THE ADOPTION OF WESTERN MANAGEMENT ACCOUNTING PRACTICES IN TRANSITIONAL ECONOMIES: EVIDENCE FROM ROMANIA

Ctlin Nicolae Albu* Associate Professor of Accounting, PhD Bucharest Academy of Economic Studies, Romania Faculty of Accounting and Management Information Systems 6 Piaa Roman, sector , Bucure!ti, " "#$% Email& catalin'al(u)cig'ase'ro & Nadia Albu Associate Professor of Accounting, PhD Bucharest Academy of Economic Studies, Romania Faculty of Accounting and Management Information Systems 6 Piaa Roman, sector , Bucure!ti, " "#$% Email& nadia'al(u)cig'ase'ro & Flavius Andrei Guinea Lecturer of Accounting, PhD Bucharest Academy of Economic Studies, Romania Faculty of Accounting and Management Information Systems 6 Piaa Roman, sector , Bucure!ti, " "#$% Email& fla*ius'guinea)cig'ase'ro & Mathe !sa"en#i Professor of Accounting, PhD Birmingham Business School +ni*ersity of Birmingham +ni*ersity ,ouse Birmingham, B - .//, +0 Email& m'tsamenyi)(ham'ac'u1 * Corresponding !"#or

THE ADOPTION OF WESTERN MANAGEMENT ACCOUNTING PRACTICES IN TRANSITIONAL ECONOMIES: EVIDENCE FROM ROMANIA
A$s"r %" !his %a%er is concerned about the ado%tion of &estern "anage"ent accounting %ractices in organi'ations in transitional econo"ies, in %articular for"er co""unist econo"ies( !he ai" is to understand ho the "anage"ent accounting innovations are i"%le"ented and used in these environ"ents( !he e"%irical setting of our anal#sis is a large )o"anian construction co"%an# that had i"%le"ented and diffused &estern*st#le "anage"ent accounting innovations in its +, inde%endent subsidiaries-business units( Data for the stud# ere collected bet een +,,. and +,$, fro" "ulti%le sources, including se"i* structured intervie s, direct %artici%ant observations, infor"al discussions and docu"ent anal#sis( !he %a%er finds that over ti"e the internal decision facilitating role intended for the Manage"ent Accounting /#ste" 0MA/1 changed to ards generating infor"ation for e2ternal financial re%orting and ta2ation( Dra ing on Actor*Net or3 !heor# 0AN!1 the %a%er e2%lores the role of 3e# actors in sha%ing the MA/( &e'(ords: Manage"ent Accounting4 Financial )e%orting4 !a2ation4 Actor*Net or3 !heor#4 !ransitional 5cono"ies

THE ADOPTION OF WESTERN MANAGEMENT ACCOUNTING PRACTICES IN TRANSITIONAL ECONOMIES: EVIDENCE FROM ROMANIA
)* In"rod!%"ion !here is an increasing %ressure on transitional econo"ies to ado%t estern*st#le "anage"ent %ractices, including "anage"ent accounting innovations( !his %ressure is driven notabl# b# the ave of econo"ic and %olitical refor"s s ee%ing across these environ"ents( !hough the ado%tion of these estern %ractices %oses a nu"ber of challenges to transitional econo"ies in general, the issue is "uch "ore co"%licated in e2*co""unist transitional econo"ies due to various historical and social reasons( /ince the colla%se of the /oviet 6nion over three decades ago, a significant nu"ber of these e2* co""unist states have e"bar3ed on %olitical and econo"ic refor"s in an atte"%t to 7oin the 5uro%ean 6nion, attract estern invest"ent and also integrate into the global econo"#( Des%ite the refor" atte"%ts in these countries, several structures and institutions associated ith the co""unist era still %ersist and %ose %articular challenge to the functioning of estern ideals( )o"ania is an e2*co""unist countr# situated geogra%hicall# in Central and 5astern 5uro%e 0C551( /i"ilar to "ost of these e2*co""unist countries, )o"ania has i"%le"ented a nu"ber of refor"s, including strengthening its financial re%orting b# ado%ting the 8nternational Financial )e%orting /tandards 08F)/1 and also har"oni'ing ith the 5uro%ean 6nion Directives( !here have been suggestions that i"%rove"ents in financial re%orting could in fact have %ositive i"%acts on "anage"ent accounting develo%"ents( 8n this conte2t, 9ald"a and L::ts 0+,,+1 consider financial accounting;s refor" as a %rere<uisite for the develo%"ent of "anage"ent accounting( !here is ho ever ver# li"ited research to assess the state of "anage"ent accounting in these countries 09ald"a and L::ts, +,,+4 /'#chta, +,,+4 =>"osi, +,,?1( 9ence authors such as )e7c 0+,,.1 called for co"%arative studies in order to anal#'e the i"%act of local factors on "anage"ent accounting develo%"ent in these transitional econo"ies( 9ald"a and L::ts 0+,,+1 conclude that the li"ited research could be attributed to the fact that "anage"ent accounting is still in its initial stages of develo%"ent( @ut this could also be due to the argu"ent that the fe researchers that have focused on these environ"ents tended to have %reference for i"%roving financial accounting and re%orting and not "anage"ent accounting 0Moilanen, +,,A1( !his %a%er is about the ado%tion of estern*st#le "anage"ent accounting %ractices in organi'ations in e2*co""unist transitional econo"ies( @ased on a field stud# in a large )o"anian construction co"%an# that had ado%ted a "anage"ent accounting s#ste", the %a%er i+s to %rovide understanding of the %rocess of i"%le"entation and the uses of the "anage"ent accounting s#ste" in the organi'ation( &e ado%t an organi'ational %ers%ective, ith rich field studies in order to address t o "ain research <uestionsB ?

$( &hat %rocess as follo ed in i"%le"enting the "anage"ent accounting s#ste" in the organi'ationC +( 9o as the "anage"ent accounting used in da#*to*da# decision "a3ing in the organi'ationC 8n order to full# "a3e sense of the %rocess and uses of the "anage"ent accounting s#ste" in our case organi'ation, e ado%t actor*net or3 theor# 0AN!1( AN! hich has been idel# ado%ted in the "anage"ent accounting literature 0Chua, $DD.4 Preston et al', $DD+4 @a2ter and Chua, +,,?4 9#vonen et al', +,,E4 Pi%an and C'arnia s3a, +,$,4 Fustesen and Mouritsen, +,$$1 is %articularl# useful for us to be able to trace the roles of the various actors in the develo%"ent of the "anage"ent accounting s#ste" and to understand ho the s#ste" as i"%le"ented and used( !he re"ainder of the %a%er is structured as follo s( !he ne2t section %resents a revie of the literature follo ed b# the develo%"ent of our theoretical fra"e or3( !he research "ethods are then discussed after this follo ed b# the discussion of our results in line ith our theoretical fra"e or3( !he final section %rovides concluding co""ents( ,* Re-ie( o. Li"er "!re !here have been calls for studies to understand the ado%tion of "anage"ent accounting %ractices in transitional econo"ies 0Faruga and 9o, +,,+4 Nobre and )is3al, +,,?4 G;Connor et al', +,,H4 )e7c, +,,.4 9o%%er et al', +,,D4 6#ar, +,$,1( Anderson and Lanen 0$DDD, %( H,D1 noted ho transitional countries %rovide Ian un%aralleled o%%ortunit# to stud# the evolution of "anage"ent accounting %racticesJK !he transfor"ation of the econo"ies of China and e2*co""unist states in 5astern and Central 5uro%e to ards "ar3et ca%italis" and the e"ergence of countries such as @ra'il and 8ndia as global econo"ic %o ers have been the "otivations behind the increasing interest in understanding ho "anage"ent accounting o%erates in transitional econo"ies( For the e2*co""unist states, accounting refor" is often %roble"atic because of the %ersistence of socialist structures and institutions hich are inco"%atible ith estern accounting ideals( For e2a"%le, it has been argued that accounting under co""unis" lac3ed econo"ic content, and as engaged b# socialist govern"ents as a tool intended to "eet the re<uire"ents of a centrall# %lanned econo"# hich as lac3ing in %ro%erl# functioning "ar3ets 0@aile#, $DD.1( 6nder such circu"stances, accounting s#ste"s served the state interest here the# ere used to 3ee% record of ha%%enings ithin state* o ned enter%rises( Prices ere controlled b# the state, hence artificial and rendered accounting of little conse<uences in directing econo"ic actions( !he inconse<uential %lace accounting occu%ied in such econo"ies as not accidental, but as deliberatel# structured b# the state 0@aile#, $DD.1( !he advent of globali'ation, hich as acco"%anied b# co"%etition along ith other econo"ic challenges such as increases in in%ut %rices cou%led ith unresolved econo"ic crises "eant such s#ste"s ere unsustainable and have given so"e for"er socialist econo"ies the i"%etus to see3 transition leading to the creation of different sorts of "ar3et "echanis"s 06#ar, +,$,4 @aile#, $DD.1( !hese for"er socialist econo"ies ho are no under transition are H

