Journal of Accounting & Organizational Change 1,2 (2005) 180-198

Management accounting change and the changing roles of management accountants: a comparative analysis between dependent and independent organizations

Hassan Yazdifar
University of Shefeld, Management School, Shefeld, United Kingdom

Mathew Tsamenyi
University of Shefeld, Management School, Shefeld, United Kingdom
Abstract: Management accounting change and the changing roles of management accountants have dominated both the professional and academic accounting literature in recent years. This paper aims to contribute to these debates by providing evidence from a sample of management accountants working in both dependent (group) and independent (non-group) organizations in the U.K. One thousand (qualied) members of the Chartered Institute of Management Accountants (CIMA), U.K., were randomly selected from the associations database for a postal survey questionnaire. In all, 279 professionally qualied management accountants in both types of organizations responded to a postal survey questionnaire (58 percent from dependent and 42 percent from independent organizations respectively). A Mann-Whitney analysis of the responses indicates that while some signicant differences exist between the views of the two groups, these management accountants agree on several of the management accounting practices and the roles of the management accountant investigated. The study provides further insight into MAS and the changing roles of management accountants. It was earlier hypothesized that signicant differences would exist in the perceptions between the two groups. However the weak support for the hypotheses could be explained by the inuence of other institutional forces apart from the head ofce control which is focused on in the paper. Thus, it was recognized that other institutional forces are likely to be at play in shaping the perceptions of the management accountants. This is a limitation of the paper and future research to study the impacts of other institutional factors is recommended.

Keywords: Management accounting; Professions; Change management.

DOI: 10.1108/18325910510635353 Corresponding address: Dr Hassan Yazdifar, Shefeld University Management School, 9 Mappin Street, S1 4DT, UK. Phone: 0044(0) 161 222 3433; Fax: 0044(0) 161 222 3348, Email: H.Yazdifar@shefeld.ac.uk

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1. Introduction
The last two decades have witnessed a re-evaluation of management accounting (MA), in terms of developing new techniques and systems (Scapens, 1990; Abdul Khalid, 2000) and changes in the roles of management accountants (Evans et al., 1996; Burns and Yazdifar, 2001; Scapens et al., 2003). Since the relevance lost argument by Johnson and Kaplan (1987), the 1990s have witnessed a urry of books and articles aimed at developing these new (so-called advanced) MA techniques, including activity-based costing, target costing, Kaizen costing, the balanced-scorecard, throughput costing, and other new MA techniques. Despite the commercial promotion given to such new MA techniques and the enthusiasm of their key advocates, several studies have found low adoption rates among organizations.1 In fact, the arguments so far suggest that some organizations prefer to use traditional management accounting systems (MAS), and make different uses of the information thus generated, rather than adopt revolutionary MA approaches (Bromwich and Bhimani, 1989; Burns et al., 1999). It has been argued that one reason for this is that, in order to deal with environmental uncertainty and complexity, especially during the last two decades, organizations are retaining relatively simple MAS and supplementing this with other sources of information (in particular, non-nancial information) (for example, Staubus, 1990; Burns et al., 1999). In terms of the changing roles of management accountants, it has generally been suggested that these are shifting from traditional control-type to business analysis and organizational consultancy (Evans et al., 1996; Burns and Yazdifar, 2001; Scapens et al., 2003). While recent evidence implies that the adoption of new management accounting practices in subsidiary organizations may be inuenced by pressure from the group (Granlund, 2003), limited research has focused on exploring this issue. Granlund (2003) observes that few studies have investigated MA change in subsidiary organizations, exploring the relationship between acquired (parent) and acquiring (subsidiary) organizations. He adds: Mergers and acquisitions have rarely been analyzed from management accountings point of view (Granlund, 2003, p.208). Such a study will provide evidence on why organizations, such as groups (dependent), elect to retain their simple MAS or adopt the new advanced techniques (Jones, 1985, 1992; Hopwood, 1987; Vamosi, 2000; Kostova and Ruth, 2002). This paper contributes to the debates on management accounting change and the changing roles of management accountants by examining whether any signicant differences exist between organizations that are part of a group (that is, subsidiary or dependent companies) and those that are not part of a group (that is, independent companies). The aim is to determine the extent to which a head ofce inuences changes in management accounting practices and the roles of the management accountants. We compared the perceptions of management accountants working in dependent and independent organizations on the following three main issues: 1. Management accounting practices (tasks and tools/techniques) both in the 1990s and in the new millennium; 2. Factors driving changes in management accounting practices; 3. The roles of management accountants (skills and perceptions of other managers) both in the 1990s and in the new millennium.
For evidence of this, see, for example, studies on ABC by Innes and Mitchell (1995) and Innes et al. (2000), which show the results of a survey of the U.K.s 1000 largest companies.
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This comparison is necessary to determine whether management accountants working in subsidiary organizations are likely to experience changes in their management accounting practices and the roles they perform (due to pressures from the group) differently from those in organizations which are not part of a group. The remainder of the paper is structured as follows. The next section presents the theoretical framework informing the study. Following this, the research method is described; the results of the survey are then presented, followed by a discussion and concluding comments.

