Management Accounting Research, 2001, 12, 389–402

doi: 10.1006/mare.2001.0178
Available online at http://www.idealibrary.com on

Management accounting change1

John Burns* and Juhani Vaivio†

Background: management accounting change as a current concern

Recent literature, both academic and professional, is flush with commentaries on the
changing nature of management accounting practice (see Bhimani, 1996; Shields,
1997, for overviews). These are interesting and extremely challenging times for
management accounting, its academics and its practitioners. The ‘New Economy’
demands change—or so it appears. Particularly since the publication of Relevance Lost
(Johnson and Kaplan, 1987), academics, accountants in business and consultants have
sought to develop new and so-called ‘advanced’ management accounting techniques
and new management accounting systems—a management accounting that meets
the information requirements of business managers in today’s global, technology-
driven world.
In recent years, many firms have been experiencing significant change in their
organizational designs, competitive environments and information technologies.
For instance, business environments exhibit a variety of structures and processes—
including flat and horizontal organizational forms, multidimensional matrix
structures, networks of ‘virtual’ organizations and self-directed work teams (see
Lukka and Shields, 2001). Also, advances in information technology have driven
innovation and change in the collection, measurement, analysis and communication
of information within and between organizations, facilitated in particular by such
technologies as enterprise resource planning systems, e-commerce, the internet,
electronic data interchange and electronic meetings (see Atkinson et al., 1997). To
many observers, such broad change implies a need for management accounting to
change also.
1 This special issue is devoted to the subject of management accounting change. It comprises five
studies that address various dimensions of this important research area, each study adopting different
perspectives and different research methodologies. This foreword seeks to establish why the research area
is of importance, highlights potential channels for future investigation and assesses the contribution of the
studies in this issue.
*University of Colorado at Denver, 1250 14th Street and Larimer, Campus Box 165, PO Box 173364 Denver,
CO 80217-3364, USA. E-mail: eburns@carbon.cudenver.edu.
†Helsinki School of Economics and Business Administration, Runeberginkatu 22–24, 00100 Helsinki,
Finland. E-mail: vaivio@hkkk.fi

1044–5005/01/040389 + 14/$35.00/0 c 2001 Academic Press

390 J. Burns and J. Vaivio

This said, much of the evidence to date suggests that, in practice, traditional
management accounting techniques (especially budgeting) remain popular (see
Drury et al., 1993; Ezzamel et al., 1995; Burns and Yazdifar, 2001). However,
importantly, it appears also that such traditional techniques are nowadays being
used alongside new and so-called ‘advanced’ accounting techniques such as rolling
forecasts, activity-based costing and the balanced scorecard (see Scapens et al., 1996).
While new information technology, in particular, is driving ‘routine’ accounting
tasks into centralized (or out-sourced) positions in many organizations, management
accounting is becoming more and more decentralized and being pushed out into
core business areas (see Granlund and Lukka, 1998a). In other words, a great deal
of management accounting is being undertaken by the business managers rather
than by the accountants per se. So, for instance, business managers are devising and
managing their own budgets rather than being ‘given’ the numbers, and ‘hit’ once a
month with the variances.
The management accountant’s role in many organizations has transformed from
‘controller’ or ‘score-keeper’ to ‘business support’ or ‘internal business consultant’
(IMA, 1999; Coad, 1999). For instance, it is not uncommon for management accoun-
tants to nowadays be proactively involved in such areas as strategy, information sys-
tems implementation and change management—activities that, ten years ago, were
unheard of for the vast majority of management accountants.
Professional accounting bodies, for their part, have made a substantial effort to
change or, at least, to highlight a need for change (see Armstrong and Jones, 1992).
For instance, several leading international bodies have recently implemented sig-
nificant changes in their training and education programmes. The Chartered Insti-
tute of Management Accountants (CIMA), in the UK, for example, has revamped its
examination curricula to include subjects apparently more in keeping with the future
role of a management accountant—e.g. systems and project management, organiza-
tional management and strategy. This (to some extent, a ‘re-’) emphasis on manage-
ment issues conveys a common trend amongst professional accounting bodies—for
instance, a recent publication by the International Federation of Accountants (IFAC,
2001), based in the USA, also focuses heavily on, as they see it, a need for its members
to put the management back into accounting.
Back in 1987, Johnson and Kaplan’s seminal piece, Relevance Lost, kick-started a new
agenda for management accounting research and practice, built on an assertion that
its subject was failing to provide business managers with the information that they
demanded—management accounting was ‘in crisis’. Johnson and Kaplan clamoured
for improvements in information technology, and a radical re-think and re-design
of management accounting techniques and accounting systems, thereby ensuring
that relevance was achieved once more. Nearly 15 years on from Relevance Lost,
information technology has advanced in ways that were likely unimaginable for
Johnson and Kaplan at the time they wrote their book. New management accounting
techniques abound (see Bjoornenak and Olson, 1999, for an overview), although
the magnitude of their implementation in practice continues to disappoint their
advocates (see Innes et al., 2000).
However, maybe a ‘crisis’ exists today also—a crisis that has more to do
with ‘survival’ than a need for radical design and innovation. The fundamental
challenges, amongst other things, include how best to utilize the extended capacities
of the information technology on offer, and how new ‘advanced’ management
 Management Accounting Change 391