ado%ting accounting %ractices 0including cost and "anage"ent accounting %ractices1 of ca%italist econo"ies in develo%ed countries 06#ar, +,$,1( !he "ean status <uo hich as intentionall# accorded to accounting in the for"er socialist states as infor"ed b# argu"ents that accounting as used as a tool of re%ression b# individuals in ca%italist econo"ies 0@aile#, $DD.4 Moilanen, +,,A1( Accounting as %erceived as that tool that as used to ac<uire legiti"ac# to a%%ro%riate sur%luses that ere collectivel# generated into %rivate coffers( Follo ing these argu"ents, such govern"ents ensured that accounting onl# had relevance hen it had to do ith furthering the interest of the state 0@aile#, $DD.1( 9ence, accounting onl# had controlling abilit# hen it as incor%orated into the centrali'ed ad"inistrative s#ste" here it as used to control the activities of state o ned enter%rises( 8t also beca"e useful 0as a "onitoring tool1 hen the safeguard of the %ro%ert# of the socialist govern"ent entrusted to state*o ned enter%rises as %ara"ount( !he sociall#*run central govern"ents %aid less attention to co""ercial considerations in the decision*"a3ing %rocess 0@aile#, $DD.4 Anderson and Lanen, $DDD1( All invest"ents decisions hich ere "otivated b# social and technical considerations ca"e fro" the central authorities( Further"ore, the %erfor"ance "easure"ent abilities of accounting ere rendered irrelevant as centrall#*run state*o ned enter%rises ere not accountable to the %ublic for their %erfor"ance( 8nstead of individual %erfor"ances of enter%rises being accessed, the central authorit# %aid attention to the overall econo"ic %erfor"ance of the countr#( !his s#ste" of overseeing the econo"# of the countr# rather than individual fir"s have i"%lications on "anage"ent accounting and control s#ste"s( !he econo"ic and %olitical changes associated ith transition or econo"ic liberali'ation have had their effects on "anage"ent accounting %ractices 0Anderson and Lanen, $DDD1( 5vidences of the effects of these changes including changes to their a%%lication and the ad"inistrative %rocesses involving their use are docu"ented 0Anderson and Lanen, $DDD4 6#ar +,$,4 Anh et al', +,$$1( !he evidence su%%orts the evolution and develo%"ent of "anage"ent accounting %ractices to fit the infor"ation needs of "anage"ent( Gra# and )oberts 0$DD$1 for instance noted that the transition fro" a centrall# %lanned econo"# to "ar3et liberali'ation "eant "ore e"%hases as laid on %rofit as the "easure of econo"ic efficienc# and for"s the core for the investigation of i"%act the transition "a# have on the accounting and control s#ste"s( Anderson and Lanen 0$DDD1 observed in their stud# of i"%act of the transition activities in 8ndia on "anage"ent and controls s#ste"s that the transition %rocess did not onl# have its effects on "anage"ent accounting %ractices but also on other as%ects of organi'ational %ractices hich are tied to "anage"ent accounting( !he changes observed did not onl# have i"%act on the %ractices, but also on the nature and ti"ing of the infor"ation re<uired of accounting( !hus, accounting develo%ed fro" being a tool used to achieve the ob7ectives of the state to a decision su%%ort tool 0Foshi, +,,$1( 8nstead of boo33ee%ers, fir"s sought for "anage"ent accountants ith the abilit# to influence and co""unicate business ideas( Manage"ent accounting has been suggested to have gain

%ro"inence and change in substance as a result of the i"%act of econo"ic transition 0Anderson and Lanen, $DDD1( !he nu"ber of "anage"ent accounting studies fro" e2*co""unist transitional econo"ies is scant#( 8n ter"s of s%ecific studies fro" these environ"ents, Cade' and Guilding 0+,,A1 e2a"ined the develo%"ent of strategic "anage"ent accounting in /lovenian organi'ations and Moilanen et al' 0+,,E1 studied the role of "anage"ent accounting in )ussian co"%anies( 8n both studies there as evidence of li"ited use of the various "anage"ent accounting techni<ues studied( Moilanen ho ever argued that this "a# change as the transition into a "ar3et econo"# stabili'es( Ling et al' 0+,,$1 found that the transition %rocess in )o"ania re<uired ta3ing into cogni'ance the i"%ortance of control over the rate of change( /uch control, follo ed b# a training %rocess as needed to have the ne s#ste" of "ar3et econo"# established successfull#( A controlled refor" %rocess as even "ore necessar# as the govern"ents still anted to retain a level of control over %rofessionals and business enter%rises that sa the transition as an o%%ortunit# to ta3e charge of their o n affairs( Moilanen 0+,,A1 observed in the for"er /oviet 6nion that the "ediating role of accounting changed along ith the refor" %rocess( Accounting itself also ent through a translation %rocess in the for"er socialist econo"ies 0Anh et al', +,$$4 @aile#, $DD.1( As a 3e# finding of the research on controls in the for"er /oviet 6nion, Moilanen 0+,,A1 asserts that the control effects of accounting techni<ues alone "a# be in a%%ro%riate if other channels of inter*%ersonal contacts are not e2%lored( !he %riorit# of %lace given to %ersonal net or3ing ties cou%led ith the influence of a %revailing business tradition that recogni'es the i"%ortance %ersonal net or3ing "a3es the situation uni<ue( !he %erce%tion of ca%italis" in the sense of its o%eration in the est as a "eans of ta3ing in sociall# generated resources into %rivate o nershi% or as Mbourgeois decadence; still had i"%act on the level to hich ca%italist oriented %ractices ere received des%ite "ar3et liberali'ation 0Fan, $DDE1( Follo ing the second %hase of the liberali'ation %rocess in China, the recognition of the short*falls in the %lanning s#ste"s onl# eased*off e"%hasis on "andator# %lans to the use of guidance %lans( /tate*o ned enter%rises "ove fro" being driven b# %roduction to beco"ing res%onsive to the "ar3et 0Duh et al', +,,D4 Fan, $DDE1( A nu"ber of studies in the e2*co""unist countries have discussed the drivers of "anage"ent accounting change in these environ"ents( 8n )ussia it has been suggested that "anage"ent accounting develo%"ent has been ha"%ered b# the do"inance of ta2 re%orting, and the inade<uate financial accounting standards and %ractices 0!a#lor and Gsi%en3ova, +,,?1( Gther identified factors driving "anage"ent accounting s#ste"s change in the transitional e2*co""unist econo"ies include changes in regulations, increasing co"%etition, changes in the for" of business o nershi%, foreign ca%ital, and ne infor"ation technologies 0/'#chta, +,,+ and 9ald"a and L::ts, +,,+1( 9ald"a and L::ts 0+,,+1 also identif# t o influential factors on the evolution of "anage"ent accounting %racticesB traditions and 3no ledge that have origins in their centrall# %lanned econo"ic bac3ground, and the necessit# to solve urgent %roble"s of ever#da# "anage"ent( =>"osi 0+,,?B +,A1 found in 9ungar# that Ioften, "anage"ent in N

transition co"%anies is %erfor"ing a balancing act bet een histor# and inertia, on the one side, and the de"ands for change that the "ar3et is assu"ed to "a3e, on the otherK( 9ald"a and L::ts; 0+,,+1 stud# hich is re%orted above anal#'es the develo%"ent of "anage"ent accounting in 5stonian co"%anies ith the conclusion that "ost co"%anies have inade<uate cost s#ste"s, budgets and even inade<uate financial re%orting driven techni<ues( =>"osi;s 0+,,?1 stud# cited above as an e2%lorative case stud# describing a turbulent %rocess, na"el# the %rivati'ation of a 9ungarian co"%an#, anal#'ing "anage"ent accounting concerning change( !he author anal#'es t o "anage"ent accounting %racticesB 0$1 the calculation %ractice4 in this case, the %ractice is not ne , being used before and after %rivati'ation, thus being a stabili'ing ele"ent4 #et, the calculation %ractice changed focus fro" a %ro for"a, infor"ative nature to satisf# %lanning "inistries, into a "anage"ent tool4 and 0+1 the cash flo "anage"ent O a co"%letel# ne techni<ue, re%resentative for the "ar3et econo"ic idea( Manage"ent accounting %ractice at this fir" Ican be vie ed as a social and institutional %ractice for constitution of the ne financial and econo"ic do"ainK 0=>"osi, +,,?B +,A1( !he author uses an institutional %ers%ective in order to sho the social di"ension of "anage"ent accounting I hich is not "erel# a technical, ob7ective and institutional s#ste", but a s#ste" ith build*in, attributed logics and rationalities that result in technical social %racticesK 0%( $DN1( Perha%s, China;s case is so"eho %arallel to those of the transitional e2*co""unist states of 5astern and &estern 5uro%e because of si"ilar institutions and structures( !he restructuring of state*o ned enter%rises in China follo ing "ar3et liberali'ation re<uired ado%tion of estern*st#le organi'ational designed( As these organi'ations that once had little to orr# about %rofitabilit# and survival struggle to sta# on or gro , the use of incentive co"%ensation sche"es beca"e "ore relevant to enhancing %roductivit# and innovative thin3ing 0G;Connor et al', +,,N1( As fir"s sought "ore efficient a#s to organi'ing their activities, "anage"ent accounting %ractices li3e delegation of decision* "a3ing authorit# to lo er level "anagers and an ob7ective %erfor"ance evaluation s#ste" beca"e necessar#( 9ence, accountabilit# assu"ed a "ore "eaningful %lace and as at the core of the "ar3et refor" %rocess 0=>"osi, +,,.1( Fan 0$DDE1 identified cultural and behavioral factors, environ"ental and organi'ational factors as constraints to ado%tion of "anage"ent accounting %ractices in China and G;Connor et al', 0+,,N1 observed that China;s transition to full "ar3et econo"# as ha"%ered b# govern"ent interest %olitical constraint still influence the ado%tion of accounting %ractices to an e2tent 0G;Connor et al', +,,N1( !he above studies have %rovided evidence on the ado%tion of estern*st#le "anage"ent in a nu"ber of transitional econo"ies, es%eciall# those that have so"e histor# of co""unis"( 9o ever these studies have largel# failed to e2%lain the %rocess that organi'ations follo in ado%ting these "anage"ent accounting %ractices( Moreover there is a need for rich field studies to e2%lain the outco"e of the ado%tion of these "anage"ent accounting %ractices( !he %resent research is designed to address these ga%s

