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Book part
Publication date: 8 July 2010

Steve G. Sutton

Behavioral accounting research has flourished over the past 40 years and vastly improved our understanding of accounting judgment and decision-making, human behavior as it…

Abstract

Behavioral accounting research has flourished over the past 40 years and vastly improved our understanding of accounting judgment and decision-making, human behavior as it is affected by accounting information and processes, and influences on organizational and social structures. However, to increase the validity and reliability of the work, researchers have generally narrowed the area of study to exclude many of the environmental factors that can influence the resulting behaviors that are observed. One environmental factor that has largely been ignored by the broader accounting research community is the rapidly increasing impact of information technology (IT) on all aspects of accounting. The purpose of this chapter is to elaborate on the predominance of IT in all areas of accounting and to urge behavioral accounting researchers to integrate IT aspects into their research to enhance the value and relevance of our research. Each of the major areas of accounting disciplinary research is considered (i.e., financial accounting, managerial accounting, auditing, and tax). This disciplinary focus is not intended to exclude the area of accounting information systems as is often the case in commentaries on behavioral accounting research but rather to focus on how accounting information systems are fundamentally integrated across the decision environments of every aspect of the accounting discipline.

Details

Advances in Accounting Behavioral Research
Type: Book
ISBN: 978-0-85724-137-5

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Article
Publication date: 27 September 2021

Riccardo Giannetti, Lino Cinquini, Paola Miolo Vitali and Falconer Mitchell

The purpose of this paper is to investigate how a substantial organization gradually builds a management accounting system from scratch, changing its accounting routines…

Abstract

Purpose

The purpose of this paper is to investigate how a substantial organization gradually builds a management accounting system from scratch, changing its accounting routines by learning processes. The paper uses the experiential learning theory and the concept of learning style to investigate the learning process during management accounting change. The study aims to expand the domain of management accounting change theory to emphasize the learning-related aspects that can constitute it.

Design/methodology/approach

The paper provides an interpretation of management accounting change based on the model of problem management proposed by Kolb (1983) and the theory of experiential learning (Kolb, 1976, 1984). The study is based on a 14-year longitudinal case study (1994‐2007). The case examined can be considered a theory illustration case. Data were obtained from a broad variety of sources including interviews, document analysis and adopting an interventionist approach during the redesign of the costing system.

Findings

The paper contributes to two important aspects of management accounting change. First, it becomes apparent that the costing information change was not a discrete event but a process of experience and learning conducted through several iterations of trial-and-error loops that extended over the years. Second, the findings reveal that the learning process can alter management accounting system design in a radical or incremental way according to the learning style of the people involved in the process of change.

Research limitations/implications

Because of the adopted research approach, results could be extended only to other organizations presenting similar characteristics. Several further areas of research are suggested by the findings of this paper. In particular, it would be of interest to investigate the links between learning styles and communication and its effect on management accounting change.

Practical implications

The paper includes implications for the management of learning during management accounting change, to improve the efficiency and effectiveness of this process.

Originality/value

This paper is one response to the call for an interdisciplinary research approach to the management accounting change phenomena using a “method theory” taken from the discipline of management to provide an explanation of the change in management accounting. In respect of the previous literature, it provides two main contributions, namely, the proposal of a model useful both to interpret and manage learning processes; the effect of learning style on management accounting routines change.

Details

Qualitative Research in Accounting & Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1176-6093

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Book part
Publication date: 28 October 2021

Matt Kaufman, Ella Mae Matsumura and Urban Wemmerlöv

This study examines challenges to the retrospective financial evaluation of continuous improvement (CI) activities. Through a review of the literature and active…

Abstract

This study examines challenges to the retrospective financial evaluation of continuous improvement (CI) activities. Through a review of the literature and active engagement with CI implementations, we identify several issues that may lead to divergence between operational and financial assessments. Out of this conflict emerges a set of concepts that we find important − the delineation of soft versus hard capacity benefits, the distinction between capacity used and capacity paid for, and the data gaps that relate to these benefits – and recognize operational improvement and financial improvement as distinct, yet interrelated, theoretical constructs. This study helps explain a series of persistent gaps in the management accounting literature: Conflict between operations and accounting managers, the divergent perspectives of Johnson and Kaplan after their publication of Relevance Lost (Johnson & Kaplan, 1987), and the need for both operational control (including detailed capacity control) and accounting control in CI firms. Instead of one control system being at odds with the other, or co-existing despite each other, each of these systems support a different component of the financial improvement process. Operational control systems in CI firms emphasize non-financial information and social and behavioral controls that empower decision-making by employees, while accounting control systems seek to motivate and translate operational gains into financial gains. Soft and hard benefits linked to capacity play an integral role in understanding the difference in focus of each control system, while data limitations help to explain why these systems remain loosely coupled in practice (or absent, as seems to be the case with detailed Capacity Management Systems).

