The Strategic Role of Middle Managers’
in a Management Accounting
Change Process
By
Migeron M.F. Zijlstra
Master Thesis
MSc Business Administration,
Specialization
The Strategic Role of Middle Managers’
in a Management Accounting
Change Process
By
Migeron M.F. Zijlstra
University of Groningen
Faculty of Economics and Business
MSc Business Administration
Organizational & Management Control
August 2012
Bedumerstraat 183-A 9716BK Groningen, the Netherlands
M.M.F.Zijlstra@student.rug.nl (+31) 616475413 Student number: 1616048 Supervisor: Dr. Martijn van der Steen
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Abstract
This literature study analyzes the strategic role of middle managers during a management accounting change process. Based on the four strategic roles identified by Floyd and Wooldridge (1992, 1994, 1997) (i.e., synthesizing information, championing, facilitating adaptability, and implementing deliberate strategy), combined with the sensemaking/sensegiving role of middle managers, a conceptual framework is constructed to analyze the existing literature about middle managers’ strategic role between 1992-2012. In addition to the strategic role of middle managers during a management accounting change process, this study examines the factors and enablers that are important for middle managers who are fulfilling strategic roles. To conclude, this study makes some recommendations for further research regarding middle managers’ strategic role.
Keywords: middle managers, strategy role, sensemaking/sensegiving, management accounting
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Preface
Dear reader,
With this literature study I will end my studies in Business Administration with a specialization in Organization and Management Control at the University of Groningen. I would like to thank God for giving me the strength to finish my studies after all the good and bad times during this period. Secondly, I would like to thank my supervisor Dr. Martijn van der Steen for challenging me during the entire process of writing this thesis and for the time he spent helping me with my thesis. Without his comments and remarks I am sure I would not have been able to complete this thesis.
Further, I would like to dedicate this study to my mom, Yvonne Savans. Without her support, dedication and sacrifices I probably would not have made it so far. For this reason and many others, I dedicate this study, which represents the completion of my student life, to her.
To conclude, I would like to thank all those people who, in one way or another have helped me, motivated me and assisted me during my studies, especially during these last stages. With this thesis my student life comes to an end and I will start a new phase in my life. I have really enjoyed my student life; however I am glad I have reached the finish line.
Hopefully, you will enjoy reading this thesis. Yours Sincerely,
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INDEX
1. Introduction ... 5 2. Research Methodology ... 7 2.1 Problem Statement ... 7 2.2 Research Objectives ... 7 2.3 Research Question ... 7 2.4 Selection Criteria ... 7 2.4.1 Journals Evaluation ... 8 2.4.2 Articles Evaluation ... 83. Middle Managers and their Strategic Roles ... 10
3.1 Middle managers ... 10
3.2 The Strategic Roles of Middle Managers ... 11
3.2.1 Sensemaking/ Sensegiving ... 12
3.3 Factors and enablers ... 13
3.4 Conceptual Framework ... 13
4. Results ... 15
4.1 Synthesizing Information ... 15
4.2 Championing... 16
4.3 Sensemaking/Sensegiving ... 17
4.4 Factors and Enablers ... 18
4.5 Facilitating Adaptability ... 18
4.6 Implementing Deliberate Strategy ... 19
5. Analysis ... 22
5.1 Analysis of the Results of the Conceptual Framework ... 22
5.2 Visible Patterns from the Results of the Framework ... 22
5.2.1 The Basic Articles of Floyd and Wooldridge ... 22
5.2.2 Championing Results ... 23
5.2.3 Downward Role Results ... 24
5.2.4 Sensemaking/Sensegiving ... 24
5.2.5 Theoretical vs. Empirical articles ... 25
5.2.6 Chosen Topics of Researchers ... 25
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5.4 Linking Middle Managers Strategic Roles to an Implementation Process ... 26
6. Discussion and Conclusion ... 29
6.1 Findings of the Study ... 29
6.2 The Meaning and Importance of the Findings ... 29
6.3 Findings in Relation to Existing Studies ... 29
6.4 Alternatives explanation of the Findings ... 30
6.5 The (Practical) Relevance of the Findings ... 30
6.6 Suggestions for Further Research ... 30
6.7 The Limitations of the Study ... 31
6.8 Conclusion ... 31
References ... 33
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1. Introduction
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of management accounting has been extensively researched, the organizational part, more specifically the behavior and organizational variable of the middle managers’ strategy, is still being overlooked.
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2. Research Methodology
This research study is conducted in the form of a qualitative, descriptive literature study, based on desk research. The entire research is based on secondary data research (Cooper & Schindler, 2006). This chapter will begin with an elaboration of the problem statement and research objective. The research question will also be discussed. Thereafter, the selection criteria used to select the articles for this research will be mentioned. This chapter will conclude with a presentation of the chosen articles.
2.1 Problem Statement
According to Cooper and Schindler (2006), a problem statement mentions the necessity of the research project. The problem is usually represented by a management question, and it is followed by a more detailed set of research objectives. The following sections discuss these items in more detail.
2.2 Research Objectives
The research objectives address the purpose of the project. These objectives may be research questions and associated investigative questions (Cooper & Schindler, 2006). The purpose of this research is to contribute to the scientific knowledge about the strategic role of middle managers. The intention is not to create new theory, but rather to add some elements to the existing literature. The aim of this research is to analyze the strategic role of middle managers in a management accounting change process.
2.3 Research Question
Now that the research objectives have been defined, the research question can be formulated. The key research question is:
“In a management accounting change process, what is the strategic role of the middle managers?“ In order to answer this research question, this study will analyze the existing literature about middle managers. The following paragraph will elaborate more on the criteria used to select the articles from the literature.
