Path dependence of accountants: Why are they not involved in corporate sustainability?

Wenzig, Julius; Nuzum, Anne‐Katrin; Schaltegger, Stefan Article — Published Version Path dependence of accountants: Why are they not involved in corporate sustainability? Business Strategy and the Environment Provided in Cooperation with: John Wiley & Sons Suggested Citation: Wenzig, Julius; Nuzum, Anne‐Katrin; Schaltegger, Stefan (2022) : Path dependence of accountants: Why are they not involved in corporate sustainability?, Business Strategy and the Environment, ISSN 1099-0836, Wiley, Hoboken, NJ, Vol. 32, Iss. 6, pp. 2662-2683, https://doi.org/10.1002/bse.3263 This Version is available at: https://hdl.handle.net/10419/288145 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. http://creativecommons.org/licenses/by/4.0/ RESEARCH ARTICLE Path dependence of accountants: Why are they not involved in corporate sustainability? Julius Wenzig 1,2 | Anne-Katrin Nuzum 1,3 | Stefan Schaltegger 1 1 Centre for Sustainability Management (CSM), Leuphana University, Lüneburg, Germany 2 Center for Sustainable Leadership (ZNU), Witten/Herdecke University, Witten, Germany 3 Nordakademie Hochschule der Wirtschaft, Elmshorn, Germany Correspondence Stefan Schaltegger, Centre for Sustainability Management (CSM), Leuphana University, 21335, Lüneburg, Germany. Email: [email protected]hana.de Funding information Nordakademie Foundation Abstract Accounting has been identified as a key area to inform managers seeking to transform businesses towards sustainability. Empirical research, however, shows that management accountants are scarcely involved in sustainability accounting. This paper contributes to understanding their barriers, using path dependence theory as a theoretical framework to empirically investigate how accountants have become “locked in”by self-reinforcing mechanisms. Based on semistructured interviews with 33 management accountants in Germany, the paper identifies three interrelated selfreinforcing mechanisms that inhibit accountants from sustainability involvement. A strong focus on financial priorities and incremental improvements driven by top management expectations hinder the consideration of sustainability beyond its direct costs. Specialization is another barrier, as is an understanding of sustainability as peripheral rather than a core business. Contrary to prior literature, accountants express eagerness to learn, though rarely about sustainability. They rarely question assumptions about sustainability and their role, leading to missed opportunities for double-loop learning and more transformative change. KEYWORDS corporate sustainability, management accounting practices, management control systems, path dependence theory, performance measurement, sustainability accounting 1|INTRODUCTION Sustainability management accounting and control offers many (potential) benefits for organizations, like improving environmental and economic performance (Chaudhry & Amir, 2020; Gunarathne et al., 2021; Naranjo Tuesta et al., 2021), enabling comprehensive risk management (Arjaliès & Mundy, 2013), contributing to process innovation (Ferreira et al., 2010), and supporting decisions to stay in the space of planetary boundaries (Schaltegger, 2018). With the recent introduction of the sustainable finance taxonomy by the European Union (European Commission, 2020), sustainability management accounting and control may gain even wider relevance for corporate decision-making in practice. Academia echoes this regulatory development with an increasing number of publications in this field of research (Guenther et al., 2016; Parker, 2011; Traxler et al., 2020) and recent calls for a broader understanding of the accounting function, changing it from a mere technical practice to a moral and social one (Carnegie et al., 2020). Abbreviations: EBIT, Earnings Before Interest and Taxes; EU, European Union; M&A, Mergers & Acquisitions; R&D, Research & Development; SDGs, Sustainable Development Goals; VP, Vice President. Received: 16 April 2021 Revised: 31 August 2022 Accepted: 8 September 2022 DOI: 10.1002/bse.3263 This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited. © 2022 The Authors. Business Strategy and The Environment published by ERP Environment and John Wiley & Sons Ltd. 2662 Bus Strat Env. 2023;32:2662–2683. wileyonlinelibrary.com/journal/bse The role of management accountants has been discussed with regard to their potential in promoting sustainability in companies. Williams (2015, p. 281) argues that it is important to involve accountants in corporate sustainability due to “their technical expertise, key reporting competencies, and ability to analyze and translate data into accessible measurements”. Management accountants are responsible for management accounting and control systems, and especially their conventional accounting skillset could make sustainability projects more robust and prominent in organizations. Wilmshurst and Frost (2001) furthermore argue that accountants can make financially focused sustainability metrics more reliable and accurate, thereby underlining their importance. Accountants might also promote sustainability by improving the decision utility of accounting-related technologies (Lambert & Sponem, 2011). Due to their important position in organizations and their close relation to top management, management accountants also know the characteristics of key performance indicators and top management's decision-making processes (Schaltegger & Zvezdov, 2015). Based on the perception of an ever-changing business environment, Hoang (2018) underlines that the rise of integrated reporting gives accountants an important role to play in providing sustainability information to stakeholders. Furthermore, EU regulations like the emissions trading system, the corporate social reporting directive, or the corporate sustainability due to diligence directive drive companies into accounting, reporting, and managing sustainability impacts. Recent research shows that in this context, chief financial officers can help promote sustainability in the organization (Asiaei et al., 2022). The dynamic business environment, however, does not only concern financial officers and accountants: It also calls for an increased professionalization of internal accounting processes to create the necessary data that will support management decisions and therefore requires the involvement of management accountants. In contrast to these calls for involving management accountants more closely in corporate sustainability management, empirical investigations of corporate practice show that they are rarely involved in sustainability accounting (Bennett et al., 2013; Caron & Fortin, 