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Book part
Publication date: 6 May 2003

Seleshi Sisaye

Accounting for quality and improved organizational performance has recently received attention in management control research. However, the extent to which process…

Abstract

Accounting for quality and improved organizational performance has recently received attention in management control research. However, the extent to which process innovation changes have been integrated into management control research is limited. This paper contributes to that integration by drawing from institutional adaptive theory of organizational change and process innovation strategies. The paper utilizes a 2 by 2 contingency table that uses two factors: environmental conditions and organizational change/learning strategies, to build a process innovation framework. A combination of these two factors yields four process innovation strategies: mechanistic, organic, organizational development (OD) and organizational transformation (OT).

The four process innovation typologies are applied to characterize innovations in accounting such as activity based costing (ABC). ABC has been discussed as a multi-phased innovation process that provides an environment where both the initiation and the implementation of accounting change can occur. Technical innovation can be successfully initiated as organic innovation that unfolds in a decentralized organization and requires radical change and double loop learning. Implementation occurs best as a mechanistic innovation in a hierarchical organization and involving incremental change and single loop learning. The paper concludes that if ABC is integrated into an OD or OT intervention strategy, the technical and administrative innovation aspects of ABC can be utilized to manage the organization’s operating activities.

Details

Advances in Management Accounting
Type: Book
ISBN: 978-1-84950-207-8

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Book part
Publication date: 13 August 2018

Chaminda Wijethilake and Athula Ekanayake

Purpose – The purpose of this paper is to develop a framework which sheds new light on how sustainability control systems (SCS) can be used in proactive strategic

Abstract

Purpose – The purpose of this paper is to develop a framework which sheds new light on how sustainability control systems (SCS) can be used in proactive strategic responses to corporate sustainability pressures.

Design/Methodology/Approach – Corporate sustainability pressures are identified using insights from institutional theory and the resource-based view of the firm.

Findings – The paper presents an integrated framework showing the corporate sustainability pressures, proactive strategic responses to these pressures, and how organizations might use SCS in their responses to the corporate sustainability pressures they face.

Practical Implications – The proposed framework shows how organizations can use SCS in proactive strategic responses to corporate sustainability pressures.

Originality/Value – The paper suggests that instead of using traditional financial-oriented management control systems, organizations need more focus on emerging SCS as a means of achieving sustainability objectives. In particular, the paper proposes different SCS tools that can be used in proactive strategic responses to sustainability pressures in terms of (i) specifying and communicating sustainability objectives, (ii) monitoring sustainability performance, and (iii) providing motivation by linking sustainability rewards to performance.

Content available
Article
Publication date: 29 April 2021

Gaia Bassani, Jan A. Pfister and Cristiana Cattaneo

The purpose of this paper is to explore the role of leadership in management accounting change processes and outcomes.

Abstract

Purpose

The purpose of this paper is to explore the role of leadership in management accounting change processes and outcomes.

Design/methodology/approach

The paper draws on an ethnographic study in a Southern European company and mobilizes leader–follower relations as a method theory to analyse the observations.

Findings

The findings show how a leadership dispute between two top managers can be amplified during the management accounting change process and percolate throughout an organization. The authors identify five contested areas where the role of accounting amplifies the leadership dispute by unfolding its reach to other organizational actors. The leadership dispute can shape and reinforce a fragmented organization, with some organizational members creating convergent leader–follower relations while others divert and fragment with an increased turnover. This amplification can lead to unexpected outcomes of the change process in terms of how and by whom accounting is performed.

Research limitations/implications

The authors propose the study of leadership and followership as an important but, to date, largely neglected theme in management accounting research.