2.4 Selection Criteria
As mentioned before, this research will be a literature study. One of the necessary conditions for conducting good research with high credibility is that the articles used in the research are from highly qualified journals. The selected articles should also have the right content so they add value to the research. The articles used for this research were selected based on the following criteria:
The articles must be from highly rated journals
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2.4.1 Journals Evaluation
The evaluation rating of the journals was determined by using the Journal Quality List of Professor Anne-Wil Harzing (1997-2012). The Journal Quality List of professor Harzing mentioned 21 different rankings. This research used four of these 21 different rankings, two rankings from 2012 and two from 2011. One of the reasons for this choice was the impression that everything can change over the years, journals rating can also change with time. The second reason for the use of four different ranking lists was the noticeable difference between completeness of some of the ranking lists. The first comparison was made between the list of ESSEC Business School Paris 2011 (ESS 2011) and the Erasmus Research Institute of Management Journal Listing (EJL 2012). In the case that there was no ranking mentioned for a journal in one of the ranking lists (or both), the list of the Centre National de la Recherche Scientifique (CNRS 2011) and the list of the Cranfield University School of management (CRA 2012) was used. The journals were selected based on the ranking list as follows: using EJL 2012 the journal must have been classified as a STAR (top journals among P) or P (best journals in the field). When using the ESS 2012 list, the journal ranking must have been classified as 0+ (recognized internationally as best in the discipline) or 0 (excellent at a level close to top journals in the field). For the of CNRS 2011 list, the journals must have been classified as a 1* (the highest quality rating) or 1 (intermediate quality rating) ranking. For the of CRA 2012 list, the journal must have been classified as a 4 (world leading) or a 3 (top international). An exception to the above criterion was made for articles in lower rated journals if the article had substantial added value in relation to the research. In that case, the article was included in the research; otherwise it was ignored. With regard to the search for high quality journals, EBESCOHOST was used as the main internet database. This database consisted of the following databases: Academic search premier, Business Source premier, EBooks collection, and Ecolit. Additional criteria for the journal articles from the databases was that references of the article must be available, the article must be written in English, and it must be published in a scholarly journal between 1992 and 2012.
2.4.2 Articles Evaluation
9 Table 1. List of analyzed articles
Author Title
Balogun, J. and Johnson, G., 2004 Organizational Restructuring and Middle Manager Sensemaking
Balogun, J. and Johnson, G., 2005 From Intended Strategies to Unintended Outcomes: The Impact of Change Recipient Sensemaking Balogun, J., 2006 Managing Change: Steering a Course Between Intended Strategies and Unanticipated Outcomes Beatty, C.A. and Lee, G.L., 1992 Leadership Among Middle Managers – And Exploration in the Context of Technological Change Beck, T.E. and Plowman, D.A., 2009 Experiencing Rare and Unusual Events Richly: the Role of Middle Managers in Animating and Guiding
Organizational Interpretation
Boyett, I. and Currie, G., 2004 Middle Managers Moulding International Strategy An Irish Start-up in Jamaican Telecoms Conway, E. and Monks, K., 2011 Change From Below: The Role of Middle Managers in Mediating Paradoxical Change
Currie, G. and Procter, S., 2005 The Antecedents of Middle Managers’ Strategic Contribution: The Case of a Professional Bureaucracy Dutton, J.E. et al., 1993* Selling Issues to Top Management
Dutton, J.E. et al., 1997 Reading the Wind: How Middle Managers Assess the Context for Selling Issues to Top Management Dutton, J.E. et al., 2001* Moves that Matter: Issue Selling and Organizational Change
Floyd, S.W. and Wooldridge, B., 1992 Middle Management Involvement in Strategy and its Association with Strategic Type: A Research Note Floyd, S.W. and Wooldridge, B., 1994 Dinosaurs or Dynamos? ‘Recognizing Middle Management strategic Role
Floyd, S.W. and Wooldridge, B., 1997 Middle Management’s Strategic Influence and Organizational Performance Lüscher, L.S. and Lewis, M.W., 2008 Organizational Change and Managerial Sensemaking: working Through Paradox Mantere, S., 2008 Role Expectations and Middle Manager Strategic Agency
Raghu Raman, S., 2009 Middle Managers’ Involvement in Strategic Planning: An Examination of Roles and Influencing Factors Ren, C.R. and Guo, C., 2011 Middle Managers’ Strategic Role in the Corporate Entrepreneurial Process: Attention-Based Effects
Rouleau, L., 2005 Micro-Practices of Strategic Sensemaking and Sensegiving: How Middle Managers Interpret and Sell Change Every Day
Rouleau, L. and Balogun, J., 2011 Middle Managers, Strategic Sensemaking, and Discursive Competence
Shi, W. et al., 2009 The Role of Middle Management in the Strategy Process: Group Affiliation, structural Holes, and Tertius Lungens
Stoker, J.I., 2006 Leading Middle Management: Consequences of Organisational Changes for Tasks and Behaviours of Middle Managers
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3. Middle Managers and their Strategic Roles
This chapter will further elaborate on the literature on middle managers and their strategic roles. Further, this chapter will discuss the factors and enablers for middle managers’ strategic roles. To conclude, the constructed framework will be presented.
3.1 Middle managers
The existing literature about middle managers gives numerous definitions for middle managers and their (strategic) roles in organizations. For instance, Floyd (1997) defined middle managers as: “organization members who link the activities of vertically related groups and who are responsible for at least one sub functional work flow, but not the work flow of the organization as a whole”. In comparison, Floyd and Wooldridge (1992, 1997) define the middle managers’ role as one of coordinating, where they mediate, negotiate and interpret the connections between the organization’s institutional (strategic) and technical (operational) levels. While Balogun (2003) characterized middle managers as change intermediaries who fulfill four inter-related roles during change implementation: undertaking personal change, helping others through change, implementing necessary changes in their departments, and keeping the business going. In addition Balogun (2003) states that middle managers are usually responsible for making the outline structures devised by their seniors work. Moreover, Balogun claims that the actual change outcomes depend on how middle managers interpret what is required, what they can do personally, and which actions and initiatives they take as result of these interpretations. To summarize, Lassen et al. (2009) assert that the primary responsibility of middle management is to monitor on behalf of, and report to/from, top management.