b# %roving evidence on the %rocess and outco"e of the ado%tion of "anage"ent accounting innovations in our case co"%an# in )o"ania( /* T#eore"i% 0 Fr +e(or1 Doing <ualitative studies Iinvolves an ongoing reflection on data and its %ositioning against different theoriesK 0Ahrens and Cha%"an, +,,NB E+,1, and the reference to a theor# can illu"inate the activities of the field( Gur case is about the %rocess of elaboration, i"%le"entation and use of MA/s, and e are %articularl# interested in the a# in hich MA/ intersect ith organi'ational goals, instru"ents and "odes of "anage"ent( &e believe that I8t is %eo%le ho "a3e u% accounting nu"bers in s%ecific a#s to tr# and achieve certain ob7ectivesK 0Chua, $DD.B $$N14 thus, e search to understand ho a certain realit# ca"e to e2ist in a sociall# constructed "anner, and ho different actors influenced this %rocess( &e ado%t Actor*Net or3 !heor# 0AN!1 hich advocates a socio*%hiloso%hical a%%roach here hu"an and non*hu"an, social and technical ele"ents Iare brought together in the sa"e anal#tical vie K 0Mclean and 9assard, +,,H, %( HDH4 9assard, et al', $DDD4 Ne#land, +,,N1( !hus, the theor# %laces e"%hasis on hu"ans and non*hu"ans in order to understand ho IfactsK co"e to be settled as the# are 0Lo e, +,,$1( AN! also %laces "uch e"%hasis on e2%loring the social effects, hatever their "aterial for" is, and tr#ing to ans er the Iho K <uestions about the structure, %o er, and organi'ations 0La , $DD+1( !he i"%le"entation and use of MA/ are caused b# the net or3s of hu"an and non* hu"an actors such as "anagers, accounting %ractitioners, %olic# "a3ers, govern"ents, %oliticians, globali'ation and technolog#, %articularl# MA/( &e are %articularl# interested in one conce%t in AN! * IfabricationK( Latour 0$DEA1 e2a"ines the %roduction of science and technolog# and suggests that in order to better understand the nature of a technolog#, the %rocess of its fabrication should be e2a"ined( Preston et al' 0$DD+B .N.1 understand through IfabricationK several i"agesB the building of the technolog#, the fragilit# of the technological %roduct, and the %ro"otion and selling of the technolog#( !he ter" Mtechnolog#; is not defined b# Latour, and researchers in "anage"ent accounting considered that budgeting s#ste"s or costing s#ste"s are such Mtechnologies; 0Preston et al', $DD+4 Chua, $DD.1( Dra ing on Latour 0$DEA1, Preston et al' 0$DD+B .NN1 %rovide a "odel of the %rocess of fabrication, sho ing ho uns%ecified social, %olitical and econo"ic conditions enable so"e ea3, hesitant %ossibilities( /o"e of this ill e"erge because of the convincing argu"ents through rhetoric or e2%eri"ents, and an increasing "obili'ation of allies and resources( !he Latourian a%%roach has alread# been used in case studies illustrating Iho "anage"ent accounting nu"bers are constructed to acco""odate and %ersuade diverse interests ithin organi'ationsK 0@a2ter and Chua, +,,?B $,+1( ! o studies are es%eciall# lin3ed to oursB Preston et al' 0$DD+1 anal#'e the %rocess of fabricating a budgeting technolog# in the National 9ealth /ervice in 6L, that is the a# in hich the s#ste" as designed to o%erate and ho it o%erates in an organi'ational conte2t( Chua 0$DD.1 also uses Latour;s sociolog# in order to e2a"ine the develo%"ent and i"%le"entation of a E

costing s#ste"s in the Australian %ublic hos%ital s#ste", de"onstrating ho nu"bers connected diverse interests(

accounting

5ven though critical accounting research gained i"%ortance in the last decades, there are still fe studies on the "a3ing u% of accounting nu"bers in different organi'ational settings 0Chua, $DD.1( More than that, the %rocess of "anage"ent accounting change is ver# rich and conclusions of %revious studies are controversial, because Iaccounting change is not linear, %redictable, controllable, e2clusivel# technical or ell*behavedK 0@a2ter and Chua, +,,?B $,A1( 8n this conte2t, our focus is on the %rocess of fabricating accounting s#ste"s, including Ithe building of the technolog#K, the a# in hich technolog# is used and different interests interfere ith this %rocess( AN! enabled us to follo the 3e# actors both in and out of the organi'ation( !hese areB 0i1 the i"%le"entation tea"B consisting of the "ain driver of change 0i(e(, the researcher1 and the accountants and other e"%lo#ees ith econo"ical bac3ground4 the tea" has designed and contributed to the i"%le"entation of the s#ste"4 0ii1 the grou% of s#ste";s usersB consisting of the re"aining internal actors, that isB the o ner 0the originator of the %rocess of change14 the "anagers of the case co"%anies4 and the e"%lo#ees of technical bac3ground O the %eo%le or3ing in the field, ho ere to so"e e2tent involved in the s#ste";s i"%le"entation and use4 0iii1 the Me2ternal; grou%B all of ho" are %laced outside the businessesB the )o"anian /tate via its re%resentatives 0i(e(, the fiscal and control authorities14 and the finance %roviders 0"ainl# the ban3ing sector1( !heir de"ands and e2%ectations i"%act the organi'ations; %ractices, choices and Iaccounting nu"bersK( 2* Me"#od nd Rese r%# Si"e 4.1. Method and data collection Case stud# has been %referred as a research "ethod in order to get a "ore %rofound and co"%rehensive understanding of the studied sub7ect( Case studies have beco"e <uite co""on in accounting research, es%eciall# in "anage"ent accounting 0Pin, $DEH4 )#an et al', +,,+1( !he a%%roach e ado%ted allo ed for an in*de%th e2%loration of the issues under investigation( Data for the stud# ere collected bet een +,,. and +,$, fro" a large )o"anian construction fir" and its +, subsidiar# co"%anies( A%%ro2i"atel# H,Q of the subsidiaries e"%lo# bet een $, and ., %ersons, hile N,Q e"%lo# "ore than ., %ersons, ith an average nu"ber of e"%lo#ees of ., across all the subsidiaries( !he co"%an# is fa"il# controlled fir" o ned entirel# b# a )o"anian citi'en 0hereafter Mthe o ner;1( Managers have been a%%ointed for each res%ective subsidiar# so in effect there as less control fro" the o ner( Prior to +,,., decision "a3ing in the co"%an# had been via infor"al %rocesses based on e2%erience, %ersonal beliefs and infor"al sources 0si"ilar to Preston, $DEN1( !he nu"ber of case subsidiaries changed throughout the entire %eriod of data collection, as so"e subsidiaries disa%%eared hile others ere created( D

/everal t#%es of data ere gathered, such asB internal and %ublic docu"ents, direct observation, %artici%ation at "eetings, and conversation, thus allo ing data triangulation 0Durden and Perera, +,,E1( Data ere treated in an iterative %rocess of validation of data, identification of e"erging the"es and inter%retation of data 0as %er Chenhall and 5us3e, +,,AB N$H1( &e did not conceive data as Iuntainted slices of ob7ective realit# but as%ects of recorded activit# that a stud# finds significant for theoretical reasonsK 0Ahrens and Cha%"an, +,,NB E+,1( Attention has been %aid b# the tea" "e"bers to both authenticit# of research finding and to the %lausibilit# of e2%lanations 0Lu33a and Modell, +,$,1 so as to ensure the %a%er;s validit#( Gne of our tea" "e"ber;s %artici%ation at for"al and infor"al "eetings on the research site as a "a7or source of data for our anal#sis( !he acade"ic 0hereafter Mthe researcher;1 has been involved in direct contact ith the co"%an# for t o da#s %er ee3 throughout the duration of the %ro7ect( !hese "eetings allo ed hi" to observe organi'ational "e"bers fulfilling their roles, discussing MA/s, establishing, discussing and delegating ob7ectives, and "a3ing decisions( Nu"erous infor"al "eetings %rovided Ibehind the scene infor"ationK, gossi%s, and allo ed the understanding of the "entalit#, attitude and decisions during the observed %eriod( A noteboo3 as used to collect data and to record i"%ressions, during or after such "eetings( !he other sources of data included internal and e2ternal docu"ents, related to the design of MA/ and use of accounting data, training sessions, financial state"ents, ta2 returns, internal re%orting docu"ents, and internal "e"os( 9is long*ter" involve"ent on the research site allo ed a dee% understanding of the circu"stances of the research( As such, he had the o%%ortunit# to observe Ithe relevant as%ects of the social %rocessK 0@abbie, $DED cited in Pa'difar et al(, +,,E1 such as facial e2%ressions, the tone and intonation of the voice, the gestures, the interaction ith other %eo%le( @eing involved in these organi'ations for "ore than . #ears he beca"e InativeK and allo ed e2a"ining "anage"ent accounting in its natural setting and fro" a %ractitioner vie %oint 0Durden and Perera, +,,E1, besides being an acade"ic( 9e could IJ onl# obtain ade<uate 3no ledge of cultural %ractices b# engaging in those %racticesK 0Ahrens and Cha%"an, +,,NB E+E1( !he other authors 0also acade"ics1 ca"e later on the %ro7ect, and ere involved in data anal#sis and %ositioning against theor#( !his 3ind of authorshi% %rovides a control of the research bias as %er 5us3e and )iccaboni 0$DDD1, i(e( one author is %art of the environ"ent in hich MA/s ere created and i"%le"ented, thus "ini"i'ing Ithe chances of "issing signals that are encr#%ted in the data co"ing fro" that environ"entK, hile the t o others have the advantage of being 0e2ternall#1 able to see Ithose as%ects of the environ"ent that are ta3en for granted or not seen b# those ho are %art of that environ"entK( !his co*authorshi% thus enabled an overvie and a discussion of the data collected through "eetings, %ersonal observations, internal and e2ternal docu"ents via long hours of discussion bet een tea" "e"bers( 8t as an intensive %rocess ith "uch successive iteration, given the difficult# of case studies to translate data into %atterns 0Durden and Perera, +,,E1( $,

