Qualitative Research in Accounting & Management: Article Information

Qualitative Research in Accounting & Management
Evaluating the temporal dimension of legitimisation strategies: Evidence from

non-financial reporting in response to a social crisis
Warren Maroun,
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QRAM
15,3 Evaluating the temporal
dimension of legitimisation
strategies
282 Evidence from non-financial reporting in
Received 3 January 2017
response to a social crisis
Revised 31 May 2017
7 February 2018 Warren Maroun
Accepted 22 April 2018
University of the Witwatersrand, Johannesburg, South Africa
Abstract
Purpose – The purpose of this study is to examine how social disclosures by one of the world’s largest
producers of Platinum Group Metals are used to maintain and repair legitimacy in the context of South
Africa’s prevailing socio-economic conditions and in response to the immediate challenge to legitimacy
posed by violent worker demonstrations taking place at its operations in Marikana during August 2012.
This is done to highlight how legitimacy strategies take account of the temporal characteristics of a
threat to legitimacy and how these, in turn, may constrain the need for far-reaching organisational
change.
Design/methodology/approach – Suchman’s (1995) outline of legitimacy theory and Laughlin’s (1991)
model of organisational change provide a frame of reference for a detailed thematic content analysis which
identifies the use of different strategies by an organization to respond to threats to its credibility and how
these impact, resulting changes to business philosophies, policies and systems.
Findings – The study highlights the temporal dimension of legitimisation strategies. Social-related
disclosures provided by the case entity in response to labour unrest are aimed at addressing both the
episodic and continual threat to legitimacy resulting from the unfavourable event. These also have the
effect of limiting the extent of internal changes to select business policies and sub-systems. Carefully
managing legitimacy allows the case entity to avoid the need to reformulate its business ethos.
Research limitations/implications – The study deals only with a single case organisation. Although
the emphasis is on highlighting themes and principles, results are not necessarily applicable in different
contexts. Related to this, although the study deals with a major South African mining company, it does not
prove the relevance of local cultural differences to the legitimisation process.
Originality/value – The study dispenses with the use of proxies, such as frequencies of disclosures, to
demonstrate how organisations use non-financial reporting to secure legitimacy. Instead, it offers a
detailed account of how different sub-sets of legitimacy are being mobilised in corporate reports
response to long-term and episodic legitimacy considerations. In addition, the study offers one of the
first interpretive accounts of how strategies used to manage legitimacy may constrain the potential of a
material external shock resulting in internal organisational change. Finally, the study offers one of the
first examples of the operation of legitimacy and organisational change theory from the African
Continent.
Keywords Corporate social responsibility, Organisational change, Legitimacy theory,
Integrated reporting
Paper type Research paper
Qualitative Research in
Accounting & Management
Vol. 15 No. 3, 2018
pp. 282-312 Special thanks go to the participants of the Meditari Accountancy Research Conferences (2015 &
© Emerald Publishing Limited 2016). The researcher is also grateful to Lelys Maddock, Helen Tregidga, Wayne van Zijl, Jill Atkins
1176-6093
DOI 10.1108/QRAM-01-2017-0001 and John Burns for their comments on earlier versions of this paper.
1. Introduction Legitimisation
A large body of work examines the relationship between environmental and, more broadly, strategies
sustainability reporting and legitimacy theory (see, for example, Deegan, 2002; Cho, 2009;
Watson, 2011; De Villiers and Alexander, 2014; Vourvachis et al., 2016). Much of this
research focuses on how the quantum of information being reported changes over time,
usually in response to an environmental crisis, such as the Exxon Valdez oil spill (Patten,
1992), the Deepwater Horizon disaster (Summerhays and De Villiers, 2012) or toxic waste
contamination (Milne and Patten, 2002; Patten, 2002). The effect of new laws and regulations 283
(De Villiers and van Staden, 2006), adverse media coverage (Deegan et al., 2002), codification
of reporting standards (De Villiers and Alexander, 2014), use of assurance services
(Michelon et al., 2015) and industry or country-specific factors (Newson and Deegan, 2002;
Khlif et al., 2015) on the quality and quantity of non-financial reporting has also been
evaluated (for a detailed framework, see Alrazi et al., 2015).

While these studies provide an important confirmation of the operationalisation of
legitimacy theory in a corporate context, the exact means by which non-financial disclosures
are used to repair or maintain legitimacy are not always clear (Cho et al., 2010; Vourvachis
et al., 2016). In particular, the prior research often stops short of making an explicit link
between specific types of disclosures in integrated or sustainability reports and the
underlying strategy being used to appeal to a sense of pragmatic, moral or cognitive
legitimacy (Suchman, 1995; Deegan et al., 2002; Dumay et al., 2017; Guthrie et al., 2017). More
importantly, while there are multiple examples of studies examining event-specific threats
to legitimacy (De Villiers and Maroun, 2017), few draw a contrast between episodic and
continual legitimacy considerations and how disclosures in corporate reports vary
according to the temporal dimension (Suchman, 1995). Related closely to this, the possibility
that the strategy used to manage legitimacy in the aftermath of an adverse event may have
implications for the way in which an organisation internalises that event and, in turn, the
extent of internal change in response to an external shock has not been considered.
This research seeks to address these limitations. It examines how a South African-based
mining company (Lonmin Plc[1]) mobilised different types of disclosures in its corporate
reports in response to violent strike action at its Marikana operations during August
2012[2]. This is done to consider how the company seeks to maintain and repair legitimacy
in response to both the episodic and continual threat to credibility posed by the labour
unrest. For this purpose, legitimacy (and the tactics used to manage it) are presented
according to the framework outlined by Suchman (1995) which specifically recognises the
temporal dimension of legitimacy management. At the same time, Laughlin’s (1991) model
of organisational change is used to shed light on how different legitimisation strategies may
constrain the potential for wide reaching reforms to a company’s strategy/business
philosophy (interpretive schemes), its structures and policies (design archetypes) and
relevant systems, processes and actions (sub-systems).
Empirically, the paper makes an important contribution by dealing with the functioning
of organisational legitimacy in a social (rather than an environmental) context. The findings
also complement the existing body of sustainability reporting research which is normally
conducted in Europe (Laine, 2009a), the USA (Cho et al., 2010) or Oceania (Deegan and
Blomquist, 2006) and has ignored the development of non-financail reporting in an African
context (Brennan and Solomon, 2008; Maroun and Jonker, 2014).
At the theoritcal level, the research offers evidence in support of Sucham’s (1995)
legitimacy framework. It highlights differences in the strategies used to maintain or repair
legitimacy when dealing with an episodic threat to credibility posed by violent strike action
and contrasts these with how the company manages stakeholder expectations, informed by
QRAM South Africa’s unique socio-political past and underlying structural or continual legitimacy
15,3 considerations. At the same time, the findings establish a link between Suchman’s (1995)
conceptualisation of legitimacy and organisational change. This not only adds to the
understanding of corporate reporting provided by legitimacy theory, but also answers calls
for additional research on exactly how organisations may be able to limit the extent of
substantive change required in the aftermath of an external shock (Laughlin, 1991; Stubbs
284 and Higgins, 2014). Consequently, although this paper deals with a specific mining company
in a single jurisdiction, the findings offer a conceptual basis for analysing in more detail the
operation of different legitimisation strategies according to the temporal context and
organisational change pathways, something which should be broadly applicable for
sustainability accounting researchers.
The remainder of this paper is structured as follows. Section 2 discusses Laughlin’s
(1991) model of organisational change and legitimacy theory and the link between these
theoretical frameworks and sustainability reporting. Section 3 provides a brief overview of

the South African socio-economic context and a summary of the events which took place at
Marikana. Section 4 discusses the method used in this research. Section 5 presents results
and Section 6 concludes and identifies areas for future research.
2. Theoretical frameworks
2.1 Organisational change
According to the organisational change model outlined by Laughlin (1991), a firm can be
presented as an amalgamation of interpretive schemes, design archetypes and sub-systems.
At the most tangible level, sub-systems are made up of elements such as financial and
manufactured capital, human resources and the management and accounting infrastructure
used to coordinate and report on business activities (Greenwood and Hinings, 1987). An
entity’s structures, decision-making processes and communication systems make up the
design archetypes. More broadly, its beliefs, values, mission or purpose constitute its
interpretive schemes and represent the fundamental assumptions about the firm or its
business ethos (Ouchi, 1979; Laughlin, 1991).
These three elements are in “dynamic balance”. Even if there is some disagreement
among the individuals making up an organisation, views coalesce to yield a primary
perspective on the firm (Laughlin, 1991, p. 213). This is because the acceptability of a
particular organisational state is not only a function of rational outcomes or the consistency
of technical processes, but also of the amalgamation of a firm’s system, structures and
designs which align with prevailing social or institutional norms, value and beliefs (Meyer
and Rowan, 1977). As a result, a type of “inertia” around this dominant perspective becomes
the norm’ unless there is a material external disturbance which results in reconfiguration of
interpretive schemes, design archetypes and sub-systems (Laughlin, 1991, p. 213).
This type of organisational change is referred to as morphogenesis or second-order
change brought about by either a colonisation or an evolutionary change mechanism
(Laughlin, 1991; Stubbs and Higgins, 2014). In the first instance, change is forced on an
organisation which is compelled to alter its design archetype and, in turn, its interpretive
schemes and sub-systems. Firm participants must accept the reconfigured state (which
becomes the new dominant perspective of the organisation), even if they are reluctant to do
so. Evolution is similar to colonisation in that a new conceptualisation of the firm emerges,
but individuals are either co-opted or chose to take responsibility for the change process,
rather than being forced to change (Laughlin, 1991; Gray et al., 1995).
In most instances, however, organisations rely on a “typical homeostatic control system
working on repetitive defensive mechanisms to deflect any challenges to the organizational
equilibrium state” (Laughlin, 1991, p. 216). The need for change is either rebutted or the firm Legitimisation
reverts to its original state after the external event has passed. A rebuttal strategy can also strategies
involve “making things to look different while remaining basically as they have always
been” (Smith, 1982, p. 318).
Where the effect of an external shock is too severe to be rebutted completely, a firm can
modify its sub-systems or design archetypes but in a way which leaves a firm’s fundamental
values or interpretive schematics unaffected. As a result, this type of first-order change
(referred to as re-orientation) stops short of a radical re-evaluation of a firm’s systems, 285
processes and values which characterises second-order change (Laughlin, 1991; Gray et al.,
1995; Adams and McNicholas, 2007; Stubbs and Higgins, 2014).
Morphostasis and morphogenesis are useful schematics for explaining how firms react to
dynamic environments and alter their behaviour over time. As cautioned by Laughlin
(1991), first- and second-order change pathways provide only a high-level explanation of
organisational change processes. The precise mechanisms by which an entity reacts to an

external event and how these may alter, depending on the nature of that event and its
duration are not addressed. As a result, this research complements Laughlin’s
organisational change model with legitimacy theory, focusing specifically on how
companies maintain, repair or regain legitimacy when faced with an external event which
undermines their credibility.
2.2 Legitimacy theory

