Management Accounting Research 17 (2006) 11–41

Trust for accounting and accounting for trust
Cristiano Busco a , Angelo Riccaboni a , Robert W. Scapens b,c,∗
b

a
University of Siena, Italy
Manchester Business School, Booth Street West, Manchester M15 6PB, UK
c
University of Groningen, The Netherlands

Abstract
This paper combines insights from the sociology of knowledge and the emerging practice-based literature on
learning and knowing to extend the institutional framework of accounting change developed by Burns and Scapens
[Burns, J., Scapens, R.W., 2000. Conceptualising management accounting change: an institutional framework.
Manage. Acc. Res., 11, 3–25]. In particular, it explores how management accounting systems (MAS) can be
implicated in processes of learning and culture change, and used to identify ‘trustworthy’ solutions in the face
of organisational crises. A case study of an Italian company, which was subject to massive change following its
acquisition by General Electric, is used to discuss how, when crises arise and organisation members find themselves
under intense pressure for change, their rationales and routinised behaviour, which are driven by the existing
knowledge and cultural assumptions, are challenged. The case illustrates how MAS can act as sources of trust for
the processes of change – i.e., accounting for trust; while at the same time being socially constructed objects of
trust – i.e., trust for accounting. Drawing on the concept of personal trust and the notion of roles as access points to
organisational (expert) systems, the paper discusses how, in this case, finance experts facilitated the acceptance and
progressive sharing of new rationales and routines. Clearly, this does not guarantee that change will occur or occur
in some ‘desired’ direction in other cases, but it increases the possibility of replacing trust in the predictability of
routines with feelings of trust for change.
© 2005 Elsevier Ltd. All rights reserved.
Keywords: Management accounting; Change; Crisis; Trust; Expert systems

Corresponding author.
E-mail address: Robert.Scapens@mbs.ac.uk (R.W. Scapens).

1044-5005/$ – see front matter © 2005 Elsevier Ltd. All rights reserved.
doi:10.1016/j.mar.2005.08.001

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C. Busco et al. / Management Accounting Research 17 (2006) 11–41

1. Introduction
This paper aims to understand how management accounting systems (MAS)1 are implicated in processes of individual (un)learning2 and organisational culture change, and how they may be used to identify
‘trustworthy’ solutions in the face of organisational crises. By extending the institutional framework of
management accounting change developed by Burns and Scapens (2000), we will explore the role of
MAS as practices acting both as sources and objects of trust/distrust for change (Nooteboom, 2002),
and discuss the way in which they may be relied upon by organisational actors to challenge existing
knowledge, and open up possibilities for radical change.
The last 20 years have witnessed a massive transformation in business organisations, which have been
forced by intense competition and the globalisation of markets to re-define their strategies, structures
and processes. Consequently, change has become a pervasive feature of organisational life. The role
of accounting and control systems within processes of organisational learning and transformation has
been widely debated in the literature (see, among the others, Hopwood, 1987; Argyris, 1990; Dent, 1990;
Gray, 1990; Cobb et al., 1995; Otley and Berry, 1994; Coad, 1995; Kloot, 1997; Burns and Scapens, 2000;
Meer-Kooistra and Vosselman, 2000; Johansson and Baldvinsdottir, 2003; Seal et al., 2004; Bhimani and
Roberts, 2004). Various writers have illustrated the potential of accounting for visualising, analysing and
measuring the current state of a business, for questioning operational and managerial strategies, and for
justifying new courses of action (Hopwood, 1990; Ezzamel et al., 1998). In particular, there is agreement
that systems of measurement and accountability have the potential for making reality calculable (and
thereby making individuals accountable—see Miller and O’Leary, 1994); for translating stock market
driven pressures into quantifiable financial targets linked to production processes and business practices
(Ezzamel et al., 1999); for promoting employee identification with and commitment to specific values
and operating philosophies (Jazayeri and Hopper, 1999); and for improving intra-organisational communication by infusing managers and non-accountants with a shared financial vocabulary for reading the
state of the business (Roberts and Scapens, 1990).
When crises arises, organisations can be faced with an overwhelming need for radical change, and
accounting practices (along with other organisational systems) can play a role in enabling individual
organisational members to respond to this need for change. Their responses, however, may be guided
by either existing routines and habits of thought, or by rational deliberation. As carriers of organisational and individual knowledge (Nelson and Winter, 1982; Burns and Scapens, 2000), MAS can, on
the one hand, play an active part in processes of change, by facilitating search and experimentation,
while on the other hand they can also limit the questioning of existing knowledge and assumptions
(Hopwood, 1987; Dent, 1990; Argyris, 1990). Kloot explored the intertwined relationship that links management control practices and organisational learning, and argued that “management control systems
affect the understanding of what changes mean, how and what solutions might be generated, and a perception of whether the time has come to uncouple the organization from old structures and operating
paradigms to move to new structures and paradigms” (1997, p. 69). Although organisational learning
implies that knowledge is transferred to the organisation, learning per se is essentially an individual
1

In this paper, we use the term management accounting systems to be consistent with the literature to which we refer. But
possibly, the label “performance measurement” would be a more accurate term to describe the broader essence of these systems.
2
We use the expression (un)learning to signify that the process of acquiring new knowledge and skills may also involve the
discarding of existing skills and knowledge.

C. Busco et al. / Management Accounting Research 17 (2006) 11–41

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process (Argyris and Sch¨on, 1978; Levitt and March, 1988; Herriott et al., 1985). However, the way
in which MAS contribute to processes of individual (un)learning, and the relationship between tacit
(unconscious) and purposeful (conscious) behaviour is still far from being clear and deserves further
investigation.
Aiming to address these issues, this paper combines insights from the sociology of knowledge (Berger
and Luckmann, 1966; Giddens, 1984, 1990) and the emerging practice-based literature on learning and
knowing (Gherardi, 2000; Gherardi and Nicolini, 2001; Nicolini et al., 2003) to extend the institutional
framework of accounting change developed by Burns and Scapens (2000); where MAS are viewed as
sets of rules (the formalised statements of procedures) and routines (the practices habitually in use)
implicated within the production and reproduction of knowledge. In so doing, we emphasise the need
to study processes of (un)learning and change by looking at the intertwined relationship between participation in a practice – such as management accounting – and the management of anxieties (Schein,
1992) which characterise reflection on a practice. According to this perspective, knowing and acting in
organisations and in other situated contexts are mediated, not just by rules and routines, but also by discourses, social relations, etc. (Nicolini et al., 2003). This paper will combine theoretical interpretations
with empirical evidence from an explanatory case study—while, on the one hand, the perspective developed in the paper has contributed to our search for a theoretical explanation of the evidence collected;
on the other hand, the empirical data has itself illuminated the interpretive perspective offered in these
pages.
The structure of the paper is as follows. Section 2 introduces the concept of MAS as routinised practices implicated within processes of individual (un)learning and organisational change. In so doing,
the section discusses issues such as the reasons behind the routinisation of human behaviour, the
way in which knowledge is (un)learned by participating in and reflecting on practices, as well as
the role of trust in assessing and questioning the validity of existent knowledge. The section ends
by exploring the concept of trust for change. Section 3 then explores the interplay between MAS
and trust in action; illustrating the processes of cultural integration and transformation which followed the acquisition of Nuovo Pignone (Italy) by General Electric (US). Section 4 begins with a
review of the concept of culture, which anticipates a discussion of the role of MAS within the process of cultural unfreezing, change, and re-freezing at General Electric-Nuovo Pignone. Next, the
insights from our interpretive perspective are discussed as we explore the nature of MAS as: (1)
sources and (2) objects of trust; (3) the notion of roles as access points to organisational systems
such as management accounting; (4) the need to interpret processes of radical change beyond idle
curiosity, as they involve practice-based management of anxieties. We end this section by illustrating that (5) the intertwined relationship between MAS and trust for change can sometimes work in a
mutually damaging way. Finally, Section 5 concludes the paper by reviewing its contents and key messages.

2. The role of trust and accounting practices within processes of (un)learning and change
2.1. MAS as routinised practices and their linkage with trust
During the 1990s, a number of scholars described accounting practices as organisational routines (see,
among others, Roberts and Scapens, 1990; Dent, 1991; Scapens, 1994; Mouritsen, 1994; Burns and

and needs to be explored within the specific organisational context. 289–292). for as Webb argues. accounting systems. a powerful force tending to hold organisations on the path of relatively inflexible routine” (1982. and as such accounting and accountants are welcome in the search for solutions to the crisis. it becomes imperative to choose those you can trust” (1996. A substantial threat to either the organisation or the individual is generally at the centre of such definitions (Webb. “one area of firm behaviour that plainly is governed by a highly structured set of routines is accounting” (1982. 1996). 920). the accepted norms of behaviour and ways of thinking). The work of Nelson and Winter (1982) on evolutionary economics seems to have directly or indirectly influenced many of these contributions. and there is always the possibility of a breakdown in behavioural regularities. . . and trust entails predictability (Luhmann. / Management Accounting Research 17 (2006) 11–41 Scapens. “there will be moments of crisis situations or structural breaks when existing conventions or social practices are disrupted” (1985. 2000). Nelson and Winter describe routines as the means through which organisational memory is produced and reproduced in practice. and to reconstitute the previous conditions of ‘safety’. Busco et al. 1990). detached from any trusted rationales. they are likely to be marginalised. 1996). Conversely. Webb suggests that an assessment of the adequacy of resources is a key element in defining the presence or absence of a crisis. 1963. However. pp.14 C. When accounting is embedded within the trusted rationales (i. they suggest. However. such situations represent a breaking down of the behavioural and cognitive truce. the power of routines is reinforced by their ability to reduce conflict. may have the potential to sustain trust at such a time. In such situations. 1976). Habits of thought and routinised patterns of behaviour provide a sense of stability and predictability through time and space. in general. Webb also points out that crises are “magnifying loci for the enhancement or dissolution of trust” and “a uniquely heated crucible” for both its creation and its destruction (1996. p. Hermann. they assist individuals to cope with the uncertainties that characterise their social experience. pp. 2000. purposively designed by management. when accounting systems are used as ad hoc measures. 1990). although deeply embedded in individual stocks of knowledge. As suggested by Lawson. Furthermore. . feelings of trust are likely to play a pivotal role in the search for solutions as. it is likely to be employed to confront environmental disturbances or organisational crises. “routine operation involves a comprehensive truce in interorganisational conflict . which is normally sustained by organisational routines. But here it is important to know who or what you can trust. Significantly. But the outcome is far from obvious. and enable individuals to cope with the complexity of specific situations and to take appropriate actions (Bourdieu. As routines represent the behavioural-level manifestation of the institutionalised cultural order. which distinguishes a potential crisis from ordinary problems. Since crisis involves inadequacy. p. Turner.. 410). 110–112). When shared organisationally. p.e. As stressed by Nelson and Winter. 293). Arguing that the routinisation of activity is the most important mechanism for the storage of organisational knowledge. for the individual. it is the lack of available resources. The literature on organisations contains various definitions of crisis (see for example. Burns. “when you feel shaky about your own ability to cope. In such crisis situations. there are usually inadequate resources and little time in which to respond (see Mishra. In crisis situations dependency on others increases as it is necessary to look to others to provide the missing resources. and consciously/unconsciously drawn upon by organisational members. but they could become a focus of conflict if they are then drawn upon in a crisis (see Roberts and Scapens. (and) the fear of breaking the truce is. 1979). which sustain organisational routines. there could be said to be acceptance of accounting. routines do change over time.

