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Business transformation through empowerment and the

implications for management control systems

Article  in  Journal of Human Resource Costing & Accounting · September 2009

DOI: 10.1108/14013380910995511

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Business
Business transformation through transformation
empowerment and the
implications for management
221
control systems
Ian Herbert
Loughborough University Business School, Loughborough, UK

Abstract
Purpose – The purpose of this paper is to explore the concept of employee empowerment, and the
implications for management control systems (MCS), as the style of management changes from a
hierarchical, top-down, style to a more lateral, bottom-up, orientation, in which workers assume
greater responsibility for situated decision-making and self-monitoring.
Design/methodology/approach – A longitudinal, multiple method, case study explores how
empowerment is both understood and applied by management and workers. Simons “Levers of
Control” framework is employed as a sensitising device to understand the implications for MCS.
Findings – The transformation strategy is largely successful in changing the long-standing,
bureaucratic, public-sector culture, to a more devolved style in which challenge and participation is
encouraged, although actual adoption patterns are uneven and developments are not always linear. By
the end of the study period, there is a move back towards centralised control but, significantly, the
study is able to confirm Simons’ argument that the use of an appropriate mix of levers in a
“loose-tight” manner can still promote empowered working.
Research limitations/implications – The field work consists of a single case, albeit this is a large
company with a number of autonomous units and, over time, each developed its own style of
management control. At times, it is difficult to establish clear linkages between the empowerment
initiative, operational management, actual performance and the MCS due to numerous contextual
factors, hence the longitudinal nature of the project.
Originality/value – Whilst practitioner literature has made copious exhortations to empower
workers, there is little empirical work on the practical application of empowerment, or the implications
for MCS in the longer term. This paper finds that empowerment can, despite some academic
reservations, have an honest purpose and indeed outlive its otherwise faddish tendencies.
Keywords Empowerment, Control, Management accounting, Information systems
Paper type Research paper

1. Introduction
Empowerment is about pulling 200 levers rather than one big one! (Station Manager).
Since the 1980s, various new working practices (NWPs) have been enthusiastically
espoused by gurus in both accounting and general management fields. Taken
together, NWPs support, and to some extent define, the “new commercial agenda”
(Munro and Hatherly, 1993). Despite being adopted by a wide range of organisations Journal of Human Resource Costing &
Accounting
Vol. 13 No. 3, 2009
The author thanks all staff at the case company for their enthusiasm and help with the project. pp. 221-244
q Emerald Group Publishing Limited
Also thanks for comments on earlier drafts to Mark Tippet, Laurie MacAulay, the Editor, 1401-338X
Robin Roslender, and two anonymous referees. DOI 10.1108/14013380910995511
JHRCA the constellation of methods and ideas comprising NWPs remains somewhat nebulous.
13,3 Otley (1994, p. 289) refers to delayering, right-sizing, BPR, outsourcing and value chain
analysis. Other authors suggest “soft” techniques such as total quality management
(TQM; Johnson, 1994), empowerment (Wilkinson, 1998) and the related practice of
self-directed team working (Coyte, 1995). Empowering workers with the authority to
perform a task in the most appropriate manner, and without excessive recourse to
222 higher levels of management, has been one of the more significant of the NWPs.
Though in practice, a wide range of terms is used, sometimes with particular meanings
such as decentralisation and entrepreneurship, and sometimes with more philosophical
leanings such as emancipation and liberation.
Common objectives of empowerment include process flexibility, continuous
improvement and better motivation of workers through involvement and
commitment (Byham, 1989; Clutterbuck and Kernaghan, 1994; Drucker, 1988;
Johnson, 1992; Kanter, 1983; Peters, 1992; Simons, 1995a; Vogt, 1990). There is a
copious practitioner-oriented literature on empowerment, but the appeals to faith by
management gurus are essentially premised upon selective failings of the traditional
(western) “command and control” model. The “new way” is generally evinced by the use
of bite-sized exemplars from “excellent” (western) corporations, often without a
systematic attempt to assess the efficacy and longevity of empowerment in practice.
Moreover, such exemplars tend to be restricted to dynamic, customer-driven, contexts
where there is a premium on innovation and customisation (Johnson and Kaplan, 1987).
By contrast, more mundane operational environments such as power generation, where
the steady evolution of working methods is more about reducing cost whilst maintaining
output, receive much less attention. In these contexts the natural initiative of workers
tends to be subsumed into operational techniques such as TQM (Deming, 1982). Thus,
the first issue for this study is: how might the nature and form of empowerment be
understood as a multi-faceted concept, and does it have the potential for applicability in
non-customer facing environments over the longer term?
Management gurus such as Johnson and Kaplan (1987), Peters (1992) and Kanter (in
Graham, 1995, p. xiv) have been expressly critical of the command and control model,
with its emphasis on top-down decision making. Johnson’s (1992, pp. 16-32) vision of
bottom-up empowerment argues that front-line workers are best placed to make
decisions about what to do and how to do it. The new role of senior management being
to set an overall strategic direction for the enterprise and then put in place a framework
that supports, rather than controls, workers. Otley (1994, pp. 297-8) concurs:
In essence we are having to move from a hierarchical, top-down, approach to control, to one
where self-control, innovation, and empowerment are of at least equal importance.
However, such a change is likely to have significant implications for both the processes
and technologies of management control systems (MCS) as the locus of control moves
down the scalar chain. On the one hand, less direct supervision should be necessary,
but, on the other hand, entrepreneurial flair might expose the business to excessive risk
or compromise operational integrity (Simons, 1995a, p. 80). Furthermore, changes in
the MCS will likely have concomitant implications for management accounting
information systems (MAIS), which have tended to develop as an instrument of the
traditional, vertical, command and control, style of management: that is, reporting
upwards to a small number of senior managers, rather than downwards to a larger
number of junior managers and workers ( Johnson and Kaplan, 1987, pp. 19-21). Thus, Business
the second issue is to explore the tensions inherent in loosening control whilst not transformation
losing control.
The remainder of the paper is structured as follows: first, there is a review of the
nature and form of empowerment, together with the implications for MCS and MAIS,
to inform the construction of propositions to guide the field work. Second, the research
method is described. Third, the context of the case study organisation is outlined and 223
the findings presented. Fourth, the findings are discussed and some tentative
conclusions are drawn. Finally, some suggestions are made for further research.

