Institutional Theory and Hybrid Accounting and Control Systems

Publication Date

3-1-2024

Document Type

Article

Publication Title

Journal of Management Accounting Research

Volume

36

Issue

1

DOI

10.2308/JMAR-2023-024

First Page

1

Last Page

26

Abstract

We identify several manifestations of hybridity in accounting and control systems. Hybridity in the form of multiple accounting systems and actual or postural conformity to institutional expectations can enable organizations to overtly, but sometimes ostensibly, combine multiple logics to appease stakeholders. Hybridity increases costs and the risk of internal inconsistency. Consequently, firms decouple some practices to provide an impression of conformance. We offer a typology of three forms of hybridity—compliance, complete decoupling, and partial decoupling—and illustrate using examples from accounting hybridization choices regarding corporate social responsibility (CSR), diversity, equity, and inclusion (DEI), and international reporting standards. We empirically examine hybridity in the context of the voluntary adoption of international financial reporting standards (IFRS). We find that instrumental pressures are associated with adoption through compliance; however, social pressures are likely to be placated through complete decoupling, whereby firms voluntarily adopt multiple systems in policy, but not in practice.

Keywords

accounting system design, hybrid organizations, institutional theory

Department

Accounting and Finance

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