accounting techniques can best be aligned to broader (organizational, environmental,

managerial) changes that continually (re-) mould the context in which management
accounting operates. Furthermore, where does the management accountant fit in all
of this? It has been said that management accountants face both opportunities and
threats (e.g. Burns and Yazdifar, 2001). Routine accounting tasks (e.g. transaction
processing and statutory reporting) will continue to demand a small (and declining)
number of ‘specialist’ accountants who can rely on the technology to do the bulk of
the work. Others—i.e. the ‘management accountants’, if they are to be called that—
are likely to take on a role more akin to internal ‘business consultants’ (see Burns
and Baldvinsdottir, 2001). But, as stated elsewhere (e.g. Mouritsen, 1996), accountants
face likely competition from other managers in performing such consulting roles—
for example, from IT specialists or from production managers with a sound financial
acumen (gained, for instance, through an MBA programme).
The present ‘crisis’ theme is also apparent in university-level teaching (see
Albrecht and Sack, 2000). The number of students engaging in accounting degrees
is dwindling at an alarming rate, especially so in the USA:
We have an enterprise that is experiencing decreased customer demand, where past
customers are recommending that prospective customers shop elsewhere, and where there
are significant complaints about our services and products. Accounting education is in a
precarious condition (Albrecht and Sack, 2000, p. 59).

Students are opting more and more for non-accounting degrees. Accounting pro-
grammes clearly have no hold on a ‘best route’ for students to future rewarding
positions in business management, be it direct from university or indirectly via the
accounting profession. Accordingly, it is becoming more acceptable to think and talk
in terms of some form, and degree, of change being both necessary and worthwhile—
essentially, the talk around town is to ‘sex-up’ accounting degrees. But, how to actu-
ally do this in practice is far from clear-cut, and the jury is still out. Universities that
remain hell-bent on the provision of mainly ‘technical-oriented’ accounting degrees
are likely to lose out to those universities who begin to integrate accounting much
more with its business and management orientation (Albrecht and Sack, 2000). So,
for example, in the near future, accounting degrees will likely incorporate elements
of, and direct linkage to, such subjects as strategy, ‘hands-on’ information technology,
change management and other aspects of business life that, previously were viewed
as being ‘someone else’s domain’.
Whether or not management accounting is again in the midst of a ‘crisis’, there
seems little doubt that considerable challenges lie ahead, likely to drive further
change. For their part over the last two decades or so, academic researchers have
attempted to ‘feed’ this process, for better or for worse, with numerous studies of
management accounting change—studies that have been conducted across many
different business sectors and different national settings, and adopting a multitude
of research perspectives and methods.
Certain studies have explored the relative success or failure in change implementa-
tion (e.g. Shields, 1995) while others (e.g. Malmi, 1997) directly question whether
such distinction between success and failure is possible, or even wise. Models of
change implementation have been developed, based on empirical findings (e.g. Innes
and Mitchell, 1990; Vaivio, 1999b) and some authors have attempted to conceptual-
ize management accounting change by drawing theoretical insight from outside dis-
ciplines (e.g. Burns and Scapens, 2000). Geographical and country-specific cultural
392 J. Burns and J. Vaivio