2. Theoretical framework and hypotheses development

It has been argued that most prior studies on management accounting change have largely been grounded in neoclassical economics (Scapens, 1990). This mainstream view would argue that organizations either retain their simple MAS or adopt new advanced techniques in order to maintain and/or enhance efciency. Such an argument, however, is too simplistic, because it fails to explore other plausible explanations for why organizations adopt new MAS. This paper draws mainly on new institutional sociology (NIS), which has been adopted over the last two decades to conceptualize and explain management accounting in practice (see, for example, Berry et al., 1985; Covaleski and Dirsmith, 1988; Mezias, 1990; Carpenter and Feroz, 1992). NIS challenges conventional wisdom and prevailing research beliefs that assert that organizations are bounded, relatively autonomous and made up of rational actors (Abernethy and Chua, 1996). NIS views organizations as embedded within larger interorganizational networks and cultural systems. This institutional environment not only inuences the organizations input and output markets but also its beliefs, norms and historical traditions. From an NIS perspective, the success of an organization is dened by the extent to which it embodies societal ideals (myths) regarding norms of rational behavior. Furthermore, more societal legitimacy is said to be achieved by/through conforming to society norms. Such legitimacy, which affects an organizations structure, denes the domain of its activity and is the main factor for survival and growth (Meyer et al., 1983). NIS theorists also argue that some institutional sectors or elds contain environmental agents that are sufciently powerful to impose structural forms and/or practices on subordinate organizational units (Scott, 1987).2 In addition to Nation-States, which do this when mandating by law changes in existing organizational forms or when creating a new class of administrative agencies, Scott (1987, p.501) explicitly mentions corporations as cases which routinely do
NIS theorists argue that organizations conform to institutionalised structural forms and/or practice through the processes of isomorphism. Isomorphism here means, the concept that best captures the process of homogenization (DiMaggio and Powell, 1991, p.66). DiMaggio and Powell (1991) identify three mechanisms through which institutional isomorphic change occurs, each with its own antecedents. The rst is coercive isomorphism, which stems from political inuence and the problem of legitimacy. It is the response to both formal and informal pressures exerted on organizations by other organizations upon which they are dependent and by cultural expectations in the society within which organizations function (Ibid, p. 66). The second mechanism is mimetic isomorphism, which occurs when organizations face uncertainty and model themselves on other organizations. Organizations will tend to copy those organizations in their organizational eld that are perceived to be more legitimate (for example, parent company) or successful or those outside their organizational eld that are similar to themselves in complexity. The third mechanism is normative isomorphism which is associated with professionalization (Ibid) and arises when professionals operating in organizations are subject to pressures to conform to a set of norms and rules developed by occupational/professional groups (Abernethy and Chua, 1996, p.574). The detailed discussion of these mechanisms and how they form the processes of homogenisation is beyond the scope of this paper and is pertinent, in particular, when case studies are undertaken.
2

