Management Accounting Change Research Articles

Collective identity, institutional logic and environmental management accounting change

Purpose The purpose of this paper is to examine how collective identity and institutional logic affect the design and use of an environmental performance measurement system. Design/methodology/approach The authors use a qualitative case study with abductive theorizing and empirical data obtained through semi-structured interviews, observation and document analysis. Findings The new environmental measures were reshaped by aligning them with the existing and dominant collective identity in the case organization – in other words, cost savings and profitability. Moreover, the institutional logic forced the environmental measures to remain as non-strategic and non-bonus criteria in favour of traditional financial measures. Originality/value Thornton and Ocasio’s (2008) institutional logic is applied and its potential for analyzing change in environmental accounting is shown. The paper illustrates how collective identity and institutional logic are important mechanisms reshaping environmental performance measurement design and use, when the existing collective identity is reproduced.

Management accounting and enterprise risk management. A potential integration as a new change in managerial systems

The main goals of this research are: 1) to understand if a further change in management accounting (MA) is required by changes in the contemporary extra-organisational environment, highlighting the main direction of this change, with particular attention to the integration with the enterprise risk management (ERM) as a new organisational institution; 2) to investigate if the management accountants' role should coherently evolve toward a deeper integration and coordination with that of risk managers, as an intra-organisational condition of success. The research method used is a qualitative mixed method, as it integrates inductive and deductive perspectives. In particular, we firstly used an empirical and comparative analysis based on explorative case studies. Secondly, our research adopted institutional theory, not with the intention of formally testing it, but rather to support our theoretical model of the successful directions of change.

Results based costing (RBC) system: questioning the unit of analysis in ABC

This paper aims to introduce Results Based Costing (RBC) System as an alternative accounting tool by questioning the unit of analysis in ABC. By focusing on ‘Results’ instead of ‘Activities’, it investigates its manifest and underlying agendas as a newly innovative idea, with a view to determining its degree of cost management focus and Results Based Management (RBM). Adoption of ABC in different countries especially developed countries has not fulfilled early expectations. Its influence on organizational performance, depending upon how successful performance is defined, has not been evident (see Langfield-Smith 2008). The study thus uses historical and website analysis methodologies for investigating innovative diffusion philosophies related to ABC practices and discourse. These are examined through the theoretical lenses of institutional logics theories. It thus distinguishes between institutional logics and situated logics, and their variances. ABC implementation can be characterized as an encounter between the ABC’s inscribed institutional logic and the situated institutional logic that is embedded in the existing practices in a given organization. The paper moves on to consider the surrounding emergence of RBM approach and then introduces RBC as new accounting tool along with its developments, its processes, intentions and claimed advantages. RBC’s dominant agenda are overhead cost reduction, cost management, performance management and results orientation. Accounting research into the management accounting system and its processes is much needed. This has been largely neglected in favor of management accounting change and innovative diffusion literature. In a world dominated by IT industries, RBC system as a center of organizational and accounting management merits greater attention by researchers. Practitioners in this way can better design and implement systems that build on past knowledge and learning. This study thus presents itself as a first study about RBC currently available in the accounting and management research literatures. It also represents one of the very few referred studies of the Results Based Accounting in the accounting research literature globally.

Management accounting change: critical review and a new contextual framework

Purpose– This paper aims to introduce and discuss a new contextual framework to explain the processes of management accounting change in various organizations.Design/methodology/approach– Having an institutional perspective, the paper develops a “conceptual contextual framework” of management accounting change. The methodology to accomplish this theory building consists of an integration of a number of different works summarizing the common elements, contrasting the differences and extending the work in some fashion. Particularly, it draws on theoretical triangulation by adopting three approaches: old institutional economics for internal processes and factors (Burns and Scapens, 2000); new institutional sociology for external processes and pressures (Dillardet al., 2004); and power and politics mobilization (Hardy, 1996).Findings– The proposed framework provides an understanding of the complex “mixture” of interrelated factors that may influence management accounting change at multi-institutional levels: political and economic level, organizational field level and organizational level.Research limitations/implications– The framework extends institutional theory-based management accounting research as well as provides a comprehensive basis for examining dynamics of accounting in the institutionalization process. Through further research, the framework will be extended and refined.Practical implications– The paper has practical implications for practitioners and officers as well as for the accounting profession and academics alike.Originality/value– The proposed contextual framework provides insights into the processes of change by focusing attention on the underlying institutions that encode accounting systems or practices in three institutional levels: political and economic level, the organizational field level and organization level. Examining the tension between institutionalized beliefs and values that may occur between these three levels of institutions will enhance our understanding of management accounting change in organizations.

