Bitter Sweet Symphony? Insights into the discrepancy between managers and organizations towards ESG

Journal title MANAGEMENT CONTROL
Author/s Rosanna Spanò, Ilaria Martino, Flavio Spagnuolo, Alessandra Allini
Publishing Year 2024 Issue 2024/2 Suppl.
Language English Pages 23 P. 75-97 File size 347 KB
DOI 10.3280/MACO2024-002-S1005
DOI is like a bar code for intellectual property: to have more infomation click here

Article preview

FrancoAngeli is member of Publishers International Linking Association, Inc (PILA), a not-for-profit association which run the CrossRef service enabling links to and from online scholarly content.

The aim of this paper is to explore whether any discrepancy between individuals’ cultural understanding and perceptions concerning ESG and the organizational cultural posture towards ESG is likely to arise, and what individual’s characteris-tics may influence it. The study relies on Habermas’ theory of Communicative Action, mobilizing the conceptualizations of anomie, to analyze data gathered through a survey answered by 136 Italian managers acting in highly ESG-exposed industries. Our results give evidence of the existence of ESG orientation discrepan-cy and suggest that certain individuals’ characteristics such as age, job grade, and tenure influence its magnitude. The study contributes to ESG literature offering empirical ground for crucial yet overlooked issues relating to the role of individuals in ESG organizational processes change. Also, it has relevant implications for both companies and policymakers, pushing reflections on the need to avoid discrepan-cies toward more effective ESG practices.

Keywords: ESG, discrepancy, managers, individuals, organizations, perception.