3). later. 57). p. This is achieved through processes of reutilisation. Consequently. The latter is made possible through the “world-openness”. Agent’s need for routinisation Berger and Luckmann (1966) draw on Gehlen’s philosophical anthropology (1956). the role of trust in assessing and questioning the validity of existent knowledge (Section 2.C. which is developed during the infant’s pre-linguistic stage to cope with anxiety and. Importantly. p. p. 2. Giddens (1984) stressed the importance of routinised patterns of behaviour in the continuity and ordering of social life. through routinised practices individuals satisfy their need for ontological security. Berger and Luckmann see social order as emerging out of the need to support human nature by providing it with those stabilising cognitive and normative structures that are absent biologically. These issues are crucial to understanding the dynamics of stability and change at both the individual and organisational level. Similarly. which characterise agents’ relationships with their environment (Berger and Luckmann. Thus. 65).4). 50). “the generation of feelings of trust in others. secondly. thirdly. through the enactment of repeated patterns of behaviour. He argued that ontological security is the basic anxiety-controlling mechanism (1984. the cognitive sense of safety. while routinisation provides individuals with the sense of safety that is needed for coping with the anxieties that characterise the contexts of interaction. as well as the role which MAS are able to play during these processes. as the deepest-lying element of the basic security system. and the potential for change. or organisation. In particular. the way in which knowledge is (un)learned by participating “in” and reflecting “on” routinised practices (Section 2. can be described as a never-ending social product. they argue that the formative causes of social experience are anthropological in nature: “the human organism lacks the necessary biological means to provide stability for human conduct” (1966. Busco et al. sustained through the enactment of predictable routines in social interaction. human agency is “mediated by the social relations which individuals sustain in the routine practices of their daily lives” (1984. is constantly created. Giddens grounded his theory of the subject in the interplay between the development of personality. Accordingly. / Management Accounting Research 17 (2006) 11–41 15 To explore the linkages between MAS and feelings of trust within processes of (un)learning and change. by which agents retain the knowledge acquired from their social experiences and cope with reality of every day life without continually questioning its traits and characteristics. p. which combines both stability. As Giddens argues. while reproducing the wider organisational and societal order. the cultural order of any society. sustained and reinforced in action through practices. 69). Significantly. maintained (or questioned) and validated before it becomes embedded in routinised practices? . However.2. the reasons behind the routinisation of human behaviour (Section 2. and the reflexive monitoring of action. a question remains: how is knowledge acquired.2). the processes of routinisation. p. which individuals are looking for. Human behaviour is not exclusively dependent upon psychological mechanisms embedded within the personality of the individual. Trust is to be found in the deepest layer of ontological security and. 53). drawing on the Freudian perspective of personality and Erikson’s ego-psychology (1963). as Giddens suggests. Schutz’s phenomenological approach (1972) and Mead’s social psychology (1934) to explore the mechanisms through which a shared cultural order is produced and reproduced in light of the ‘biological’ qualities of the individual. depends substantially upon predictable and caring routines” (1984. 1966. three connected issues require particular attention at this stage: firstly.

2001. In particular. 1984). abstracting and acting. 1993. 2001). Drawing on Dewey’s philosophical pragmatism (1910) and Lewin’s social psychology (1952). which deny any role for subjective experience in the learning process (Kolb. Competence in a practice is built through participation and is embodied in pre-reflexive tacit knowledge. Senge. creating a distance between the knowing subject and the object of its knowledge. In doing so. Polanyi defines tacit knowledge as “the outcome of an active shaping of experience performed in the pursuit of knowledge” (1983. experiential learning theory describes the way in which the individual constructs meaning through continuous cycles of experiencing. experiential learning theory has stressed the central role that experience plays within processes of individual (un)learning and organisational change (see Kolb.e. some existing knowledge that is being acted upon. p. and (2) behavioural studies. reflexivity betrays “the logic of practice” (Gherardi and Nicolini. the concept of practice is central to experiential learning.e. Accordingly. / Management Accounting Research 17 (2006) 11–41 2. they rely on taken-for-granted tacit assumptions) and reflexively constitutive of the context from which they arise. Through practices. knowing in practice) is recursively linked to reflecting on a practice (i. p. Therefore... 1984. 6). when critical situations arise. by including both the mental and the material.3 Importantly. which leads to another concrete experience” (p. i. Experiential learning theory suggests that an experience alone is not sufficient for learning. there must be something to be transformed. Gherardi and Nicolini. it requires a separation. the concept of participation emphasises the fact that (un)learning does not take place exclusively in the minds of individuals. To participate in a practice implies learning the sens pratique of that activity (Bourdieu. In the same way. Cognitive and behavioural implications of learning: the concept of practice Interpreting MAS as socially constructed and institutionalised practices involved within processes of individual (un)learning and organisational change. and testing those ideas in new situations.. Practices contain both behavioural and cognitive elements. which tend to emphasise cognition over effect. Busco et al. as the locus to participate in and to reflect on. “The logic of practice does not draw a distinction between subject and object” (Gherardi and Nicolini. it is kept within the habitus. 2001). Therefore. 2001). forming abstract concepts and generalisations based on those reflections. 2001.e.3. Kim. change alone does not represent learning. by defining learning as a process whereby knowledge is created through the transformation of experience. making observations and reflections on that experience. by emphasising that learning is achieved through reflection upon everyday experience. this theory aims to reconcile: (1) cognitive perspectives. knowing a practice). situations and knowledge recursively reproduce themselves within processes of (un)learning and change. Kim (1993) argues that learning involves thought and action in both the conceptual (cognitive) and the operational (behavioural) realms. The sens pratique is pre-reflexive.. Eventually.16 C. A practice is a system of activities in which ‘knowing’ is not separate from ‘doing’. something must be done with it. 1990. practices are both pre-reflexive (i. requires exploration of ‘practice’ as a concept which combines the social constructionist notion of ‘participation’ with the institutional notion of ‘reflexivity’ (Gherardi and Nicolini. reflecting. locked-in routinised behaviours and supported by historical anchors. the tacit-knowledge embedded in that practice (Polanyi. 51). 3 Building on the work of Kolb (1984) and Senge (1990). 1990). . and explains how in learning “a person continually cycles through a process of having a concrete experience. 53). 1962). 38). Participation in a practice provides individuals with ‘know how’.e. p. but rather stems from the engagement of individuals in social practices situated in specific contexts of interaction (Gherardi and Nicolini. participating competently in a practice (i.

and is now also beginning to be discussed in the accounting literature (Meer-Kooistra and Vosselman.e. 2005). distant events are shaped by local happenings. 2004. 2000. the conceptualisation of trust can be linked to an understanding of the agent’s psychological make-up (Giddens. 1988. in which there is a disembedding of experiences and meanings from the local context where they emerge. 2003. When the validity of existing knowledge is questioned through reflection on practices. only when a breakdown threatens the tacit-knowledge. The role of trust in the modern organisation derives from the way contemporary organisations engage with the complexity of late-modernity. 1992. which implies a preference for a stable and predictable environment (Luhmann. in the practices that sustain an organisation. Grey and Garsten. in its broadest sense. Johansson and Baldvinsdottir. processes of (un)learning and change are continuously performed by individuals as they engage. 1990. therefore. Seal et al. while standardised and abstract dimensions of space and time come to rationalise these decontextualised activities. The next section focuses on the role of trust in coping with the uncertainty that characterise processes of change. providing abstract guarantees of expectations through 4 According to Giddens. to the process of disembedding knowledge from those practices through which it is sustained in action. is linked to the institutionalisation of knowledge. 2003. trust. the subject switches from subsidiary to focal awareness to re-asses the validity of knowledge that was once taken-for-granted. . is a mechanism that can reduce uncertainty in contexts of interaction and facilitate the functioning of organisational systems through the behaviour of social actors (see Sako. Barrett et al. when the flow of experience is interrupted. p. in turn. 2001. i.. According to Giddens. 1984) and his/her need for routinisation (Berger and Luckmann. as competent (knowledgeable) actors. As such. 24). 1979). 1996. Individuals produce and reproduce social contexts by participating in practices. Tomkins. 27). is “systems of technical accomplishment or professional expertise that organise large areas of the material and social environments in which we live today” (Giddens. In Polanyi’s terms. Dekker.. Giddens (1990. 22). 2. which sustains them. Nooteboom. which he collectively refers to as abstract systems (p. Tyler and Kramer. In such situations.4. money “provides for the enactment of transactions between agents widely separated in time and space” (1990. 1991) characterises late-modernity by the intensification of world-wide social relationships which link ‘distant localities’ in such a way that local happenings are shaped by distant events and. 80). expert systems. which can store and transmit some sort of value. Expert systems facilitate the establishment of social relations across vast expanses of time and space. whose validity becomes the object of a critical reflection. 1966). individuals use their practical experience to reflect back on the contents (‘knowing what’) of their existing knowledge. Busco et al. distance and risk: the role of trust What is trust? What is the role of trust in modern organisations? Trust is a concept. Symbolic tokens (money is probably the best example4 ) are mechanisms. Coping with uncertainty. 2004. p. which has been widely explored in the management and organisation literatures (Gambetta. thereby enabling value to be transported across both time and space. p. For our purposes.C. 2001). Giddens identifies two types of disembedding mechanisms: symbolic tokens and expert systems (1990.. trust becomes an important resource to be drawn upon by individuals. 2002). Reflexivity. / Management Accounting Research 17 (2006) 11–41 17 According to this perspective. the ‘problem of order’ in late-modernity is one of time-space distanciation. The second type.