Interactions of rules and routines: re-thinking rules

Purpose– The purpose of this paper is to address the extant and arguably excessive focus on routines in management accounting research and a relative neglect of rules. It seeks to advance our understanding of how rules and routines may interact in the technology-enabled context of management accounting and control of contemporary organizations.Design/methodology/approach– The authors draw on, and develop, insights from extant literature and from two case studies to explore how rules and routines may interact.Findings– The paper proposes a framework on the interactions of rules and routines across multiple dimensions. The authors adopt a wide notion of rules to include formal rules, rules as internal cognitive structures of human actors and rules technologically embedded in non-human actors. The authors argue that rules underlie and may precede routines, distinguish between repeated practices and routines and explore the role of technology in today’s management accounting practices.Research limitations/implications– This research shows how the process of routinization and, ultimately, institutionalization of practices involves multiple dimensions of rules, as well as both human and non-human actors. With this understanding, researchers and practitioners will be better equipped to, respectively, understand nuances of management accounting change and actually achieve change in practice.Originality/value– This paper highlights the importance of rules in the routinization and institutionalization of management accounting practices and proposes a framework which explores the interactions of rules and routines across three realms: material, action and psychological. Including a material realm, related with technologically embedded rules, in the proposed framework contributes to institutional theory by acknowledging today’s increasing role of technology in organizational life.

“Hybridised” financial control in the Victorian construction industry: George Gilbert Scott’s rebuilding of Glasgow University, 1864–1872

This article examines the financial control of Scotland’s largest building construction project of the 1860s and 1870s, the relocation of Glasgow University at Gilmorehill. In discussing the respective roles of the architect, the “measurer” (quantity surveyor), the client, the clerk of works and the various contractors engaged to carry out the construction work, particular attention is given to the detailed management processes and involvements which contributed to the project’s financial control and, ultimately, its success. The study relates this system of control to the literature on “hybridised” accounting and also to that concerning management accounting change within institutions. It also comments on the activities and professional status of the “measurer”, whose work was central to the project’s financial management system.

PRIVATISATION AND MANAGEMENT ACCOUNTING CHANGE: THE DRIVERS OF CHANGES IN A BRAZILIAN ELECTRICITY DISTRIBUTION COMPANY

Resumen en: The main of this study is to explain the main drive r s of the process of management accounting change in a privatised Brazilian electricity distribution...

Accounting Information Systems Implementation and Management Accounting Change

Abstract Background: There is an on-going discussion within management accounting research regarding how to work with performance measures. In the process of developing new forms of performance measurement the task of choosing business metrics is central. This process is closely connected to the implementation of IT solutions. Objectives: In order to understand how new performance measurement solutions are implemented and used, it becomes crucial to understand how measures are selected and how new accounting information systems (AIS) are developed and implemented. Methods/approach: The paper builds on the case of an on-going AIS project at a large, public university in Sweden. The empirical material was collected using a semi-action research approach over a two-year period. The majority of the material comes from written documentation and minutes. Results: Even though the implementation of a new AIS triggers a change in the management accounting practice, this study shows that this is done in more than one perspective. Conclusions: As the project develops, new priorities and objectives evolve, which in the end shape what management accounting change becomes.

Accounting for war risk costs: management accounting change at Guinness during the First World War

This paper explores management accounting change at the St. James's Gate Brewery of Arthur Guinness & Sons Ltd brought about by the effects of the First World War (WWI). In particular, how additional war risk costs were accounted for internally is revealed. Using organisational routines as a theoretical backdrop, new management accounting practices are interpreted. These new practices allocated war risk costs incurred by head office (in Dublin) to other parts of the company. The key role of existing management accounting routines in the formation of new routines is also revealed. Although WWI was an exogenous driver of change, endogenous change also featured as existing practices guided the creation/adaptation of routines. In essence, accountants within the Guinness Company drew upon their existing knowledge to deal with a new and complex scenario (i.e. the war). Thus, change and stability went hand in hand. Although change did occur, it was moderate and more adaptive, which signifies that existing accounting routines were strong and adaptable to major drivers of change such as WWI.

