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Nuraddeen Abubakar Nuhu, Kevin Baird and Ranjith Appuhami

This study examines the association between the use of a package of contemporary and a package of traditional management accounting practices with organizational change

Abstract

Purpose

This study examines the association between the use of a package of contemporary and a package of traditional management accounting practices with organizational change and organizational performance.

Methodology/approach

Data were collected based on a mail survey distributed to a sample of 740 public sector organizations.

Findings

The findings indicate that while the prevalence of traditional practices is still dominant, such practices were not associated with organizational change or performance. Rather, those organizations that use contemporary management accounting practices to a greater extent experienced greater change and stronger performance.

Practical implications

The findings suggest that contemporary management accounting practices can assist public sector practitioners in improving performance and promoting organizational change.

Originality/value

The study provides an empirical insight into the use and effectiveness of management accounting practices in the public sector. The study provides the first empirical analysis of the effect of using a package of management accounting practices in the public sector.

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Book part

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

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

João A. Ribeiro and Robert W. Scapens

To explore the contributions made by two strands of institutional research that have been applied to the study of management accounting change: “old institutional…

Abstract

Purpose

To explore the contributions made by two strands of institutional research that have been applied to the study of management accounting change: “old institutional economics” and “new institutional sociology”. To propose ways of developing these theories, and in general to develop an institutional understanding of management accounting change.

Design/methodology/approach

Analysis of the literature on management accounting change, with a special emphasis on the literature drawing on institutional theory. Theoretical discussion based on the concept of the “circuits of power”. Illustration with observations made during a case study of an organisation in which attempts to promote change in management accounting were conducted in recent years.

Findings

Identification of some complementarities between these two strands of institutional theorising, and suggestions of how they can be developed by drawing on insights from the “circuits of power” framework.

Research limitations/implications

The case study analysis is limited to an illustration of the theoretical discussion. A building of bridges between the various developments in institutional approaches to management accounting change is necessary.

Originality/value

The paper is of value to researchers studying management accounting change. It clarifies the theoretical underpinnings of the institutional frameworks and suggests areas for institutional research into management accounting change.

Details

Qualitative Research in Accounting & Management, vol. 3 no. 2
Type: Research Article
ISSN: 1176-6093

Keywords

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Article

Pär Åhlström and Christer Karlsson

Explores the role of the management accounting system in the process of adopting a complex manufacturing strategy, lean production. Finds, in a longitudinal field study…

Abstract

Explores the role of the management accounting system in the process of adopting a complex manufacturing strategy, lean production. Finds, in a longitudinal field study, using the clinical methodology, that in order to change the management accounting system to support the adoption of lean production, traditional performance measures have to reach a certain threshold. An important way to create impetus for this change is to raise the level of the unit of analysis in the management accounting system, both horizontally and vertically. Finally, the management accounting system affects the process in three concurrent ways: technically, through its design; formally, through its role in the organization; and cognitively, through the way in which actors think about and use the management accounting system. Proposes that in order for the system to be congruent with lean production principles, all three of these perspectives need to be changed.

Details

International Journal of Operations & Production Management, vol. 16 no. 11
Type: Research Article
ISSN: 0144-3577

Keywords

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Article

Reinaldo Guerreiro, Carlos Alberto Pereira and Fábio Frezatti

The objective of this case study is to evaluate the change process, under the old institutional economics (OIE) approach, that had occurred within the managementaccounting

Abstract

Purpose

The objective of this case study is to evaluate the change process, under the old institutional economics (OIE) approach, that had occurred within the managementaccounting system of Brazilian bank. The present study examines the efficacy of the change process in management accounting, from the perspective of system users, seven years after its beginning.

Design/methodology/approach

The research is based on a case study. The study presents a literature review of institutional theory and a case study of Banco do Brasil – a large Brazilian bank that has implemented profound changes in its managementaccounting system.