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this when, for example, structural changes are imposed on companies that have been acquired or when existing subsidiaries are reorganized. Therefore, through the lens of NIS, subsidiary companies are subject to environmental pressures exerted by their constituencies, amongst them parent companies in particular. The latter, as Scott (1987) notes, exerts its inuence by means of authority. Therefore, the subsidiary, rather than pursuing economic efciency, conforms to the demands and expectations of the parent company which is a basic assumption in NIS theory. The demands and/or perceived expectations of a parent organization are regarded as one such instance for subsidiary (dependent) organizations, whereby management accounting is viewed as being, to a large extent, an issue of projecting the right image and impressions of what is expected externally to obtain legitimacy in the eyes of parent companies), whereas, it is suggested, independent organizations would not be subject to the same particular external pressures (from parent companies) and, thus, differences in internal practices should be apparent. The differences in internal practices of independent companies might be due to many factors (such as market demand) or institutional pressures but not one exerted by a parent company. The subsidiary companies in this survey were all subject to different forms of institutional processes from their parent companies. NIS would argue that these subsidiaries need to conform to the pressures imposed by their parent companies if they want to survive and prosper (Meyer and Rowan, 1977, 1991; DiMaggio and Powell, 1983, 1991). Parent companies expect their subsidiaries to become more efcient and expect managers to use the most efcient means to achieve important ends. However, as Abrahamson (1996) argues, what constitutes the right ends and which means are the most efcient are often ambiguous. Therefore, managers in such situations of uncertainty legitimize their actions by creating the appearance that they are conforming to norms of rationality. In this situation, they tend to adopt management techniques generally believed by organizational constituencies to be a rational and efcient means of enhancing organizational goals (Meyer and Rowan, 1977, 1991; Abrahamson, 1996; Major and Hopper, 2003). Based on the argument presented above, we expect the subsidiaries in our study to be under pressures from their parent companies to follow certain practices, especially at the time of mergers and acquisitions, such as organizational restructuring (Bethel and Liebeskind, 1993), new accounting software (Couturier and Kumbat, 2000) and new management styles (Jones, 1992), reecting cultural expectations of gaining legitimacy (DiMaggio and Powell, 1983). On the other hand, the independent organizations in our study will not be subject to such pressures and are thus not likely to adopt similar management accounting practices to those dependent organizations. We also expect management accountants in the dependent organizations to perform different roles from those in the independent organizations because of the differences in the institutional environment we have argued above.3 Based on the above arguments, the paper tests the following three hypotheses: H1: There are signicant differences in the perceptions of management accountants in dependent and independent organizations about management accounting practices.
3 Management accountants in dependent organizations would be expected to perform roles that emphasise the integration of the group. This would, for example, require knowledge in IT (such as database management) and using much more integrated performance evaluation techniques. However, those in independent organizations while would require this knowledge are not going to be subjected to the same group pressure. As a result we expect differences in the roles the two types of management accountants perform.

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H2: There are signicant differences in the perceptions of management accountants in dependent and independent organizations about the factors driving changes in management accounting practices. H3: There are signicant differences in the perceptions of management accountants in dependent and independent organizations about the roles of management accountants.

3. Data collection and analysis

One thousand (qualied) members of the Chartered Institute of Management Accountants (CIMA), U.K., were randomly selected from the associations database. Two main criteria were adopted in selecting the participants. First, participants should have been fully CIMA qualied for at least seven years, as they are then more likely to be in the appropriate (senior) positions to inuence decisions on changing practices and roles. Second, they should have been with their present organization for more than ve years to have more chance of having experienced the changing roles of the management accountant. The questionnaire consists of several parts, asking respondents to rate as either vitally important, average importance or negligible their perception of diverse management accounting practices and the roles of the management accountant, both in the 1990s and in the future.4 Using the same scale, the questionnaire further asked respondents to rank their perception of factors driving changes in management accounting practices. The nal part of the questionnaire was about the background information of the respondents and their organizations. In all, 279 questionnaires were returned, giving a response rate of approximately 28 per cent, which is consistent with most other management accounting survey studies (Henri, 2004; Davila et al., 2004). Table 1 below provides some background information about the respondents and the organizations. Over 76 per cent of the respondents from both dependent and independent organizations are over the age of 41. Similarly, over 82 per cent have been qualied as management accountants for over ten years. The majority of the respondents (62.5 per cent and 66.4 per cent respectively) have worked for less than ten years in their present organization. Furthermore, the majority (84.1 per cent and 63.1 per cent respectively) work in large organizations. 52.1 per cent of respondents in dependent organizations work in the manufacturing sector while 70.5 per cent of those in independent organizations work in the service sector. An alpha test is used to examine whether the sample drawn from the population is representative of that population in terms of a specic characteristic. As noted by Cramer (1998), the test needs to be conducted in order for an investigator to be certain whether a sample differs from its population, whether two groups differ from each other or whether a relationship exists between two variables. The high Alpha test results show that the collected data are reliable and accordingly the samples are representative of their population (Table 2). A Mann-Whitney U test (see Mendenhall et al., 1996; Cramer, 1998; Bryman and Cramer, 1999; Sweet, 1999) was used to test for differences between the two groups (dependent and independent organizations). The data satised the three assumptions underlying the Mann-Whitney U
4

We dene the future as the rst ten years of the new millennium.

