Master Thesis
MSc BA Organizational & Management Control
by
Martin van der Meulen
Management accounting change theories: an impossible reality?
Practical contributions of management accounting change theories; a
systematic review of the positivists and the interpretive approach
University of Groningen
Faculty of Economics and Business
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Abstract
This research has developed a descriptive framework that outlines the practical contributions of the positivist and interpretive approach in management accounting change. A total of 36 articles are selected by a systematic method. These articles are analyzed by using techniques of pattern matching, rival explanation and explanation building. Four forces are recognized that influence management accounting change implementation, namely: environment, individual, momentum and barriers. The results of this research indicate that the underlying assumptions of each management accounting approach explain its practical relevance in each dimension. In general, the positivist approach scores high on practical relevance in the dimension environment. The interpretive approach scores high on creating and sustaining momentum and overcoming barriers. This leads to the suggestion that these approaches may likely be complementary to each other.
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Preface
This master thesis has been the last episode of my study at the University of Groningen. Conducting this research has been an exciting period. Since my bachelor thesis was an empirical research, I decided to expand my experience by undertaking a more qualitative research assignment. In this research I tried to critically evaluate the management accounting theories and their added value.
For this challenging process, I would like to thank my first supervisor dr. Martijn van der Steen of the University of Groningen. He gave me very quick, useful and inspiring feedback. Besides that, the communication and discussion with him was always very respectful and positive. Further, I would like to thank my second supervisor, dr. Ben Crom, for reading and evaluating this research. Finally I would like to thank my family for their support, they enabled me to get the maximum out of this inspiring and educational study period.
For now I would like to wish you a pleasant time reading my master thesis, I hope you enjoy it as much as I did finishing it.
Martin van der Meulen
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Table of Contents: 1 Introduction 5 1.1 Motivation 5 1.2 Framework 6 1.3 Research questions 6 2 Theory 8
2.1 Management accounting change literature 8
2.1.1 The positivist research 8
2.1.2 The interpretive research 9
2.1.3 Criticism on the positivist and the interpretive approaches 10
2.2 Practical relevance in the management accounting literature 12
2.3 Influencing forces on management accounting change implementation 13
3 Methodology 16
3.1 Type of research 16
3.2 Relevance, validity and reliability 16
3.3 Data presentation and analysis 17
3.3.1 Data collection 17
3.3.2 Data analysis 17
3.3.3 Data synthese 18
3.4 Identifying the selection criteria 19
3.4.1 Management accounting literature 19
3.4.2 Quality selection 20
3.4.3 Content selection 21
3.4.4 Addition group articles 21
3.5 Database search 22
3.6 Examining the potential for change 22
3.6.1 Examining practical relevance 22
3.7 Pilot testing of the framework 25
4 Synthesis of the analysis 27
4.1 General findings 27 4.2 Positivist research 28 4.2.1 Environmental elements 28 4.2.2 Individual elements 30 4.2.3 Momentum 31 4.2.4 Barriers 32 4.3 Interpretive research 33 4.3.1 Environmental elements 33 4.3.2 Individual elements 34 4.3.3 Momentum 35 4.3.4 Barriers 36 5 Discussion 37
5.1 Discussion of the analysis 37
5.2 Contribution to the management accounting literature 40
5.3 Limitations and suggestions for further research 41
5.4 Conclusion 42
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1 Introduction
1.1 Motivation
Management control systems can be divided into two basic functions: strategic control and management control. Management control basically focuses on behavioral orientation, both on managerial level as on the level of employees if they are involved in an implementation phase. In exercising management control, managers have to deal with internal issues as; lack of direction, motivational problems and personal limitations (Merchant and Van der Stede, 2007). When facing these internal issues, managers do tend to find solutions in Management Control systems. These systems are particularly used when facing an organizational change (Sandelin, 2008).
Management accounting change is a highly debated topic of recent years and there are discussions whether the fundamental nature of management accounting systems is changing. Within management accounting research, many questions arise why the implementation of Activity Based Costing (ABC), Just In Time (JIT) and Total Quality Management (TQM) systems remain commonly used without much success. Little is known about the accounting change as a process (Briers et al., 2001), although the source of most change program failures can be found in the inability of organizations to effectively unfreeze and create readiness for change (Jones et al., 2005). Organizations tend to move directly to the implementation phase while the employees or the organization, as a whole, is not yet psychologically ready. While the literature describes many different models to achieve change, the high number of accounting change failures indicate a lack of effectiveness of these change models (Jones et al., 2005). Thus, can the
management accounting change theories be compared with the work of Escher1; is it an impossible reality?