factors have been examined in respect of their influence on the path dependency of
management accounting change (e.g. Granlund and Lukka, 1998a), as have different
aspects of the potential or real resistance to change (e.g. Scapens and Roberts, 1993).
Indeed, there are many more areas to which academics have contributed, within the
umbrella of the theme of management accounting change; however, we leave it to
the articles in this special issue to map out additional extant literature.
This special issue of Management Accounting Research attempts to make its own
contribution towards the evolution of our understanding of management accounting
change, as well as prompting thoughts and insightful discussion for the future. The
collection of articles in the special issue include empirical insight of dimensions
previously under-researched in the accounting literature (for example, a case study of
management accounting change in a UK police constabulary), as well as both ‘new’
theories in accounting research and ‘extensions of’ theories used previously in other
accounting works. While this particular special issue of MAR has not emerged from a
need to highlight a neglected area, it nevertheless addresses a fundamental research
theme in our discipline. Management accounting change is certain to continue to be
an important theme, in the short and long run, and for academics and practitioners
alike. But, there is still much to be learnt, developed and understood—the present
time seems as good as any to take stock of our current positioning.
In the following, we offer first a discussion of change—opening perspectives on
this elusive phenomenon, which now stands as a central concern. Our aim is to
provide anchoring for further research in this field. Therefore, we suggest intellectual
avenues. Second, we are pleased to briefly introduce the contributions of this MAR
Special Issue on Management Accounting Change. The papers present a rich array of
arguments. Each of them has different theoretical underpinnings, but they do form
a coherent body of academic work. Taken together, they come to an intriguing set
of conclusions, widening our appreciation of management accounting change. We
are happy to relate the central themes and foremost findings of these papers to the
intellectual sketch that we shall put forth next.

‘A Beginner’s Guide’: three perspectives on management accounting change

Doing research on management accounting change can become a traumatic affair.

Instead of a firm theoretical footage, we quickly step on ambiguity. Change is an
exciting but problematic concept, defying definition and structured analysis. Here,
three perspectives on change are introduced. These perspectives seek to categorize and
contrast the perplexing questions and multiple dimensions of analysis that plague
the notion of change. Hence, even when they may appear as overlapping and vague,
these perspectives provide at least some order to the change-inspired accounting
scholar, pinpointing also areas where further research is most urgently needed. They
offer, in a sense, ‘A Beginner’s Guide to Management Accounting Change’—which is not
a detailed ‘Reiseführer’ of the terrain, but serves as a compact basis of orientation in
this still challenging and rewarding field of enquiry.

Perspective I: the epistemological nature of change

First, we begin by facing the most fundamental question: What is the epistemological
nature of change? For it is not self-evident that what at first appears like change really
 Management Accounting Change 393

is change. At closer examination, change could reduce into a non-phenomenon: it

may be an illusion of the observer, a kind of ‘organizational mirage’. Since powerful
commercial interests are entwined with change, cosmetic changes in management
accounting phenomena become confused with substantive ones. Does non-financial
measurement in the ‘Balanced Scorecard’ really bring a new measurement system to
the shop-floor? (Vaivio, 1999a,b) And does ABC in fact provide a new appreciation
of product costs? (Malmi, 1997) Even when surface evidence suggests change,
the ‘new’ can be a mere rearticulation of the old. Hence, we should distinguish
between normative claims of change and change as an evidenced empirical phenomenon.
Furthermore, what magnitude of change actually counts as genuine change must
be asked. Is marginal change in the trivia of organizational control, or a modest
repackaging of conventional management accounting techniques, really the change
that merits scientific exploration?
A related issue concerns change being synonymous with progress. Often, man-
agement accounting change is conceived a priori as a positive phenomenon—as
something that reforms the present towards the better (see Hopwood, 1987). But
change can also become associated with negative development, and management
accounting change can introduce substantial problems instead of the pursued
improvement. Change can become equated with gradual regression; at worst it
causes instant havoc. A substantial body of accounting research provides evidence
on the disappointing consequences of change (Scapens and Roberts, 1993; Argyris
and Kaplan, 1994; Ezzamel, 1994; Malmi, 1997; Kasurinen, 1999; Granlund, 2001).
However, it seems that more should be known about how change in management
accounting is derailed, stagnates or leads into unforeseen conflict. Complementing
reports on management accounting success, intensive field efforts should cast more
light on the ‘Dark Stories’. There is a lot to be learned in rich accounts of change
that fails—despite the promises of management agendas and the best intentions of
agents (see Ahrens and Dent, 1998).
The epistemology of change includes, however, other elements. A classic
dichotomy contrasts between change and stability, as co-existing elements of reality
(Giddens, 1979; Granlund, 2001, 1998). Consequently, we gain different insights
on change by making systematic but detached, large-sample statistical comparison
of status quo, or by examining closely the elements of stability in a single context,
rather than by exploring in depth the complex dynamics of a particular management
accounting change itself, head on (see Burns, 2000). Moreover, a profound debate
underlies the question of whether change can be studied as a distinct, observable
episode, which has a beginning and an end, or whether we should approach change
as an ongoing phenomenon. Is management accounting change, from a research
point of view, a continuous organizational process?
If so, this process should also be studied from a broader perspective. It may
reflect external influences, societal agendas and historical drama of quite Hegelian
dimensions, as has previously been pointed out (Armstrong, 1987; Bhimani, 1993;
Miller and O’Leary, 1987, 1994; Ramsay, 1996; Granlund and Lukka, 1998b). The
multiple interlinkages between management accounting change and its collective
context, the wider social and institutional forces that surround it, remain an
intriguing area of study (see Hopwood and Miller, 1994). Especially, more light
should be cast on how commercialized ‘new’ management accounting products are
assembled, how they become transmitted and how they construct the problematic
394 J. Burns and J. Vaivio