once new solutions have been successfully experienced and validated.The complexity of late-modernity requires two forms of trust: a confidence in the reliability of: (i) specific individuals (personal trust) and (ii) abstract systems (system trust). 2001). together with established rules and procedures. / Management Accounting Research 17 (2006) 11–41 the development of their own expertise and cadres of experts who further stretch social systems. and through face-to-face contacts such individuals can absorb risk by assuring potential users that these systems are trustworthy (Bachmann. Consequently. and (3) the contextual factors that serve to either enhance or prevent the development and maintenance of a sense of trust (Lewicki and Bunker. it is crucial to interpret trusting relationships as cognitive phenomena embedded in practices. as individuals are usually the access points for the systems. to embody a certain degree of confidence in the face of risk (Lewis and Weigert. 194). Busco et al. trust can be understood only by recognising and accepting the radical uncertainty of human behaviour (Nooteboom. (2) the risks associated with acting on the basis of such predictions. and they will experience what Giddens refers to as ‘ontological insecurity’. Schein emphasised the role of anxiety and argued that in order to cope with the anxiety. these two forms of trust are often interdependent. trust is connected to: (1) predictions about the trustworthiness of the trustee. 5 In his earlier work Schein called survival anxiety “Anxiety 1” and learning anxiety “Anxiety 2” (see 1993). (3) the creation of psychological safety and the overcoming of learning anxiety5 and finally. and grounded within ongoing processes of individual (un)learning and social interaction. 2. Once this level is achieved. whereas face-to-face contacts represent an important source of system trust. agents are constantly looking for some level of psychological safety (1992. trust can be interpreted as risky engagement (Luhmann. 115). trusting relationships involve a state of “confident positive expectations about another’s motives with respect to oneself in situations entailing risk” (p. the notion of trust extends beyond a basic need for predictability. 2001). 1985). see Nooteboom (2002). can also contribute to reinforce personal trust. the strength of stable and anonymous standards of expertise. 2001). As such. Summarising. 1993). the agent maintains this sense of safety through the repeated enactment of behavioural routines that tend to avoid cognitive and behavioural changes. For these reasons. As suggested by Boon and Holmes (1991). by (4) a cognitive redefinition and sedimentation of the new experiences. individuals (and social groups) will be unable to rely on the anticipated behaviours and responses. (2) the emergence of guilt or survival anxiety.18 C. 1996). Managing anxieties during processes of (un)learning: interpreting “trust for change” In his description of individual (un)learning. 2002). Importantly. in organisations the processes of social validation enable a progressive sharedness and collective re-freezing of the new experiences that proved to be successful in practice. according to Luhmann. Similarly. Importantly. where someone (the trustor—the subject of trust) has trust in someone or something (the trustee—the object of trust) in some respect and under certain conditions (the context). which arises in contexts of social interaction. . But (un)learning and change are possible through a process of cultural unfreezing and re-freezing. which at the individual level comprises: (1) mechanisms of disconfirmation. Thus.5. but at the same time produces risk. In this respect. 1979). p.Where trust is undermined. Trust absorbs uncertainty. Risk is inevitable whenever any individual decides to trust another social actor or a social system on the basis of limited available information (Bachmann. since (un)learning is “uncomfortable and anxiety-producing” (1999. the first and basic problems with which social actors have to cope: is how to reduce uncertainty (Bachmann. 1995.

Following from such positions. and to raise sufficient survival anxiety to stimulate change. trust for change is socially constructed and mediated by interaction: i. which although it “prevents learning.. shame or guilt associated with not learning anything new” (1993. . Emerging from the individual’s expectations about order. . p. In this paper we will discuss how feeling of trust (and distrust) for processes of change can emerge in practice through the tensions that characterise individuals’ responses to a crisis. we will begin this process by outlining the change which followed the acquisition of Nuovo Pignone (Italy) by General Electric (US). 1997). “the fear. Schein argues that in order to take such information seriously. a second kind of anxiety can create defensive reactions and resistance to change. without generating a level of learning anxiety which escalates defensive attitudes. We will adopt an interpretive perspective combining theory with insights from the field. is necessary to start learning as well” (Schein. . However.. In the next section. Although survival anxiety may arise when disconfirming information is considered valid and relevant.. 88). p. on the one hand. 2003). is not enough for change to occur. by itself. challenging the taken-for-granted assumptions and routinised patterns of behaviour). 6 This leads him to the twofold and. it is a psychological state built on social practices and experiences. 1993. disconfirming information. / Management Accounting Research 17 (2006) 11–41 19 Schein considers disconfirmation the key psychological element which lies at the centre of processes of (un)learning and change. paradoxical role of anxiety. 89). trust is built on and carried in the practices through which agents make sense of the reality in which they live. safety and stability in the realm of social interaction (see Garfinkel. Importantly. p. which characterise such responses. . the disconfirmation must stimulate what he calls survival anxiety: i.e. Such a perspective offers us an interesting point of departure to interpret the intertwined relationship between MAS and feelings of trust for change. Along these lines. on the other hand. While.e.. trusting relationships are needed to give confidence in the search for new types of behaviour that will inevitably involve uncertainty and risk. we can define trust for change as the psychological condition experienced by individuals as they reflect critically on their social experiences. Conceptualised as social and institutional practices.C. this paper seeks to understand the role of management accounting practices in the emergence of feelings of trust (or distrust) for the changes proposed in crisis situations. MAS have the potential to engender feelings of trust in the identification of possible solutions in critical situations (see Johansson and Baldvinsdottir. “the feeling that is associated with an inability or unwillingness to learn something new because it appears too difficult or disruptive” (1993. We will explore how MAS can be implicated in the management of potential conflicts between tacit (or unconscious) and purposeful (or rational) behaviour. Our objective is to investigate the extent to which forms of personal and system trust are implicated in the constitution of (management) accounting as a social and institutional practice. Seal and Vincent-Jones.e. and to motivate individuals to change. which allows them to classify events or data as disconfirming (i. Busco et al. the evidence will also be used to illuminate and reflect on the insights that characterise our interpretive perspective. 1967). to some extent. Such practices represent the ‘presentational’ ground on which feelings of trust are created and sustained in specific contexts of interaction (Lewis and Weigert. 86).e. 1985. the perspective developed in the paper will provide a theoretical explanation of the evidence collected. This Schein describes as learning anxiety6 : i. In such circumstances.

in 1994. as well as the need to reduce public-sector debt. As far as measurement systems were concerned. workshops and focus groups. in order to develop and present together with GE finance experts training courses on such topics as ‘finance for non financial managers’. We were offered the chance to play an active role in both discussing the changes with employees and contributing to their re-training. Given NP’s well-earned reputation for the quality of its engineering and products. which was one of ENI’s few profitable businesses. political and economic life: (1) a massive investigation during the early 90s. Although various programmes of organisational restructuring were implemented within NP. ENI entered a phase of major organisational restructuring. who later committed suicide in prison. encouraged by the European Union’s restrictions on state aid to industry. over the years the company grew and prospered through the design and manufacture of specialised equipment. and also its extensive market portfolio.8 Established as a cast-iron foundry. a state-owned holding company. which ended in the arrest of hundreds of politicians and managers. seminars. and was later. We will focus on the integration of NP into the global GE organisation. called Mani Pulite (or Clean Hands). Busco et al. The investigation was driven by a pervasive public mood to rid the economic and political life of the country of kickbacks and bribery. which has been carried out by successive Italian governments since 1993. 1992) allowed us wide-ranging access to the organisational setting. the process of integration was grounded in a major change in the understanding of ‘measurement’. As a result of its production excellence. The case of Nuovo Pignone: the background of an acquisition7 Originally established in 1842 in Florence (Italy) as Pignone. Gabriele Cagliari. was classified as non-core and sold in 1994 through a private treaty between the government and GE. 8 NP was acquired by GE Power Systems (which in 2004 became GE Energy). GE’s acquisition of NP took place following two major events which had had a huge impact upon Italian social. group discussions and courses. . We were asked to build on our interviews. and especially performance measurement. Nuovo {New} Pignone (NP) was set up in 1954 following its acquisition by ENI. General Electric (GE). pumps and turbines for energy related industries—its technical achievements include the world’s first gas-powered internal combustion engine. it was not surprising that GE decided to acquire this major competitor. acquired by the US multinational. such as supplying pumping stations and other equipment for the Trans-Siberian Pipeline. During this period NP. including its chairman. NP has been successful in gaining large contracts for major projects. Accounting and trust: evidence from the field 3. 2003). ‘understanding financial fundamentals’. ‘the financial benefits of six-sigma’ and ‘controllership’.1. the culture of NP was so totally different to GE that a massive 7 The insights from the GE-NP case are based on a longitudinal study of close observation during which two of the current authors had the opportunity to spend considerable amounts of time in the company (see Busco. The sale was part of the privatisation programme. where we took part in workshops. Overall. compressors. we conducted more than 90 interviews up to the end of 2004. and (2) an extensive programme of privatisation which was launched by the government in 1993. Hit by this Mani Pulite scandal and by a loss of $554 million in 1992. such as electrical turbines. / Management Accounting Research 17 (2006) 11–41 3. observations. ranging from downsizing and delayering to boundaryless working and outsourcing. participations in meetings. Important for our purpose is that the investigation led to the arrest on corruption charges of some 20 of ENI’s top executives. and to interpret the reactions of a community whose ‘culture’ was deeply challenged by the GE acquisition.20 C. During the Mani Pulite investigation the climate in the country was very tense. within NP. From 1995 to 2004 we were given the opportunity to explore the process of accounting and performance measurement change as it unfolded. This dual role as researcher and helper–clinician (Schein.

