Socio-Economic & Political Institutions and their Impact on Non-Financial Performance Measurement: A Case Study

Abstract

The institutional environment is defined as being characterized by the elaboration of rules and requirements to which individual organizations must conform if they are to receive support and legitimacy. National and transnational institutions pressure firms to change their Management Accounting (MA) practices to make them consistent and clear. Some argue that national institutions have preserved their role as important players in the organizational and societal fields in different countries. Some researchers, by contrast, demonstrate the decreasing importance of these institutional impacts for some contemporary reasons. The Banks/Financial Institutions (BFI) operate within the stronger influence of international institutions, such as the IMF and the World Bank. Furthermore, nowadays most world economies are directly or indirectly associated with some regional and trans-national institutions. In this study, Finland, Sweden and Japan are affected by the strongest regional institutions. Thus, the BFI in these countries can also be influenced by some regional institutions. However, the factors that decrease national institutional influence also exist in these countries. This study investigates the effect of these socio-economic and political institutions on nonfinancial MA measures in twelve BFI in Finland, Sweden and Japan within multiple exploratory case study principles. The results of this empirical study demonstrate the influence of socio-economic and political institutions on non-financial MA measures in BFI. That is, the effect of national, transnational and international socio-political and cultural institutions on non-financial MA measures is identified in a number of the studied BFI. According to the empirical evidence, some hypotheses are generated for further research.