Inertia and management accounting change: The role of ambiguity and contradiction between formal rules and routines

Accounting Auditing & Accountability Journal (Impact Factor: 1.1). 06/2009; 22(July):736-761. DOI: 10.1108/09513570910966351
Source: RePEc

ABSTRACT 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.

  • 01/2004;
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: Institutional theory and structuration theory both contend that institutions and actions are inextricably linked and that institutionalization is best understood as a dynamic, ongoing process. Institutionalists, however, have pursued an empirical agenda that has largely ignored how institutions are created, altered, and reproduced, in part, because their models of institutionalization as a process are underdeveloped. Structuration theory, on the other hand, largely remains a process theory of such abstraction that it has generated few empirical studies. This paper discusses the similarities between the two theories, develops an argument for why a fusion of the two would enable institutional theory to significantly advance, develops a model of institutionalization as a structuration process, and proposes methodological guidelines for investigating the process empirically.
    Articles & Chapters. 01/1997;
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: Remarkably little advice has been offered in the way of helping management develop appropriate strategies to cope with different forms of uncertainty. In an effort to fill this gap, the present article combines extant research from economics and strategy to identify two broad classes of uncertainty and the generic strategies that are appropriate to handle each class of uncertainty. We point out that organizational routines are ways to reduce pervasive uncertainty in decision making, whereas increasing the available information is appropriate when other, less demanding forms of uncertain situations arise. The argument is supported by empirical tests.
    Journal of Business Research. 02/2005; 58(6):746-757.