2014; Egan & Tweedie, 2018). The collection, analysis, and use of sustainability information seem to instead spread among various roles and business functions in a company (e.g., Albelda, 2011;Schalteggeretal.,2015). In cases where management accountants are involved, they often act as gatekeepers to top management (Schaltegger & Zvezdov, 2015). While accounting is thought to be a key area to inform managers seeking to transform businesses towards sustainability (e.g., Gray et al., 1995) and general “road blocks”to establishing environmental and sustainability accounting have been identified (Burritt, 2004), there has been relatively little investigation into the actual role of management accountants in corporate practice. Even though the lack of contributions by management accountants to corporate sustainability has been mentioned in the literature (e.g., Burritt et al., 2011;Caron& Fortin, 2014;Egan&Tweedie,2018; Lovell & MacKenzie, 2011), the reasons for this behavior have rarely been analyzed empirically and in-depth. In particular, barriers from the perspective of accountants have so far not been subject to wider empirical investigations, analyzing both the accountants and their organizational contexts. This paper aims to fill this research gap by empirically investigating barriers preventing management accountants from becoming involved in sustainability accounting and from integrating environmental and social issues into conventional accounting. The following empirical analysis aims to enhance our understanding of accountants' perceptions of their roles in organizational change and their interdependencies within the organization (Wolf et al., 2020). The present analysis is guided by a theoretical framework based on organizational path dependence theory, which has been applied as a useful theoretical lens in organizational research to investigate barriers to changing organizational and individual behavior (Garud et al., 2010; Sydow et al., 2009,2020; Vergne & Durand, 2010). It is based on interviews with 33 management accountants of medium-sized and large companies in a wide range of industries in Germany. Based on the analysis, approaches to overcoming these barriers and to supporting the integration of sustainability into the work of accountants are discussed. The focus of the following analysis is on management accountants who are in responsible for management control and support managerial decision-making. Malmi and Brown (2008) differentiate between accountants that contribute to an accounting system that supports corporate decision-making at any organizational level and accountants that contribute to a management control system. The latter are in charge directing employee behavior and maintaining or altering management patterns in organizations (Simons, 1994). Hence, they have a greater influence and a larger scope of action than the former (Malmi & Brown, 2008). In the literature, they are generally called management accountants or in the European context sometimes called “controllers”(Hartmann & Maas, 2010). Luther et al. (2010) found in their empirical investigation that controlling practices in German-speaking countries are somewhat different to management accounting practices in the UK and other Anglophone countries. In Germany, the focus tends to be more on financial figures than would be the case elsewhere. However, they also note that “the functions of controlling and the roles of controllers are moving in directions that will be more familiar to management accountants”(Luther et al., 2010, p. 4). This article focuses on professionals responsible for internal accounting processes in the sense of controlling practices and adopts the term “management accountant,”or just “accountant”as a short version of management accountant. This article is structured as follows: Section 2draws on current literature and reviews reasons for involving accountants in corporate sustainability and barriers to their involvement. Section 3contains the theoretical framework drawing on path dependence theory. In Section 4, details on the research design and methods are presented. The results are presented in Section 5and discussed in Section 6 where they are also placed in the context of the literature, and implications for research and practice are developed. 2|LITERATURE REVIEW The term “sustainability management accounting”is understood as the process of collecting, analyzing, and communicating sustainabilityWENZIG ET AL.2663 related information (Maas et al., 2016). The data, measures, and indicators are mainly internally motivated and are used to improve sustainability performance. Sustainability management accounting focuses on material indicators for decision-making purposes (Beske et al., 2020). Material matters are those that substantively affect the organization's ability to create value over the short term, medium term, and long term (IIRC, 2021). Sustainability management accounting uses not only monetary data, often drawn from the same database as financial accounting and reporting data, but also nonmonetary (physical) data, as this often reflects the drivers of monetary outcomes (Burritt et al., 2002). 2.1 |Reasons for involving management accountants While accountants working with management accounting systems already contribute to many business functions and departments (Byrne & Pierce, 2007), a large body of literature agrees that accountants should be involved in sustainability management accounting too (e.g., Albelda, 2011; Maas et al., 2016; Schaltegger & Burritt, 2018; Wilmshurst & Frost, 2001). Accountants possess skill sets that allow them to play an important role in organizations, which supports the argument that accountants should be involved in sustainability management accounting systems. Reasons for involvement found in the literature can be structured using a widely acknowledged classification by CIMA (2005) between accountants as methodological experts, as authorities and gatekeepers, and as knowledge experts. A range of different reasons to involve accountants in sustainability management have been proposed in the literature (Table 1). First, accountants can serve as methodological experts by collecting data and defining information properties, (key) performance indicators, and methods (Schaltegger & Zvezdov, 2015). This is an important skill in conventional management accounting that drives more data-driven and rigorous decision-making. Organizing data, being familiar with adequate methods of data collection, and processing large data quantities to a reasonable set of indicators are acknowledged as a valuable expertise of accountants (Pierce & O'Dea, 2003). Increasingly, management accountants are also