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Vilà and Canales (2008) indicate in their article that the involvement of middle managers in the strategy process facilitates the change process. Moreover, Shi et al. (2009) propose a framework that identifies the active role that middle managers can play during the strategic decision process. In particular, the roles presented in the article not only reflect middle managers’ contributions to strategic innovation and renewal, but also display their contributions to strategy implementation. Similarly, Charlotte and Chao (November 2011) argued that middle managers actively participate in the “thinking” of strategy by playing two distinctive roles, namely, evaluating and selling entrepreneurial initiatives in the impetus process. Their role as initiative evaluators involves noticing a set of entrepreneurial opportunities emerging from a lower organizational level, assessing their potential for future corporate growth, making decisions about whether to endorse them, and determining how much support to offer. In contrast their seller role involves leveraging contextual factors to get top management’s attention and support for certain opportunities, reshaping the strategic thinking of top management, and getting top management to modify existing corporate strategy. Stoker (2006) argues that middle managers are not per se a blockage to change, but they can make an important strategic contribution. Based on this characteristic of middle managers and their strategic role, Lassen et al. (2009); Stoker, (2006) and Huy, (2002) conclude that middle managers are at least as important as senior executives in facilitating radical change. Therefore, based on the above evaluation of the role of middle managers, a constructed framework will be discussed in the last paragraph of this chapter.
3.2 The Strategic Roles of Middle Managers
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Table 2. Forms of middle management strategic influence activities by Floyd and Wooldridge (1997).
Upward
Synthesizing information:
Gather information on the feasibility of new programs Communicate the activities of competitors, suppliers, etc. Assess changes in the external environment
Championing:
Justify and define new programs Evaluate the merits of new proposals Search for new opportunities
Propose programs or projects to higher level managers
Downward
Facilitating adaptability:
Relax regulations to get new projects started 'Buy time' for experimental programs
Locate and provide resources for trial projects Provide a safe haven for experimental programs Encourage informal discussion and information sharing Implementing deliberate strategy:
Monitor activities to support top management objectives Translate goals into action plans
Translate goals into individual objectives Sell top management initiatives to subordinates Source: (Floyd & Wooldridge, 1997)
3.2.1 Sensemaking/ Sensegiving
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Tillmann and Goddard use the following definition for sensegiving: an activity concerned with the process of attempting to influence the sensemaking and meaning contribution of others towards a preferred redefinition of organizational reality. As this study aim to find the strategic roles of middle managers during a management accounting change process, sensemaking and sensegiving role of middle managers are incorporated into the conceptual framework as possible strategic roles of middle managers.
3.3 Factors and enablers
During a change process of the management accounting systems, such as, during the implementation of Activity Based Costing (ABC), middle managers could fulfill different kinds of strategic roles during the process. In 1995, Shields made use of a framework previously constructed by Shields and Young to analyze the implementation experience of Activity Based Costing (ABC). The assumption behind Shields and Young’s model was that a cost management system and ABC are not technical innovations. The perspective adopted by Shields is that the key to successfully implementing ABC is effectively dealing with specific behavioral and organizational variables. The seven behavioral and organizational variables identified by Shield and Young were: (1) top management support; (2) linkage of the cost management system to competitive strategies, particularly quality and speed strategies; (3) linkage of the cost management systems to performance evaluation and compensation; (4) sufficient internal resources; (5) training in designing, implementing and using cost management systems; (6) non-accounting ownership: and (7) consensus about clarity of the objectives of the cost management systems. These variables identified by Shields and Young (source: Shields, 1995) could be possible factors and enablers for middle managers during a process of change. By including the variable factors and enablers in the conceptual framework, this study will attempt to determine if there are any factors and enablers noted in the literature with regard to middle managers fulfilling a strategic role.
3.4 Conceptual Framework
14 Figure 1. Conceptual Framework
Articles
Upward role Fa cto rs and E n ab lers Downward role Sy n th es iz in g i n fo rmat io n C h ampio n in g Se n se mak in g/ S en se gi vi n g Fa ci lita ti n g ad ap ta b ili ty Imple men ti n g d el ib er ate str ateg y Se n se mak in g/ S en se gi vi n gThe
o
ret
ica
l
ar
ti
cle
s
Floyd, S.W. and Wooldridge, B., 1994
Beck, T.E. and Plowman, D.A., 2009
Dutton, J.E. et al., 1993
Ren, C.R. and Guo, C., 2011
Shi, W. et al., 2009
Empir
ica
l ar
tic
le
s
Floyd, S.W. and Wooldridge, B., 1992 Floyd, S.W. and Wooldridge, B., 1997
Balogun, J. and Johnson, G., 2004
Balogun, J. and Johnson, G., 2005
Balogun, J., 2006
Beatty, C.A. and Lee, G.L., 1992
Boyett, I. and Currie, G., 2004
Conway, E. and Monks, K., 2011
Currie, G. and Procter, S., 2005
Dutton, J.E. et al., 1997
Dutton, J.E. et al., 2001
Lüscher, L.S. and Lewis, M.W., 2008
Mantere, S., 2008
Raghu Raman, S., 2009
Rouleau, L., 2005
Rouleau, L. and Balogun, J., 2011
Stoker, J.I., 2006
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4. Results
This chapter addresses the results of this literature study (Figure 2). The findings about the strategic role of middle managers will be divided according to the roles mentioned in the constructed framework. In the case of the upward and downward strategic roles of sensemaking/sensegiving, the choice was made to present their results in one combined paragraph, since most of the articles discussed both the upward and downwards roles. Further, this chapter elaborates on the factors and enablers of middle managers’ strategic role.