  1. Adegbie F.F., Fofah E.T. (2016), Ethics, corporate governance and financial reporting in the Nigerian banking industry: global role of International Financial Reporting Standards, Accounting and Finance Research, 5(1), pp. 50-63.
  2. Agostini M., Costa E., Korca B. (2022), Non-financial disclosure and corporate financial performance under directive 2014/95/EU: evidence from Italian listed companies, Accounting in Europe, 19(1), pp. 78-109.
  3. Arvidsson S., Dumay J. (2022), Corporate ESG reporting quantity, quality and performance: Where to now for environmental policy and practice?, Business Strategy and the Environment, 31(3), pp. 1091-1110.
  4. Bebbington J., & Larrinaga C. (2014), Accounting and sustainable development: An exploration, Accounting, Organizations and Society, 39(6), pp. 395-413.
  5. Bhattacharya A., Misra S., Sardashti H. (2019), Strategic orientation and firm risk, International Journal of Research in Marketing, 36(4), pp. 509-527.
  6. Bohman J. (1999), International regimes and democratic governance: political equality and influence in global institutions, International Affairs, 75(3), pp. 499-513.
  7. Broadbent J., Laughlin R. (2009). Performance management systems: A conceptual model, Management Accounting Research, 20(4), pp. 283-295.
  8. Broadbent J., Laughlin R. (2013), Accounting control and controlling accounting: Interdisciplinary and critical perspectives, Emerald Group Publishing.
  9. Busch T., Bauer R., & Orlitzky M. (2016), Sustainable development and financial markets: Old paths and new avenues, Business & Society, 55(3), pp. 303-329.
  10. Cardillo G., Harasheh M. (2023), Stay close to me: What do ESG scores tell about the deal timing in M&A transactions?, Finance Research Letters, 51, 103498.
  11. Chen S., Song Y., Gao P. (2023), Environmental, social, and governance (ESG) performance and financial outcomes: Analyzing the impact of ESG on financial performance, Journal of Environmental Management, 345, 118829.
  12. Crace L., Gehman J. (2023), What really explains ESG performance? Disentangling the asymmetrical drivers of the triple bottom line, Organization & Environment, 36(1), pp. 150-178.
  13. Cucari N., Esposito De Falco S., Orlando B. (2018), Diversity of board of directors and environmental social governance: Evidence from Italian listed companies, Corporate Social Responsibility and Environmental Management, 25(3), pp. 250-266.
  14. Cupertino S., Vitale G. (2024), Exploring the nexus between corporate digitalisation and environmental sustainability: The moderating role of slack resources, Management Control, 1, pp. 87-108. DOI: 10.3280/MACO2024-001005
  15. Demirtas O. (2015), Ethical leadership influence at organizations: Evidence from the field. Journal of Business Ethics, 126(2), pp. 273-284.
  16. Demartini P., Pagliei C. (2023), Can we trust ESG Ratings? Some insights based on a bibliometric analysis of ESG data quality and rating reliability, Management Control, 2, pp. 161-187. DOI: 10.3280/MACO2023-002-S1008
  17. Fiondella C., Macchioni R., Maffei M., & Spanò R. (2016), Successful changes in management accounting systems: A healthcare case study, Accounting Forum, 40(3), pp. 186-204.
  18. Galeotti M., Lombardi R., Principale S., Sura A. (2023), Aligning Integrated Data Management with Corporate Reporting: The role of sustainability reporting, Management Control, 2, pp. 65-81. DOI: 10.3280/MACO2023-002-S1004
  19. Garcia-Blandon J., Argilés-Bosch J. M., Ravenda D. (2019), Exploring the relationship between CEO characteristics and performance, Journal of Business Economics and Management, 20(6), pp. 1064-1082.
  20. Garcia A.S., Mendes-Da-Silva W., Orsato R.J. (2017), Sensitive industries produce better ESG performance: Evidence from emerging markets, Journal of cleaner production, 150, pp. 135-147.
  21. Giese G., Lee L.E., Melas D., Nagy Z., & Nishikawa L. (2019), Foundations of ESG investing: How ESG affects equity valuation, risk, and performance, The Journal of Portfolio Management, 45(5), pp. 69-83.
  22. Glavas A. (2016), Corporate social responsibility and employee engagement: Enabling employees to employ more of their whole selves at work, Frontiers in psychology, 796.
  23. Habermas J. (1984), The Theory of Communicative Action. Vol. 1. Reason and the Rationalization of Society, Boston: Beacon Press. English edition.
  24. Habermas J. (1987), The Theory of Communicative Action (McCarthy, Thomas, Trans.), Vol. I.
  25. Hernandez M. (2012), Toward an understanding of the psychology of stewardship. The Academy of Management Review, 37(2), pp. 172-193.
  26. Huang M., Li M., Li X. (2023), Do non-local CEOs affect environmental, social and governance performance?, Management Decision.
  27. Kalia D., Aggarwal D. (2023), Examining impact of ESG score on financial performance of healthcare companies, Journal of Global Responsibility, 14(1), pp. 155-176.
  28. Kao F. C. (2023), How do ESG activities affect corporate performance?, Managerial and Decision Economics, 44(7), pp. 4099-4116.
  29. La Torre M., Leo S., Panetta I.C. (2021), Banks and environmental, social and governance drivers: Follow the market or the authorities?, Corporate Social Responsibility and Environmental Management, 28(6), pp. 1620-1634.
  30. Laughlin R.C. (1987), Accounting systems in organisational contexts: a case for critical theory, Accounting, Organizations and Society, 12(5), pp. 479-502.
