Trevor Hopper

Management Control in an Area of the NCB: Rationales of Accounting Practices in a Public Enterprise

This paper explores the rationales offered by participants for the accounting and management control practices in which they are involved. An analysis of these rationales emphasis four characteristics of current practices. Firstly, financial planning and control systems do not appear to be a dominant mode of organisational control for the organisation investigated, physical production planning appearing to be more important. Secondly, the parts of the whole organisation appear to be only loosely coupled, thereby insulating the various parts from each other, and from pressures for change. Thirdly, in such a context, accounting and information generally may be managed either (or both) to enhance ambiguity or to provide legitimacy in (and about) the organisation. The paper concludes, fourthly, by noting the pressures for change which appear to operate through the finance function, thereby enhancing that functions organisational role. The observations and analysis of the paper are based on an in-depth observational study of an Area (i.e. geographical division) of the National Coal Board, in the U.K., and on a detailed study of that organisations history and environment.

Cost accounting, controlling labour and the rise of conglomerates

Abstract Through a detailed critique of Johnson & Kaplans Relevance Lost, (Johnson, H.T. & Kaplan, R.S., Relevance Lost: The Rise and Fall of Management Accounting (Boston, MA: Harvard Business School Press, 1987)), based upon labour histories of control within North American firms, this article identifies major deficiencies in conventional historical studies of cost and management accounting and offers possibilities for their resolution. After noting the limitations of transaction cost theory for the theorisation of organisations and their history, the paper argues that accounting controls were not a consequence of economic or technological imperatives, but rather were rooted in struggles as firms attempted to control labour processes in various epochs of capitalistic development. Cost accounting developments are related to the destruction of internal subcontructing and craft control of production in early factories, the advent of “Scientific” Management and homogenised labour and, post-1930, with an accord between primary sectors of labour and corporations, which led to an increased emphasis on monopoly pricing, smoothing production and hence employment patterns, and a shift of economic pressures to secondary labour and producer markets. The paper concludes by arguing that, in the context of todays globalisation of capital, control associated with the labour and capital accord are being abandoned as corporations experiments with new methods and ideologies of control which are reflected in current fashions in accounting research.

The new accounting history: An introduction

Abstract Over the last decade accounting history has changed significantly. This change entails both a pluralization of the methodologies and a change in the position of history within the discipline of accounting. The extent of this change is held to entitle us to speak of the “new accounting history” as a loose assemblage of diverse research questions and issues. It involves attention to a variety of agents and agencies, the conditions of possibility of transformations in accounting knowledge and practice, the institutional forces that shape actions and outcomes and the rationales that set out the objects and objectives of accounting. The new accounting history is located in relation to changes in the discipline of history itself, and is held to have implications for the current burgeoning of interest in “field studies” of accounting.

Accounting for accounting: Towards the development of a dialectical view

This paper questions the adequacy of current approaches to accounting research. Following a re-examination of the progress made by the interpretive perspective in correcting for many of the shortcomings in the traditional framework, a catalogue of unresolved problems and silences is constructed. It is argued that central to this is the persistent failure adequately to contextualize accounting whilst at the same time treating it as a fully social practice. The second part of the paper is accordingly devoted to the development and illustration of an alternative, fuller, perspective. This, it is claimed, contains the potential to allow a deeper understanding of the linkages between routinized practices and conflicts and the socio-economic contexts in which they are located.

Extending Institutional Analysis through Theoretical Triangulation: Regulation and Activity-Based Costing in Portuguese Telecommunications

Abstract This paper examines why a Portuguese telecommunications company – Marconi – adopted activity-based costing (ABC). The focus lies in new institutional sociology (NIS), particularly the institutional change model of Dillard et al. (Accounting, Auditing and Accountability Journal, 17(4), pp. 506–542, 2004), supplemented by theoretical triangulation involving economic, labour process and actor network theories to enrich observations and extend theory. Why Marconi adopted ABC lay in a complex, interrelated chain of institutions, including the parent company, management consultants, national and European Union regulators, financial markets and consumer associations during market liberalization. ABC was a means and symbol of improved competitiveness and efficiency but its diffusion and adoption also involved mimetic, coercive and normative factors. In regulated environments external legitimacy and efficiency were intertwined and demonstrating efficiency using accounting symbols is problematic. The results confirm criticisms of early NIS research for dichotomizing economic and institutional pressures, assuming private organizations are exempt from institutional pressures and neglecting internal organizational dynamics. The Dillard et al. model accommodated many features of institutionalization but needed extension to incorporate the public interest, the role of boundary spanners across social levels and how intra-organizational factors and properties of the technology derived following translation and praxis play a part.

