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«Paul M. Collier Aston Business School, Aston University Accounting for Managers Accounting for Managers: Interpreting accounting information for ...»

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In fact, evidence in the field suggests that accounting practices are not uniformly implicated in organizational activities (Goold & Campbell, 1987; Miles & Snow, 1978). In some organizations, accounting is centrally involved in work rituals: financial achievement is celebrated; budgets are massaged, pored over,


and matter. In others, accounting is incidental, perhaps existing as a practice, but with no particular significance. Similarly, entrepreneurial risk taking is sometimes valued for its own sake. Dynamic, decisive, action-oriented men and women who innovate are heroes, almost irrespective of the financial consequences. In other organizations, risk taking is valued only if successful in financial terms.

Arguably, the multi-faceted interplay of accounting with organizations’ cultural and technical systems is under-researched. More empirically grounded research is needed to ascertain the way in which accounting is drawn upon by actors within organizations in the creation and maintenance of cultures.

Responding, with others, to appeals for field studies (e.g. Bruns & Kaplan, 1987) and for the study of accounting in its organizational and social context (e.g. Hopwood, 1978, 1983; Dent, 1986), this paper reports a longitudinal study undertaken in one organization to research this issue. The organization is a railway company.

The study focuses on its senior management elite: a group of approximately 120 ´ people including head office executives, senior line management and people in senior staff positions (i.e. finance and engineering). Prior to the study, the dominant culture within this management group was well established, and centred on engineering and production concerns. Accounting was incidental in this culture: it was necessary in the technical-rational sense of ensuring that revenues were accounted for and suppliers were paid, but it was not incorporated into the culture among the senior management elite in any significant way. Rituals, symbols and language ´ celebrated the primacy of the engineering and production orientation. During the course of the study, a new culture emerged. The previously dominant orientation was displaced by a new preoccupation with economic and accounting concerns.

New accounts were crafted. Gradually, through action and interaction, they were coupled to organizational activities to reconstitute interpretations of organizational endeavour. Accounting actively shaped the dominant meanings given to organizational life, ultimately obtaining a remarkable significance in the senior management culture. A new set of symbols, rituals and language emerged to celebrate an economic rationale for organized activity. This paper carefully traces the events and interactions through which accounting was endowed with significance.

The paper is written from a cultural perspective, but in a very real sense the study is also concerned with power and influence in the organization. A new culture can be a major source of power, particularly if it gains ascendancy to become dominant, for it effectively alters the legitimacy of accepted criteria for action.

The next section of the paper outlines the cultural approach adopted in the subsequent analysis. The following section explains the method employed in the study. Two sections then document the study itself. Thereafter, some implications for accounting and culture are drawn out. Finally, there is a concluding comment.

Culture In recent years, a prolific literature has emerged to offer a wide array of perceptual, symbolic and processual characterizations of organization (e.g. Hedberg et al., 1976; Jonsson & Lundin, 1977; Hedberg & Jonsson, 1978; Pondy, 1978; Weick, 1979;


Ranson et al., 1980; Argyris & Schon, 1981; Pfeffer, 1981; Starbuck, 1982; Pondy et al., 1983; Brunsson, 1985; Greenwood & Hinings, 1988). As a result, we are now used to conceptualizing organizations as bodies of thought, variously described as myths, causal schema, theories-of-action, interpretive schemes, ideologies, paradigms and so forth. The concept of culture, drawn from anthropology and ethnography, has entered the organizational literature as a framework for extending this ideational understanding of organizations1 (Pettigrew, 1979; Smircich, 1983a; Allaire & Firsirotu, 1984; Van Maanen & Barley, 1984; Meek, 1988).