For the purpose of this research, legitimacy is understood as a primarily strategic construct
in the sense that firms are seen as acting rationally when deciding what information to
include in their corporate reports (see, for example, De Villiers and van Staden, 2011; Leung
et al., 2015) and consciously rely on different types of disclosures to garner support[3]
(Suchman, 1995). This may be focused at the pragmatic, moral or cognitive level depending
on whether or not an organisation is responding to an episodic or continual thereat to
legitimacy as explained by Suchman (1995) and Dowling and Pfeffer (1975) and summarised
in Table I.
At the episodic level, the emphasis is on demonstrating positive outcomes. Exchange
legitimacy (a sub-set of pragmatic legitimacy) is accorded when constituents regard an
organisation’s policies, actions or processes as valuable and the entity is seen as acting in
stakeholders’ best interests (Dowling and Pfeffer, 1975; Suchman, 1995). Moral legitimacy is
the result of pro-social normative assessment of an organisation and its activities (Suchman,
1995). A consequential legitimacy sub-set of moral legitimacy depends on normative
Focus on character or
Temporal focus Legitimacy type Focus on actions essence
Episodic Pragmatic Exchange Dispositional – Interests

Continual Influential Dispositional – Character
Episodic Moral Consequential Personal
Continual Procedural Structural
Episodic Cognitive Comprehensibility – Predictability Comprehensibility –
Plausibility
Continual Taken for grantedness – Taken for grantedness –
Inevitability Permanence Table I.
Period, legitimacy
Source: Suchman (1995, p. 584) type and focus
QRAM assessments of an organisation’s achievements against morally or socially accepted
15,3 standards, including whether or not the respective activity is “the right thing to do”.
Consistently delivering positive outcomes results in the personification of the organisation
as a “good citizen” (Suchman, 1995, p. 580). Finally, an organisation’s activities are
consistent and accommodated by cultural models which provide a basis for the existence of
the firm, comprehensibility and predictability accord cognitive legitimacy (DiMaggio and
286 Powell, 1983; Powell, 2007).
To manage a continual threat to legitimacy, the emphasis shifts to the processes used to
achieve outcomes and defining the organisation’s character. An influential form of
pragmatic legitimacy depends on co-opting constituents in decision-making processes and
adopting their standards of performance/behaviour (Dowling and Pfeffer, 1975).
Dispositional legitimacy can be secured if constituents feel that the company’s interests are
either consistent with their own or if the firm can demonstrate that it is aligned with
culturally desired norms, such as honesty, trustworthiness or decency (Zucker, 1986;

Suchman, 1995). This can be reinforced by using generally accepted methodologies,
procedures or techniques which accord a procedural form of moral legitimacy (Dowling and
Pfeffer, 1975; Suchman, 1995). Over time, the “structurally legitimate organization becomes
a repository of public confidence” because procedural rigour and appropriateness are
recurring features and the entity is generally accepted as the “the right organization for the
job” (Suchman, 1995, p. 581). Conversely, claims to structural legitimacy can be used to
mobilise “social norms and values that define and delimit legitimate spheres of
organisational activity” (Dowling and Pfeffer, 1975, pp. 125-126). To the extent that it is
attainable, an organisation may be able to “mesh” so completely with the “larger belief
systems and experienced reality of the audience’s daily life” that its existence is taken for
granted and alternatives to the outputs or functions of the organisation (even if ambiguous)
become unimaginable. In other words, a sense of permanence or inevitability can become a
long-term source of cognitive legitimacy (Suchman, 1995, pp. 582-583).
Much of the prior research using legitimacy theory deals with how companies change
their corporate reporting in response to an adverse external event (De Villiers and Maroun,
2017). This typically involves investigating how changes in the quantum of information
being reported to stakeholders (for example, Patten, 2002; Vourvachis et al., 2016) or the
location of disclosures (for example, De Villiers and van Staden, 2011) are used as broad
legitimacy management strategies. Narrowing the unit of analysis to individual disclosures
and considering how these are used to appeal to pragmatic, moral or cognitive legitimacy
sub-sets can, however, provide more detail on exactly how companies use their corporate
reports to manage an event which threatens legitimacy than focusing only on the sum or
location of corporate disclosures in total. A refined perspective on different “elements” of
legitimacy (and how these vary according to temporal focus) can also be useful for
complementing Laughlin’s (1991) model of organisational change by shedding light on why
morphogentic change does not occur in response to a material external event and how
entities are able to limit change to the first-order type.
2.3 Legitimacy as a mechanism of morphostatic or morphogentic change

There are numerous examples highlighting different reporting strategies which companies
can use to manage legitimacy (see, for example, Deegan et al., 2002; O’Donovan, 2002; De
Villiers and van Staden, 2006). Two of the seminal texts categorise these according to
whether or not the emphasis is on gaining, maintaining or repairing legitimacy (Ashforth
and Gibbs, 1990; Suchman, 1995). These legitimisation tacticts can also be classified
according to the extent to which an organisation reacts substantively or symbolically to
changing events or circumstances and whether any changes are morphostatic or Legitimisation
morphogentic in nature. strategies
2.3.1 Morphogenetic change. When faced with a crisis of confidence, organisations will
often attempt to signal allegiance to the pre-existing institutional regime (Ashforth and
Gibbs, 1990). The intention is to meet the expectations of stakeholders (exchange
legitimacy); offer decision-making access (influential legitimacy); and produce morally
desirable outcomes (consequential legitimacy) using generally accepted and socially
responsible techniques (procedural legitimacy) (Suchman, 1995). In terms of Laughlin’s 287
(1991), these legitimisation strategies can also be seen as part of a colonisation change
pathway. For example, Deegan (2002, p. 319) explains how “managers will adopt strategies,
inclusive of reporting strategies, which show stakeholders that the organisation is
attempting to comply with society’s expectations (as incorporated within the social
contract)”. This is confirmed by De Villiers and van Staden (2006) and Brennan and Merkl-
Davies (2014) who find that, when faced with an immediate threat to legitimacy, companies
will acknowledge weaknesses, rationalise shortcomings and attempt to co-opt stakeholders
in some decision-making processes. They also change the extent of reporting on the adverse
event to signal conformance and preserve standing. According to Suchman (1995), this can
be complemented by offering guarantees for better performance, normally backed by
support for additional monitoring and review and improved systems of accountability,
especially as the focus shifts from the short- to the long-term.
Provided that rhetoric is supported by action, the steps taken to manage legitimacy can
also be understood as a type of colonisation change pathway. For example, altering business
outcomes, engaging more actively with stakeholders or refining corporate reporting to
address changing expectations (Deegan et al., 2002; De Villiers and van Staden, 2006;
Brennan and Merkl-Davies, 2014) is likely to require changes to strategies, policies,
processes and systems which constitute the firm’s interpretive schemes, design archetypes
and supporting sub-systems. This is especially true if the reaction to an external shock is not
just symbolic and results in a genuine change in business ethos and practice (see, for
example, Atkins et al., 2015a; Cho et al., 2015; Gallhofer et al., 2015; Guthrie et al., 2017).
Colonisation change should be contrasted with a consensus-based possibility of change
which characterises the evolutionary form of morphogenetic change. As explained by
Hopwood (1987), the accounting infrastructure is simultaneously affected by and an enabler
of change:
Through its intertwining with the discursive notions of accountability and responsibility,
accounting can play a role in the reconstitution of organisational agents, enabling different
configurations of organisational arrangements to exist [. . .] [It] can change conceptions of the
past, the present and the future, contributing different saliences to each which can, in turn,
moderate temporal preferences and emphases, and thereby, organisational actions. (Hopwood,
1987, p. 229).
This line of thought is consistent with a growing body of work which argues that
accounting (including different forms of corporate reporting) has the potential to change
both corporate behaviour and reporting (Atkins et al., 2015b; Gallhofer et al., 2015). By
constructing and expanding fields of organisational visibility, the act of providing an
account of financial, social or environmental performance can reveal weaknesses in existing
policies, processes and lines of communication which, in turn, drive the improvement of sub-
systems, design archetypes and interpretive schemes (for details, see Hopwood, 1987;
Adams and McNicholas, 2007; Guthrie et al., 2017; McNally et al., 2017). In these instances,
pragmatic and moral legitimacy results from the reflective process of reporting on different
performance dimensions and demonstrating how improvements yield positive outcomes (at
QRAM the episodic legitimacy level) or bolster the organisation’s structural position (at the
15,3 continual legitimacy level).
An evolutionary change profile may also be synonymous with proactive management of
emerging issues to prevent future threats to legitimacy or to drive the long-term social
agenda. This can amount to gaining legitimacy by appealing to like-minded individuals who
value the organisation’s genuine efforts to achieve a particular outcome or the methods
288 being used to champion a given objective (Ashforth and Gibbs, 1990). Similarly, companies
which pioneer new approaches to business management can “intervene pre-emptively in the
cultural environment in order to develop bases of support specifically tailored to their
distinctive needs” (Suchman, 1995, p. 591). This can allow these organisations to secure
moral and cognitive legitimacy by establishing the standards or norms according to which
all other entities must be assessed and direct the debate on key issues (Suchman, 1995,
p. 591). A good example is provided by companies pioneering innovative forms of social and
environmental reporting, aimed at improving their own stakeholder engagement, informing
the public of emerging social or environmental problems (Atkins et al., 2016; Jonäll and
Rimmel, 2016) or championing a social or environmental project such conservation of
specific species (Atkins et al., 2018). These entities signal that they are cognisant of the
dynamic environment in which they operate; are at the cutting edge of relevant
developments and have managers who are capable of responding to events or circumstances
not yet anticipated by their competitors.
2.3.2 Morphostatic change. According to Dowling and Pfeffer (1975, p. 127), an
organisation “can attempt, through communication, to alter the definition of legitimacy so
that it conforms to the organisation’s present practices, outputs, and values”. This often
involves stressing past successes, de-emphasising negative events or presenting a rational
technical case for the organisation’s activities to limit the need for substantive change
(Higgins and Walker, 2012; Solomon et al., 2013; Atkins and Maroun, 2014; Tregidga et al.,
2014; Cho et al., 2015).
As part of this process, corporate reports are drafted to convey a sense of social and
environmental responsibility and to integrate the environment and society as part of the
taken-for-granted organisational domain. A resulting sense of sustainability as a “natural”
part of day-to-day operations is combined with references to competency, experience,
transparency, accountability and responsibility, personifying the organisation and
entrenching a sense of cognitive, procedural and dispositional legitimacy (Higgins and
Walker, 2012; Tregidga et al., 2014). The intention is to reassure stakeholders that
significant steps are being taken to balance ESG concerns with financial performance
(Higgins and Walker, 2012; Brennan and Merkl-Davies, 2014). At the same time, the need for
managing financial and broader social and environmental concerns and educating the
public on the inherent risks of business operations is emphasised to limit what organisations
can reasonably be expected to do, garner sympathy and abrogate responsibility for
environmental or social failures (O’Donovan, 2002; Laine, 2009b; Gray, 2012; Higgins and
Walker, 2012; Tregidga et al., 2014; Cho et al., 2015). The intention is not fraudulent but
rather to construct a particular organisational identify which limits accountability and, in
turn, the need for material change (Roberts et al, 2006; Solomon et al., 2013).
The maintenance of this corporate image means that, when faced with a threat to
legitimacy, organisations frequently attempt to create a “firewall” between the questionable
event and the assessment of the organisation as a whole. This can be achieved by denying
responsibility; attributing the failure to events beyond the organisation’s control or
presenting failures as isolated (Laine, 2009a; Tregidga et al., 2014; Dube and Maroun, 2017).
To the extent that an organisation is able to rely on ceremonial displays and the good faith
assumption that it is socially responsible, it can successfully separate current technical Legitimisation
outcomes from society’s ideals and avoid the need for reform by preserving or bolstering strategies
claims to cognitive legitimacy (Meyer and Rowan, 1977; O’Dwyer, 2002; Solomon et al.,
2013).
“[. . .] The organization can [also] attempt to become identified with symbols, values,
or institutions which have a strong base of social legitimacy” (Dowling and Pfeffer,
1975, p. 127). For this reason, environmental or social disclosures are often driven by
established norms and industry leaders (de Villiers and Alexander, 2014) and the 289
information expectations of powerful stakeholders (de Villiers and van Staden, 2006).
The codification and professionalization of integrated and sustainability reporting
adds to this, allowing the organisation to “demonstrate” alignment with generally
accepted reporting standards and the latest respected thinking in sustainable business
practice, suggesting its actions are logical and valid (Suchman, 1995). In turn, it
becomes possible for symbolic displays to be evaluated against established norms,
allowing the organisation to occupy the position of “best sustainability reporter” or
“integrated thinking leader” (Higgins and Walker, 2012; De Villiers and Alexander,
2014; Tregidga et al., 2014). At the same time, if an organisation can create an image of
an honest and sincere social actor, then dispositional legitimacy results (Suchman,
1995). Consequently, corporate reports frequently rely on concepts such as
responsibility, environmental friendliness and human rights to personify the
organisation and association it with socially desirable qualities (Laine, 2009b; Higgins
and Walker, 2012).
Finally, when crisis strikes, disassociation can also be useful. Explicitly denying
responsibility may not be a viable option for managing demands for at least some reaction
to an external shock (Suchman, 1995). Instead, a firm can justify failures in a manner which
wins support; symbolic distancing of the organisation from the event or person which is
perceived as discredited and creating the appearance of a willingness for change in line with
societal expectations (Meyer and Rowan, 1977; Suchman, 1995).
The mix of strategies used to manage the threat to legitimacy will be determined by the
magnitude of external shock, the temporal context and the nature of the relationship
between the firm and its key stakeholders (Suchman, 1995; Deegan et al., 2002). Irrespective
of the precise approach used to maintain or repair legitimacy, any revisions to operating
policies, decision-making processes or lines of communication may be cosmetic (consider
Stubbs and Higgins, 2014; Cho et al., 2015). In these instances, the methods used to manage
legitimacy result in only first-order change. In terms of Laughlin’s (1991) typology, as the
underlying sub-systems and interpretive schemes are left unaltered, legitimacy
management takes place at the symbolic level and only a rebuttal type of first-order change
results (see also Meyer and Rowan, 1977) In cases where some steps are taken to modify
accounting and management systems, organisational change is at the re-orientation level.
This is similar to a situation where revisions at the policy level (organisational rhetoric) are
supported by, at least, some changes to underlying systems and reporting protocols
(organisational action) (see also Cho et al., 2015). As with the rebuttal change type, because
the strategy, business philosophy and firm ethos are left unaltered, second-order change has
not occurred (Laughlin, 1991).
The relationship between the level of organisational change and strategy selected to
manage legitimacy is summarised in Table II. No distinction is drawn between tactics used
to gain or maintain legitimacy and rebuttal or re-orientation change types. As explained
above, this is because both types of organisational change do not result in revisions to the
respective firm’s interpretive schemes. The only distinction between the rebuttal and
QRAM Legitimacy perspective
15,3 Organisational
change type Episodic event Continual event
First-order change
Rebuttal
Reoriantation De-emphasise negative events and offer Stress past accomplishments to reaffirm the
290 normalising accounts to justify actions or organisation’s character
outcomes Use corporate reporting to manage the image
Offer generic solutions and avoid specific of corporate responsibility
action plans Embed organisational practice and reporting
Avoid accountability for specific actions/ in generally accepted frameworks
events by disputing responsibility Use corporate reporting to create an
Distance the organisation from any association between the organisation and
action or outcome which may discredit it socially desirable qualities