1 M. C. Escher was a Dutch graphic artist. He is known for his often mathematically inspired woodcuts, lithographs,
and mezzotints. These feature impossible constructions, explorations of infinity, architecture, and tessellations (www.mcescher.com).
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The reasons presented conclude that this execution failure in practice lies in viewing accounting as a social not equally strategic and commercial technology. These theories have left an important gap in understanding the interconnections between accounting and other organizational practices (Ahrens et al., 2007). To analyze this gap in management accounting literature this research focuses on two main approaches: the so-‐called positivist approach and the interpretive approach.
This research will review the recent theories on management accounting change. The aim is to evaluate these approaches, position them in a change framework to provide an overview and so create a structure in the existing management accounting change literature.
1.2 Framework
The positivist and interpretive approaches will be analyzed by using a descriptive framework. This framework is based on the literature of management accounting change and will position the theories based on a set of variables, which will be later defined. The difference in both management accounting approaches will be discussed in terms of objectivity, uniformity, quantitivity, and conceptuality.
1.3 Research Questions:
In order to link the theories and to find an answer of the described problem the following research question is formulated:
What are the practical contributions of the positivist approach and the interpretive approach to management accounting change?
The following three sub research questions have been formulated to support the main thesis.
- Which theories contributed to management accounting change literature?
- In what dimensions can theory be converted into practical knowledge? - How do the different theories score on these dimensions?
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management accounting change. The first part of this research contains the determination of the methodology and the selection of the theories for the analysis. The following part discusses these theories and evaluates them in the framework. When a clear overview has been established, the gap with practical implementation and the added value of the currents theories can be identified. This framework will lead to a better understanding of the management accounting research and provides clear overview of the management accounting change in
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2 Theory
2.1 Management accounting change literature
All research, quantitative or qualitative, is based on underlying assumptions about what constitutes ‘valid’ research and which research methods are appropriate. In the research literature there are different approaches with different assumptions on appropriate argumentation. This research focus’ is on the positivist and interpretive approaches. The positivist research approach assumes reality to be objective and rational which should be described by measurable properties independently of the researcher. The interpretive research approach generally argues that access to reality is only through social constructions. The next two paragraphs explain these approaches in more detail.
2.1.1 The positivist research
Positivism seeks to explain and predict what happens in the social world by searching for patterns and relationships. Hypotheses are developed and tested. The positivist approach is associated with inferential statistics, hypothesis testing, mathematical analysis, and experimental and quasi-‐experimental design (Lee, 1991). Positivists argue that true belief is grounded in what people perceive which in turn is derived from a value-‐free, independent reality (Ryan et al., 2002). To illustrate this approach incorporated in a theory, examples are provided of a factor stage model and transaction costs economics.
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The transaction-‐ cost economics (TCE)2 rests on a comparative-‐efficiency framework;
organizations are driven by efficiency-‐based competition to continuously evaluate the efficiency of their current design and constantly look for more efficient alternatives. The TCE theory demonstrates how the combination of bounded rationality and opportunism creates the prospect that costly negotiating and monitoring costs may accompany exchanges conducted within the market. The comparative-‐efficiency framework is based on three assumptions. The first assumption is that organization decision making is rational, the second assumption is that competitive pressure is the main driver which force them to efficiency. Finally, this model assumes there are no institutional influences in determining which organizational design is adopted (Roberts & Greenwood, 1997). With respect to the explanation about the adoption of the design over time, there are refinements and extensions desirable (Williamson, 1987 and Roberts & Greenwood, 1997).
2.1.2 The interpretive research
The interpretive approach, also called the alternative management accounting, covers several perspectives (Baxter & Chua, 2003). It is concerned with understanding the social world, and includes work that seeks to understand the social nature of accounting practices. Examples of an interpretive approach are the routes and routines theory of Burns & Scapens (2000) and the actor network theory.
Burns & Scapens (2000) conceptualized an institutional framework for management accounting change. A commonly used definition of an institution is: ‘a way of thought or action of some prevalence and permanence, which is embedded in the habits of a group or the customs of people’. They conceptualized management accounting change by proposing that an Accounting system is based on a set of rules (formal representations of actions) and routines (actual behavioral patterns). Changing the set of rules and routines can lead to different types of resistance. The limitation of this approach is the dependency of the role of power in this process (Burns & Scapens, 2000).