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

Over the past decade institutional theory, and particularly the Burns and Scapens framework has been used for many studies of management accounting change [Burns, J., Scapens, R.W., (2000). Conceptualizing management accounting change: an institutional framework. Management Accounting Research, 11(1) 3-25]. This paper rethinks and extends the Burns and Scapens framework and explores changes which are needed in light of more recent work in institutional theory, both in institutional sociology where the emphasis is now on practice variations and institutional logics, and in old institutional economics where there has been debate about the relationship between institutions and actions. An extended framework is developed which recognises both external and internal institutions, the role of deliberation and human agency, and the power of specific individuals and/or groups to impose new rules. By incorporating deliberation within the framework, the importance of logics is emphasised. However, a distinction is made between institutional logics and situated logics. The latter recognise that in any specific situation there will be multiple logics which arise from the mix of internal and external institutions. Furthermore, different groups within a given organisation may have different situated logics, and contradictions in these logics can be a source of institutional change within the organisation. As the paper was stimulated by a puzzling difference in the performance measurement systems used in the Accounting and Finance Groups in the Universities of Groningen and Manchester, performance measurement in the two universities is used to illustrate the extended framework.

Management accounting change and agency in embedded situations

Focusing on internal micro-processes, this study contributes to the management accounting change literature showing what conditions allow agency in embedded situations. We analyse a family company in the period 1904–1969 in that, after more than 50 years of ongoing reproduction of highly institutionalised management practice, the chief executive officer (CEO) fostered a radical institutional transformation in whose process the implementation of a cost accounting system was driven.As main conclusions, first, we argue that management accounting change drivers are strongly influenced by actors’ interests and by the perception and interpretation that actors make about institutional contradictions or external critical events and their effects on the organisation. Second, we shed light about the interrelated influences that institutions and individuals exert on meanings and roles attributed to management accounting in institutional change, even impelling the implementation of a completely new system to support it. Finally, we illustrate that both process and content of accounting change are moulded by normative influences intertwined with the cognitive schemes of actors involved.

Economic crisis as a driver of management accounting change

Purpose – The purpose of this paper is to investigate change processes within German and Spanish management accounting which are induced by the recent economic crisis. To illuminate these changes, a particular emphasis is put on budgeting processes and the role of management accountants. Design/methodology/approach – A cross-sectional field study that mainly builds on interviews with senior management accounting executives in nine German and nine Spanish companies was conducted. The German and Spanish companies were matched in terms of industry and size to assure comparability of the two national samples. Findings – The most recent economic crisis represents a crucial driver of management accounting change in the companies comprising my sample. Whereas budgeting is increasingly performed continuously, the empirical evidence suggests that opportunities are continually evolving that might result in a more powerful position of management accountants within corporate decision-making processes and an improved image of management accountants. Research limitations/implications – The findings of this study should not be generalised in a statistical sense. However, the results may be used as the basis for qualitative and quantitative follow-up studies. Practical implications – The paper provides several examples which demonstrate, that management accountants can improve their image and their influence on corporate decision making in times of economic crisis. Originality/value – This paper contributes to the literature by providing both theoretical refinement of and empirical evidence on propositions on the influence of the economic crisis on management accounting.

Cost Management in European Universities - a Time of Change

European higher education institutions are becoming increasingly focused on cost reduction and accurate linking of costs to the accomplishment of their strategic goals. Research problem of this paper is a search for factors, common in managerial accounting practice, which could become a basis for convergence of management accounting systems across Universities. The authors have formulated conclusions, important for a successful completion of the process of changes in cost accounting and management accounting in the strategic management context. DOI: http://dx.doi.org/10.5755/j01.ss.82.4.6610

Influence of management accounting change on performance of small entrepreneurial reorganising firms

This paper analyses the moderating effects of different contextual variables on the influence of management accounting change (MAC) on the long-term financial performance of small entrepreneurial reorganising Finnish firms. Empirical data are based on a survey responded by 85 entrepreneurial firms. The findings show that the influence of MAC on financial performance is weak. They also show that the sign of influence is sensitive for control variables. For univariate analysis without any controlling variables the relationship is weak but positive. When controlling for management control system change (MCSC), organisational change (OC) and contextual variables the relationship is still weak but negative. Twelve contextual variables were used to moderate the relationship between MAC and performance influence. For both the low and high levels of each variable the effect was found negative. The general conclusion is that for very small reorganising firms the influence of MAC is negative irrespective of the context.