who still deserve to be trusted because they have the potential to improve their skills and productivity. Promote them. this did not prevent NP from being quite profitable. who subscribe to the company’s values and who have to be kept and rewarded. Despite its undoubted technical competence. . GE’s management and organisational style relied extensively on such systems for both communication and control. GE Equipment Services. We want only A players. NP was a state-owned and largely bureaucratic company. and are described as market leaders with great strengths in technology. and the second was the subsequent implementation of the Six Sigma Initiative—a measurement-based quality improvement programme. . / Management Accounting Research 17 (2006) 11–41 21 process of cognitive and practical redefinition was required. besides being radical. which sometimes described itself as a bureaucratic giant.10 managed through a common organisational language and widely shared cultural values. the key pillar of GE’s education strategy was to expose key-players to Crotonville—a 52 acre training campus in the Hudson Valley of 9 This is the term used to describe the established ways of working within GE. Pay them well. On the other hand. There are four GE Cash Generators businesses namely: GE Advanced Materials. GE Commercial Finance. due largely to its excellent products and production systems. Talking to a meeting of GE operating managers. Whereas NP had no tradition of using performance measurement systems. Busco et al. Before the acquisition. These businesses are more cyclical. We’re an A plus company. following the acquisition by GE significant change took place as the ‘GE Way’9 was applied very aggressively throughout NP. An interesting example concerns human resource management. Although. Reward them. GE Transportation. “We knew the world was going to change. . It’s a contribution”. B players. 10 . who do not subscribe to the company’s values and who. There were two major components of this change within NP: the first was the re-design of the company’s systems of control and accountability. Push C’s on to B companies or C companies. GE Energy (formerly GE Power Systems). deserve to be fired. and C Players. but characterised by consistently strong cash flow. The challenge of cultural change: the GE Way GE is a massive global business. We can get anyone we want. Jack Welch – the CEO of GE at the time – categorised managers and employees as: A players. 1998) The GE Way of running the business was deployed within NP through a massive program of training and education. GE has reorganised its structure around markets and customers. besides intense training sessions in Florence. 3. . The Growth Engines represent about 85% of GE’s earnings. . and they’ll do just fine. services. GE Insurance. The GE Way is a tough and aggressive business philosophy. Take care of your best. Move them on out early. (GE’s CEO—reported in Slater. However. “Too many of you work too hard to make C’s into B’s. GE Healthcare. the processes of change that GE brought to NP. without remorse. The seven GE Growth Engines businesses are: GE Consumer Finance. were also very rapid. GE businesses have been divided into two groups: Growth Engines and Cash Generators. And the world has changed totally!” confirmed an NP finance manager. speed and promptness were not typical characteristics of the old NP. Importantly. Cash Generators represent about 15% of GE’s earnings. p. It is a wheel-spinning exercise.C. which had to produce budgets and various reports for both head office and the state bureaucracy. cost. Give them a lot of stock options and don’t spend all that time trying work plans to get C’s to be B’s. From 1st January 2004.2. GE Infrastructure. 5). GE Consumer & Industrial (GE 2003 Annual Report. but they were used largely for ceremonial purposes and not integrated into management practices. . NBC. global distribution and capital efficiency. In particular.

offering to the company a common frame of reference to forge ties that promote knowledge and bestpractices sharing”. reliable and.e. top-managers and corporate initiative champions meet to share views and best practices from across the company. but they didn’t look so interesting or ‘burning’ as now”. We plan. “We are building up the necessary kit-for-survival. Sessions I (strategy review). The tools were there. aren’t we?” commented a project engineer at the end of a financial fundamentals training session. Re-structuring the accounting and finance function Redesigning the systems of accountability involved major extensions to the company’s financial systems. one of which was the language of accounting and measurement. In addition. communication and controllership” explained a senior GE FP&A Manager. cash flow. profitable. explained that: “GE’s headquarters need numbers to show to Wall Street. Busco et al. you have to look at GE’s operating system. traditional controllership [to] full-fledge participants in driving the business to win in the market-place—a role far bigger than the dreary and wasteful budget ‘drills’ and bean counting that once defined and limited the job” (CEO’s letter to share owners. the data were there. the week after tough inquirers start to cross the Atlantic . Quarterly Business Reviews. operating margin. indeed. when asked to describe NP’s control systems before GE’s arrival. NP’s employees were not left alone to face the uncertainties of change. No particular information was required. “I still have doubts that anyone bothered to read our reports carefully”. The latter comprised a reorganisation of Manufacturing Finance (the department traditionally responsible for cost accounting) and the establishment of new departments: namely Financial Planning and Analysis (FP&A) and Commercial Finance. Sessions II (budgeting) as well as Sessions D (compliance)”. “For this reason”. we need to be fast. he continued. / Management Accounting Research 17 (2006) 11–41 New York. but transcend. “Courses in Crotonville gather together leaders from all the GE businesses around the world. monitor and evaluate contribution margin. Thus. a management accountant emphasised that “there were no pressures for financial improvements. . FP&A means planning. If not. and enjoy the ride all the way through Operating Managers Meetings.3. this was the rollercoaster we suddenly found ourselves on. Interestingly. . who was urged to attend a Leadership Development Program right after the GE takeover. The process of re-structuring the finance function in NP reflected the GE view of the role of accountants “whose talents include. however. he continued: “if you wish to fully understand the magnitude of the NP process of change. They were provided with a number of instruments for learning and coping with the new business reality.”. . “We investigate our financials to provide the CFO and the CEO with accurate information to make proper decisions. . “Within GE. and a profound process of re-structuring of the accounting and finance function. GE 1997 Annual Report). In January 1995. Consequently. explained a NP manager. which helped to exorcise the fears connected to the re-defined organisational context. Corporate Executive Councils. .. while nervously consulting his calendar. while experiencing a period of transformation. everyone within NP was learning a new vocabulary and a set of practices. which is the GE Way in action: i.22 C. . The extent of the change that took place within NP was quite obvious in an interview with a business analyst who. a year-round series of intense learning sessions where Business CEOs. 3. the frightening Sessions C. we had to learn quickly how to fasten our seats-belt. With no chance to escape or postpone. a new task-force of Finance Managers was created and assigned to individual divisions or streams as finance experts to support the businesses.

global segment roll-ups. they assist in the development and execution of cost commitment. they work closely with the general manager to meet the financial and operating goals of the business. Finally. we have to be accurate and reliable in order to be trusted” (FP&A Manager). Finance Managers are physically located within the business. Volume). through planning and reporting the FP&A team is instrumental in ensuring the integrity of the financial statements which is essential for controllership purposes. committed expenses and estimates. transparent financial reporting and disclosure. Wearing that hat will open up new sales vistas and greater opportunities. were encouraged ‘to wear the hat of finance’ and consider customers as financial entities. we monitor the external environment by applying financial tools and techniques to the assessment of markets and market dynamics such as competition. who continued. which continues: “[as] sales and sales support professionals. FP&A managers share with the divisions’ general managers the ownership of the planning and budgeting process. Balance Sheet. payback. the FP&A team is responsible for business segments analysis and closing: i. providing a liaison between finance. and observance of common policies and processes up to the contribution margin level. analyse projects to determine cost benefit based on economic return and strategic considerations. Reporting directly to the CFO.e. declared an internal booklet prepared by Commercial Finance. as well as the linkages with corporate processes such as the strategy definition and the Operating Plan. and other sales personnel. statutory compliance. FP&A plays a central role in terms of communication and coordination. Importantly. Being the pulse of what/how the business is doing.”. they liase with FP&A on financial closing processes. as well as ensuring consistency. on the other hand. The Commercial Finance department had a crucial role in encouraging those within the sales department to think in financial terms. barriers to entry/exit. technology. you’re being asked to wear one more hat – probably the most important and powerful one in your career – that of a financial consultant. An interesting example concerns the intensive training sessions where sales managers. you wear many hats and possess many skills that keep our corporation at the sales and support forefront. “We are the channel where all the key financial information flows. functions or businesses. including monthly pre-close. quarterly closing. and the global HQ.C. and contribution to profits is a universal language that decision-makers around the world speak and understand” (emphasis in the original). for all financial reporting and analysis requirements (Profit & Lost. emphasised the senior GE FP&A Manager. Being responsible for business financial forecasting and variance analysis. In so doing. . Within GE.. and provide strong support to the businesses in following up year-to-date figures. Finance Managers supervise budgeting and reporting within the individual divisions. cost/benefits analysis. Now. return on investment. . Such a pivotal position has put FP&A at the forefront of the GE organisation. / Management Accounting Research 17 (2006) 11–41 23 and all key financial measures. Busco et al. Financial selling is the ultimate persuasive sales message – cost of ownership. Importantly. . “GE is devoted to controllership”. plans and performance measurements. ad hoc analysis and project reporting. . generate reports that provide a picture of current business standing and how this defines future business risks and opportunities. They coordinate business opportunities. front-end businesses. We touch almost everything that has to do with financial data. You will be increasingly challenged to know and assist your accounts better than ever – to look for every opportunity to improve their financial condition by selling General Electric solutions that truly affect their bottom line. as well as an efficient and effective use of resources”. . etc. “we maintain a dynamic system of controls and procedures that is designed to ensure reliable financial record keeping. on the one hand. management packages. . “Financial solution selling will be a strategic weapon in our sales arsenal”. . We estimate major short and long-term financing outlays.