involved in data analytics and visualization using advanced statistical tools such as cluster analysis and Monte Carlo analysis, which can be useful in analyzing complex data sets (Oesterreich & Teuteberg, 2019). Sustainability management accounting systems require profound methodological expertise, as physical data are often more difficult to handle and calculate than monetary data. Empirical research has shown that some accountants already fulfill this role and work with environmental data, especially on carbon emissions and water usage (Lovell & MacKenzie, 2011; Schaltegger et al., 2015). Accountants can help organizations decrease the costs of information collection and improve data quality (Bennett et al., 2013; Burritt et al., 2011). They can also support management decisions regarding a “green strategy”(Parker, 2001). The role of the methodological expert has also given accountants the image of a “bean counter”and “number cruncher”(Byrne & Pierce, 2007;Mistry et al., 2014). Wilmshurst and Frost (2001) stress that accountants' methodological expertise does not depend on being experts in environmental or social issues, as they also work with other departments such as sales and engineering without being experts in those fields either. Another reason to involve accountants is their authority in a gatekeeper function of providing information to top management and other important decision-makers in organizations. In this role, accountants are increasingly perceived as business partners who support managers in becoming more strategic, forward-looking, and collaborative (Mistry et al., 2014). However, this powerful broker role enables TABLE 1 Skills and roles of accountants related to sustainability management accounting Reasons for involvement References Use of accounting skills for measuring, recording, monitoring, and verifying data as well as handling information in general Lovell and MacKenzie (2011), Wilmshurst and Frost (2001), Pierce and O'Dea (2003) Decrease costs of information collection and improve data quality with established accounting systems Bennett et al. (2013), Burritt et al. (2011) Define objectives, performance measures, and key performance indicators Bennett et al. (2013) Support strategic decisions concerning the suitability, adoption, and implementation of a “green”strategy Parker (2001) Collate and interpret sustainability information in an economic context, translate it for top management, and thereby address its (non)importance Albelda (2011), Egan and Tweedie (2018), Schaltegger and Zvezdov (2015) Act as facilitators of corporate sustainability for top management Mistry et al. (2014) Legitimize the work of environmental managers and lend internal credibility Albelda (2011), Adams (2002) Identify key problems by means of environmental audits to assess risks and compliance and give feedback for improvement Wilmshurst and Frost (2001) Include environmental and social costs in systems and structures Adams (2002), Albelda (2011), Wilmshurst and Frost (2001) Use sustainability data for integrated reporting to external stakeholders, which could also assist internal management Albelda (2011) Apply checks and controls to sustainability data to improve quality and validity Bennett et al. (2013) 2664 WENZIG ET AL. them to advance or suppress certain information or actors in the company. For example, accountants can interpret sustainability information in an economic context for top management (Albelda, 2011; Egan & Tweedie, 2018). This can have both positive and negative impacts on corporate performance, depending on what information is forwarded (Schaltegger & Zvezdov, 2015). If, however, accountants choose to engage with sustainability data, this can legitimize and lend internal credibility to such matters (Adams, 2002; Albelda, 2011). The role as a knowledge and information expert comprises the accountants' knowledge of what kinds of information are relevant to managing a company successfully (e.g., Jack & Kholeif, 2008). In this role, accountants are often perceived as actors with no other interest than to improve the rationality of management activities (Deegan, 2013). As they are the process owners of financial accounts and as many environmental impacts are also likely to have a financial impact, it would be irresponsible of management not to involve accountants in the process of considering these costs and revenues in accounts, reports, and decision-making (Adams, 2002; Wilmshurst & Frost, 2001). Adams (2002) shows that conventional accounting systems can be used to effectively manage and analyze sustainabilityrelated data instead of implementing entirely new systems. Similarly, Albelda (2011) finds that integrating environmental costs into the existing costing system had the desired effect of decreasing energy consumption and waste. As accountants are the experts in managing those systems, they can also apply checks and controls to sustainability data to improve its quality and validity (Bennett et al., 2013). In their role as knowledge and information experts, management accountants can provide information on business cases for decisionmaking to top management. Identifying and developing business cases of and for sustainability has been proposed as one of the possible reasons for involving management accountants in sustainability accounting. Four different types of business cases have been distinguished: reactionary, reputational, responsible, and collaborative business cases (Schaltegger & Burritt, 2010,2018). The reactionary business case of sustainability focuses on maintaining business as usual and only allows for sustainability measures if they increase profitability. The reputational business case of sustainability aims for reputational benefits that translate into financial benefits. The responsible business case for sustainability strives for operational excellence and is based on best management practices. The collaborative business case for sustainability calls for engaging in stakeholder collaborations to develop new, effective sustainability solutions as future business. These different types of business cases can be identified, analyzed, and developed by management accountants to support top management decision-making. The changing roles of management accountants have also been discussed widely in the conventional accounting literature. For instance, the transition from the accountant as a “bean counter”predominantly processing data to a “business partner”supporting top management's decision-making has been discussed since the 1990s (e.g., Bougen, 1994) and is still debated today (Karlsson et al., 2019; Wolf et al., 2020). Research shows that especially smaller organizations still employ accountants mostly as data processors (bean counters) (Oesterreich & Teuteberg, 2019), but also in larger organizations, many accountants are concurrently involved in both data processing and business partnering (Burns & Baldvinsdottir, 2005; Karlsson et al., 2019), suggesting they have multiple identities (Wolf et al., 2020). Multiple role identities could also allow accountants to become involved more closely in sustainability issues. However, the difficult transition to the business partner role shows that, due to role ambiguity, it would be misleading to think that shifting among multiple identities is easily accomplished (Wolf et al., 2020). However, several requirements of the business partner role, such as providing strategic and long-term information for decision-making, are in line with addressing corporate sustainability as well. The literature review shows that management accountants have a wide array of useful skills and play important roles that could help companies in fostering their sustainability performance (Table 1). However, empirical research shows that in corporate practice management accountants rarely participate actively in sustainability management (e.g., Albelda, 2011; Mistry et al., 2014), and if so, mainly in a gatekeeper role for top management (Schaltegger & Zvezdov, 2015). A large international survey in 11 countries reveals that accounting and finance departments were ranked last among all corporate departments in promoting sustainability (Schaltegger et al., 2014). This lack of engagement in sustainability by accountants, despite numerous compelling reasons to do so, makes clear that there must be barriers to involvement, which in his conceptual overview Burritt calls “roadblocks on the way to the green and pleasant land”(2004, p. 13). 2.2 |Barriers to involving management accountants An analysis of the accounting literature reveals few articles that focus systematically and in-depth on the barriers to involving accountants in corporate sustainability (Table 2). For instance, some consider organizational aspects and investigate the role of professional accounting bodies (Lovell & MacKenzie, 2011), the accountant's intention to engage in sustainability accounting (Kwakye et al., 2018), or deal with general role shifts (Lambert & Sponem, 2011). While Mistry et al. (2014) highlight the complexity of sustainability and the challenges of integration into existing accounting systems and organizational structures, Lovell and MacKenzie (2011) point out a lack of similarity between sustainabilityrelated processes and the current activities of accountants. Others discuss the personal characteristics of accountants and emphasize differences between accountants and sustainability managers in ideology, mindset, and culture as well as perceptions of sustainability's relevance and strategic importance in general (Kwakye et al., 2018). Lambert and Sponem (2011) find a lack of creative or innovative thinking among accountants, which would be required to integrate sustainability issues into conventional accounting approaches. Accountants might also be afraid that their power would be threatened and therefore use their position for gatekeeping purposes (Schaltegger & Zvezdov, 2015). An in-depth case study on the involvement of accountants in sustainability management initiatives by Egan and Tweedie (2018) finds that nonaccountants see WENZIG ET AL.2665 accountants as simply unwilling or unable to engage with sustainability, both in the practical sense of visiting production facilities as well as intellectually in understanding the interconnectedness of sustainability issues. Similarly, Adams (2002) conducted interviews in seven companies involved in corporate social reporting and finds that neither were accountants involved in data collection nor were they considered appropriate people to be involved, mostly based on their inability to understand sustainability data and their perceived irrelevance. Furthermore, several authors (e.g., Schaltegger & Zvezdov, 2015; Spence et al., 2012) see a lack of training and education as a possible cause for the lack of involvement of accountants. Albelda (2011), in turn, conducted case studies of six factories and did find evidence for a close collaboration between accountants and environmental managers but only with regard to data concerned with capital and operating expenditures. This was attributed to the accountant's underlying values emphasizing profit orientation. Another study using a single case study reports a hostile relationship between accountants and sustainability managers due to different goals and ideologies (Larrinaga-Gonzalez & Bebbington, 2001). In this case study, accountants appeared to find environmental issues irrelevant, and using accounting systems for sustainability purposes did not help to boost sustainability's internal importance (LarrinagaGonzalez & Bebbington, 2001). Overall, the literature review provides a multitude of potential reasons why accountants do not contribute to sustainability. However, despite almost half a century of social and environmental accounting research (Burritt & Schaltegger, 2010; Parker, 2011), few articles have systematically addressed barriers to integrating sustainability into the work of accountants. Research either normatively expresses the desire to further develop corporate sustainability with accounting concepts and tools (e.g., Schaltegger & Zvezdov, 2015) or, based on empirical research, is characterized by consternation at the lack of involvement by accountants (e.g., Gray et al., 1995). The few empirical studies that systematically analyze why accountants largely fail to contribute to corporate sustainability are based on case studies and use small sample sizes (Adams, 2002; Albelda, 2011; Egan & Tweedie, 2018; Larrinaga-Gonzalez & Bebbington, 2001). While current research has helped to improve understanding of potential barriers to the sustainability involvement of accountants, their own perceptions of what key barriers are have so far not been empirically investigated in a larger sample of companies and industries. The following qualitative research addresses this gap by investigating in a larger number of companies from various industries which barriers hinder the sustainability involvement of accountants in corporate practice. The analysis specifically considers internal organizational processes, the interplay of accountants with other organizational actors, and their reasons not to learn about and engage with sustainability. The analysis is guided by path dependence theory, which is summarized in the following section. 