4.2. The research site !he case co"%an# and its subsidiaries under ent a %eriod of increasing results until +,,E, hen the econo"ic crises started affecting )o"ania too( !he )o"anian GDP has decreased b# A(+Q and the current account deficit has idened to $?Q of GDP in +,,D 0u% fro" E(AQ in +,,.1 driven b# a gro ing trade deficit, hile inflation decreased to H(AHQ in +,,D 0fro" N(?Q in +,,E1, and since +,,D, )o"ania has suffered a recession of around N*AQ 0Coface, +,$,1( Do"estic co"%anies currentl# need to deal ith increased interest rates, a deterioration of the national currenc# and reduced de"and( Pet, several econo"ic strengths re"ain, including, a lo cost of labor, a reduced rate of debt in the %ublic sector, the su%%ort of the 8MF, and significant currenc# reserves 0+E(? billion euro in Dece"ber +,,D1( !his reduced de"and has seriousl# affected )o"anian business, ith .$Q of "anagers indicating it as the reason for reducing %roduction 0/A), +,,D1, but it also "ight be argued as a factor to induce a "ore "anagerial a%%roach to decision "a3ing( !he consu"%tion and the do"ains of constructions and industrial %roduction 0the countr#;s "ain drivers of econo"ic gro th for the last #ears1 have been the sectors "ostl# affected b# the crisis, due to an increasingl# gro ing difficult# in getting credit affecting the econo"#( !his has "ostl# affected the constructions do"ain, hich as literall# obstructed, along ith all the co"%anies acting in associated activities( 8n line ith the orld crisis, the industrial %roduction of )o"ania has severel# decreased since +,,E 0CGFAC5, +,$,1( According to a recent surve# b# the )o"anian Acade"ic /ociet# 0/A), +,,D1, HHQ of )o"anian "anagers in the "etallurgical, "etallic constructions and %roducts, and H,Q of "anagers in the che"ical industr#, consider the lac3 of credit access as a "a7or cause for decreasing de"and in their res%ective lines of businesses( !he National @an3 of )o"ania sho s in +,,D 0@N), +,,D1 that +.Q of the co"%anies in the constructions do"ain have been affected b# difficult cash collections, hile the financial crisis has severel# affected the do"ain of constructions 0/A), +,,DB D1( Gur case fir"s %roduce "etallic constructions and ite"s of such constructions, build residential and non residential co"%le2es and housing, build roads and high a#s, h#dro technical constructions, %erfor" electrical or3s, %rovide consultanc# and engineering and technical advisor# for such activities, build concrete co"%onents for constructions, and car%entr# activities( !heir %er"anent ob7ective is increasing their "ar3et shares and diversif#ing their %ortfolios( !heir organi'ational structures beca"e increasingl# co"%le2 follo ing the rate of e2%ansion of their activities, #et the individual res%onsibilities are not clearl# defined, ith fre<uent overla%%ing of activities bet een %eo%le and de%art"ents( /uch Msli%%ing; often generates conflicts and disru%tions in the chain of res%onsibilities( A first ea3ness of all these fir"s is the lac3 of a clear definition of res%onsibilit# centers, as ell as of clear o%erating and control %rocedures for their activities( !here is a ver# turnover of e"%lo#ees and continuous ea3ening of their %rofessional s3ills(

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3* Dis%!ssion o. O!r C se 5.1 The implementation of the MAS Gur ai" here is to anal#'e the %rocess of develo%ing the MA/( Latour 0$DEA1 suggested that in order to understand the nature of one technolog#, e should e2a"ine the %rocess involved in its develo%"ent 0Preston et al(, $DD+1( 8n our case, b# technolog# e signif# the MA/, the %rocess of %roducing and using it and the 3no ledge of the %eo%le involved in these %rocesses, asB Itechnolog# can be an artifact 0a budget docu"ent1, the %rocesses or uses of the technolog# 0e(g( %roducing and "a3ing use of a budget1 and the 3no ledge of %eo%le in designing or o%erating the technolog#K 0Preston et al(, $DD+B .N?1( 8n order to understand the %rocess of the develo%"ent of the technolog#, e should stud# the Iscience in actionK, as Latour 0$DEA1 argues and si"ilar to the a%%roaches of Preston et al( 0$DD+1 and Chua 0$DD.1, that is, e should arrive at the site before technolog# is beco"ing ta3en for granted, or Ifi2ed, 3no n and un%roble"aticK 0Preston et al(, $DD+B .N?1( Gne of the authors ca"e in close contact ith the research site and as involved before the beginning of the %rocess of fabrication, and still "aintains contact ith these organi'ations, even though not in relationshi% to the i"%le"ented s#ste"( !his conte2t allo s us to describe the initiative, the social and econo"ic conditions, the %ossibilities, resources, actors, sources of %o er and influence surrounding this %rocess( Gur tea" "e"ber 0the researcher1 as e2tensivel# involved in the develo%"ent and i"%le"entation of ne MA/s in the case co"%anies4 thus, he acted as an actor of change b# Mintroducing a ne s#ste"; 0)#an et al(, $.+1( 9e as hired bac3 in +,,. b# the founder of these case co"%anies 0Mthe o ner;1, to assist the accounting %ersonnel in %lace in his businesses, or3 out difficult ite"s such as end*of*#ear closure transactions, advanced ta2 calculations and cost anal#ses( @esides these initial activities, the tea" "e"ber beca"e after so"e ti"e involved in designing an a%%ro%riate su%%ort s#ste" in decision*"a3ing, as he anted to la# so"e "ore solid grounds for cost calculations in financial re%orting and decision "a3ing( !hus, the o ner beca"e the official initiator of the %rocess of change, hile the "a7orit# of the a%%ointed "anagers also su%%orted it( !he s#ste";s ob7ectives as initiall# intended b# the o ner ere threefoldB $1 to ensure a correct calculation of costs for financial re%orting %ur%oses 0evaluation in financial state"ents1, +1 to %rovide su%%ort in decision*"a3ing, and ?1 to ensure a "ore effective use of resources 0es%eciall# for variances control1 and cost reductions( 9e as3ed for the s#ste" to be created so as to reflect ver# accuratel# the e2isting real data, all the ob7ectives being fulfilled via the sa"e datasets( !hus, the s#ste" as intended to fulfill the so*called classical roles of MA/ 0as docu"ented in literature14 the value creation and su%%ort in strateg# i"%le"entation 0also docu"ented in literature on "ore advanced MA/1 did not re%resent intended ob7ectives for the s#ste" under stud# in our %a%er($

&hile this has been docu"ented abroad in a nu"ber of studies conducted in advanced econo"ies, no such ob7ectives have been docu"ented in C55 e"erging countries, %robabl# due to the Iinitial stages of MA develo%"entK advocated b# 9ald"a and L::ts 0+,,+1(

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!he s#ste" as designed during +,,. and +,,N4 it functioned ell during +,,A and through to the fall of +,,E, hen the first indications of the financial crisis affected the businesses( 9ence the s#ste" as tuned in accordance, t o ti"es, hich ill be develo%ed at a later stage of the %a%er( Currentl#, so"e of the fir"s still a%%l# the s#ste", or at least a distorted 0to so"e e2tent even Mchaotic;1 version of it, ith the co"%anies; "ain focus on financial re%orting and ta2ation issues( Griginall# the s#ste" as fueled and designed using data fro" three co"%anies, on hich the s#ste" as also %ilot*tested u%on( /o"e "odifications ere brought to the s#ste" as a result of the %ilot*testing, and the s#ste" as in this for" i"%le"ented in all but t o of the e2isting co"%anies( + !he s#ste" as designed and i"%le"ented onl# ith the e"%lo#ees of the case co"%anies, no consultant ever being used( /uch e"%lo#ees onl# included accountants and other %rofessionals ith econo"ical bac3ground, full# coo%erative but rather reactive than %roactive( Mainl# due to the resources allocated to this %ro7ect b# each co"%an# "anage"ent and-or the characteristics of the target co"%anies, the MA/ i"%le"entation %eriod as co"%rised bet een ? and $+ "onths( !he "ain strength of the i"%le"ented s#ste" as costs identification( !he tea" intentionall# focused on such an identification of costs b# cost ob7ects that onl# a fe costs ould finall# be considered indirect ones( &hen in too "uch doubt about the nature of a %articular cost, the s#ste" treats the ite" as an Mad"inistrative; cost, thus avoiding an# identification and allocation as overhead b#-to cost ob7ects 0to circu"vent a less rational allocation1( !hus, the s#ste" as designed as a variant of the direct cost "ethod e2tant in the French MA literature4 this "ethod assigns to cost ob7ects all costs but those indirect fi2ed 0fr( de structure1 costs, hich have been incurred for the general functioning of the business(? 8n our a%%roach, the distinction is being "ade bet een direct and ad"inistrative costs( All costs need to be either traced to cost ob7ects or re"ain an ad"inistrative cost4 an# cost hich cannot easil# be traced to cost ob7ects should be further anal#'ed to either beco"e a direct or an ad"inistrative one( A %o erful advantage of the s#ste" is that it allo s decision*"a3ing even here e2tre"el# heterogeneous cost ob7ects are obtained( /econdl#, b# treating costs as either direct 0thus traced to cost ob7ects1 or ad"inistrative ones 0thus onl# "aintained at the level of the business1 the s#ste" decisivel# eli"inates the distortions caused b# irrational overhead allocations( At the end of each accounting %eriod, the s#ste" generates b# centre a re%ort hich e2%licates the effects of the %rocess of cost identification b# cost ob7ects, either s#ntheticall# or anal#ticall#( !his re%ort is subse<uentl# transfor"ed into a schedule of the cost of %roduction in order to increase the degree of understandabilit# b# "anagers,

