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The Rhetoric and Reality of An Accounting Change: A Study of Resource Allocation
Abstract
This paper presents a case study of health service resource allocation as a basis for exploring how organizational members come to understand the meanings and implications of accounting change within the enterprise. The analysis describes how the significance of a new calculative process emerges over time, during which accounting both shapes and is in turn shaped by organizational reality. The paper concludes with a discussion of the interplay between the rhetoric and reality of accounting, reviewing the ways in which, as an expressive order, accounting provides a language for discourse, rules for guiding action and a way of establishing legitimacy in an institutionalised organization.
... There has, thus, arisen a call for a more "interpretive" approach which seeks to gain knowledge of the meanings which organisational actors attach to accounting and the action they take with respect to it (e.g. Colville, 1981;Berry et al., 1985;Nahapiet, 1988). In the 1980s, accounting research has started to borrow from interpretive sociology (e.g. ...
... In the 1980s, accounting research has started to borrow from interpretive sociology (e.g. Pondy, 1983, 1986;Covaleski and Dirsmith, 1986;Nahapiet, 1988;Rosenberg et al., 1982). It has been argued that such an approach may offer new insights when adapted to accounting research (Chua 1988). ...
... The so-called interpretive accounting studies that are now emerging show that accounting is not a neutral technical activity, but is both a constituent and constitutive element of organisational practices (e.g. Roberts and Scapens, 1985;Nahapiet, 1988;Preston, 1989;Dent, 1991). The increasing use of this interpretive approach highlights the growing acceptance of accounting as a phenomenon which is subject to the influences of both the particular organisation and the wider social structure in which it functions (e.g. ...
p>This research uses an inductive theoretical development process based upon the 'paradigm model' developed by Strauss and Corbin (1990). Accounting practice, in both organisations, has been observed as a routine process with a limited function in managerial decision making. The grounded theory shows the change in perceptions of organisational members towards their organisational reality, with particular respect to accounting, as the central phenomenon. In Khartoum University, this represented a change in perceptions from a planning system to a poverty/crisis management system. On the other hand, the focal concept found in Sudan University of Science and Technology personifies a change in perceptions from a poverty/crisis management system to a decentralised budget planning system.
The conditioning context that influences the central phenomenon relates to three aspects, namely the higher education revolution ( which involved changes in the broader culture and the broader power structure of higher education), the financial crisis and the organisational response. Three interactional strategies, namely changes in accounting practices, changes in the organisational culture and change in the organisational power structure are representative of the major processes involved in managing and responding to the central phenomenon. The outcome of these interactional strategies is represented by a change in organisational processes/activities. Furthermore, the findings of this study lend further support to existing arguments that accounting is both a reflective and a constitutive practice. In addition, this field study represents an extension to previous studies which have explicated a mode of theorising linkages between accounting and culture. This study also offers an extended explanation of the role of accounting in a crisis situation through the use of a more empirically grounded approach.</p
... Relatively few authors make explicit in published output, declarations of the methodology guiding their research (see for example, Jonsson, 1982;Covaleski and Dirsmith, 1983;Preston, 1986;Laughlin, 1988;Gray et al., 1995;Ahrens, 1997;Granlund and Lukka, 1998;Dirsmith et al., 1997;Abdul-Rahman and Goddard, 1998) and even when this is stated there are grounds for contesting a good fit within the main interpretive methodologies (see Jonsson, 1982;Covaleski and Dirsmith, 1983). Some have taken a non-committal disposition and assumed an 'interpretive' and/or a 'naturalist and qualitative' methodology^ (see Rosenberg et al, 1982;Boland and Pondy, 1983;Berry et al, 1985;Dirsmith and Covaleski, 1985;Covaleski and Dirsmith, 1986;Boland and Pondy, 1986;Ansari and Euske, 1987;Covaleski and Dirsmith, 1988;Jonsson and Gronlund, 1988;Nahapiet, 1988;Innes and Mitchell, 1990;Ansari and Bell, 1991;Dent, 1991;Hoque and Hopper, 1994;Goddard and Powell, 1994;Chew and Greer, 1997.). For this reason, identification and attachment of methodological affiliation has been attempted, wherever possible, for each work reviewed but account has also been taken of prior classification effort. ...
... Accounting and change in organisational socio-cultural settings In Nahapiet (1988) it was shown that accounting was a constituting and a constituted component in organisational reality. Accounting changes were able to redefine resource statuses, heighten visibility of some cost categories and stimulate organisational change. ...
... Members of the organisation had two interpretive schemes through which different interpretations of accounting information were made. These findings are consistent with multiple interpretations of budgets and other accounting information observed in Boland and Pondy (1983) and Nahapiet (1988). ...
p>This research investigates the phenomenon of accounting in non-governmental organisations (NGOs). It seeks to understand accounting processes and reporting practices in NGOs and conditions that sustain those processes and practices. NGOs have become important institutions in world affairs but accounting research has not developed interest in their operations. Premised on an interpretive theoretical orientation this research executes a grounded theory strategy as the principal line of inquiry (Strauss and Corbin, 1990; 1998). However, since stakeholder relationships are important dimensions in NGOs, a stakeholder analysis framework (Mitchell et al., 1997) was also employed. Fieldwork was undertaken from June 1999 to October 2000 in three Tanzanian NGOs.
The research established the importance of accounting in the process of seeking, attaining and maintaining organisational legitimacy. Accounting communicated activities and scale of resource need and was the formal channel for justifying resource utilisation, but it was also an important legitimating catalyst because it symbolised organisational competence. When perceived to be adequate accounting enhanced organisational legitimacy. Increased availability of easily accessible donor funds; a weak and outdated regulatory regime; effects of stakeholder stature, organisational growth, conflicts; organisational credibility; the strength of cultural orientation; and the state of trust relationships emerged as other important conditions that facilitated or constrained the processes of navigating legitimacy.
The research contributes to interpretive accounting research by providing incremental evidence of previously observed phenomena but from organisational forms that have not been studied previously. It observes accounting to be intertwined with intra-organisational dynamics as well as inter-organisational dynamics that arise from interactions with, and meeting demands, or stakeholders. The research underscores the centrality of trust to organisational accountability and suggests that the relationship between accounting and trust is a multi dimensional one. Whereas accuracy, integrity, frequency, and coverage of accounting information affect levels of trust, the depth of trust relationships similarly influences the burden of accounting.</p
... The issue of accounting change has been investigated by Hopwood (1987), Nahapiet (1988), Dent (1991), Chua (1995), Cobb et al. (1995), Vaivio (1999), Bums and Vaivio (2001), Collier (2001), Kasurinen (2002), and Helliar et al. (2002). Closely related to this is the issue of organisational culture, which will be addressed in the next subsection, even though cultural elements are also referred to here in relation to change (e.g. ...
... Bums and Vaivio (2001) provide some comments on management accounting change more specifically. Two key interpretive contributions (Nahapiet, 1988;Dent, 1991) are now considered in more detail. Nahapiet (1988) presents a case study of health service resource allocation as a basis for exploring how organisational members come to understand the meanings and implications of accounting change within this specific context. ...
... Two key interpretive contributions (Nahapiet, 1988;Dent, 1991) are now considered in more detail. Nahapiet (1988) presents a case study of health service resource allocation as a basis for exploring how organisational members come to understand the meanings and implications of accounting change within this specific context. She analyses the implementation of a new calculative process of resource allocation in one regional health authority and its four area health authorities. ...
p>This research investigates the phenomenon of strategic management accounting in multinational companies. It seeks to understand strategic management accounting processes in use in a particular organisational context. Multinational companies are an important phenomenon of our time and researching strategic management accounting in such a setting promises rich insights into its use in a complex environment. Little is known to date on how strategic management accounting is undertaken in organisations and this research contributes to that field of knowledge. Premised on an interpretive theoretical orientation, this research involves a grounded theory study (Strauss and Corbin, 1990, 1998) based on data collected in a large multinational company in Germany.
The research establishes the importance of management accounting for the assessment of strategic situations. It was found that sense making was the main activity underlying strategic management accounting processes. Sense making was defined as involving the understanding of diverse situations, thereby finding and demonstrating their meaning to the company and individuals inside the company. The importance of sense making arose from the presence of a multiplicity of relevant aspects in the organisation's internal and external contexts, all of which had to be taken into account for the assessment of strategic situations. This put a premium on information, professional management accounting and interdisciplinary know-how, and a feel for the game, which intervened in sense making activities. As a consequence, there was found to be a need for an enhanced management accounting skills profile.
This research contributes to interpretive accounting research by providing incremental evidence of a particular phenomenon, strategic management accounting, in a particular setting. It presents rich insights into the use of management accounting in the case site, while also analysing the particular environment of its use, thereby contributing to an emergent understanding of accounting in organisational contexts.</p
... There are several contenders. For example, social constructionism has much to offer in understanding how what is measured and accounted for refl ects social values (Burchell et al ., 1980 ;Nahapiet, 1988 ) . Social identity theory offers important insights, for example showing how multiple representations of the self-individual, relational, and collective-can enrich our understanding of individuals-their attributes and actions (Sedikides and Brewer, 2001 ) . ...