2. The nature and form of empowerment

In the normative literature the notion of empowerment, if not quite the term, can be
credited back to Mary Parker-Follett in the 1920s, a time when much of the thinking
about the contrasting command and control culture was being developed by Fayol
(1916), Taylor (1911) and Ford (1922), amongst others. Parker-Follett’s notion of
“power-with” rather than “power-over” (Graham, 1995, p. 103) nicely captures the
essence of the dichotomy between “compliance through consent” in an empowered
regime and the traditional “command and control” model. A more direct view might be
that management simply need to get out of people’s way, having first set strong cultural
values – what Peters and Waterman (1982, c12) referred to as simultaneous loose/tight
properties. Peters (1992) subsequently coined the term: “liberation management” to
describe a new paradigm in which traditional, hierarchical, forms are replaced by loose
coalitions of workers operating either as individuals or in flexible teams. With roots in
historical class and gender struggles, the notion of “liberation” might be expected to
appeal to a sense of self-ownership, social justice and power redistribution on the part of
workers, who it is assumed, will welcome the chance to be freed from the yoke of
managerial suppression.
Emancipation is another term used synonymously with empowerment. Munro and
Hatherly (1993, p. 372) note that emancipation also invokes philosophical notions of
freedom and fulfilment but, whatever the term, empowerment can become a desolate
state if meaning is eschewed. Industrial democracy is used to evoke a sense of
partnership, or at least recognition of common interest, between workers, managers
and stakeholders – see Herbst (1976) for applications in Norway and British coal
mining. More recent notions of participation and involvement (Marchington, 1995;
Parry, 1972) are also consistent with empowerment as a psychological construct.
However, against these more ideological conceptions of empowerment the
managerial imperative is summarised by Wilkinson (1998, pp. 47-8) as:
[. . .] part of an overall agenda of change from a rational, bureaucratic, hierarchical,
rules-based, paradigm to a post-Fordism era characterised by; employee involvement,
attitudinal change, delayering, decentralisation, project-based teams and the
knowledge-based organisation.
The lexicon of modern management is replete with alternative terminology and
empowerment is no exception. Entrepreneurship tends to be used to describe a more
strategic level of empowerment in which managers have sufficient scope and resource
discretion to be monitored as profit or investment centres, in other words, managers
can decide both what to do, how to do it and what to do it with. Entrepreneurship tends
JHRCA to be used synonymously with the pursuit of innovation, albeit that the former is
13,3 usually used in external market-driven contexts, and the latter tends to be used when
the focus is essentially internal, say, in developing new products or methods. In a
similar vein, autonomy tends to be used to describe more tactical situations in which
there is some scope for balancing a mix of task priorities, methods and resources but,
within a given framework or towards a given end. For example, a team may have a
224 level of discretion in how it organises itself and arranges task processes, but conversely
may have little discretion over what to do; for instance, whether it does a task at all or
undertakes a different task.
Hofstede (1968) discusses the “controversy” between control and individual
autonomy, the latter defined as “The degree to which a person within an organizational
situation is able to affect his own actions and environment” (p. 13). First, Hofstede asks
whether greater control represents a loss of autonomy? And, as a corollary, whether
such loss represents an impairment of the human spirit (“[. . .] reducing the people
controlled to cogwheels in a machine, to yes-men, to ‘organisation men’?” p. 12). Then
he suggests that this is incompatible with a “worldwide tendency towards
democratisation” (p. 12) and thus presents ideological choices for managers
(MacInnes, 1987, p. 14). Second, he suggests that the polarity of control and
autonomy “are neither fully conflicting, nor fully consonant” and that the management
task is to optimise the two rather than attempt to maximise both (emphasis added).
Hofstede also highlights the term decentralisation as a form of autonomy operating
across product or geographical spheres within an overall corporate design.
Autonomy tends to be used interchangeably with empowerment in practice, but in the
literature the two terms appear to evoke different meanings. Autonomy, along with
self-contained tasks appears relatively passive, almost “laissez-faire”. It suggests that
whilst “autonomy” might be given to workers, “empowerment” is a phenomena positively
created by management. For example, Hofstede’s definition of autonomy above might be
juxtaposed with the following view of empowerment by Johnson (1992, p. 95).
Facilitating ownership of processes and information by workers such that they will be
motivated to remove constraints on production and create flexibility through organisational
learning and innovation.
In Johnson’s definition it seems implicit that workers have previously acquiesced to the
continuance of such constraints. A key term in the new regime is “facilitating
ownership”, by which it is assumed that workers will internalise the process of
empowerment, and in doing so will become aligned with wider stakeholder concerns
for the stewardship of assets and outputs. By comparison, the purpose in Hofstede’s
autonomy is left to be assumed by the reader, rather than is made explicit. Indeed,
Johnson (1992, p. 186) notes that historically senior management have tended to
optimise rather than remove constraints and perhaps that might be all that is expected
with autonomous working. Thus, it would appear that empowerment is a laden term.
Rather than attempt to provide an idealised definition of empowerment, Wilkinson
(1998, pp. 47-9) proposed a five-stage typology of empowerment styles comprising:
information sharing, upward problem-solving, task autonomy, attitudinal shaping and
self-management. By “attitudinal shaping” he means creating an empowered (and
hence more productive) feeling in people’s minds.
 Whilst most of the practitioner literature views empowerment positively, some Business
academic writers see empowerment as a less than honest concept, or at least one that is transformation
difficult to implement (Johnson and Thurston, 1997; Khan, 1997; Robinson, 1997).
According to Adler (1993) “empowerment can simply become abandonment”. Wilkinson
(1998, p. 40) also suggests that empowerment can be a hollow term:
Most (initiatives) are purposefully designed not to give workers a very significant role in
decision-making but rather to enhance employee contribution to the organisation. 225
At a general level, the debate surrounding the effectiveness of NWP schemes tends to
divide between those who argue that NWPs are “obviously” good for organisations
and others such as Webb (1995, p. 107) who argues that from a worker perspective:
[. . .] they merely disguise an intensification of work, increased surveillance and management
over labour with cosmetic language of teamwork and personal empowerment.
According to Braverman (1974, pp. 38-9):
‘New reforms’ represent a ‘style of management’ characterised by a ‘pretence of participation’.
Collins (1995) argues that in reality participation is complex, and at the level of the
individual is an ideological construct influenced by situated contexts. Arnold (1998)
describes how the adoption of NWPs in the Decautar plant, as studied by Miller and
O’Leary (1994), reverted to the former command and control model within a few years
(Simons, 1995a, p. 82; Malone, 1997).
Despite such concerns, empowerment has an intuitive and popular appeal; let people
get on with what they know how to do best. Yet, curiously, there tends to be little
reference in the literature to the intrinsic motivation of workers which, presumably, is
necessary to mirror management’s own enthusiasm for workers to take on additional
responsibility. In the tradition of self-determination theory, if empowered working is to
be fulfilling it should provide opportunities for workers to satisfy the three inherent
human needs for capability, relatedness and meaning (Deci and Ryan, 2000). In the
normative literature, e.g. (Peters, 1992) worker motivation is taken as a given, or at
least that the process of empowerment and, by implication, management’s expression
of trust in workers should be sufficient incentive.
Furthermore, there are relatively few empirical examples of the implementation of
empowerment programmes, or indeed reports of failure. The hypothetical scenario
created and discussed by Rothstein (1995) stands to highlight the paucity of empirical
case studies. This seems odd given the academic reservations about the efficacy of
actual empowerment. Notwithstanding the conceptual difficulties of defining
empowerment and the alternative terms in use, identifying its manifestations in the
workplace is likely to be problematic.