Second-order change
Colonisation Acknowledge weaknesses and meet Rationalise shortcomings and offer genuine
expectations decision-making access
Suggest solutions and produce morally Propose long-term change and guarantee
desirable outcomes procedural rigour
Ensure consistency moving forward Demonstrate structural integrity/permanence
Evolution A self-driven exercise of driving Reflexively evaluate systems, processes and
improvements to outcomes to bolster objectives to bolster the organisation’s
exchange and consequential legitimacy standing to secure influential and procedural
and demonstrate long-term predictability legitimacy and provide stakeholders with a
Table II.
Maintain an awareness of changing sense of permanence
Organisational stakeholder expectations, stand ready to Be perceptive to changing environments and
change versus act and reassure key constituents ensure that managers have the ability to
legitimisation respond to emerging or unanticipated events/
strategy matrix circumstances
re-orientation categories is whether or not the legitimisation strategies result in changes to

sub-systems (re-orientation) or only to the organisation’s design archetype (rebuttal). When
it comes to second-order change, a distinction is drawn between legitimisation strategies
which are designed to react to an episodic or continual threat to legitimacy (colonisation)
and those which reflect an awareness of the dynamic environment and the need for self-
driven reform (evolution).
To explore the interconnection between organisational change pathways and different
strategies used to manage legitimacy, the remainder of this paper focuses on how one of the
world’s largest producers of platinum group metals reacted to violent strike action at its
operations in Marikana, South Africa in 2012. The labour unrest received considerable
media coverage and raised a number of questions about the company’s commitment to good
corporate governance, especially when taking the country’s complex socio-political past into
account. It has also had a significant financial impact on the organisation. As a result, the
events at Marikana are an example of an external shock which had the potential to overcome
organisational inertia and result in second-order change (Laughlin, 1991). By examining the
way in which the company discusses the strike action and its relationship with labour (in
general) in its integrated and sustainability report, different tactics for managing legitimacy
in response to an episodic and continual threat to credibility can be discerned. In turn,
inferences can be drawn about the extent to which the company becomes committed to
changing its business approach.
3. Marikana and the South African context Legitimisation
As explained by De Villiers and van Staden (2006, p. 769), with the coming to power of the strategies
ANC, mining companies faced:
[. . .] a situation where everything, including their core values, was questioned. Not only did
society, represented by the new government, question the methods and motives of individual
companies but the system of allowing companies to operate, the for-profit motive and the free-
market ethos, were questioned. 291
The ANC’s majority in Parliament meant that it was not only able to prescribe unilaterally
sector-specific operating and investment policies. It is generally accepted position as a
legitimate liberation movement, its considerable public support and the mining sector’s
direct or indirect support of Apartheid, allowed the political party to reframe the role of
mining companies and redefine the characteristics of a legitimate mining operation (de
Villiers and van Staden, 2006).

Other stakeholders, such as institutional investors and the press, do have some impact on
how the industry functions (Atkins and Maroun, 2015), but this influence is limited. In
general, South Africans are able to invest off-shore but exchange control provisions,
particularly for the large pension funds, restricts overseas investment (for details see de
Villiers and van Staden, 2006). In addition, the country is characterised by low levels of
investor activism. Prior research suggests that investors seldom engage companies on
material social and environmental issues. At the same time, the majority of participants in
the capital market lack the understanding of the corporate reporting and investment
processes needed to hold companies accountable for poor environmental, social or
governance practice (Rensburg and Botha, 2014; Atkins and Maroun, 2015). Similarly, the
South African Constitution guarantees citizens’ freedom of expression, but the country is yet
to see the levels of activism by media houses and NGO’s present in more mature
democracies.
Consequently, mining companies are taking cognisance of the interests of different
stakeholders (Carels et al., 2013; Atkins and Maroun, 2015), but business leaders are fully
aware of the power of the ANC-led Government to shape public policy and the resulting
need to manage Government’s expectations (de Villiers and van Staden, 2006). These are
laid out mainly in policy documents and regulation, the most specific of which is the Mining
Charter[4].
3.1 Managing the interests of the state