... The second framework, developed in the context of research specifi cally exploring the links between social capital and intellectual capital, identifi es three dimensions that are important in understanding the links between knowledge and relationships. They are the structural, the relational, and the cognitive (Nahapiet and Ghoshal, 1998 ) . As the name suggests, the structural dimension refers to the overall pattern of connections between actors whereas the relational dimension describes the kind of relationships actors have in terms of such facets as trust, obligations, and emotional bonds. ...
... As Spender suggests, 'knowledge is less about truth and reason and more about the practice of intervening knowledgeably and purposefully in the world' (Spender, 1996 : 64) . Moreover, an emphasis on knowing also indicates that we may need to move to a richer view of social capital beyond the prevailing model which sees networks and ties primarily as conduits or pipes through which information and knowledge fl ow towards embracing a practice perspective on social capital (Nahapiet, 2009 ) . What becomes clear from these trends is that human capital and social capital are highly interrelated. ...
... Meanings and the search for the truth is possible only through social interactions (Streubert and Carpenter 1999). The inability quantitatively to measure some phenomena has led to intense interest in using other approaches to particularly human phenomena (Nahapiet 1988). ...
... This study was designed with an interpretive method of inquiry and was conducted in an organisational setting, as also suggested by Nahapiet (1988). This study used PT. ...
... Covaleski et al (1995), for example, believe that "...accounting is not only an instrument for representing economic reality...but also a rhetorical device for setting forth...". Moreover, Nahapiet (1988) concludes that accounting is a language for discourses, a set of rules for negotiating an understanding or an organisational reality and a mechanism for establishing and maintaining the legitimacy of social actions. An example of the use of rhetoric can be seen from a message by the Board of Commissioners in the 2003 annual report of PT. ...
This study is a case study conducted in an Indonesian insurance company. The aim of the study is to understand the dynamics of financial reporting in the company. Ontologically, this study is built on a belief that financial reporting practice is a socially constructed reality. As a socially constructed reality, such a practice involves an interaction among social actors, and between organisational actors and the institutional and cultural environment in which the company operates. The main research question of this study is why and how the company constructs its financial reporting to deliver messages to its audience. This study reveals that the company is committed to quality financial reporting because such reporting can be used to gain legitimacy and to maintain social harmony. Consequently, financial reporting is constructed as a rhetorical story about its performance, management ability and insight into the future.
... Meanings and the search for the truth is possible only through social interactions (Streubert and Carpenter 1999). The inability quantitatively to measure some phenomena has led to intense interest in using other approaches to particularly human phenomena (Nahapiet 1988). ...
... This study was designed with an interpretive method of inquiry and was conducted in an organisational setting, as also suggested by Nahapiet (1988). This study used PT. ...
... Covaleski et al (1995), for example, believe that "...accounting is not only an instrument for representing economic reality...but also a rhetorical device for setting forth...". Moreover, Nahapiet (1988) concludes that accounting is a language for discourses, a set of rules for negotiating an understanding or an organisational reality and a mechanism for establishing and maintaining the legitimacy of social actions. An example of the use of rhetoric can be seen from a message by the Board of Commissioners in the 2003 annual report of PT. ...
This study is a case study conducted in an Indonesian insurance company. The aim of the study is to understand the dynamics of financial reporting in the company. Ontologically, this study is built on a belief that financial reporting practice is a socially constructed reality. As a socially constructed reality, such a practice involves an interaction among social actors, and between organisational actors and the institutional and cultural environment in which the company operates. The main research question of this study is why and how the company constructs its financial reporting to deliver messages to its audience. This study reveals that the company is committed to quality financial reporting because such reporting can be used to gain legitimacy and to maintain social harmony. Consequently, financial reporting is constructed as a rhetorical story about its performance, management ability and insight into the future.
... Johnson and Christensen (2007) point out that the appropriate sites of business research and where theories relating to the complexities of change and its longer-term implications can be developed, are the organizations and institutions where business takes place. The interpretive case study approach, therefore, enables researchers to make sense of the evolution of accounting processes and its languages, as social practices with reference to surrounding institutions and underpinning routines (Nahapiet, 1988) on the basis of direct knowledge. ...
... The interpretative case study approach enables researchers to comprehend the complexities and progress of accounting processes as social practices with reference to their surrounding institutions and bases of routines (Nahapiet, 1988). The descriptive, illustrative, experimental, exploratory and explanatory functions of interpretive case studies are not based on pre-specified theories (Scapens, 1990). ...
Purpose
The purpose of this paper is to extend the knowledge claim of management accounting research using qualitative research methods, in particular, the interpretive case study, and its evaluation using “convincingness” criteria demonstrating the textual authenticity, plausibility and criticality of case study findings.
Design/methodology/approach
Qualitative research in the management accounting field considers both context and function (Burchell et al., 1980). This study sets out the rationale for adopting qualitative methodologies such as interpretive case studies in which rich, contextual and detailed data were collected and analyzed (Miles and Huberman, 1994; Mason, 2002). Methodological issues related to research design, analysis and evaluation are discussed by drawing on frameworks of social science research design. The paper sets out the procedures of an interpretive case study essential to ensuring the procedural validity of research which can be evaluated more accurately using the criteria of “convincingness” rather than positivist measures of the reliability, validity of data and the generalization of results. Textual authenticity, plausibility and critical interpretation, and how these hallmarks of “convincingness” can reflect the procedural validity of accounting research are described.
Findings
Qualitative research strategies such as the interpretive case study, which consider the complex settings of accounting change and practice, are found to offer deep understandings and convincing explanations of accounting change. Affirming that accounting is firmly established as a social science, the paper finds that the authenticity, plausibility and criticality of research in this field.
Research limitations/implications
The relevance of qualitative research to contemporary accounting research is considered as an effective method to explicate theory and inform practice, which suggests that new measures to evaluate related research are required to develop the potential of selected qualitative research methodologies in accounting domains.
Originality/value
Qualitative research in management accounting focuses on the interpretation of meanings found in people and organizations that are subject to the influence of contextual variables. Human attributes underpin accounting conventions and change resulting from continuous technological and regulatory advances. This paper’s comprehensive account of interpretive case study research emphasizes the significance of evaluative criteria that relate, beyond reliability, to the richness of the text. This, thus, encourages and supports new and emerging researchers to seek qualitatively coherent and critical interpretations in management accounting research.
... This approach is evident in the work that first drew me to Templeton-the study of accounting in its social and organizational context. 20,21 It is in this spirit that I now pursue the premise that many of the core ideas about organizations developed in previous times and different places live on-embedded in our thinking and practice-even though the circumstances of our time and the resources available already provide radically different alternative forms of organizing that challenge these core ideas. ...
... The book stimulated a great deal of debate in Europe-particularly about whether the paradigms were incommensurate or could be combined in some way. It highlighted the importance of a socially constructed world in which the creation and negotiation of meaning is a central endeavour 21 and it brought power centre stage in discussions about organization. In so doing, it raised again in a more radical and complex form the issues raised earlier by Gouldner about theoretical alternatives to rational systems models. ...
... They distinguished competitive isomorphism from three types of institutional isomorphism: (i) coercive isomorphism, guided by legal or governmental requirements; (ii) mimetic isomorphism, which engages the use of successful organizations' practices, usually in not defined contexts; and (iii) normative isomorphism, which comes from shared values and thoughts, often distributed through professional networks and education. Finally, Nahapiet (1988) argued that the significance of legitimacy is higher in organizations that face high ambiguity and visibility daily, such as WUs. Nevertheless, according to some scholars, legitimacy theory alone cannot fully explain the influence of stakeholders (Manes-Rossi et al. 2021). ...
Materiality is a key principle enabling organizations to determine what information to disclose, serving as both a filtering mechanism and a strategic tool shaped by institutional dynamics. Institutional logics, which inform and legitimize organizational practices, significantly influence accountability and reporting processes, including the application of materiality. Effective water management is essential for sustainable development, making the water industry a key sector for exploring materiality and stakeholder engagement within sustainability strategies. This study explores the integration of the materiality principle, stakeholder engagement, and related organizational practices into the sustainability strategies and reporting of the European water industry between 2020 and 2022. Through content analysis of sustainability reports from 26 European water utilities, the study identifies three primary stakeholder engagement approaches: one‐way communication, dialogic interaction, and multi‐directional dialog. The prevailing trend is a dialogic approach that has evolved over time, though concerns about its relevance and effectiveness remain. Additionally, the study examines disclosed material topics, noting a dominant focus on environmental concerns and health and safety, with economic and governance issues receiving comparatively less attention. It emphasizes the need to improve the materiality process by integrating insights from accounting research into organizational practices and underscores the importance of effective stakeholder engagement for fostering trust and collaboration, particularly in vital sectors like water management. The findings offer valuable perspectives for policymakers, emphasizing the need to design robust mechanisms that promote stakeholder engagement. While progress in this area in recent years is evident, as demonstrated by this research, it must quickly evolve into a fundamental component of effective water management to avoid the risk of becoming merely an organizational façade.
... Recently a discourse has emerged as a result of FASB's approach of constructing reality [236][237][238][239][240][241][242] which is added to the debate on accounting truth and reality [225,229,[232][233][234][235][243][244][245][246][247][248][249][250][251][252][253]. Professor Sterling's [256] warnings [257] and others' warnings of the coming crisis in accounting [258] have been ignored. ...