in organizations in accordance with implicit societal ideals. Finally, the concept of

change can be pondered along yet another fundamental dimension: Is management
accounting change a disruptive revolutionary phenomenon that has shattering
impacts within organizations, or should it be conceived as a more incremental
evolutionary chain of development (Scapens, 1994; Burns and Scapens, 2000)? This
has important implications for research design. The study of revolutionary change
requires, in ideal terms, intensive data collection during an actual revolution. By
contrast, evolution is best captured by persistent, longitudinal field studies.

Perspective II: the logic of change

Second, research on management accounting change should acknowledge the
perspective of the logic of change. Here, a foremost notion of change presents
it as a managed and formal organizational event or process. In this view, change
in management accounting becomes something that has been premeditated by
organizational authors. It is designed and carried out in a preordained way. It is
actively steered towards an objective, away from potential obstacles. This logic of
change grants a key role to the motivated actors who initiate and take responsibility
for transformations in the management accounting craft.
A diametrically opposite logic is, however, also at hand. Change in management
accounting is not a consciously planned and rationally executed part of reality.
Organizations drift more than they admit. They are subject to random influences.
Chance takes them unprepared. And management accounting change is, to a
considerable extent at least, an unmanaged phenomenon that also contains informal
elements. Various implicit pressures to change gather by accident, to gradually
forge refinements in important unofficial management accounting routines. Popular
management accounting fashions may unintentionally appeal to certain niches of
action, and become later transmitted to the entire organization (see Abrahamson,
1991; Malmi, 1999). An unexpected crisis may call for dramatic change in calculative
practices (Granlund, 1994). Of course, further research will uncover plausible logics
of management accounting change between these extreme perspectives.
Relating directly to the above, the logic of management accounting change can also
be categorized as linear or nonlinear. Is change a systematic endeavour, which proceeds
towards a well specified, explicit objective according to a preset scheme, ordered
stages and agreed procedures? Or is the path of change perhaps more unsystematic
and unpredictable—including ambiguous goals, unforeseen incidents, abrupt turns
and unwanted phases of development? Especially because of the managerialist
undertones that subconsciously may haunt the bona fide scholar, we have to guard
against simplistic interpretations of ‘trajectories’ of development (Hopwood, 1986,
1987). Who are the real proponents of reform and can more silent agents be involved
in management accounting change? Can remains of earlier change agendas become
resuscitated in current reforms? (Vaivio, 1999b) How does the organization roll back
a disappointing but pompously launched change?
Furthermore, a critical dimension in the logic of change cannot be overlooked.
Does management accounting change, as a subject of study, follow a functional logic?
Or is it to be conceived as inherently political activity? In the functional view, a
tacit normative emphasis and basis of interpretation is taken from the outset of
the enquiry. Organizational agents say what they mean. And they mean what they
say. Management accounting change is good, serving the economic rationale of
 Management Accounting Change 395