Role of management control systems

There is something counter intuitive about a bottom-up philosophy being directed
downwards by management; furthermore, there is relatively little direct
acknowledgement of the flip side of loosening control, that is losing control, Simons
(1995a, b) and Robinson (1997) being exceptions. Moreover, if the process of
empowerment has the potential to be a slippery term, then there is also a need to be
clear about how the nature and form of the MCS might be affected. Delineation between
traditional tight/rational and enlightened loose/empowered lines is not
JHRCA straightforward. For example, Merchant (1998, p. 155) suggests that any one control
13,3 can be tight or loose but that things can become muddied in actual practice. Having
few controls may be loose, but rigorously enforcing those few controls may be seen as
tight control. More often these are relative terms used to describe the process of change,
e.g. “tightening loose controls”. Similarly, there is a need to be clear about the form of
the traditional, command and control model, as a baseline from which to assess the
226 degree of movement away from under empowered working.
Management control is comprised of two aspects: first, the process of control defined
as the intentional effect by managers on the behaviour of workers (Tannenbaum, 1962,
p. 239), and second, as a set of control technologies (means or tools (Drucker, 1964)).
In terms of both process and technologies it is assumed here that empowerment
represents a move away from the, rational-legal, form of bureaucracy (Wilkinson, 1998,
pp. 47-8). That is the Weberian ideal form (Weber, 1947) comprising hierarchical
relationships characterised by: division of activities; controls and sanctions; technical
qualification for roles; hierarchical authority; rules and appointment by superiors on
merit. Herbst (1976, p. 22) presents a summary of differences between bureaucratic and
non-bureaucratic forms, the latter being more conducive to empowered working. Crozier
(1964, p. 193) critiques the rationale notion of bureaucracy arguing that “[. . .] the
bureaucratic system of organization is primarily characterized by the existence of a
series of relatively stable vicious circles that stem from centralisation and impersonality”.
Simons (1987, p. 358) defines a MCS as:
The formal, information-based routines and procedures used by managers to maintain or
alter patterns in organisational activities.
Simons (1994, p. 170) proposes that management can retain control through four levers:
diagnostic control systems (formal feedback systems used to monitor deviations from
preset standards of performance); interactive control systems (formal systems used by top
managers to regularly and personally involve themselves in the decision activities of
subordinates); boundary systems (explicit limits and rules which must be respected – limits
to empowerment); and belief systems (core values/culture). He argued that rather than
control being a unitary concept, either tight or loose, simultaneous loose-tight properties can
be achieved through across individual levers (Simons, 1995b, pp. 161-2). For example, in a
military context, field commanders will have significant operational discretion during
battle conditions. However, their empowered actions are guided by: years of involvement
and challenge by senior generals in peace time manoeuvres (interactive controls); strong
belief systems based on regimental tradition and boundary controls based on both overall
battle orders together with detailed standing army regulations. However, in the “fog of
war”, diagnostic controls may be difficult to operate and interactive controls are effectively
suspended. Thus, simultaneously, two levers are tight (boundary controls and belief
systems) whilst two levers are loose/suspended (diagnostic systems and interactive
controls). Whilst this might present an extreme analogy, nonetheless, engineers working in
critical environments on 24 July basis may have similar control context.

Information for control

Around the same time as the emergence of NWPs in the 1980s, Johnson and Kaplan
(1987), argued in their seminal text, Relevance Lost: The Rise and Fall of Management
Accounting that the emergence of Japan as an industrial competitor to the USA
indicated that the traditional model of management was deficient and that a new Business
“enlightened” approach, based on NWPs, was required. Furthermore, they argued that transformation
MAISs had not kept pace with the needs of users, and had developed to support the
traditional, top-down, orthodoxy of those managers who sought to command and
control their subordinates:
This is the form within which most accounting and control notions have been developed, that is
accounting control is strongly related to the bureaucratic form of organisation (Berry, 1989, p. 64). 227
Munro and Hatherly (1993) argued that emancipatory potential through lateral control
(team working) necessitated the dismantling of traditional, hierarchical, surveillance
controls. The MAIS has a role to play in shaping new diagnostic systems through: the
choice and level of performance measures; setting boundary parameters and targets
for interactive control by senior management through the budgeting process and
providing sufficient relevant quantitative and qualitative information in a timely and
appropriate manner to support workers in situated decision making and
self-monitoring.

Propositions
Empowerment is both a managerial process and a psychological construct. Its form
and nature can be ambiguous; identifying its presence in situated contexts is likely to
be problematic. Management control in an empowered environment will likely require
managing a mix of all four levers of control and doing so in a manner and with an
appropriate MAIS that supports and guides, rather than unduly interrogates worker
decisions. Thus, the following propositions were developed to guide the field work
reported below:
P1. That empowerment is being used. Evidence would be that:
† People are aware of empowerment and feel empowered. Relationships
between managers and their subordinates[1] are less formal (Munro and
Hatherly, 1993) and the responsibility level of subordinates has increased,
i.e. reduced interactive control. Note: assuming authority has increased
with responsibility but mindful of Wilkinson’s (1998) concerns about
greater employee commitment.
† Managers and workers are able to provide examples of how their
decision-making processes have resulted in adaptations and innovations in
working methods.
P2. That the MAIS is providing sufficient relevant and timely information to
enable budget holders to understand the financial impact of their decisions
and to monitor their performance (bottom-up diagnostic controls) in
conforming with budget expectations (boundary controls). Evidence will be
that workers feel routine accounting outputs (monthly accounts) and ad hoc
costing data are appropriate, timely and understandable.
P0. That no significant changes have taken place. Evidence would be:
† People do not feel empowered and the MCS still reflects the traditional,
top-down command and control model.
† The MAIS still reflects the traditional outlook based primarily on reporting
cost information upwards to senior management.
JHRCA 3. Method
13,3 Pilot interviews in 1997 had suggested that a multi-method approach consisting of
questionnaires, individual and group interviews would capture a sufficiently wide and
deep range of views across senior, middle and junior managers plus those workers
with budget holding responsibilities, i.e. able to spend money and accountable for
concomitant outputs. Six out of the case company’s ten power stations were visited in
228 1998, comprising four coal stations (Northcoal, Midcoal, Southcoal and Eastcoal) and
two gas stations (Northgas and Southgas). The gas stations provided a point of
comparison with the coal stations, the gas stations having been built after 1993 and
hence without the cultural history of the coal stations. Emerging insights from each
site informed subsequent site visits by providing a further focus for questions and
clarification in the manner of progressive focussing (Hammersly and Atkinson, 1995).
Qualitative data gathering consisted of spending time, typically one or two days on
site during which individual and group interviews following a semi-structured format
were undertaken. In addition, the main processes of the accounting system would be
documented and examples of current engineering projects would be selected to follow
through into interviews with non-financial managers. Rich insights into working life
often occurred during tours around the plant, or in general conversation in the canteen
(which tended to double as informal meeting place). Whilst most people were
welcoming and candid in their views, 1998 was still a sensitive time for employee
relations and by prior agreement recording of interviews was not undertaken in the
first round. This was still a heavily unionised environment and there was a long
shadow of political tension in industrial relations cast by the power disputes of
the 1970s and 1980s (Webb, 1984). The coal stations were all approaching, or beyond,
the end of their design life, described by one management accountant (MA) as “on a
glide path to closure” – although subsequent increases in gas prices and cleaner coal
technology largely reversed this position. Later in the inquiry interviews were recorded
and transcribed, wherever ambient noise conditions would allow – power stations are
extremely noisy places. The senior MA at head office (HO) and other central managers
were also interviewed. The findings from the 1998 round of visits were presented to a
conference of the MAs from across the group (approx. 15) and some useful, if robust,
feedback was received, indicative of sensitivities in the general employment situation
and their relationships with engineers. The Appendix shows a summary of key events
and imperatives in the transformation programme and stages in the inquiry.
A short questionnaire (13 questions) was used to gather quantitative background
data on all budget holders in each station and to explore P1(1), and P2. Further
qualitative responses to explain some of quantitative answers were also invited. The
questionnaire also provided an opportunity for comments to be made confidentially, if
participants had felt inhibited in the group interviews. It also enabled wider
participation across the three shift patterns (24 July operation). Questionnaires were
distributed at the end of each site visit in 1998 to all budget holders by the MA, with a
freepost envelope for return direct to the researcher (restricted at Eastcoal to those with
a limit over £10,000). Questionnaires were not distributed at the gas sites several of the
questions addressing aspects of change since privatisation were not appropriate to the
newer gas staff, usually recruited from outside the generation industry.
A second round of visits in 2002/2003 largely replicated the first, although the
stations visited were not all the same as in the first round. Three stations, Northcoal,
Eastcoal and Southgas, had been sold but another gas station, Eastgas, was substituted. Business
Further visits to operational sites and to MAs at HO took place at intervals until 2007. transformation
As Utilityco expanded its corporate scope visits were made to the management
accounting functions in the Shared Service Centre and a division responsible for power
distribution (2003-2007).