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Latour and Callon (Callon 1980, 1986, Law & Rip, 1986; Law & Callon, 1992, Latour 1992, 1993) tried to convert the ‘static’ theoretical approaches of accounting change to a translation process. These processes of translation have three stages that are labeled as problematization, interessement and enrollment. The defined actors should be added in the process by stage. This theory has been adapted in several studies of accounting change such as the studies of Chua (1995), Miller (1991), Preston et al., (1992) Robson, (1991), (1992). The Actor Network Theory (ANT) is a rather controversial theory and in sharp contrast to paradigms of management accounting scientist (Justesen & Mauritsen, 2011). The theory has been criticized because of the following: inclusion/exclusion of actors; equal treatment of humans and non-‐humans; nature of privileging and status; the handling of agency and structure; and the process of heterogeneous engineering, notable in relation to concepts of power, ordering and distribution (McLean, and Hassard, 2004) The ANT provides a different view of accounting change. Instead of the contingency and institutionalism approaches, the ANT sees accounting change as a translation process.
Different authors added tools to overcome the resistance for change. An example is the approach of Weick (1995) and Tillman (2008), who provided approaches for management accountants by using sense making. Managerial sense making can be used to overcome resistance. Sense making has an essential role in linking processes of knowledge management and strategic decision –making (Hasan & Gould, 2001). Sense making is an interdependent and reciprocal process during the launching of strategic change (Gioia et al., 1994). Sense making is commonly used in strategic management but less in accounting literature.
2.1.3 Criticism of positivist and interpretive approaches
Both approaches should lead to a successful change. However, this is not always the case and the different scientists do not support each other’s approaches. The main differences of their approaches are: (1) objective versus subjective (Burrell & Morgan, 1979), (2) nomothetic versus idiographic (Luthans & Davis, 1982), (3) quantitative versus qualitative (Van Maanen, 1979), (4) outsider versus insider (Evered & Louis 1981), and (5) etic versus emic (Morey & Luthans 1984).
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Classification Criteria
Positivist research Interpretive research
Beliefs about physical and social reality
There is a single, tangible, fragment-‐ able phenomenon of interest and there is a unique best description of any aspect of that phenomenon.
Social world is not given. It is produced and reinforced through human actions and interactions. Interpretations of reality change with time, circumstances, objectives and constituencies.
Beliefs about the notion of knowledge
Deductive logic to discover unilateral, causal generalized relationships, predict patterns of behavior across situations.
Involves getting inside the world of those generating the social process. The models are not unidirectional, but are circular or reciprocally interacting models of causality. Note a priori researcher-‐imposed formulations of structure, function and attribution are assumed.
Beliefs about the relationship between knowledge and empirical world
If the appropriate general laws are known and the relevant initial conditions can be manipulated, we can produce a desired state of affairs, natural or social. Research is value free.
Knowledge is never value-‐free. Weak constructionist view, the researcher merely describes the phenomenon in words of the actors. In the strong view, the researcher‘s interpretations intervene with the actual meaning of the world, thus the researcher is in part, enacting the social reality of the actors.
Table 2.1 Classification Criteria Positivist and Interpretive approach (Orlikowski and Baroudi, 1991).
A point of criticism from the interpretive researchers on the positivist approach is mainly that this approach is often a ‘static’ theoretical approach whereas much of the existing research in this area focuses on management accounting change as an outcome (Burns & Scapens, 2000). So are the designed factor stage models based on economic rationality and potential behavior instead of realistic and actual behavior (Anderson, 1995). The interpretive research is also criticized. Baxter and Chua (2003) argue that alternative management accounting research shows little or no sense of any technical elegance or excellence management accounting change. They state that accounting change is not linear, predictable, controllable, exclusively technical or well-‐behaved.
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tried to combine the two approaches such as the research of Roberts & Greenwood (1997). However, they were not successful in their attempts and could not bring these approaches together.