4.1 Synthesizing Information
The middle management strategic role of synthesizing information was emphasized in eight of the 23 articles analyzed, including the three articles of Floyd and Wooldridge upon which the constructed framework was based. Boyett and Currie (2004) conducted a research on how middle managers specifically contribute to strategy in international ventures. The case study was of an Irish company launching a mobile telecommunications network in Jamaica. They acknowledge that middle managers synthesize the following information for the top management: corporate responsibility and community involvement is more important in Jamaican than product promotion; the virtues of Jamaica as a “hub” within the region; the workforce is not ready for European management style; the need for status in Jamaica; Jamaica prefers ‘international’ rather than domestic suppliers or employers. Much like the research of Boyett and Currie, the articles of Mantere (2008); Beck and Plowman (2009); and Raghu Raman (2009) also acknowledge the strategic role (i.e., synthesizing information) of middle managers. Raghu Raman (2009) suggests that the strategic role of synthesizing information performed by middle managers does have some relevance in the context of strategic planning in an emerging market like India. According to Raghu Raman, middle managers make a contribution to the process of strategic planning by synthesizing information. In this case, middle managers were synthesizing information by collecting and processing information from multiple sources.
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4.2 Championing
As mentioned above, the research of Boyett and Currie (2004) was based on a case study of an Irish company launching a mobile telecommunications network in Jamaica. It analyzed how middle managers specifically contribute to strategy in international ventures. They observed that middle managers were also fulfilling the strategic role of championing to the top management. The middle managers were indicating the importance of the following items to the top management: growth through a company rather than product focus; widening the product bundle; lengthening the anticipated timeframe; retention of Jamaica as an operational hub; hierarchical organizational structure; modification to the reward strategy; non Jamaicanisation of Digicel and longer term expectations of PCN involvement. Much like to Boyett and Currie, many other authors have also acknowledged that middle managers fulfill the strategic role of championing. In the article of Currie and Procter (2005), the authors made use of the constructed framework of Floyd and Wooldridge (1992, 1994, and 1997) to examine the strategic role of middle managers in the UK’s National Health Service (NHS). They found that middle managers fulfill a championing role by selling strategic ideas (proposals) to executive management and by elaborating and modifying the detailed content of strategic change. Similarly, Raghu Raman (2009) acknowledges that middle managers were championing by providing alternatives for the organization. Similarly, Mantere (2008) mentions that middle managers reported in the interviews that they were expected to challenge their superiors with new strategic ideas. The interviews completed by Conway and Monks (2011) provided insights into the wide range of tactics that the managers adopted in order to carry out change. The middle managers where fulfilling the strategic role of championing by designing pilot projects to test the reactions to a particular initiative and evaluate the impact of this initiative before moving to full-scale reorganization. The middle managers interviewed by Conway and Monks, also recognized the need to abolish old models of working before implementing new ones. These actions fit with the championing role proposed by Floyd and Wooldridge.
The articles of Dutton and Ashford (1993); Dutton et al. (2001); and Dutton et al. (1997) all elaborate on how middle managers can sell issues to top management. The term sell issue can be compared to Floyd and Wooldridge’s item “Propose programs or projects to higher level managers” mentioned in Table 2 for the strategic role of championing. For example, of Dutton and Ashford (1993) emphasize that by selling issues, middle managers can affect the organizational actions. Further, the article elaborates on different types of issue selling discussed in the existing literature at that time. A few years later in 1997, Dutton et al. elaborated more on the middle managers’ strategic role of proposing ideas to the top management. In this case they examined what middle managers think about as they decide whether or not to sell strategic issues to top management. After this in 2001, Dutton et al. elaborated more on the issue selling of middle managers. They uncover three kinds of contextual knowledge that are critical to the execution of issue selling moves. As in the three articles above, authors Vilà and Canales (2008) indicate in their article that the involvement of middle managers in the strategy process facilitates the change process. They also acknowledge the strategic role of issue selling and proposals for action (championing) by middle managers.
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communication process from top management down to middle managers and then between middle managers. Finally, liaison 2 is the communication process from the top management down to the middle managers, and then from middle managers down to lower level managers. The framework of Shi et al. (Appendix A; Figure 2) illustrates these three brokerage roles and their influence on strategic goals. Similarly, Ren and Guo (2011) also divide the middle managers’ championing role. First, they state that middle managers evaluate the strategic merits of entrepreneurial initiatives emerging from lower organizational levels and assess their potentials for future corporate growth. Second, according to Ren and Guo middle managers gain top management’s attention and support for an entrepreneurial initiative that may fall outside the organizational agenda. In this “seller” role, they reshape the strategic thinking of top management and get top management to modify existing corporate strategy to accommodate successful new initiatives.
4.3 Sensemaking/Sensegiving
Over a period of three years, Balogun (2006; with Johnson in 2004, 2005) publishes three articles about the sensemaking/sensegiving role of middle managers. The article from 2004 was based on the sensemaking role of middle managers during a revolutionary change. At that time they identified a “replacement” pattern of schema development in which middle managers moved from shared through clustered sensemaking, to shared but differentiated sensemaking. Further, they mentioned that middle managers use both vertical and horizontal social processes of interaction, but, as expected, given vertical structural barriers, most interaction occurs horizontally, between middle managers. In their 2005 paper they suggest that the majority of middle managers’ sensemaking activities occur through lateral and largely informal processes in the absence of more senior managers. In 2006, however Balogun illustrated the pivotal role that can be played by middle managers in top-down change programs. According to Balogun, middle managers put into action the plans of senior managers. They have to undertake changes themselves, while also implementing changes within their own departments. These middle managers need to engage in a range of sensemaking activities, both upwards between middle managers and top management and at the same time the sensemaking process between middle managers, and ultimately downwards with their teams, to aid their interpretation of the change intent and to negotiate how the change should be advanced.
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(2005) also discusses the sensemaking and sensegiving of middle managers during a change. The article indicates that the middle managers’ role is to bring awareness about the change and to sell the strategic change. Further, the author discusses strategic sensemaking and sensegiving processes at the organizational interface, emphasizing the renewal of links with stakeholders in general and clientele in particular. Rouleau and Balogun (2011) also discuss the sensemaking role of middle managers. Their article elaborates on the use of verbal language by middle managers to make sense of the change.