Findings

The results indicate that new concepts have been effectively institutionalised and converted into new values, habits, and routines inside the organisation. The study provides new insights into managementaccounting change.

Research limitations/implications

A single case study does not allow the results to be generalised to other organisations.

Originality/value

The study offers a conceptual structure and operational guidelines to evaluate institutionalisation of managementaccounting change processes. The main contribution of this study is to offer new operational insights on managementaccounting institutionalisation using the conceptual framework proposed by Burns and Scapens.

Details

Journal of Accounting & Organizational Change, vol. 2 no. 3
Type: Research Article
ISSN: 1832-5912

Keywords

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Article

Martijn van der Steen

The purpose of this paper is to explore the dynamics involved in the emergence and change of management accounting routines. It seeks to provide an understanding of the…

Abstract

Purpose

The purpose of this paper is to explore the dynamics involved in the emergence and change of management accounting routines. It seeks to provide an understanding of the ways in which these complex routines foster stability and change in management accounting practices.

Design/methodology/approach

A longitudinal case study was conducted at the Rabobank Groningen – an autonomous member of the cooperative Rabobank group – over a period of four years. The emergence of a new routine of planning and control was traced, which evolved substantially over the period of study.

Findings

It was found that the cognitive representations of the routine studied, i.e. the way it was subjectively understood, provided a temporarily stable basis for the routine. Change arose from improvisations through its recurrent performances. It was also found that change could result from complex dynamics in the routine, as opposed to viewing them as static and stable entities that react to “external” stimuli.

Research limitations/implications

The research findings contribute to an understanding of the reproduction of management accounting routines and the ways in which change can arise in these routines. It provides a means to study the micro‐processes of reproduction of routines, which play an important part in institutional theories of management accounting change.

Originality/value

This paper places management accounting routines and their processes of reproduction at the centre of the argument to provide an understanding of the role of routines in accounting change. Since the notion of management accounting routines has not been developed extensively, this understanding contributes to studies into the nature of routines and their role in management accounting change.

Details

Accounting, Auditing & Accountability Journal, vol. 24 no. 4
Type: Research Article
ISSN: 0951-3574

Keywords

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Article

Nizar Mohammad Alsharari and Mayada Abd El-Aziz Youssef

The purpose of this paper is to explain the processes of management accounting change (MAC) in the Jordanian Customs Organization (JCO) within its social context following…

Abstract

Purpose

The purpose of this paper is to explain the processes of management accounting change (MAC) in the Jordanian Customs Organization (JCO) within its social context following public sector reforms. It focuses on the regulative way in which a new accounting system of government financial management information system (GFMIS) was implemented throughout three levels of an institutional framework.

Design/methodology/approach

The paper uses an interpretive case study in which the GFMIS was imposed by the government. It draws on a framework that comprises three institutional approaches: old institutional economics; new institutional sociology; and power mobilization.

Findings

In the JCO case, the GFMIS contributed effectively to the development of a comprehensive approach to the preparation of the budget while it works to facilitate the estimated process of expenditures and revenues. The study recognizes that the implementation of GFMIS may have emerged primarily as a response to external political and economic pressures. The MAC was carried out in the “from-top-to-bottom” level of institutional analysis, which confirms the “path-dependent” and evolutionary nature of the change. It concludes that the evolutionary MAC in the JCO case study was not only a decorative innovation in management accounting, but was also represented in the working practices. It has produced comprehensive and timely information about strategic planning, chart of accounts and classification of assets, liabilities, and revenues and expenses at all levels of management and programs. The study also confirms that management accounting is not a static phenomenon but one that changes over time to reflect new systems and practices.