Although the South African Government has no formal nationalisation policy for the sector,
it continues to hold the view that capitalism, inequality and the legacy of legalised racism
(under Apartheid) are interrelated and that State intervention in the operations of mining
companies is paramount (de Villiers and van Staden, 2006). The preamble to the Mining
Charter formalises the ANC’s position on the South African mining sector:
The systematic marginalisation of the majority of South Africans, facilitated by exclusionary
policies of the apartheid regime, prevented historically disadvantaged South Africans (HDSA’s)
from owning the means of production and from meaningful participation in the mainstream
economy (Department of Mineral Resources, 2010, p. 1).
One of the main intentions is to promote minimum levels of ownership of mining and
mineral companies by HDSA’s (currently set at 26 per cent) and so create opportunities for
these groups to engage with and enter the industry (Department of Mineral Resources, 2010,
p. 1). This goes hand-in-hand with efforts to improve the social and economic welfare of
QRAM communities on whom the mines are dependent for labour. Under Apartheid, restrictions on
15,3 the movements of black South Africans led to a migrant labour system which required mine
workers to live and work on the country’s mines, while their families remained in the rural
“homelands”. In addition to poor living conditions created by a shortage of suitable
accommodation, the effect was to disrupt normal family life, leading to a host of social
challenges (Hamilton et al., 2009; Welsh, 2011). Consequently, mining companies are
292 required to make significant improvements to the standards of living and housing by
converting hostels to family units, reducing occupancy rates and supporting home
ownership (Department of Mineral Resources, 2010).
In response to the economic exclusionary practices of Apartheid, which also limited
access to education, mining companies are required to invest in the development of their
human capital. This must be achieved by direct investment in training initiatives and the
implementation of employment equity targets designed to achieve “transformation” by
advancing black employees to managerial positions. The aim is not only the development of
individual mineworkers but also the social upliftment of mining communities on which the
local industry is heavily dependent (Department of Mineral Resources, 2010).
This is complemented with a local procurement and enterprise development requirement
in terms of which mining companies are required to procure at least 40 per cent of capital
goods, 70 per cent of services and 50 per cent of consumer goods from BEE entities[5]. The
intention is to improve competiveness, create opportunities for economic growth and “widen
the scope for market access of South African capital goods and services” (Department of
Mineral Resources, 2010). This is especially relevant in light of the country’s political and
economic isolation under Apartheid, coupled with the ramifications of the colonial system,
which limited its economic development. Consequently, the ANC-led Government has
focused policy on developing black-owned business and mandating beneficiation to enhance
industrialisation and create opportunities for higher-income sources of employment for
HDSA’s (Department of Mineral Resources, 2010).
As formal Government policy on the South African mining industry, the prescriptions of
the Mining Charter do more than just define specific operating and investment
requirements. Each provision in the Mining Charter articulates the ANC’s Socialist
objectives and reaction to the socio-economic impact of Apartheid. The significant influence
and political power of the ANC allow it to define the long-term or structural socio-economic
challenges which characterise the industry and, in turn, the minimum levels of social
investment and engagement required to be accepted as a credible mining operation and
secure the support of, arguably, the industry’s most influential stakeholder (de Villiers and
van Staden, 2006). In this way, emphasis on increasing black ownership of mining assets,
employee education and training, beneficiation, the advancement of black entrepreneurs and
the provision of decent housing represent the non-episodic legitimacy dimensions of the
South African mining industry. The relevance of these social dimensions for corporate
reporting and organisational legitimacy have been reinforced by developments in corporate
reporting and governance.
3.2 The growing importance of non-financial reporting

South Africa is hard hit by the long-term effects of Apartheid, a HIV/AIDS pandemic,
unacceptably high unemployment and a host of related social ills (de Villiers and van
Staden, 2006). These represent significant structural issues which, in practical and financial
terms, need to be managed by the mining industry: they are a focal point for stakeholder
engagement and reporting designed to reassure key investors that significant social and
governance challenges are being managed (PwC, 2012; Carels et al., 2013; IOD, 2016). South
African corporate reporting has also been shaped by an international proliferation in codes Legitimisation
of corporate governance and sustainability reporting standards which emphasise the strategies
relevance of environmental and social metrics for responsible business management
(Rossouw et al., 2002; Solomon and Maroun, 2012; De Villiers and Alexander, 2014; Maroun
et al., 2014).
Consequently, in addition to managing Government’s expectations, compliance with the
latest non-financial reporting frameworks has become an important non-episodic legitimacy
consideration. For South African mining companies in particular, effective non-financial 293
reporting is important for demonstrating that the industry is aligned with the latest
international trends and the generally accepted view that environmental and social metrics
are important indicators of long-term sustainability [International Integrated Reporting
Council (IIRC), 2013; Atkins and Maroun, 2015].
3.3 The Marikana incident

A detailed review of the events unfolding at Marikana is beyond the scope of this paper.
Briefly, a year of strike action in the South African mining sector over wages, living
conditions and disputed union representation culminated in police opening fire on
mineworkers, resulting in multiple injuries and fatalities (Farlam et al., 2015). The events
unfolding at Marikana are regarded as an example of some of the most violent strike action
post-democracy with parallels drawn between the Marikana shootings and the Sharpeville
and Soweto uprisings of 1960 and 1976, respectively[6] (Sorensen, 2012; Botiveau, 2014).
Lonmin was criticised significantly in the press. The company was questioned on the
adequacy of the steps which it took in direct response to the outbreak of violence at or near
its operations during August 2012 (Frankel, 2012; Farlam et al., 2015). Adding to the
negative press coverage was the direct economic cost. Following the Marikana incident,
Lonmin reported that industrial unrest had resulted in an immediate loss of 15,000 ounces of
platinum production and a significant decline in share price (Lonmin, 2012a).
Perhaps most important for this paper’s theme was the criticism that the company
appeared to be unaware of the socio-economic plight of its labour force and had taken
inadequate steps to improve the quality of life of those working down its shafts (Frankel,
2012). In the context of significant unemployment, dissatisfaction with working conditions
and calls for improved worker housing (as discussed earlier), it was argued that the
corporate social responsibility (CSR) practices at Lonmin may have been a contributing
factor to the violence which broke out at Marikana. Compounding this was the concern that
the strike action was indicative of a systemic CSR problem and a lack of commitment by the
company to champion social transformation and the essence of the Mining Charter (Frankel,
2012).
In other words, the events unfolding at Marikana gave rise to short-term challenges to
legitimacy such as the adequacy of the company’s current wage levels and its handling of
the strike, including how Lonmin responded to the loss of life. Marikana also had the
potential to become more than just an episodic legitimacy issue. In the context of South
Africa’s current socio-economic conditions, the legacy of Apartheid and the Socialist
framing of ANC-backed policy on mining, the strike may easily be interpreted as
symptomatic of a lack of commitment to some of the country’s most important social
reforms and objectives leading to a long-term challenge to legitimacy.
In the aftermath of the unrest, the company issued a number of reports (which it posted
on its website) and dedicated a substantial part of its 2012 Annual Report to addressing the
events of 12 August 2012. This is consistent with the findings of Patten (1992, 2002) and
O’Donovan (2002): that corporate reporting reacts to material events in order to preserve or
QRAM regain organisational legitimacy. What is less clear are the specific reporting strategies
15,3 which the company has used to address the negative publicity of the Marikana incident,
reassure its most important stakeholders that the strike was not the outcome of a deeper
lack of commitment to South Africa’s broader social policy and, ultimately, manage the
extent of changes to its interpretive schemes, design archetype and sub-systems.
294 4. Method
Consistent with the approach followed by Higgins and Walker (2012); Brennan and Merkl-
Davies (2014) and Tregidga et al. (2014), non-financial reporting is seen as a socailly
constructed action focused on different strategies to achieve defined goals. As a result, a
form of interpretive text analysis was used to collect data. The inherently subjective nature
of this approach may be seen as a limitation. Nevertheless, the chosen method is well-suited
for analysing predominantley qualitative or narrative information typically included in

integrated or sustainability reports and providing a clear understanding of how corporate
reporting is used as part of a legitimisation and organisational change process (consider
Laine, 2009b; Merkl-Davies et al., 2011; Tregidga et al., 2014).
4.1 Selected text

The data analysed include the annual and sustainability reports for the financial period
during which the strike action occurred[7]. The analysis was complemented by reviews of
press releases by the organisation on and media coverage of events taking place at
Marikana[8]. The data collection and analysis were, however, focused mainly on the annual
and sustainability reports because these are the primary documents produced by the
organisation. They provide an account of the company’s performance, are required to be
lodged formally with various regulators and are distributed widely. Because the research is
concerned with how Lonmin is using social- and governance-specific disclosures in its
communications with stakeholders to manage legitimacy, articles published by third parties
(which may not reflect the company’s position) were used to provide context but were not
taken into account when describing Lonmin’s legitimisation strategies.
4.2 Test analysis

