Inertia and Management Accounting Change; The Role of Ambiguity and Contradiction Between Formal Rules and Routines
Purpose – This paper aims to investigate ways in which inertia obstructs the adoption of new management accounting rules. Drawing on the view of management accounting as organisational rules and routines, it aims to suggest various ways in which inertia can become more pronounced when new accounting rules challenge existing routines. Design/methodology/approach – A longitudinal case study was conducted at one of the largest banks in The Netherlands. This bank introduced a program called “Results Oriented Management”, which produced various new management accounting rules. Findings – The paper identifies various ways in which inertia manifested itself when new management accounting rules were introduced. Moreover, the paper shows that ambiguity and contradictions play an important role in the presence of inertia. Research limitations/implications – The identification of individual-level habits and scripts is a difficult undertaking. Through a focus on the performative and ostensive aspects of routines, some of the processes of inertia and change on an individual level are identified. This is a relevant method for students of management accounting change. Originality/value – Although it is well known that routines can produce inertia, the process by which this inertia is manifested and how this affects the adoption of new management accounting rules is still unclear. The paper aims to contribute to this understanding.
Available from: Gaël Le Mens
- "Organizations typically rely on procedural logics rather than consequential ones, and well-established procedures create obstacles to organizational change (Cyert and March 1963, Nelson and Winter 1982). The content of organizational memory—procedures, scripts, discourse, routines, and shared organizational culture—provides the source of inertia (Gilbert 2005, van der Steen 2009, Naslund and Pemer 2012). The more extensive the content, the stronger the inertial pressure. "
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ABSTRACT: This paper proposes a distance-based characterization of age-related structural inertia as an increasing constraint on the speed of change as organizations age. Our framework regards organizations as points in multidimensional metric spaces of architectures. Organizational change means movement in this space. The speed of change is the ratio of the distance between positions in a space and the time it took for the organization to make the move. We illustrate how our distance-based approach can be used to formulate theories of age-related organizational inertia by using this representation to develop a model for a possible mechanism: age-related cultural resistance to change based on the dynamics of exposure of organizational members to architectural features. Our proposed mechanism is distinct from prevailing explanations and leads to new predictions. We also illustrate the value of our distance-based approach in a reanalysis of Sørensen and Stuart’s study of age variations in firms’ patenting behavior [Sørensen JB, Stuart TE (2000) Aging, obsolescence, and organizational innovation. Admin. Sci. Quart. 45(1):81–112]. On the basis of patent citations, we construct a space that allows us to characterize the positions of organizations and the speed at which they change. We find that organizational age has a negative effect on the speed of change.
Organization Science 05/2015; 26(3):150320102201006. DOI:10.1287/orsc.2015.0966 · 4.34 Impact Factor
Available from: eprints.qut.edu.au
Available from: Joanne Meehan
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ABSTRACT: Procurement has a key role in sustainability as policies and practices need to extend beyond organisations' boundaries incorporating their whole supply chains. Guidelines on sustainability encourage procurement to make decisions that encompass the environmental, economic and social elements of the Triple Bottom Line (TBL). Taking a supply chain perspective, procurement also need to analyse how decisions impact on the TBL in respect of suppliers. The results of a survey of sustainable procurement practices in 44 English-based UK Housing Associations (HAs), who are responsible for the provision of social housing, confirms prior research of other sectors that suggests 1) a failure to overcome inertia in relation to sustainable procurement; and 2) in the few examples where practices have been established, only the environmental element of the TBL is considered. The organisations surveyed have sustainability-related issues in their missions and external and internal pressures to embed sustainability, yet this has not translated into widespread establishment of sustainable procurement. Recommendations to neutralise inertia are: firstly, take the experiences from other areas, e.g. innovation management, which stress the importance of inter-organisational relationships; secondly, develop a small number of sustainable development indicators for procurement and, to take advantage of the relatively more-advanced environmental practices to show how these elements have socio-economic impacts; and finally, rather than focus on just the pressures and drivers of sustainability (as suggested in strategic models of sustainability), emphasise the triggers that overcome inertia and lead to changes in behaviour amongst procurement staff i.e. the establishment of ethical pricing models. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.
Business Strategy and the Environment 02/2011; 20(2):94 - 106. DOI:10.1002/bse.678 · 2.88 Impact Factor
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