2.2 Practical relevance in the management accounting literature
Discussions about practical relevance are not absent from the management accounting literature (Malmi et al., 2009). As Ahrens et al. (2007) argues, “man created an unhelpful dynamic between the writing and thinking of academics and practitioners and, related to this, between notions of individual agency, social norms, and control”. He crudely states that the normative literature, which poses them as practically relevant, has often emphasized agency over context and succumbed to hero sociology. The more sociologically grounded literature has frequently offered practitioners little advice beyond emphasizing the complexities of purposeful management control (Ahrens et al., 2007). The key for management control theory is not how to constrain individuals and overcome resistance; it needs to bring the focus of the possibilities of management control systems as a resource for actions (Ahrens et al., 2007). As the debate on practical relevance is ongoing, it still it is difficult to find a uniform definition on practical relevance in the context of management accounting.
Choudbury (1986) composed a definition. He claims that: “management accounting research is relevant to practice when it helps practitioners to understand their organizations and to improve practices, and when it contributes to a theoretical body of knowledge that is beneficial to effective organizational change in the future” (Choudhury, 1986). There are three main degrees in this definition that explains the practical relevance. First, the theory should help practitioner to understand their organization. Second, the theory should help practitioner to improve practices. Third, this theory should contribute to a theoretical body of knowledge that is beneficial to effective organizational change
The definition of Choudhury (1986) will be used as a guideline to further analyze the practical relevance of the MAC theories. These variables will be outlined against the factors influencing management accounting change in the analysis phase.
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2.3 Influencing forces on management accounting change implementation
Regardless of how skillful a change is managed, change projects do not always seem to lead to a successful implementation. Therefore, Kasurinen (2002) developed an accounting change model by specifying the types of forces influencing management accounting change in real life circumstances. He analyzed influencing factors determining success for accounting change and combined this with barriers for change. The theory clearly describes how different factors combine and interact regarding accounting change in practice. So this model can be used to analyze the completeness of management accounting change theory with respect to the practical relevance.
Figure 2.1 Accounting Change Model (Kasurinen, 2002).
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Therefore sufficient momentum is required to maintain the pace of change and to overcome the potential barriers. The potential barriers are defined as confusers, frustrators and delayers. Environmental forces
The environmental forces are pressures to initiate change. They are categorized by: 1) motivators: 2) catalysts: and 3) facilitators. Motivators influence change in a general manner. Examples of motivating roles are competitiveness of the market, production technology and the product cost structure. To generate change there should be suitable facilitating conditions. These are comprised conditions stimulating management accounting change, which are necessary but solely not sufficient for the change to occur. Examples included the availability of adequate accounting staff. Facilitators do not result per se in change but their existence is often necessary for the actual realization of the change. The last factor is directly associated with the changes of their occurrence corresponding closely to the timing of the change. These are for example the loss of market shares, arrival of a new accountant or a pressure on margins. This factor is termed as catalysts. Catalysts are the initiators of a change process. The motivators, facilitators and catalysts act positively to generate change but could only become effective where suitable facilitating conditions existed (Kasurinen, 2002 and Innes & Mitchell, 1990). Individual forces
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Process – taking action
Motivators, catalysts and facilitators may be necessary to create a potential for change, but action by individuals is needed to overcome the barriers to change (Cob et al., 1995). When change occurs, individuals should take action to realize the change. Here, momentum of change is an important factor for driving change.
Starting a change, no organization has the momentum, power or time to remove all the obstacles. Nevertheless, it is important to confront and remove the significant ones. Action is essential, both to empower others and to maintain the credibility of the change effort as a whole (Kotter, 2007). During the change, the timing of different phases seems to be crucial and the process is a necessary part of a change theory.
Barriers
There are many potential problems during a management accounting change. The literature describes many barriers that could hinder the change. These barriers give a more realistic view on accounting change in this model. Examples of barriers are changing priorities, accounting staff turnover and staff attitudes to change. Other factors, such as potential barriers are categorized in the model are defined as ‘confusers’, ‘frustrators’ and ‘delayers’. ‘Confusers’ occurs when the goals of the change project seemed to be disrupted. Often this is due to division managers not being clear about goals during the change. ‘Frustrators’ relate to mismatches between existing reporting systems and/or not fitting organizational culture. ‘Delayers’ could for example be the use of inadequate information systems. The advancing forces mentioned earlier should overcome these barriers to get create a successful accounting change out of the potential for change, see figure 2.1.
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3 Methodology 3.1 Type of research
The goal of this review is to provide a comprehensive overview and present a conceptual framework of the practical contribution of both approaches on management accounting change.