Corporate failures trigger corporate regulations. The corporation is a fiction that is theorized as a nexus of contracts. Mechanisms for monitoring corporations, namely the external audit function and corporate governance, have been promoted and propagated. Whether corporations are governable is a question. An argument made in the accounting literature is that the audit function has been successful because of the ability of external auditors to appear independent when they might not be. The board of directors of such corporations may appear governing executive managers while they are in fact not or cannot. With the ideology of “profit over people,” multinational companies run the world with CEOs who are the most powerful individuals in the corporate model. Without corporate financers’ active involvement, corporations are unleashed. Corporate financers need to be aware of their power and be able to hold executive management accountable to make their corporations good citizens of the globe. Corporate monitoring mechanisms do not make up for their absence in the corporate model, which makes the view that corporations are founded to maximize the value of absentees naïve. A long history of corporate failures has proven its fallacy.
Keywords
corporate model; corporate accounting; monitoring external auditing.
... Its apparent accomplishment in the US accounting academy is rhetoric [9,104,119]. Accounting can best be viewed as rhetoric [132,133]. Some important concepts in accounting, for example, auditor independence, is justified rhetorically [134]. ...
The needs for economic systems that humans constructed throughout time have been the driving force for accounting technological inventions starting with bookkeeping, followed by double-entry bookkeeping. Many civilizations and societies have contributed to the development and advancements of accounting. To this effect, Italy was a fortune county in which the number of “antecedents” converged, and thus, is
considered the place of origin for modern accounting. Italy as a society cannot be held solely responsible for its birth, nor can its citizens be credited for the invention of accounting. Attributing the creation of accounting to Pacioli and the dating of its origin to 1449 require further consideration, rendering the questions of who invented accounting and when wide open. In the absence of hard evidence, speculating
such a defining moment is the optimal contemporary accounting research produces. Accounting has retained its usefulness in societies through its adaptability to new roles when the master of the business is present. The business model needs to be revisited and retheorized when accounting is not serving well. A social paradox results from financing the operations of corporations and becoming their victims. Accounting cannot compensate for owners’ absence in the business model selected for conducting business. Accounting research inquiring about the role of accounting and questioning its usability and benefit to society labeled ‘critical’ or ‘historical’ or deeming such discourse radical should be one of the mainstream accounting research instead.
Keywords: Accounting origins; Pacioli; Civilization; Accounting roles; Corporate accounting; Corporations; Bookkeeping; Double-entry bookkeeping; Single bookkeeping; Triple bookkeeping.
... In spite of the social loyalty and biases of accounting, though unobvious, are masked by the self-importance of objectivity and independence (Tinker et al. 1982, 167). This is aligned with the argument that accounting objectivity is a "myth" (Hines, 1988;Morgan, 1988;and Young, 2003) and "rhetoric" (Nahapiet, 1988;Thompson, 1991). Society deceptively is left with an imagined world and sufficient with the rhetoric of a profession as important as accounting, and a function as sensitive as auditing, and a concept as critical as auditor independence. ...
The audit function in a corporate model can be a defective tool in monitoring executive management. Arguably, the Sarbanes-Oxley act (SOX) inadvertently has placed auditors in unwanted positions while increasing their independence. Auditors' reliance on their clients for collecting information, financial dependence, and self-bias in processing information restrain them from neutrally and objectively judging corporate reporting. Mandated rules can never substitute integrity and the desired objectivity by shareholders. By reconceptualizing the result of the relationship as a general partnership where trust plays a critical role, this study considers the relationship between management and their auditors, offers an explanation about the audit firms' behavior, and offers reasons for the failure of some audit for committing unethical actions. The analysis leads to testable empirical and policy implications. Accounting theorists should be on board critiquing and retheorizing positively but not normatively: A corporation with the absence of an objective party that shareholders count to attest corporate reporting impartially.
... They cite Nahapiet's (1988) study of changes to a resource allocation formula in the UK's National Health Service in which stakeholders strongly contested the formula's loose design and its subsequent multiple interpretations consistent with dissonant translation highlighting the need for greater operational guidance and consequential clarity and consistency of use in practice. Indeed, of direct relevance to a financial accounting context, Mennicken and Power (2015, p. 211) comment that "valuation practices may eventuate in single figures"…but that they are "inherently malleable…delineating the complex and contested nature of specific accounting valuation practices" whose subsequent interpretation by users belies the apparent precision of recognised assets on the balance sheet. ...
Research and development (R&D) is increasingly significant in the global economy and its accounting treatment has always been, and remains, a contentious area. The standard governing its accounting treatment under International Financial Reporting Standards is IAS 38 Intangible Assets. This was issued in 1998 and remains in force today. This study contrasts the thinking of the standard setters in the historical development of the standard with evidence through 17 interviews with contemporary buy-side and sell-side equity investors. Specifically, we examine the decision-usefulness of R&D accounting information to them, and especially that of the capitalisation of development costs. This unique insight reveals that investors find R&D accounting information useful for decision making, are supportive of the principle of the mandatory capitalisation of development costs, subject to meeting specified conditions, and are very much opposed to a US expense all treatment. However, they do not regard such assets as providing an adequate signal of future value creation to them, which was the expectation of the standard setters. This is attributed to the perceived vagueness and subjectivity of the conditions currently in the standard. The theoretical framing of dissonant translation is employed to unpick these tensions. The study makes significant contributions to the standard setting and R&D strands of the financial accounting literature and the findings raise important policy implications.
... Environmental aspects (e.g. social, political and economic) have an essential impact on the actual accounting practices and information within organisations (Siverbo, 2012;Nahapiet, 1988). Therefore, a change in the orientation of accounting practices was essential in the Emirates company context. ...
Benchmarking is the continuous process of measuring products, services and practices against competitors recognised as industry leaders. This study focuses on understanding and explaining the problems that confront companies which implement benchmarking practices. Attention is centralized on two aspects of the process that lead to these problems. Benchmarking is an exogenous process for the company as well as a multivariate one. Further discussion is devoted to culture and the company’s issues relevant to benchmarking. This paper argues that when benchmarking is implemented, the sensitivity and behaviour of managers are more influenced by’ vivid’ than by statistical information. The availability heuristic that influences the benchmarking decisions of managers is also described. The main concentration of the paper is a concern with benchmarking processes in the context of a developing country.
... Environmental aspects (e.g. social, political and economic) have an essential impact on the actual accounting practices and information within organisations (Nahapiet, 1988). ...
Benchmarking is an important technique that organisations seek to implement to obtain superior performance. This study focuses on understanding and explaining the problems that confront organisations that implement benchmarking practices. Attention is focused on two aspects of the process that lead to these problems. Benchmarking is an exogenous process for an organisation as well as a multivariate one. Further, discussion is devoted to culture and organisational issues relevant to benchmarking. This paper argues that the sensitivity and behaviour of managers are more influenced by `vivid' than by statistical information when benchmarking is implemented. It also describes the availability heuristic that influences the benchmarking decisions of managers. A central focus of the paper is a concern with benchmarking processes in the context of a developing country.
... Accounting played different roles in the construction of reality (Burchell et al. 1980;Hines 1988) and in managing uncertainty (Chong and Chong 1997). Accounting provided certain language and discourse that constitute a way of establishing legitimacy in highly ambiguous situations (Nahapiet 1988). We argue that accounting has a role in making public sector organizations more resilient, with relevant policy and managerial implications. ...
There are various factors that can affect an organization’s ability to overcome a crisis and the uncertainties that arise thereafter. Little is known about the process of organizational resilience and the factors that can help or prevent it. In this paper, we analyzed how public sector organizations build resilience/traits of risks awareness, and in doing that, we derived some elements that could affect the process of resilience. In particular, drawing on the conceptual framework proposed by Mallak we analyzed an in-depth case study in a public sector organization (PSO) identifying some contextual dimensions implicated in the process of building resilience. In our analysis, we identified two main elements that affect resilience: Risk perception and the use of accounting. Results shown how risk perception is perceived as a trigger, while accounting is considered as an enforcer in the process of building resilience capacity. The results also show the way accounting is implicated in the management of austerity programs and supporting the creation of a resilient public sector organization. In our case, the risk has become an opportunity for change. In the face of these budget cuts, management began refocusing the company’s mission from infrastructure maintenance to providing services with a market-based logic.
... Sobre o tema, a literatura nacional, até então consultada, tem se concentrado em pesquisas quantitativas realizadas, em sua maior parte, a partir dados contábeis publicados em sistemas coletores dos Tribunais de Contas, e/ou repositórios do Governo Federal, não adentrando em analisar percepções dos profissionais de contabilidade, bem como questões organizacionais, culturais e estruturais envolvidos no processo. Por outro lado, a comunidade acadêmica internacional tem demonstrado um grande interesse nas discussões sobre mudanças das normas contábeis (Nahapiet, 1988). O debate, que antes era voltado para as questões normativas (Hammerschmid & Meyer, 2005), hoje se concentra no entendimento dos impactos e processos de mudança em nível organizacional (Liguori & Steccolini, 2012;Liguori, 2012). ...