8t as argued b# the "anagers of those t o co"%anies ho refused to i"%le"ent the s#ste" that Msince the final result 0i(e(, the botto" line1 is the sa"e under the e2isting 0their1 and the %ro%osed 0ne 1 s#ste"s, there;s no use of changing the old s#ste" for the ne one( 5ven though no significant stud# confir"s this, e hold this vie is largel# co""on to the "a7orit# of )o"anian "anagers, ho have not #et understood the role "anage"ent accounting can 0and should1 %la# in offering the" su%%ort in "anaging their businesses( !his "ight also e2%lain their li"ited interest in training their e"%lo#ees in such co"%etencies( ? !his "ethod is referred to as R la "Sthode du direct costing SvoluS T or R la "Sthode du coUt direct T 0see @ou<uin, +,,N1(

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as under its original design it onl# reca%itulates accounting data, thus lac3ing ease of understanding b# other users than accountants( =arious %rocedures have been thus %re%ared for the design and functioning of such a MA/, on different the"es of interest in this businessB "a3ing the offer and %re%aration of the technical docu"entation4 anal#sis of the contract4 getting su%%lies4 %lacing orders for "aterials and e<ui%"ents4 use, storage, %ac3ing, "aintenance and deliver# to custo"ers4 o%erational %erfor"ance4 design of the asse"bl# de%art"ent4 inventor# ta3ing and "anage"ent of e<ui%"ents and "achiner#4 %re%aration and "anage"ent of accounting %a%er or34 co"%utation and control of %roduction costs( Pet, a follo *u% anal#sis of the i"%le"ented s#ste" has sho n considerable distortions of its intended "anner of functioning, certainl# not i"agined b# the designer of the s#ste"s at that ti"e( !hese distortions are "ainl# intended to achieve a Mdesired; inco"e ta2 or a Mdesired result;, thus reducing the fiscal burden, and to react <uic3l#( !his is a case of "ani%ulation of re%orting, and literature docu"ents "an# such "ani%ulations both in internal and e2ternal re%orting 0Macintosh, $DD.4 La"bert and /%one" H, +,,.1( As for the causes of these "ani%ulation, literature states for e2a"%leB the desire of the "anagers to secure their bonuses or to "eet targets, or strong de"ands of the e2ternal users 0investors, creditors1 0Merchant, $DD,4 La"bert and /%one", +,,.1( !hus, our ai" is to understand ho the s#ste" as conceived "ainl# b# its users, hich ere the e2%ectations, attitudes, and interests surrounding this %rocess( &e ill be infor"ed in our anal#sis b# AN!( 5.2 The uses of the MASs Follo ing our actors enabled us to understand ho the "anage"ent accounting technolog# as used in the organi'ation( !he organi'ational conte2t before the MA/ i"%le"entation can be described as follo sB * H,Q of the co"%anies anal#'ed did not dis%la# an# MA/ as of that "o"ent, des%ite the legal obligation 0the Accounting La no( E+-$DD$ ith subse<uent revisions1( !his astonishing observation da''led the researcher, ho began searching for %ossible reasons( A discussion hich M7ustifies; this state fro" the %oint of vie of the "anagers and the o ner follo sB )esearcherB Considering the e2tre"el# co"%le2 features of #our activities 0constructions1, ho co"e a MA/ has never been i"%le"entedC G nerB !he accounting de%art"ent has constantl# argued that the advantages of such a s#ste" ill al a#s be out eighed b# the costs of designing, i"%le"enting and "aintaining it( ! o "ain as%ects %la# a "a7or role in this res%ectB the li"ited availabilit# of %ersonnel ho ould be able to %erfor" such co"%le2 activities, and the %er%etual %ressure of ti"e( At least for the ti"e being, no such structure is econo"icall# viable( Also, b# actuall# selling the %roducts during the "onth of %roduction, there are no fiscal co"%lications( /ince inco"e ta2 is co"%uted
H

8nterestingl#, La"bert and /%one" 0+,,.B A$A1 note that in France "anage"ent controllers %la# a central role in %rofit "ani%ulation(

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<uarterl#, there;s no %roble" if e invoice the %roducts several ee3s or even a "onth later( )esearcherB And ho do #ou ensure the control and decision*"a3ing as%ects under these circu"stancesC G nerB &hen e "a3e the actual %ro%osition to the client, e are e2tre"el# careful to overstate the %rices b# including sufficient "argins( &e cannot easil# cover all of our ages and indirect charges, but the "argins e set for "aterials "a3e u% for the losses( &e have "anaged to ensure a strict control over the consu"%tion chart and %ro7ect;s s%ecifications, hich substitutes a "anage"ent accounting s#ste"( /econdl#, hat e are e2tre"el# interested in is to collect our "one# fro" the custo"er, not to set u% another s#ste" hich ould onl# %rovide nu"bers for the fiscal authorities( Gf course, several as%ects can be underlined here( First, the researcher has found out that cases here the invoicing "onth differs ver# significantl# fro" the %roduction one are in fact fre<uent, thus contradicting the argu"ent of the o ner( Also, it is interesting to note the o ner;s %erce%tion on the MA/ 0i(e(, a s#ste" %roducing nu"bers for the fiscal authorities1, %erce%tion hich de"onstrates a ver# li"ited understanding b# the o ner of the 0"anagerial1 accounting %heno"enon( More, this s3e ed %erce%tion affects the o ner b# "a3ing hi" ignore the roles a MA/ can %la# in the "anagerial and decision* "a3ing %rocesses, due to the goal of all %rofit*"a3ing businesses, i(e( collecting "one# to ensure going concern 0hence, no e2clusion, even the contrar# in fact1( Not lastl#, the %rices are intentionall# established in such a a# as to cover all %otential losses, instead of being deter"ined either fro" the forecast cost %lus a reasonable "argin, or in a target costing a%%roach( Moreover, )esearcherB 9o are %rices setC ManagerB Prices are set sufficientl# elevated that the# ould cover u% the "ore or less calculated and understood costs( &e need to convince our clients that even though e "a2i"i'e our %rofits, e have "ini"i'ed their costs( /ince e have a large base of su%%liers, e can negotiate sufficient "argins for our "aterials and services, es%eciall# for those hich are significant in ter"s of cost structure( !hese "argins need to cover the hidden cost of labor hich e 3no it ill not be acce%ted b# the custo"ers( Also, e need to thin3 about those inefficiencies e constantl# incur and need to cover u%( * hen e2isting 0the re"aining N,Q of the co"%anies1, MA/s are e2tre"el# li"ited and rudi"entar#, and virtuall# no %ersonnel is trained in to have such co"%etencies( No %ro%er identification of costs is being "ade b# cost ob7ects, and the %roduction cost is loosel# calculated b# adding u% so"e costs hich can be 0al"ost too easil#1 identified, and are too big to be ignored( Accordingl#, the %roduction cost is onl# restricted to a fraction of direct costs( Another conse<uence is that the cost of goods sold is co"%letel# rong, and one can al"ost never find an e2%lanation for the cost of the finished %roducts obtained( @# revie ing internal docu"ents, the researcher has identified "a7or fla s of those e2isting s#ste"s, a"ongst hichB boo33ee%ing for the "aterials consu"ed, %roduction costs and cost of goods sold onl# results at the end of each <uarter due to the re<uire"ent to co"%ute inco"e ta2es( 8t onl# co"%rises related 7ournal entries, hile no $.

details are being "aintained %er individual %ro7ects or %roducts( !o the e2tent these consu"%tions are docu"ented via %roduction schedules, such schedules are e2tre"el# abridged, onl# stating "aterials, labor, services, and allocated overheads of $,Q of "aterials and labor( !here;s virtuall# little e2tent to hich these costs can be bro3en do n into co"%osing %arts( Another significant as%ect is the identification of labor costs b# %ro7ects, b# onl# stating their final 0%aid actual1 a"ounts and ithout a correlation ith the labor costs recorded in the official accounting s#ste", heavil# underesti"ated for fiscal reasons4 * this is reinforced b# a reduced s%oilage control, as the s#ste" considers that its out%uts to be its in%uts 0thus ignoring aste1( All %urchases and utili'ations are chaoticall# "ade, in an unfortunate altered co%# of the M7ust*in*ti"e; %rinci%les 0in fact, it;s an I e need this M7ust no ;K sort of a%%roach1( /tandards ere never established, and variance control is not of too "uch interest( !he bills of "aterials contain a colu"n in hich variances should be re%orted, but onl# those variances hich corres%ond to significantl# i"%ortant costs are deter"ined( As for the use of such variancesB
)esearcherB &hat corrective "easures are being ta3en to the e2tent large variances sho u%, and ho are such "easures i"%le"entedC ManagerB Firstl# e "a3e atte"%ts to identif# their causes( &e usuall# identif# ver# <uic3l# several such causes, ith "ore or less e2%lanator# %o ers( !hus, and since e are being forced b# the %ace i"%osed b# our %artners 0clients, su%%liers, ban3s, e"%lo#ees etc(1 e do not find the ti"e to anal#'e variances in detail( Not "uch actions follo this ra%id identification of causes, and no increase of %eo%le;s res%onsibilit# and-or i"%act on re ard is being envisaged, as e can surel# "a3e u% for these losses on account of savings resulting fro" other cost structures( !he conte2t of our business does not allo us elaboratel# anal#'e such variances and ta3e a%%ro%riate "easures( )esearcherB All right, but 8 have detected so"e behavior to ards the e2ceeding of the "aterials assigned in the bill of "aterials or its avoidance, es%eciall# here inefficientl# "anaged %ro7ects are concerned( A s%ecial cost ite" called Msundr# "aterials;, hich hides such costs, is so"eti"es i"%ortantJ ManagerB /everal reasons e2%lain the inefficienc#, es%eciall# the lac3 of %revious e2%erience, insufficientl# %re%ared or3force or deliver# deadlines unrealisticall# deter"ined( And such inefficienc# ill al a#s generate overuse of so"e "aterials( !i"e %ressure leads to %urchases of lo er <ualit# "aterials and errors hich ould in turn lead to re%eated %urchases of these "aterials( Also, there are so"e %ersonal needsJ &e have got to be realistic and acce%t to a certain e2tent the e2istence of certain Melusive; "aterials, hich if the# are controlled, it sti"ulates the e"%lo#ees and ensures us that the# attend to their activities accordingl#( Gne "ust not forget the conte2t and the "entalit# characteri'ing our environ"entJ

As one can easil# understand, Mreserves; of Msundr#; "aterials are being constituted to the infor"al 0and agreed1 availabilit# of e"%lo#ees, hich in turn should ensure the good %erfor"ance of their dail# activities( !his alternate Mcontrol; s#ste" builds a so"e hat reassuring trust of the "anagers in their %ersonnel, but things can easil# degenerate, as such e2ceeding "a# easil# beco"e uncontrollable( * the "anage"ent;s e2clusive focus on the cash flo s, ith virtuall# no consideration to calculated 0accrual1 ite"s and control over the life of the %ro7ect4 also, the "anage"ent;s $N

onl# focus on financial infor"ation, disregarding all non*financial infor"ation( 8n this res%ect,
)esearcherB &ould #ou feel the need for a %eriodical revie of the %ro7ect over its lifeC ManagerB 8t;s all about cash flo s for us( &e have little consideration for such invented ite"s as revenues and charges( 8t;s not revenues and charges that ensure the going concern of "# business4 these ter"s are e2cessivel# used b# econo"ists( For us, revenues are cash inflo s and charges are cash outflo s4 hence e onl# invoice hen collection is i""inent, and an# %urchase for us is seen in ter"s of a %a#"ent( !he accounting s#ste" should reconnect to the %resent realities( Do #ou consider that the fiscal authorit# should %ressure us to %a# ta2es as long as e have not collected our "one#C A detailed anal#sis of revenues and charges does not %a# our su%%liers and e"%lo#ees( 8nco"e not sustained b# cash inflo s is "ere for" ithout an# substance(

&hile e agree ith this "anager that an interest on inco"e ithout a close regard to cash is dangerous for an# business, focusing e2clusivel# on cash recei%t and %a#"ents detracts "anage"ent fro" an a%%ro%riate control over the course of the %ro7ect( !his a#, variances fro" the standard %urchase %rices and variances of the cost of "aterials and labor used are i"%ossible to identif# and anal#'e( !hus, even though all %a#"ents ill be ulti"atel# 3no n to the "anage"ent, it is generall# too late to influence-control, and earl# Msli%%ing; cannot be detected, ulti"atel# negativel# influencing the business( * generall#, there is a lac3 of control, structure and %rocedures characteri'ing the or3 of all the de%art"ents( Moreover, henever control is involved, it is resented as an intrusion and %unish"ent trigger, thus efforts of the entire organi'ation are focused on getting the right result rather than on the %rocess, on assigning res%onsibilities and on the anal#sis of the %rocess( !he follo ing re%l# to the %revious <uestion of the researcher is highl# illustrativeB
G nerB &e "ust acce%t that an# organi'ation faces a confrontation 0 h# e cannot sa# the cohabitationC1 bet een an official "anage"ent accounting s#ste" and an infor"al self*legiti"i'ation and self*control s#ste"( 8n the case of our activit#, the technical bac3ground of a %art of the e"%lo#ees al a#s influences the decision "a3ing %rocess as the# are "ore 3no ledgeable of the field realities and the# are ver# e2%erienced( A construction based on nu"bers ill al a#s be de%ersonali'ed, lac3ing force and be regarded as inco"%lete( 8f accountants invo3e the sub7ectivit# and arrogance of the field e"%lo#ees, it onl# denotes their frustration( !he# cannot %resent an#thing <ualitative and value*added, as this is onl# brought about b# %eo%le actuall# ta3ing %art of the action(

!hus, the or3ing e2%erience is invo3ed so as to under"ine the Malternative;, that is the calculations, the sheer nu"bers, as accountants 0sta#ing1 in their offices si"%l# cannot offer insightful infor"ation of an# sort hatsoever( !he# are onl# frustrated %eo%le not contributing at all at the value created b# field %ersons, Ithe ones bringing "one# inK( An# for" of control initiated b# these %ersons "ust be avoided, as the# don;t have a clue about real activities( &hile e agree that the accounting s#ste" can be critici'ed for its alienation fro" realit#, es%eciall# in heavil# industriali'ed activities, this management function has alread# %roved hel%ful in aiding "anagers run their businesses in "ore advanced econo"ies, such a case being described b# Preston 0$DEN1(

$A

As %reviousl# "entioned, the "ain initiator of the MA/ as Mthe o ner;( As Mthe researcher; %reviousl# interacted ith "anagers, the need for a %ro%er MA/ as also visible( !hus, in the initial %hase, all the internal actors su%%orted the ne %ro7ect, each having their o n e2%ectations( For e2a"%le, the o ner de"anded a s#ste" develo%ed in close relationshi% ith financial re%orting( 5ven if the researcher as a are of %ossible alterations of this solution 0as underlined b# Fohnson and La%lan, $DEA1, he had to co"%l# ith this de"and( Managers e2%ected a tool for cost esti"ation for decision "a3ing and a "ore effective use of resources( !he# arguedB
I&e usuall# have identical %ro7ects, for e2a"%le building "ore si"ilar houses( 8 e2%ect the s#ste" to offer "e the e2%lanations for the cost of the first house in order to "a3e "ore accurate decisions about the ne2t houses 0%rices, "aterials, labor, aste etc(1K(

@efore the ne MA/ as i"%le"ented, infor"al relations such decisions( Gne "anager saidB

ere used in order to "a3e

I8 find out that a certain construction has re<uired ., sac3s of ce"ent( 8 as3 a %erson 8 trust, usuall# ith a good 3no ledge ith the field, to chec3 the %ro7ect and he then tells "e I8t usuall# ta3es H, sac3sK( 9ence, 8 tr# to find here did the rest of $, sac3s vanished(K Gr, I8 send hi" 0i(e(, an e2%erienced, res%ected e"%lo#ee1 to ins%ect the construction site, and he re%orts bac3 to "e on the nor"al consu"%tions on si"ilar %ro7ects( 9ence, co"%aring these nu"bers ith the actual consu"%tions, variances are deter"ined(K

!hese %ieces of discussion are thus re%resentative for the s#ste";s initial ob7ectives, as e2%lained aboveB $1 to ensure a correct calculation of costs for financial re%orting %ur%oses 0evaluation in financial state"ents14 +1 to %rovide su%%ort in decision*"a3ing4 and, ?1 to ensure a "ore effective use of resources 0es%eciall# for variances control1 and cost reductions( !he accounting %eo%le of the co"%an# ere also involved in the %ro7ect and the# al a#s su%%orted it( During the %hase of develo%"ent, there ere "an# interactions, discussions, follo *u%s bet een the i"%le"entation tea" and the users( A "a7or role as %la#ed b# the o ner and the "anagers( /ince the# originated and full# su%%orted the MA/ at that ti"e, the# convinced the other organi'ational "e"bers that the s#ste" ould be full# functional and beneficial( /o"e of the e"%lo#ees tended to re7ect the change, but the "anagers too3 care to e2%lain to the" that the s#ste" ould not be used to %unish, or Magainst; %eo%le( Peo%le fro" all organi'ational levels ere involved in the i"%le"entation %hase of the %rocess, since "anagers tried to convince ever#one before the actual i"%le"entation to Mgive the s#ste" a chance;( Pet during the develo%"ent %rocess so"e of the Mengineers; begun to fear that the s#ste" ould %rovide "anagers too detailed infor"ation, hich ould uncover their %ractices( Vualit# %roble"s beca"e visible 0es%eciall# ith uns3illed or3force1 0lac3 of training es%eciall# due to cost reduction, ended u% in s%oilage and aste, affecting the "argins and net inco"e1( As %reviousl# e2%lained, after the initial design, the s#ste" as %ilot*tested in three co"%anies( /o"e deficiencies ere identified and these are usuall# lin3ed to %eo%le;s attitudeB for e2a"%le, the# refuse to correctl# fill in the docu"ents, the# do not obe# $E

deadlines set for %roviding data, the data ere not in accordance ith realit# and no chec3ing as %erfor"ed %rior to data being %rovided etc( 5ven if %eo%le ere fro" the beginning trained ho to use and su%%ort the s#ste", the# continued to have a detractive behavior, ith no res%ect for nu"bers, accurac#, ti"eliness( !he i"%le"entation tea" al a#s focused on i"%roving the s#ste"( Also, "anagers observed so"e benefits of the MA/ and acce%ted its i"%le"entation in all but t o subsidiar# co"%anies( !he s#ste" functioned ell during +,,A and through the fall of +,,E, #et so"e here there as a drift in its actual use, on hich e ill focus in the follo ing %art( As Preston et al( 0$DD+B .NA1 notice IJindividuals; inter%retations and res%onses "a# reinforce or else "odif# and change Iofficiall#K intended %atterns of res%onsibilit#, accountabilit#, "echanis" of control and "anner in hich the s#ste" as designed to o%erateK( 8n the case of the o ner and the "anagers, the# re%orted %ressures es%eciall# fro" the e2ternal grou%, in the sense of hat the# called the over hel"ing fiscal burden the co"%an# felt4 thus, the# began searching for alternative a#s to avoid this burden( !he# have accordingl# first %ressured the i"%le"entation tea" to "aintain t o %arallel records 0 hat e call a first alteration1, one hich ould fulfill financial re%orting and ta2ation 0official1 %ur%oses, hile the other ould infor" the 0initial1 "anagerial decision* "a3ing, reducing aste and cost reduction %ur%oses( As such, bet een the fall of +,,E 0 hen crisis began to affect their activities1 and the fall of +,,D, the s#ste" functioned fueled ith these t o 0official and "anagerial1 datasets( !he t o datasets ere designed via a different treat"ent of charges b# nature, hich ere then re%orted b# functions( !hus, t o "ain sources of difference "anifested bet een the t o datasetsB a1 actual costs hich did not a%%ear in the official dataset 0because the# ere not fiscall# deductible1 ere ta3en into account in the "anagerial dataset4 and, b1 costs hich ere recorded in the official s#ste" but ere still being ca%itali'ed in the balance sheet 0usuall# in the for" of cash advances1 and ere still M aiting; for a good o%%ortunit# to beco"e e2%ensed via the inco"e state"ent, ere ta3en into account as costs in the "anagerial dataset( !his dataset as therefore "ore Maccurate; than the official dataset, and as used as %er the initial ob7ectives of the businesses( @ut the technical staff 0engineers1 see"ed unable to beco"e Mbelievers; of the %ro%osed s#ste"( Accordingl#, hile the# fueled and used the s#ste" for one and a half #ear, the# failed to Mad7ust; their "entalit# in the sense of actuall# beginning to base their decisions on the data su%%lied b# the s#ste"( !he %ersonal and infor"al sources of infor"ation ere "aintained as %referred sources of data, thus graduall# erecting distrust in the official s#ste"( !his case is to so"e e2tent si"ilar to Preston 0$DEN1, in the sense that the infor"al s#ste" is the source of decision "a3ing( @ut in Preston 0$DEN1 the accounting s#ste" had a confir"ator# role, hich as not the case here( 5ven though ti"es hen Mtheir; s#ste" failed the", resulting in losses for their co"%anies, e2ternal causes 0i(e(, uncontrollable to the"1 ere al a#s searched for and ulti"atel# identified, thus Mclearing; the" for "a3ing a "ista3e( !hese occurrences ere ver# frustrating for the i"%le"entation tea", ho had suggested alternative courses of actions as a result of their %ro%osed s#ste"( 9o can e inter%ret and hat "ight have caused this situation in their $D