3|THEORETICAL FRAMEWORK While this research utilizes both deductive and inductive approaches, as explained in the methods section, theory is used as a framework to guide the study and data analysis (Anfara & Mertz, 2015; Saldaña, 2015). One theory that systematically addresses why organizations or organizational subunits fail to change and what mechanisms and barriers could be underlying causes for this inertia is organizational path dependence theory (Garud et al., 2010;Sydowetal.,2009,2020; Vergne & Durand, 2010). Recent research by Gunarathne et al. (2021), Chaudhry and Amir (2020), as well as Wang et al. (2019) shows that institutional pressures can be important for promoting sustainability and environmental management accounting. Institutional theory is used as a theoretical lens to illustrate how power and institutions constrain change and can be regarded as the foundation of path dependence theory. Path dependence theory builds on this insight to show how past events and practices (can) influence future action and decision-making. However, the theory goes beyond the notion of “history matters” (Rowlinson et al., 2014) by analyzing processes with self-reinforcing TABLE 2 Barriers to the involvement of accountants in corporate sustainability Barriers References Methodological difficulties with including sustainability in costing systems and organizational structures Mistry et al. (2014) Complexity of sustainability and many aspects to consider Adams (2002) Lack of similarity with current activities Lovell and MacKenzie (2011), Mistry et al. (2014), Wilmshurst and Frost (2001) Ideological and cultural differences Larrinaga-Gonzalez and Bebbington (2001), Schaltegger and Zvezdov (2015) Lack of mindset that sustainability requires overly focused on cost control and profit maximization; a tendency to constrain sustainability to a safe and controllable issue Egan and Tweedie (2018), Kwakye et al. (2018) Perceived lack of strategic importance or irrelevance; no connection to financial success Adams (2002), Albelda( 2011) Sustainability poses a threat to the power and organizational influence Schaltegger and Zvezdov (2015), LarrinagaGonzalez and Bebbington (2001) Lack of training Parker (2000); Schaltegger and Zvezdov (2015), Spence et al. (2012) 2666 WENZIG ET AL. mechanisms that lead organizations to strategic persistence and operational rigidity (Sydow et al., 2009;Wenzel,2015). Although path dependence theory has been applied in accounting research (e.g., Pittroff, 2021), it has not been used to understand why accountants do not engage in sustainability accounting. As the theory addresses both individual processes (such as learning) and organizational dependencies (on other actors), it was considered suitable for as a theoretical framework. Despite some conceptual and methodological disagreements in the organizational path dependence literature (Dobusch & Kapeller, 2013; Garud et al., 2010; Sydow et al., 2009; Vergne & Durand, 2010), most researchers agree that path dependency is characterized by the following three phases: (1) path emergence, (2) self-reinforcing mechanisms, and (3) lock-in (Figure 1). In the path emergence phase, companies have the most strategic and operational options and are not bound to any specific one. However, small contingent events or actions may unintentionally cause nonergodic, self-reinforcing processes (Dobusch & Kapeller, 2013; Vergne & Durand, 2010; Wenzel, 2015) and lead to “a critical juncture”(Mahoney, 2000, pp. 513), which then initiates the second phase. In this phase, self-reinforcing mechanisms increasingly narrow down the scope of action and lead to “path inscription”(Koch, 2011; Sydow et al., 2009). These mechanisms are termed “self-reinforcement”(Arthur, 1994; Vergne & Durand, 2010)or“increasing returns” (Arthur, 1989; Pierson, 2000), but all relate to a circle of positive feedback that leads to increased inertia. Decisions remain contingent, and actors may still choose from a narrower range of different options. In the third phase, the lock-in phase, the dominant decision pattern becomes fixed. This constriction does not necessarily lead to inefficiency, as the environment may remain similar for a long period, and decisions may still be as valid as in the first phase (Rothmann & Koch, 2014). However, when a business's environmental conditions alter, such as the emergence of sustainability challenges, the dominant decision pattern will most likely become inadequate and inefficient (Schreyögg et al., 2011). An organizational state of lock-in is not characterized by total rigidity, but instead, it leaves a certain degree of variance, as behavior is never completely fixed (Fortwengel & Keller, 2020; Sydow et al., 2020). At the core of this narrowed scope of organizational activities in the second phase are self-reinforcing mechanisms. Different terms are used for these effects; however, their self-reinforcing nature is found in almost all seminal contributions to path dependence theory (Arthur, 1989; David, 1985; Garud et al., 2010; Pierson, 2000; Sydow et al., 2009; Sydow & Schreyögg, 2013; Vergne & Durand, 2010). Sydow et al. (2009) distinguish four major effects that cause positive feedback loops: coordination, complementary, learning, and adaptive expectation effects. Table 3provides an overview of three of these self-reinforcing mechanisms with examples, as well as a description of their application to the accountants' context. These effects have been developed and discussed in the literature dealing with inertia, rigidity, and self-reinforcing mechanisms (Schreyögg & Kliesch-Eberl, 2007; Shapiro & Varian, 1999). Related effects are, for instance, direct and indirect network effects (Katz & Shapiro, 1985; Shapiro & Varian, 1999) and economies of scope (Teece, 1980). A fourth self-reinforcing mechanism,the complementary effect, results from synergies of interrelated activities that become more attractive each time they are combined. A number of departments may form a dominant cluster that drives the behavior of an entire organization and each time they cooperate their routines and practices become more effective. As this mechanism is mainly applicable to organizations and not individuals, who are the focus of our research, it is not considered further. According to Sydow et al. (2009), an empirical analysis does not have to cover all self-reinforcing mechanisms as not all mechanisms fit all contexts and the existence of a single self-reinforcing mechanism is sufficient to identify path dependence. Each mechanism needs to be analyzed within its specific context of application (Sydow et al., 2009). Dobusch and Kapeller (2013) note that positive self-reinforcing mechanisms in organizations vary in intensity and pattern. Therefore, self-reinforcing mechanisms, which hinder