Corporate Strategy and Accounting Systems: A Comparison of Developments at Two British Steel Firms, 1898–1914

Abstract

Studies of dynamic American firms reveal that new accounting systems developed during the late nineteenth and early twentieth centuries represented important adjuncts to administrative innovations which supported strategies designed to secure sustainable competitive advantages. Investigations of British firms have not previously been undertaken to provide a basis for international comparison of costing methods and systems designs which arose during the 1890–1914 period when technological change, the rise of scientific management, and growing foreign competition called for new types of strategic decisions. The following article examines the interaction between strategic processes and systems development within two British steel firms which pursued divergent strategies during the same years that du Pont made its pioneering accounting innovations. The study draws attention to the impact of environmental conditions and firm-specific factors in influencing strategy, structure, and systems design.