O objetivo do artigo foi investigar e analisar a percepção de uma amostra de contadores públicos brasileiros sobre a adoção das Normas Brasileiras de Contabilidade Aplicada ao Setor Público no Brasil, atualmente em processo de convergência com as normas da Internacional Federation of Accountants (International Public Sector Accounting Standards). A literatura consultada tem se concentrado em pesquisas quantitativas realizadas a partir das informações contábeis publicadas em prestações de contas junto aos Tribunais de Contas e repositórios do Governo Federal, não adentrando em analisar percepções dos profissionais de contabilidade envolvidos no processo. A teoria da contingência foi abarcada como lastro conceitual. O estudo é exploratório e de caráter descritivo, tendo sido coletados dados por meio de questionário eletrônico, utilizando o método de análise fatorial exploratória. A amostra contou com 168 respondentes. Os resultados indicam que há necessidade de mudanças organizacionais, estruturais, sensibilização da alta administração, de competência técnica-profissional e culturais nos segmentos de contabilidade e auditoria interna dos entes públicos brasileiros visando atender à convergência. Os achados contribuem também para o debate e reflexão sobre o processo de amadurecimento e busca de soluções para adoção de uma contabilidade pública que atenda as demandas de informações dos mais diversos grupos de interessados (internos e externos).
... To understand the evolution, causes, directions and pathways of such changes in different types of organisations, different approaches can be used (Nahapiet, 1988;Carruthers, 1995;Libby & Waterhouse, 1996;Dambrin et al., 2007). In an attempt to identify the causes that generate a significant change and its results, some authors have attached great significance to different types of social and relational factors (Abernethy & Vagnoni, 2004;Bhimani, 1996). ...
The paper sheds light on management control strategies in public administrations, particularly in the case of Legislative Assembly of the Emilia-Romagna Region (AL-RER), to understand reasons, process and effects in the introduction of a management control system. The research makes use of documentary analysis and participatory observation during the years 2015-2019 to reconstruct the motivations, process and results of the introduction of a new management control system. The analysis shows that the introduction of a management control system required different strategies of change and a reorganisation of activities and processes of AL-RER. It also offered an occasion of legitimisation of the AL-RER governance based on the management control results. Furthermore, the analysis shows that the process of introducing a management control system faced obstacles that acted as inhibitors to its introduction. It was possible to overcome the obstacles thanks to an intermediate step, which required a revision of the AL-RER strategies, and a cultural, political, and organisational change. The paper contributes to the advancement of knowledge on the subject of strategies and processes followed by public sector organisations, in particular by regions, in the introduction of management control systems, offering a first contribution concerning obstacles and benefits deriving from the introduction of such systems. The research is also of interest for public sector management, politicians and technicians, as well as for management control specialists, that have to make decisions about the introduction of management control systems.
... providing language for certain discourses (Nahapiet, 1988). Research into the unintended role of numbers indicates that they can provoke resistance and drive organizations toward inefficiency, because only what is being measured counts (Townley, Cooper, & Oakes, 2003). ...
This article examines the role of numbers in forming a city strategy in the case of Gothenburg, Sweden. The article illustrates how numbers make people act and react and shape the strategy process. The study is situated between the theoretical fields of accounting and strategy processes in cities. By relating them to the concept of ‘governmentality’, numbers are seen as helping render the city governable. Because strategizing is seen as concerning the future, the actors involved in drafting the strategy feel free to challenge historically institutionalized practices. The effect is paradoxical: the future-looking strategy process becomes a forum for solving current problems.
... Therefore, based on the coherence between ontology, epistemology and human nature assumptions, this study was designed with an interpretive method of inquiry and was conducted in an organisational setting, as also suggested by Nahapiet (1988). ...
This study is a case study conducted in an Indonesian insurance company. The aim of the study is to understand the dynamics of financial reporting in the company. Ontologically, this study is built on a belief that financial reporting practice is a socially constructed reality. As a socially constructed reality, such a practice involves an interaction among social actors, and between organisational actors and the institutional and cultural environment in which the company operates. The main research question of this study is how leadership influences the company on the construction of its financial reporting practice. This study reveals that leadership plays a crucial rule in shaping the social construction of financial reporting practice in the company. By placing themselves as a Bapak-father in the company, and seeing the company as a big family, the leader has successfully guided organisational members in running ethical business activities, including financial reporting practice. The leaders act not only as managers, but also as teachers and problem solvers. They have successfully behaved as exemplary models for their subordinates, exercised power through soft commands and avoided direct confrontations. What the company showed implies that its leadership style reflects the Javanese view on leadership, which is characterised by the image of leaders that are an exemplary model for their subordinates (ing ngarso sung tulodo), are able to empower subordinates (ing madyo mangun karso) and have a sense of responsibility to their subordinates (tut wuri handayani).
... As Nahapiet (1988) recommends, a concern with the meanings people attach to their social world can be of value as a means of understanding accounting change in a particular organization. As a matter of fact, new ways of accounting have to be understood in terms of their conditions of possibility, as well as their consequences, and made sense of (Miller, 1994). ...
The last few decades have witnessed substantial efforts to reinvent the state worldwide. While OECD countries have stood at the forefront of these developments, questions of how to modernize the public sector have been put on top of the agenda in many developing countries and those in transition more recently. The Russian state is no exception to this global trend. At the beginning of the new millennium, the need for renewal of the existing Russian model of the state has finally been acknowledged, and an up-to-date reform package has widely been promoted by the central government. Amongst other things, the latter has involved the reconstruction of accounting and financial reporting at the central government level and in particular public sector organizations in favor of accruals. This is what the subject-matter of this interpretative study concerns itself with.
Given the paucity of consistent research efforts on the topic in Western English-language literature, the present dissertation seeks to describe and analyze, and by so doing, to contribute to knowledge about Russian central government accounting in times of change. To tackle the general purpose, two levels are incorporated in this study in order to link reform initiatives for the government as a whole (i.e. the macro-level) with those attempts being made to implement them in a particular organizational setting (i.e. the micro-level), namely “Arkhangelsk State Technical University of Russia” (ASTU). The major questions to be addressed in this research project are whether, why and eventually how there have been changes at the central government level, and whether there are links to the university and its accounting system. In order to explore these research questions, a frame of reference guided by three theoretical approaches is elaborated. This troika includes a system approach to accounting, an accountability approach, and an institutional approach.
The evidence presented in this research project reveals that a new Russian public sector ideology has markedly been affected by overseas developments in the shape of large international organizations – the IMF, the World Bank, and the IPSASB. This external influence has penetrated the budgeting and accounting of the Russian central government. However, no compelling evidence has been documented in this research project unveiling that changes at the macro-level have penetrated down to ASTU to a significant extent. This study concludes that changes at the central government level have had their initial and most direct impact on formal rules at the university, but little or no impact on its everyday management activity. While an accrual-based Chart of Accounts and financial statements have penetrated formally down to the educational establishment, cash-basis data is still extensively used in the day-to-day management at ASTU.
In the light of the three theoretical approaches above, this major conclusion can be elaborated as follows. First of all, while there is a clear-cut shift towards information usefulness for decision-making at the macro-level, budgetary accounting is still an indisputable leader in its battle against action-oriented accrual accounting at the university level. Next, a move towards a new system of accounting and financial reporting can be perceived as facilitating the measurement of efficiency and effectiveness at the macroeconomic level. On the other hand, it can merely be seen as an ‘up-graded device’ to control public sector entities in those very names at the micro-level. Finally, normative isomorphic pressures have become the potent force for the federal government to launch new accounting techniques and financial reports in recent years. At the same time, Russian public sector accountants are deemed to have little or no say in this process. This means that the transformation of government accounting in Russia can now be seen as being more ideologically-driven at the macro-level, while still being hierarchically-driven at the micro-level.
Hence, changes in Russian central government accounting are for the state itself, intended to bolster its image as ‘modern’ and ‘progressive’ in the eyes of external parties and others. Rather than being instrumental, these changes are better comprehended in terms of legitimacy, promising to help reinvent the Russian public sector. The thesis then gives rise to some concerns about further implementation of the policy package embarked on at the macro-level. Finally, some fruitful propositions for new studies are discussed.
... This leads us to "see institutionalized, monolithic sets of meanings being imposed by [management accounting systems]" and thus ignore the "actor's creative, open possibilities for making meaning" (Boland, 1993, p.140). To some extent, the sharedness or commonality frameworks neglect the dynamic dimension of situated interactions, although many empirical studies (Nahapiet, 1988;Ahrens & Chapman, 2007;Boland & Pondy, 1986;Jönsson, 1998;Pentland, 1993) suggest that dialogical, creative interactions between different, pluralistic world views play a role in the shaping of collective activity that is at least as important as common views. ...