4. Case company context and findings 229

Utilityco was created in 1990 in the privatisation of UK electricity generation industry.
It had a number of power stations as its primary assets, representing around one quarter
of UK generation capacity. At the time of privatisation significant numbers of employees
were encouraged to leave, mainly through generous early-retirement packages, some
choosing to return as third-party subcontractors the following week. The company had
taken part in benchmarking exercises in the early 1990s with power stations in the USA
and this had set the agenda for the creation of a long-term business transformation
programme. As the senior MA at HO explained:
We used US comparisons particularly to look for ways of improving our own performance.
If you’re running a power plant with, say, 600 people and someone comes along and says they
can get that down to 200, everyone will laugh and say “maybe we could do 580 this year and
then 550 if we tried very hard, but never 200”. When you tell them that someone in the States
[US] is already operating with these numbers, the first stage is denial and then they say “well
it can’t possibly be right but we ought to analyse it”. Then suddenly you are thinking well
maybe we could get to 400 or maybe 300. We opened people’s eyes to the possible when
all they were seeing was incremental improvement.
Note the reference to “opening eyes” and the similarity with initiating cultural change in
another privatised industry in Dent (1991). During the period of state ownership, the
primary imperative of the business had been safety, followed by the availability and
reliability of electricity supplies. This focus on production output, rather than cost
efficiency, together with a centralised, bureaucratic, culture had created a legacy in
which the “kingdom of engineering” was the dominant political force. The aim of the
transformation project was to increase efficiency by reducing headcount and promoting
organisational and operational change through the evolution of best practice.
Empowerment and self-directed team working would encourage the remaining
workers to challenge traditional working practices, finding better and/or cheaper ways
of doing things. The company used the term financial empowerment specifically to
mean the discretion of employees to commit external expenditure and/or initiate the
consumption of internal resources. This represents an important distinction from other
empowerment schemes in which workers might have discretion over processes or
customer service, but not have the discretion to spend money.
After privatisation the organisation structure was decentralised and each power
station assumed autonomy for power generation and ancillary operations. Strategic
resource allocation and sales were handled centrally. The primary motive was that
inter-station benchmarking would encourage each station to experiment with NWPs,
and best practice would consequently emerge for the benefit of the company overall.
A sub-plot was that individual stations could be more easily be sold/traded. Under
public ownership the MAIS had been highly centralised and outputs had been
restricted essentially to monthly financial-style reports to enforce annual cash
spending limits. For further background on this case, see Coad and Herbert (2009).
JHRCA First phase (1998)
13,3 Site visits. Consistent with the questionnaires there was evidence that employees were
aware of, and understood, the concept of empowerment. Junior managers especially
welcomed the greater freedom they now enjoyed, especially when contrasted with the
former overly bureaucratic regime with limited personal discretion, resonant with
Crozier’s (1964) critique. One way in which people talked about the reality of
230 empowerment was through a change in the “blame” culture, prevalent in the old public
sector days. In 1998, people now referred to a “slow to blame” attitude (greater trust) and
described how challenges by senior management (interactive controls) had moved from
an adversarial to a more inquisitorial stance. However, some more junior managers at
Northcoal and Midcoal suggested that empowerment was often limited to information
sharing and upward problem solving, one commented, “we can solve any problem
ourselves, as long as it doesn’t require spending any money!” At these two stations there
was still explicit and implicit evidence of the command and control approach to
management. For example, managers at Northcoal complained that budgets prepared in
a participative manner were later subject to across-the-board percentage cuts by station
management. Such findings are consistent with Wilkinson’s (1998) conclusion that
many so-called empowerment schemes are essentially psychological. However, there
was also evidence at other stations, Eastcoal, Northgas and Southgas, of the other four
stages in Wilkinson’s schema, including the highest level, self-management (as far as
reasonably practical).
At all sites the overall pattern of control and empowerment styles was not
straightforward. For example, at Northcoal, which had a more traditional management
regime, a formal financial training and competency test had been instigated by the MA,
as a prelude to greater empowerment. This apparent contradiction, greater bureaucracy
to support empowerment was, nonetheless, consistent with Simon’s notion of boundary
controls facilitating greater discretionary powers. Safety was non-negotiable and the
safety culture was very much of the command and control style, with copious “do and
don’t” warnings around the plant, consistent with P0. Security and some operational
procedures were other issues still subject to a rigorously rules-based and bureaucratic
(paperwork and authorisation) approach. However, these facets appeared to co-exist
naturally with other aspects of working life where individual initiative was encouraged.
Simons (1995a, p. 80) noted that whilst such contradictions might seem anachronistic in
modern businesses, standardisation, quality and safety can be critical, thus requiring
total conformance to common routines. Middle managers talked about being “more”
empowered than previously but had difficulty being more specific, other than to give
examples of how they felt, or had acted in an empowered way on occasions. They tended
to anchor their new discretion as a counter-balance to the former bureaucratic regime,
suggesting that empowerment was a question of degree and best thought of as a
continuum between two extremes.
Prompted by specific engineering projects, selected at random from inspection of
the management accounts, managers were asked to explain typical decisions, such as
when to change components. In this industry, components can cost tens of thousands
of pounds, take days or weeks to fit and the outcomes, in financial terms, can be
difficult if not impossible to evaluate. Typically, in each decision there are a number of
interdependent variables. For example, potential savings in component and fitting
costs need to be balanced against negative outcomes such as reduced generation
capacity and/or lower fuel efficiency. Delaying a repair might increase the risk of a Business
component failing at a critical time, resulting in greatly increased repair costs and/or transformation
lost generation. The “mean-time to failure” is a key performance measure, but the
extended life-cycle of major repairs (two to four years is typical) means that evaluating
the efficacy of past decisions is problematic, especially when the accounting system is
focussed on controlling cash spend within fiscal years. To one engineer, a rumbling
pump, might be justification for its replacement but, to another, it might just need 231
closer monitoring. Indeed, it is usually difficult to determine the exact condition of
some machinery without actually taking it to pieces. Strip-down costs might be a
