From physical to accounting control: a study of accounting change resistance

Abstract

Purpose

The purpose of this paper is to examine an effort by management of a private higher education institution in Indonesia to replace its informal, relationship‐based performance system which relied on physical discourse – overseeing operational details that focus on physical accomplishment of tasks – and personal control by the school head, with a tight budgetary control system which relied on technical efficiency and rational discourse.

Design/methodology/approach

The paper is an ethnographic case study of a business school – a private higher education institution in Indonesia – known by its abbreviation as Perbanas Business School (PBS), from 1999 to 2001. The researcher is part of the case being studied, and thus is a “native” who completely participates in the change process.

Findings

The paper demonstrates how a control system change that violates existing cultural norms fails to impact day‐to‐day managerial practices or decision‐making processes. Specifically, in a business school setting, replacing an informal relationship‐based control system with a technical efficiency‐based accounting control system only produces chaotic managerial practices and degrades school services. The new system alienates staff and is not accepted or institutionalized. Instead, in daily managerial processes, management continue to rely on informal and personal relationships.

Research limitations/implications

The paper contributes to the accounting literature by studying the process of instituting accounting change and organizational participants' resistance to that change.

Originality/value

Organizational culture, reflected in values, norms of behavior and everyday practices, cannot easily be controlled or changed by chief executive officers.

Citation

Wahyudi, I. (2009), "From physical to accounting control: a study of accounting change resistance", Journal of Accounting & Organizational Change, Vol. 5 No. 2, pp. 228-242. https://doi.org/10.1108/18325910910963445