Organized Decoupling of Management Control Systems: An Exploratory Study of Traders’ Unethical Behavior

Laguecir, Aziza; Léca, Bernard

doi:10.1007/s10551-021-04741-3

Cited by 6 publications

(3 citation statements)

References 73 publications

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“…MED is difficult to sustain where practices interfere with the accomplishment of firms’ core tasks, and outcomes are monitored by external audiences (Dick, 2015). MED can be intended and organized (Laguecir and Leca, 2021; Stål and Corvellec, 2021). It can be a way for actors with limited power to decouple by providing evidence of policy compliance (Kern et al , 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

Influence of distracted mutual fund investors on corporate ESG decoupling: evidence from China

Liu

Meng

2023

SAMPJ

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Purpose This study aims to explore whether investors’ inattention is associated with firms’ environmental, social and governance (ESG) decoupling, which is defined as the misalignment between the implementation and incorporation of ESG policies. Design/methodology/approach Focusing on a sample of the components of ESG ratings for China Securities Index (CSI) 300 companies between 2017 and 2019, the authors test the relationship between firms’ ESG decoupling level and mutual fund investors’ distraction by applying exogenous shocks to their portfolios. Findings The results show that firms with distracted mutual fund investors engage in more external than internal ESG actions, leading to a high ESG decoupling level. Mutual fund investors use “threat of exit” rather than “voice” as a governance mechanism to influence corporate ESG decoupling. While external ESG actions mitigate stock price crash risk, internal ESG actions increase firm value; firms with a high ESG decoupling level suffer lower valuations. Practical implications This study has implications for increasing the congruence between firms’ external and internal ESG actions, thereby improving firms’ ESG performance and long-term economic outcomes. Social implications This paper helps policy-makers and regulators to reassess how ESG policies can be implemented to be consistent with organizations’ core business activities. Originality/value Contributing to prior studies of greenwashing and corporate social responsibility decoupling, this paper extends decoupling literature by revisiting ESG impacts in an integrated framework and explores the antecedents of corporate ESG decoupling from the perspective of institutional investor monitoring.

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Section: Literature Reviewmentioning

confidence: 99%

Influence of distracted mutual fund investors on corporate ESG decoupling: evidence from China

Liu

Meng

2023

SAMPJ

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“…Thus, unethical behavior in organizations may have more complex origins than simply self-interest or negligent supervision. At the same time, some theories, such as the fraud triangle and agency theory, assume that the fraudster does so for exclusively personal reasons; however, it is imperative to consider the pressures and incentives generated by the organization itself (Murphy and Free, 2016; Lokanan, 2015; Schuchter and Levi, 2014); especially because in highly financialized environments, such as investment banks, the role of organizational culture can be intentionally and organized so that an unethical corporate culture is encouraged to maximize profits and decouple this activity from the Management Control System aimed at behavioral regulation (Laguecir and Leca, 2021). So, it is important to understand that there is a relationship not only between ethical leadership behavior and the ethical behavior of employees, but also that the ethical climate and organizational justice play a very significant mediating role between ethical leadership and employees’ ethical behavior (Halbusi, Ismail and Omar, 2021).…”

Section: Discussionmentioning

confidence: 99%

Accounting fraud in light of organismic integration theory

Orth

Marrone²,

Macagnan³

2022

JFC

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Purpose This systematic literature review aims to identify how literature approaches motivations for committing fraud in financial statements and presents a framework on these motivations in the light of organismic integration theory (OIT). Design/methodology/approach Therefore, initially, 251 articles were analyzed. Through a systematic review of the literature, 25 were submitted to content analysis. Findings The findings suggest that the OIT explains motivational processes neglected by traditional theories, such as the fraud triangle and agency theory. Both theories consider that all human beings are utilitarian by nature. The authors expect that the better we understand the motivational factors that contribute to the large-scale endorsement of immoral behavior, it would be easier to prevent accounting fraud incidents. Research limitations/implications This work went to the limit of the proposition of premises; however, other authors can be to advance to the empirical tests. Practical implications So, different people have different motivations for committing fraud. For this reason, it is important that organizations, auditors, regulatory and professional bodies that are engaged in combating such dysfunctional behaviors seek to know more deeply whether people are more externally or internally motivated. Social implications This recognition will make it possible to design adequate rules and controls, rather than assuming that everyone is equal, and will be discouraged from committing fraud only when there is a severe punishment associated with it. Originality/value This study adds to the stream of scholars who analyze fraud from a broader perspective than the assumption that all beings are rational and seek to maximize their well-being. However, to the best of the authors’ knowledge, this is the first study to analyze the phenomenon of fraud from the perspective of the OIT.

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“…Accounting for decoupling in complex organizations also raises issues regarding the extent to which decoupling emerges from individual practices that coalesce to separate ongoing practices stemming from policy or whether decoupling is actually “organized” (Laguecir and Leca, 2022). The latter calls for considering the strategic implications of Meyer and Rowan's (1977) initial claim that external compliance secures legitimacy while decoupling ensures efficiency and to what extent this might lead organizations to organize decoupling to protect the core goals from the multiple demands that might divert internal efforts from those goals.…”

Section: Expanding Research On Decouplingmentioning

confidence: 99%

Expanding public sector performance measurement and management research with actor-centred approaches in new institutionalism

Leca,

Laguecir

2023

JPBAFM

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PurposeIn his 2022 paper, in the Journal of Public Budgeting, Accounting and Financial Management, Sven Modell reviews and reflects on the public sector's institutional research dealing with performance measurement and management (PMM) over the past decade. Modell suggests potential extensions of this body of research. This paper seeks to contribute to the path that Modell initiated. It offers directions in which institutional theory might contribute further to research on agentic aspects of PMM in the public sector.Design/methodology/approachThe paper is a rejoinder emphasizing how institutional theory could further nurture reflection on PMM research in the public sector. The authors draw upon Modell's article and ongoing research in the institutional theory field.FindingsModell insists that institutional research on PMM in the public sector should explore the constitutive effects of PMM practices while conceiving such practices as institutionally embedded phenomena. The authors seek to extend this approach by considering the role of agency in institutional processes. To do this, the authors build on recent institutional research on agency, discussing how those new conceptualizations could nurture and develop the understanding of PMM practices in the public sector. The authors further discuss implications for coupling and decoupling as sites of agency. Such literature is relevant for examining emerging themes in public-sector accounting because it allows the authors to better conceptualize the underlying mechanisms of agency in the context of public service provision characterized by institutional complexity.Originality/valueThis paper details several implications of the current developments in new institutional theory in examining agency in the relationship between institutions and PMM, pointing at the case of decoupling. In so doing, the authors seek to stimulate a constructive exchange between public-sector accounting and a broader institutionalist body of research and suggest ways of extending the PMM research agenda.

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Organized Decoupling of Management Control Systems: An Exploratory Study of Traders’ Unethical Behavior

Cited by 6 publications

References 73 publications

Influence of distracted mutual fund investors on corporate ESG decoupling: evidence from China

Influence of distracted mutual fund investors on corporate ESG decoupling: evidence from China

Accounting fraud in light of organismic integration theory

Expanding public sector performance measurement and management research with actor-centred approaches in new institutionalism

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