significant proportion of the cost of doing the whole repair and there tends to be an
element of intuition in such judgements. Moreover, as noted by Otley (1989, p. 37),
scheduled maintenance tends to be inversely correlated with plant utilisation; when
production is slack more money is spent on maintenance. Decisions would also be
influenced by the team’s overall workload, its functional expertise and the
appropriateness of using subcontractors, which required giving autonomy to
a third-party as to how to do the task but with tight output (diagnostic) controls.
Thus, in terms of maintenance, relationships between inputs and outputs were tenuous
to say the least but empowerment means that management must ultimately trust
workers to make decisions, within their authorisation limits. One engineer suggested
that the performance measures in the MAIS might be viewed as a non-trust factor,
another felt that TQM was essentially a non-trust system and thus explained there
was no appetite for formal quality frameworks (Hill and Wilkinson, 1995).
Whilst the corporate logo at the front gate of each station was the same, this could
easily have been six different organisations. Technology, old, labour intensive black
fossil fuel (coal/oil) versus new gas, was one factor. But, there were also significant
differences in the management styles between stations using like technology, a result
of the autonomous nature of the organisation structure. For example, Northcoal had a
very no-nonsense, macho, culture; engineering was still the dominant force (Knights
and Collinson 1987, pp. 460-72). In comparison Eastcoal had what was described by
them as having a “touchy-feely” approach. In one of several examples of the
people-centred ethos at Eastcoal the station manager would be personally involved in
plant cleaning days. At Northcoal such behaviour would probably have been taken as
evidence of him being a bit “soft in the head”! People at Northcoal were aware of
empowerment but things were changing more slowly on the ground. At Eastcoal they
could not see what all the fuss was about, they said they had been doing empowerment
for years; it was natural. Almost all 250 employees had received financial training and
could commit expenditure, up to their personal limit; from £500 to £300,000. The
following comment is from a team leader at Eastcoal:
The man who takes something to pieces is the only person who can really have a valid
opinion on whether a certain part needs replacing. He “owns” that plant along with the rest of
his team; of course, he wants it to work right. The only thing a manager could add to the
decision is a view on the financial implications of changing the part. Why not let the fitter
understand what these implications are. The decision can then be made at the same time,
instead of taking three days for the same outcome. In any case what’s so complicated about
accountancy when you’re working on equipment costing millions of pounds?
The style of empowerment adopted at Eastcoal was reflected both task autonomy and
self-management; setting the annual budget reflected a participative approach in terms
JHRCA of considering overall targets and various activity scenarios. To further illustrate the
13,3 difference in thinking between these two stations the following comments originate
from Northcoal and Eastcoal, respectively. Similar sentiments might not be out of place
in the practitioner literature. The first could be by a business turnaround specialist, the
second by a leadership guru. Both have a rationale, within a particular context:
Yes, we have cut out of a lot of unnecessary cost. [For example] People always wanted to
232 paint things. There really was no point in a lot of it, as the customer never sees our plant.
Engineers used to compete with each other to prove who had the best looking plant.
Fortunately, strong financial control has now stopped most of that (Accountant at Northcoal).
Here is our “XYZ” machine, I’m sorry it looks a bit tatty at the moment. It’s due to be painted
on the next site clean-up day. That’s when everyone on the site, including the station
manager, puts on overalls and we all clean the site for a morning. Then we all have a drink
together in the canteen (Engineer at Eastcoal).
Questionnaires. The questionnaires (52 replies, response rate 82.5 per cent) confirmed
that almost all respondents (91.2 per cent) had been employed for ten years or more,
i.e. covering the period of privatisation and the subsequent introduction of NWPs. The
respondents covered a range of seniority levels with authorisation limits from £5,000
to £1 million. The average span of control was 13.9 reports. Almost all budget holders
(96.2 per cent) felt that their relationship with management (next level above) had
become less formal in the past three years and 86.5 per cent felt that their level of
responsibility had increased over the past three years, suggesting that the new regime
had increased commitment. Both findings lend support to P1 that empowerment had
been adopted. The majority of respondents (69.2 per cent) felt that the MAIS was
adequate, supporting P2. Most (86.5 per cent) felt able to evaluate the financial
implications of their decisions, supporting P2. Alternatively, this might suggest that
some managers (15.3 per cent) felt able to make decisions whilst not having
satisfactory accounting information. In the interviews this was explained by managers
keeping shadow records of expenditure in addition to the official MAIS. There were no
comments concerning lack of awareness of empowerment although there was
occasionally a little scepticism of management motives.
In sum there was evidence that empowerment was being adopted – P1(1) and (2).
However, the actual pattern of adoption varied greatly displaying all five stages of
Wilkinson’s schema both across the company and within individual sites. There was a
strong sense that empowerment felt right and, whilst risks were acknowledged, the cause
was legitimate because other organisations were also doing it; legitimisation through
mimetic isomorphism (DiMaggio and Powell, 1983). However, it was not clear whether
empowerment would become embedded in natural behaviour or, alternatively, might
prove to be a short-term fad and reversed in the manner of Arnold’s (1998) findings.
From inspection of the management accounts it was evident that maintenance
budgets were being reduced year-on-year but, on the other hand, there was still some
slack from the public sector days, for example, through cannibalising out of commission
equipment or holding fewer spare parts. This meant that forming a view on whether the
business transformation programme, and more specifically empowerment, was really
delivering better operational efficiency was difficult to evaluate. A summary of the
project was presented to the annual conference of MAs within Utilityco, where it
received a mixed reaction. They accepted that empowerment was being adopted across
all levels of plant management, albeit that the scope and style was patchy, although Business
there was a good deal of scepticism about the MCS. The MAs felt that their intentions in transformation
repositioning the focus of the MAIS to support workers more directly was constrained
by a lack of resources given that maintaining the top-down nature of budgeting and
reporting systems for senior management was required (these were the days of
spreadsheet interfaces between computer systems). Senior managers were not getting so
personally involved with lower levels of management in operational decisions 233
(loosening informal interactive controls), and thus required more robust visibility of
operations at a higher level through formal interactive and diagnostic controls. Overall,
the emerging picture was not straightforward and a further schedule of further visits
over the next few years was agreed.

