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Managing Multiple Institutional Logics and the Use of Accounting: Insights from a German Higher Education Institution

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Abstract

This paper examines the use of accounting in managing the co‐existence of different institutional logics in a German higher education institution (HEI), and its impact on the HEI. The study is of particular interest as the HEI analyzed pursued its own corporatization through a re‐organization from a state into a foundation university. We show that this corporatization through the adoption of new public management related ideas leads to institutional complexity arising from the co‐existence of extant state and emergent business logics. Our study suggests that HEIs may deploy particular accounting practices shaped by business logic only superficially, so as to satisfy stakeholders such as governmental authorities in order to enhance their legitimacy following a self‐imposed reform, while the operation of the HEI remains rooted in state logic. Specifically, the findings suggest that in the case of actual changes to the budgetary process arising through the corporatization and an emergent logic, failure to replace abandoned accounting practices shaped by a previously dominant logic with equivalent practices adhering to either extant or emerging logic(s), may put the organization at risk. Overall, our study contributes to a better understanding of the dangers of an organizational response to institutional complexity, referred to as reactive decoupling, in the management of institutional complexity and points to its negative impact on organizations' hybridization capability.

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... Recently, many studies have elaborated on the implications of co-existing institutional logics for management accounting (e.g., Kastberg & Siverbo, 2016), performance management (e.g., Giacomelli et al., 2019), and organisational identity (e.g., Kallio et al., 2020). The contexts of these studies are typically knowledgeintensive and professional industries or organisations, such as the finance sector (Battilana & Dorado, 2010;Lounsbury, 2002), health care (D'Aunno et al., 2018;, law firms (Cooper et al., 1996), higher education (Conrath-Hargreaves & Wüstemann, 2019), and various types of public-private partnerships (Johanson & Vakkuri, 2017) in which institutional complexity requires a new kind of organisational response (Greenwood et al., 2011). Despite the dominance of knowledge-intensive sectors and organisations in the literature on institutional logics, there are only a few studies explicitly investigating the implications of institutional logics for knowledge management (e.g., Currie & Suhomlinova, 2006;Mangen & Brivot, 2015;Oostervink et al., 2016). ...
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This paper examines the introduction of budgeting practices in situations where institutional logics are competing. The empirical cases, studied in two phases in the 1990s and in 2011, explore tensions that emerged between the new business logic, prevailing professional logic, and governance logic in the education field. We analyze the theorization of budgeting practices and their performative effect on cognition in organizations. We argue that competing logics in a field impact upon budgeting practices and theorization of the meanings attributed to budgetary outcomes. Our study contributes to the understanding of accounting in processes of institutional change, and the further development of neo-institutionalist theory by attending to the sources of practice variation and their relationship to competing logics. We advance four tentative theoretical propositions concerning the impact of multiple logics upon budgetary practices.
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The move from cash to accruals accounting by many governments is viewed as an aspect of an ongoing New Public Management agenda designed to achieve a more business-like and performance-focused public sector. Proponents argue that accruals accounting provides more appropriate information for decision makers and ultimately leads to a more efficient and effective public sector. The transition from cash to accruals accounting for UK central government departments was announced in the early 1990s and was embedded within approximately ten years. At that time there were clear indications that analogous changes, following a similar timeline, would occur in the Republic of Ireland (RoI). In reality, the changes were significantly less extensive. Utilising document analysis and interviews with key actors, this paper considers why a functioning accruals system was established in the UK whereas in the RoI the change to accruals accounting was a ‘road not taken’.
Article
This paper describes assumptions, rationale, and track-offs involved in designing the research methodology used in a longitudinal study of the relationships among changes in organizational contexts, designs, and effectiveness. The basic research question concerns when how, and why do different types of organizational change occur. Given this research question and a desire to develop and test generalizable theory about changes in organizational design and effectiveness, we conducted a longitudinal study of over 100 organizations. Data concerning the changes were obtained through four interviews spaced six months apart with the top manager in each organization. Each interview provided a short-term retrospective event history over the preceding 6-month interval in aggregate, the four interviews provided a 24-month event history for each organization. Additionally, periodic assessments of the state of the organization's context, design, and effectiveness were collected with two questionnaires spaced one year apart. Finally, in each organization, the top manager's personal characteristics were assessed after all other data were obtained. This paper examines the alternatives, advantages, and disadvantages of the research design decisions. With some hindsight, we also offer some suggestions for future researchers with similar goals of developing and testing generalizable explanations of change processes in organizations.
Article
In this paper we develop a theoretical model that helps to understand change in mature organizational fields by emphasizing the role of competing institutional logics as part of a radical change process. Our investigation into a large-scale, government-led health reform initiative in Alberta, Canada, is based upon a qualitative case study approach to understanding the process of field recomposition. This study focuses on the later portions of change in an organizational field - that is, rather than explaining the sources of change, we investigate how a field becomes re-established after the implementation of a radical structural change.
Article
This article examines one of the most significant phenomena of the late twentieth and early twenty-first centuries—the emergence of New Public Management (NPM). NPM has been widely adopted, internationally. However, its adoption is based on governments having faith in its deployment to transform their public sectors using private sector performance criteria. In this article, the case is advanced that the widespread use of NPM is often a cruel disappointment for governments. This is demonstrated by focusing on four key elements of NPM, as practised in the early twenty-first century—the role of management consultants, the development of e-government, the emergence of the ‘audit society’ and the increasing importance of risk management.