Culture is an elusive concept.2 Here, drawing on Geertz’ (1973, 1983) interpretive anthropology, it is defined to be the broad constellation of interpretive structures through which action and events are rendered meaningful in a community. Balinese cockfights, a sheep raid in Morocco, funeral rites in Java – or nearer home, the graduation ceremony, the distinguished lecture series, the publication of papers in prestigious journals – all have singular meanings in their respective communities (as does all social action). Culture is the ‘‘ordered clusters of significance’’ (Geertz, 1973, p. 363), the shared ‘‘webs of significance’’ (p. 5) through which people appreciate the meaningfulness of their experience, and are guided to action. Culture, as an ideational system, is produced and reproduced through action and interaction. But it is not just lodged in people’s minds. Culture is public, the product of minds, between minds. Culturally significant events give public expression to the ideational system.

The appreciation of organizations as cultures brings the interpretive, experiential aspects of their activities to the foreground of analysis, emphasizing their expressive qualities3 (Van Maanen, 1979, 1988; Feldman, 1986). Looking at the railway, for example, the train is not seen as cold technology; the concourse is not just glass and marble; ‘‘Mr General Manager’’ is not an anybody; cost allocations are not mere calculations: everything is expressive. Local knowledge, beliefs and values vest them with symbolic qualities of meaning. The train may be vested with a sacred quality (or not, as the case may be) quite beyond its technical Cultural ideas are not new to organizational research. They surface in many classic descriptive studies of organizational behaviour (e.g. Roethlisberger & Dickson, 1939; Whyte, 1948, [1943] 1955; Selznick, 1949; Gouldner, 1954; Blau, 1955; Roy, 1954, 1960; Goffman, 1959; Hughes, 1958;

Dalton, 1959; Buroway, 1979). Only in the late 1970s, however, did organizational culture emerge as an explicit theme.

In cultural anthropology, culture is used in different ways. The broad idea of culture as a ‘‘total way of life’’ of a community, developed by classical anthropologists (e.g. Radcliffe-Brown, 1952;

Malinowski, 1922; Evans Pritchard, 1937, 1940), is continued by Harris (1979), among others.

More commonly, culture is used to denote a system of ideas, a position associated in different ways with Goodenough (1971), Levi Strauss (1963, [1962] 1966) and Geertz (1973, 1983). Allaire & Firsirotu (1984) trace implications of these different perspectives on culture for organizational research. Wuthnow & Witten (1988) discuss the use of culture in contemporary sociology, see also Wuthnow et al. (1984).

With Meek (1988), Feldman (1986) and others, I wish to distance myself from the current vogue of ‘‘pop-culture’’ literature on the management of meaning, which is ill-informed in the anthropological tradition: e.g. Ouchi (1981), Peters & Waterman (1982), Deal & Kennedy (1982), Kilmann et al. (1985). No one has a monopoly of meanings (Smircich, 1983b). See Barley et al.

(1988) for an interesting discussion of the contaminating effects of this literature.


properties; beliefs about the skills required to operate a railway and appropriate forms of organizing may endow the General Manager with special status and privilege (or not). Cultural analysis attempts to uncover these meanings and to trace the underlying thematic relationships. The objective is interpretation and ‘‘thick description’’: the production of rich contextually laden accounts conveying the symbolic content of social action.

Meaning systems may differ within organizations, of course. The train, the framing of the routing problem as a cost allocation issue and so on are likely to be interpreted differently by different groups. Within the overarching concept of an organization as a culture, it is sensible to recognize the possibility and likelihood of distinct subcultures existing among managerial teams, occupational groups, members of different social classes and so on; many of which may transcend organizational boundaries (Van Maanen & Barley, 1984). As a limiting case, these subcultures may be isomorphic; more commonly, they may only partially overlap.4 Also, some may be dominant-cultures and others counter-cultures (Martin & Siehl, 1983), perhaps partially uncoupled from each other (Berry et al., 1985), or co-existing in an ‘‘uneasy symbiosis’’ (Martin & Siehl, 1983), or in contest with each other for dominance (Gregory, 1983; Riley, 1983; Pettigrew, 1985; Feldman, 1986). Moreover, cultures in organizations are not independent of their social context. They are interpenetrated by wider systems of thought, interacting with other organizations and social institutions, both importing and exporting values, beliefs and knowledge.

