The interplay between home and host logics of accountability in multinational corporations (MNCs): the case of the Fundão dam disaster

Abstract

PurposeThe major purpose of this paper is to answer the overarching questions of how multinational corporations (MNCs) address the multiple institutional logics of accountability and pressures of the field in which they operate and how the dominant logic changes and shifts in response to such pressures pre- and post-disaster situation.Design/methodology/approachIn-depth interpretive textual analyses of multiple longitudinal data sets are conducted to study the case of the Fundão dam disaster. The data sources include historical documents, academic articles and public institutional press releases from 2000 to 2016, covering the environment leading to the case study incident and its aftermath.FindingsThe findings reveal how MNCs' plurality of and, at times, conflicting institutional logics shape the organizational behaviors, actions and nonactions of actors pre-, peri- and post-disaster. More specifically, the predominance bureaucracy embedded in the state-corporatist logic of the host country before a disaster allows the strategic subunit of an MNC to continue operating while causing various forms of environmental damage until a globally visible disaster triggers a reversal in the dominant logic toward the embrace of wider, global, emergent social and environmental accountability.Originality/valueThis paper contributes to discussions regarding the need to explore in depth of how MNCs respond to multiple institutional pressures in practice. This study extends the literature concerning disaster accountability, state-corporatism and logic-shifting by exploring how MNCs respond to the plurality of institutional logics and pressures over time and showing how, in some cases, logics not only reinforce but also contrast with each other and how a globally exposed disaster may trigger a shift in the dominant logic governing MNCs' responses.

Institutional logics and practice variations in sustainability reporting: evidence from an emerging field

“…Following from this, we make a second contribution in demonstrating the value of the concept of "institutional logics" for explaining the source of practice variations, recognizing that institutional contexts are characterized by the coexistence of multiple logics deriving from institutional orders. Drawing on institutional studies, accounting researchers have demonstrated how logics shape organizational responses (Safari et al, 2020;Golyagina, 2020;Yee, 2020;Conrath-Hargreaves and W€ ustemann, 2019). Yet, as Contrafatto et al (2019) note, relatively little attention has been paid to the likelihood that logics drive accounting practices, including sustainability reporting.…”

“…Interplays between logics and organizational responses, including practice variations, are well documented (Herremans et al, 2009;Ezzamel et al, 2012;Lander et al, 2013;Guerreiro et al, 2012;Conrath-Hargreaves and W€ ustemann, 2019;Malik and Nicholson, 2020). More recently, attention has focused on how organizations actively manage institutional complexity in the face of conflicting logics (Lepori and Montauti, 2020) and prioritize a particular logic over others when faced with disasters, instability and external pressures (Safari et al, 2020;Golyagina, 2020;Yee, 2020;Conrath-Hargreaves and W€ ustemann, 2019).…”

Social and environmental accounting in developing countries: contextual challenges and insights

“…For example, content analysis may include textual or discourse analysis of CSR reports, public policy documents, and/or media press to triangulate empirical evidence (e.g. Safari et al, 2020). These also involve a combination of interview/case study and content analysis (e.g.…”

“…It is likely that MNCs will apply pluralist logic to discharge different social and environmental accountability to host (developing) countries where resource exploration and disasters occur, than to home countries where MNCs are from (Safari et al, 2020).…”

“…When governments are highly reliant on foreign investment and lack effective mechanisms or motivations to enforce SEA rules, serious questions could be raised as to whether SEA is driven by MNCs' desire to discharge social and environmental accountability or simply another form of imperative for MNCs to better advance their corporate objectives and economic interests in less-developed countries (Belal and Owen, 2015;Phiri et al, 2019). It is likely that MNCs will apply pluralist logic to discharge different social and environmental accountability to host (developing) countries where resource exploration and disasters occur, than to home countries where MNCs are from (Safari et al, 2020).…”