  31. Li Y., Gong M., Zhang X.Y., Koh L. (2018), The impact of environmental, social, and governance disclosure on firm value: The role of CEO power, The British Accounting Review, 50(1), pp. 60-75.
  32. Likert R. (1932), A technique for the measurement of attitudes, Archives of psychology.
  33. Luo W., Zhang C., Li M. (2022), The influence of corporate social responsibilities on sustainable financial performance: Mediating role of shared vision capabilities and moderating role of entrepreneurship, Corporate Social Responsibility and Environmental Management, 29(5), pp. 1266-1282.
  34. Mason E.S., Mudrack P.E. (1997), Do complex moral reasoners experience greater ethical work conflict?, Journal of Business Ethics, 16, pp. 1311-1318.
  35. McNamara T.K., Carapinha R., Pitt‐Catsouphes M., Valcour M., Lobel S. (2017), Corporate social responsibility and employee outcomes: The role of country context, Business Ethics: A European Review, 26(4), pp. 413-427.
  36. Mulki J.P., Locander W.B., Marshall G.W., Harris E.G., Hensel J. (2008), Workplace isolation, salesperson commitment, and job performance, Journal of personal selling & sales management, 28(1), pp. 67-78.
  37. Nalukenge I., Nkundabanyanga S.K., Ntayi J.M. (2018), Corporate governance, ethics, internal controls and compliance with IFRS, Journal of Financial Reporting and Accounting, 16(4), pp. 764-786.
  38. Ortiz-de-Mandojana N., Bansal P., Aragón-Correa J. A. (2019), Older and wiser: How CEOs’ time perspective influences long-term investments in environmentally responsible technologies, British Journal of Management, 30(1), pp. 134-150.
  39. Osagie E.R., Wesselink R., Blok V., Lans T., Mulder M. (2016), Individual competencies for corporate social responsibility: A literature and practice perspective, Journal of Business Ethics, 135, pp. 233-252.
  40. Parboteeah K.P., Chen H.C., Lin Y.T., Chen I. H., Lee A.Y., Chung A. (2010), Establishing organizational ethical climates: how do managerial practices work?, Journal of Business Ethics, 97, pp. 599-611.
  41. Pham H., Kim S.Y. (2019), The effects of sustainable practices and managers’ leadership competences on sustainability performance of construction firms, Sustainable Production and Consumption, 20, pp. 1-14.
  42. Rodell J.B., Lynch J.W. (2016), Perceptions of employee volunteering: Is it “credited” or “stigmatized” by colleagues?, Academy of management Journal, 59(2), pp. 611-635.
  43. Schaltegger S., Beckmann M., Hansen E.G. (2013), Transdisciplinarity in corporate sustainability: Mapping the field, Business strategy and the environment, 22(4), pp. 219-229.
  44. Schaltegger S., Burritt R., Zvezdov D., Hörisch J., Tingey‐Holyoak J. (2015), Management roles and sustainability information. Exploring corporate practice, Australian Accounting Review, 25(4), pp. 328-345.
  45. Shin Y. (2012), CEO ethical leadership, ethical climate, climate strength, and collective organizational citizenship behavior, Journal of Business Ethics, 108, pp. 299-312.
  46. Spanò R., Caldarelli A., Ferri L., Maffei M. (2020), Context, culture and control: a case study on accounting change in an Italian regional health service, Journal of Management and Governance, 24(1), pp. 229-272.
  47. Sult A., Wobst J., Lueg R. (2023), The role of training in implementing corporate sustainability: A systematic literature review, Corporate Social Responsibility and Environmental Management.
  48. Thomassen L. (2010). Habermas: A guide for the perplexed. A&C Black.
  49. VanSandt C.V., Neck C.P. (2003), Bridging ethics and self leadership: Overcoming ethical discrepancies between employee and organizational standards, Journal of Business Ethics, 43, pp. 363-387.
  50. Velte P. (2017), Does ESG performance have an impact on financial performance? Evidence from Germany, Journal of Global Responsibility, 8(2), pp. 169-178.
  51. Wan Y., Hong Z., Liu W., Cui J. (2023), Executives’ Education: A Catalyst for Enhanced ESG Disclosure, Finance Research Letters, 104429.
  52. Wang H., Tong L., Takeuchi R., George G. (2016), Corporate social responsibility: An overview and new research directions: Thematic issue on corporate social responsibility. Academy of Management journal, 59(2), pp. 534-544.
  53. Wernicke G., Sajko M., Boone C. (2022), How much influence do CEOs have on company actions and outcomes? The example of corporate social responsibility, Academy of Management Discoveries, 8(1), pp. 36-55.
  54. Zhang B., Wang Z., Lai K.H. (2015), Mediating effect of managers’ environmental concern: Bridge between external pressures and firms’ practices of energy conservation in China, Journal of Environmental Psychology, 43, pp. 203-215.
  55. Zhang D., Wang C., Dong Y. (2023), How does firm ESG performance impact financial constraints? An experimental exploration of the COVID-19 pandemic, The European journal of development research, 35(1), pp. 219-239.
  56. Zhou G., Liu L., Luo S. (2022), Sustainable development, ESG performance and company market value: Mediating effect of financial performance, Business Strategy and the Environment, 31(7), pp. 3371-3387.
  57. Abu-Bader S.H. (2021), Using statistical methods in social science research: With a complete SPSS guide, Oxford University Press, USA.

Rosanna Spanò, Ilaria Martino, Flavio Spagnuolo, Alessandra Allini, Bitter Sweet Symphony? Insights into the discrepancy between managers and organizations towards ESG in "MANAGEMENT CONTROL" 2 Suppl./2024, pp 75-97, DOI: 10.3280/MACO2024-002-S1005