Following the scholarly view of accounting as a social practice, this research explores the role of accounting in managers' ongoing efforts to effectively understand and influence organizational change in the course of a series of review meetings. To study the role of accounting in meaning-making processes - i.e. collective processes of ascribing meanings to experienced social situations - we develop a processual and semiotic view of Goffman's theory of frames. Central to the paper's argument is the concept of framing, defined as an ongoing social process of context production in an unfolding situation. In this perspective, accounting numbers are viewed as signs mediating situated interactions. This theoretical framework is applied to complex situations of negotiation between a retailer and sixteen suppliers, under a category management approach. The crucial finding of our research, illustrated empirically, is the plurality of competing frames and the occurrence of frame-shifting episodes, the process by which one frame is suddenly replaced with another frame that has a deeply different way of narrating the situation: this process is triggered by a specific event, and the frame shift has potentially significant effects on practices. The case study highlights the mediating role of frames, and the plasticity and vulnerability of framing processes. It exemplifies the dual nature of accounting numbers in situated meaning-making: they can be viewed simultaneously as generic models - parts of social frames - and singular events - parts of the current situation. Due to this dual nature, they can act as mediators between a singular situation and socially-constructed, generic classes of meaning.
... With decision makers avoiding uncertainty (Bromiley & Rau, 2015;Heavey et al., 2009), the acceptance of a proposal with not clearly specified returns (as a result of uncertainty in the environment) becomes more difficult, even if based on familiar information. Therefore, actors who advocate the proposal have to provide argumentation in support of the proposal, using facts and evidence (Nahapiet, 1988;Pfeffer & Sutton, 2006) and engaging in dialogue with other decision makers in order to persuade them (Garbuio et al., 2015). The combination of formal An actor-centered perspective analysis (Cabantous & Gond, 2011;Langley, 1989) and rational justification (Garbuio et al., 2015;Lechner & Floyd, 2012), leads to a decision process with strong elements of comprehensiveness and rationality, while interaction among decision makers takes place in a comprehensive way as well (argumentation and dialogue). ...
In this paper we are looking into how firms make strategic decisions that either conform to
established strategies or introduce novelty and alter them. Building on the strategy process and
strategic decision-making literatures, we propose that strategic decisions, oriented towards
exploration or exploitation with respect to the established strategies of the firm, are the results
of decisions processes with specific characteristics. The way these processes unfold (more
rational-comprehensive or more political) is not pre-specified. Instead, actors (individuals or
coalitions) within the firm initiate decision processes, introducing information they gather
through search activities and directing the attention of other decision makers towards particular
issues. Furthermore, these actors use different methods and tactics to elaborate on the issues
they have introduced, and in favor of particular proposals. Through their actions and interactions
(with other decision makers), they shape both the processes of decision-making and the decision
outcomes (exploration or exploitation-oriented strategic decisions).
... In the context of designing and implementing accounting systems, management control scholars have been exploring how organizational groups use particular tools and technologies, such as costing and performance measurement systems, to advance their interests and values (Andon et al., 2007;Briers and Chua, 2001;Chenhall et al., 2013;Christiansen and Skaerbaek, 1997;Nahapiet, 1988). In particular, Chenhall et al. (2013) developed the concept of compromising accounts to describe the role of accounting tools such as performance measurement systems in facilitating the requisite (if temporary) compromises that heterarchies require. ...
This paper examines the role of calculative practices in the creation of the Charlie Chaplin museum, a multiparty cultural project with the mission to ‘bring back’ the great entertainer in an ‘authentic’ and commercially viable way. As with many other cultural organizations, there are multiple parties with competing and even conflicting objectives, leading to disagreement not only about the final objectives but also about the evaluative principles that would guide the parties towards consensus and productive action. Previous research in such settings has commonly portrayed accounting as a mediating practice which helps reconcile the dilemma between commerce and culture. We put forward accounting as a catalyzing—rather than compromising—factor in producing cultural goods. We develop this claim by examining the transformative power of calculative practices during the creation of the Chaplin museum.
... Dans le domaine de la comptabilité et du contrôle de gestion, un certain nombre de chercheurs anglo-saxons soulignent ainsi que les techniques et autres indicateurs de gestion contribuent avant tout à légitimer l'ordre social existant (Brosnan, 2005) et à reproduire certaines visions de l'organisation (Bloomfield & Vurdubakis, 1997 ;Colville, 1981 ;Nahapiet, 1988). Les indicateurs de gestion permettraient notamment aux dirigeants de justifier leurs décisions et de véhiculer une certaine idéologie managériale (Brosnan, 2005). ...
Based on an intervention research study on the implementation of the RATP “Bus Attitude” project and the consequent evolution of control methods, the article describes and analyses the ticket inspector “job genre”. It shows how certain management indicators can play a critical role in constituting and maintaining the “job genre”, sometimes even devitalizing it. The authors then question the relevance of acting on the management indicators to transform job practices and revitalize the “job genre”. The article highlights the advantages and limitations of such an action and examines the role of the researcher during the intervention.
... In the context of designing and implementing accounting systems, management control scholars have been exploring how organizational groups use particular tools and technologies, such as costing and performance measurement systems, to advance their interests and values (Andon et al., 2007;Briers and Chua, 2001;Chenhall et al., 2013;Christiansen and Skaerbaek, 1997;Nahapiet, 1988). In particular, Chenhall et al. (2013) developed the concept of compromising accounts to describe the role of accounting tools such as performance measurement systems in facilitating the requisite (if temporary) compromises that heterarchies require. ...
This paper examines the role of calculative practices in the creation of the Charlie Chaplin museum, a multiparty cultural project with the mission to 'bring back' the great entertainer in an 'authentic' and commercially viable way. As with many other cultural organizations, there are multiple parties with competing and even conflicting objectives, leading to disagreement not only about the final objectives but also about the evaluative principles that would guide the parties towards consensus and productive action. Previous research in such settings has commonly portrayed accounting as a mediating practice which helps reconcile the dilemma between commerce and culture. We put forward accounting as a catalyzing—rather than compromising—factor in producing cultural goods. We develop this claim by examining the transformative power of calculative practices during the creation of the Chaplin museum.
... In the context of designing and implementing accounting systems, management control scholars have been exploring how organizational groups use particular tools and technologies, such as costing and performance measurement systems, to advance their interests and values (Andon et al., 2007; Briers and Chua, 2001; Chenhall et al., 2013; Christiansen and Skaerbaek, 1997; Nahapiet, 1988). In particular, Chenhall et al. (2013) developed the concept of compromising accounts to describe the role of accounting tools such as performance measurement systems in facilitating the requisite (if temporary) compromises that heterarchies require. ...
... Basecl on the coherence betwecn ontology, epistemology, and human nature as-rssN 2087--3735 sumptions. this stucly r'vas designed with an interpletive methr:cl of inquiry ancl was conducted in an organisational setting, as also suggested by Nahapiet (1988). This stLrdy enrploved PT. ...
This study is aimed is to understand a ritual in financial reporting practice of a single com- pany, and how institutional theory is useful to explain such ritual through institutionalized isomorphism. Ontologically, this study is built on a belief that financial reporting practice is an institutional practice concerning the supply of information. As such, this study employed interpretive paradigm and was conducted in an insurance company, as a research setting. To improve the credibility of the research findings, the data were collected from interview, ob- servation, and document analyses which were manually analyzed using a method suggested by Marshall and Rossman (1999) and Seidel (1998). It reveals that financial reporting prac- tice has been perceived by organizational members of PT ABTBK as an institutionalized rou- tine that becomes a ritual in the company. Financial reporting practice is seen as a ritual of constructing and delivering information to an audience using “a holy guidance of ceremony” (regulations, law, standards and procedures). In doing so, the company employed three insti- tutionalized isomorphism as explained by the institutional theory. It advocates that financial reporting practice of the company is a socially-dynamic process that is not value free, but rather a socially constructed reality.
... Trust keeps individual's mind open to all evidence; therefore, secures communication and dialogue (Misztal 1996). Where high levels of trust exist, people are more likely to take risks in social exchanges (Nahapiet 1988;Ring and Van de Ven 1992) and more open to the value creation through exchange in relations (Nahapiet and Ghoshal 1998). ...
Online communities have become a common means for people with shared interests to exchange information with each other. Although several studies have been undertaken to understand individuals' motivation to contribute to online communities, little is known about how individuals adopt the information they receive through these communities. Therefore, this study aims at addressing this gap by investigating the process of information adoption in online communities. Drawing upon the Elaboration Likelihood Model, we argue that quality of the information, information recipient's level of trust in the online community and the information source trustworthiness are important factors in the process of information adoption in the context of online communities. Moreover, the information recipient's expertise and involvement in the issue related to the received information determine which factor is more dominant in this process.
... In a slowly emerging research agenda, management control scholars have been exploring how organizational groups use particular tools and technologies, such as costing and performance measurement systems, to advance their interests and values (Andon et al., 2007; Briers and Chua, 2001; Chenhall et al., 2013; Nahapiet, 1988). In particular, Chenhall et al. (2013) developed the concept of compromising accounts to describe the role of accounting tools such as performance measurement systems in facilitating the requisite (if temporary) compromises that heterarchies require. ...
This paper examines the role of calculative practices in the creation of the Charlie Chaplin museum, a multiparty cultural project with the mission to ‘bring back’ the great entertainer in an ‘authentic’ and commercially viable way. As with many other cultural organizations, there are multiple parties with competing and even conflicting objectives, leading to disagreement not only about the final objectives but also about the evaluative principles that would guide the parties towards consensus and productive action. Previous research in such settings has commonly portrayed accounting as a mediating practice which helps reconcile the dilemma between commerce and culture. We put forward accounting as a catalyzing—rather than compromising—factor in producing cultural goods. We develop this claim by examining the transformative power of calculative practices during the creation of the Chaplin museum.