Originality/value

In contrast to the prior management accounting literature, the paper departs from a leadership-centric and role-based approach and employs a co-constructionist and relational approach to leadership and followership to analyse management accounting change. In addition, it applies and extends Alvesson's (2019a) theory on “divergent relationalities” between the presumed leaders and followers. In doing so, the paper also adds to the leadership field by theorizing and integrating the situation of a leadership dispute in this novel theoretical framework.

Details

Accounting, Auditing & Accountability Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0951-3574

Keywords

Abstract

Purpose

The paper extends the organizational learning framework: Structural-Functional (SF)-single-loop or Conflictual-Radical (CR)-double-loop learning to the management accounting literature. The sociological approach of organizational learning is utilized to understand those contingent factors that can explain why management accounting innovations succeed or fail in organizations.

Approach

We view learning as enhancing an organization’s strategic competitive advantage by making it better able to adopt and diffuse innovation in respond to changes in its environment in order to manage improved performance. The success of management accounting innovations is contingent upon whether its learning process involves SF-single-loop or CR-double-loop learning to adopt and diffuse process innovation.

Findings

The paper suggests that the learning strategy that the organization chooses is the reason why some management accounting innovations are more successfully adopted than others and why some innovations are easily diffused in some organizations but not in others. We propose that the sociological approaches to learning provide an alternative framework with which to better understand the adoption and diffusion of process innovations in management accounting systems.

Originality

It has become evident that management accounting researchers need to pay particular attention to an organization’s approach to adoption and diffusion of innovation strategies, particularly when they are designing and implementing process innovation programs for an organization. According to Schulz (2001), there are two interrelated stages of the learning that can shape the outcome of the innovation process in an organization. The first stage is related to the acquisition/production (adoption) of knowledge that results in gathering information, codification, and exploration. This is followed by the second stage which is the distribution or dissemination (diffusion) processes. When these two stages – adoption and diffusion – are applied within an accounting context, they address issues that are commonly associated with the successes and/or failures of management accounting innovations.

Research limitations/implications

Although innovation involves learning, the nature of the learning process does not completely describe the manner in which an innovation affects the organization. Accordingly, we suggest that the two interrelated organizational sociological dimensions of innovations processes, namely, (1) the adoption and diffusion theories of Rogers (1971 and 1995), to approach organizational learning, and (2) the SF (single loop) and CR (double loop) approaches to learning be used simultaneously to describe management accounting innovations.

Practical implications

When an innovation is implemented, it initially can be introduced as an incremental change, one that can be limited in both in its scope and its breadth of administrative changes. This means that situations which are most likely to benefit from its initiation can serve as the prototype for its adoption by the organization. If successful, this can be followed by systemic accounting innovations to instituting broader administrative changes within the existing accounting reporting and control systems.

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Article
Publication date: 6 May 2021

Malik Muneer Abu Afifa and Isam Saleh

This study aims to investigate the relationship between management accounting systems effectiveness (MASE) and company performance and then it examines the role of…

Abstract

Purpose

This study aims to investigate the relationship between management accounting systems effectiveness (MASE) and company performance and then it examines the role of perceived environmental uncertainty as a moderator on this relationship. It provides empirical evidence from a developing market, especially from the Jordanian market.

Design/methodology/approach

This study is based on collecting its data using a quantitative method to assist in explaining and interpreting the results, whereby the study data were collected through a survey design approach using a questionnaire method to achieve the objectives of the study. The population of this study included all Jordanian companies listed on the Amman Stock Exchange (ASE) at the end of 2019, a total of 187 companies. Therefore, the study sample consists of all these companies (a completely sensuous population) which are listed on ASE at the end of 2019.

Findings

The findings of this study offered that two informational characteristics of MASE, namely, timeliness and integration, have a significant impact on the financial performance and other characteristics have no impact on the financial (FP) and nonfinancial (NFP) performance. The informational characteristics of management accounting systems complement each other to ensure the MASE in the company, where the relationship between MASE proxied by four informational characteristics together and FP as well as NFP, were highly significant. Additionally, the findings documented that perceived environmental uncertainty, namely, customer uncertainty, competitor uncertainty and technology uncertainty separately do not moderate the relationship between MASE and company performance (both FP and NFP).

