TY - JOUR

T1 - Valuation devices and the dynamic legitimacy-performativity nexus

T2 - the case of PEP in the English legal profession

AU - Faulconbridge, James

AU - Muzio, Daniel

N1 - This is the author’s version of a work that was accepted for publication in Accounting, Organizations and Society. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Accounting, Organizations and Society, 91, 2021 DOI: 10.1016/j.aos.2020.101224

PY - 2021/5/31

Y1 - 2021/5/31

N2 - Existing studies have developed increasingly sophisticated accounts of the performative agency of valuation devices and their effects on markets and organizations. In particular, research has focused on the work of different actors to legitimize valuation devices and ensure their adoption, which then leads to performativity. This paper extends work on the legitimacy and performativity of valuation devices by developing a dynamic, non-linear theorization of the boundary conditions of performativity and the feedbacks that result in changes in performativity over time. We ask: How do evolutions in a valuation device’s legitimacy relate to its performativity? Our analysis is based on a longitudinal study of the profits per equity partner (PEP) metric which between 1995 and 2013 became established as a key valuation device for English law firms. Through this case we draw attention to the dynamic legitimacy-performativity nexus. We show how the waxing and waning of different forms of legitimacy, in line with the dynamics of the broader institutional environment, affect the performativity of a particular valuation device. We also reveal a performativity paradox. The more a device gains legitimacy the more it becomes influential and exercises performative effects. The more this happens, the more the risk that tensions, contradictions and challenges will arise and begin to undermine the valuation device’s legitimacy and consequently its performativity. Consequently, we contribute to better theorizing the dynamic links between legitimacy, performativity and counter-performativity.

AB - Existing studies have developed increasingly sophisticated accounts of the performative agency of valuation devices and their effects on markets and organizations. In particular, research has focused on the work of different actors to legitimize valuation devices and ensure their adoption, which then leads to performativity. This paper extends work on the legitimacy and performativity of valuation devices by developing a dynamic, non-linear theorization of the boundary conditions of performativity and the feedbacks that result in changes in performativity over time. We ask: How do evolutions in a valuation device’s legitimacy relate to its performativity? Our analysis is based on a longitudinal study of the profits per equity partner (PEP) metric which between 1995 and 2013 became established as a key valuation device for English law firms. Through this case we draw attention to the dynamic legitimacy-performativity nexus. We show how the waxing and waning of different forms of legitimacy, in line with the dynamics of the broader institutional environment, affect the performativity of a particular valuation device. We also reveal a performativity paradox. The more a device gains legitimacy the more it becomes influential and exercises performative effects. The more this happens, the more the risk that tensions, contradictions and challenges will arise and begin to undermine the valuation device’s legitimacy and consequently its performativity. Consequently, we contribute to better theorizing the dynamic links between legitimacy, performativity and counter-performativity.

KW - Valuation device

KW - Legitimacy

KW - Performativity

KW - Institutionalization

KW - Law firms

U2 - 10.1016/j.aos.2020.101224

DO - 10.1016/j.aos.2020.101224

M3 - Journal article

VL - 91

JO - Accounting, Organizations and Society

JF - Accounting, Organizations and Society

SN - 0361-3682

M1 - 101224

ER -