Norio Sawabe

Time and space in income accounting

Abstract Inspired by the work of DR Scott, we explore the formation of an internal logic of income accounting that bestows upon the income accounting system an institutional status. As large scale modern corporations emerged in the market, imaginative ways of doing income accounting were developed and exercised in the 19th century. Creative accounting practices of the time were eventually evolved into what is now known to be the accrual process. A distinctive feature of the accrual accounting system, that has the accrual process as its essential part, is that it creates internal space demarcated (de-marketed) from the external world. In the demarcated space of the accrual accounting system, “the Emptying-out of Internal Transaction Time” takes place. Internal transactions enable the accrual accounting system to generate smoothed income series out of cashflow chaos, which function as an “attractor” in the complex relationships between managers and stakeholders. Creative accounting practices induced phase transition so as to establish the accrual accounting system as a legitimate social institution.

Core values as a management control in the construction of “sustainable development”

Purpose - – This paper aims to examine a management control constructed by senior managers, a core value focused on sustainability, as it travels through time and space. The criticality of sustainable development suggests the need to understand the effects that core values have on organisational actions. Design/methodology/approach - – A case study methodology carried out at a multinational organisation is used. This analysis was informed by an actor-network theory which allowed placing the organisation’s sustainability focused core value at the centre of this research. Findings - – It was found that management control, in the form of a sustainability-focused core value, took on an active role in the case organisation. This enabled the opening of space and time that allowed actors to step forward and take action in relation to sustainable development. It is shown how the core value mobilised individual actors at specific points in time but did not enrol enough collective support to continue its travel. The resulting activities, though, provided a construction of sustainable development within the organisation more in line with traditional profit-seeking objectives rather than in relation to sustainability objectives, such as inter- and intra-generational equity. Research limitations/implications - – These findings suggest possibilities for future research that examines the active role that management controls may take within sustainable development. Originality/value - – This paper shows the active role a management control, a sustainability focused core value, took within an organisation. This builds on the research that examines management control in relation to sustainability issues and sustainable development as well as the literature that examines core values.

Accounting for the public interest: a Japanese perspective

Purpose – To expand ones understanding about how accounting helps to shape, mediate and constitute the public interest, the private interest, and their relationships.Design/methodology/approach – An interpretive approach is utilized to analyze the documents that have both informed and legitimized the Japanese financial regulatory changes since the end of 1970s.Findings – The paper finds that the concepts of private and public interest, and their relationships have been mutable in the deployment of accounting rhetoric. The concept of private interest was given more concrete shape as the market‐oriented reform advanced in the name of public interest.Originality/value – This paper sheds light on the constructing role of accounting in society, which in turn helps to understand changing conceptualizations of the public interest, the private interest, and their relationships.

The past, present and future of accounting: A review essay of Accounting, organizations and society: The inside and outside of accounting by Sadao Takatera

Abstract This review demonstrates that the main contribution of a leading Japanese accounting scholar — Takatera —lies in the synthesis of a descriptive examination of the past of accounting in conjunction with a normative study of accounting of the future. Employing social and organizational perspectives, Takatera advances a framework in which the calculation structure and power of accounting are essential. The framework encompasses both internal and external accounting as integral parts of the whole. This essay highlights Takateras holistic image of accounting along with “his own time axis”.

Management Controls and Pressure Groups: The Mediation of Overflows

Organisations produce effects that go beyond the economic framing within which they operate, referred to as overflows in this paper. When an organisation comes under pressure to address these overflows they must decide how to respond. Previous research has placed social and environmental reporting as an important tool organisations mobilise in their attempts to mediate these pressures and the groups that give rise to them. However, these reports are typically only released once a year while the pressures that organisations face can arise at any time and are ongoing and constant. The purpose of this paper is to explore situated organisational practices and examine if and how management controls are mobilised in relation to the actions of pressure groups.,This paper takes a case study approach to understand how an organisation attempts to mediate the pressures from a number of overflows: carbon emissions, changing lifestyles, aspartame and obesity. To undertake this research a performative understanding of management control is utilised. This focusses the research on if and how management controls are mobilised to assist with attempts to mediate pressures.,Analysis of the data shows that many different management controls, beyond just reports, were mobilised during the attempts to mediate the pressure arising from the actions of groups affected by the overflows. The management controls were utilised to: identify pressures, demonstrate how the pressure had been addressed, alleviate the pressure or to dispute the legitimacy of the pressure.,This paper shows the potential for new connections to be made between the management control and social and environmental accounting literatures. It demonstrates that future research may gain much from examining the management controls mobilised within the situated practices that constitute an organisations response to the pressures it faces.

Performance Measurement Systems for Managing Exploration/Exploitation Tensions within and between Organizational Levels

Recent studies on performance measurement systems (PMS) have addressed how managers deal with two competing demands such as efficiency and flexibility, creativity and control, and exploration and exploitation. This paper adopt March’s (1991) suggestion on the tension between exploration and exploitation. Organizational ambidexterity literature suggests that exploration/exploitation tensions could transpire at multiple levels in the organizations simultaneously. However, little empirical work illustrates how these dual competing demands relate to multiple organizational levels. This study explores three questions: how PMS supports to build internal alignments within exploratory and exploitative subunits (at the strategic planning level); how PMS supports to make integration mechanisms function between exploratory and exploitative subunits (at the operational level); and, how managers use PMS to manage tensions between the strategic planning level and operational level. We draw on a case study of one organization. We can summarize our findings as follows. First, we focus on structural differentiation at the strategic planning level. We identify two separated subunits: sales department and production department. The middle range plan includes exploratory and exploitative strategic goals. However, not only exploratory goals but also exploitative goals are cascaded down to both the subunits. The selection of performance measures and their linkages with initiatives are different between subunits. The targets are set at the stretched level in both the subunits. Second, we investigate targeted integration mechanisms at the operational level. The monthly sales-production meetings are used as a integration mechanism. Operational managers take part in the meeting and are allowed to modify production plans. While fix cost targets must not be changed, the priority specs created at the meeting can incorporate a certain degree of flexibility into production capacity. Although the resource reconfiguration through the formal planning and budgeting process is not responsive, the targeted integration mechanism with daily measurement and monitoring of capacity utilization is useful. Finally, we identify managerial capabilities to balance tensions between the above two levels. Manager’s understanding of production capacity is critical to successfully adjust production schedules without fixed cost overrun. His understanding comes from doing budgeting tasks every year. The budgeting process provides a training field for his subordinate. But another manager has difficulty because cost information is not supplied in a timely manner.