and to identify critical-to-quality (CTQ) areas where we can add value or offer any sort of improvement”. The Master Black belts are the full-time Six-sigma experts. “If you’re relatively new to finance. Six-Sigma11 is a highly disciplined quality improvement initiative. which need to be investigated in order to reduce defects 11 Sigma is a measure of the number of errors (mistakes) in any process—it is derived from the statistical notion of standard error. blackbelts. the continuous waves of communication and training promoted an emerging sense of safety which had a significant impact on the process of change. Busco et al. Mastering quality: the six-sigma initiative Despite the benefits of ‘wearing the hat of finance’.4. “customers perspectives are crucial to look at our processes from the outside in.24 C. are the full time quality managers who lead the teams dedicated to specific projects. using a naval metaphor: “Overall. Within the company. Whilst their effect was to create considerable anxiety.4 mistakes per million discrete operations. stimulated feelings of ‘trust for change’—as we will discuss more fully later. The stories and rhetoric embodied within the GE Way had a powerful impact on the established rationales within NP. . Master Black belts. which has had a major impact on a number of large businesses over the past decade. you don’t have to be a CPA or financial wizard to use some of the fundamentals of finance in selling” reassures the introduction to an internal selling booklet. When a specific process operates at Six-sigma it means there are only 3.. green belts) are attached to the individuals involved. The latter. This was intended to provide participants with instruments (the strategic weapons). The emerging sense of safety was rooted in and supported by the new organisational language which in many circumstances. relax – it’s not that difficult or complicated to get started. As pointed out by an account manager. nobody asked us to find our limits: there were no wars to do”. which broadened their knowledge and skills (their sales arsenal). the Green belts work part-time on specific projects (normally 20–25% of their time). When GE took over. The changes to the previous management processes were tangible. “Key customers define what quality should mean for us in terms of performance. armed enough (even before GE takeover). champions. it was probably the Six Sigma initiative which played a major role in bringing about change in NP. various labels (i. prices. 3. 12 In addition to the full-time Quality Team. No. which disrupted the certainties embedded within the existing stocks of knowledge. The question was that we didn’t need to shoot. It comprises a range of tools. who in GE are collectively referred to as a ‘new warrior class’. the Six-sigma organisational architecture includes Champions. while continuing their normal activities in the company. master black-belts.12 The Six Sigma initiative in NP was driven by a desire to improve service to customers. who then continued. reliability. levels of service and many more” explained a Six Sigma project leader. Once CTQ areas have been identified. they are then broken-down into multiple critical processes. techniques and processes for achieving very tight quality targets at every organisational level and operation. the GE Way and the new organisational credo that it entailed were supported and reinforced by an extensive programme of training. approve and facilitate the projects within their area of responsibility. to be a bureaucratic state ship we were adequately equipped. who manage various projects and train the Black Belts. / Management Accounting Research 17 (2006) 11–41 Overall.e. The Champions are the leaders of functions or divisions who promote. Finally. by empowering individuals with new rationales. the situation was clear to everybody—there was no room for ambiguity. In applying Six-Sigma. the market competitors. the ‘war’ began and there was a common enemy to shoot at. Black belts and Green belts.

and line managers are looking to this initiative as an opportunity to reduce expenses. operating managers within NP are now able to share technical improvements and their consequences in financial terms with other GE managers wherever they are located. boost cash and increase productivity”. Before a project is initiated. the potential financial benefits and cost savings of prospective process improvement are quantified. we have emphasised the need to reconcile the cognitive and behavioural implications of learning by looking at the intertwined relationship between participation . they didn’t reproduce accountants. / Management Accounting Research 17 (2006) 11–41 25 and increase profitability.C. the aim of this paper is to understand the way in which MAS and feelings of trust contribute to processes of individual (un)learning and organisational culture change. ranging from brainstorming to statistical techniques. including CEO. They created a minimum common base of knowledge to talk about contents. the way in which organisational practices are implicated within the production and reproduction of knowledge. By integrating financial and non-financial measures. As a result of using the language of Six-Sigma. Busco et al. CFO. products and services by eliminating defects and the root causes of those defects. CTQs and the core business processes involved. “The rigor associated with linking Six Sigma projects to business financials”. by interpreting MAS as socially constructed and institutionalised practices. through Six Sigma process improvements we strengthen the ties with their consequences in financial terms”. (5) Control: where the improvements deployed are monitored through statistical process control to ensure that the new quality standards are maintained. we discussed how trust can be built on and carried in the practices though which organisational participants make sense of the reality in which they operate. On the contrary. (4) Improve: where the processes are re-engineered to bring the number of defects within the targeted limits. The way in which the Six-sigma initiative contributed to the process of culture change within NP will be further explored in the next section. (2) Measure: where data are collected and CTQs issues are assessed in sigma terms. whatever business they are in. (3) Analyse: where the fundamental causes of the defects are analysed using a wide variety of tools. explained a NP project manager. Six-Sigma extended the culture of measurement to all parts of NP. they have infused operating roles with a broader view of the business. Benefits and savings are re-evaluated during the analysis phase to ensure that the cost of the improvements suggested will be justified by the financial benefits of the project. Therefore. “By empowering engineers and technical experts with finance fundamentals they [NP management] didn’t create new figures. In Section 2 we relied upon insights from the sociology of knowledge and the literature on learning and knowing in organisations to explore issues such as the reasons behind the routinisation of human behaviour. as well as the role of trust in assessing the validity of existent knowledge and behaviours. Importantly. These critical processes are examined through specific ‘micro’ projects which involve five separate steps referred to by the acronym D-MAIC: (1) Define: a preliminary phase where the key characteristics of the project are identified in terms of customers. emphasised a NP project manager. “although Quality has always been about improving processes. As suggested by a NP project manager. and then used to help to select and prioritise projects. to reach the shop floor without losing any time arguing about meanings”. We concluded our theoretical analysis by exploring the concept of trust for change. “reinforces alignment within the company as the entire managerial structure. As stated in the introduction. The actual financial benefits and cost savings are verified once the project enters the control phase.

The theoretical insights presented in this paper (see Section 2) suggest that for change to occur individual actors must take seriously the rationales and potential of the change in order to overcome the . 4. Thus.26 C. Busco et al. are challenged. However. 1983. For these reasons. If culture represents “shared interpretive schemes. 61). in such situations the certainty and predictability of routines are radically disrupted. and organisations are faced with a need to change. When crisis situations arise. Along these lines. In the following section we will combine these theoretical insights with the empirical evidence offered in this section. it can be argued that social constructionism and functionalism converge in an interpretative perspective according to which organisations both reflect and shape their own reality (Parker. between organisations having cultures and organisations as cultures (see Mouritsen. p. organisational culture can be interpreted as a socially constructed pattern of shared basic assumptions. by creating circumstances of radical disjuncture of an unpredictable kind that threaten or destroy the certitudes of institutionalised routines. 65). and anxiety swamps habitual behaviours. Their rationales and routinised behaviours. which can be passed on to newcomers as the appropriate way to act. we draw on Schein (1991. it needs to be acknowledged that “such schemes provide the basis for shared systems of meaning that allow day-to-day activities to become routinised or taken for granted” (Smircich. Such assumptions represent a mutual stock of knowledge stored in organisational routines. which have been developed by a specific group of individuals (organisational members) as they learn to cope with the problems of external adaptation and internal integration. as the GE-NP case illustrates. Culture embodies the accumulated knowledge that has been socially validated through past experience. to explore the extent to which forms of personal and system trust are implicated in the constitution of (management) accounting systems. Following Berger and Luckmann (1966. Accordingly. / Management Accounting Research 17 (2006) 11–41 in a practice and the management of anxieties which characterise reflection on a practice. Although a review of these studies is beyond the scope of this paper. 1984. When crisis challenge culture: accounting for trust and trust for accounting The concept of culture has been central to many research studies in fields ranging from sociology to organisation theory. p. it is important to recognise that the conceptualisation of culture has historically been influenced by the traditional dualism between the objective and subjective perspectives. expressed in language and other symbolic constructions that develop through social interaction”. crises can unlock possibilities for change (Giddens. CzarniawskaJoerges. 1999) to conceptualise organisational culture as an institutionalised phenomenon. we begin the following section with a discussion of the concept of culture. which we drew upon in Section 2. 2000). which can be interpreted as socially constructed objects of (dis)trust – which we will label trust for accounting – as well as the role of MAS as sources of (dis)trust during processes of (un)learning and culture change – which we will label accounting for trust. organisational members can find themselves under intense pressure. Schein’s view of culture is consistent with the literature on learning and knowing. 1989. which are driven by their existing knowledge and cultural assumptions. organisational culture as well as individual knowledge changes overtime. p. According to Giddens (1984). which binds time and space through ongoing processes of social interaction. Here culture is grounded on the agent’s ability to acquire knowledge from social interaction. 160). Sometimes such change is particularly intense. as well as continuous processes of individual (un)learning and organisational sharedness. 1991). think and feel in specific situations. and from anthropology to management studies.

Burns and Scapens. 1990. Being at the root of the constitution of both the individual subject (and her/his cognitive and behavioural characteristics) and the social context. ‘Jump into the water’. . In particular. This suggests the way in which management accounting practices and feelings of trust for change can act in a recursive mutually reinforcing way—such as in NP. 9). We aim to interpret the intertwined constitution of management accounting and feelings of trust for change within processes of individual and collective (un)learning. 1990. management accounting .. 1994. (see Ezzamel et al. change and refreezing in NP: the role of management accounting practices The reflective and constitutive role of accounting systems has long been debated within the literature (see for instance Hopwood. Nevertheless.. 1994. 2003). As suggested by Ezzamel et al. among the others.. . (1999) provides an interesting metaphor. Busco et al. . p. not only won’t they jump but they also won’t feel too kindly towards the foreman.. . Synthesising the philosophy which inspired a process of renovation in one organisation. 1987. They’ll jump only when they see themselves the flames shooting up from the platform. 2000). As indicated at the outset. they can also work in an opposite mutually damaging way. 4. 39) This metaphor opens up possibilities for illuminating the role of accounting in a crisis situation. Jazayeri and Hopper. Miller and O’Leary.. as we discuss later. p. The process of change begins when people decide to take the flames seriously and manage by fact. the aim of this paper is largely theoretical. 1999.C. . Johansson and Baldvinsdottir. There may be sharks in the water. Specifically. 41). For this reason.e. rather it is an accounting construction” (Ezzamel et al.1. the paper of Ezzamel et al. Ezzamel and his colleagues quoted the company’s CEO. 42). and the relationship between the existing taken-for-granted assumptions and the emerging new reality of everyday life (Scapens. change and re-freezing at Nuovo Pignone. 1990). he argued that: “. Conceptualised as organisational rules and routines. Scapens and Roberts. Carmona et al. 1993. particularly during the last decade. p. accounting systems have the potential to help organisational leaders make flames visible: i. 1999. / Management Accounting Research 17 (2006) 11–41 27 psychological forces which tend to resist processes of individual (un)learning and transformation. and that means the brutal understanding of reality”. Macintosh and Scapens. organisational practices (including management accounting) can be important in crisis situations. accounting practices have been said to “influence perceptions. 1998. when the roustabouts are standing on the offshore oil rig and the foreman yells. “‘the burning platform’ metaphor is not simply facilitated by accounting. who talked about a ‘burning platform theory of change’. The leader’s job is to help everyone see that the platform is burning. concerns and worries. Portrayed as playing a “powerful role in organisational and social affairs”. p. conceptualised as rules and routines. MAS are pivotal in supporting the ongoing constitution and redefinition of agency. The next section uses the theoretical perspectives discussed earlier to examine the way in which MAS contribute to the unfreezing. Among the recent research which has explored the role played by accounting systems in processes of organisational transformation. 1999. Dent. to act as disconfirming data and to “construct a powerful discourse that almost literally ‘sets the platform on fire”’ (1999. several case studies have attempted to investigate the way in which accounting and other organisational practices contribute to the ongoing processes of production and reproduction of a specific organisational reality (see. 1991. thereby permeating the way in which priorities. and new possibilities for action are expressed” (Hopwood. change language and infuse dialogue. whether the flames are apparent or not. In addition. Unfreezing.

