Institutions, Situated Rationality and Agency in Management Accounting: Extending the Burns and Scapens Framework

Abstract

Purpose Drawing on recent research, which recognises the situated nature of accounting practices, the aim of the paper is to extend the Burns and Scapens (B&S) framework and illustrate its potential for studying the situated nature of management accounting practices. The extended framework distinguishes field-level institutions (broader institutions) and institutions within the organisation (local institutions). In extending the B&S framework the paper draws on recent debates in institutional theory, both new institutional sociology (NIS), where the focus has been on the institutional logics perspective, and old institutional economics (OIE), where there has been debate about the relationship between institutions and actions. Design/Methodology/Approach While the B&S framework focussed on institutions within the organisation, our extended framework explicitly recognises institutions which extend beyond the boundaries of the organisation. It also recognises the way in which rationality and deliberation are related to human agency, as well as the power of specific individuals and/or groups to impose new rules. To illustrate the usefulness of the extended framework the paper draws on a recent study of performance measurement in the Accounting and Finance Groups of the Universities of Groningen and Manchester. Findings It is argued that local institutions (within the organisation) combine with the broader institutions to shape the forms of (situated) rationality which are applied by individuals and groups within the organisation. As different groups within an organisation (e.g., engineers versus accountants) can have different forms of (situated) rationality, and contradictions in these forms of rationality can be a source of institutional change or resistance to change within the organisation. Originality/Value The extended framework will be useful for studying: (1) how situated rationalities evolve within an organisation, more specifically how they are shaped by both local and broader institutions; and (2) how prevailing situated rationalities shape the responses to accounting change.