Second phase – 1999 to 2006

In the update meetings with the senior MA at HO in 2002 (there were three incumbents
between 1998 and 2007) he explained how the industry was being subject to ever
greater competitive pressures and how the company was continuing to evolve in
response. The visits in 2002/2003 were to Midcoal and Northgas – Northcoal and
Eastcoal had been sold. Eastgas was substituted. All the station managers, engineers
and MAs that were interviewed felt positive about the empowerment initiative, both at
personal and team levels, as evidenced by comments about greater job satisfaction.
The availability of better, near real-time, distributed data for decision making and team
monitoring has been facilitated improvements in information technology (IT) systems,
e-mail, intranet and later the enterprise resource planning system (ERP).
Empowerment was no longer such a headline issue but something that had been
embedded into everyday thinking (Bromwich and Bhimani, 1989, p. 85). Interestingly,
whilst empowerment had been embedded within the stations, HO was starting to
reappraise its role as the need to realise further operational efficiencies increased. The
senior MA at HO explained in 2003 that 2002 had represented a watershed in the
decentralisation process:
Organisationally, we still support the devolved, empowered, culture although that is being
chipped away at the edges now. We are probably not as devolved as we were in that we have
appointed general managers that cover several sites [like technology]. Five years ago the
pendulum swung very much to the decentralised model, now it is being nudged back again,
although it is unlikely to go all the way back to centralised control with [separate] support
functions.
At the time of the visit to Eastgas in 2003 the generator had been mothballed due to the
economic downturn following the 9/11 attacks; only a handful of staff had been retained
to continue essential maintenance. The exemplars from the normative literature all paint
a virtuous circle of “empowerment ¼ motivation ¼ success ¼ better motivation”, etc.
But here was an industry with real difficulties and that empowerment was still viewed
positively here was a credit to the scheme. The MA (a former engineer) explained that
this station had been the crucible of empowerment, championed initially by a single
engineer frustrated with the bureaucracy. The local success was then incorporated into
the overall business transformation programme. Whilst this version of events was not
acknowledged elsewhere, the sites were in competition and other sites, such as Eastcoal,
reported that they also developed an empowered manner in the years after privatisation.
Moreover, it was easier for the gas plants as they were essentially greenfield operations
JHRCA but even that statement is complicated by them having been built on old coal sites and
13,3 sometimes with a transfer of some workers. Yet, it would appear that to some extent the
genesis of empowerment was “pulled” from the bottom and “pushed” from the top.
The following quotes (précised in places) are from the chief engineer at Northgas in
2002). They have been extracted from a one hour interview and have been chosen as
representative of the other views expressed in the period 1999-2006:
234 .
On commercial challenges:
The Station was newly constructed in 1996. Most of the operating recommendations
and manuals are based on what the manufacturers say and obviously they have a
commercial interest in saying “Change this pump every two years” so it’s now about
gathering information, challenging what the assumptions are and working out how to
do things for the best value.
Meeting the needs of the electricity market has changed dramatically with NETA
[see Warren, 2005]. This station was originally designed as a base load power station to
run continuously with the machines running at maximum capacity, when they are most
efficient. Now that there is a demand for more flexibility; shutting the machines down
more often and starting them up; creating more flexibility in the fire up and down cycle
and meeting the challenges of that[2]. We are working outside the original operating
envelope; pushing the envelope out a bit plus, managing the contractors [third-party
workers]. We are so heavily reliant on that.
. On management control:
It [MAIS] gives us a fairly good picture, I can drill down into it and look at what the
money has actually been spent on, sometimes I need to do that. I found when I was a
team leader, I used to do that more often than I do now. Now what I’m looking for is
where are the variances, if there is a big variance, where is it? What’s it due to? And
then I go down and find why? And I ask people why?
With greater seniority he is less involved in personal, informal, interactive controls
and is now managing by exception using variances (diagnostic controls) from
ex ante involvement in setting plans and budgets (formal interactive controls)
albeit getting involved with the causes of variances (informal, interactive control).
.
On the MAIS:
I’ve been on Utilityco’s Management Course, which had an accountancy element in it
and explained the terms to you. For example, what an accrual is. I’ve also had formal
training on using all the systems in the station. I’ve had coaching from the MA and he’s
always available, so I think I understand the terms, yes I feel comfortable.
.
On empowerment:
It’s very easy to say “Ah yes, you are empowered now, sort out all these problems”.
I think you’ve got to make sure that you have the support systems and the information
if you like, and the right people as well, you know throwing people in at the deep end.
I think it’s important to recognize that there are different levels of empowerment.
Some people you can empower to do more tasks, higher level tasks, more complex tasks
than others. So just because they are not empowered to the same level it doesn’t mean,
you don’t have to say alright we are empowered and every single person can do this
level of tasks, when 50 per cent of those people are going to feel “Oh hang on a minute,
I’m not ready for this”. You’ve got to do it, you’ve got to tailor to meet their needs, don’t
empower it for the sake of empowerment.
The empowerment initiative assumes homogeneity across workers whereas the point Business
here is that people within a team are different in their ability to be empowered. transformation
Third phase (2007)
The transformation programme continued to evolve and Figure 1 shows the main
changes in the organisation structure. At the time of privatisation the direct workforce
was reduced to leave a smaller base of core workers supplemented by third-party 235
contractors. The next step was to create autonomous stations bearing down on costs at
a local level. Some stations, e.g. Northcoal and Eastcoal (depicted as “X”) were
subsequently sold. By 2001/2002 the opportunities for further localised cost reductions
were diminishing and HO started to take a more proactive role, initially combining
like-technology stations (e.g. coal or gas) to share strategic resources, e.g. major spare
parts and key engineering staff, and diffuse best practice through project task forces
and staff secondments. In 2002, Utilityco was sold to a multinational corporation.
In 2003, a Shared Service Centre was set up to consolidate common back-office
transaction processes. Note; marked as “Shared service organisation (SSO)” as the
company preferred “Organisation” to “Centre”, being keen to avoid signalling a return
to centralisation. From 2004, further consolidation of generating stations occurred,
with a mandatory “fleet-wide” approach to common purchasing and engineering
issues. In the meantime, Utilityco had acquired certain retail electricity and distribution
companies (Y) although these businesses had to be run at “arm’s length” due to
statutory regulations.
In an interview at Midcoal with a group of engineers and other non-financial
managers (some of whom had previously been interviewed in 1998) it was confirmed
that empowerment had been embedded into the culture of the company. A decision
support programme, asset engineering risk optimisation (AERO) had been introduced
to guide managers through the process of compiling expenditure proposals and this

