From Paradox to Legitimacy: Mediating Sustainability Through Management Accounting in Agribusiness

Abstract

As sustainability becomes a strategic imperative for organizations globally, firms must navigate complex tensions among financial performance, environmental, and social accountability. In this context, management accounting emerges as a pivotal tool that can mediate the paradoxes inherent in sustainability initiatives while enhancing organizational legitimacy. This study investigates how management accounting can mediate the relationship between sustainability challenges and performance in the agribusiness sector, where sustainability challenges are particularly pronounced. Drawing on paradox theory and legitimacy theory, we developed and applied a conceptual framework, which we call the Legitimacy–Paradox Accounting Mediation (LPAM) Framework, that explains how external and internal pressures generate tensions and how management accounting facilitates navigating these contradictions. Using a qualitative, single-case study methodology, we examine a Brazilian family-owned agribusiness firm to explore how accounting practices support decision-making amid competing stakeholder expectations and sustainability demands. Our findings reveal that while legitimacy concerns often initiate sustainable practices, the pursuit of sustainability itself generates paradoxical tensions that are mitigated, rather than resolved, through adaptive and integrative management accounting strategies. Additionally, the pursuit of sustainable options does not have to be an aspirational narrative, but rather a logical, data-driven decision that supports the company’s legitimacy as well as its bottom line. The study contributes to theory by extending the role of management accounting beyond performance monitoring to a dynamic, mediating force in organizational adaptation. It also provides practical insights for firms seeking to align with evolving sustainability standards while maintaining economic viability. This research advances the accounting literature by illustrating how management accounting can both reflect and shape sustainability transitions in contested, high-impact sectors.