... The controls literature suggests that, when productivity and accountability are emphasised in organizational objectives, accountants as well as accounting controls tend to gain a new importance in such organizations (Hopwood, 1985;Dent, 1991;Abernethy and Chua, 1996;Ogden, 1995). On the one hand, accounting becomes a facilitating mechanism in promoting such goals (e.g., to rationalise actions [Scapens & Roberts, 1993;Nahapiet, 1988;Hopper, Cooper, Lowe, Capps, and Mouritsen, 1986;Berry et al., 1985] and in changing the culture [Dent, 1991]), and on the other hand the increased use of accounting information further reinforces the adoption of such concepts (Burchell, Clubb, Hopwood, Hughes and Nahapiet, 1980;Abernethy and Lillis, 1995). ...
... In general terms, the choice of rhetoric as an enriching device for the analysis of documents stems from the potential that it manifested in social sciences (Latour, 1987), economics (McCloskey, 1998) and accounting research (Arrington and Schweiker, 1992) studies to elucidate the persuading strategies employed by standard-setter (Young, 2003) or by the promoters of new technical mechanisms (Berland and Chiappello, 2009) to gain institutional legitimacy (Nahapiet, 1988). Most importantly, for the sake of the argument proposed, rhetoric has been recognized as one of the main drivers able to explain the recurrence to consultancy work (Berglund and Werr, 2000). ...
The paper provides some insights into the rationales, processes and actors according to which Intangibles Reporting (IR) has reached a (soft) regulatory stage in the German business context since the mid 2000's. It draws on the "logic of appropriateness" (March and Olsen, 1992; 1997) combined with the "rhetoric of the expert" (Czarniawska, 1997) in order to examine the documents published in relation to IR. The analysis demonstrates how in Germany this (soft) regulation of reporting of these resources has been mainly realized by a group of management consultants. It is of a particular interest that in the Guidelines they have devised and promoted, the ad hoc organizational figure, the moderator, that has been identified as central for the proposed intangibles reporting does not belong to the accounting domain. This way, the work contributes and expands on previous debates in relation to the "professional jurisdiction" that has made claim throughout the arena of Intangibles by accountants (Napier and Power, 1992; Power, 2006), illustrating an example of an alternative site in which its professionalization and regulation can occur (Cooper and Robson, 2006). Specifically, it is suggested that the actors and the ways in which regulation is created and perpetuated have sometimes to be disentangled from the ones created within the accounting field.
... While an increased emphasis on transparency opens up a space for accounting (Chua & Preston, 1994;Heald, 2006aHeald, , 2006bHeald, , 2012Messner, 2009;Nahapiet, 1988;Roberts, 2009;Strathern, 2004), concerns have been expressed over the capability of hospital accounting systems to make meaningful connections with hospital managers (Jones & Mellett, 2007;Lawrence, Alam, & Lowe, 1994;Preston, Cooper, & Coombs, 1992). Indeed, the financial reporting infrastructure in this hospital when it was both religiously owned and when it became a public sector hospital, was weak. ...
Abstract
This paper examines the experiences of a publicly owned hospital which had formerly been part of a religious order of nuns. This paper presents novel findings to extend our understanding of the emergent theory of transparency in the public sector. The literature on secrecy and transparency is drawn upon to inform a case study investigation of the use of accounting under both forms of ownership. This reveals both the continuing influence of this hospital's prior existence and the difficulties of adapting to public ownership. The findings reveal the tensions of the change from secretive religious organisation and history of parsimony to current public sector organisation. The end state of public sector ownership brings its own difficulties, with accounting systems failing to achieve the aim of transparency.
Keywords: Charity; Religious secrecy; Public ownership; Transparency; Health care
... A focus on the changing relations between volumes and costs in advanced manufacturing (Jonsson and Gronlund, 1988) allows one to understand how practices and procedures are worked out in local settings. In so far as new ways of -20accounting have to be understood and made sense of, an understanding of accounting change in a particular organisation can similarly be facilitated by referring to the meanings people attach to the social world (Nahapiet, 1988). The emergence of a new accounting based organisational culture can be analysed using an interpretive or ethnographic frame (Dent, 1991). ...
The roles of accounting in shaping the economy are currently being rediscovered by sociologists (Callon, 1998; Fligstein, 1990; Granovetter, 1985). This recent revival of interest in accounting marks a further stage in a curious pattern of alternate attention and neglect on the part of sociologists towards the practices that make the economy visible and measurable qua economy. This paper reviews the different ways in which accounting has been given a wider sociological significance across the twentieth century. It argues for a focus on how new calculative practices emerge within historically specific assemblages, and how they alter the capacities of agents and organisations, and the interrelations among them. Investment appraisal practices are used to illustrate. The paper is in five sections. Section one introduces the paper. Section two considers briefly the work of Max Weber in the early 20 th century, and the link established in his writings between accounting and rationalisation. Section three considers a subsequent stage, with a markedly different focus, namely the emergence in the 1950s and 1960s of a substantial literature on budgeting. Heavily influenced by theories of group dynamics, this
... Meanings and the search for the truth is possible only through social interactions (Streubert and Carpenter 1999). The inability quantitatively to measure some phenomena has led to intense interest in using other approaches to particularly human phenomena (Nahapiet 1988). ...
This study is a case study conducted in an Indonesian insurance company. The aim of the study is to understand the dynamics of financial reporting in the company. Ontologically, this study is built on a belief that financial reporting practice is a socially constructed reality. As a socially constructed reality, such a practice involves an interaction among social actors, and between organisational actors and the institutional and cultural environment in which the company operates. The main research question of this study is how organisational culture influences the company on the construction of its financial reporting practice. This study reveals that the company is committed to quality financial reporting because such reporting can be used to gain legitimacy and to maintain social harmony. The company conducts itself in this way is because it reflects Javanese culture, a dominant culture in Indonesia. Furthermore, this study concludes that the way the actors in the company construct financial reporting practice is influenced by its organisational culture. The organisational culture of the company, which reflects Javanese culture, is able to shape the behaviour of its actors from the top level to lower levels to conduct ethical and transparent business practice. Thus, as Hines (1988) claims, this paper concludes that financial reporting practice is a socially constucted reality.
The article is mainly about the possibility of using corporate governance as a means of signaling to the market that the actions of executives are governed. This is possible in theory by putting in place corporate governance mechanisms while their effectiveness might not be as should be. The assumption is that corporate executives are more powerful than all corporate stakeholders and other parties involved in the corporation. Corporate executives can utilize the appearance of governing their behavior while they are unleashed to opportunistically behave. Two types of individuals can suit the appearance of a corporate governor while they are not: illiterate individuals whose knowledge in accounting, finance, and business is weak and individuals who are willing to cooperate with the executives The argument presented in the article is important to parties financing the corporation's operations, mainly, shareholders. This article is an extension to the stream in the literature that the corporate model of conducting business is a challenge. We probably have not yet fully understood it.
Keywords: Corporations; Governance; Appearance; Opportunism; Human Nature
تتناول هذه المقالة بشكل أساس إمكانية استخدام حوكمة الشركات، كوسيلة للإشارة إلى السوق، أنَّ تصرفات المديرين التنفيذيين تخضع للرقابة، وهذا ممكن من الناحية النظرية من خلال وضع آليات حوكمة الشركات، في حين أن فعاليتها قد لا تكون كما ينبغي، فالافتراض أنّ المديرين التنفيذيين للشركات أقوى من جميع أصحاب المصلحة في الشركات والأطراف الأخرى المشارِكة في الشركة، يُمْكن للمسؤولين التنفيذيين في الشركات الاستفادة من صورية التحكم في سلوكهم، بينما العنان لهم للتصرف بشكل انتهازي غير محكوم.
هناك نوعان من الأفراد يُمْكن أن يتناسبوا مع صورية حوكمة الشركة وهم ليسوا كذلك: الأفراد الأميون الذين تكون معرفتهم بالمحاسبة والمالية والأعمال الضعيفة، والأفراد الذين هم على استعداد للتعاون مع المديرين التنفيذيين، إنّ الجدل المقدم في هذا المقال مهم للأطراف التي تموّل عمليات الشركة المساهمة، وبشكل رئيس المساهمين. تُعدُّ هذه المقالة امتدادًا للتيار البحثي الموجود في الأدبيات القائل: بأن نموذج الشركة في إدارة الأعمال يمثل تحديًا، ربما لم نفهم الأمر بالكامل بعد.