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Table 1
Background of respondents and the organizations Independent organizations Total responses Age: Less than 30 years 31 40 years 41 50 years Over 50 years Period qualied as CIMA: 7 10 years 11 20 years Over 20 years Experience at current organization: Less than 10 years 11 20 years Over 21 years Average size of organizations (turnover) Small and medium (under 11.2 m) Large (over 11.2) Industry: Manufacturing Service 29.5 70.5 52.1 47.9 36.9 63.1 15.9 84.1 66.4 26.2 7.4 62.5 25 12.5 15 46.7 38.3 17.8 57 25.2 0.9 20.8 43.4 34.9 2.7 22 54 21.3 117 (42%) % Dependent organizations 162 (58%) %

test, that (i) the two samples are random, (ii) the two samples are independent, and (iii) the scale of measurement is at least ordinal. A major limitation of the paper is that by using questionnaires, we have failed to study management accounting systems in their organizational contexts. A more organizational approach, such as case studies, could offer further insights into management accounting practices.

4. Results
4.1. Management accounting practices
Management accounting practices are measured by (a) tasks and (b) tools/techniques. (a) Tasks: Respondents were asked to indicate the importance of several management accounting tasks in their organization in the (i) 1990s, and the (ii) future. The ten

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Table 2
Reliability test Reliability tests for each section of the questionnaire Tasks Tools/Techniques Skills Perception by other managers Change drivers Alpha test results % 99.18 97.79 98.80 95.15 97.43

most important tasks (from a possible choice of 32) and the corresponding MannWhitney U test results are presented in Tables 3 and 4. (i) Management accounting tasks in the 1990s: The analysis provided in Table 3 above shows that business performance evaluation and cost/nancial control were viewed as the top two vitally important tasks for management accountants in both independent and dependent companies in the 1990s. However, respondents in dependent companies gave more support than those in independent companies to the importance of interpreting/presenting the management accounts, interpreting operational information, implementing/designing new information systems, planning/managing budget, and prot improvement. The results of the statistical test of difference (Mann-Whitney U ) show a statistically signicant difference between the two groups for interpreting/presenting the management accounts. Respondents in dependent companies have stronger support for the importance of interpreting/presenting management accounts than those in independent companies. The survey responses did not reveal signicant differences between the two groups for the other tasks investigated. (ii) Management accounting tasks in the future: Respondents were asked to indicate ve tasks and roles which they expect to become the most important for management accountants in their organization in the future. The most commonly identied tasks (13 tasks which, between them, the respondents selected from a possible choice of 32) are presented in Table 4. Respondents in both dependent and independent organizations perceived business performance evaluation as the most vital task for management accountants in the future. The MannWhitney U Test result also shows a statistical signicant difference between the two groups for this task. Management accountants in dependent companies rated this task signicantly higher than those in independent companies. Respondents in independent companies rated cost/nancial control, working capital and short-term nance management, productivity improvement and managing IT systems higher, while those in dependent companies rated interpreting/presenting management accounts and strategic planning/decision making higher. However, the results suggest that the differences between the two groups for these tasks are not statistically signicant. (b) Management accounting tools/techniques Respondents were asked to indicate the perceived importance of several management accounting tools/techniques in fullling their tasks in (i) the 1990s (see Table 5), and (ii) the future (see Table 6).

Table 3
Independent Dependent Independent Dependent

Rankings of management accounting tasks in the 1990s

Tasks

MannWhitney Vitally Average Negligible Vitally Average Negligible Mean Std. Mean Std. U Test important important % important important % % % % % 83.2 79.4 68.2 66.4 59.4 57.9 54.7 53.8 52.3 50 37.7 12.3 39.3 8.4 59.6 49.3 36.8 9.4 52.3 32.1 13.2 59.6 31.8 10.3 54 39.3 27.2 43 36.4 44.1 36.8 3.8 71.3 25.3 31.8 1.8 80 19.3 0.7 3.4 6.7 13.2 4.7 4 6.6 28 3.8 73.5 23.8 2.7 16.8 3.8 81.5 17.9 0.6 14 2.8 83.4 13.2 3.4 2.86 0.755 2.84 0.692 2.81 0.787 2.85 0.649 2.70 0.823 2.75 0.721 2.70 0.800 2.88 0.824 2.68 1.04 2.76 0.897 2.54 0.921 2.56 0.968 2.54 1.139 2.51 0.891 2.56 1.105 2.52 0.789 2.50 0.902 2.60 0.774 2.50 1.132 2.43 0.615 0.984 0.654 0.379 0.013 0.077 0.806 0.651 0.961 0.191 0.955

