still have scope
for further development. In the present paper, Berger and
Luckmann’s insights, and particularly those related to the
concepts of externalization, objectivation and internaliza-
tion, have been explicitly adopted to illuminate the pro-
cesses whereby ideas, concepts and meanings (i.e.
rationales) related to sustainability (and accountability)
were constructed to ‘‘become part of [the] organizational
discourses’’ in the case study organization (Bebbington,
O’Dwyer, & Unerman, 2007, p. 348). Hence, in illuminating
such processes the analysis of this ?rst stage helps to put
?esh on the work of Miller (1994) by providing an in-
depth, detailed and context-rich narrative of the dynamics
(i.e. how) and conditions/contingencies (i.e. why) through
which such rationales emerge, evolve and consolidate to
become a catalyst for accounting innovation and change.
The second phase, namely practicalisation, commenced
in the mid 1990s immediately after the pioneering ?rst
environmental report had been published. As a result of
the process of practicalisation, increasingly structured
rules and routines were progressively adopted in the orga-
nization, over time. These routines, which re?ected institu-
tional principles, norms and meanings, were ‘‘enacted and
reproduced’’ (Burns & Scapens, 2000, p. 14) by the individ-
uals of BETA in their daily activity. Through a recursive
428 M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432
process, these routines/rules became institutionalized in
the organization.
In BETA the initiation of environmental reporting
seemed to be the natural (i.e. logical and expected) result
of the internal initiatives undertaken in the previous years
rather than a ‘‘structurally determined’’ or ‘‘instrumental’’
mechanism to ‘‘strategically respond’’ to the pressures of
the external environment (Lounsbury, 2008, pp. 352–
353). This is not to say that the external context did not ex-
ert any in?uence on the implementation of the process of
reporting, but rather that these external factors, taken
alone, were not suf?cient to explain the complex dynamics
that led BETA to publish the ?rst report. In this sense,
therefore, the ?rst environmental report was the result of
internal organizational dynamics, which were spurred by
the in?uences (e.g. mimetic and normative) exerted by
favorable institutional factors. These results resonate with
the observations of Bebbington et al. (2009) who suggest
that the initiation of SER, rather than being merely a com-
pliance with external (institutional) pressures, represents
the ‘‘natural’’ (p. 613) outcome of a complex process where
‘‘what goes on inside organizations’’ (p. 616) (i.e. internal
dynamics) is determinant. In particular, this study has illu-
minated the existence of a re?exive and circular nexus be-
tween organizational practices (e.g. accounting) and the
cultural-cognitive frameworks (i.e. concepts, ideas,
meanings systems) on the basis of which these practices
were adopted. In BETA, the initiation of SER was ‘‘informed
by and bound up in’’ (Lounsbury, 2008, p. 357) the concept
of social and environmental responsibility and its related
meaning, which, as argued above, represented its ‘‘ratio-
nales’’ (Miller, 1994). On the other hand, the empirical
?ndings have revealed that the ?rst report was not only
the ‘‘outcome’’ of the process of putting into practice the
concept of social and environmental responsibility, but
also the ‘‘medium’’ (Giddens, 1984) through which to rein-
force and embed the previous process of the construction
of a common meaning system. In particular, SER acted as
a structured formal language (Berger & Luckmann, 1966)
which contributed, through the mechanisms of typi?ca-
tion/categorization, quanti?cation and communication, in
‘‘making’’ the notion of social and environmental responsi-
bility more ‘‘operable’’, recognizable and manageable
(Miller & Napier, 1993, p. 641).