the organization. Change has mostly intended, overtly stated effects. The possible
problems of change have a technical nature, but with good ‘implementation’ they
can be solved (see e.g. Kaplan and Norton, 1996).
Undoubtedly, the functional logic has its place in developing our understanding
of management accounting change. But even more is to be expected from studies
that take a political orientation. Management accounting change is rarely consensual,
neutral activity. Within this change, ‘some are more equal than others’. Stated
objectives may hide the real ones. Power is involved, even when denied. Interests
coincide but also collide, and alliances take shape. Resistance may have few overt
forms, but lies beyond surface manifestations (Hopwood, 1983, 1986; Markus and
Pfeffer, 1983; Knights and Collinson, 1987). What are the effects of an integrated
system like SAP, or of focused non-financial measurement, on the relative influences,
privacies and career profiles of organizational agents? How is the ‘new’ accounting
visibility exposing functional performance; are traditional winners becoming future
losers? What novel tensions and what more refined modes of resistance are created
within management accounting change? These are questions that contemporary
research should urgently address in necessary depth, especially with deep-probing
organizational studies. In terms of field conduct, the picture of a somewhat innocent
accounting academic should give way to a politically sensitive Inspector Morse!

Perspective III: the management of change

Third, if management accounting change is understood as a phenomenon which
is to be actively managed, research can be conducted following several alleys—
adopting inevitably normative undertones, and borrowing of course from what
has been noted above about the epistemology and the logic of change. In this
perspective, a critical question places change on the following axis: (1) Change
can be seen as a centrally driven effort, where the organization’s top management
plays a key role. It recognizes the need to change, plans, organizes and oversees
the change. Other organizational agents are in a secondary position, assisting
and implementing a centrally initiated, comprehensive top-down effort. (2) But
management accounting change can also be regarded as a fundamentally local
concern. Top management is unable to identify the particular conditions that cry for
reform—local actors within larger, decentralized structures are the real architects and
mobilizing agents of change. Established management accounting routines become
re-evaluated as a result of local questioning. Management accounting change is thus
about limited changes in dispersed time/space niches, instead of being a monolithic,
overarching organizational undertaking. And a more encompassing, organization-
wide change can also be achieved as a bottom-up process: change that stems from
local experimentation permeates other parts of the superstructure, becoming an
‘emergent’ organizational phenomenon (Mintzberg, 1990; Mintzberg et al., 1998).
The management of change suggests, however, yet another consideration: How is
management accounting change intertwined with a changing organizational culture?
It can be argued that management accounting is not at the fore of paramount
cultural change, taking a passive and more adaptive role within such comprehensive
reorientations of organizational life. However, if management accounting is seen to
take an active part in the processes that fundamentally transform an organization’s
core values, beliefs and ways of operating (see Dent, 1991; Partanen, 1997), how
can management accounting change be focused to problematize the most critical
396 J. Burns and J. Vaivio

orthodoxies that prevail? How can it be mounted to expose inertia and certain clearly
outdated practices, which should be uprooted? In what ways is new management
accounting argumentation driving the justification of a new organizational reality?
Our appreciation of the relationships between management accounting change and
these wider organizational transformations is still to be elaborated.
A current question couples management accounting change with the organiza-
tional cultures of the ‘New Economy’—which are characterized by innovation, a fast
pace of operations, informal practices, as well as by an entrepreneurial spirit of risky
investment into novel ventures. Looking at the drastic rise and fall of many of these
businesses, a central issue surfaces: How should management accounting technolo-
gies be introduced into these dynamic and unwelcoming contexts? How is it pos-
sible to install formal, ‘boring’ management accounting practices into cultures that
embrace informal management mechanisms, radical ways of thinking and ‘irrational’
modes of swift action? (Brunsson, 1982) With reference to what recently has taken
place in the ‘New Economy’, it can be argued that management accounting change
should accompany growth even in such organic and turbulent settings. The introduc-
tion of flexible, ‘Not-So-Heavy’ planning and control mechanisms seems essential in
management situations where enthusiasm should be checked against more temper-
ate analysis. Such ‘postmodern’ management accounting would not eliminate risk—
but it would force key agents to explicate their assumptions. Empirically grounded
theoretical advances of how management accounting change proceeds in these new
industries, and of how it assists management situations of considerable uncertainty
and complexity, are needed within this window on change.
Finally, from the perspective of managing change the diffusion of management ac-
counting expertise remains to be underlined. For management accounting can no
longer be understood as a discrete knowledge, mastered by a handful of specialists.
Instead, management accounting is becoming a dispersed knowledge within the or-
ganization. Management accounting change suggests substantial changes in the po-
sitioning and role of the Controller (Granlund and Lukka, 1997, 1998a): the specialist
staff-expert is moved into the field—to provide direct support in ongoing business
operations. Moreover, ‘hybrid accountants’ are born in the field (Burns and Bald-
vinsdottir, 2001). The product designer, the customer team manager or the sales rep-
resentative is often familiar with at least the basics of management accounting think-
ing, bringing this analysis into acute management concerns. But how is this diffusion
of accounting knowledge reshaping and constraining the flow of day-to-day action;
what interpretations are really given to ‘the numbers’ in specific situations? How
are rigid professionalisms or certain types of practical expertise truly receiving the
constant presence of management accounting? (Ahrens, 1996, 1997). And how is this
management accounting diffusion—at closer look a rather unpredictable and com-
plex phenomenon—to be managed in a sensible way within organizations? These
questions, alongside those pointed out earlier, call for further empirical enquiry un-
der the topic of management accounting change.
Summing up, the introduced perspectives on change—tackling its epistemology,
logic and management—provide avenues for approaching management accounting
change as a subject of research. Since it is unlikely that a conceptually unanimous,
consistent and formalized ‘Grand Theory’ of management accounting change is
ever to emerge, we emphasize that we are looking forward to a ‘Loosely Coupled’
Theory. Different, often incompatible research perspectives on these phenomena
 Management Accounting Change 397