Business performance evaluation

Cost/nancial control

Planning/managing budget

Interpreting/presenting the management accounts

Interpreting operational information

Implementing business strategy

Prot improvement

Yazdifar and Tsamenyi/Journal of Accounting & Organizational Change 1,2 (2005), 180-198

Cost cutting

Implementing/designing new information systems

Capital expenditure evaluation/control

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Table 4
Rankings of management accounting tasks in the future Tasks Business performance evaluation Cost/nancial control Prot improvement Planning/managing budget Interpreting/presenting the management accounts Implementing business strategy Strategic planning/decision making Generation/creation of value Interpreting operational information Working capital and short-term nance management Operational planning/projects/decision making Productivity improvement Managing IT systems Independent % 48 44 33 30 29 29 26 21 21 19 18 17 17 Dependent % 58 34 31 32 36 25 31 25 22 14 21 12 12 Mann-Whitney U Test 0.025 0.149 0.888 0.655 0.249 0.506 0.478 0.417 0.700 0.239 0.615 0.344 0.268

(i) Tools and techniques in the 1990s: The top ten tools/techniques, from a choice of 16, in the 1990s, presented in Table 5 above, suggest that there is a general agreement between respondents in both types of organization about the tools/techniques used by management accountants in the 1990s. Thus, with the exception of Economic Value Added, there are consistencies in the ranking of these tools/techniques between the two groups. However, respondents in dependent organizations ranked most of the tools/techniques higher than those in independent organizations. The difference in the ranking of the rolling forecast is statistically signicant between the two groups. The differences in the ranking of the other tools/techniques were not statistically signicant. (ii) Tools and techniques in the future: The analysis of the top ten tools/techniques, from a choice of 16, that respondents expect to be the most important for management accountants in their organization in the future is presented in Table 6. When comparing the two groups it is apparent that they register high levels of agreement regarding Budgets, Strategic management accounting, Variance analysis, Rolling forecasts and Value added accounting. Respondents in independent companies are generally more supportive of Total quality management, Activity-based costing, Balanced scorecard, and Economic value added. Respondents in dependent companies, on the other hand, ranked Standard costing more than those in independent companies. With the exception of Total quality management, no statistically signicant differences exist between the groups for the other tools/techniques.

Table 5
Independent Dependent Independent Dependent MannWhitney U Test 0.514 2.62 1.551 2.57 0.988 2.31 1.203 2.47 0.845 2.31 1.157 2.22 0.915 35.1 35.3 40.4 30.9 31.5 11.3 36.4 43.7 51 54.4 52.3 1.86 1.256 1.97 0.976 2.11 1.543 1.92 1.083 2.07 1.838 1.77 0.931 1.88 1.722 1.82 1.273 1.76 1.582 1.74 1.258 1.77 1.574 1.64 0.91 0.117 0.021 9.3 19.2 0.814 0.069 0.617 0.960 0.352 0.298 0.434

Ranking of management accounting tools and techniques for the 1990s

Tools/techniques

Vitally Average Negligible Vitally Average Negligible Mean Std. Mean Std. important important % important important % % % % % 17.8 47.6 36.8 47.2 31.1 42.3 33.3 28.2 25 27.9 61.5 63.5 14.1 59.2 18.1 50 15.9 36.5 18 46.7 48.1 27.8 37.1 17 37.1 43.7 22.6 52.3 38.4 10.7 56.7 34.7 8.6 2.8 83.6 14.4 2 2.82 0.771 2.82 0.437

Budgets

79.4

Variance analysis

41.7

Rolling forecasts

40.6

Strategic management accounting

35.8

Standard costing

20.8

Total quality management

21.2

Value added accounting

16.7

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Economic Value Added (TM)

12.6

Balanced scorecard

11.5

Activity-based costing

10.6

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Table 6
Ranking of management accounting tools and techniques for the future Tools/techniques Budgets Strategic management accounting Variance analysis Rolling forecasts Value added accounting Total quality management Activity-based costing Balanced scorecard Standard costing Economic Value Added (TM) Just-in-time Target costing Driver analysis tables Independent % 73 61 60 53 38 37 29 25 21 17 9 9 7 Dependent % 68 59 56 56 34 25 40 31 27 25 9 11 10 Mann-Whitney U Test 0.511 0.959 0.667 0.545 0.609 0.050 0.058 0.298 0.246 0.085 0.989 0.617 0.334