Utilityco – changing corporate structure 1990-2007

1990 1998

Delayering, X Small HO
Downsizing Core H Autonomy–
Outsourcing survival of fittest
X

2007 2002

Joined–up company Diffusion of best

Standardisation C G practice
H H
Centralisation C G Like technology
More purposive HO SSO Y Y consolidated
Figure 1.
Stages of business
X = sold or mothballed unit, H = Head office, C = Coal G = Gas
transformation
SSO = shared service organisation, Y = acquired business (arm‘s length)
JHRCA required estimates of the probabilities of outcomes (e.g. mean time to failure) and
13,3 downside risk (e.g. overspends, premature failure) to be factored in. Since 2003, there
has been a need for operations to comply with a stronger level of corporate governance
due to the Sarbanes-Oxely legislation (SEC, 2002). In addition, the new European
owners had imposed a more bureaucratic style but, interestingly, there was not a
feeling that things were returning to the “bad old days”. Indeed, some of the new
236 engineers in particular welcomed the more explicit guidance (boundary controls) that
the more robust decision framework provided. They still felt that they had sufficient
flexibility to decide what to do and how best to do it, but now there was a supportive
framework. This suggests that in a flatter hierarchy, new workers are not likely to
benefit from such close supervision (interactive control) and in this respect the more
explicit framework to guide decision making is welcome support (boundary controls).
At HO, the senior MA explained that one of the most significant changes from the
past was that nowadays the business case for expenditure proposals has to be written
down rather than argued verbally to management (reduced informal interactive
control, greater formal interactive control based on the boundary controls implicit and
explicit in the AERO system). He also explained that electricity production is now a
given, no longer a “modern wonder” but rather just another commodity to be traded on
the open market; its worth is now in the commercial realisation of total capacity. This
was a distinct shift from the previous paradigm of the stations, “we make money
whenever we generate”. Now the emphasis is on “commercial” availability of energy
vis-à-vis market prices, together with tight cost control, rather than maximum revenue
creation within station level cash spending limits. He noted that there is now
more empowerment, albeit within a tighter regime of cost control. The slow-to-blame
culture had further evolved into a principle whereby the “right thing” is assumed to
have been done. Trust (self-belief systems) rather than personal control is now a key
lever in the MCS.

5. Discussion
After ten years of trying to find substantive evidence for the falsification of the P1,
it is concluded that there has indeed been a lasting change to empowered working
evidenced by greater discretion for workers in decision making and self-monitoring.
Empowerment has been embedded throughout the company’s culture, with the
exception of those sub-regimes consistent with the negative P0, safety, security, etc.
Workers have accepted and internalised the new commercial agenda which
aligns with a wider societal ideology of individual effort and responsibility;
probably helped in this case by employee share-ownership schemes and the success
of the shares (MacInnes, 1987). However, the interpretation and adoption of
empowerment at a local level has been patchy and uneven at times. There has been
evidence of all five stages in Wilkinson’s (1998) typology. There are some
significant contradictions between empowerment in practice and the literature that
need setting in context.
First, it had been expected that evidence of empowerment would be evident in less
formality between layers of management (Munro and Hatherly, 1993). Whilst the
interviews and questionnaires had confirmed this, paradoxically, in the MCS,
interactive controls have become more formal but with less, informal, involvement in
subordinates’ decision-making. This is to say that there is no direct involvement
though. Interaction in real-time decision-making has been reoriented towards: greater Business
participation with workers in planning and budgeting (ex ante control) and greater transformation
monitoring of diagnostic controls (variances and performance measures – ex post) on a
management by exception basis, e.g. comments by senior manager at Northgas in
2002). According to Simons, 1994, p. 171) interactive controls are “formal systems used
by top managers to regularly and personally involve themselves in the decision
activities of subordinates” (emphasis added). However, in subsequent analysis, say, 237
Simons, 1995a, p. 87) states that “interactive control systems focus on constantly
changing information that senior managers consider potentially strategic”. Thus, there
appears to be a separation in an empowered environment between the new strategic
agenda of senior managers (looking outwards) and the traditional agenda of looking
downwards to optimise the decision-making of subordinates, with the strategic scope
largely taken as a given. It seems helpful from the viewpoint of the MAIS to view
interactive controls as either informal (Simons, 1994) or more formal (Simons, 1995a).
Second, there had been a progression in the management style since 1990 and this is
shown schematically in Figure 2. Trust is depicted as the converse of control, and
bureaucracy as the converse of empowerment. At face value, such continuums appear
inconsistent with Hofstede’s “control v. autonomy” representation. However, the senior
MA at HO explained that senior management have an option whether to get directly
involved in real-time decision-making (informal interactive control) or stand back and
trust their subordinates (belief systems), but then monitor events ex post through
scrutiny of variances (diagnostic controls) applying formal interactive control on an
exception basis. Thus, “control” is viewed here as direct involvement by management
during decision making, in other words non-trust of subordinates. On the bi-lateral
axis, the centralised management regime in the days of public ownership had been
very bureaucratic in its style because the detailed formal rules (tight boundary
controls) and the hierarchical nature of the authorisation process meant that managers

Trust
(belief systems)

