Preventive and Remedial Actions in Corporate Reporting Among “Addiction Industries”: Legitimacy, Effectiveness and Hypocrisy Perception

Diletta Acuti, Marco Bellucci, Giacomo Manetti

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Abstract

The adoption and reporting of CSR policies have important ethical and managerial implications that need scrutiny. This study answers the call of CSR scholars for further studies in controversial sectors by focusing on the voluntary reporting practices of companies that market products or services that generate addiction among consumers. It contributes to the debate on organizational legitimacy and corporate reporting by empirically analyzing whether and how corporations in the tobacco, alcohol and gambling industries disclose their CSR actions and what reactions such disclosures generate in stakeholders. Drawing on legitimacy theory and organizational façades, we apply a consequent mixed-methods design (initiation approach) built on (i) a content analysis of reports prepared by a large set of companies listed on the European,
British, US, Canadian, Australian and New Zealand stock exchanges and (ii) an experiment on how different actions taken by the companies (preventive vs. remedial) elicit different perceptions of company hypocrisy and action effectiveness. While previous analyses have focused on “sin” or “harm” industries, this is one of the first to assess how companies account for “addiction”, which is more difficult for them to report and legitimate due to long-term negative consequences. This study contributes to the literature on the instrumental use of CSR reporting by empirically investigating how addiction companies shape their organizational façades and manage organizational legitimacy through disclosure. Moreover, the experimental evidence advances the knowledge of how cognitive mechanisms influence stakeholders in terms of legitimacy assessment and the perceived hypocrisy/effectiveness of CSR disclosure
Original languageEnglish
Pages (from-to)603-623
Number of pages21
JournalJournal of Business Ethics
Volume189
Issue number3
DOIs
Publication statusPublished - 8 Mar 2023

Bibliographical note

Funding
Open access funding provided by Università degli Studi di Firenze within the CRUI-CARE Agreement. The authors received no financial support for the research, authorship, and/or publication of this article.

Keywords

  • Addiction
  • CSR reporting
  • Controversial industries
  • Effectiveness
  • Hypocrisy
  • Legitimacy

ASJC Scopus subject areas

  • Economics and Econometrics
  • Arts and Humanities (miscellaneous)
  • Law
  • General Business,Management and Accounting
  • Business and International Management

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