4.2. Factors driving change in management accounting practices

Respondents were asked to indicate the perceived importance of several factors in driving changes in management accounting practices in their organization. These results are presented in Table 7. The two groups viewed information technology and organizational restructuring as the top two vitally important change drivers. The views of those working in dependent companies are more supportive than those in independent companies of new accounting software and a new management style as vitally important change drivers. They consider these as the third and fourth most vitally important change drivers, while professional accountants in independent companies consider them as the fth and seventh most vitally important change drivers. The results of the statistical test of difference (Mann-Whitney U) between the two groups indicate that, statistically, there are signicant differences between the two groups regarding organizational restructuring, new management style and globalization. The views of management accountants working in group companies indicate stronger support for these three change drivers. The differences could be due to take-over and merger events, as higher rates have been registered by respondents in dependent companies than those in independent companies. However, the survey responses did not reveal signicant differences between the two groups on the other factors presented in the table above.

4.3. Roles of management accountants

The roles of management accountants were measured by (a) their skills requirements, and (b) the way other managers perceive them in their organizations.

Table 7
Independent Dependent Independent Dependent MannWhitney U Test 0.139 0.018 0.592 0.102 2.29 0.938 2.41 1.019 25.3 12.5 22.3 34.5 49.3 51.7 24.3 14 7.4 21.6 37.3 37.6 40.7 31.1 33.5 54.1 48.7 55 2.17 1.172 2.07 1.059 2.09 0.972 2.29 0.677 2.20 1.345 2.18 1.303 1.79 1.268 2.17 1.694 1.94 1.198 2.07 1.338 1.92 1.395 1.95 1.203 1.62 1.030 1.89 1.434 1.78 1.187 1.75 1.099 1.61 1.206 1.67 1.217 0.199 0.431 0.005 0.841 0.023 0.360 0.281 0.125 0.870 0.415

Ranking of change drivers

Change drivers

Vitally Average Negligible Vitally Average Negligible Mean Std. Mean Std. important important % important important % % % % % 34.6 39.6 35.8 38.7 49.5 50.9 50.5 51.4 25.5 47.2 41 25.2 45.3 30.2 61.3 45.3 59.8 43.8 35.8 19.6 14.8 54.7 24.8 23.8 21.6 23.3 41.4 46.1 56.1 22.6 22.7 52 14 44.7 43.3 12 24.5 27.3 42 30.7 23.6 36.7 39.3 24 16 58.9 33.8 7.3 74.8 23.8 1.3 2.71 0.774 2.78 0.692 2.41 1.160 2.56 0.820 2.30 1.209 2.22 1.097 2.25 1.208 2.06 1.105

Information technology

65.4

Organizational restructuring

44.3

Customer-oriented initiatives

40.6

E-Commerce/electronic business

36.8

New accounting software

36.4

External reporting requirements

26.4

New management styles

26.2

Core competency aims

24.8

Globalization

19.8

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Quality-oriented initiatives