To minimize the bias of this paper the literature will be analyzed by performing a systematical review. The reason to prefer systematic review instead of narrative review is that it adopts a comprehensive, unbiased search (Transfield et al., 2003). Systematic review has been argued to provide the most efficient and high quality method for identifying and evaluating extensive literatures. It improves the quality of the review process and outcome by employing a transparent and reproducible procedure (Tranfield et al., 2003). Therefore, an analytical review scheme is necessary for a systematic analysis (Ginsberg & Venkatraman, 1985).
3.2 Relevance, validity and reliability
Relevance refers to the explicit benefits of doing the research at this specific moment in time. (Cooper & Schindler, 2006). As explained above, this review concerns an overview of management accounting change theories framed against practical relevance. The results will provide the emphasis of both theories concerning practical relevance more in detail. Validity can be defined as: ‘Including all aspects of science that ensure that the results of the study are reliable and which can be determined through a description of the exactness, precision and consistency of the research’ (De Leeuw et al., 2003). In this systematic review different methods will be used to ensure exactness, precision and consistency of the research. Exactness can be defined as the reliability of the study. Reliability implies that repetitive execution of this research lead to comparable results. The datasets for this research are representative for the literature due to the fact that the majority of this dataset is derived from top quality journals and therefore is reliable to draw conclusions from. A review process will pattern consistency: first, data will be consistently selected: second, a suitable data analysis will be preformed, and finally
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3.3 Data presentation and analysis
The challenges of performing a systematic review are (1) a difficulty of data synthesis from various disciplines, (2) insufficient representation of books, (3) large amounts of material to review and (4) to turn the conclusions from a systematic review into guidelines for practice (Pittaway et al., 2004). However, this paper only produces a framework for an overview of the different management accounting change theories, thus a new theory will not be conducted. In such a broad field as management accounting change the systematic review is the methodology that should be used to make this analysis representative. The aim of this method is to create an output of the information by fully listing the articles and papers on which the review will be based. The review process will be divided into three parts: data collection, data-‐analysis and data synthesis (Crossan & Apaydin, 2010).
3.3.1 Data collection:
The knowledge of existing literature will be used to collect the data for the research. Using the literature as a source of evidence provides stable, unobtrusive, exact information that covers a broad range of information (Yin, 2009). Articles that made a core contribution to the literature, either conceptually or empirically, will be identified from a database by using keywords. After the first data collection a predefined selection algorithm will be used to remove the subjectivity of this method (Crossan & Apaydin, 2010). Chapter 3.4 will go into more detail with regards to the selection criteria.
3.3.2 Data analysis:
The chosen methodologically is limited at a descriptive analysis level, rather than an in depth statistical analysis. Beyond the descriptive categorization of the paper, the data is qualitative (types of theories used, ways constructs are conceptualized and explanatory rational offered). To test the internal validity of the paper techniques as (1) pattern matching, (2) rival explanations and (3) explanation building will be used in this review (Yin, 2009).
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1) Pattern matching
Pattern matching is one of the most desirable techniques to use in a case analysis. Pattern matching compares an empirically based pattern with a predicted one. Overlapping patterns help strengthen the validity of the research (Yin, 2009). In this descriptive study the independent variables will be defined in the framework defining dimensions of practical relevance and factors influencing management accounting change. The dependent variables will come out of the articles of both approaches outlined in chapter 2.1. However, Yin’s approach to pattern matching is implicitly limited to the testing of propositions about characteristics of single cases (which can be tested in single cases) and not about differences between cases. Therefore rival explanation is added to this method.
2) Rival explanation
The use of rival explanation is a variant of pattern matching for independent variables. In this case, the two approaches are known to have a certain type of difference as explained in table 2.1. The goal of this investigation is to outline and analyze the independent variables and the similarities and differences of both approaches on practical relevance. In this case the independent variables are the four elements (environmental, individual, momentum and barriers) describing potential for change. The dependent variables are derived from the data. 3) Explanation building
With this analytical technique the analysis will be explained by stipulating a presumed set of causal links about the elements. With explanation building the review builds up a general explanation that fits each individual case. The difficulty of this method is to stay close to the original topic. However, data synthesis will keep the analysis narrowed to the topic.
3.3.3 Data synthesis
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implicate successful practical implementation of change. These dimensions will be outlined against the defined theories. The final step will be mapping them into a framework.
