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Toward a More Coherent Understanding of the Organization–Society Relationship: A Theoretical Consideration for Social and Environmental Accounting Research

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Abstract

In this study we analyze the overlapping perspectives of legitimacy theory, institutional theory, resource dependence theory, and stakeholder theory. Our purpose is to explore how these theories can inform and be built upon by one another. Through our analysis we provide a broader theoretical understanding of these theories that may support and promote social and environmental accounting research. This article starts with a detailed analysis of legitimacy theory by bringing some recent critical discussions on legitimacy and corporations in the management literature into accounting research. The notion forwarded by legitimacy theory then serves as an overarching concept to examine the relationship between and among theories. We conclude that two theoretical considerations are important for future social and environmental accounting research. First, it must be acknowledged that some business entities initiate social activities based on direct interactions with stakeholders, whereas others may also undertake similar activities to manage their societal level of legitimacy. Second, from analyzing the perspectives of legitimacy theory, institutional theory, resource dependence theory, and stakeholder theory, it is possible to reach compatible interpretations of business social phenomena, and the selection and application of these theories should depend upon the focus of study.

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Acknowledgments

The authors would like to thank Jason Chen, Charles Cho, Peggy Dwyer, Tom Keon, Kiana Lin, Den Patten, and the participants of the 5th Conference on Social and Environmental Accounting Research, the 2006 European Accounting Association Meeting, and research workshops at the University of Central Florida for their constructive comments.

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Correspondence to Jennifer C. Chen.

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Chen, J.C., Roberts, R.W. Toward a More Coherent Understanding of the Organization–Society Relationship: A Theoretical Consideration for Social and Environmental Accounting Research. J Bus Ethics 97, 651–665 (2010). https://doi.org/10.1007/s10551-010-0531-0

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