17

New accounting techniques 9.4 8.5

15.2

Take-over/merger

15

External consultants advice

Production technologies

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(a) Skills requirements of management accountants Respondents were asked to indicate the perceived importance of several skills for the management accountant in (i) the 1990s (see Table 8), and (ii) the future (see Table 9). (i) Skills in the 1990s: The top ten skills for the management accountant in the 1990s, from a choice of 20, are presented in Table 8. It can be observed that respondents from both groups ranked Analytical/interpretive skills as the most important skill in the 1990s. However, there was 11 per cent (84.2/75.7) more support for this from respondents in independent companies than from those in dependent companies. While respondents in independent companies were supportive of Integrating nancial and non-nancial information and ranked it second, those in dependent companies ranked this eighth (28 per cent 66.4/52 more support from the former group). The difference between the two groups for how they perceive this skill is statistically signicant. Respondents in independent companies were more supportive of IT/systems knowledge, Presentational, and Commercial skills than those in dependent companies. The slightly less supportive view of respondents in independent companies in relation to IT/systems knowledge could be attributed to their parent companys roles in providing them with this facility. On the other hand, respondents in dependent companies indicated more support for Broad business knowledge, Teamwork, Oral communication, Professional/ethical and Interpersonal skills than those in independent companies. No statistically signicant differences exist between the two groups for the other skills. (ii) Skills in the future: The top ten skills for the management accountant in the future, from a choice of 16, are presented in Table 9. A comparison of the views from two groups suggests that there is a general agreement that Analytical/interpretive skill is expected to be the most important skill in the future. Respondents in independent companies were more supportive of IT/ systems knowledge than those in dependent companies, who indicated stronger support for Broad business knowledge. Strategic thinking and Change management, which were not seen as very important skills in the last ve years, were selected by about one third of respondents in both groups. However, respondents in independent companies indicated more support for Strategic thinking than those in dependent companies, who indicated stronger support for Change management. (b) How management accountants are perceived by other managers Respondents were asked to indicate the extent to which certain characteristics suitably describe how, in their opinion, business managers currently perceive them in their organization. The results are summarized in Table 10 below. The results suggest that there is no statistically signicant difference between the perception of managers in both independent and dependent companies. Management accountants in independent companies indicate stronger support for Business advocates, Business analyst, Business partners and Financial analyst. However, those in dependent companies indicate stronger support for Beancounters, Corporate police, Number crunchers and Scorekeepers. The responses imply that managers in independent companies require management accountants to become more proactive in strategic decision making, and encourage them to become more integrated into process-oriented managerial teams. Burns and Baldvinsdottir (2001) labelled these management accountants as hybrid accountants who play a role in facilitating process team integration and enabling common understanding amongst different managers. Such roles and expectations, it is argued, are a long way from the stereotypical beancounter image that accountants still command across much of society, and this is to some extent supported by

Table 8
Independent Std. Dependent Independent Dependent Mean Std. MannWhitney U Test 0.135 2.64 0.826 2.63 0.548 2.61 0.841 2.63 0.525 2 2 3.9 34.2 50.7 43 48.7 9.9 7.2 4 8.5 2.58 0.844 2.61 0.529 2.68 0.841 2.49 0.564 2.62 0.794 2.49 0.575 2.53 0.870 2.46 0.670 2.46 0.869 2.53 0.780 2.52 0.859 2.35 0.612 2.44 0.899 2.34 0.631 0.026 0.414 0.406 0.339 0.395 0.949 0.120 0.260 0.567

Ranking of management accountants skills for the 1990s

Skills

Vitally Average Negligible Vitally Average Negligible Mean important important % important important % % % % % 23.4 29 36.4 37.4 40.2 43.9 42.1 44.9 48.6 45.8 8.4 5.6 53 42.8 4.6 42.1 5.6 55.9 0 53.3 42.8 3.7 62.5 35.5 3.7 64.5 33.5 2.9 66.4 30.3 3.3 4.6 52 44.7 3.3 0.9 84.2 15.1 0.7

Analytical/Interpretive

75.7

2.81 0.755 2.84 0.389

Integrating nancial and non-nancial information

66.4

Broad business knowledge

60.7

Team-work

58.9

Oral communication

56.1

IT/systems knowledge

56.1

Professional/ethical

52.3

Yazdifar and Tsamenyi/Journal of Accounting & Organizational Change 1,2 (2005), 180-198

Presentational

50.5

Interpersonal

45.8

Commercial

45.8

193

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Table 9
Ranking of management accountants skills for the future Vitally important skills Independent % Analytical/Interpretive IT/systems knowledge Integrating nancial and non-nancial information Broad business knowledge Strategic thinking Commercial Team-work Change management Presentational Leadership 59 50 47 39 34 29 27 25 25 22 Dependent % 60 43 34 43 28 27 34 33 18 20 Mann-Whitney U Test 0.888 0.315 0.064 0.532 0.324 0.759 0.208 0.170 0.157 0.627

managers in dependent companies. This seemingly retrograde step in dependent companies is interesting because it lends credence to the idea that management accountants in subsidiary companies are there to produce accounts for parent companies rather than being business advocates offering consultancy to managers.

