Alnoor Bhimani

A study of the emergence of management accounting system ethos and its influence on perceived system success

Abstract This study considers how certain notional organisational culture elements became embedded in the design of an innovative management accounting system (MAS) and how the alignment between the cultural premise of the MAS and that espoused by MAS users influenced the perceived success of the new system. The research data for the study were obtained over a three and half year period and derive from interviews, questionnaire responses and public as well as internal corporate documents. The site chosen for the study is a division of Siemens—a global firm in the electronics and electrical components industry. Two employee groups with functional expertise in engineering and business economics respectively comprise the MAS user groups. During the development and implementation phases of the new MAS, Siemens was actively engaged in a corporate-wide culture change programme that was supportive of the new MAS initiative. The study results are in two parts. First they report on the manner in which the organisational programme of culture change affected the cultural premise of the new system. Second, they indicate that the degree of alignment between the organisational culture elements which were embedded within the MAS and the organisational outlook of the two user groups significantly influenced the systems perceived success.

Mapping methodological frontiers in cross-national management control research

Abstract Cross-national studies of management control systems and internal accounting practices are suggestive of the existence of distinct national differences. These studies are, however, methodologically partial, drawing upon contingency theory rationales and culture based arguments in examining international management control variety. The purpose of this essay is to review these perspectives critically and to consider other modes of analysis used by researchers investigating diversity in the structuring of organisational arrangements and forms of management practices across different contexts. Specifically, the essay discusses the societal effects approach, new institutionalism and “new” historical analyses. The paper also provides a tabular representation which classifies and positions the alternative perspectives in comparative management control research discussed in the paper along different conceptual dimensions. ©

Indeterminacy and the specificity of accounting change: Renault 1898–1938☆

Abstract This essay focuses on the manner in which an enterprises accounting practices may be affected by a complex of independent and disparate external factors interacting with internal forces to create a sustained dynamic of change within the organisation. As its object of enquiry, the French motor car manufacturer Renault is studied over a forty-year period immediately preceding the Second World War. The conditioning influences of scientific management and statistical information and their interplay with Renaults costing concerns are examined. The study suggests that accounting change at Renault was dependent on a complex set of relationships and preconditions and that the specificity of the companys accounting controls was tied to both contemporary and historically distant influences rather than to notions of functional requirements dictated by processes internal to the organisation. As such, accounting change is argued to have been determined by circumstance as opposed to essence.

Implementing ABC: a case study of organizational and behavioural consequences

Relatively little is known of the ways in which the operationalization of accounting techniques can give rise to unforeseen repercussions within an enterprise. The case examined in this paper considers the effects of implementing an activity-based costing system in a company vis-a-vis its intended aims. In doing so, it draws attention to certain unanticipated organizational and behavioural consequences. The paper not only suggests that the perceived role of the accounting function within the enterprise changed following the adoption of the new costing technique, but also that the authority and organizational power base of different line managers also shifted.

Management Accounting in the Digital Economy

There is mounting evidence that the deployment of digital technologies by enterprises affects not just their functioning in economic terms, but also mobilizes broader social, institutional, and organizational effects. At a technical level, digitization directly influences organizational processes. Notions of its potential also define managerial pursuits and the search for enhanced organizational performance. Inevitably, digitizatoin impacts the form, substance and provenance of internal accounting information with attendant consequences on the behaviour and actions of decision makers. Knowledge about the influence of digital technologies on management accounting thinking processes and practices is starting to emerge. A variety of issues relating to pricing strategies, cost management and control mechanisms are evident. But the implications for the field are far wider. Aspects of trust, organizational power, cultural shifts, strategization, convergence of product and information elements, and newly perceived contingencies between information dimensions and contextual factors are altering management accounting systems, structures, thinking, and practices. This book explores these and other issues along different planes of reference. The first part of the book consists of chapters that discuss accounting and management control systems and wider structural shifts connected with the advent of digital technologies. In the second section, the contributors analyse organizationally focused shifts occurring concomitantly alongside digital transformations in the economy. The final part of the book comprises chapters that consider avenues of accounting transformation that may be pursued in specific contexts both in terms of practice and as concepts that afford insights into possible management accounting futures. Broadly, the fourteen chapters of this book bring together practical commentaries, conceptual frameworks, and theoretical argumentation and explore wider narratives regarding the interface between management accounting and the digital economy. Management Accounting in the Digital Economy will be of interest to scholars, advanced students, and practitioners concerned with the management accounting and control implications of the growing ubiquity of digital technologies across organizational spaces and economic platforms. Contributors to this volume - Shannon Anderson, Graduate School of Management, Rice University Paul Andon, School of Accounting, University of New South Wales, Sydney Franco Amigoni, SDA Bocconi School of Management, Bocconi University Jane Baxter, School of Accounting, University of New South Wales, Sydney Alnoor Bhimani, Department of Accounting and Finance, London School of Economics and Political Science Ariela Caglio, SDA Bocconi School of Management, Bocconi University Chris Chapman, Said Business School, University of Oxford Wai Fong Chua, School of Accounting, University of New South Wales, Sydney Angelo Ditillo, SDA Bocconi School of Management, Bocconi University Lawrence A. Gordon, Robert H. Smith School of Business, University of Maryland Maurice Gosselin, Ecole de Comptabilite, Universite Laval, Quebec City, Canada Markus Granlund, Turku School of Economics and Business Administration, Finland Frank Hartmann, Universiteit van Amsterdam Kristian Kreiner, Copenhagen Business School Hans-Ulrich Kupper, Institute of Production Management and Management Accounting, University of Munich Martin P. Loeb, Robert H. Smith School of Business, University of Maryland Kari Lukka, Turku School of Economics and Business Administration, Finland Paulo Quattrone, University Carlos III, Madrid Hanno Roberts, Norwegian School of Management Karen L. Sedatole, McCombs School of Business, University of Texas at Austin Leif Sjoblom, IMD, Switzerland Eddy H. J. Vaassen, Universiteit Maastricht