caseC 8t "a# have been their %erce%tion on the design of the s#ste", i(e( all b# non*technical bac3ground e"%lo#ees 0the researcher and the rest of the i"%le"entation tea" ith econo"ical bac3ground1, an Morigin; hich "ight have %rofoundl# disli3ed the engineers, dis%la#ing a lo level of confidence in the official Mnu"bers;, hile their Me2%erience; said so"ething else( !his first alteration consisted in the "ani%ulation of the s#ste" as a result of e2ternal %ressures 0i(e(, reducing fiscal burden and co"%l#ing ith i"%osed re<uire"ents fro" the finance %roviders1( Managers and the o ner beca"e a are of the various o%%ortunities the s#ste" %rovided the" to avoid ta2ation and thus ensure the going concern of their businesses, in a h#%er*fiscali'ed econo"#( As such, several as%ects hich e have been observed at the research site include.B an alteration of the cost of goods sold in order to ad7ust the %rofit obtained, to reduce inco"e ta2 0so"eti"es in order to achieve a level of inco"e ta2 %aid Mreco""ended; b# the "anagers the"selves, or in order to si"ultaneousl# co"%l# ith the so"eti"es contradictor# de"ands of "ulti%le users such as the "anagers O "ini"i'ation of inco"e ta2 %aid to the /tate, and funds %roviders O ho de"anded "ini"u" rates of return in order to a%%rove financing1, cross*allocation of costs bet een different %ro7ects in order to cover u% hidden 0illegal1 costs incurred hile reducing inco"e ta2 via avoidance of ta2 %a#"ents for charges that are not recorded via the official accounting s#ste" (ecause the# are not 7ustified b# docu"ents 0hence the# ere non*deductible for ta2ation %ur%oses1, "ani%ulations of transfer %rices in order to charge losses to so"e of the co"%anies, hile clearing the other0s1, a %ervert use of the allocation rate of overheads via "ani%ulations in the t o co"%anies hose "anage"ent did not a%%rove of the %ro%osed MA/4 in this a%%roach, "anage"ent si"%l# envisaged to include or avoid the inclusion of certain costs in or fro" the %roduction costs 0hence "ulti%le a#s of calculation of these allocation rates1, strategic earnings "anage"ent based on a %erverted use of deferrals and accruals, hich in turn leads to intended levels of %rofits and ta2 declared, double boo33ee%ing and cost deter"ination 0an official deter"ination, for financial re%orting and fiscal %ur%oses, and one "ore fair, intended for the use of "anagers, 3ee%ing trac3 of fair cost allocations and costs hich are not 7ustifiable in accounting records due to lac3 of legal docu"entation1, sabotaging one fir" over the others, via an allocation of larger costs to one fir" that its real costs and reduced revenue recognition via the transfer %rice s#ste" in order to ban3ru%t this fir" and ensure the success of the others, different "argins for %ro7ects of si"ilar nature( !he# all "a# be regarded as %erverted effects of an originall# ell* designed s#ste", and "a# have contributed the current failure of the s#ste" N, via an evolutionar# %rocess of alteration of the s#ste"s intended ob7ectives( @ut it;s hat ha%%ened ne2t the %robable cause of the actual failure of the s#ste", i(e( hat e call the second alteration( 8t "eans in fact the abandon of the "anagerial dataset of the s#ste"( No ada#s, the co"%anies onl# use the s#ste" in the M"ani%ulative;
.

8t is outside the sco%e of this %a%er to e2%lore in detail these %heno"ena4 thus, e ill onl# "ention so"e of our observations, refraining fro" a "ore detailed e2%lanation of these distortions, as fascinating as the# "a# be( Further investigation is needed and ill %robabl# be underta3en at a future %oint( N @# failure e "ean that the s#ste" does not co"%l# ith the initial %ur%oses nor does it function in the "anner envisaged b# its originator and i"%le"enter an#"ore, even though it is still in use in "ost of the co"%anies in hich it as i"%le"ented(

+,

0official, financial re%orting, reducing fiscal burden b# avoiding ta2 %a#"ents1 "anner, and an# infor"ation for cost e2%lanation, control and decision "a3ing is not re<uested an#"ore( As the effects of the crisis begun to be "ore intensivel# felt through to the end of +,,D, "anagers and o ners begun to act chaoticall#, increasingl# oriented on cash, on "ini"i'ing the inco"e ta2, and on fulfilling the finance %roviders; re<uire"ents 0this in Maslo ;s ter"s "a# be regarded as their basic needs1( All the other "ore evolved needs are being ignored 0such as infor"ed decision*"a3ing, rational cost reduction and variance anal#sis1( !he Mengineers; continue to use their infor"al "ethods and s#ste"s, as the# $1 did not trust these out of realities data, and +1 the# "ight have beco"e a are that the accounting nu"bers can be "ani%ulated 0via the official dataset fueling the s#ste"1 0if the s#ste" can be used to reduce ta2, h# cannot it be used arbitraril# against %eo%leC1( Another e2%lanation could be that for "anagers and engineers there as no ti"e to anal#'e in detail the re%orts %roduced b# the MA/ 0even as accurate as the# ere via the use of real data for "anage"ent;s use1, due to the ti"e constraints, thus the cost-benefit ratio of having t o datasets used at the sa"e ti"e beca"e too big( Parado2icall# the# unfortunatel# abandoned the sole source of reliable data hich could have hel%ed the" fight bac3 the crisis, and %ossibl# ensure the going concern of their businesses( !he lac3 of adhesion fro" the engineers has also %robabl# %la#ed a crucial role in this result, because if the# ould have adhered to its %rinci%les and ould have a%%lied its %rinci%les in their o%erational activities, the s#ste" ould have %robabl# stood a "uch better chance to survive( !his entire evolution "a# be de%icted as follo s 0 e do not consider the ti"escale before +,,. hen the researcher as hired b# the o ner4 during this %hase, onl# so"e of the case co"%anies en7o#ed ver# li"ited MA/s1 0see !able $1B Inser" T $0e ) Here 4* Con%0!sion !his stud# as designed to e2a"ine the %rocess of i"%le"enting and using &estern*st#le MA/ in a large )o"anian co"%an#( &e focused on the interests of the various actors hich have influenced the s#ste", starting ith its ince%tion and concluding ith its failure, and on the %rocess of its fabrication to serve so"e detracting %ur%oses( &e e2a"ined the chains of reasoning, the attitudes and influences bet een actors in order to understand the direction of change and the outco"e of the %rocess( 6nli3e %revious studies that ado%ted AN! 0Chua, $DD.1, the origins of the net or3 in our case co"%an# ere less co"%le2, #et so"e of the %rocesses acted also as catal#sts and others served to distract the accounting change( 8n order to reflect the historical conte2t and the attitudes and interests of actors involved in the %rocess of the use of the MA/ e follo ed the a# the actors Ithin3, tal3 and feel about the s#ste"K 0Preston et al(, $DD+B .NA1( !hough the MA/ as designed ith initial intentions of facilitating da#*to*da# decision "a3ing, the end result as different fro" this( !he s#ste" as fabricated and largel# +$

ignored in decision "a3ing b# users( 8t has been argued that the fate of technolog# does not lie in the hands of its designers or initial su%%orters, but ith those ho co"e after O actors, ho are often %ossessed b# different interests and sub7ect to different %ressures 0Latour, $DEA4 Chua, $DD.1( 8n our case the decou%ling of the MA/ as caused b# the actions of the various actors ho ere involved in its use( &e also observed fro" the stud# that the %eo%le involved in the accounting change %rocess are at least as i"%ortant as the s#ste" itself, consistent ith the vie that Ithe technolog#K enco"%asses the MA/, the %rocess of using it and the 3no ledge and attitudes of %eo%le involved( AN! served as a ver# %o erful tool hel%ing us understand ho MA/ evolved in order to acco""odate different interests 0Preston et al(, $DD+4 Chua, $DD.4 @a2ter and Chua, +,,?1( !he %rocess of %rofit "ani%ulation via the MA/ in our case co"%an# is also an interesting observation that is orth highlighting( A nu"ber of studies have docu"ented the role of controllers in the "ani%ulations of internal re%orting 0Merchant, $DD,4 Macintosh, $DD.4 La"bert and /%one", +,,.1( Gur stud# has %rovided evidence on the "anner in hich this beca"e the sole ob7ective of the MA/s in the case co"%an#( !his discussion "a# also be develo%ed in light of the Irelevance lostK idea of Fohnson and La%lan;s 0$DEA1, related to the relationshi% bet een financial and "anagerial accounting( Gur %a%er is a clear evidence of the relevance lost of the initiall# ell designed s#ste", hen several conditions ere "et 0a"ongst hich financial re%orting constraints1( !he stud# further highlights the i"%ortance of infor"al s#ste"s in organi'ations( Gur case co"%an# and its subsidiaries have develo%ed strong infor"al s#ste" hich functioned for a long ti"e ithout for"al MA/( !his infor"al s#ste" i"%acted significantl# on the i"%le"entation and use of the for"al MA/( As Preston 0$DEN1 %oints out, this Isocial orderK is ver# i"%ortant and the infor"al s#ste" should be recogni'ed and ac3no ledged before the i"%le"entation of a for"al s#ste"( &e consider this as an e2%lorator# stud# and a useful starting %oint to understand the ado%tion and use of &estern*st#le MA/s in for"er co""unist transitional econo"ies( Further rich field studies are needed fro" other countries to docu"ent ho these MA/s are ado%ted and used in these countries( Further"ore, the interaction bet een for"al and infor"al s#ste"s is a fruitful line for future research(