Management Accounting Change in Developing Countries

In recent years, investigations and debates regarding the changing nature of management accounting have aroused a tremendous amount of interest and concerns among academics. The debates have been supported by a wide array of contradictory research. On the one hand, some researchers [1-3] claim that management accounting has not changed but has remained a centralized function exercising formal controls dominated by external reporting. Yet, on the other hand, other researchers [4-11] argue that the management accountant’s role has changed. The change is mainly in the tasks that management accountants undertake. Much more emphasis is being placed on strategy and decision-making roles, rather than the more traditional areas of costing and financial analysis. Between these two arguments others, for example Granlund and Malmi [12], concluded that there are moderate changes in management accounting and control procedures.

Explanations for the gap between management accounting rules and routines: An institutional approach

This is a longitudinal in‐depth case study that was conducted within a Portuguese public sector organization, the National Postal Service of Portugal, where two management accounting innovations were implemented. The aim of one of the innovations – Income Statements – was to account for the financial results for the different areas within the organization, which could filter down to its basic elements. The aim of the other – Key Performance Indicators – was to provide indicators to monitor business performance. These innovations were not used in practice as planned, which afforded me the opportunity to explain the existing gap between their rules and routines. To do this, I based this study on the old institutional economics (OIE) inspired management accounting change literature.Following a strategy of collating together issues from more than one theory, this study contributes to the OIE inspired management accounting change literature by providing evidence that trust and power issues should be analyzed simultaneously and not separately, in order to extend our understanding of how management accounting innovations are (or are not) used in practice, and it also provides evidence that external and internal pressures or the lack of them should be considered through time and not only in explaining the initial stage(s) of the management accounting change processes. The study also provides practical insights for those who intend to carry out changes in management accounting practices in an organizational setting.

Stability and Change in Management Accounting: An Exploratory Study of the Use of Standard Costing in an Irish Manufacturing Company

This paper examines the simultaneous presence of both stability and change in management accounting practices by exploring the use of a traditional technique, namely standard costing, in an organisation. The study is framed by literature concerning routines and rules, and the data were gathered by means of a case study. This paper contributes to the literature by providing empirical evidence of the interactions of management accounting routines and rules in a relatively traditional environment. The analysis reveals that change to stable routines can occur but, at the same time, these routines can become further embedded within an organisation.

Mudanças na contabilidade gerencial: uma revisão

The objective of this study is to discuss the main aspects of management accounting change and the present stage of research in the area. Research in the field of management accounting change can be characterised by its methodological diversity which includes interpretive research, critical research and the traditional functionalist and positivist research. A variety of research methods have also been used, including surveys, fieldwork, case studies and ethnographic studies, as well as studies that have adopted a more conventional quantitative approach, such as contingency-type studies. In addition, researchers have drawn on a wide range of theories, including traditional positivistic theories, such as economic theory and contingency theory, and alternative theories, such as institutional theory, structuration theory, actor network theory, middle-range thinking, labour process theory, political economy, and Foucault’s theory. Therefore, management accounting change is a heterogenic field of research with a non-dominant paradigm.

On the interplay between environmental reporting and management accounting change

This paper investigates how environmental reporting (ER) and environment-related management accounting (EMA) practices may interact in the process of responding to disturbances of the natural environment (e.g., changes in environmental regulation, green consumerism, societal pressures for environmentally-responsible conduct). Based on data gathered in four Belgian case companies, we find that the emergence of an interplay between ER and EMA practices is related to the change pathways followed by these disturbances. Moreover, the strength of the environmental disturbances, top management commitment and the presence of an environmental champion are important contingent factors in understanding the development of a recursive relationship. Finally, the findings illustrate that an interplay between ER and EMA practices has the potential to foster or stifle organizational greening.

Stability and change in management accounting over time—A century or so of evidence from Guinness

In recent years, much has been written on the nature of management accounting change, and indeed stability. Many researchers have used concepts such as rules and routines to interpret this change and/or stability. Recent research has provided an increasingly clear picture of what rules and routines are, as well as contributing to our understanding of the processes of change and stability in management accounting.Management accounting research has mainly presented rules and routines as related phenomena, but some conceptual work has suggested they are separable and can (and possibly should) be considered independently when studying processes of change/stability within management accounting. However, empirical support for such work has been scarce to date. This paper uses data from the archival records of the Guinness company in an effort to establish whether rules and routines, at least in management accounting research, are best considered separable concepts or not. The archival records are artefacts of rules and routines and thus can be used to trace the interactions of rules and routines over time. Support for the notion that rules and routines should be considered separately is presented. The findings also portray the stable, but changing, nature of management accounting routines over time; a point worthy of further research.