organizational change, and their effects need to be analyzed within a specific organizational context. The next section explains the research design and methods chosen for the empirical study of barriers that could prevent the involvement of accountants with sustainability. FIGURE 1 Organizational path dependence (based on Sydow et al., 2009, p. 692) WENZIG ET AL.2667 4|RESEARCH DESIGN The lack of large-scale empirical studies and the complexity of investigating organizational path dependence, and as previous conceptualizations of self-reinforcing mechanisms (Dobusch & Kapeller, 2013; Sydow et al., 2009), call for a qualitative research design. In the following analysis, interviews with management accountants were conducted to understand (1) whether and what kind of self-reinforcing mechanisms hinder management accountants from involvement with sustainability management accounting and (2) what further barriers might exist. To ensure a diverse sample, the interviewees were selected based on the following characteristics: company size, industry, hierarchical position of accountants, gender, and company commitment to sustainability (high ranking or awards). This study uses both inductive and deductive aspects for research design, data collection, and analysis. Combining both inductive and deductive approaches is common (Miles et al., 2020; Schönwälder & Weber, 2022; Siems & Seuring, 2021). In the present study, theory is used as a framework to deductively guide the research design and understanding of the sustainability accounting context. Including the theoretical framework early in the study “guides the nature of the questions asked and answered”(Creswell & Plano Clark, 2018, p. 44). Inductive approaches were used to develop the questionnaire and in the coding process to analyze further barriers. In line with Siems and Seuring (2021), we followed a clear operational structure for data collection and analysis. For further details, see the following sections on data collection and data analysis. 4.1 |Data collection To investigate why management accountants do not contribute to corporate sustainability, 33 management accountants from German companies were interviewed in semistructured interviews, either in person (64%) or by phone (36%) if they were not available for a personal meeting. Using different interview modes is common in research (e.g., Goodman et al., 2017). While in-person interviews can offer a view into their desktop and work environment as well as give social cues (Opdenakker, 2006), such information is not included in the following analysis. The topics were discussed in a comparable manner and scope across both interview modes. Phone interviews were only 2 min shorter on average than in-person interviews. The interviews had an average duration of 54 min, and they took place over a period of approximately 6 months in 2019. The interview questions focused on the scope of consideration of environmental and social aspects in accounting and applying the selfreinforcing mechanisms in path dependence theory to the accounting context (including possible learning effects, adaptive expectations, and coordination effects). Interview questions were developed based on a theoretical understanding of the self-reinforcing mechanisms and a transfer of these mechanisms to a management accounting context. However, the use of additional open questions allowed space for interviewees to express other reasons for their involvement with sustainability accounting or lack thereof. The interview guide is included in the Appendix. All interviewees were assured confidentiality. Since the understanding of corporate sustainability in this paper assumes that all accountants ought to be involved in addressing sustainability challenges within their responsibilities, this research adopts the broad understanding of the accounting function according to Carnegie et al. (2020), and hence, different types of management accountants were interviewed. The sampling strategy followed three principles following Miles et al. (2020): convenience, sequential, and purposive sampling. Initially, a convenience sampling strategy was used by approaching management accountants in companies affiliated with the researchers' universities. After conducting these interviews, it was decided to undertake sequential sampling to achieve a large variation in different characteristics, such as leadership role, gender, industry, and company size. Purposive sampling was undertaken to include management accountants not involved in sustainability accounting (typical cases) and management accountants with high, TABLE 3 Self-reinforcing mechanisms and application to the accountants' context Self-reinforcing mechanisms Application to the context of accountants (theses) Coordination effects emerge when different organizational actors are willing to conform to the same (set of) rules. Continuous repetition most likely results in more efficient interaction among different actors, which further reinforces the dominance of this rule. Accountants focus on financial indicators like profitability and are efficient in working with them. Given their expertise, they impose these financial rules on other business units and neglect issues related to sustainability. Adaptive expectation effects describe varying preferences of individuals in response to the expectations of others. When organizational members are uncertain about their decisions, they often adopt routines or practices to meet the expectations of others. Management accountants prioritize tasks and routines in line with the expectations of their key stakeholders (e.g., top management). When those stakeholders do not require sustainability to be considered in internal accounting reports, accountants feel affirmed in continuing to neglect sustainability. Learning effects. Each iteration of a specific action or routine increases its efficiency, making it less attractive to switch to a different one. Steps leading to past success are often repeated and refined until it seems there is no other option than to continue reproducing the pattern. Accountants execute existing routines without seriously questioning their validity. They are unwilling to learn or take on new tasks as they replicate successful routines focussed on financial outcomes. This makes it increasingly difficult for accountants to engage with sustainability. Note: Adapted from Sydow et al., 2009. 