The analysis of the second stage offers two main theo-
retical contributions. First, in response to Lounsbury’s
(2008) calls for more studies investigating the multifari-
ousness and novelty of organizational practices, this anal-
ysis provides in-depth empirical evidence of the ‘‘origins’’
of new (social) accounting practices by shedding light on
the complexities of the institutional dynamics involved in
the (un)-isomorphic change. In particular, the analysis
has revealed that the decision making about the initiation
and development of SER was not an instrumental and spas-
modic initiative, which is consistent with the ?ndings of
Bebbington et al. (2009), nor an automatic process of a-ra-
tional isomorphic adaptation to the institutional condi-
tions. To the extent that isomorphic behavior occurred,
this was not a blind (see Lounsbury, 2008) mechanism of
alignment to normative rules or an a-critical imitation of
other peers, but rather a rationally-grounded attempt at
gathering resources, for example in terms of ideas, models
and guidelines, to improve the organizational reporting
practices. Thus, in such a situation, the decision making
regarding SER was driven by the existence of a form of
rationality on the basis of which managers acted in dealing
with the existing institutional forces (e.g. mimetic and nor-
mative) and conditions. This rationality was not an ‘‘instru-
mental-type’’ (Lounsbury, 2008. p. 352, in referring to
Oliver (1991)) but rather it resembled the ‘‘institution-
ally-based’’ rationality that was envisaged by Lounsbury
(2008, p. 352), though strongly infused with a manifest
organizational-orientation. In BETA, this institutionally-
in?uenced and organizationally-oriented rationality was
less based on the idea of ‘‘?tting in’’, as suggested for exam-
ple by Bebbington et al. (2009, p. 612), and more grounded
on the idea of designing, cutting and sewing SER and re-
lated practices in such a way that was congruent with
the organizational needs and expectations.
Second, the empirical ?ndings of this stage provide some
insights into the role that institutionalization of cultural-
cognitive elements can have in increasing the degree of
institutionalization of (accounting) practices. In BETA, the
institutionalization of the concept of social and environ-
mental responsibility, metaphorically speaking, provided
not only fertile soil for the initiation of environmental
reporting but also stable and deep ground where SER, and
related rules and routines, could actually grow, propagate
and take root: i.e. become institutionalized. The practices
of SER developed and became institutionalized, because,
in a favorable institutional context, these could rely on the
existence of an institutionalized notion of social and envi-
ronmental responsibility (i.e. its institutionalized ‘‘ratio-
nales’’ (Miller, 1994)), which provided a stable and secure
basis. It is believed that these observations provide a
glimpse into the role that cultural-cognitive elements once
institutionalized, canplay, inadditionto their role of ‘‘mobi-
lize[r]’’ (Miller, 1994), in the processes of embedding and
fostering persistence (Zucker, 1991) of accounting prac-
tices. In other words, these empirical ?ndings provide in-
sights to better understand the possibilities and
circumstances under which it is feasible to enhance effec-
tiveness, pervasiveness and durability of organizational
practices, including social and environmental accounting,
and to reduce the potential for intended or unintended
decoupling (see Scott, 2001).
Finally, in the third phase, namely reinforcement, initia-
tives were undertaken in BETA to support and reinforce the
SER-related activities. In the early 2000s, two highly for-
malized structures were established: the Environment
and Safety Department and the Social Responsibility Unit
respectively. These structures contributed to sustaining
the legitimacy and social-fact quality of the established
practices of SER. In addition, effective and appropriate
management and control systems, along with the acquisi-
tion of new staff and implementation of ad hoc projects,
were also adopted. In particular, the empirical evidence
has highlighted the pivotal role that these initiatives
played in cementing and solidifying the entire process of
institutionalization of SER.
The results of this phase offer two main theoretical con-
tributions. First, the analysis sheds light on the different
M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432 429
bodyof strategies andinitiatives, inadditiontotheconstruc-
tionof roles of responsibility (see Berger &Luckmann, 1966)
and constitution of formal structures, which may be effec-
tively adopted in the organizational context to maintain, in-
crease and consolidate the degree of institutionalization of
existing accounting practices, such as SER. In particular,
the analysis has revealed the role that can also be played
by management, control and audit systems in this process
of consolidation. Second, the narrative of the third phase of-
fers insights toextendunderstandingof howthe process and
initiatives of reinforcement may impact on the nature and
role of SER. As an outcome of the process of reinforcement,
SER became, by referring to Zucker (1991), a ‘‘fact of life’’,
i.e. a central component of the organizational reality beyond
its technical reporting characteristics. In doing so, SER and
related practices augmented their relevance and impor-
tance to become, in the words of an interviewee, an ‘‘indis-
pensable part’’ of the management and control of the
organization’s operational activities.
