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Management Accounting Research 18 (2007) 125–149

Management Accounting Research 18 (2007) 125–149



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Management Accounting Research 18 (2007) 125–149
Management AccountingIssues in interpreting its nature and change
Cristiano Busco
, Paolo Quattrone
, Angelo Riccaboni
Universit`a di Siena, Faculty of Economics, Piazza S. Francesco 7, Siena, Italy
Sa¨ıd Business School and Christ Church, University of Oxford, Park End Street, OX1 1HP Oxford, UK 
Studiesintheareaofmanagementaccountingchangehaveproliferatedinthepastfewyears.Itseemsthentimeforsystematizing the analysis of management accounting change along some key dimensions which can prompt somefurther reflection. This paper proposes to organize such reflection along these dimensions: the agents and object of change; the forms and ratio of change; the space and time of change; and the interplay between change and stability.This systematization, the paper argues, will help us to relate a reflection on the process of change with the natureof management accounting itself. Studying change entails a reflection on
changes and studying what changesimplies a reflection on the nature of management accounting and its ability to become what is not, i.e. its
.© 2007 Elsevier Ltd. All rights reserved.
Management accounting; Change and stability; Nature of management accounting; Heteromogeneity
1. Introduction
“I definitely agree we need to improve our processes of integration within [MEGOC], we shallcommunicate better and engage more effectively in day-to-day operations
. . .
at present, despite thesix common strategic imperatives, each business line is a kingdom on its own, we know that
. . .
However, I have heard we are introducing a new system called Balanced Scorecard that run withinthe SAP’s platform [MEGOC’s Enterprise Resource Planning system] and allows us to monitorthe achievement of our strategic imperatives along four different perspectives of analysis. Let’s seewhat it is like, and its impact on the job as I wouldn’t like to change my existing working practices
Corresponding author.
 E-mail address:
busco@unisi.it(C. Busco).1044-5005/$ – see front matter © 2007 Elsevier Ltd. All rights reserved.doi:10.1016/j.mar.2007.04.003
C. Busco et al. / Management Accounting Research 18 (2007) 125–149
because someone on the Board has fallen in love with the flavour of the month during a trainingcourse in London
. . .
(Operating Manager).Middle-East Gas and Oil Company (MEGOC) is a large corporation operating in the oil and gasindustry. The company is owned by the national government and the revenues generated constitute alarge part of the GDP of that country.
In 2002, following a call from the government for companiesto take some action to improve the local economy and increase the revenue generated for the country,MEGOC’sexecutivemanagementboardredefinedthestrategicdirectionofthecompany“tosignificantlyincrease its contribution to the country’s revenue needs and [
. . .
] consistently promote the developmentof the local economy” (MEGOC’s mission statement).OneoftheconcernsevokedbyMEGOC’soperatingmanagerrelatestowhetherchangeisgoodtohaveor should be resisted. He also questions the novelty of the proposed new technical solution, the BalancedScorecard (BSC) in this case, asking whether it is the result of transitory fads and fashions or of moreprofound reflections on effective organizational needs for such a new system, and on its effects on thecorporation and its employees.The quote reported above and the brief description which followed it are illustrative of many of thethemes that the literature on management accounting change has been addressing in these last few years,and that we also intend to recall and systematize in this paper, which opens the second
Management  Accounting Research
Special Issue on Management Accounting Change.In doing so we believe that the first building block of our systematizing effort concerns the issue of 
drives management accounting change and whether this is some hidden structural force,some clear individual agency, an opaque combination of the two or even something else. The operatingmanager rightly evokes ideals which are often mobilized for prompting change: ‘integration’ (seeBuscoet al., 2006; Dechow and Mouritsen, 2005; Hansen and Mouritsen, 1999),various ‘imperatives’ andslogans (seeQuattrone and Hopper, 2001, 2005, 2006),and so forth. Are these the drivers of change? Are they the result of broader environmental, contextual and institutional forces (see, for instance,Baines andLangfield-Smith, 2003; Carmona et al., 1998)or the product of individual visions which are translatedinto the framing attempt of the Balanced Scorecard (seeBloomfield and Vurdubakis, 1997)? Addressing these issues and offering some material for reflection is the first building block of thesystematization we intend to offer in this piece (seeFig. 1).