4.4 Factors and Enablers
The article written by Raghu Raman (2009) mentions that a rigorous description of middle managers’ strategic roles was initiated by Floyd and Wooldridge (1992). In addition to the four strategic roles (championing alternatives, synthesizing information, facilitating adaptability and implementing deliberate strategy) distinguished by Floyd and Wooldridge (1992,1994, 1997), the article mentions that Floyd and Wooldridge have also identified various factors that affect middle managers’ contribution to strategy. Raghu Raman made a compilation of these factors in his article. He mentions the following factors that can influence the strategic role of middle managers: boundary-spanning positions, position in the managerial hierarchy, involvement, organizational structures, and management development.
The factor boundary-spanning indicate that middle managers in boundary-spanning positions make greater strategic contributions to the company. The second factor, position in the managerial hierarchy, indicates that middle managers who are situated in the lower level of the company contribute less to the strategic activities in organizations. In the case of the third factor involvement, this factor emphasizes the involvement of middle managers in goal formulation and not just for implementation. The factor organizational structures, implicate that flatter structures increase the importance of strategic contributions of middle managers. The last factor that, according to Raghu Raman, the authors Floyd and Wooldridge mention as factor that can influence the strategic role of middle managers is management development. This factor implicates that exposure to strategic and other management development programs enrich the strategic contribution of middle managers. In relation to the factors of Floyd and Wooldridge, Raghu Raman has incorporated the factor Job insecurity identified by Currie and Procter (2005) as one additional contingent factor. This factor goes unrecognized by Floyd and Wooldridge as a contingency that might limit middle managers’ desire to take up a more strategic role. The factor of job security implicates that middle managers who perceive job insecurity tend to contribute less to strategic activities of organizations.
Aside from this, Mantere (2008) discusses enablers for the four strategic roles distinguished by Floyd and Wooldridge. These enablers could be seen as expectations of the middle managers from the top. The enablers for the implementing role of middle managers are; narrating, contextualization, resource allocation and respect. With the facilitating role of middle manager, trust is important, while responsiveness is important by synthesizing information. With the championing role of middle managers: inclusion and refereeing are important enablers.
4.5 Facilitating Adaptability
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managers’ the strategic role of facilitating adaptability. In their research Boyett and Currie (2004) report the following facilitating adaptability: extending timeframes to accommodate Jamaican needs; developing alliances and networks; more conducive to a longer timeframe; translation of intent for Jamaican acceptability; development of one organizational chart on hierarchical lines, and a means to accommodate the parent country nationals (PCNs) separately within the company architecture; blocking the proactivity of Jamaican employees; modification of recruitment strategy; and attempt to modify the reward strategy. As mentioned earlier, their research was based on the case of an Irish company launching a mobile telecommunications network in Jamaica. They analyzed specifically how middle managers contribute to strategy in international ventures. In addition to the facilitating role of middle managers, Mantere (2008) mention that the interviewed middle managers reported that they were expected to challenge themselves and their subordinates to autonomously develop their work practices to fit the environment.
In comparison, the results of the research done in six large Dutch companies (Dutch State Employees’ Pension Scheme, Royal Dutch Telecom, Dutch Railways, Ahold, the IRS, and consultancy firm Berenschot) by Stoker (2006) also indicate that middle managers show coaching behavior (facilitating), even though it was little according to employees. The authors here imply that the concept of coaching needs further elaboration and concretizing. Concerning coaching, the results of the study also show that organizations find it hard to make clear what the actual coaching behavior should look like. This leads to middle managers who act on their own discretion, and to situations in which managers think they show coaching behavior, whereas the one that is being coached does not experience coaching behavior. Further, in a more theoretical view of the strategic role of facilitating adaptability, Shi et al. (2009) created three new brokerage roles for this middle management strategic role. These are gatekeeper 2, liaison 2, and coordinator (see Appendix A; Figure 1). In figure 1, Shi et al. show that the communication process of gatekeeper 2, as explained earlier, is the communication process from the top management down to the middle managers and then from middle managers to other middle managers. In the case of liaison 2, the communication process is from top managers down to middle managers, and then from middle managers down to lower level managers. For coordinator, the communication process is between middle managers and other middle managers. The framework of Shi et al. (Appendix A; Figure 2) illustrates these three brokerage roles and their influence on strategic goals.
4.6 Implementing Deliberate Strategy
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21 Figure 2. Conceptual Framework results
Articles Upward role Fa cto rs and E n ab lers Downward role Synth esiz in g in fo rm ati o n Ch am p io n in g Sen sem akin g/ S ensegi vin g Fa cili tat in g adap tabi lity Im p le m entin g delib er ate strate gy Sen sem akin g/ S ensegi vin g Theo ret ical articles
Floyd, S.W. and Wooldridge, B., 1994 x x x x
Beck, T.E. and Plowman, D.A., 2009 x x x
Dutton, J.E. et al., 1993 x
Ren, C.R. and Guo, C., 2011 x
Shi, W. et al., 2009 x x x x Em p ir ical ar ticles
Floyd, S.W. and Wooldridge, B., 1992 x x x x
Floyd, S.W. and Wooldridge, B., 1997 x x x x
Balogun, J. and Johnson, G., 2004 x x
Balogun, J. and Johnson, G., 2005 x x
Balogun, J., 2006 x x
Beatty, C.A. and Lee, G.L., 1992 x
Boyett, I. and Currie, G., 2004 x x x x
Conway, E. and Monks, K., 2011 x x x
Currie, G. and Procter, S., 2005 x x
Dutton, J.E. et al., 1997 x
Dutton, J.E. et al., 2001 x x
Lüscher, L.S. and Lewis, M.W., 2008 x x
Mantere, S., 2008 x x x x x
Raghu Raman, S., 2009 x x x
Rouleau, L., 2005 x x
Rouleau, L. and Balogun, J., 2011 x x
Stoker, J.I., 2006 x
Vilà, J. and Canales, J.I., 2008 x
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5. Analysis
This chapter first addresses the analysis of the results of the constructed framework. Then the patterns found in the results of the constructed framework will be presented. Finally, in the last paragraph there will be an analysis of middle managers role in relation to management accounting change.