. The changes were fast and. “That wasn’t a normal change. By exploring the processes of knowledge recall in crisis situations. . As we will see. we suddenly faced the A. with the strong commitment to the workers.28 C. between tacit and rational choice. which the individual experiences during processes of (un)learning. . . by jumping on what they perceived as a rollercoaster (“With no chance to escape or postpone. Take the example of human resource management. that was a shock! An earthquake in our daily way to think and behave. / Management Accounting Research 17 (2006) 11–41 practices can be implicated in the tensions between habitual and intentional behaviour. recalled a B-ranked engineer. A couple of months after this speech the following trade-union notice appeared in the canteen14 : “Nuovo Pignone has grown up . speed was not a typical characteristic of the old NP. which individuals experienced in departing from their existing organisational routines.1. I am not arguing it was right before. . and within NP in particular.”—as cited earlier) are just a few examples of the ways of deploying the GE Way worldwide. we had to learn quickly how to fasten our seats-belt. the transformation of NP was very deep and intense. the transformation of NP clearly illustrates the way in which MAS are implicated within the sociological and psychological mechanisms at work. NP employees had to cope with it promptly. 1999). GE is a massive organisation that is constantly seeking to create shared organisational knowledge. . As acknowledged by people at all levels in the company. as well as the day-to-day pressures of the job (“If not. Most acquisitions involve some cultural shift. which make it difficult to fire people. B. and globally reproduced its own way of running the business. despite its technical abilities. the head of Human Resources at NP argued: “You have to get rid of blockers and identify high-flyers simultaneously”. . but in NP it was a very major one. Next. Its continuous and almost obsessive objective is to use a common culture to align the strategy of its global and heterogeneous businesses. I am not arguing it at all. In so doing.1. but this was scary”. 1992). we begin the construction of our interpretive perspective by drawing on insights from the GE-NP case. Again.”—as cited earlier). . the week after tough inquirers start to cross the Atlantic . the CEO’s speech (quoted earlier in the paper) had a profound effect on everyone in NP. 14 Unions have traditionally been very strong in this region. this paper focuses on the management of anxiety which characterise processes of reflection on a practice. reflecting the sentiments of GE’s CEO. Change occurred through the redefinition of key concepts. 4. commonly referred to as the GE Way. Training sessions in Crotonville. such cognitive experiences were crucial in overcoming the learning anxieties. . and enjoy the ride .13 the intense pace of the GE operating system. The unfreezing of Nuovo Pignone as the GE Way gets reproduced As described earlier. in spite of Italian labour regulations. from a rather relaxed system mainly based on egalitarian principles. C ranking theory. Grounded in the emerging practices. . Busco et al. It was a matter of unlearning the old culture as everyone in NP became exposed to the GE Way. and between unconscious and conscious deliberation. Thus. We will not allow the destruction of an asset [human resources] by someone [GE headquarters] who ignores our 13 Such is the power of Crotonville in promoting leadership and the GE culture that Schein compared its training activities and courses to wartime brainwashing (Crainer. and the resulting behavioural changes became refrozen in the personalities of the individuals and in the organisational norms and routines (Schein. GE was so different from ENI that a massive cultural re-definition (a cultural revolution) was required. over the past 20 years GE has grown by acquisition. relying on employees’ commitment to the slogans and rhetoric of its senior corporate officers.

“it follows you even in the toilet” was the possibly exaggerated claim of one NP white-collar worker. The stories and rhetoric.2. At the beginning of 2004 the total number of workers (around 4200) in NP was approximately the same as in 1994. the unions stated they were ready to fight. Deployed through massive waves of training. and the communication was endemic. explained a human resource manager pointing to one of the latest mission statements. expenses reimbursement. GE is not afraid to commit resources to the communication of its values—especially within a recently acquired company. the reasons for change were more complex and. continuous waves of communication and training promoted an emerging sense of psychological safety. Most of the participants were quite aware of the organisational characteristics of the old NP. the trade unions emphasised the importance of re-training people for different jobs. a deeper explanation is needed. due to the attention then being given to efficiency and cost savings. Changing Nuovo Pignone’s culture as finance and measurement become increasingly important The psychological securities built up during the era of ENI management were seriously threatened by the GE Way. the workers’ reactions to GE’s values were quite rational.) This trade union notice appeared following a decision by NP’s management to restructure certain activities within its offices in Florence. in Schein’s terms. Thus. you may need time to understand them. C ranking) could (indeed. internal deliveries. they knew its strengths and weaknesses. which contributed to the creation of the myth of the GE Way. Thus. In the late-1990s. but NP was already changing. 4. they are out there. although local management’s conduct was regarded by some union leaders as opportunistic behaviour. but you cannot say that nobody told you. That is to say. training and re-education have come to be seen as important common ground for trade union agreements in the face of organisational restructuring. it was clear that a major change was going to take place. Of course. rather than resisting these changes. revealed quite clearly how much they cared about being part of a world-famous company. NP employees were not left alone in coping with the change. it cannot be interpreted simply as a matter of bonuses and stock options (being well paid!). the reproduction of the GE Way within NP was rooted in charismatic leadership and a new measurement-based language. were all about to be outsourced. However. personnel attendance records. / Management Accounting Research 17 (2006) 11–41 29 history. The interviews with lower level employees. had a powerful impact on the established frames of meaning. the organisational life of our company or by someone [local management] who has suddenly lost his memory due to being well paid!” (Comments in brackets added. communication and training were (and still are) central to GE’s policy for NP. our culture. but certainly once GE acquired NP. B. they are everywhere”. In view of GE’s reputation.C. As illustrated below. Increasingly. after creating survival anxiety (or guilt). both of which acted as sources of disconfirmation to unfreeze the existing culture. The resources invested in NP to communicate the GE Way were massive. fax and switchboard. such as NP. services such as the payment of wages. Busco et al. “You may not completely share these ideas. It is important to recognise that NP’s acquisition by GE did not have a significant effect on employment levels. it was not difficult to make predictions about the intensity of the process of integration. It was very clear that threats (like the A. thus.1. and security. mail room. technical documentation and filing. reception. and a betrayal (someone who has suddenly lost his memory). You can’t ignore them. Specifically. This was reinforced by the diffusion of . They were possibly already under threat following the Mani Pulite investigation. would) become facts. apart from cataloguing a variety of complaints on specific issues. Thus.

reflexive actors have the capability of making sense of organisational life (Kim. . mostly concerned with complying with local laws and regulations. which entailed the significant use of quantitative tools and a major focus on the consequences of quality improvements in terms of cost savings and financial benefits. Harris (1994) suggests that responses to such questions are primarily the outcome of mental dialogues which the individual has with him/herself (e. ‘What would they think about it? What I am expected to do?’). such as machine upgrades.g. ‘What are the implications of GE’s acquisition for my job?’ and. NP went through a metrics revolution.15 six-sigma team members were progressively educated about the whole financial picture of their projects. a second major transformation came along with the launch of the Six-sigma initiative. enhancing revenues and reducing costs. Through the active participation of finance contacts. Importantly. and many were required ‘to wear the hat of finance’ (cited earlier). 15 Finance contacts are accounting and finance experts who assist black belts and green belts as they translate operational improvements into cost savings and financial benefits. but existential beings who reflexively monitor and provide rationales for the character of the ongoing flow of their social life’ (1990. MAS and the finance function became involved in translating day-to-day activities into terms that Champions.1. when GE took-over. so is it better to behave in this way or that?’) and other contextually relevant agents (e. the first three GE individuals to arrive at NP were the chief financial officer. Within the first six months. 1993). GE knew it was buying a state-run company with good product technology. By drawing on their knowledge. ‘How should I now behave?’. As the former CFO of NP pointed out: “. 1999). within NP this included the impact of operating decisions. p.. the role of MAS became central. / Management Accounting Research 17 (2006) 11–41 a new business credo. growth and cost savings..30 C. . Moreover. .3. Very early in the process. ‘I believe X means Y. As pointed out by Macintosh and Scapens. after the re-structuring of the accounting and finance function. which empowered individuals with the level of trust required to overcome the learning anxiety that characterises human beings (see Schein. The finance organisation changed its mission from just being a general accounting operation with obsolete legacy systems. Importantly. . reviews of working practices and changing raw materials. ‘individuals are not just social dupes. on key performance indicators—like cash flow. As they were increasingly confronted with GE financial jargon. and me as a corporate auditor. to being a more contemporary organisation with financial analysis skills. 4. . the financial planning and analysis manager. Busco et al. Within this context. 458). a significant effort was put into creating a measurement system aligned with the business goals that was capable of providing timely and accurate information. new accounting systems. the six-sigma team members came to see their finance contacts as knowledgeable experts who were capable of facilitating informed access to the measurement-based GE Way. as described earlier. poor measurement systems. and mostly concerned with driving shareholder value by taking an active part within organisational life”. and little financial management. . non-value added activities. principally. Black Belts and Green Belt were increasingly concerned about: meeting the budget. The individual is faced with questions such as: ‘What is GE?’.g. Re-freezing culture through successful experiences Participation within management accounting practices enables ‘informed’ employees to rely upon their reflexive abilities to make sense of the new organisational reality.