European management accounting research: traditions in the making

A sizeable body of studies in management accounting undertaken by Europeans now exists. The European Accounting Review (EAR) has been a key outlet for the publication of such works. This paper considers whether European management accounting research (EMAR) published in EAR exhibits a diverse range of methodologies and research perspectives such as to adhere to the journals initial editorial intent of providing a forum where researchers of all backgrounds can bring their work to a wider audience. The paper also assesses whether the journal has played a role in making possible the emergence of new European traditions of management accounting. The paper develops an approach to classifying management accounting research perspectives and categorizes EMAR published in EAR in this light. The analysis suggests that the journal exhibits considerable diversity in paradigm emphasis across areas of management accounting researched by Europeans. Moreover, several strands of EMAR are highlighted as contributing to novel avenues of enquiry within the field.

Digitisation, Big Data and the transformation of accounting information

Developments in digitisation, software and processing power and the accompanying data explosion create significant alterations, dilemmas and possibilities for enterprises and their finance function. The article discusses a model for understanding data, information and knowledge relationships. We apply the model to examine developments in strategy, organisational and cost structures, digitisation, business analytics, outsourcing, offshoring and cloud computing. We argue that organisations need to be sensitised to different types of knowledge, the challenges in creating and applying that knowledge, and be more circumspect about what can be achieved through advances in information-based technologies and software. We point to both the potential of and the complexities presented by Big Data in relation to the finance function generally and to management accounting information provision specifically. We suggest that ‘Big Data’ and data analysis techniques enable executives to act on structured and unstructured information but such action must recognise that the traditionally presumed sequential and linear links among corporate strategy, firm structure and information systems design are no longer in play. Additionally, cost structure changes are affected by developments in how data, information and knowledge can be utilised. We discuss the outsourcing and offshoring of work and their data, information and knowledge ramifications as well as those related to cloud computing. We conclude that the possibilities for the digitally enabled business create a range of ‘information literacy’ challenges as well as new possibilities for accounting information providers.

Exploring big data’s strategic consequences

Big data multiplies the potential of organizational data engagement and the shaping of enterprise strategy processes. The paper argues that big data qualitatively alters strategic processes by extending managerial possibilities for acting on both structured and unstructured information because the conceptually presumed linear links between corporate strategy, firm structure and information systems design no longer hold. Big data draws organizational information systems into a shifting dynamic of altered forms of information access and use as part of a wider complex loop of interventions and analyses. Big data analyses are for many firms becoming indispensable strategic ploys which themselves alter strategies that further mobilize big data consequences. The paper also argues that the use of big data for directing enterprise activities effects behavioural and political organizational consequences. The paper concludes

Strategy and activity based costing: a cross national study of process and outcome contingencies

This investigation assesses the associations between strategy and experiences with activity based costing (ABC). Experience with ABC has two elements – processes and outcomes. The study considers strategy based process contingencies in relation to the decision to implement ABC, as well as the extent and speed of implementation. Outcome contingency is considered in terms of the perceived success of ABC implementation. A questionnaire was developed to collect information on corporate costing experiences and strategic orientation across organisations in seven countries. The results of the study suggest the prevalence of outcome based rather than process based dependencies between ABC and corporate strategy orientation.

The Role of Financial, Macroeconomic, and Non-financial Information in Bank Loan Default Timing Prediction

We assess the use of bank loan information in predicting the timing to default. We use unique data on defaults in small and medium enterprises maintained by the Central Bank of Portugal which includes financial accounting and macroeconomic indicators, as well as non-financial information. The findings are indicative of the incremental predictive ability of non-financial information over and above macroeconomic and financial accounting information in the baseline, industry, and in- and out-of-sample models. Specifically, total credit secured by firms is, as expected, negatively and significantly related to default. Gross domestic product is negatively and significantly related to default, and benchmark market rate is positively and significantly associated with default. The findings also reveal that firms which are operated by partners, which have stronger financial support from partners, and which possess operational assets exhibit lower hazards of default. The study indicates that non-financial information and macroeconomic indicators assessed alongside financial accounting data can significantly improve the forecasting performance of default models.