ACCOUNTING FOR PRIVATISATION IN BANGLADESH: TESTING WORLD BANK CLAIMS

Abstract The World Bank and the IMF have encouraged many less developed countries (LDCs) to pursue privatisation policies. Development economists and World Bank reports claim this facilitates development by improving controls within enterprises and external regulation of financial markets acting on external accounting reports. This paper questions these beliefs. It compares the post-privatisation performance of companies in Bangladesh examined in a World Bank report with the authors’ own research on the same companies. The World Bank report reported that the success of the privatisations established the case for more. In the research reported here, only one of the privatised companies was judged a commercial success, though the unavailability and dubious accuracy of accounting reports prevented any definitive assessment. Above all, the paper questions the narrow criteria adopted by the World Bank report—namely profitability—and the neglect of employment conditions, trade union and individual rights; social returns; and financial transparency and accountability to external constituents. Our evidence suggested that privatisation has not increased returns to society: privatised companies’ contributions to state revenue declined in real terms and as a proportion of value added. Transparent external reports failed to materialise as required by law and there was evidence of untoward transactions affecting minority shareholders, creditors, and tax collecting institutions. Internal controls may have become more commercial but at the cost of declining employment, wages, quality of working life, and employee rights. The World Bank claims rest upon efficiency benefits trickling down to all but the effects of privatisation may have been a redistribution of power and wealth to the new owners. This paper argues that the IMF, the World Bank, and Western capitalist states have not provided the technical infrastructure and organisational capacity to execute their neo-liberal privatisation agenda, which rests on dubious socio-economic assumptions. Our unfavourable evaluation of privatisation in Bangladesh is not unique. It has been happening again and again around the world.

What is IT? SAP, accounting, and visibility in a multinational organisation

Abstract Recent work on Information Systems tries to reconcile the apparent homogeneity of Information Technologies (IT) with the heterogeneity of their use by recognising that users can render IT systems flexible and malleable. This paper advances theorisation of this apparent paradox by reflecting on the nature of IT, i.e. its ontology. Observations of an ERP (SAP) implementation in a large USA multi-national cast within Actor-Network Theory and Science and Technology Studies approaches help illustrate how an object like IT can possess diversity and heterogeneity whilst being a homogeneous and operative technology. The paper argues that IT appears homogeneous for it attracts and generates heterogeneous uses. This paradox is labelled ‘heteromogeneous’. An IT system is theorised as an absence which establishes a presence by mobilising and attracting other actors and technologies, in this instance accounting, seeking visibility in organisations. IT emerges from multiple and continuous translations involving customisations of SAP. Thus the definition of IT is neither stable nor singular across time and space, which enables IT and SAP to travel across organisations.

Political and Industrial Relations Turbulence, Competition and Budgeting in the Nationalised Jute Mills of Bangladesh

Abstract This paper reports an empirical investigation, based on triangulation methods, of how a set of environmental facts affect budgeting characteristics in the nationalised jute mills of Bangladesh. The key factors were derived from intensive fieldwork. Five external factors (political climate, industrial relations, competition, aid agencies and government regulations) were deemed to affect budget-related factors (such as participation, accountability for budget, budget evaluation, budget analysis, interactions among managers and budget flexibility). Data from 38 state-owned jute mills within the Bangladesh Jute Mills Corporation (BJMC) are used to test the propositions. The analyses of data reveal a significant relationship between environmental factors and budget-related behaviour. Political factors, industrial relations and market competition were major influences on how budgeting systems were perceived. The study shows how political volatility and industrial relations can render the formal systems...

Critical Theorising in Management Accounting Research

Abstract There is a long and distinguished history of critical theorising in management accounting, but some doubt its continuing relevance to understanding modern management, organisations and the world, more generally. We address this issue by showing how three broad approaches to critical theory (labour process, critical theory and post-structuralism) help us understand two major developments in modern management accounting. We review the critical accounting literature in strategic management accounting and new public management to show, inter alia , the enduring value of a socially and historically contextualised view of management accounting that emphasises power and conflict, examines the multiplicity of mechanisms of commodification and is oriented to social improvement. The chapter concludes by identifying some continuing challenges and highlights the achievements of critical theorising in management accounting.