“They are cultural. Busco et al. this paper builds on a series of contributions that conceptualise knowledge and learning as social and cultural phenomena involving both behavioural and cognitive elements (see Section 2). We surveyed literature which emphasises that processes of individual (un)learning cannot be conceived only as mental processes residing in individuals’ heads. . . rather it was complemented by the culture of measurement. relational and cultural contexts in which they arise. Nowadays. in a global company such as GE there are potential benefits stretching far beyond the boundaries of the division or subsidiary which implemented them. rather they must be viewed as situated in the historical. 4. It doesn’t matter if we are ringing Talamona [a distant NP’s division] or the States”. 1990). 1985. they are generally accompanied by phases of disorientation and then reorientation. which is now strongly integrated and bound by this modus operandi. globally—Giddens. .. as was the case with the NP response time in ITO processes project that was acclaimed the best Sixsigma project within GE Power Systems at the 1998 Quality Rally in Atlanta. it can become institutionalised in organisational rules and routines. . supported by only a hunch or a value. 1984). 18). waving a folder containing Six-sigma training material. and are embodied in a variety of socially constructed forms (such as MAS). Within NP the existing technical culture was not repudiated.C. Few managers and employees left the company. rather they participated in the process of transformation. knowledge is maintained both as memory traces and within repeated patterns of behaviour (Giddens. for us. and is developed socially through participation in and reflection on practices . have become so taken for granted that one finds little variation within a cultural unit” (Schein. Thus. we do it in terms of Critical-To-Quality issues and contribution margin. as locally developed improvements contributed to the reproduction of the GE Way organisation-wide (that is. we combine the theoretical insights of the paper with evidence from the GE-NP case to sketch our interpretive perspective. It doesn’t matter if we are talking to the accountants or among engineers. Thus. they cannot be always synthesised in impressive numbers. MAS as sources and objects of trust: an interpretive perspective With the purpose of understanding how MAS are implicated in processes of organisational culture change. Indeed. 1999) – as their available knowledge does not help them cope with the crisis which has to be faced. but they represent potential future achievements” argued a Human Resources manager. p. “What was once a hypothesis. if a solution is found and it continues to be successful. when we think. . / Management Accounting Research 17 (2006) 11–41 31 When crises arise. discuss or communicate. Consequently. and greater productivity and customer satisfaction. the cultural benefits of the project were spread throughout GE. . Talking about Six-sigma. an NP engineer emphasised: “Six-sigma has been spread throughout the company. “The sharing of these measures allowed our outcomes to be understood and appreciated world-wide” claimed an engineer a few months later. .2. Next. Basic assumptions . comes gradually to be treated as a reality. . there are also important intangible outcomes of the Six-sigma initiative. In such instances. Hennestad. In particular. Furthermore. which merged the engineering-oriented capabilities of NP with the GE’s obsessive attention for bottom-line results. and how they can be used by individuals to identify trustworthy solutions in critical situations. as well as improvements measured on the sigma-scale. during which individuals and organisations initially face a cultural mismatch – a knowledge gap (Haerem et al. MAS and feelings of trust for change acted in a mutually reinforcing way as they enabled the process of (un)learning and the sharing of new knowledge which characterised the process of cultural integration. 1996.

so that what previously was unproblematic and taken-for granted was re-assessed as it came to the surface. Then we extend Burns and Scapens’ (2000) institutional framework by focussing attention on (3) the notion of roles as access points to organisational systems. on the other hand. (2) how forms of personal and system trust were implicated in the introduction and constitution of MAS as socially constructed objects of trust – trust for accounting. as well as to evaluate the risks associated with acting on such an assessment. reflection requires a separation (i. especially in crisis situations and the accompanying cultural transformation. it was accounting for trust. In this respect. the object of trust was the new GE Way. The aim of this section is to illustrate some of the key issues which characterise our interpretive perspective. the mechanisms. we emphasise the importance of understanding the role of practices within the process of (un)learning and knowing. participation in a practice facilitates processes of critical reflection. organisational systems such as management accounting inform social actors at socially constructed loci (i. in terms of faceto-face encounters. / Management Accounting Research 17 (2006) 11–41 (rather than simply the outcome of independent thinking by autonomous individuals). we argued that trust for change is a psychological condition built in and on practices. participation is mediated though expert individuals and expert systems that are potential sources of trust.. In the case of NP. Accordingly.32 C. something previously usable in practice must become unusable. thereby enabling them to reflect upon and assess the trustworthiness of the trustee (i. or indirectly. (1) MAS as sources of trust: exploring accounting for trust Throughout this paper we have recognised that trust is a socially constructed phenomenon. and (4) the nature of processes of radical change. Whether directly. within NP.e. In the following sub-sections we will explore the concept of trust and its use in understanding processes of accounting change. projects and initiatives for dealing with the new business reality. accounting for trust. such as management accounting. Finally. When disconfirming episodes occur. as knowledge is an institutionalised version of knowing (Nicolini et al. In particular. aren’t we?”—cited earlier). Busco et al.. and embodying a certain degree of confidence in the face of the proposed change. and offers the opportunity to re-assess existing ways of thinking. Next. Drawing on insights from the GE-NP case we will discuss the way in which on the one hand: (1) MAS acted as sources of trust during processes of individual (un)learning and culture change within NP – that is. the starting point for our interpretive perspective is to recognise that for reflexive and conscious processes to come into play. In this particular context. In such situations.e. Within NP. MAS participated in the creation of trust for change.. its acquisition by GE led to a questioning of existing knowledge. the section ends by summarising the key features of our interpretive perspective. as they contributed to the perceived trustworthiness of the GE Way and the new solutions it offered—as such. and informed processes of critical reflection on their experiences (“We are building up the necessary kit-for-survival. In that context. language and experts of accounting supported the six-sigma teams in making sense of the financial consequences of their technical . a distance to be created) between the knowing subject and the object of knowledge. we discuss (5) how it is also possible for the intertwined relationship between MAS and trust for change to work in a mutually destructive way. GE’s top management purposively accompanied the unfreezing of the existing culture with the introduction of a number instruments.e. work places). which precede knowledge both logically and chronologically. 2003). In that respect. Thus.. it could be said that the language of accounting and measurement (“NP went through a metrics revolution”—CFO of NP cited earlier) supported NP’s employees in making sense of the new organisation. through faceless mechanisms. the object of trust). Therefore.

(2) MAS as objects of trust: conceptualising trust for accounting Within NP. as well as the expertise of the finance contacts had a dual role in the process of change: on the one hand. The understanding of this reciprocal relationship is a feature of our interpretive perspective. since (as in the GE-NP case) contacts with such expert systems often occur in the form of interactions with expert individuals. However. Interestingly. In so doing. However. organisational systems need to prove their ability to facilitate these processes in contexts of interaction. they embodied the meanings and the rationales of the new GE Way and. they can be interpreted as objects of trust in themselves. Therefore.C. In so doing. In this paper. so that while accounting practices can be interpreted as sources of trust (i. participated in the reproduction of the tacit knowledge which became embedded in practices as the organisational participants learned how to be GE.e. Within phases of organisational transformation. system trust) is mutually dependent on the trustworthiness of the access points or interfaces of the systems. (3) Management accounting roles. as suggested above. for this reason. the competence of the finance contacts for the Six-sigma projects. as well as the support of Finance Managers in translating operational matters in financial terms. rather than simply hearing about GE. such as NP’s response time in ITO processes. there has to be trust for accounting. For this reason. MAS in the GE-NP case. MAS acted a source of trust for change. For example. personal trust and systems trust Within NP. interpreted as objects for trust. that is. as in the GE-NP case. practices need to be trusted if they are to become the objects of the proposed changes. trust in expert systems (i. we have highlighted the intertwined relationship between MAS and feelings of trust for change during processes of (un)learning and organisational culture change. knowledge is immediately put back into the social context in which it has meaning. concepts such as contribution margin and critical-to-quality can become the symbols of a new organisational language. whether (or not) processes of critical assessment involve disembedding knowledge from the practices that sustain it in action. As participation and engagement in a practice are critical to socially constructing and sharing new meanings. while on the other hand. accounting for trust). reinforce the GE Way far beyond the boundaries of the divisions that develop them and thereby contribute to the organisation-wide reproduction of the GE Way. it could be said that practices become objects of trust within processes of interaction. To do so. forms of personal and system trust are implicated in the introduction and constitution of MAS as socially constructed objects of trust—that is. which is particularly important as we seek to extend Burns and Scapens’ (2000) institutional framework by giving attention to the notion of roles (and to the concept of personal trust) at access points to organisational systems such as management accounting. By so doing. we have argued that the complexity and uncertainty of contemporary organisations require participants to rely day-to-day upon a wide range of abstract systems in which they themselves possess little or no technical expertise (Giddens.e. 1990). the vocabulary. they sustain the trustworthiness of meanings and rationales which characterise institutionalised knowledge. as suggested earlier. lexis and expressions of accounting. trust for accounting. they have to be trusted.. knowledge (whether revised or not during processes of reflection) is re-encoded into practices.. as it informs sense-making and patterns of behaviour. all helped to humanise and re-embed the unfamiliar jargon (of the . accounting and trust are mutually dependent. the face-to-face relationships with FP&A professionals. / Management Accounting Research 17 (2006) 11–41 33 decisions. which are reflexively constitutive of the context from which they arise. and they need to be invested with institutionally certified and enforced standards of conduct and expertise. Busco et al. successful six-sigma projects.

1919). .e. To explore the individuals’ motivation for change. When organisational actors participate in a practice. management accounting practices had a central role in enabling and coordinating processes of individual (un)learning and organisational change. especially when a crisis occurs and individuals experience extraordinary pressures for (un)learning and change. in NP the reliance upon management accounting rules and routines highlighted the key position and responsibility of specific individuals who acted as access points to the new GE Way: ‘People from Finance’ were increasingly perceived by the rest of the organisation as competent interfaces with the functioning of an important. p. As such. and contribution to profit were increasingly presented as a universal language that decision-makers around the world speak and understand. the formalised statements of procedures). change is usually incremental. accounting and measurement systems participated in the acceptance and diffusion of the GE Way. Although retaining the view of change as a continuous. As argued by Giddens. trust for accounting.34 C. but totally new. management accounting and other organisational practices. the inherent indeterminacy of social reproduction makes change intrinsic to every circumstance of social life. Thus. 18). it can be argued that forms of system and personal trust were implicated in the constitution of MAS as objects of trust: i. within NP.. ongoing. and to examine the emergence of feelings of trust for change. and entails “a slow drift away from a given practice or set of practices at any given location in time-space” (1991. 304). in the GE-NP case return on investment. (4) Radical change: MAS and the management of anxieties Being rooted at the very heart of processes of (un)learning and knowing. are involved in the production and reproduction of organisational culture. evolutionary path. they could be interpreted as expert systems that embody the rationales of the GE Way. being based on the repetition of routinised patterns of behaviour. which they describe as “the human tendency towards experimentation and innovation which generates novelty and impetus for change” (2000. action-driven process. Extending the interpretation of Burns and Scapens (2000). language for the company. we continue to sketch our interpretive perspective as we explore the linkages between radical change and the management of anxieties. p. have the potential both to promote or to impede (un)learning and change. from the trust placed in the institutional mechanisms themselves (systems trust). the finance ‘roles’ constitute important conjunctions at which (dis)trust for change can be created and maintained through practices. During the process of cultural transformation which characterised NP. and since attitudes of trust toward specific expert systems are likely to shaped by participating in and reflecting on experiences at the access points. cost/benefits analysis. They argue that this concept allows for the conceptualisation of stability and change as part of the same.. their trustworthiness is facilitated by situations of co-presence within a practice. / Management Accounting Research 17 (2006) 11–41 GE Way) in interpersonal interactions. He suggests that. Busco et al. We could say that. For these reasons. Next. Burns and Scapens draw on Veblen’s concept of idle curiosity (1898. along with other organisational systems. we now believe it is important to go beyond mere idle curiosity.16 we portray MAS as a set of rules (i. In fact. As cited earlier. it is very difficult to disentangle the trust invested in the specific people who represent the expert systems (personal trust). payback.e. However. routines (the practices habitually in use) and roles (the network of social positions) which. Critical situations have the potential to destroy the certitudes provided by 16 They focus attention on management accounting rules and routines. although expert systems can gain and maintain trust without continual reproduction through interpersonal relations. and communicated through finance experts. whose meanings and rationales were embodied in the rules and routines.