The intention was not to quantify the disclosures using a scientific text analysis or to form
an opinion on the quality of the information found in the reports. Instead, each report was
examined several times to obtain a sense of its content and structure (adapted from Laine,
2009b; Merkl-Davies et al., 2011). Passages in the annual and sustainability reports with
references to social issues were identified and analysed in more detail and recorded on a
content summary sheet according to what the disclosures dealt with. Two broad types of
extracts were identified:
(1) disclosures dealing with social-related issues in general such as worker housing,
safety standards and equal employment opportunities; and
(2) specific details on the events taking place at Marikana (adapted from Cho, 2009;
Laine, 2009b).
Disclosures included in the content summary were re-read several times and linked to an
underlying claim to pragmatic, moral or cognitive legitimacy. The relevant legitimisation
strategies outlined in Section 2.2 (and summarised in Table II) were used as a type of open
code framework (adapted from Laine, 2009b; Solomon and Maroun, 2012). Once disclosures
dealing with social-related issues were grouped under the different open codes, the manner
in which Lonmin reacted to Marikana as an episodic legitimacy challenge and to the broader Legitimisation
CSR challenges which characterise the mining industry (continual legitimacy) was strategies
considered. This also took into account whether or not disclosures were focused on changes
to the company’s business philosophy/strategy (interpretive schemes), policies and
processes (design archetypes) and specific changes to operating practices and management
systems (sub-systems). The aim was to determine if the legitimisation strategies were
associated with first- or second-order levels of change.
The coding process was a time-consuming and iterative one with the data analysis
295
moving between the information found in the annual and sustainability reports (and press
releases) and the respective legitimisation strategies until the sections of these reports
dealing with social and governance issues had been dealt with. It should be stressed that the
coding process was not intended to be a scientifically rigorous exercise. As explained by
Laine (2009a, p. 1034), the data analysis and aggregation and presentation of final results are
developed according to “a process of subjective sense-making, which included numerous
rounds of reading and various attempts to systematise the findings into a coherent
interpretation”.
The data collection and analysis were completed in October 2014. The data were re-
examined three months later. The coding of the social and governance disclosures according
to legitimisation strategy, including re-assessment of the results, took several months and
was completed in June 2015. This process of data collection, analysis and reflection, taking
place over 9 months, was used to ensure that the data was consistently analysed and that no
key disclosures were overlooked.
5. Findings
5.1 Responding to the episodic legitimacy challenge associated with Marikana
To respond to the episodic threat to legitimacy posed by the events at Marikana, the
company aims to contextualise the strike action, something which requires a recognition of
stakeholders’ immediate concerns and establishment of the firm’s response. Disclosures
focus on acknowledging the human tragedy, defining the level of responsibility and pointing
to possible solutions, a reporting strategy labelled “rational proactivity”. It is described as
rational because the focus is on exchange and consequential variants of legitimacy rather
than appealing only to the organisation’s character. At the same time, while the company
deals with the social aspects of the strike action, it retains a clear focus on underlying
economic imperatives consistent with a rational capital perspective of corporate
sustainability (Laine, 2009b; Tregidga et al., 2014; Cho et al., 2015). The reporting is
proactive because the company does not deny any responsibility for dealing with episodic
legitimacy threat (Suchman, 1995). It is active in presenting its position on Marikana, rather
than giving the initiative for making initial proposals to the State or other stakeholders. In
this way, there is some evidence of changes to the firm’s design archetypes. These are
supported by proposed revisions to management systems and processes suggesting that the
company’s sub-systems have also been affected by the strike action. Proactivity is, however,
limited because the firm stops short of recognising the need for a fundamental change to
business strategy and values or to its interpretive scheme. In this way, the legitimisation
tactics are associated with re-orientation first-order change.
5.1.1 Establishing the firm’s position on Marikana. Lonmin appeals to a sense of
pragmatic legitimacy by dealing with the consequences of the strike action at both the
emotional and economic level. The aim is to demonstrate how the firm is handling the events
at Marikana in a way which resonates with stakeholders’ expectations and adds value in
QRAM terms of support for miners and their families and risk management for shareholders
15,3 (Suchman, 1995).
In the first instance, the company acknowledges Marikana was a tragedy which has
resulted in significant public scrutiny (Lonmin, 2012a, 2012b):
There is no way to begin our Annual Report this year without addressing the terrible events
which took place at Marikana in August and September. The scenes which unfolded shocked and
296 horrified all who witnessed them. They placed this company in the global spotlight [. . .] (Lonmin,
2012a, p. 2)
The company relies on a conformance strategy, signalling how it identifies with the public
feeling of shock and regret. It acknowledges the dead, expresses condolences and relies on a
tone of sadness and loss to stress a sense of identification with those directly affected by the
strike and to offer emotional support. Claims to exchange legitimacy are bolstered by
providing direct financial assistance to families affected by the loss of life in the form of an
independent trust to provide for the children of the deceased. To stress its acknowledgement
of the human cost of Marikana, these disclosures are included in the opening section of the
annual report rather than only in specific sections of the sustainability report (De Villiers
and van Staden, 2011). The result is the humanisation of the organisation. It is presented as
a socially responsible employer which genuinely cares about the loss of human life and is
working in the best interest of affected employees. This accords a sense of dispositional
legitimacy in the eyes of the company’s stakeholders.
At first glance, the nature of these disclosures suggests a change to both the firm’s design
archetypes and interpretive schemes. For example, there are details on a type of policy for
alleviating the plight of affected families and information on the actions which have been
taken to date. The disclosures also suggest that the firm is shocked by the events taking
place at Marikana which it describes as “a watershed moment” (Lonmin, 2012a, p.6) and “a
seminal episode” in the organisation’s operations (Lonmin, 2012b, p. 12) with the inference
that Markiana has resulted in deep reflection on Lonmin’s values, beliefs and future
strategy. On closer examination, however, the extent to which the company’s interpretive
schemes have been affected by the unrest is questionable.
As explained by Tregidga et al. (2014, p. 14) sustainability reporting is also about
strategically aligning “social sensibilities” with “economic viability and financial success”
(see also Pesqueux, 2005; Atkins et al., 2015d; Cho et al., 2015). As a result, social metrics
form a part of the broader sustainability assessment but business fundamentals continue to
be framed in economic terms and these must be addressed to ensure exchange legitimacy in
the eyes of shareholders:
The tragic events at Marikana significantly impacted our operational and financial results –
110,000 ounces of mined Platinum lost (Lonmin, 2012a, p. 4)
The Company also identifies the positive impact of the strike on the supply-side dynamic
which is contrast with the effect of increased costs:
The Events at Marikana, and subsequent strike action at almost all other South African PGM
producers have, given the importance of South African producers to global PGM production, in a
short space of time altered the outlook for the supply side of the PGM industry. These events have
increased operating costs for Lonmin and other companies in the South African PGM mining
industry, while at the same time creating supply constraints which have contributed to an
increase in PGM prices (Lonmin, 2012a, p. 7).
Lonmin cannot appear to be underplaying the social implications of Marikana. As a result, it
establishes the human cost of the strike and deep sense of regret upfront in the first pages of
its annual report but then turns its attention to providing a rational assessment of the Legitimisation
financial implications of the labour unrest and plan for preserving shareholder value (Cho strategies
et al., 2015). The Acting CEO summarises this position:
In truth, as we continue to grapple with the social ramifications of the Marikana tragedy, we also
have to acknowledge that we are running a PGM business in the most difficult trading conditions
our industry has faced in recent times. Those people who provide the capital we need to invest in
our business have been subject to negative returns (Lonmin, 2012b, p. 12, emphasis added).
297
The continuing centrality of the shareholder and financial capital means that the episodic
threat to legitimacy has not resulted in a broadening of interpretive schemes to incorporate
non-financial considerations (Laine, 2009b; Tregidga et al., 2014). Both the International
Integrated Reporting Council (IIRC) (2013) and South African codes on corporate governance
(IOD, 2009) recognise the need for human and social capital to be incorporated as a key part
of an organisation’s ethos. Nevertheless, the “inertia” of a finance-centric logic at the heart of