Research limitations/implications

The need for having an integrated GFMIS in the authors’ case arises from two key dimensions: increasing pressures from the International Monetary Fund to improve fiscal management and reporting, and the government needs to respond to the demand of better information disclosure. GFMIS has provided an integrated solution for public financial management through the automation of the entire life cycle of budget preparation, budget execution, and financial reporting. The system operates across all budget organizations to ensure transparency and accountability in all public resources transactions, including allocation, use, and monitoring. Hence, it has important implications for policy decision makers through linking all budget organizations, for the purposes of supporting the process of decision making in an informed manner. The study has important implications for the ways in which change dynamics can emerge, diffuse, and implement at three levels of institutional analysis. It also explains the interaction between the external origins and internal accounts, which identified that GFMIS is both shaped by, and is shaping, wider socio-economic and political processes.

Originality/value

This study fills a gap in the literature, as it explains the processes of MAC associated with the introduction of GFMIS in the JCO within its social context. It recognizes the institutional pressures that affected the emergence and diffusion of GFMIS and how they interacted through three levels of institutional analysis.

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Article

Seleshi Sisaye and Jacob Birnberg

The purpose of this paper is to develop a contingency framework that allows researchers to classify and study management accounting innovation within the context of the…

Abstract

Purpose

The purpose of this paper is to develop a contingency framework that allows researchers to classify and study management accounting innovation within the context of the literature on the sociology of diffusion and adoption.

Design/methodology/approach

The process of innovation in organizations involves two stages: the stages of diffusion and adoption along two dimensions of extent: technical and administrative, and scope: autonomous and systemic. A combination of these two dimensions yields four types of accounting innovations: mechanistic, organic, organizational development, and organizational transformation. Management accounting innovations has been studied using these four innovation typologies.

Findings

The paper suggests that management accounting researchers pay particular attention to an organization's approach to diffusion and adoption strategies of innovation, particularly, the extent and scope dimensions when designing and implementing process innovation programs.

Research limitations/implications

The innovation contingency framework developed in this paper facilitates the analysis of two important research questions. First, why have some innovations been readily accepted while other, apparently similar proposed innovations have not? Second, why has a particular innovation succeeded in some firms and failed in others?

Practical implications

The subject of accounting innovations and change are important to managers. Accounting innovations as administrative and technical innovations are intertwined in performance evaluation as well as compensation systems. Accordingly, they are resisted.

Originality/value

The paper's contribution is in the advancement of sociological theories in behavioral managerial accounting. The paper develops a process innovation framework that integrates organizational sociological research in process innovations, particularly in diffusion research.

Details

International Journal of Accounting & Information Management, vol. 18 no. 2
Type: Research Article
ISSN: 1834-7649

Keywords

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Article

Ken Ogata and Gary Spraakman

The purpose of this paper is to ascertain whether the deinstitutionalization of management accounting is better described using structuration theory (techniques are…

Abstract

Purpose

The purpose of this paper is to ascertain whether the deinstitutionalization of management accounting is better described using structuration theory (techniques are reproduced until replaced) or sedimentation (layering of a new technique upon an earlier technique).

Design/methodology/approach

An archival study of management accounting at the Hudson's Bay Company (HBC) between 1670 and 2005.

Findings

With the delegitimation of management accounting at the HBC, both structuration and sedimentation processes occurred. However, delegitimation did not mean all of the techniques within a set were eliminated. Several management accounting techniques often continued from one set to another (e.g. indents, outfits, standards of trade) reflecting continued reproduction of existing practices. Sometimes new techniques were added to allegedly make the set more effective, but these overlays did not always replace the former.

Research limitations/implications

The usual limitations of single firm study generalizations.

Practical implications

The research provides practitioners with insights into how management accounting practices change. With change some aspects of management accounting will remain the same.

Originality/value

This case study is based upon a unique primary archival. The HBC has made its accounting and other corporate records available to the public for the period 1670‐1970. The archival data set is supplemented by access to some of the Company's private (and more recent) corporate records, plus interviews with retired and existing senior managers about these changes to their management accounting techniques, up to 2005. Therefore, this study is based upon an extensive, unique and robust longitudinal data set.

Details

Journal of Accounting & Organizational Change, vol. 9 no. 3
Type: Research Article
ISSN: 1832-5912

Keywords

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