Chapter 8 - System-oriented accounting theory P3

According to Lindblom (1994), which of the following strategies can an organisation adopt when it perceives that its legitimacy is in question because its actions or operations are at variance with society's expectations and values?

A. Seek to educate and inform its 'relevant public' about actual changes in the organisation's performance and activities.

B. Seek to change the perceptions that 'relevant public' have of the organisation's performance and activities

C. Seek to manipulate perception by deflecting attention from the issue of concern onto other issues to demonstrate how the organisation has fulfilled social expectations.

D. All of the given options are correct.

Based on a joint consideration of Media Agenda Setting Theory and Legitimacy Theory, which of the following statements is correct?

A. According to Legitimacy Theory management uses the annual report as a tool to legitimise the ongoing operations of the organisation, and according to Media Agenda Setting Theory the media are able to influence community perceptions about issues such as the environment.

B. Community concerns about the environmental performance of a specific firm in an industry will also impact on the disclosure strategies of firms across that industry.

C. We should find a relationship between the extent of disclosure of social and environmental issues within the annual report and the media attention given to those issues

D. All of the given options are correct.

Which of the following hypotheses, proposed by DiMaggio and Powell (1983), do not relate to coercive or mimetic isomorphism?

A. The greater the dependence of an organisation on another organisation, the more similar it will become to that organisation in structure, climate and behavioural focus.

B. The greater the centralisation of organisation A's resource supply, the greater the extent to which organisation A will change isomorphically to resemble the organisations on which it depends for resources.

C. The greater the reliance on academic credentials in choosing managerial and staff personnel, the greater the extent to which an organisation will become like other organisations in its field.

D. The more ambiguous the goals of an organisation, the greater the extent to which the organisation will model itself after organisations that it perceives to be successful

Which of the following is not true about Political Economy Theory?

A. The perspective embraced is that society, politics and economics are separable, and economic issues can be meaningfully investigated in the absence of considerations about the political, social and institutional framework in which the economic activity takes place.

B. By considering the political economy, a researcher is able to consider broader (societal) issues that impact on how an organisation operates and what information it elects to disclose.

C. Political Economy Theory has been divided into two broad streams: 'classical' and 'bourgeois'.

D. The political economy perspective perceives accounting reports as social, political and economic documents.

Which of the following is true about substantive management techniques of legitimation?

A. It does not actually reflect any real change in activities.

B. Corporate behaviour is portrayed in a manner to 'appear consistent with social values and expectations'.

C. It involves real, material change in organisational goals, structures, and processes or socially institutionalized practices.

D. Companies may publish policies on various issues including the environment but not enforce or set in place mechanisms for the full adoption of such policies.

Legitimacy Theory cannot be applied to:

A. Financial disclosure practices

B. Social disclosure practices

D. None of the given options are correct.

Which of the following is true about Stakeholder Theory?

A. Stakeholder Theory can help managers in solving ethical problems, such as the environment, and gives managers a practical framework for assessing and balancing interests as long as normative principles are the foundation upon which decisions are made.

B. Normative principles are incorporated into organisational decision making, and it allows managers to give an unbalanced or biased weighting of issues in order to preserve ethical integrity

C. Assessing stakeholders is often based on descriptive, not normative, assumptions

D. All of the given options are correct.

The rate of institutional isomorphism is increased when firms:

A. Are highly dependent on the institutional environment

B. Exist under high uncertainty or ambiguous goals

C. Rely extensively on professionals

D. All of the given options are correct.

Chapter 8 - System-oriented accounting theory P3

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