Animus Ltd is a mining company operating in Australia. The company has recently developed a new environmental management accounting system. According to institutional theory:
A) the new system is likely to be the result of the Australian culture of being environmentally conscious and the fact that negative environmental impacts can result in significant fines to the company.
B) the new system is likely to be the result of gaining legitimacy and to imitate other mining companies who are 'doing the right thing'.
C) the new system is likely to be the result of stringent government regulations.
D) the new system is likely to be the result of careful, rational, cost-benefit analysis.

Question

Quizplus · Accepted Answer

According to institutional theory, organizations adopt practices and systems to gain legitimacy and imitate other successful firms in their industry, rather than solely rational or regulatory considerations. As such, Animus Ltd is likely implementing the new environmental management accounting system as a way to gain legitimacy and stay competitive in the mining industry by demonstrating environmental responsibility.

Animus Ltd Is a Mining Company Operating in Australia