the business model is not overcome by the external shock resulting from the events at
Marikana. In other words, any change evident from the company’s corporate report is only
morphostatic in nature. While this type of change may result in revisions to design
archetypes and sub-systems (re-orientation), the manner in which the company defines its
responsibility for the effects of the labour unrest ensures that the extent of change to any
systems, policies and processes is limited.
5.1.2 Defining responsibility. Lonmin’s reporting strategy recognises the need to define
the field of responsibility to manage expectations, limit accountability and minimise the risk
of far-reaching reforms which could impact the economic dimension of the business (Malsch,
2013; Tregidga et al., 2014; Cho et al., 2015). This is achieved by framing Marikana as
indicative of social issues at the country rather than at the company level. For example,
Marikana is presented as a personal loss for the firm but something which leaves the “South
Africa” (as opposed to the company) “seeking answers to some of the most difficult questions
it has faced in a generation” (Lonmin, 2012a, p. 2). This theme is repeated several times:
It is important to remember also that we found ourselves at the centre of nothing less than a
national crisis for South Africa (Lonmin, 2012a, p. 3, emphasis added).
Similarly, there are references to South Africa’s complex political past which transcend the
social policies of any one mining company or even the industry as a whole:
Deep-rooted issues of poverty and inequality have been highlighted by what has taken place, but
those go beyond mining and to every corner of South Africa [. . .] no company, however large, can alone
address the socio-economic issues facing the Republic [. . .] (Lonmin, 2012a, p. 3, emphasis added)
To iterate this position, neither the Annual nor the Sustainability Reports highlight any
weaknesses in CSR policies. The Annual Report (Lonmin, 2012a) and communications
published on Lonmin’s website on the date of the incident (Lonmin, 2012c) stress the
importance of contributing events beyond the organisation’s control including the actions
taken by the police (Farlam et al., 2015), worker intimidation (Lonmin, 2012c) and the
difficulties of dealing with certain unions:
One union chose not to [conclude a wage agreement] but in the interests of peace, we and the other
signatory parties reached out to them to join the wage negotiations which followed (Lonmin, 2012a, p. 2)
These disclosures are important for securing consequential legitimacy. The aim is not to
show what the company has accomplished (Suchman, 1995) but to justify the company’s
reaction to the strike action and short-term outcomes. There is a subtle (but important)
inference that the organisation was working under very difficult conditions and its
QRAM immediate handling of the strike was, therefore, reasonable. At the same time, the
15,3 disclosures are effective for avoiding the external shock giving rise to colonisation-type
change which would require far-reaching revisions to operating systems, the design
archetype and interpretive schemes. Rather than reformulating the company’s strategy,
human capital policies and internal management systems to achieve second-order change
required by a material external shock (Laughlin, 1991), disclosures are used to pre-empt key
298 stakeholders holding Lonmin solely responsible. Instead, Marikana is interpreted as
indicative of material labour problems in the country by reminding the public of government
and union involvement in the strike. Lonmin alone was not responsible for reacting to the
unrest and, as a result, the message that the events at Mariakana are a national (rather than
firm-specific) responsibility is reaffirmed.
Complete denial and maintenance of the status quo is not, however, possible (Suchman,
1995). Lonmin’s involvement in the strike action cannot be avoided or disputed (Farlam
et al., 2015) and the company must give some indication that it has internalised the
implications of the labour unrest. This is achieved by offering to change, at least, some
elements of the company’s design archetypes and sub-systems.
5.1.3 Proposing solutions. In an effort to secure exchange and consequential legitimacy,
the Company presents itself as both transparent and accountable, inviting additional
monitoring and review by regulators to confirm the soundness of its CSR practices and
policies (Ashforth and Gibbs, 1990; Suchman, 1995). A conformance strategy adds to this.
The company commits to cooperate fully with the relevant authorities and involve the
government-established commission of enquiry in its future collective bargaining processes
(Lonmin, 2012a, p. 27). To demonstrate that Lonmin is working for the betterment of its
stakeholders, it advances a collaborative response to the Marikana incident, appealing to a
sense of collective effort and communtiy which accords exchange and consequential
legitimacy (Suchman, 1995):
Only by working in partnership with central and local government to build a sustainable and
profitable mining sector can we make the investments needed to create and sustain the jobs and
careers which will help solve some of these problems (Lonmim, 2012a. p. 2, emphasis, added).
In particular, the power of the ANC-led government to define the public agenda and dictate
industry reform (Section 3.1) means that the tone in the Annual Report is friendly and
cooperative to signal a continued commitment to the State’s social policy on mining,
including the handling of Marikana. The ultimate aim appears reasonable:
[. . .] to better understand the tragic events that occurred at Marikana so that we can address those
issue we are responsible for to ensure we never again see a repeat (Lonmin, 2012a, p. 47, emphasis
added).
Neither the Annual nor the Sustainability Report (Lonmin, 2012a, 2012b) define exactly
what the company accepts responsibility for lest this gives rise to additional scrutiny by
regulators or other powerful stakeholders (de Villiers and van Staden, 2006). Instead,
disclosures are generic, inviting a broad review and reform of existing business practices
without outlining clear plans of action and associated time frames (Malsch, 2013). For
example, Lonmin secures consequential and exchange legitimacy by proposing “Social and
Labour Plan Targets” which, as per the recommendation of codes of best practice, will be
subject to regular review by the Company’s Executive Committee, Transformation
Committee and Safety and Sustainability Committee (Lonmin, 2012a, 2012b, p. 47). The
Company commits to an acceleration of CSR initiatives and the inclusion of targets as part of
the response to “primary risks”. All of this will be supported by a “Balanced Scorecard”
(Lonmin, 2012a, 2012b, p. 46) to ensure effective implementation and avoid the need for Legitimisation
additional reform. At the same time, the company is mindful of the possibility of Marikana strategies
shifting from an episodic to continual legitimacy issue. This it addresses using a pre-
emptive strategy. The Company appeals to a sense of stakeholder engagement and
involvement in decision making processes by making use of non-executive committees of
the Board to champion its risk response, complemented by promises for active dialogue with
key role players (Lonmin, 2012a, 2012b, p. 47). The result is a sense of exchange and 299
consequential legitimacy based on the good faith assumption that these initiatives will lead
to substantial social transformation.
In this way, the external shock created by Marikana appears to be resulting in changes to
some aspects of the firm’s design archetypes and relevant sub-systems. For example, a
balance scorecard has been introduced to track progress in initiatives implemented in
response to Marikana (Lonmin, 2012b), and there is a list of examples of specific actions
which have been taken to manage the impacts of the unrest:
‘Reached an agreement through an all-inclusive negotiation process (an addendum
to the existing 2012/2013 wage agreement) with striking employees, facilitated by
the CCMA.
Safety momentum in operations restored following the events of Marikana.
Production ramp up going better than planned.
Establishing Sixteen-Eight Memorial Fund to fund the education for children of the
deceased’ (Lonmin, 2012a, 2012b, 2012c, p. 5).
Similarly, the establishment of the “Social and Labour Plan Targets” and expansion of the
functions of committees of the Board (Lonmin, 2012a, 2012b, p. 47) to include a review of
these targets, as discussed above, can be interpreted as the introduction of additional
policies and systems for handling the effects of Marikana. This view is affirmed by the
inclusion of the operational and financial implications of the strike action in the sections of
the annual report dealing with operational reviews, risk analysis, human capital
management and stakeholder engagement (Lonmin, 2012a).
On closer examination, however, details on the systems and processes put in place to deal
with the aftermath of Marikana and exactly how actions taken to date are being managed
and reviewed are limited. For example, Lonmin gives no indication of which members of
management have been tasked with interacting with community groups, how the
organisation is going to identify and communicate with key community figures and how
this process will lead to actual results. Similarly, although there is a considerable amount of
information on the structure of the different Committees of the Board, there is little on the
connection between strategy, risk and remedial action or any detailed examples of exactly
how the Balanced Scorecard is operationalised (Atkins and Maroun, 2015, PwC, 2014). For
the critical reader, this may raise questions about the extent to which the company’s sub-
systems and design archetypes are actually being changed. What should be kept in mind is
the fact that, with a high level of public scrutiny in the aftermath of Marikana, the company
must balance the benefits of proposing improvements to its policies and systems with
inadvertently impairing its legitimacy reserve by suggesting that its broader CSR practices
are inappropriate. In other words, the absence of detail does not necessarily mean that there
are no changes to the underlying systems, processes and operating practices: it is safer to
rely on general statements, expectations and the good faith assumptions of users to “fill in
the blanks” on generic CSR statements (Laine, 2009b; Higgins and Walker, 2012).
QRAM 5.2 Continual legitimacy
15,3 As the focus of legitimisation moves from the episodic to continual dimension, reporting
appeals more to the organisation’s character and, related closely to this, influential, structural
and procedural elements of pragmatic and moral legitimacy (Suchman, 1995). The rational
proactive strategy is complemented by reporting designed to draw a clear line of distinction
between Lonmin’s identity as a reputable mining company and the events at Marikana. As a
300 result, similar to the management of the episodic threat to legitimacy, there is little indication
of changes to the company’s interpretive schemes. Disclosures dealing with social issues also
become more broad, referring less often to Marikana and focusing instead on the CSR
credentials to align the entity with already legitimate practices, policies and institutions. This
means that there is less evidence of changes to specific sub-systems and the focus of the
company’s disclosures is on how design archetypes will be revised, in general, to ensure long-
term sustainability. This amounts to a rebuttal type of morphostatic change (Laughlin, 1991)
The company attempts to distance itself from the strike action and focus on how its long-term
performance confirms that it is a good corporate citizen. This is explained in detail below.
5.2.1 Buffering negative inferences from Marikana. To praphrase Suchman (1995,
p. 598), Lonmin seeks to “explain the disruptive events in a way that preserves an otherwise
supportive worldview”. It does so by using its corporate report as an opportunity to inform
stakeholders of the nature of the business and inherent risks, indirectly providing a
normalising account of the strike action which secures procedural legitimacy:
Mining is a dangerous business. We are proud of our record of being the safest primary platinum
mining company in the world but all of us who have been involved in this industry for years know the
pain of losing colleagues underground. Nothing, though, could have prepared the Lonmin family for
the loss of so many colleagues during the events which took place. Like the whole nation around us, it
will take a long time for us to come to terms with the tragedy that unfolded and for normality to return.
We have begun that journey, but it will be long and difficult (Lonmin, 2012a, p. 2, emphasis added).
As discussed in more detail below, the company establishes itself as a leader in safety
standards to bolster a sense of experience, knowledge and trustworthiness. Dispositional
legitimacy results from the personification of the organisation, specifically the establishment
of an image of a company which understands society’s sense of loss and shock. Concurrently,
the reader is informed that the mining industry is a dangerous. The implication is that, while
the loss of life at Marikana was unusual, deaths are to be expected. Ambiguity about deaths
resulting from unrest and workplace accidents is left to the reader to resolve.
The above example makes an additional point: Marikana is a tragedy but one which is
not typical of the usual business environment. As a result, there is a need to engage with the
events at Marikana on an emotional level but embarking on a programme to reform
strategies, policies and systems is unnecessary. This is far from the morphogenetic response
to an external shock which “penetrates so deeply into the “genetic code” that all future
generations [of managers] acquire and reflect these changes” (Smith, 1982, p. 131). Instead, a
type of oscillation change pathway is seen (Laughlin, 1991). There is some reaction to the
events at Marikana but, because the strike is not indicative of underlying structural or
procedural shortcomings in Lonmin’s CSR policy, a return to normality is presented as an
emotionally difficult but, ultimately, inevitable process.
Making a distinction between Marikana and an otherwise socially responsible
corporation is a recurring theme. In the Sustainability Report (2012), for example, the
“Message from the Acting Chief Executive Officer” states: “It would be simplistic, and
indeed defeatist, to reduce our sustainability performance to the events of August [2012][9]”
(Lonmin, 2012b, p. 12). Most notably, the main section of the Annual Report which deals
directly with the Marikana incident is separate from the “traditional” annual report Legitimisation
components. This is explained by the company as follows: strategies
In compiling our Annual Report this year we faced a challenge in that the events at Marikana are
so relevant to so much of our business that they could be mentioned in most sections of the report.
An Annual Report, however, is, by definition, a complex and technical publication, containing a
huge amount of information to help inform its shareholders. For that reason, we felt that we
should address Marikana immediately (Lonmin, 2012a, p. 2). 301
As suggested by management, this choice of structure signals that the company has taken the
loss of life seriously (Section 5.1), but it also has the effect of separating the primary content
concerning the event from the rest of the organisation. This symbolic gesture is reiterated by
choice of diction throughout the report which refers to Marikana as “exceptional” and “clearly
distinct” from daily organisational experience (Suchman, 1995). Consider, for example, the
following comment from the acting CEO following the end of the strike:
We are heartened and proud of the achievements made to return the mine to production. The
results have exceeded both our, and the industry’s, expectations. October – the first month of our
new financial year – was the safest month with the lowest incidence of lost time injuries that we
have seen in many years. Attendance was above normal levels, which supported a production
build-up that exceeded our expectations. The ramp-up was supported by the focus on a safe start-
up which is being adopted as best practice by other mines. This shows that safe production adds
both financial and social value (Lonmin, 2012d).
The company is establishing itself as a leader in workplace safety and efficiency,
particularly evident when pointing out that it is setting the standards being adopted by
other mines (Suchman, 1995; Tregidga et al., 2014). The intention is to make stakeholders
aware of its world-class operating practices to embed procedural legitimacy and use this as
a buffer against any criticism of the company’s operations on the basis of what happened at
Marikana. A rebuttal change process is also evident. Key performance indicators (such as
levels of production, safety records and worker absenteeism) are unchanged. They continue
to be used to articulate operational activities and subtly (but importantly) re-emphasise that
significant changes to company’s interpretive schemes and core operating systems (part of
the design archetype) are not required. This is especially true when it comes to dealing with
human capital, something which is addressed by broad policy statements which suggest a
commitment to worker safety:
Our principal operational priority is the safety of our employees and contractors. While we
recognise that mining and processing operations present a safety risk, we believe that we can
operate without injury and, most importantly, without loss of life (Lonmin, 2012b, p. 2)
In addition to posing an episodic threat to legitimacy, Marikana has the potential to raise
questions about the long-term sustainability of the company’s business model. As a result,
disclosures dealing with the immediate social and financial cost (Section 5.1) must be
complemented with details pointing to the firm’s structural integrity. This is achieved by
establishing the company as setting the benchmark for worker safety and stipulating clearly
a commitment to responsible production standards. At the same time, the external shock felt
because of Marikana is limited to a first-order change type. Changes to the company’s
interpretive schemes followed by material revisions to the design archetype and sub-
systems would amount to acknowledging tacitly limitations in the business model and
operating practices. This would amplify the continual threat to legitimacy by calling into
question whether Marikana was only an illustration of a systemic problem with the
QRAM organisation’s broader commitment to addressing the expectations of the state as espoused
15,3 in the Mining Charter and existing codes of corporate governance.
5.2.2 The socially responsible citizen. In the context of the country’s high levels of
unemployment, coupled with skills shortages, the Company reports on various social
indicators such as the number of previously disadvantaged workers in managerial training;
community education initiatives; repatriation of wealth to community trusts and the
302 positive steps being taken to ensure employee equity participation in line with the
Government’s policy of Black Economic Empowerment (Section 3). Given underlying
gender inequality and the country’s housing shortages (Welsh, 2011), the company also pays
considerable attention to how it has promoted equal employment opportunities and the
steps being taken to improve the living conditions of its employees and their families.
Equally relevant is the issue of employee health. South Africa and, in particular, the mining
sector, has been significantly affected by poor health services, aggravated by the effects of
HIV/Aids (de Villiers and van Staden, 2006). As a result, the Annual and Sustainability
Reports detail the steps taken to improve safety conditions and include statistics on
occupational illness, infectious disease, lost production time because of work stoppages and
fatalities (for example see, Lonmin, 2012a, pp. 52-55).
The socially desirable “properties” of Lonmin’s CSR disclosures are subjective and their
impact cannot be measured. As a result, influential and procedural legitimacy are secured
by demonstrating how the organisation is responsive to the interests of stakeholders and, to
paraphrase Suchman (1995, p. 580), “making a good faith effort to achieve valued, albeit
invisible ends”. The company does not necessarily provide a detailed account of how its
community-based projects interconnect with its strategy and contribute to financial and
non-financial performance (Solomon and Maroun, 2012). Nevertheless, Lonmin cleverly
“meshes” a number of social indicators (such as rates of HIV infection, houses constructed
and safety track records) with the organisation’s operating ethos to establish the mining
house as “natural actor” which takes “responsibility for and care[s] for the environment and
society” (Tregidga et al., 2014, p. 11). This grounds the company in an easy-to-identify-with
cognitive base. Although the organisation is unable to manage stakeholder expectations
directly for the industry as a whole, it incorporates already-established policies and
principles in business practices, with the result that its operations and outputs are readily
accepted as a taken-for-granted part of the South African economy (Suchman, 1995). In turn,
the organisation is able to rely on its social and governance reporting as a subtle (but
important) means of demonstrating how its actions and operating ethos are aligned with the
prevailing public agenda formalised by the ruling party’s political manifestos and, most
importantly, the Mining Charter. Complementing this are comments on how the company is
adhering to generally accepted standards and codes of best practice.
For example, the Sustainability Report (2012) has been independently reviewed (Lonmin,
2012b, p.19) and:
Has been prepared in accordance with GRI’s G3.1 Guidelines, its Mining and Metals Sector
Supplement, the 10 Sustainable Development Principles and the mandatory Position Statements of
the International Council on Mining and Metals (ICMM). We have assessed this report against the
GRI requirements for an Aþ level of reporting and we declare it to be compliant with this level
(Lonmin, 2012b, p.3, emphasis added).
Concurrently, the Company uses subtle associations with already legitimised institutional
structures to reiterate its position as a responsible and credible mining house. Consider, for
example, the following description at the start of the Annual Report (2012):
Listed on the London Stock Exchange and the Johannesburg Stock Exchange, Lonmin is one of the Legitimisation
world’s largest primary producers of Platinum Group Metals (PGMs) (Lonmin, 2012a, p. 1,
emphasis added).
strategies
The Company is presented as a respectable institution which is listed on a major financial
market and is compliant with the relevant standards. At the same time, the organisation is a
key player in the industry, producing a significant proportion of the world’s Platinum Group
Metals. This is complemented by aligning the values of the organisation very clearly with 303
dominant social standards by ensuring that the Company’s beliefs are consistent with
prevailing societal norms and so re-affirming cognitive legitimacy:
We believe that we can make a difference. We believe that, through our resources, our skilled and
committed teams, our partners and our Board Safety & Sustainability Committee and
Transformation Committee we have the capacity to create long-lasting value for all our
stakeholders. Supporting these beliefs are the following three pillars: People, Planet and Profit
(Lonmin, 2012b, p. 5).
The personal tone appeals to sustainability and a sense that the organisation accepts the
importance of CSR: it engenders trust and confers credibility. Reinforcing this is the sustained
emphasis on disclosures dealing with ethics, accountability and transparency, in line with
international reporting practice which is placing an increased emphasis on non-financial
disclosure [International Integrated Reporting Council (IIRC), 2013]. This reporting practice is
not specific to any one event but is part of a process of aligning the organisation with an
already legitimised corporate reporting framework in response to non-episodic legitimacy
considerations. In doing so, the company is not dismissing the need for change. As explained
in Sections 3 and 5.1, extensive media coverage and Lonmin’s direct involvement in the strike
make it difficult for the company to avoid any commitment to change (Suchman, 1995).
Instead, by grounding itself in the already accepted good governance discourse, it alters the
temporal focus of changes to its design archetype and sub-systems. Although not stated
explicitly in its annual report, the message is clear: the company has already gone to great
lengths to ensure that its policies, practices and systems are in keeping with best practice and
internationally recognised standards. Consequently, further changes which would require a
reconfiguration of the firm’s interpretive schematics are, therefore, unnecessary.
As expected, with the country’s codes on corporate governance and health, safety and
employment equity regulation in place for several years, securing legitimacy requires more
than just statements of compliance (Tregidga et al., 2014). To this end, the Company has
incorporated social- and governance-related disclosures in numerous sections of the Annual
and Sustainability Reports, giving the impression of an integrated approach to effective
governance and that the mining house has internalised the relevant recommended practices.
For example, Lonmin addresses the Mining Charter and regulatory compliance as part of the
sections of the Annual Report dealing with worker health, Black Economic Empowerment,
environmental management and governance structures (Lonmin, 2012a). In addition, the
Annual and Sustainability Reports explain that the company relies on the functions of
independent committees of the Board, compliance audits and whistle-blowing channels for
mitigating and responding to the risk of non-compliance: this relies on the appearance of
formal structures and reporting channels to confer additional credibility.
Structuring the annual and sustainability report in this way also ensures that the
disclosures are not dismissed by stakeholders as mere rhetoric. In response to the broader
social context (and continual dimension of the threat to legitimacy), the company offers
details on how it’s structures, systems and polices (the design archetype) are designed to
ensure compliance with codes of best practice and, by inference, long-term sustainability. It
QRAM is, however, difficult to define exactly how operating practices and management systems
15,3 have changed or need to change to manage corporate sustainability in the long-run. This
type of disclosure may also attract additional criticism (Suchman, 1995). As a result, the
emphasis is on the company’s design archetypes. It is left to stakeholders to draw their own
conclusion on how sub-systems will be developed over time.
Finally, when it comes to Lonmin’s interpretive schemes, carefully designed social
304 disclosures do more than just accord pragmatic and moral legitimacy. They construct an
image of an organisation which is dedicated to social upliftment and which has incorporated
important social issues in its operating philosophy (Ashforth and Gibbs, 1990; Suchman,
1995). The result is the “structurally legitimate organisation of good character” archetype
identified by Suchman (1995) relying on a deep cognitive legitimacy reserve to maintain the
confidence of its major stakeholders and signal how the organisation is managing the
systematic risks (and threats to legitimacy) which characterise the industry over the long
term. This strategy also means that when episodic crises of legitimacy occur, the effect is not
a massive disinvestment from Lonmin and the revocation of its license to operate. To the
contrary, when Lonmin concludes that responsibility for Marikana does not rest entirely with
the company, the positon is supported by the accumulated experience with and success of its
prior CSR practices and the Company’s position as a taken-for-granted part of the platinum
mining industry. With its claims to pragmatic, moral and cognitive legitimacy defended, the
company does not need to take the risk of proposing any changes to its business model, long-
term strategy or operating ethos and its interpretive schemes can be left unaltered.
6. Discussion, conclusion and areas for future research