5.1 Analysis of the Results of the Conceptual Framework
The results of the conceptual framework indicate that the strategic middle management role of championing is the most performed task of middle managers. Surprisingly, the analyzed literature indicates that the strategic downward roles of implementing deliberate strategy and facilitating adaptability are the least performed tasks of middle managers. Furthermore, the results indicate that middle managers are secondly most engaged in performing the sensemaking/sensegiving roles (both upward and downward), followed by the strategic role of synthesizing information. The literature suggests that middle managers are mostly fulfilling the strategic role of championing by proposing programs, projects or ideas to higher level managers. By fulfilling this role of championing, the literature states that middle managers can influence the strategy and the direction of the organization. Although middle managers are engaged mostly in the championing role, according to the articles analyzed, the literatures indicates that middle managers also regularly fulfill the role of sensemaking/sensegiving in both upward and downward directions. According to the analyzed literature middle managers engage in these roles of sensemaking and sensegiving to bring awareness of the change in the organization.
Even though the analyzed literature indicates that the strategic downward roles of facilitating adaptability and implementing deliberate strategy are being performed to a lesser extent, the literature states that these roles are still a part of the strategic role that middle managers perform in an organization. The results indicate that the existing literature focuses only on certain strategic roles of middle managers. The literature about the strategic role of middle managers focuses on the strategic role of championing, while the other strategic roles of middle managers are underexposed. This entails that the existing knowledge about the other aspect of middle managers’ strategic role is very scarce, in particularly in the case of a management accounting change process. Secondly, it entails that, even though middle managers fulfill several different strategic roles, scholars may believe that middle managers only fulfill certain strategic roles based on the literature.
5.2 Visible Patterns from the Results of the Framework
In this paragraph the patterns found in the results of the constructed framework will be elaborated upon. The pattern of the three articles of Floyd and Wooldridge will be analyzed, followed by the pattern of the results of the championing strategic role. Thirdly, the pattern of the downward roles of middle managers will be discussed. After the analysis of the pattern of the downward roles, there will be an analysis of the pattern of the sensemaking and sensegiving role of middle managers. Further, the difference between theoretical versus empirical articles will be analyzed. In the last sub-paragraph the pattern the choice of researchers will be briefly analyzed.
5.2.1 The Basic Articles of Floyd and Wooldridge
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adaptability, and implementing deliberate strategy. The constructed framework is based on the three articles of Floyd and Wooldridge, which include the four strategic roles mentioned above. Floyd and Wooldridge are the first scholars who discussed and developed this distinction between the strategic roles of middle managers. The reader may wonder why, if these articles were the basis for developing the constructed framework, they are included in the result of the constructed framework. These three articles are included in the results because this research could not state in the beginning whether these roles were mentioned in the literature by other researchers. Analyzing the results now, it is clear that the four strategic roles distinguished by Floyd and Wooldridge are also acknowledged in the literature as strategic roles of middle managers. Besides these three articles of Floyd and Wooldridge, the articles of Boyett and Currie (2004), Mantere (2008), and Shi et al. (2009) are the only articles that elaborate on all of the four strategic roles distinguished by Floyd and Wooldridge. Boyett and Currie, use the constructed framework of Floyd and Wooldridge to examine if parent-country nationals and host-country nationals middle managers’ roles complement each other and create a performance enhancing combination of location- and non-location-bound advantages. They used Floyd and Wooldridge’s framework to assess the contribution of parent-country nationals and host-parent-country nationals’ middle managers to international strategy, and then they consider how their respective roles influence their interaction.
In relation to the four strategic roles distinguished by Floyd and Wooldridge, Mantere (2008) elaborates on the enabling condition of the strategic roles. Mantere argues that the enablers could be seen as top management’s expectations of middle managers to perform one or more of the strategic roles. In contrast, the article of Shi et al. decomposes Gould and Fernandez’s five brokerage roles of middle managers into eight brokerage roles. Further, the article relates the four strategic roles distinguished by Floyd and Wooldridge as factors that facilitate or constrain the extent to which middle managers’ eight brokerage roles become either “tertius gaudens” or “terius iunges”. The other analyzed articles acknowledge only one or more of the strategic roles distinguished by Floyd and Wooldridge, or they acknowledge only the sensemaking/sensegiving role of middle managers. It could be said that Floyd and Wooldridge are pioneer regarding research of the strategic roles of middle managers. Many researchers have used these articles by Floyd and Wooldridge as the basis for further exploration of the strategic role of middle managers.
5.2.2 Championing Results
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Taking these issues into consideration, this research could not claim that the strategic role of championing is the most performed role of middle managers. The results of the championing role overshadowed that of the other strategic role of middle managers. The benefit of the fact that the championing strategic role of middle managers is being extensively analyzed/discussed is that it emphasizes that the championing role is one of the tasks of middle managers recognized in the literature. The downside is that the other strategic roles of middle managers are not receiving as much attention. This means that scholars interested in the strategic roles of middle managers who are trying to obtain more information about these roles can get the wrong impression because the existing literature focuses mostly on the championing role of middle managers.
5.2.3 Downward Role Results
The results concerning middle managers’ downward strategic roles (i.e., facilitating adaptability and the implementing deliberate strategy) are, in comparison with the upward strategic roles, notably lesser discussed in the literature, in particular the implementing deliberate strategy. This prompts the opposite question in relation to the championing role: Do middle managers in reality perform these tasks to a lesser extent than the other strategic roles, or is this result merely caused by what the researchers have chosen to do their research on? According to the literature, these results could be explained by the fact that organizations lately have been delayering and decentralizing, which causes the downward strategic roles of middle managers to become the lower level managers’ roles. If this is the real explanation, then the result of the downward roles is similar to what middle managers in reality do. The downward roles of middle managers should in that case be found in the literature about lower level managers, and it should state that they perform the indicated task of facilitating adaptability and implementing deliberate strategy. However, it is still a possibility that the results of the downward roles are caused by the choices made by researchers and do not accurately reflect reality. This would mean that there is not much known about these downward strategic roles of middle managers and the literature creates a false impression that middle managers do not fulfill these roles.