will together build a deeper understanding of management accounting change.

Theoretical pluralism instead of theoretical uniformity reigns. The emergence of
this theory should, however, lead to concrete implications on a number of fronts.
Besides contributing to the research community, the theory should affect the
curricula and teaching of management accounting. University and Business School
students should be exposed to multifarious theoretical contributions on management
accounting change. Later, as more educated managers of change, these critical minds
will do a better job. However, the theory of management accounting change should
also be of interest to consulting agencies: commercializing management accounting
change, they could offer empirically substantiated advice, especially on the tensions
which de facto accompany accounting reforms. Moreover, some research findings
could be elaborated into truly innovative conceptions of how change can be realized.
These theoretically informed normative prescriptions would enjoy a competitive
edge on the market of ‘packaged solutions’. Finally, the puzzled individual within the
organization—caught in the web of a laborious management accounting change that
seems to make no sense—would benefit from the more popularized articulations of
the theory. Being subject to change, you must have the means to recognize, evaluate
and dispute it.

The papers in this issue: an introduction

All but one of the articles in this special issue was originally presented at
conferences for the European Network for Research in Organisational and Accounting
Research (ENROAC). This group, comprising both academics and practitioners and
established in 1999, continues to meet bi-annually. Modell’s article was actually
submitted and reviewed separately from the special issue but its timing and
content fitted the theme of the special issue, hence its inclusion. Further, it should
be mentioned that other papers previously published in Management Accounting
Research were also originally presented at ENROAC conferences—namely Burns and
Scapens (2000), Dietrich (2001) and Vamosi (2000).
Quattrone and Hopper provide the first paper of this Special Issue. Their starting
point is to problematize the conventional concept of change as establishing a unique
‘fresh state in space and time’. Taking clearly an epistemological perspective on
change, they claim that the very notion of change is often taken for granted in
modernist assumptions. In its theoretical orientation, the paper does not rely on
a specific theory but operates several theories within the sociology of translation
and constructivism—to deconstruct these simplistic modernist beliefs tout court. The
main argument of this paper is then derived from a rich illustration of how enterprise
resource planning (ERP) systems, taking the form of SAP, were being implemented in
two multinational organizations. The analysis of Quattrone and Hopper rejects linear
and purposive conceptions of knowledge, action and rationality, redefining these
with the notions of ‘enaction’, poly-rationality and praxis. Going further, the paper
introduces the concepts of organizations that ‘drift’ and ‘a-centred’ organizations,
within the main argument of how change, and control practices in organizations,
could be reconceived. The paper does not seek to arrive at a point final, but offers
an interesting insight into interpreting organizational change, including the ones in
management accounting.
398 J. Burns and J. Vaivio

