Disclosures of labour practices: perspectives of legitimacy and impression management

Zhongtian Li, Shamima Haque, Larelle (ellie) Chapple

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Abstract

Purpose
The purpose of this paper is to analyse how an influential supplier of electronics manufacturing services (i.e. Foxconn) discloses its labour practices.

Design/methodology/approach
The analysis is conducted through the theoretical lens of legitimacy and impression management. This particular firm is selected as it provides a rich case on labour practice disclosures in a setting where significant labour malpractice incidents occurred from 2009 to 2011. The sample period covers 12 years of the firm's labour practice disclosures (2008–2019) to match with publicly available information that is used to construct expert comparative accounts on the disclosures. The authors corroborate the comparative accounts with sociological studies and responsibility reports from the major customer (i.e. Apple).

Findings
The authors found that the disclosures become more detailed over successive years. Occupational health and safety issues are predominantly reported, followed by issues relating to vocational guidance and training and then employment policy. Regarding impression management strategies, defensive strategies embedded in the disclosures are rarely detected and assertive strategies are persistently used from 2008 to 2019 to maintain legitimacy. The comparative accounts show the persistent use of one defensive strategy (i.e. omission) to maintain and regain legitimacy. In other words, as an economic strategy, material labour practice issues are persistently omitted in the disclosures. The incidents discernibly affect how Foxconn discloses labour practices.

Originality/value
The authors’ study contributes to the limited extant research on suppliers' labour practice disclosures from the perspective of legitimacy theory and impression management. The results will be of great interest to researchers, investors, assurers and other stakeholders.
Original languageEnglish
JournalJournal of Accounting Literature
Early online date2 Feb 2023
DOIs
Publication statusE-pub ahead of print - 2 Feb 2023

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