This is the disguised name of a company, the analysis of which will be used for illustrative purposes along the wholepaper. The insights from the MEGOC case are based on a longitudinal study conducted by one of the authors. From May 2003 toDecember2005wehadtheopportunitytocollectempiricalevidencethroughinterviews,observations,participationsinmeetingsand internal workshops. Overall, we conducted 32 interviews with managers and employees operating in various Divisions of MEGOC. The company is divided into seven major Divisions (or business lines):
Exploration and Producing
Gas Operations
 Refining, Marketing and International
Engineering and Operations Services
; and
Industrial Relations
. Thesebusiness lines are headed up by Corporate Heads at the Senior Vice President level, and all report to the President and CEO. Inaddition, support functions such as Corporate Planning, Information Technology, Human Resources and Management Services(where the internal consulting department is located) also report directly to the President and CEO of MEGOC.
This figure has been used by one of the authors in other papers (e.g.Quattrone and Hopper, 2001)but with different poles of interaction. What seems interesting though is that whatever issue one intends to study from a constructivist perspective, thisis always made of various concepts which appear as being in opposition and in need of being rethought under different terms.We begin in this paper by looking at issues of ‘agency’ in studying management accounting change, but this is done only forillustrative purposes and to follow the linearity of the paper for agency is indeed part also of the other poles constituting thefigure which are not sequential but all affecting issues of management accounting change.
C. Busco et al. / Management Accounting Research 18 (2007) 125–149
127Fig. 1. Issues in interpreting management accounting change and stability.
The second set of questions that the opening quote poses concerns the process through which theseideas and management accounting innovations travel and become successful (see, for instance,LapsleyandWright,2004).Thequotecallsforinterpretingtheirabilitytoattracthordesofpractitionerswhomoreor less genuinely believe that the latest innovation is able to solve a problem, make financial transactionsmoretransparent,holdemployeesmoreaccountable,andmakingthecorporationmoreintegrated(amonga plethora of many other hopes and myths).
are management accounting techniques able to spreadand become practiced (Quattrone, 2006)?
do they manage to engage practitioners who are driven bydifferent and sometimes opposing agendas?
do they manage to instil hope (of solving a problem, beit at the personal level of the manager or at the institutional level of the organization) in the perspectiveuser? All of this is still quite obscure. It seems to us that a greater understanding of the process throughwhich this happens (the
) can provide an understanding of 
this happens for it is also in how themanagement accounting solution is evoked and then performed, rather than only in the content it seeksto convey, that an understanding of successful management accounting practices can be gained. This isthe second speculation we intend to provoke in the debate on management accounting change.Establishing a link between
management accounting practices spread across organiza-tions, economies and societies is not without consequences. Going back to the opening quote, we couldbe led to believe, with the operating manager, that the decision to implement the Balanced Scorecardwas taken by some senior executive on a course in a prestigious business school in the UK. That seniorexecutive would have seen the BSC as a knowledge package easily transportable from cold Britain to hotMiddle-East. If this were the case (and indeed most consulting products are underpinned by that assump-tion), we would see a separation between the senior executive as agent (i.e. the subject of change—theactive
on the left hand side of Fig. 1)and the management accounting technique (i.e. the object of  change—the
on the right hand side of Fig. 1).Agency thus would either be in the individual or in the context as driving forces of change.However,ouroperatingmanagerissmarterandthusdoesnotbuythissimplestoryandthewholeprocessof management accounting change at MEGOC is more complex than a linear evolution from MEGOC‘without’and‘withtheBalancedScorecard.Wedonotwitnessa

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