Accounting is likely to be differentially implicated in these subcultures in organizations. Accounting systems, and information systems more generally, inevitably offer highly stylized views of the world. Any representation is partial, an interpretation through a particular framing of reality, rendering some aspects of events important and others unimportant; counter-interpretations are possible (Hedberg & Jonsson, 1978). Accounting systems embody particular assumptions about organization, rationality, authority, time and so forth. These may be more or less consonant with local subcultures in organizations (cf. Markus & Pfeffer, 1983). For example, to senior managers in some organizations accounting may symbolize efficiency, calculative rationality, order and so forth: ‘‘the name of the game is profit’’. This may motivate the development of sophisticated accounting systems measuring economic performance this way and that. To others (nearer the ground?), accounting may symbolize confusion or irrelevance: ‘‘no one understands the business’’; ‘‘when all else fails they resort to the numbers’’ (see Jones & Lakin, 1978, chapter 11, for a graphic example). Similarly, meanings may differ Geertz’ (1973, pp. 407–408) analogy is relevant here: ‘‘Systems need not be exhaustively connected... They may be densely interconnected or poorly... the problem of cultural analysis is as much a matter of determining independencies as interconnections, gulfs as well as bridges.

The appropriate image... of cultural organisation, is... the octopus, whose tentacles are in large part separately integrated, neurally quite poorly connected with one another and with what in an octopus passes for a brain, and yet who nonetheless manages to get around and to preserve himself, for a while anyway, as a viable if somewhat ungainly entity’’. He goes on: ‘‘Culture moves like an octopus too – not all at once in a smoothly coordinated synergy of parts, a massive coaction of the whole, but by disjointed movements of this part, then that, and now the other which somehow cumulate to directional change’’.


across occupational groups. Commercial managers may appreciate accounting rather differently to engineers, for example.

It is useful to think of societal cultures as emergent, unfolding through time5 (Geertz, 1973; Douglas, 1966), and similarly with organizational cultures (Pettigrew, 1985; Feldman, 1986). That is not to say that given cultures do not survive for long periods, or that changes may be proactively managed: organizational cultures probably have inertial tendencies (cf. Miller & Friesen, 1984), perhaps sometimes not even incorporating changes in wider patterns of social thought6 (cf.

Burns & Stalker’s, 1961, pathological responses in mechanistic firms). Rather, the implication is that culture is not programmed or static. The processes of cultural change in organizations are poorly understood, however. Perhaps cultural change is a political process: subcultures competing with one another for legitimacy and dominance (Pettigrew, 1985). Perhaps cultural change is akin to the diffusion of organizational forms, whole fields of organizations rapidly adopting knowledge innovations in leading firms (cf. Fligstein, 1990). Perhaps in a Kuhnian sense, cultural change is precipitated by crisis: the adoption of new cultural knowledge only being possible when faith is undermined, for example by the failure of strategies for subsistence. Maybe new cultures are autonomously crafted in organizations (cf.

‘‘groping’’ towards ‘‘solutions-in-principle’’ and their subsequent elaboration:

Mintzberg, 1978; Jonsson & Lundin, 1977); or perhaps they are already there, ‘‘lying around’’ in counter-cultures, waiting to be discovered by others (cf. Cohen et al., 1972); alternatively, cultures may be imported from the environment through new actors (cf. Starbuck & Hedberg, 1977).

Clearly, there are multiple modes and possibilities for cultural change. However, the point of importance for this paper is the conceptualization of cultural change as the uncoupling of organizational action from one culture and its recoupling to another (cf. Greenwood & Hinings, 1988; Hedberg, 1981). It is a process of fundamental reinterpretation of organizational activities. Things cease to be what they were and become what they were not: a new reality, if you will. In the railway, for example, the sacred train could turn into cold steel, or the priest-like general manager could become an anybody. Moreover, this process of uncoupling and recoupling is unlikely to be sudden, but emergent: the gradual disintegration of one coupling and the crystallization of another. This crystallization may be around an idea not fully understood, a kind of ill-articulated new knowledge, perhaps imported from the environment. In the railway, this idea was a new accounting.

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