3.4 Identifying the selection criteria
Different selection phases will be used to select the suitable articles. The data needs to have the right content and because it is a review of a selection of the literature it is important to select the articles contributed to the literature and are representative for management accounting change theory. The goal is to select a reasonable amount of articles of the positivist and interpretive research. In total, 36 articles will be analyzed. Selection of the data is based on the following selection criteria:
1. Management accounting literature 2. Quality selection
3. Content selection
3.4.1. Management accounting literature
The articles used come from scholarly journals published in the management accounting change literature. The database ‘business source premier’ is used to collect this data. A lot has been written about this topic and the theories are developing, therefore this paper focuses on recent literature to represent the current position of the management accounting theories. As a starting point, the article of Vamosi (2000) is used and therefore papers published between 2000 and 2012 will be used for the analysis. Vamosi (2000) tried to combine the positivist with an interpretive approach. The objective of his study was to understand why rationales look the way they do, how they result in organizational logic and why it may be a problem to leave, supplement, adjust or replace one logic and rationality with another when a set of logics is socially organizationally and individually institutionalized. His analysis reveals that post-‐ rationalizations and alternations have attributed to rationality in a struggle against former ‘cargoes-‐of-‐thoughts’. His analysis is a good basis to analyze recent articles.
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information on the various theories. By using keywords relevant articles will be selected. Both approaches will be analyzed by using the keyword-‐approach. By searching articles using the keywords ‘Management-‐Accounting-‐Change’ and the term ‘Institutional-‐theory + Management-‐ Accounting’ published between 2000 and 2012, there are 209 articles that are suitable for further analysis. The quality and content selection will eventually qualify the representative articles.
3.4.2 Quality selection
In this step of the selection, the bias of this approach will be removed by selecting high quality articles. To identify high quality papers, articles published in highly ranked journals and frequently quoted articles will be selected. This type of analysis is widely used as a measure of paper quality.
Firstly, by analyzing the articles that are published in the high-‐qualified journals there is a rank created of top journals by Chan et al. (2009). Overall journal ranking by citations are weighted by research method and specialty area. The ten best-‐ranked journals will be used for the analysis, see table 3.1.
Rank Weighted by Research Method 1 The Accounting Review
2 Journal of Accounting Research 3 Accounting Organizations and Society 4 Journal of Accounting and Economics 5 Behavioral Research in Accounting Auditing 6 Journal of Management Accounting Research 7 Contemporary Accounting Research
8 Auditing: A Journal of Practice and Theory 9 Accounting Horizons
10 Management Accounting
Table 3.1: top 10 journals based on research method (Chan et al., 2009)
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internationally excellent journal with an impact factor of .925 in 2010. Therefore this journal is added to the selection.
Finally there will be a citation-‐based analysis. This type of analysis is a widely used method to measure paper quality; paper citations serve as the factual vote of its contribution of towards the knowledge accumulation and development (Crossan et al., 2003). Papers cited more than ten times will be added to the analysis. Recent published papers, published from 2011, will not have had the time to accumulate citations. In this case, this research relies on the selection of top-‐quality journals.
3.4.3 Content selection
A method using analysis based on keywords for titles and abstracts represents the last option. Titles and/or abstracts are good indicators for the content. The remaining articles after the second selection will be manually analyzed to select the definitive dataset. One requirement for these titles and/or abstracts is the presence of at least management accounting change or institutional theory. See table 3.2 for an overview.
Content selection
Management Accounting Statistical Analysis Institutional Theory Framework
Change Model
Table 3.2 Keywords content title/abstract paper
3.4.4 Additional group articles
The method described above results in suitable selection of high quality articles. In order to make this analysis more representative, an additional group of ten articles will be added to the selection. The add-‐on articles are not published in the high quality journals but are still recognized as intermediate quality journals. Thus, this ends up with this list a total of 36 quality journals that will be used for the analysis (Appendix A).
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3.5 Database search
These selected articles will be adopted and tested in the framework to analyze the practical contribution of the individual theories. The selected data have the topic management accounting change in common. However, the goal of the researchers can differ. For example, the objective of the research can be evaluation of instrumental effectiveness of management accounting techniques, or understanding the change processes that shape their use. Comparing these approaches, the first is more likely to be used for practitioners than the second. Researches that explicitly address conditions for successful application of a management accounting technique may be of greater relevance to practice than researchers that only describe and explains the actual use of that technique (van Helden et al., 2010). In the analysis this approach will be taken into account to draw meaningful conclusions.