5. Discussion and conclusion

This paper has presented the results of a questionnaire survey that examined whether signicant differences exist between the perceptions of management accountants working in dependent

Table 10
Ranking of how management accountants are perceived Independent % Beancounters Business advocates Business analyst Business partners Corporate police Financial analyst Number-crunchers Scorekeepers 9.4 15.1 52.8 22.6 16.2 60.7 26.4 22.6 Dependent % 20.5 8.2 42.4 17.2 25 53 30.7 28.1 Mann-Whitney Test 0.065 0.558 0.093 0.251 0.177 0.350 0.537 0.099

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(subsidiaries) and independent organizations on three main issues: (1) management accounting practices, (2) factors driving change in management accounting practices, and (3) the roles of management accountants. The analysis was based on responses from professionally qualied management accountants (CIMA qualied) working in dependent and independent companies. This section discusses the signicant ndings and also provides concluding comments. The results of the analysis suggest that very few signicant differences exist between the two groups in terms of the variables tested (see Table 11). For the perceptions of management accounting practices, there are signicant differences in only four of the questions asked. These are interpreting and presenting management accounts, business performance evaluation, the use of rolling forecasts, and total quality management. For the perceptions of drivers of management accounting change, only three questions are signicant. These are organizational restructuring, new management styles, and globalization. Finally, for the roles of the management accountant only one question is signicant. These signicant differences are rst explained. The signicant differences between the two groups could be explained by the institutional theory argument we advanced earlier in the paper. We argued that dependent organizations are likely to adopt certain practices due to inuence from the head ofce. In our survey, respondents in dependent organizations ranked management accounting tasks of interpreting/presenting management accounts and business performance evaluation, and the management accounting tools/technique of rolling forecasts, signicantly higher than their counterparts in independent organizations. The signicantly higher emphasis on these practices, especially interpreting/ presenting the management accounts and implementing/designing new information systems, might be attributed to the relation between subsidiary companies and parent companies, as subsidiaries are expected to present their management accounts in formats dictated by the parent company and also implement their management information system in a way consistent with the parent company. Management accountants in independent companies, on the other hand, are likely to have different attitudes toward some of their tasks due to the absence of pressure to conform to

Table 11
Summary of statistical signicant differences Parts Tasks and roles Topics/sections Interpreting/presenting the management accounts Business performance evaluation Tools/techniques Skills Change drivers Rolling forecasts Total quality management Integrating nancial and non-nancial information Organizational restructuring New management styles Globalization

1990s future

More supportive group Dependent

Dependent Dependent Independent Independent Dependent Dependent Dependent

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practices in a parent organization. The signicant statistical differences between the two groups for the management accounting tools and techniques of rolling forecasts and total quality management, and the skills of management accountants in terms of integrating nancial and non-nancial information, could also be attributed to the differences in the nature of institutional pressures the organizations face. The signicant emphasis placed by respondents in dependent organizations on change drivers of organizational restructuring, new management styles, and globalization may also be explained by the role of the parent company. It is likely that the head ofce would impose new organizational forms and management styles on its subsidiaries; hence these are seen as vitally important change drivers, which is signicantly different from respondents in independent organizations. Dependent organizations, by being members of a group, are also more likely to experience the impacts of globalization compared to independent organizations, hence the signicant high emphasis on globalization as a change driver. Apart from the few signicant differences discussed above, the results largely suggest that there are no signicant differences in the majority of the variables tested. For example, out of the ten items that examined the rankings of management accounting tasks in the 1990s, only 1 was signicantly different between the two groups (Table 3). Similarly, only one out of the 13 items on management accounting tasks in the future was signicantly different between the groups (Table 4). A similar observation can be made in terms of the rankings of the management accounting tools and techniques for the 1990s and for the future (Tables 5 and 6). For the rankings of the change drivers, only three out of the 14 items were ranked as signicantly different between the groups (Table 7). In terms of the rankings of the management accountants skills, only one out of the ten items was signicant for the 1990s (Table 8), and no signicant results were found for the future (Table 9). Similarly, no signicant differences exist between the groups on the rankings of how management accountants are perceived (Table 10). Based on the analysis presented above, we found weak support for the three hypotheses we developed earlier in the paper. Thus, we had earlier hypothesized that signicant differences would exist in the perceptions between the two groups on management accounting practices (H1), the drivers of management accounting change (H2), and the roles of the management accountant (H3), and the weak support for our hypotheses could be explained by the inuence of other institutional forces apart from the head ofce control which we focused on in our paper. Thus, we recognized that other institutional forces are likely to be at play in shaping the perceptions of the management accountants. Head ofce control is, thus, only one of the multiple institutional factors. This is a limitation of the paper and we recommend future research to study the impacts of other institutional factors.

Acknowledgements
The authors gratefully acknowledge the helpful comments of the anonymous referenes and Professor John Burns.

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