Faculty Publications

Talk The Talk Or Walk The Walk? An Examination Of Sustainability Accounting Implementation

Document Type

Article

Keywords

Ambiguity avoidance, Environmental sustainability, Social norms influence, Trust

Journal/Book/Conference Title

Journal of Business Ethics

Volume

152

Issue

3

First Page

725

Last Page

739

Abstract

This study examines how ambiguity in corporate objectives affects managers’ choice between opposing sustainability and short-term profit goals. We test this question with an experiment in which we vary whether environmental sustainability is included explicitly (vs implicitly) as a strategic objective that is used for managers’ performance evaluations. Findings show that managers increase (decrease) biodegradable production and correspondingly decrease (increase) short-term profit when environmental sustainability performance is explicitly (implicitly) incorporated within the company’s strategic objectives. Also, managers in the implicit incorporation group are more likely to decrease (increase) their biodegradable production when they learn that their counterparts within the firm have chosen to decrease (increase) biodegradable production in other product lines. Further, managers in the explicit incorporation group have greater trust in senior management, and that trust mediates the negative relationship between incorporation ambiguity and the level of biodegradable production. The theoretical and practical implications of this study are discussed.

Department

Department of Accounting

Original Publication Date

10-1-2018

DOI of published version

10.1007/s10551-016-3282-8

Repository

UNI ScholarWorks, Rod Library, University of Northern Iowa

Language

en

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