الكلمات الدالة: الشركات، صورية الحوكمة، الانتهازية، الطبيعة البشرية
تج عن انفصال الملكية عن الإدارة في أنموذج الشركة المساهمة الحاجة لأن يصادق طرف خارجيٍ على تمثيل القوائم المالية التي أعدّتها الإدارة التنفيذية للشركة المساهمة لمركزها المالي والأداء المالي والنقدي والتشغيلي لإدارتها التنفيذية، كما نتج عن وجود الشركة المساهمة المسموح بتداول أسهمها في السوق والبورصات ظهور فئة في المجتمع متربصة بالأسعار، وأوجدت المحاسبة مفهوماً فحواه أنها خادمة كل متخذ قرار رشيد، إلا أنّ مفهوم’ متخذي القرار‘ في المحاسبة مَحْضُ خيالٍ، فلم تستطع المحاسبة المالية لما يزيد عن قرن زمان وحتى لحظتنا هذه تقديم أنموذج للقوائم المالية والتقارير الملزومة شركة المساهمة بإعدادها ونشرها ملبيةً بها حاجات مموليها، فتعد القوائم المالية بناء على معايير المحاسبة المالية، فهي ممثلة للحقيقة ما مثلتها هذه المعايير، فالحقيقة في المحاسبة مستحيلة وليست انعكاساً للحقيقة الاقتصادية القائمة عليها الوحدة المحاسبية.
إن مصادقة المراجع الخارجي على القوائم المالية للشركة المساهمة المعدة من قبل إدارتها التنفيذية تجعله شريكها في إعداد القوائم والتقارير المالية، إنّ ما يعطي قيمة لرأي الطرف الخارجي هو تمتعه بالمعرفة الفنية التي تمنحه امتيازاً عن باقي أفراد مجتمعه، كما أن استقلاله عن الإدارة التنفيذية ركيزة عمله ومهنيته، إلا أنّ البحث الأكاديمي في المحاسبة والمراجعة يضفي شكاً في موضوعية المراجع الخارجي بل وقدرته على الاستقلال، فعلاقتهما للتعاون أقرب تصوراً منها للتناحر والتدافع تمثيلا لمصالح الطرف الغائب عن العلاقة التعاقدية بينهما، إن المراجعة الخارجية هي المهنة الوحيدة التي على ممتهنها مراقبة من يقبض منه المراجع الخارجي أتعابه خدمةً لطرف غائب في العلاقة التعاقدية، فلا يقدّم المراجع الخارجي خدمة مراجعة القوائم المالية وتقارير الشركات المساهمة خدمةً مجتمعية أو تطوعية، وإنما هي خدمة بمقابل تغطيةً لنفقاته وتحقيقاً لمصدر دخل، كما إنّ مهارات العمل والتعامل مع عملاء شركة المراجعة من الأهمية بمكان في شركة المراجعة، كما أنّ قيادة ارتباط المراجعة بأنموذج الشريك الواحد في تنفيذ ارتباطات المراجعة مصدر مخاطرة، إنّ المراجع الخارجي نتاج مجتمعه، فالعقيدة التي عليها مجتمعه يعتقدها هو، وهي مما يؤثر على قرارته، فهي ميزان الأمور، إن تعضيد استقلالية المراجع الخارجي حتى في حضرة التشريعات غير كفيل باستقلال ذهن المراجع الخارجي.
كلمات مفتاحية
الحقيقة, المراجعة, محاسبة الشركات المساهمة
The separation of ownership and management in the corporate model resulted in the need for an external party to certify the representation of the financial statements prepared by the corporation’s executive management of its financial position and the financial, cash and operational performance of its executive management. The existence of the corporation whose shares are traded in the market and stock exchanges also resulted in the emergence of a class in society, lurking for price fluctuation. Accounting has founded a concept that it is the servant of every rational decision maker. However, the concept of ‘decision makers’ in accounting is imaginary. Financial accounting has not been able for more than a century and until our present moment to provide a model for the financial statements and reports that the corporation is required to prepare and publish in response to their so-called needs of its financiers. The financial statements are prepared based on financial accounting standards, which represent the contemporary accounting truth. Such truth is impossible and is not a reflection of the economic reality on which the accounting entity is constructed.
The external auditor’s approval of the corporate financial statements prepared by its executive management makes him its partner in preparing the financial statements and reports. What gives value to the opinion of the external party is his possession of the technical knowledge that gives him an advantage over the rest of the members of his society, and his independence from the executive management is the foundation of his work and professionalism. However, academic research in accounting and auditing casts doubt on the objectivity of the external auditor and even his ability to be independent, as their relationship is closer to cooperation than to opposition, representing the interests of the party absent from the contractual relationship between them. External auditing is the only profession whose practitioner must monitor whom he receives his fees in service to watch the interest a part that is absent in the contractual relationship. The external auditor does not provide the service of auditing the financial statements and reports of corporations as a community or voluntary service, but rather it is a service in exchange for covering his expenses and achieving a source of income. Also, work skills and dealing with the audit firm’s clients are of great importance in the audit firm, and leadership. Reliance on the one-partner model in implementing audit engagements is a source of risk. The external auditor is a product of his society. The doctrine that his society follows is his belief, and it is what affects his decisions. It is the balance of matters. Strengthening the independence of the external auditor, even in the presence of legislation, is not sufficient for the independence of the mind of the external auditor.
Keywords: Auditing, Corporate Accounting, Truth,
This paper explores the impact of neoliberalism on Australia's public higher education system. It examines flaws in the university system revealed by the COVID-19 pandemic and identifies how the conditions created by neoliberal policies have limited universities' capacity to respond to a crisis. The paper reviews the previous literature on universities, neoliberalism policies, and new public management practices. It uses data from the literature, newspapers, and contemporary documents to shape an overview of the Australian public sector university system up to 2021 and its transformation by stealth. The impact of this transformation has been a heavy reliance on international onshore student fees to fund operations, infrastructure, and research activities. COVID-19-related public health measures have caused a significant downturn in the number of international students studying in Australia, in turn, creating a financial crisis that has seen many tens of thousands of university staff losing their jobs and courses being cut. The transformation has also seen accountingization of both individual academic and university performance to become the norm. The quantified performance metrics associated with accountingization have become universities' new language, and their goal displaced ends. Revenue generation and expenditure has been privileged over making a contribution to the nation and society. We call for a radical rethinking of the public sector university mission for the ultimate benefit of the Australian community.
This paper investigates the rhetoric deployed by the International Integrated Reporting Council (IIRC) to legitimise itself and Integrated Reporting ( ) and establish its ideology. We draw on Aristotle’s rhetorical appeals – ethos, logos, and pathos – and the rhetorical theory of diffusion to conduct a rhetorical analysis of the IIRC’s initial documents. Our findings demonstrate how the IIRC’s rhetorical strategies serve to: authorise and moralise the IIRC’s actions through ethos and pathos; contrast certain social interests and privilege a capitalist ideology through logos; and establish and maintain the IIRC’s authority in a way that reflects the interests of the financial community and investors, again, through ethos. We demonstrate how the IIRC has strategically used rhetoric to gain support and develop its authority by contrasting and resisting competing ideological pressures. We also show how a capitalist ideology emerged from this struggle as the shaping force behind at the cost of marginalising wider social interests. Examining the IIRC’s rhetorical process contributes to understanding the ideological struggle surrounding and enriches our empirical understanding of the ideological turn of rhetorical strategies. Our study contributes to theory and practice by advancing knowledge on the rhetorical strategies that shape and establish dominant ideologies in accounting practice.
This chapter offers a thorough overview of the literature on organizational controls and links that literature to organizational learning. This ensures survival of the organization, which becomes able to (1) detect problems inside the organization or in its fit with the external environment, and (2) correct problems, finding solutions and reacting to environmental changes. Organizations should use both adaptive single-loop and generative double-loop learning processes. The former ensure short-term survival, while the latter provide a solid basis for long-term success. This chapter focuses on the key element of control systems as a structural characteristic worth investigating to understand different types and the relative amount of learning in organizations.
Scholars of the theory of the firm have begun to emphasize the sources and conditions of what has been described as “the organizational advantage,” rather than focus on the causes and consequences of market failure. Typically, researchers see such organizational advantage as accruing from the particular capabilities organizations have for creating and sharing knowledge. In this article we seek to contribute to this body of work by developing the following arguments: (1) social capital facilitates the creation of new intellectual capital; (2) organizations, as institutional settings, are conducive to the development of high levels of social capital; and (3) it is because of their more dense social capital that firms, within certain limits, have an advantage over markets in creating and sharing intellectual capital. We present a model that incorporates this overall argument in the form of a series of hypothesized relationships between different dimensions of social capital and the main mechanisms and processes necessary for the creation of intellectual capital.
How single organizations manage the process of change and why only some of them are able to actually reach radical change are central questions in today's theoretical debate. The role played by the process of change and its dimensions (namely, pace, sequence and linearity), however, has been poorly investigated. Drawing on archetype theory, this paper explores: (i) whether a specific pace of radical change exists; (ii) whether different outcomes of change are characterized by different sequences of change in key-structures and systems (iii) how the three dimensions of the process of change possibly interact. As an example of organizational change the study takes into consideration processes of accounting change in three departments of two Canadian and two Italian municipalities. The results suggest the supremacy of the sequence of implemented changes over the other two dimensions of the process in order to achieve a radical outcome of change.
This paper explores the relationship between organizations in ambiguous situations, the technology of choice and the uses of internal accounting systems (systems of cost accumulation, performance evaluation and budgetary control). Accounting systems are examined in terms of the two elements of March's technology of foolishness (Civilokonomen, May 1971, pp. 7-12). Relaxation of traditional prohibitions in choice behaviour against imitation, coercion and rationalization suggest that accounting systems might be understood both in terms of their impact on sustaining and influencing an organization's culture and language and in terms of their ideological and legitimizing influence in maintaining systems of power and control in organizations. Allowing playfulness in the choice process suggests that accounting systems might be designed to facilitate creativity and innovation in organizations, insofar as these characteristics are appropriate in contributing to organizational effectiveness.