Lonmin’s social-related disclosures in its annual and sustainability reports at the time of
violent strike action at Marikana provide a unique account of how an organisation uses non-
financial reporting to maintain and repair legitimacy. The disclosures can be seen as
illustrations of the different legitimisation strategies outlined in the prior research (Dowling
and Pfeffer, 1975; Deegan et al., 2002; De Villiers and van Staden, 2006). An alternate
perspective is that they represent different types of reporting according to a framework
which, on the one hand, reacts to the immediate threat to legitimacy posed by a negative
event and, on the other, concentrates on the organisation’s character or structural values as a
buffer against long-term threats to legitimacy. This has implications for the extent to which
organisational change occurs in response to an external shock as summarised by Figure 1.
In the first instance, Lonmin’s non-financial disclosures are used as part of a rational and
proactive reporting strategy. This relies mainly on adaptation and conformance to stress
outcomes and actions, rather than focusing on the organisation’s character or essence
(Suchman, 1995; Cho et al., 2015). Exchange legitimacy is secured from one group of
stakeholders (probably the state, labour and the general public) by acknowledging the human
cost of Marikana and framing the strike action in a way which aligns with society’s shock and
outrage. The company, however, stops short of proposing reforms to its interpretive schemes.
On the contrary, the business model, strategy and operating philosophy remain grounded in a
strong economic discourse and corporate reporting reflects balanced pragmatism. The 2012
annual report recognises that, in the context of the broader Capitalist system, the financial
implications of the events at Marikana have to be addressed to allay shareholder concerns
(Laine, 2009b; Tregidga et al., 2014). At the same time, the company cannot rely on an explicit
denial strategy as a method of maintaining or repairing legitimacy (Suchman, 1995). Instead,
Lonmin adopts a more proactive approach to reporting by taking a position on lines of
responsibility and advancing a possible course of action. Examples include policy statements
on the need for good labour relations and achieving consensus with important trade unions.
Rational proactivity Legitimisation
Establish a position
strategies
·
·
Acknowledge the tragedy
·
Identify with a sense of loss
·
Assist families
Remain focused on business
fundamentals Legitimacy tactics Reorientation change
Defining responsibility Acknowledge challenges Sub-systems (e.g.)

305
· Frame Marikana as a broader social
problem rather than a firm-specific
Social and labour targets
Balanced score card
Suggest solutions
·
Growing continual focus of legitimacy dimension with reduction on event-specific reporting
issue New monitoring functions

Remind stakeholders of the
involvement of multiple party
involvement to avoid direct Propose change Design archetype (e.g.)
responsibility
Good labour relations

Avoided extended accountability
Consensus with unions
Propose solutions
· Invite additional monitoring and
·
review to demonstrate transparency
Call for a collaborative response to
·
the crisis
Refer to changes but avoid clearly
defined commitments
Character reporting
Buffering
Expectation & impression management
· Provide a normalising account of the

Reorientation change
·
strike action Distance from negative events
Stress the distinction between the
‘normal’ business and the events at Sub-systems (e.g.)
·
Marikana
Contrast Marikana with the Protect past accomplishments and No specific changes
company’s position as a CSR leader de-emphasise negative events proposed
Design archetype (e.g.)