2668 WENZIG ET AL. routine involvement in sustainability accounting (exceptional cases). Of the 33 sampled accountants, 54% were in a leadership position, and 73% were male. They represented companies of varying sizes and industries: 16% from small and medium-sized companies (up to 250 employees), 52% from companies with 250 to 5000 employees, and 32% from large companies (more than 5000 employees). Of all companies in the sample, 58% were multinational companies (based on Kogut's (2001) criteria of business activities in more than two countries). In terms of industry, 24% were in the mechanical and electrical engineering sector, 18% each in logistics as well as services and trade, 15% in consumer goods, 15% in construction and chemistry, and nearly 10% in banking, insurance, and real estate. The sample is therefore adequate to investigating why accountants in a wide range of organizational contexts fail to contribute to corporate sustainability. Table A1 in the Appendix provides an overview of the interviews including anonymized interviewee characteristics and contexts. All interviews were recorded and transcribed. 4.2 |Data analysis Both deductive and inductive approaches were used to identify the extent to which self-reinforcing mechanisms can hinder an accountant's involvement with sustainability. Deductive coding was first completed before inductive coding was undertaken (Siems & Seuring, 2021). First, a coding scheme based on the three selfreinforcing mechanisms as described in the organizational path dependence literature was developed deductively and applied as a priori codes (Miles et al., 2020). Second, separate descriptive codes were developed to capture how each of the mechanisms might appear in the accounting context (for some examples, see Table 3). This coding scheme allowed for coding both positive instances of self-reinforcing mechanisms, as well as negative or discrepant instances indicating an absence of these mechanisms (Maxwell, 2013). The deductively developed codes were used as impulses or “sensitizing concepts” (Brinkmann & Kvale, 2015, p. 269) for the data analysis, rather than definitive concepts. Additional barriers that emerged throughout the coding process were captured inductively, first as in vivo codes (Saldaña, 2010), then as themes. Allowing for coding of negative instances as well as additional inductive codes was done in order to avoid an overreliance on theory and to ensure researcher openness to alternative explanations of the phenomena (Miles et al., 2020). The coding process was supported using MAXQDA software. Validity is ensured in qualitative research by using different approaches and criteria (e.g., Creswell & Plano Clark, 2018; King et al., 2019). We follow Creswell and Plano Clark (2018), who recommend choosing at least three approaches. First, member checking involves asking interview partners to decide whether the results accurately reflect their positions (see also Miles et al., 2020). The research results were presented and discussed in a workshop with 42 management accountants, of which 36 had not been previously interviewed. The workshop was used to gain feedback from interviewees as well as from other management accountants who were not involved in providing data and insight up to that point. This approach provided a “member check”(Miles et al., 2020, p. 303) and a “community for a dialogue on validity”(Brinkmann & Kvale, 2015, p. 285). Second, disconfirming evidence was noted and reported. Both types of statements, positive instances of self-reinforcing mechanisms and negative instances, were coded and analyzed. Both results are reported in the results section. The third approach according to Creswell and Plano Clark (2018) is to ask peers to examine the data and approaches. The data, codebook, process, and results were shown for examination to two other researchers with expertise in sustainability and accounting and who were not co-authors. They approved the process and results. Aside from these three criteria, this study also utilizes several of Miles et al.'s (2020) criteria for internal and external validity. These include a clearly characterizing a diverse sample, commenting on congruency with results from other studies, and specifying appropriate settings for further research. Miles et al. (2020) suggest various criteria to ensure reliability throughout the whole research process. This study used the following of their criteria: stating a clear research question, conducting the data collection in settings suitable to the research question, using peer reviews, and ensuring intercoder reliability. Creswell and Plano Clark (2018) consider reliability less relevant than validity in qualitative research since subjective interpretations in the data are central to the approach. However, reliability can be achieved to a certain extent by ensuring intercoder agreement. The authors suggest the following steps to ensure intercoder agreement: establishing a codebook, simultaneous coding of the same transcript by all coders, and comparing codes. The method of this study included these three steps. Before coding, a codebook (Saldaña, 2010) was written based on the deductively developed codes. The same transcript was coded by the two coders and then compared. To ensure intercoder agreement between the two coders in subsequent transcripts, coded transcripts were discussed in weekly meetings to build consensus on the consistent use of codes (Harry et al., 2005). This process can be considered codeconfirming (King et al., 2019), where coded transcripts were scrutinized by the other authors. The codebook was refined as a shared understanding of the codes emerged, leading to clearer definitions (Miles et al., 2020). After the initial coding, all interview data and codes were reviewed by one of the researchers, comparable with Schönwälder and Weber (2022). The analysis searches for possible explanations for lack of involvement by accountants with sustainability accounting by (i) comparing similarities and (ii) comparing differences across interviews. In the first approach, statements made by a majority of accountants are denoted with “nearly all”(no more than two accountants differing) or “most”(more than 75% of the accountants agreeing). For more divergent results, the share of accountants in agreement is provided for each result. In the second approach, coded interview segments were compared for different accountant characteristics and contexts and noted in this section. 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Journal of Accounting and Organizational Change,16(3), 311–347. https://doi.org/10.1108/JAOC-022019-0025 How to cite this article: Wenzig, J., Nuzum, A.