3.6 Examining the potential for change
In the analysis, the theory of the article will be the basis for the results in the analysis. Van Helden (2010) developed a method to assess practical implications in Public Sector Management Accounting Research (PSMAR). He conducted a classification for assessing the practical orientation of PSMAR concerns in a way in which researchers present the practical implications of their research. The strength of this classification is that it distinguishes whether a paper ‘only’ draws attention on practical implications.
However, as van Helden (2010) investigated practical implications, this paper will investigate practical relevance. Consequently his model will be adapted to our objectives and other measurement systems will be used. Referring to the definition of Choudhury (1986) a theory should: 1) help practitioners to understand their organizations: 2) to improve practices: and 3) when it contributes to a theoretical body of knowledge that is beneficial to effective organizational change in the future.
3.6.1. Examining practical relevance
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the degree of presence in the theory, see table 3.3. To integrate the articles in the framework of table 3.3 it is important to distinguish between the different classifications of practical relevance. The different levels, zero to three, reflect the presence of practical relevance. Here must be noted that these levels not quantify the results but solely function as a synonym.
Potential Change / Article nothing about
this element theory helps practitioner to understand theory helps practitioner to improve practices
element contributes to a theoretical body of knowledge that is beneficial to effective organizational change
Environment Level Level Level Level
Motivational factors 0 1 2 3 Catalyzing factors 0 1 2 3 Facilitating factors 0 1 2 3
Individual
Leading the Process 0 1 2 3
Momentum
Guiding the Process 0 1 2 3 Timing for Change 0 1 2 3
Barriers
Elements containing
barriers or resistance 0 1 2 3 Table 3.3 Framework Potential Change versus article
1) Theory helps the practitioner to understand their organization:
The first classification means that the paper provides little scope for readers to infer any direct practical relevance. It helps to understand the existence of this element but does not provide any further guidance. An example illustrates this: when an article is naming competition as an influencing motivational factor, but give no further information as to what the interrelation between the variables are, it helps the reader to understand this element but does not give further guidance.
Also Dambrin et al., (2007), and Sharma et al., (2010), illustrate a classification of a theory that helps the practitioner to understand.
‘Level of decoupling depends on the relative power of external elements and on the power of its stakeholders' -‐ Dambrin et al., (2007).
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2) Theory helps the practitioner to improve practices
An important difference between the first and the second classification is that a second classification defines the way the two elements interrelate. As in the first classification the reader could readily understand the practical relevance. In the second classification the theory gives guidance of the effect higher or lower existence of the element on potential for change in order to improve practices. The next examples provide a clear illustration:
‘Theory suggests that uncertainty from competitive pressures in the external environment will drive the need for change in the organization’s information-‐processing requirement’ – Williams et al., (2004).
‘Successive implementation of ABC depended crucially not only on 'top management support' but on the dedicated work of the external consultants. Further, on lower levels supportance is also important to gain support. The article is naming rapid changes in the Australian economy as a motivational factor’ – Briers et al., (2001).
3) Theory contributes to a theoretical body of knowledge that is beneficial to effective organizational change:
When the author integrates the element in their theory and it explicitly points out practical guides, it positions it in a classification three. It then contributes to a theoretical body of knowledge either in general terms or as a basis for suggesting specific guidance for practice. So in this case it is important that researchers integrate the element in their framework. The next couple of examples illustrate the clear difference between giving guides as previously described and integrating the element to a theoretical body of knowledge.
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‘Visual model which allows institutional entrepreneurs to destroy prior institutions and set up new rules and routines’ -‐ Sharma et al., (2010).
‘Identified 12 causes of change all related to environment. Innes and Mitchell (1990) describe a model whereby turbulent internal and external environments create tensions and a pressure for change in management accounting systems. The nature and intensity of changes in competition, market volatility and the socio-‐political environment generally differs between South Africa and the U.K. The expectation is that these differences between the external environments faced by businesses in the two countries will elicit different change agents’ -‐ Innes and Mitchell (2010).
When the total framework is constructed by these variables influencing success for organizational change, the management accounting change theories will be evaluated on the given results.
3.7 Pilot testing of the framework
The four influencing elements, as explained in the model of Kasurinen (2002) describe the potential for change and the way they interact with each other. To test the practical relevance this model will be linked to a method to identify if the articles provide this information.