5.2.4 Sensemaking/Sensegiving
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existing literature not only acknowledges the active roles of middle managers, but it also illustrates that some strategic roles of middle managers can also be passive. It creates awareness that, when analyzing the strategic role of middle managers, it is important to analyze both the active and passive strategic role of middle managers.
5.2.5 Theoretical vs. Empirical articles
Another notable pattern found in the results is the predominance of empirical articles as opposed to theoretical articles. By comparing these two methods of research, the results indicate that more empirical articles have been written about the strategic roles of middle managers than theoretical articles about the strategic role of middle managers. This indicate that researchers are not constructing new concepts/testable propositions in order to do more research on the strategic role of middle managers. Therefore, the existing literature about the strategic role of middle managers is not expanding regard to theoretical articles. The possibility exists that researchers are constructing concepts/testable propositions, but they have chosen to immediately conduct research to test these concepts/testable propositions. Did could be the reason why there are more empirical articles about middle managers. Aside from this, only a few researchers have chosen to write theoretical article about the existing literature on middle managers strategic roles, summarizing/reviewing what is known about the strategic role of middle managers. The benefit of summarizing/reviewing the existing literature is, it give the possibility to find gaps in the existing literature. The state of knowledge in relation to this pattern is, it implies that the existing knowledge is based on what have been tested by researcher by means of case study, interviews, conducting surveys, etc. On the other hand there may be gaps in the literature that is still unknown.
5.2.6 Chosen Topics of Researchers
The last notable pattern is what the researchers have chosen to write about. Some researchers tend to write about the same topics. For example, Floyd and Wooldridge have written about the strategic roles of middle managers in three articles. In comparison to Floyd and Wooldridge, Balogun continues to write about the sensemaking/sensegiving role of middle managers. This is also the case for Dutton, who continues to write about selling issue to the top management. One possible explanation for this pattern is that researchers tend to choose topics in their own specialization field. The downside is that other topics are not discussed. Another explanation is, the large demand for the chosen topics, since they have not been analyzed thoroughly. Some of the reasons these above researcher gave for conducting research on the same topics are: they found gaps in the existing literature, they research what other authors do not address in their articles, and because commonly strategic roles of senior managers are examined and not the strategic roles of middle managers. Ideally, researchers should take risks and write about topics outside their comfort zone, so that the existing literature can expand. This would allow new strategic roles to be distinguished and presented in the literature. The benefit that researcher continue to write about the same topics is that the state of knowledge about these topics is broad. On the other hand, this entails that other topics are underdeveloped in the case that there is few literature about them.
5.3 Middle Managers in Relation to Management Accounting Change
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evaluation and compensation; (4) sufficient internal resources; (5) training in designing, implementing and using cost management systems; (6) non-accounting ownership; and (7) consensus about the clarity of the objectives of the cost management systems (Shields, 1995), could be factors and enablers for middle managers. In relation to the strategic middle managers roles, these behavioral and organizational variables is similar to what Mantere (2008) summarize in the literature as enablers for the four strategic roles (synthesizing information, championing, facilitating adaptability, and implementing deliberate strategy) introduced by Floyd and Wooldridge. In this paragraph an attempt is made to link the behavioral and organizational variables mentioned by Shield (1995) in the management accounting literature to the factors and enablers mentioned by Mantere (2008) in the literature on middle managers.
According to Mantere, “top management support” is a valuable variable for middle managers in fulfilling all of the strategic roles in the constructed framework. The chance that a middle manager will be able to fulfill a strategic role without the support of the top management is minimal. Regarding the synthesizing role of middle managers, Mantere indicates that middle managers expect responsiveness, that is, they expect top management to respond to feedback and communicate the success and failure of past actions. In relation to the championing role of middle managers, he states that middle managers expect inclusion, that is, where top management invites and expects middle managers to participate in planning. Further, Mantere indicates in his article that middle managers expect refereeing, where top management reacts to new ideas, refereeing between ideas. In the downward role of the middle managers, he asserts that middle managers expect respect from the top management, where they acknowledge the value of the everyday work as implementing activity that is relevant to the strategy. In addition, Mantere claims that middle managers expect trust when they are fulfilling the role of facilitating adaptability. Furthermore, middle managers expect that top management encourages new ideas, as well as open communication regarding success and failure in experimentation.
The variables, “linkage of the cost management systems, particularly quality and speed strategies” and “linkage of the cost management systems to performance evaluation and compensation” relates to what Mantere refers to as contextualization in the process of implementing, where top management makes an effort to link the strategy to relevant work contexts. The variable “sufficient internal resources” is similar to what Mantere describe as resource allocation in the implementing process, where middle managers receive explicit top management authorization to make changes to everyday work. According to Mantere, resource allocation reflects changes needed in everyday work. In the case of the last three behavioral/organizational variables, “training in designing, implementing and using cost management systems; non-accounting ownership; and consensus about clarity of the objectives of the cost management systems”, the literature reports that middle managers are fulfilling the roles of sensemaking/sensegiving the changes in the organization.
5.4 Linking Middle Managers Strategic Roles to an Implementation Process
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accounting. The literature about middle managers only address the strategic roles of middle managers, while the literature of management accounting in most cases only address the technics to implement change in management accounting. In this paragraph an attempt is made to link the strategic roles of middle managers to an implementation process to illustrate which strategic roles middle managers would likely perform in a stage implementation process. In the linking process of the middle managers strategic roles to the six stage implementation process, the strategic roles of middle managers mentioned in the conceptual framework where used (see Figure 3).
28 Figure 3.
Routinization The complete replacement of
the old work practices by the new systems. Initiation Pressure to change arises from internal needs or external competitive threats and a search for solutions begins. Adoption The selection of a proposal solution and the decision to invest resources to facilitate change occur. Adaptation Where in the process of changing, unforeseen needs or system shortcomings are identified. Acceptance The minimal level of use and
maintenance the new technology requires to be sustained. Synthesizing Information Communicating the activities of competitors and suppliers; and asses changes in the external environment and gather information on the feasibility on new programs. Championing Proposing new programs to higher level managers. Try to justify and define the new program, evaluate the merits of the new program and search for new
opportunities.