In summary, this paper has focused on the black box of
the processes and dynamics through which SER has over
time become an institutionalized actuality in the case study
organization. In particular, a three-step process leading to
the institutionalization of SER has been identi?ed from the
empirical analysis. Through this three-step process it has
been possible to investigate how the ‘‘rationales’’ (i.e. con-
cepts and meanings) (Miller, 1994, p. 3) of (social) account-
ing have been constructed and translated into practice, and
howthese practices have beenreinforcedinto the case study
organization. Theunderstandingof thesecomplexdynamics
represents a sine qua non in appraising the actual, realistic
and potential role of social and environmental accounting
and accountants to promote any substantial changes (see
Georgakopoulos & Thomson, 2008; Gray, 2002) in business
and organizational realms towards a more harmoniously
balanced‘‘relationshipbetweenhumanandnatural worlds’’
(Hopwood, 2009b, p. 434). However, toevaluatethis roleit is
essential to extend understanding of how accounting prac-
tices are constructed, implemented and consolidated to be-
come institutionalized. Only inthis way wouldit be possible
to ascertain how, when and to what extent accounting
researchers may participate, directly or indirectly, in the
processes of making accounting interventions more benign
(Adams & Larrinaga-Gonzáles, 2007; Adams & Whelan,
2009). Inthis regard, theempirical analysis of this paper pro-
vides some suggestive insights for understanding how and
to what extent many interventions (e.g. by academics,
NGOs, practitioners, charity activists and opinion leaders)
could in?uence the process of construction and institution-
alization of SER at the different identi?ed phases. With re-
gard to the ?rst phase (i.e. construction of a common
meaning system) academics, for example, couldact, directly
or indirectly, as promoters and educators for more societal
understandings of social and environmental responsibility
(Adams & Larrinaga-Gonzáles, 2007). Similarly, researchers
could be involved in the second and third phases respec-
tively by providing guidance for: (i) the implementation of
appropriaterules androutines; and(ii) theadoptionof effec-
tive systems and structures to manage and report social and
environmental issues. However, whether, and if so how, so-
cial and environmental accounting interventions are actu-
ally generating these desirable outcomes is something that
requires further research and investigation.
In conclusion, the focus of this paper has been on a sin-
gle case whose practices of SER (and its processes of insti-
tutionalization) have been studied through extensive
?eldwork. The choice of studying a single case has pro-
vided detailed and in-depth insights for understanding
how and why sustainability principles and practices are
constructed and implemented in various norms of organi-
zational life (Bebbington, O’Dwyer, & Unerman, 2007). On
the other hand, this also constitutes an important limita-
tion given that the explanations and considerations
reported are very much spatially and contextually con-
strained. Moreover, a second limitation is that this paper,
while taking into consideration the in?uences exerted by
the macro institutional context, does not speci?cally ad-
dress the complexities of the interlinks between macro-
institutionalism, which for example may take place at the
level of sector or industry, and meso-micro institutional-
ism related to SER. Finally, this paper has explicitly focused
on the ‘‘how’’ and ‘‘why’’ institutionalization of SER took
place rather than its effects on organizational changes.
Therefore, more research should be encouraged to en-
hance the theoretical understanding of the dynamics, con-
tingencies and complexities of organizational behavior
related to the institutionalization of SER. It would be valu-
able, for example, to extend the analysis to involve multi-
ple case studies in similar institutional and contextual
settings in order to ascertain patterns of convergence or
divergences between cases. Similarly, research may be car-
ried out to study SER practices of individual cases in differ-
ent contexts (e.g. countries or sectors) in order to
investigate the in?uences of different institutions and
institutional forces (e.g. regulative and normative) across
contexts. In addition, a particular issue that could be fur-
ther investigated is how and to what extent the interweav-
ing of the different macro and meso-institutions, and
related dynamics, drive, in?uence and shape social
accounting practices over time. Finally, it would be bene?-
cial to conduct more in-depth and longitudinal research to
investigate the effects of the institutionalization of SER and
the role that this process may (or not) play in promoting
signi?cant changes in organizations towards more socially
and environmentally responsible practices.
Acknowledgements
I am very grateful to Jan Bebbington, John Burns, Gius-
eppe Delmestri, Carlos Larrinaga-Gonzáles and Lee Parker
for many helpful comments and advice during the writing
of this paper. In addition, I wish to especially thank David
Collison and Rob Gray for their helpful and supportive sug-
gestions during the revision process. Also, I would like to
immensely thank the two anonymous reviewers and the
editor in chief, Chris Chapman, for their comments, sugges-
tions and assistance in developing the paper. Finally, I
would like to thank participants at the: 9th ENROAC Con-
ference held in Dundee in 2009; the 21st International
CSEAR Conference held in St. Andrews 2009; and the 7th
Spanish CSEAR Conference held in Las Canarias in 2009.
430 M. Contrafatto/ Accounting, Organizations and Society 39 (2014) 414–432
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