The aim of this chapter is to survey developments in the application of organization theory to management accounting research to provide accounting researchers with a basis for designing future research projects that will make useful contributions in this area. The original intention was to examine recent empirical work in organization theory with a view to identifying topics and methods that might be fruitfully applied in management accounting research. However it rapidly became apparent that organization theory is not a coherent body of work but highly fragmented and that it faces many of the same problems as management accounting research. Thus more attention is given to some of the theoretical issues that have arisen in organization theory as they closely parallel issues that are important in the development of management accounting research. Accounting researchers should not assume that organization theory is a well-ordered body of knowledge awaiting application to management accounting, but rather they should be aware that the operation of accounting systems in organizations is a topic of interest in both disciplines and might best be explored in conjunction. My conclusion on completing the survey is that the most important current contribution that could be made is the development of ‘grass roots’ research designed to describe and explain how management accounting is used by organizations in the context of other organizational processes.
Argues that the formal structure of many organizations in post-industrial society dramatically reflect the myths of their institutional environment instead of the demands of their work activities. The authors review prevailing theories of the origins of formal structures and the main problem which those theories confront -- namely, that their assumption that successful coordination and control of activity are responsible for the rise of modern formal organization is not substantiated by empirical evidence. Rather, there is a great gap between the formal structure and the informal practices that govern actual work activities. The authors present an alternative source for formal structures by suggesting that myths embedded in the institutional environment help to explain the adoption of formal structures. Earlier sources understood bureaucratization as emanating from the rationalization of the workplace. Nevertheless, the observation that some formal practices are not followed in favor of other unofficial ones indicates that not all formal structures advance efficiency as a rationalized system would require. Therefore another source of legitimacy is required. This is found in conforming the organization's structure to that of the powerful myths that institutionalized products, services, techniques, policies, and programs become. (CAR)
A dialectical approach to the study of organizations is proposed and contrasted to conventional approaches. Established perspectives fail to deal with the production of organizational arrangements or to analyze the entanglement of theories in those arrangements. The dialectical approach places at the center of analysis the process through which organizational arrangements are produced and maintained. Analysis is guided by four basic principles-social construction, totality, contradiction, and praxis. The organization is seen as a concrete, multileveled phenomenon beset by contradictions which continuously undermine its existing features. Its directions depend upon the interests and ideas of people and upon their power to produce and maintain a social formation.
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Evidence suggests that educational organizations lack internal coordination. This is especially true of the content and methods of what is presumably their central activity--instruction. Instruction tends to be removed from the control of the organizational structure, both in its bureaucratic aspects and in its professional or collegial aspects. Such organizations are "loosely coupled," which means that structure is disconnected from activity, and activity is disconnected from its effects. For instance, there is no technology or program of instruction that is of established or consensual efficacity. Thus, it is difficult even to establish standards of content and procedure in instruction. Despite this lack of coordination, the educational system and its organizations appear to have considerable stability. That is the problem of this paper--to explain how organizations with few controls over their central activity persist so stably, and to explain how implicit coordination is achieved. The explanation takes two forms--a general explanation of how substantive educational activity is coordinated outside of organizational (or professional) forms, and a discussion of the implications of this explanation for the understanding of educational organizations, decision-making, change in educational organizations, and theory of organizations. Areas of needed research are pointed out. (Author/IRT)
Short courses, books, and articles exhort administrators to make decisions more methodically, but there has been little analysis of the decision-making process now used by public administrators. The usual process is investigated here-and generally defended against proposals for more "scientific" methods. Decisions of individual administrators, of course, must be integrated with decisions of others to form the mosaic of public policy. This integration of individual decisions has become the major concern of organization theory, and the way individuals make decisions necessarily affects the way those decisions are best meshed with others'. In addition, decision-making method relates to allocation of decision-making responsibility-who should make what decision. More "scientific" decision-making also is discussed in this issue: "Tools for Decision-Making in Resources Planning."
Debates regarding research methods in the social sciences are linked directly to assumptions about ontology, epistemology, and human nature. After reviewing a range of positions relating to these assumptions, we argue that the dichotomy between quantitative and qualitative methods is a rough and oversimplified one. Contemporary social science is dominated by commitments to research methods almost as ends in themselves, resulting in abstracted modes of empiricism based on both quantitative and qualitative methods. Qualitative research is an approach rather than a particular set of techniques, and its appropriateness derives from the nature of the social phenomena to be explored.
This paper adopts a critical stance towards behavioural accounting research methodology. It is argued that most accountants have based their behavioural research on the natural scientific approach, a paradigm whose relevance and suitability for conducting social research has been increasingly questioned in recent years. The author discusses some alternatives to the positivistic research methodology of the natural sciences as a way of developing social science and the implications these have for providing a coherent theoretical and methodological perspective for future “behavioural accounting” research.
Accounting theory elaborates imagery. Working within a framework defining a numerical view of reality, accountants draw on different images of the accounting process to elaborate different theories of accounting. This paper examines how different images have shaped developments in financial accounting and considers the implications for future theory and research.
Research on accounting in its organizational context is most fruitfully done by attempting to understand how its rational and natural aspects interact within the lived experience of individuals. Accounting serves both objective and symbolic functions. Research that emphasizes a genuine union of the two aspects reveals accounting's role as a complement and supplement to more qualitative and interactive forms of problem solving. It also reveals that accounting is a technique that must be transcended to be used effectively and that its inadequacies challenge humans as moral agents.
This paper compares some uses made of accounting by modern societies with the use of witchcraft in less advanced ones. A common factor is a need for machinery to accommodate awkward facts in a way which does not undermine the fundamental beliefs of the culture. Western examples of this behaviour are analysed, and it is hypothesised that it occurs because low morale increases sensitivity to good and bad news. Such sensitivity affects the efficiency and existence of the organization.
Traditional approaches to management control usually fail for public and not-for-profit activities.1 The type of control applicable to such activities depends on four criteria: are objectives unambiguous, outputs measurable, effects of interventions known, and is the activity repetitive? Depending on where activities stand with regard to these criteria, the control applicable corresponds to one of six different types: routine, expert, trial-and-error, intuitive, judgemental, or political control. The first three types can be represented by cybernetic models; the other three ask for more complex and less deterministic models. For these, a “political” and a “garbage-can” model are described. Key elements in the latter models are the values and the culture of the actors. As an example, the topology for management control is applied to the area of budgeting, covering regular budgeting as well as such techniques as PPBS, MBO, and ZBB and distinguishing between investment budgets, operations budgets for input centers, and operations budgets for input-output centers. Coming back to management control in general, the paper discusses the consequences of choosing the wrong model for a given management control situation: it distinguishes between “Type I” and “Type II” errors. It finally relates management control to organizational adaptation and suggests how to avoid control systems which prevent an organizational system from learning.
The purpose of this paper is to present the elements of a radical humanist critique which suggests that the discipline of organization theory has been imprisoned by its metaphors, and to stimulate an awareness through which it can begin to set itself free. The paper explores the relationship among paradigms, metaphors, and puzzle solving showing how organization theory and research is constructed upon a network of assumptions that are taken-for-granted. The metaphorical nature of theory and the implications of metaphor for theory construction are examined. A theoretical and methodological pluralism which allows the development of new perspectives for organizational analysis is suggested. While orthodoxy is based upon a few metaphors characteristic of the functionalist paradigm, metaphors characteristic of other paradigms, which challenge the ground assumptions of orthodoxy, are shown to have much to offer.
Background to the 1975 reorganisation -- The Department of Health and Social Security and the Regional Health Authorities -- The districts - Medical services -- Dental, ophtalmic and pharmaceutical services -- Nursing services -- Health Service staffs and industrial relations -- Financing the National Health Service -- The Public and the National Health Service -- The future Pertenece al fondo donado por D. Félix Mansilla
The objective of this article is to analyse the way in which budget allocation decisions have been made in the National Health Service (NHS) of Britain. Despite the criticisms of the pre-1948 health care system on the grounds of geographical inequity, it was not until nearly twenty-five years after the service's inception that explicit allocation formulae were devised and implemented in an attempt to achieve equity, defined as equal financial resources for health care for those in equal need.
The article is divided into four sections; the first analyses briefly the establishment of the NHS in 1948 and the failure of policy-makers to rectify the significant inequalities in the distribution of health care inputs between the regions. The second section is concerned with the official recognition of the policy problem of geographical inequality in resources and the first attempt to rectify it. In the third section the most recent set of resource allocation formulae for England, Scotland and Wales will be analysed and compared. The final section offers some brief conclusions.
The paper seeks to contrast the roles that have been claimed on behalf of accounting with the ways in which accounting functions in practice. It starts by examining the context in which rationales for practice are articulated and the adequacy of such claims. Thereafter consideration is given to how accounting is implicated in both organizational and social practice. The paper concludes with a discussion of the implications for accounting research.
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