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Counterproductive Syndrome

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Chapter 8 – Systems oriented theories

1. Introduction
Rationale: Why corporate management might elect to voluntarily provide particular information to parties outside the organisation. (Page 250 & 251)

Gray, Owen and Adams (1996):
Legitimacy Theory and Stakeholder Theory are two theorietical perspectives that have been adopted by a number of researchers in recent years. The theories are sometimes referred to as “systems-oriented theories”.

Within a systems-based perspective, the entity is assumed to be influenced by, and in turn to have influence upon, the society in which it operates.

Within both legitmacy theory and Stakeholder theory, accounting disclosure polices are considered to constitute a strategy to influence the organisation’s relationships with the other parties with which it interacts.

2. Political Economy Theory
According to Gray, Owen and Adams (1996), Legitmacy Theory and Stakeholder Theory are both derived from a broader theory which has been called “Political Economy Theory”.

“Political Economy” as defined by Gary and Owen as the “social, political and economic framework within which human life takes places”.

The perspective embraced is that society, politics and economies are inseparable, and economic issues cannot meaningly be investigated in the absence of considerations about the political, social and institutional framework in which the economic activity takes place.

Gurthrie and Parket (1990) states that corporate reports cannot be consdered as neutral, unbiased documents …., but rather are ‘a product of interchange between the corporation and its environment and attempt to mediate and accommodate a variety of sectional interests.’

Chapter 8 – Systems oriented theories

2. Political Economy Theory (Cont’d)

Two Broad streams which Gray, Owen and Adams have labelled are: - Classical political economy

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