MAS. in another division the understanding of accounting was restricted to the accounting department. Nevertheless. In particular.3. V´amosi. These two possibilities were contrasted by Roberts and Scapens (1990). trust and processes of change: the pillars of our interpretive perspective Building on literature that conceptualises (un)learning and change as social and cultural phenomena. Johansson and Baldvinsdottir. in this section we have sketched our interpretive perspective which links MAS. and to reconstitute the previous conditions of ‘safety’. Thus. as we discuss below. detached from any trusted rationales. In contrast. MAS can be implicated in the management of anxieties which characterise individuals’ responses to crisis (cf. In such situations. feeling of trust and 17 Subsequently. . with feelings of trust for change. 2003). it is likely to be employed to confront environmental disturbances or organisational crises. crises force the agent to unfreeze the existing rationales. When accounting is embedded within the trusted rationales (i. and as such accounting and accountants are welcomed in the search for solutions to the crisis. by setting the individual’s mental platform afire. while in the former division the language of accounting represented an important means for identifying possible solutions to deal with the crisis. Schein. In such situations individuals will employ their abilities in assessing the adequacy of the resources which are available to locate a solution to the crisis. However. the financial crisis made accounting the focus of conflict and a perceived source of the problem. Within one division. which sustain organisational routines. the accepted norms of behaviour and ways of thinking). Conversely. to descend the levels of abstraction in the mechanisms of knowledge recall. this does not guarantee that change will occur (or occur in some desired direction). where accounting and trust for change acted in a recursive mutually reinforcing way. but it increases the possibility of replacing trust in the predictability of routines. the intertwined relationship between MAS and trust for change may sometimes work in a mutually destructive way. the case was further analysed in Scapens and Burns (1996). when MAS are used as ad hoc measures. the interpretive perspective presented in this paper is able to explain not only the transformation within NP. there could be said to be trust for accounting (i.e.. / Management Accounting Research 17 (2006) 11–41 35 routines.C. accounting meanings were deeply implicated in the shared constitution of the organisational reality. and to open up the possibilities for conscious and radical change. Clearly. 4. by emphasising the potential of MAS to support the rationales underpinning processes of culture change. 1992). As we saw in the GE-NP case.. (5) When distrust for accounting turns down the flames of change The GE-NP case shows how organisational transformation can be facilitated by the implementation of an organisational-wide system of accounting and performance measurement. acceptance of accounting). 2000.e. the case illustrates the role of organisational practices in giving direction to processes of (un)learning and individual re-orientation. Busco et al. In this latter division. for instance. but also to clarify what may happen when the two work in an opposite mutually damaging way (see. they are likely to be marginalised and could even become the focus of conflict if they are drawn upon in a crisis. in terms of the ‘burning platform theory of change’ mentioned earlier.17 who explored how two divisions of a UK-based multinational coped with a critical situation which threatened the financial stability of the company as a whole.

especially when disconfirming episodes occur. we discussed what happens when the intertwined relationship between MAS and trust for change work in a mutually damaging way. . in terms of face-to-face encounters. although we retain the view of change as a continuous action-driven process. / Management Accounting Research 17 (2006) 11–41 processes of change. Importantly. (un)learning and change are conceptualised as involving both cognitive and behavioural elements: i. we argued that (un)learning and change are rooted in processes of active appropriation by the individual.. they are likely to be marginalised. we extended the Burns and Scapens’ (2000) framework by introducing the concept of roles as access points to MAS. we go beyond Burns and Scapens (who viewed idle curiosity as the motivation for change) and explore the role of accounting practices (along with other organisational systems) in managing the tensions between existing routines and the rational deliberation which accompanies the disconfirming episodes that characterise critical situations. trust in the expertise of specific individuals. As such. we argued that accounting and trust are mutually dependent within the organisational context. a psychological state built on practices and experiences. After describing the intertwined relationship between MAS and trust. and could become the focus of conflict if they are drawn upon in a crisis. Finally. forms of personal and system trust are implicated in the constitution of MAS as socially constructed objects. 5. Conclusions In this paper we have discussed an interpretive perspective for understanding the way in which MAS are implicated in processes of individual (un)learning and organisational culture change. In addition. trust in expert systems (system trust) is likely to be mutually dependent on the trustworthiness of the interfaces with those systems (personal trust): i. However. which is defined as a psychological state mediated by organisational practices – such as MAS – and processes of social interaction.. we conceptualise trust (or distrust) for change as socially constructed and mediated by interaction: i. When MAS are detached from trusted rationales. in a recursive way. Whereas accounting practices can be interpreted as sources of trust (accounting for trust). we argued that such change is likely to be dependent on the emergence of feelings of trust. which ultimately have to be trusted if they are to be drawn upon in crisis situations (trust for accounting). such as management accounting. In sketching our perspective we began by discussing the way in which MAS may be interpreted both as sources and objects of trust.e. or indirectly. either directly. this informed our interpretation of trust. We relied on studies which portray processes of individual (un)learning and change as involving. Busco et al. Furthermore. both engagement in social practices (behavioural elements) and acts of sense-making (cognitive elements). which are built through participation in and reflection on practices.. such as management accounting. are likely to occur in the form of interactions with finance experts. through faceless (abstract) systems. they require acts of sense-making by the individual that follow and complement engagement in social practices. since contact with systems. We suggested that. organisational systems such as management accounting represent potential sources of trust as they offer the opportunity to re-assess existing ways of thinking.36 C. Notably. In exploring the role of trust in understanding processes of accounting change.e. Along these lines.e. and how they may be used to identify trustworthy solutions in the face of organisational crises. in view of the intense pressure for (un)learning and transformation which individuals can experience during processes of radical change.

However.2). routines (the practices habitually in use) and roles (the network of social positions) which. When accounting systems are used as ad hoc measures.. detached from trusted rationales. but it increases the possibility of replacing trust in the predictability of routines with feelings of trust for change. An understanding of the mutual relationship between trust in expert systems (i. rather it was complemented by the GE Way. MAS participated in the creation of trust for change in practice. We suggested that. we combined theoretical insights with evidence from the field to develop a perspective for interpreting the intertwined relationship between MAS and feelings of trust for change. from a bureaucratic. / Management Accounting Research 17 (2006) 11–41 37 The paper combines theoretical insights (drawn from the sociology of knowledge and the literature on learning) with empirical evidence from the GE-NP case to sketch the elements of our interpretive perspective. We suggested that. Nevertheless. to an important business in one of the most profit-oriented global corporations. In this paper.2). and the opportunities and threats connected with critical situations. change and re-freezing of NP’s culture and discussed how accounting and measurement systems could be interpreted both as sources and as objects of trust for change (points 1 and 2 in Section 4. within NP. we argued that exploring the way in which individuals draw upon accounting practices during processes of radical change can help our understanding of the motivations for institutional change (beyond the notion of idle curiosity). system trust) and the trustworthiness of the interfaces with those systems (i.e. as well as the support of Finance Managers in translating operational matters into financial terms. personal trust) enabled us to extend Burns and Scapens’ (2000) framework. In parallel. Within NP the existing technical culture was not repudiated. the competence of the finance contacts for the Six-sigma projects.C. The reflective and constitutive role of MAS within organisations has long been debated in the literature. within processes of (un)learning and transformation.. In so doing. We illustrated the way in which MAS contributed to the unfreezing. involve the practice-based management of anxieties (point 4 in Section 4. Busco et al. and we suggested that through the rules. The sense of safety carried by existing knowledge and routines.e. the cognitive and the behavioural levels are . Drawing on the concept of personal trust and the notion of roles as access points to organisational (expert) systems (see point 3 in Section 4..e. the intertwined relationship between MAS and trust for change can have unintended consequences (point 5 in Section 4. as they contributed to the trustworthiness of the GE Way and the identification of the new solutions it offered—accounting for trust.2). face-to-face relationships with FP&A professionals. along with other organisational systems. the process of change has not taken place without conservation. they can be marginalised and the MAS as well as the finance experts could become a focus of conflict if they are drawn upon in a crisis. roles and routines of MAS organisational participants learned how to be GE rather than simply hearing about GE Way. Clearly. facilitated the acceptance and progressive sharing of new rationales among professionals with different backgrounds. although expert systems can gain and maintain trust without continual reproduction through interpersonal relations. we discussed how. state-owned Italian company with no culture of measurement. we emphasised the importance of expert individuals within the production and reproduction of the GE Way. the formalised statements of procedures). this does not guarantee that change will occur or occur in some ‘desired’ direction.2). Within NP. their trustworthiness is facilitated by situations of co-presence within a practice. we emphasised how forms of personal and system trust were mutually implicated in the construction of MAS as socially constructed objects to be trusted—trust for accounting. with its expert systems and expert individuals who supported the processes of change in practice. We described how MAS participated in the process of cultural change in NP. MAS are a set of rules (i. and with different degrees of knowledge of the GE Way. Furthermore. For us. are involved in the production and reproduction of organisational culture.

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