Collier presents a longitudinal study of the implementation of (manager-owned)

budgeting systems in a UK police constabulary. The article adopts a ‘new’ institu-
tional sociology framework (Powell and DiMaggio, 1991) to illustrate how the police
constabulary coped with external pressures for increases in accountability, in the con-
text of a strong internal ethos towards the (operational) policing of crime and law
enforcement. This piece presents particularly interesting insights on the implications
of power relations and loose coupling in management accounting change, relating
thus to the perspectives of the logic and the management of change. More specif-
ically, Collier illustrates how a loose coupling emerges from an accounting system
that accommodates both (external) institutional demands and (internal) operational
demands. In this case study, management accounting is seen to act as a discourse
between the two demands, whereby conflict is minimized by common interests and
power is enabling rather than dominating. Finally, Collier makes several suggestions
on how the case study findings point towards potential development of the use of
‘new’ institutional sociology in management accounting research.
Modell highlights how managers proactively designed and implemented new
systems for performance measurement in the context of recent reforms within the
Norwegian public health sector. Drawing from Oliver’s (1991) managerial frame-
work, Modell’s approach represents an extension of ‘new’ institutional sociology, in
so far as it explores how managers make proactive choices and decisions in the face
of strong institutional pressures rather than following a line of passive compliance.
The article fits within the perspective of the management of change, and adopts
a (managerial) framework which to date has scarcely been used in accounting
literature (see, however, Abernathy and Chua, 1996). Modell explains how, with
one eye also on a ‘middle-range thinking’ philosophy (see Laughlin, 1995), Oliver’s
theory sits comfortably alongside (and, indeed, he argues, fills gaps in) the ‘new’
institutional sociology approach that is more commonplace in accounting research.
He elects not to formally ‘test’ Oliver’s ideas but uses them as a theoretical ‘skeleton’
while ‘fleshing out’ and refining Oliver’s ideas through his own empirical findings
(see Humphrey and Scapens, 1996). The end result is a thoughtful interpretation of
implementing change in performance measurement in the public sector.
Seal presents a case study of management accounting change in a company that,
once a highly diversified conglomerate, implemented a new strategy of product
market focus combined with a more multinational scope. The article illustrates how
the drive for a new organizational identity (i.e. as a high-growth, high-technology
business) in turn catalyses shifts from predominantly financial-oriented control
mechanisms to ‘fresh’ (predominantly non-financial-oriented) control mechanisms
that implied considerable change in management accounting practice. Hence, it is
connected to our perspective concerning the organizational logic of management
accounting change. Seal adopts self-referential systems theory that, he argues,
exhibits some commonality with an ‘old’ institutional economics view of manage-
ment accounting change (see Burns and Scapens, 2000). Self-referential systems
theory specifically enables Seal to explore the paradox that while an organization
can become more focused on particular markets and technologies, its management
accounting can become more diffuse and differentiated. Furthermore, the adopted
framework enables Seal to directly address different aspects of changing organi-
zational identities—applied at both the level of the case study company and at
the level of control systems. Importantly, the case study provides insight into how
 Management Accounting Change 399

differentiated control systems within an organization might be linked in ways that

nevertheless preserves their capacity for self-regulation.
Finally, Laitinen takes a very different perspective on the logic that drives
management accounting change, adopting a fundamentally economics-based view
of the firm that operates in different competitive conditions, and changes its
internal structures accordingly. What is the firm’s economic motivation to change its
management accounting system, the paper asks. Seeking an answer, it addresses the
question in the context of the organic small technology company, which provides
an intriguing unit of analysis. The paper then identifies a typology of different
patterns of motivation and corresponding organizational characteristics from a
sample of 93 Finnish small technology companies: (1) change-oriented, (2) stable and
conservative, (3) performance-contended and (4) discontent resourceless companies
follow different logics in developing their management accounting systems (MAS).
Furthermore, the paper introduces a mathematical model to give us expectations
of management accounting change within the identified motivation patterns of the
adaptive firm. The change-oriented company reports large changes in MAS, whereas
the stable and conservative company and the performance-contended company will
show small changes; the discontent resourceless company reports average change in
MAS. Overall, Laitinen’s carefully constructed argument reminds us not to disregard
underlying economic forces in our explanations of management accounting change.

Concluding remarks

While hardly constituting a ‘neglected’ research area in management accounting,

change is a fundamental issue that begs further (both theoretical and empirical)
understanding. It is hoped that the collection of articles in this issue can make
an insightful contribution to such development in our understanding, and form a
springboard off which others can then launch their own subsequent research.

Acknowledgements

The editors of this special issue wish to thank all the reviewers for their time and
effort in bringing this collection of papers together. They, and all the contributors, are
grateful to CIMA for their continuing funding of the ENROAC.

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