2007
2002
Bureaucracy
(constrains Empowerment
1998
discretion requires
informal interactive &
control)
& decentralisation
1990 (loose boundary
centralisation controls)
(tight boundary
controls) Safety &
security Figure 2.
Progression of
management styles and
Management control involvement levers of control
(informal interactive control)
JHRCA had to become involved personally for anything to happen. Empowerment represents
13,3 freedom from frustrating administrative checks (Crozier, 1964) and involvement by
senior managers who generally are in no better position to know, say, whether a pump
is “rumbling” or about to fail. Thus, empowerment, underpinned by looser boundary
controls, represents decentralisation.
The oval shapes in Figure 2 show a somewhat crude average position across the
238 sites and the varying sizes attempt to indicate the relative extent of homogeneity or
diversity of management styles across and within stations. For example, in 1990 the
MCS was centralised – narrow range of variation. Diversity between stations naturally
evolved through autonomous working to 1998. By 2002 decentralisation, facilitated by
greater trust (belief systems) and looser boundary controls, had reached its maximum.
From 2003 the company started to pull back and many procedures in the MCS were
standardised through centralisation, especially by the introduction of the SSO and ERP
although trust has continued to increase. Greater trust might also be seen as the
reduction of uncertainty through better predictability and stability in the MCS and
MAIS (Busco et al., 2006, p. 17). The progression excludes of course, those critical sub
regimes such as safety and security which are still anchored in the bottom-left
quadrant, consistent with hypothesis P0.
Quattrone and Hopper (2005) argue that centralisation can allow for more informal
control, as supervision within the hierarchy is more personal, whereas decentralisation
requires more formal (boundary) controls to maintain control over distant and time.
Whilst his appears to contrast with the situation at Utilityco, where more formality
(standardisation) is concomitant with increased central control, the contradiction can
be rationalised within the levers of control (LOC) framework. Decentralisation is based
on looser but more formal (boundary) controls which is the opposite of bureaucracy
which involves stymieing individual initiative thus ensuring that workers are forced to
consult senior managers providing opportunities to the latter to regularly and
personally indulge themselves in interactive control (Simons, 1994). The MAIS now
allows for both top-down management at a distance (formal diagnostic controls –
exceptions causing informal interactive controls) and bottom-up, formal and informal
diagnostic controls for self-monitoring by workers. The LOC framework has been
overlaid onto the vertical and horizontal axis.
Third, whilst the rollback from decentralisation has proved to be more of a check than
a brake, one manager jokingly referred to this as “Empowerment, BUT!” The acceptance
of empowerment and a greater commitment by individuals has been achieved
without significant extrinsic rewards. Indeed, it would appear that intrinsic motivation
(Deci and Ryan, 2000) has played the most significant role in embracing change,
although this is still a relatively well-paid industry and most workers were shareholders.
Finally, in terms of how change occurred the emerging picture has been a
mish-mash of a long-term corporate vision, individual ambition/empowerment,
happenstance external developments, market pressures and slow evolutionary
progress. Quattrone and Hopper (2001) argue that change in large organisations has
a tendency to resemble drift rather than be a clear, rational and linear progression.
With large organisations becoming largely acentred rather than centrally driven. The
authors’ proposition has a strong resonance with the situation at Utilityco. Indeed,
empowerment might be thought of not so much as a repositioning of the locus of
control but as the creation of multiple loci of control, or “enactment”.
6. Conclusions and suggestions for further research Business
Whilst it is accepted that some degree of partiality is inevitable in conducting and transformation
rationalising a longitudinal enquiry in a single large organisation, and that other
theoretical interpretations of the findings are possible, the following conclusions are
offered. The empowerment initiative has been adopted successfully at Utilityco and has
become embedded in the culture of the company, which has changed from a position
whereby everything is forbidden unless permitted (tight boundary controls) to a more 239
professional and supportive environment whereby everything is permitted unless
forbidden looser boundary controls). Thus, P1 is confirmed, empowerment is being used.
Furthermore, the MAIS is providing appropriate information to support operational
managers, confirming P2. Engineers no longer operating shadow accounting systems.
IT developments have supported empowerment by allowing self-monitoring by
workers and top management to have better on-demand visibility although due to
space constraints the MAIS has had only minimal attention.
Empowerment has been confirmed as a multi-faceted and context specific construct.
The term itself is nuanced and is naturally entwined with other NWPs and concepts of
management control. Whilst it is possible to appreciate real progression over an
extended time period, the course of the transformation programme has been somewhat
lumpy and opportunistic. The “low hanging fruit” (delayering, downsizing and
outsourcing) was “picked” in the early 1990s and efficiency savings from new
engineering methods have been more gradual. Cause and effect relationships are
difficult to establish in this industry although managers and workers have generally
stuck to the conviction that empowerment is right and benefits will manifest over time.
Some aspects, such as safety and security regimes, have remained firmly bureaucratic,
as in P0, consistent with Simons’ (1995b). Moreover, Simons’ (1994) levers of control
framework has been helpful as a sensitising device in understanding the changing
imperatives and operation of the MCS and groups of actors within the field.
It is something of an understatement to say that there has been a lot going on in this
transformation of a major UK plc over a ten year period. Empowerment has been the
core issue but there remains much to explore and the following suggestions are offered
in good faith to future scholars:
.
Trust was identified somewhat belatedly in this case but further insights into
empowerment might be provided by exploring the MCS in terms of operating
with in-house and outsourced teams.
.
There is a continuing literature examining the role of Simons’ LOC framework
(Bisbe and Otley, 2004; Ferreira and Otley, 2005; Tuomela, 2005; Widener, 2007)
however, the general disposition is towards strategic (top-down) concerns and
the use of performance measurement. It is suggested that there is further
potential to explore application of the framework in terms of the facilitation and
governance of relationships within the hierarchy both vertically and laterally
and in external relationships, for example the third-party contractors in this case.
.
There is also much to explore in the changing role of the management accounting
function in an empowered environment and the accountant’s role in designing
MAIS and the MCS.
JHRCA Notes
13,3 1. The terms management, subordinates, workers, team leaders, engineers and budget holders
tended to be used interchangeably across the sites. In this paper the terms manager and
worker are used to delineate between managers and subordinates generically, in the spirit of
empowerment, unless there is a need to be more specific. Budget holder is usually synonymous
with supervisor responsibilities, but at Eastcoal almost every worker had some budget
holding within a team and sometimes senior engineers had large budgets but no staff.
240
2. Each fire up cycle stresses the plant (expansion/contraction) and wastes some fuel.

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Further reading
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(The Appendix follows overleaf.)

Corresponding author
Ian Herbert can be contacted at: i.p.herbert@lboro.ac.uk

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 13,3

244

Table AI.
JHRCA

of the survey

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Key changes in the
organisation and stages
Strategic imperative and events Year Survey

Public sector ownership – central bureaucratic control 1989

Appendix

Privatisation 1990
International benchmarking 1991-1992
Labour shedding/outsourcing
Cost control
Emerging empowerment
Cost control and new gas plants 1993-1996
Cost control/cost reduction 1997 Pilot interviews – Midcoal and Eastcoal
E.g. at Midcoal MAs £ 2, engineers £ 6 (two individual four
group) þ plant tour talking to various others.
Cost control/cost reduction 1998 Site visits to six stations inc. Midcoal and Eastcoal (similar format
to above but including more formal interviews with engineers and
senior station management, senior MA at HO £ two visits
Presentation of findings to MAs conference ( £ 15).
Industry consolidation some stations sold 1999 Visit to Snr. MA at HO
web-enabled communication: e-mail, intranet Presentation to academic conferences, FIS & MARG
Extension of intranet for intra-site MAIS and communication 2000 Presentation to academic conference, MARG
New MAIS. Consolidation of like technology plants. Market 2001 Senior MA at HO visits £ 2
restructuring (NETA)
Takeover by European Group 2002 Visits to Midcoal and Northgas, similar format 1998. Presentation
to MARG
Some gas plants mothballed 2003 Visit to EastGas, Snr. MA at HO visits £ 2
Shared service organisation 2004 Visit to SSO HR manager and MA £ 2 visits
Growing impact of SARBOX
Greater consolidation of operations 2005 Visit to SSO, HO, MA at Cables Division £ 2 visits
Gas plants recommissioned
ERP introduced to engineering managers 2006 Visit to SSO, senior manager in SSO at HO, MA at cables division
Continuing cost management 2007 Visit to Midcoal individual and group interviews, total of seven
engineers and ops managers. Senior MA at HO visits £ 2
Presentation to MCA
Notes: MARG, Management Accounting Research Group Conference, Aston, September 1999; FIS, Financial Information Systems Conference,
Sheffield, July 1999; MCA, Management Control Association, Manchester, 2007; NETA, New Electricity Trading Agreement (Warren, 2005)