++

REFERENCES Ahrens, !( and Cha%"an, C(/(, +,,N( Doing <ualitative field research in "anage"ent accountingB %ositioning data to contribute to theor#, Accounting, 2rgani3ations and Society, ?$, E$D O EH$( Anderson, /(&( and Lanen, &(N(, $DDD( 5cono"ic transition, strateg# and the evolution of "anage"ent accounting %racticesB the case of 8ndia, Accounting, 2rgani3ations and Society, +H, ?AD*H$+( Anh, D(, Ngu#en, D( and Mia, L(, +,$$( &estern "anage"ent accounting %ractices in =ietna"ese enter%rises( Ado%tion and %erceived benefits, Pacific Accounting Re*ie4, +?0+1B $H+*$NH @aile#, D(, $DD.( Accounting in transition in the transnational econo"#, /he Euro5ean Accounting Re*ie4, H0H1B .D.*N+? @a2ter, F( and Chua, &(F(, +,,?( Alternative "anage"ent accounting research O hence and hither, Accounting, 2rgani3ations and Society, +E, DA O $+N( @ou<uin, A(, +,,N( 6om5ta(ilit7 de gestion, 5cono"ica, Paris( Cade', /( and Guilding, C(, +,,A( @ench"ar3ing the incidence of strategic "anage"ent accounting in /lovenia, 8ournal of Accounting 9 2rgani3ational 6hange, ?0+1, $+N*$HN( Chenhall, )(9( and 5us3e, L(F(, +,,A( !he role of "anage"ent control s#ste"s in %lanned organi'ational changeB An anal#sis of t o organi'ations, Accounting, 2rgani3ations and Society, ?+, N,$*N?A( Chua, &(F(, $DD.( 52%erts, net or3s and inscri%tions in the fabrication of accounting i"agesB A stor# of the re%resentation of three %ublic hos%itals, Accounting, 2rgani3ations and Society, +,0+*?1, $$$*$H.( CGFAC5, +,$,( !he +,$, countr# ris3 conference, re%ort available on line at htt%B-(coface(ro-( Duh, )()(, Wiao, F(X( and Cho , C(&(, +,,D( Chinese fir"s; use of "anage"ent accounting and controlsB facilitators, i"%edi"ents, and %erfor"ance effects, 8ournal of International Accounting Research, E0$1, $*?, Durden, C(9( and Perera, 9(, +,,E( !he role of "anage"ent accounting in organi'ational control s#ste"sB %reli"inar# e*idence of an organic a55roach, Proceedings of ."": AFAA;<=IAAER 6onference, N*E Ful# +,,E, /#dne#, Australia( 5us3e, L(F( and )iccaboni, A(, $DDD( /tabilit# to %rofitabilit#B "anaging interde%endencies to "eet a ne environ"ent, Accounting, 2rgani3ations and Society, +H, HN? O HE$( Fan, P(, $DDE( !he transfer of &estern "anage"ent to China, conte2t, content and constraints, Management >earning, +D0D1B +,$*++$( Gra#, /( and )oberts, C(, $DD$( 5ast*&est accounting issuesB a ne agenda, Accounting ,ori3ons, +, H+*.,( 9ald"a, !( and L::ts, L(, +,,+( 8nfluencing contingencies on "anage"ent accounting %ractices in estonian "anufacturing co"%anies, Management Accounting Research, D, ?AD*H,,( 9o%%er, !(, Lir3ha", L(, /ca%ens, )( &(, and !urle#, /(, $DD+( Does financial accounting do"inate "anage"ent accounting * A research note, Management Accounting Research 0Dece"ber1B ?,A*?$$( +?

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+H

Pi%an, !( and C'arnia s3a, @(, +,$,( 9o to construct an actor*net or3B Manage"ent Accounting fro" 8dea to Practice, 6ritical Pers5ecti*es on Accounting, +$, +H?* +.$( Preston, A(, $DEN( 8nteractions and arrange"ents in the %rocess of infor"ing, Accounting, 2rgani3ations and Society, $$0N1, .+$*.H,( Preston, A(M(, Coo%er, D(F( and Coo"bs, )(&(, $DD+( Fabricating budgetsB a stud# of the %roduction of "anage"ent budgeting in the National 9ealth /ervice, Accounting, 2rgani3ations and Society, $A0N1, .N$ O .D?( )e7c, A(, +,,.( Perfor"ance "easure"ent in Central and 5astern 5uro%e, &estern 5uro%e, and North A"ericaB a co"%arison of research and co"%an# %ractices, .nd AIMA Dorld 6onference on Management Accounting Research, Montere# Peninsula, Northern California, 6/A( )#an, @(, /ca%ens, )(&( and !heobold, M(, +,,+( Research Methodology in Finance and Accounting, +nd edition, !ho"son( /'#chta, A(, +,,+( !he sco%e of a%%lication of "anage"ent accounting "ethods in Polish enter%rises, Management Accounting Research, $?, H,$*H$E( !a#lor, !(C( and Gsi%en3ova, G(, +,,?( Manage"ent accounting in )ussiaB a or3 in %rocess, 6ost Management, $A0?1, ?D*H.( 6#ar, A(, +,$,( Cost and Manage"ent Accounting PracticesB A /urve# of Manufacturing Co"%anies, Eurasian 8ournal of Business and Economics, ?0N1B $$?*$+.( =>"osi, !(, +,,.( Manage"ent accounting and accountabilit# in a ne realit# of ever#da# life, /he British Accounting Re*ie4, ?AB HH?*HA,( =>"osi, !(, +,,?( !he role of "anage"ent accounting in a co"%an# in transition fro" co""and to "ar3et econo"#, 8ournal of Small Business and Enter5rise Ee*elo5ment, $,0+1, $DH O +,D( &a eru, N( M(, 9o<ue, X( and 6liana, 5(, +,,H( Manage"ent accounting change in /outh Africa( Case studies fro" retail services, Accounting, Auditing and Accounta(ility 8ournal, $A0.1, NA.*A,H( Pa'difar, 9(, Xa"an, M(, !sa"en#i, M( and As3aran#, D(, +,,E( Manage"ent accounting change in a subsidiar# organi'ation, 6ritical Pers5ecti*es on Accounting, $D, H,H*H?,( *** @anca Na[ional a )o"\niei 0+,,D1 @uletin de con7unctur nr( $??, anul W88 ])e%ort on the current status no( $??, #ear W88^, Fanuar#, available on*line at (bnr(ro( *** Legea contabilit[ii nr( E+-$DD$, Monitorul Gficial nr( +N.-+A($+($DD$, re%ublicat _n Monitorul oficial al )o"\niei nr( H.H-$E(,N(+,,E ]Accounting La no( E+-$DD$, Gfficial Fournal of )o"ania no( +N.-+A($+($DD$, revised, Gfficial Fournal of )o"ania no( H.H-$E(,N(+,,E^(

+.

T $0es
!i"escale Pro7ect;s %hase +,,.*+,,N NA O the researcher beca"e involved in the design and i"%le"entation of the s#ste" NA +,,A * fall of +,,E 6se of the s#ste" Fall of +,,E*Fall of +,,D Altered use of the s#ste" 0first alteration1 First alteration 0t o datasets, an official dataset and a "anagerial dataset1 !he o ner and the "anagers Allo ed both $1 fiscal o%ti"i'ation 0the official dataset1, and +1 served their original goals 0the "anagerial dataset1 5ngineers !he# did not Mbelieve; these Martificial; data No actual use on the field 5nd of +,,D to %resent da#s 9ighl# altered use of the s#ste" 0second alteration1 /econd alteration 0one dataset, the official financial re%orting one, allo ing reducing the inco"e ta2 %aid1 !he o ner and the "anagers 0the official dataset1 Allo s onl# fiscal o%ti"i'ation 0the official dataset1

/#ste";s status

!he s#ste" functioned ell and served its original %ur%oses !he o ner and the "anagers4 5ngineers Decision*"a3ing, cost reduction and effectiveness4 5ngineers ere being convinced of the %otential benefits of the s#ste" Possibl# engineers Lac3 of trust in this Mcontrolling; s#ste" Possibl# less than full involve"ent in %ro7ect;s i"%le"entation

/u%%orters &h#C

!he o ner &anted an accurate s#ste" that ould hel% hi" in "anage"ent

Detractors )easonsC Conse<uencesC

NA * *

!he o ner and the "anagers 0the "anagerial dataset1 !oo cost ineffective to "aintain both datasets Abandon of the "anagerial dataset

/a(le & Descri%tion of the MA/

+N