Sensemaking/ Sensegiving Making sense of the change process
to identify problems.
Facilitating Adaptability Locate and provide
resources for trail projects and relax regulations to get the new project
started
Six Stage Implementation Process by Anderson (1995) from the Management Accounting Change Literature Combined with the Strategic Roles of Middle Managers.
Sensemaking/ Sensegiving Explaining the change to lower level management
so that the new system can be accepted. Infusion The IT application is used often in an unanticipated way to improve work effectiveness and seamlessly integrate with other organizational systems. Implementing Deliberate Strategy Monitoring the activities to support the top management
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6. Discussion and Conclusion
The last chapter of this study is setup based on the important topics mentioned by Hess (2004) for writing an effective discussion. First of all, the findings of this study will be presented. Then the meaning and importance of the findings will be discussed. The chapter will continue by elaborating on the topics, the findings in relation to existing studies, alternative explanation for the findings, the relevance of the findings, the study’s limitations and suggestions for further research. This chapter will end with a conclusion.
6.1 Findings of the Study
Based on the analyzed literature, the findings of the constructed framework suggest that middle managers perform the strategic role of championing more in comparison to the other strategic roles of middle managers. Second, the findings suggest that the downward roles of facilitating adaptability and in particular the strategic role of implementing deliberate strategy are scarcely being performed by middle managers. Third, the findings demonstrate that there are factors and enablers known for the strategic roles of middle managers. In addition, the findings suggest that middle managers perform strategic roles in both active and passive ways. Moreover the articles of Floyd and Wooldridge, wherein they define and elaborate on the strategic roles synthesizing information, championing, facilitating adaptability, and implementing deliberate strategy, are the basis from which other researchers further analyze the strategic roles of middle managers. Finally, the results indicate that there are far more empirical articles in compared to theoretical articles.
6.2 The Meaning and Importance of the Findings
The above findings indicate that middle managers fulfill upward strategic roles more often in comparison to the downward strategic roles. In relation to change process of management accounting, the following assumption can be made based on the findings of the analyzed articles: middle managers who are involved in a management accounting change process are more engaged in championing ideas to the top management than implementing the changes. Middle managers fulfill their tasks using both active and passive approaches. These findings answer the research question and they fill a part of the gap in the literature about the strategic roles of middle managers in relation to a management accounting change process.
6.3 Findings in Relation to Existing Studies
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Wooldridge, Floyd, that more research should be done on middle managers (strategic) roles in organizations.
6.4 Alternatives explanation of the Findings
The findings indicate that middle managers are performing the role of championing more often in comparison to the other strategic roles. The possibility exists that the obtained results would be different if researchers chose to write only about the other strategic roles of middle managers. In that case, this research would note that another strategic role is the most performed strategic role of middle managers. Second, the framework may have obtained different findings had the methodology differed, for example if journals with lower ratings had been considered. The choice was made to only use highly rated journals. By including articles from lower rating journals in the conceptual framework, the results could be completely different.
6.5 The (Practical) Relevance of the Findings
The theoretical relevance of this study is to close the existing gap in the literature in relation to middle managers’ strategic role in a management accounting change process. This research, in comparison to the existing literature, also acknowledges the value of middle managers in organizations and their linking pin position. This research also acknowledges the contribution of middle managers to the management accounting change process by making an effort to relate their strategic roles to the stage process in management accounting change. In addition, middle managers should self-identity themselves in at least one of the upward/downward strategic roles mentioned in the literature. This research also gives them the opportunity to compare their strategic roles to the strategic roles of other middle managers
6.6 Suggestions for Further Research
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In relation to the patterns discussed in the analysis, researchers can make further use of the strategic roles of middle managers as defined by Floyd and Wooldridge to explore and conduct research on the strategic role of middle managers. Further, researchers should take the other strategic roles besides championing into consideration, specially the downward roles of middle managers. In addition, when conducting research, researchers have to take into account that middle managers fulfill both active and passive roles. Moreover, researchers should address the behavior of middle managers in relation to strategy and management accounting changes, so they can analyze the passive roles of middle managers. In relation to the difference between theoretical versus empirical, researchers should make an attempt to write more theoretical articles about the strategic roles of middle managers. In conclusion, the existing literature would benefit if researchers made an effort to do research outside their comfort zone. By doing this, the gap in the existing literature would close more rapidly.
6.7 The Limitations of the Study
As Cooper and Schindler (2006) mentioned, “All research studies have their limitations, and the sincere investigator recognizes that readers need aid in judging the study’s validity”. In this research the limitations are the time available for the research and the research method that has been used. This research is literature based, thus, there has been no empirical research done during the whole writing process. The available time was 3-4 months to conduct this master thesis. The criteria mentioned in the methodology could have been the cause of the limited findings, since the research is only based on articles from highly rated journals. The possibility exists that if some of the criteria were relaxed another conclusion could be extracted from the articles.
6.8 Conclusion
In Chapter 2 the following research question was constructed:
“In a management accounting change process, what is the strategic role of the middle managers?” Based on the results and analysis made in the previous chapters, the above research question can be answered. Middle managers’ strategic role during a management accounting change process consists of facilitating, synthesizing, championing and implementing, sensemaking and sensegiving. According to the results, middle managers are mostly engaged in performing the strategic role of championing. Secondly, they are engaged in performing the roles of sensemaking and sensegiving during a change process. Depending on the phase of the management accounting change process, middle managers are engaged in a different strategic role. Furthermore, there are some factors and enablers that affect middle managers when they intend to fulfill some of the strategic roles. The indicated enablers given in the results could be seen as expectations of the middle managers from the top management. The factors mentioned by Mantere (2008), must also be taken into consideration because they have an effect on strategic role the middle managers may or may not fulfill.
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