-K., & Schaltegger, S. (2023). Path dependence of accountants: Why are they not involved in corporate sustainability? Business Strategy and the Environment,32(6), 2662–2683. https://doi. org/10.1002/bse.3263 WENZIG ET AL.2679 APPENDIX A A.1 |Interview guideline This guideline was translated from German. As it is common in semistructured interviews, the order and questions asked in each interview varied. The interview also consisted of an introductory phase, additional follow-up questions not included here (such as asking for examples or further explanations), and some closing questions. •What are your main tasks at the moment? •Who are your main stakeholders? Who do you report to? •How easy or difficult is it for you to fundamentally reorganize or rethink any recurring tasks? How do you involve your key stakeholders in these processes? •What is your role when working with top management (or other key stakeholders)? •To what extent does your work in management accounting influence decision-making in your company? •What changes in the tasks of a management accountant do you expect in the next five years and how are you preparing for these changes? •What types of external or internal forms of learning and continuing education to you attend? What are the main topics? •Could you imagine taking on new areas of responsibility and familiarizing yourself with new areas of work? What kind of areas would they be? •To what extent and for what purposes are non-financial data and key figures collected and used in your company's management control systems? •To what extent do you think that top management takes sustainability into account when making decisions? How does this show in your work as a management accountant? •To what extent and for what purposes are environmental and social data and key figures collected and used in your company's management accounting? •Do you also work with or exchange data and information from environmental or sustainability management? •To what degree can you imagine collecting and analyzing environmental and social data? •To what extent do you think that closer or less close cooperation between management accounting and sustainability management would be beneficial for the company? •In your opinion, what are the reasons why management accounting has not had any involvement with environmental and social sustainability to date? 2680 WENZIG ET AL. TABLE A1 Overview of interviews No. Job Title a Leadership role Gender Involvement with sustainability accounting b Relevance of sustainability for company b Industry Company size (no. of employees) Multinational company c Date of interview Interview modus Length (minutes) 1 Controller No Male No High Mechanical and electrical engineering 250–5000 Yes 02/28/2019 By phone 75 2 R&D Controller No Male No High Mechanical and electrical engineering More than 5000 Yes 03/17/2019 In person 45 3 Controller No Female Ad hoc Low Services and trade Less than 250 No 03/20/2019 In person 50 4 Head of Controlling Yes Male No Medium Services and trade More than 5000 Yes 04/08/2019 In person 55 5 Head of Group Controlling Yes Male No High Consumer goods More than 5000 Yes 04/24/2019 In person 60 6 Assistant Director Controlling Yes Male No Medium services and trade 250–5000 No 04/29/2019 By phone 38 7 Head of Controlling Yes Male No Medium Construction and chemistry 250–5000 No 04/30/2019 In person 52 8 Head of Controlling Yes Male No Medium Construction and chemistry 250–5000 Yes 05/03/2019 In person 32 9 Controller No Male Ad hoc Low Mechanical and electrical engineering Less than 250 No 05/08/2019 In person 45 10 Marketing Controlling No Female No Medium Mechanical and electrical engineering 250–5000 Yes 05/13/2019 By phone 45 11 Head of Controlling Yes Male No Low Construction and chemistry 250–5000 No 05/15/2019 In person 70 12 Performance Controlling Yes Female Ad hoc Medium Mechanical and electrical engineering More than 5000 Yes 05/17/2019 In person 42 13 VP of Finance and Controlling Yes Male No Medium Mechanical and electrical engineering More than 5000 Yes 05/17/2019 By phone 103 14 M&A Controlling No Male No High Banking, insurance, and real estate Less than 250 No 05/20/2019 In person 43 (Continues) WENZIG ET AL.2681 TABLE A1 (Continued) No. Job Title a Leadership role Gender Involvement with sustainability accounting b Relevance of sustainability for company b Industry Company size (no. of employees) Multinational company c Date of interview Interview modus Length (minutes) 15 Controller No Male Ad hoc Medium Mechanical and electrical engineering Less than 250 No 05/21/2019 In person 82 16 Controller No Male No Medium Construction and chemistry 250–5000 No 05/22/2019 By phone 45 17 Head of Operative Controlling Yes Female No High Consumer goods More than 5000 Yes 05/27/2019 In person 63 18 Group Controlling No Female No High Consumer goods 250–5000 Yes 05/29/2019 In person 23 19 VP of Finance and Controlling Yes Male Routine High Consumer goods 250–5000 No 05/29/2019 In person 67 20 Head of Controlling Yes Female No Low Construction and chemistry 250–5000 Yes 06/04/2019 In person 52 21 Team leader Controlling Yes Female Ad hoc High Consumer goods 250–5000 Yes 06/05/2019 By phone 23 22 Head of Controlling and Risk Management Yes Male Ad hoc HIGH Banking, insurance, and real estate 250–5000 Yes 06/06/2019 In person 68 23 Head of Controlling Yes Male Routine High Services and trade 250–5000 No 06/07/2019 By phone 57 24 Controller No Male Ad hoc High Logistics 250–5000 Yes 06/11/2019 By phone 44 25 Business Unit Controller No Male Ad hoc Medium Logistics More than 5000 Yes 06/18/2019 In person 35 26 Inventory Controlling No Female Ad hoc High Logistics More than 5000 Yes 06/18/2019 By phone 38 27 VP of Finance and Purchasing Yes Male Ad hoc High Logistics 250–5000 No 06/19/2019 In person 70 28 Controlling No Male Ad hoc High Logistics 250–5000 No 06/19/2019 In person 70 29 Area Manager Controlling Yes Female No Medium Logistics More than 5000 Yes 06/21/2019 By phone 60 30 VP of Finance and Controlling Yes Male No Medium Services and trade Less than 250 No 06/25/2019 In person 85 2682 WENZIG ET AL. TABLE A1 (Continued) No. Job Title a Leadership role Gender Involvement with sustainability accounting b Relevance of sustainability for company b Industry Company size (no. of employees) Multinational company c Date of interview Interview modus Length (minutes) 31 Group Leader Controlling Yes Male No High Services and trade More than 5000 Yes 07/23/2019 By phone 60 32 Head Office Controlling No Male Ad hoc High Banking, insurance, and real estate 250–5000 No 07/23/2019 By phone 49 33 Group Controlling Yes Male No High Mechanical and electrical engineering More than 5000 Yes 09/20/2019 In person 53 a Controlling and controller as part of the job title were not translated. b Categorized based on statements by interviewed management accountants. c The multinational company definition is based on Kogut's (2001) criteria of having business activities in more than two countries. WENZIG ET AL.2683