Article
This study examines firms' decoupling of informal practices from formally adopted policies through analysis of the implementation of stock repurchase programs by large U.S. corporations in the late 1980s and early 1990s, when firms were experiencing external pressures to adopt policies that demonstrate corporate control over managerial behavior. We develop theory to explain variation in the responses of firms to such pressures, i.e., why some firms acquiesce by actually implementing stock repurchase programs, while others decouple formally adopted repurchase programs from actual corporate investments, so that the plans remain more symbolic than substantive. Results of a longitudinal study of stock repurchase programs over a six-year time period show that decoupling is more likely to occur when top executives have power over boards to avoid institutional pressures for change and when social structural or experiential factors enhance awareness among powerful actors of the potential for organizational decoupling. The study has implications for future research on decoupling, organizational learning, and corporate governance.
Article
This article applies the convergent insights of institutional and resource dependence perspectives to the prediction of strategic responses to institutional processes. The article offers a typology of strategic responses that vary in active organizational resistance from passive conformity to proactive manipulation. Ten institutional factors are hypothesized to predict the occurrence of the alternative proposed strategies and the degree of organizational conformity or resistance to institutional pressures.
Book
1. Introduction to the Institutional Logics Perspective 2. Precursors to the Institutional Logics Perspective 3. Defining the Inter-institutional System 4. The Emergence, Stability and Change of the Inter-institutional System 5. Micro-Foundations of Institutional Logics 6. The Dynamics of Organizational Practices and Identities 7. The Emergence and Evolution of Field-Level Logics 8. Implications for Future Research
Article
This article examines the historical contingency of executive power and succession in the higher education publishing industry. We combine interview data with historical analysis to identify how institutional logics changed from an editorial to a market focus. Event history models are used to test for differences in the effects of these two institutional logics on the positional, relational, and economic determinants of executive succession. The quantitative findings indicate that a shift in logics led to different determinants of executive succession. Under an editorial logic, executive attention is directed to author‐editor relationships and internal growth, and executive succession is determined by organization size and structure. Under a market logic, executive attention is directed to issues of resource competition and acquisition growth, and executive succession is determined by the product market and the market for corporate control.
Book
A bestseller since its First Edition, Institutions and Organizations remains the key source for a comprehensive overview of the institutionalist approach to organization theory. W. Richard Scott presents a historical overview of the theoretical literature, an integrative analysis of current institutional approaches, and a review of empirical research related to institutions and organizations. He offers an extensive review and critique of institutional analysis in sociology, political science, and economics as it relates to recent theory and research on organizations.
Article
Qualitative research is inquiry aimed at describing and clarifying human experience as it appears in people's lives. Researchers using qualitative methods gather data that serve as evidence for their distilled descriptions. Qualitative data are gathered primarily in the form of spoken or written language rather than in the form of numbers. Possible data sources are interviews with participants, observations, documents, and artifacts. The data are usually transformed into written text for analytic use. Selection of interview participants requires purposive and iterative strategies. Production of interview data requires awareness of the complexity of self-reports and the relation between experience and languaged expression. To generate interview data of sufficient breadth and depth requires practiced skill and time. Production of useful data from other sources is addressed. (PsycINFO Database Record (c) 2012 APA, all rights reserved)
Article
This article focuses on Public Service Bargains (PSBs) in the Organisation for Economic Co-operation and Development (OECD) world in an age of austerity and makes four main claims. First, both logic and recent history suggest that states can respond to financial crises in more than one way. Second, we argue that the pressures on existing PSBs are not all the same in this group of states, given observable differences in their financial vulnerability. Third, we analyze countries' differential exposure to two other major challenges, namely, that of population aging and environmental risk. Fourth, we show that those areas of vulnerability can counteract one another in some cases but be mutually reinforcing in others, and we argue that “triply vulnerable” states in a composite analysis are those likely to face the strongest pressure to change their existing PSBs. We conclude that while homogenizing pressures cannot be ignored, PSB diversity is likely to continue.
Article
Drawing on international research into changing university environments, profiles, and structures, this study applies a neo-institutional perspective to the analysis and critique of underlying developed country trends in public sector university corporatisation and commercialisation. Identifying primary environmental and historical influences, the paper focuses upon key environmental factors that have promoted the importation of new public management and private sector philosophies into universities of which a significant proportion have been traditionally identified as operating within the public sector. The findings reveal an underlying neoliberal political and economic agenda, that has laid the foundations for the profound transformation that has reconfigured universities’ governance, missions, core values and the roles of their academics. These changes emerge as mimicking private sector corporate philosophies and governance structures, as well as returning to scientific management approaches of a century ago. Accounting and accountability are revealed as conduits supporting these significant shifts in university identity and role. Their realignment with shifting societal economic preoccupations and priorities is revealed as permeating their intellectual core, commercialising knowledge production and transforming the identity and role of the academic community.
Article
Decoupling - the creation of gaps between formal policies and actual practices - is a ubiquitous organizational phenomenon. Yet, little research has examined how decoupling unfolds over time. This qualitative case study of a post-communist government agency develops process models of what precedes and what follows the decision to decouple. I show that the demography and ideology of powerful organizational members influence whether decoupling occurs, how it unfolds, and whether it is sustainable. Further, I suggest that decoupling may carry seeds of its own decay: under certain conditions, the decision to decouple can trigger demographic changes that eventually contribute to the erosion of decoupling. Full paper available online.