Good corporate citizen Maintain an image of a good
Policy statements on being
·
corporate citizen
Address important social metrics, an industry leader and
such as unemployment and gender complying with best
practice/generally
·
inequality, directly Create an association with socially
Refer to generally accepted accepted standards
desirable qualities
reporting standards, codes of best
practice and affiliation with already
·
legitimate institutions Embed practices in generally
Provide value statements aligned
with prevailing social expectations
accepted frameworks Figure 1.
Summary of findings
Details are also provided on “social and labour targets”, the roll out of a new balanced score
card and expanded monitoring functions for the committees of the Board of Directors. This
suggests that, while the firm’s interpretive schemes have not been impacted by the external
shock created by the strike action, there are some modifications to design archetypes and sub-
systems pointing to first-order re-orientation change.
Proactive reporting should not, however, be interpreted as an indication that design
archetypes and sub-systems have changed or will change significantly. There are some
examples of a positive response to the events at Marikana but, importantly, the company
does not commit explicitly to any radical transformations and so elements of expectation
management become evident. For example, the company espouses the need to work actively
QRAM to regain employees’ trust but detailed plans of action, an explanation of the challenges
15,3 encountered and management’s view on the success of any programmes are omitted
(Solomon et al., 2013; Cho et al., 2015). Instead, Marikana is framed as an echo of South
Africa’s socio-political past and something which can only reasonably be expected to be
addressed as part of a collaborative effort with the State and other members of the mining
industry. The reporting strategy allows the company to avoid direct accountability, negate
306 the need for morphogenetic change and limit the extent of any first-order change.
The importance of expectation management and a disassociation strategy grows as the
focus of reporting shifts from the immediate aftermath of Marikana to the underlying
structural considerations. South Africa is a developing economy characterised by high
levels of unemployment, poor health care and education and persistent inequality. These
issues are a defining feature of Government’s policy and inform its expectations for the
mining industry to participate in social initiatives aimed at improve the plight of the poor.
The events at Marikana – which originated from protests over pay, housing and competing
union demands – had the potential to call Lonmin’s commitment to the country’s broader
social agenda into question. As a result, non-financial disclosures focused on managing the
immediate threat to legitimacy posed by violent strike action must be complemented with a
broader temporal focus. This is achieved in several ways.
The company presents Marikana as an exceptional event which is not reflective of its
core business values and day-to-day operations. In an effort to distinguish between
Marikana and the rest of the business and maintain its image as a responsible corporate
citizen, Lonmin demonstrates how design archetypes ensure sustainable business practice.
For example, it uses details on its CSR programmes to establish itself as a leader in worker
safety and provides policy statements designed to frame the company as a responsible
industry member. Influential and procedural legitimacy result. Because the aim is also to
bolster the firm’s character or structural values, the narrow focus on Marikana is
complemented by a broader perspective on the company’s policies to achieve the social
objectives espoused in the Government’s Mining Charter and codes on corporate
governance. This relies mainly on association between the firm’s policies and systems and
those recommended by international best practice.
Social reporting no longer deals with Marikana specifically but on the organisation’s
character. The emphasis is on showing progress on important social metrics including, for
example, equal employment opportunities, women’s rights and occupational health and
safety. Concurrently, the company’s CSR credentials are established by demonstrating
compliance with best reporting practice, codes of corporate governance and already
legitimate industry groups. Referring to specific policies or outcomes to secure exchange
and consequently legitimacy gives way to a broader reporting style designed to demonstrate
how Lonmin is aligned with prevailing institutionalised structures and, as a result, an
integral part of the South African economic and social landscape. In other words, a rational
proactive reporting strategy grounded in exchange and consequential legitimacy and
focused specifically on Marikana is supported by a reporting strategy focused on CSR in
general, organisational character and the structural/cognitive form of legitimacy. In doing
so, the company sends a subtle but important signal: that its design archetype has been
carefully aligned with prevailing standards and social norms. As a result, the broader
implications of the events at Marikana are already under control and consequential changes
to sub-systems and interpretive schemes are unnecessary.
Although these findings are based on the reporting by a single South African company, there
are a number of important contributions. First, this study provides detail on how specific
disclosures appeal to different sub-sets of legitimacy in the context of a social crisis, something
often overlooked by the existing sustainability reporting research which usually focuses on Legitimisation
environmental issues and often applies legitimacy theory in aggregate by testing for changes in strategies
amount of information disclosed (see, for example, Patten, 2002; De Villiers and van Staden,
2006; Cho, 2009). Second, this study highlights a temporal dimension of organisational
legitimacy. Strategies such as adaptation and conformance, expectation and impression
management and association and disassociation are often referred to in the prior literature
(Deegan, 2002; Brennan and Merkl-Davies, 2014; De Villiers and Maroun, 2017). This paper is the
first to provide evidence in support of Suchman’s (1995) model of organisational legitimisation 307
by showing how Lonmin has reacted to an episodic threat to legitimacy by stressing exchange,
consequential and predictability-based aspects of pragmatic, moral and cognitive legitimacy
sub-sets. In contrast, when the focus shifts to continual legitimacy considerations, the emphasis
is on influential, procedural and inevitability-based elements of legitimacy.
Finally, this paper shows that tactics used to maintain or repair legitimacy have
implications for the extent to which external shocks result in internal change. At the episodic
level, the importance of demonstrating that an entity is achieving desirable outcomes means
that design archetypes and applicable sub-systems are subject to, at least, some revision. In
Lonmin’s case, because pragmatic and moral legitimacy can be secured by rationalising the
strike action, framing it in economic terms and proposing limited responses, organisational
inertia is not completely overcome. There is no indication of the company altering its
business model, strategy or operating ethos in a manner which would be indicative of
morphogenetic change. As the focus moves from the episodic to continual dimension,
reporting deals with organisational character rather than with action. The company seeks to
highlight how its design archetypes are developed mindful of already institutionalised best
practice. Because of the complexity of linking specific actions or systems with long-term
sustainability (and possibly to avoid additional scrutiny), there is little indication of how sub-
systems are impacted by the external shock. Organisational change remains at the first-order
level and becomes more akin to a type of rebuttal orientation path than to the re-orientation
process seen when Marikana is interpreted as an episodic threat to legitimacy. In turn, this
means that most organisational change takes place in the short term when the company is
impacted by an external event which directly challenges its credibility. When an external
shock is understood as only indirectly relevant for a company’s business model, it is less
likely that far reaching reforms will be implemented.
More research will be needed to support these conclusions. Most notably, this paper
is based on one organisation operating in a single jurisdiction at one point in time.
Additional case studies drawing on the legitimacy and organisational change
framework outlined in this paper are required to explore how other companies are
responding to episodic and long-term legitimisation challenges and the extent to which
their sub-systems, design archetypes and interpretive schemes are altered in the
process. This should be complemented with a more comprehensive review of the time
periods involved in gaining, maintaining and repairing legitimacy and how specific
aspects of an organisation change over the short, medium and long term. This research
assumes that the case organisation was already accepted as a legitimate part of the
South African context, even before the events taking place at Marikana, and
concentrates on a limited corporate reporting timeframe. As a result, the processes
involved in securing or repairing different types of legitimacy over an extended period
of time have not been dealt with. The same is true for precisely how different the
different elements in Laughlin’s (1991) model are altered over extended periods.
Future research will also need to engage directly with the users of corporate reports to
understand how they interpret and react to these documents. Interacting with managers to
QRAM understand how they react to external shocks and the pressures they experience at their
15,3 organisations will also provide important insights about the organisational change process.
Unfortunately, the researchers were unable to secure the participation of the Department of
Minerals and Energy, the preparers of Lonmin’s corporate reports and its employee
representatives. Understanding exactly how companies are engaging with their
stakeholders to identify material issues and report on information will offer more direct
308 evidence on the operationalization of legitimacy and organisational change theory in a
practical context.
Notes
1. Lonmin is the world’s third largest producer of platinum group metals (PGM). The company is
listed on the Johannesburg Stock Exchange and London Stock Exchange and uses approximately
38,000 employees and contractors. It has 11 shafts and declines situated in a geographical area in
South Africa referred to as the ‘Bushveld Complex’. In particular, the company has mining
operations in Marikana which is located in the Bushveld Complex.
2. Marikana is located close to the town of Rustenburg in South Africa’s North West Province.
Lonmin has platinum mining operations in this area.
3. Contrasting this perspective with an institutional account of legitimacy is beyond the scope of
this paper (Suchman, 1995).
4. In full, the ‘Broad-Based Socio-Economic Empowerment Charter for the South African Mining
and Minerals Industry’.
5. This is an entity where more than 25 per cent of the voting share capital is owned directly by
HDSA’s (Department of Mineral Resources, 2010).
6. These are well-documented anti-Apartheid protests which played an important role in changing
the international view of Apartheid South Africa.
7. Lonmin has a primary listed on the London Stock Exchange and a secondary listing in South
Africa. As a result, it is not required by the JSE to prepare an integrated report.
8. The data collection process does not deal in detail with the content on the Company’s webpages
because the data were collected sometime after Marikana. Changes to the webpages over the
intervening time period could not be determined so only the reports dealing with Marikana
(located in the Company’s on-line report archive) were considered.
9. In line with this statement, safety statistics in the Sustainability Report (2012) specifically
exclude the Marikana incident because this information is dealt with separately in the report
(Lonmin, 2012b, p. 49).
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Corresponding author
Warren Maroun can be contacted at: warren.maroun@wits.ac.za
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Evaluating the temporal dimension of legitimisation strategies: Evidence from

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evaluated (for a detailed framework, see Alrazi et al., 2015).

theoretical frameworks and sustainability reporting. Section 3 provides a brief overview of

organisational change processes. The precise mechanisms by which an entity reacts to an

2.2 Legitimacy theory

Episodic Pragmatic Exchange Dispositional – Interests

culturally desired norms, such as honesty, trustworthiness or decency (Zucker, 1986;

2.3 Legitimacy as a mechanism of morphostatic or morphogentic change

action or outcome which may discredit it socially desirable qualities

re-orientation categories is whether or not the legitimisation strategies result in changes to

Villiers and van Staden, 2006).

3.1 Managing the interests of the state

3.2 The growing importance of non-ﬁnancial reporting

3.3 The Marikana incident

for analysing predominantley qualitative or narrative information typically included in

4.1 Selected text

4.2 Test analysis

of an organisation’s ethos. Nevertheless, the “inertia” of a ﬁnance-centric logic at the heart of

6. Discussion, conclusion and areas for future research

Defining responsibility Acknowledge challenges Sub-systems (e.g.)

issue New monitoring functions

Good labour relations

· Invite additional monitoring and

· Provide a normalising account of the

Design archetype (e.g.)

African companies”, Meditari Accountancy Research Conference, University of Bolognat, Folrli.

et al. (Eds.), Change in Organizations, Jossey-Bass, San Francisco, pp. 316-374.

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