Research limitations/implications

The findings of this study shape the way for more thorough studies into monitoring MASE. Nevertheless, to start efficient decisions, managers need to comprehend the interaction of the MASE with other factors. All these considerations need to be comprehended both for and against the performance. Finally, this study addressed important issues that have practical management value. However, it is limited to a sample from one country. Future research would be interesting to study different businesses and cultural settings to enhance the theoretical and practical contributions of the study’s findings and conclusions. To be more specific, further study should have a wider view of the determinants of performance by containing economic factors in different areas such as the MENA region.

Originality/value

To the best of the knowledge, this is the first study of Jordan to examine the relationship between MASE and company performance from two sides (namely, financial and non-financial performance), moderated by perceived environmental uncertainty. As such, the study raises significant findings drawing attention to management accounting systems and the role of management accounting systems in Jordan.

Details

International Journal of Organizational Analysis, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1934-8835

Keywords

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Article
Publication date: 28 May 2021

Loai Ali Zeenalabden Ali Alsaid

This study aims to explore the complex, multi-level institutional dynamics of smart city reforms and projects and their potential sustainability pressures on the…

Abstract

Purpose

This study aims to explore the complex, multi-level institutional dynamics of smart city reforms and projects and their potential sustainability pressures on the implementation of a management accounting system in an Egyptian state-owned enterprise (SOE), which has a politically sensitive institutional character.

Design/methodology/approach

This study adds to institutional management accounting research using a multi-level perspective of institutional dynamics in the smart city context. Data were collected from an interpretive case study of an Egyptian SOE that was under socio-political sustainability pressures to implement a smart electricity network project in New Minya city.

Findings

Smart city projects have formed social and political sustainability pressures, which introduced the enterprise resource planning (ERP) network as a new management accounting system. A new (complex and multi-level) management accounting system was invented to reinvent the sustainable city as an “accounting city” (which appeared rhetorically as a “smart city”). “Smart” being the visibility and measurability of the sustainability performance of the collective body, which calls the city and its connectivity to different institutional levels brought out in a city network project for the ERP-enabled electricity distribution.

Research limitations/implications

This study examines a single case study from a single smart city and identifies the accounting community’s need for multiple and comparative case studies to further analyse the potential impact of smart city reforms and projects on the sustainable implementation of management accounting systems.

Practical implications

City policymakers and managers may benefit from the practical findings of this interpretive field-based case study in planning, implementing and monitoring smart city projects and objectives.

Social implications

Individual and collective well-being may be enhanced through new management accounting forms of multi-level local governance and increased political, field and organisational sustainability.

Originality/value

This study provides important insights into the sustainability dynamics of management accounting in achieving smart city reforms. The achievement of sustainability management accounting systems has connected to multiple ERP roles at different institutional levels, which resulted in accommodating the socio-political objectives of smart city projects.

Details

Sustainability Accounting, Management and Policy Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2040-8021

Keywords

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Article
Publication date: 23 April 2020

Catalin Nicolae Albu, Nadia Albu, Flavius Andrei Guinea and Mathew Tsamenyi

This paper investigates the process of translating a costing tool into operational use in the context of a transitional (post-communist) economy, where local institutions…

Abstract

Purpose

This paper investigates the process of translating a costing tool into operational use in the context of a transitional (post-communist) economy, where local institutions challenge the rationality of western methods.

Design/methodology/approach

By mobilizing Actor–Network Theory, in particular Callon's four moments of translation, and by drawing data from an interventionist research, the paper focuses on the process of change instilled by the implementation of a costing tool in 20 Romanian construction companies.

Findings

The costing system is initially problematized as a tool for rational decision making. However, the visibility over the accounting figures generated by the costing tool instilled new roles for the cost system to manage internal and external interdependencies. First, two costing datasets were created, one for decision making and one for tax purposes, to manage the relationship with the state taxation authorities. Second, since the costing tool generated visibility over the field practices as well, engineers convinced management to drop the decision-making set of costs. The costing tool ultimately only became used for tax optimization, an originally unintended use, reflecting its translation process.

Research limitations/implications

By taking an interventionist approach, the paper contributes to theorizing accounting in transitional economies by bringing their economic idiosyncrasies into the analysis.

Practical implications

The results inform managers about the intended and unintended consequences of management accounting tools and about actors' role in shaping their use.

Originality/value

Our research responds to recent calls to study how organizations configure their control systems in a rapidly changing environment and what is the role of management accounting in these arrangements.

Details

Journal of Accounting in Emerging Economies, vol. 10 no. 2
Type: Research Article
ISSN: 2042-1168

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