A Field Study of Control System “Redesign”: The Impact of Institutional Processes on Strategic Choice*

Abstract

Abstract. This paper studies the role of an organization's accounting control system (ACS) as part of an interrelated control “package,” in which other control systems function either as substitutes or complements. Drawing on resource dependence and institutional theories, it argues that this control mix is not only contingent on the organization's technical environment but also on its institutional environment. In addition, the paper draws on empirical evidence to demonstrate how the design of the “package” is actively shaped by the strategic choices of its dominant coalition. The empirics are based on a longitudinal field study of one large, public teaching hospital in Australia that underwent material changes in its governance structure, culture, and accounting control system. Résumé. Les auteurs étudient le rôle du système de contôle comptable d'une organisation, à titre d'élément d'une « famille » de systèmes de contrôle reliés entre eux à l'intérieur de Iaquelle les autres systèmes de contrôle jouent le rôle de substituts ou de compléments. S'inspirant de la théorie de la dépendance des ressources et de la théorie institutionnelle, ils affirment que cette combinaison de systèmes n'est pas seulement tributaire de l'environnement technique de l'organisation, mais de son environnement institutionnel. Ils se fondent, en outre, sur des constatations empiriques pour démontrer comment la structure de la « famille » de systèmes est activement façonnée par les choix stratégiques du groupe dominant. Les données empiriques proviennent d'une étude longitudinale sur le terrain, menée auprès d'un important hôpital public universitaire australien dont la structure de régie, la culture et le système de contrôle comptable ont connu des transformations majeures.

Tweaking the entrepreneurial orientation–performance relationship in family firms: the effect of control mechanisms and family-related goals

“…Drawing on accounting literature (e.g. Malmi and Brown 2008), the research at hand employs Abernethy and Chua's (1996) definition of control mechanisms as systems ''designed and implemented by management to increase the probability that organizational actors will behave in ways consistent with the objectives of the dominant organizational coalition'' (p. 573). So far, prior family business research predominantly addressed the use of control mechanisms from an agency theory perspective (Jensen and Meckling 1976;Schulze et al 2001).…”

Context and change in management accounting and control systems: a case study of Telecom Fiji Limited

“…To understand accounting control and environment relationships, a consideration of both the technical and institutional environments is essential (Abernethy & Chua, 1996). The central argument of this chapter is that changes at FPTL were Inside FPTL, the changes were neither quickly nor universally accepted.…”

“…The literature dealing with MACS changes has mostly portrayed changes as occurring without much resistance (Abernethy & Chua, 1996;Soin et al, 2002;Busco et al, 2006). As…”

“…While new institutional sociology theory has made a significant contribution to the analysis of accounting practices, it has been criticised as failing to capture human agencies and intra-organisational power relations (Abernethy & Chua, 1996;Seo & Creed, 2002;Dillard, Rigsby & Goodman, 2004). New institutional sociology theory needs to be expanded to capture human agents in the change process and this can be done through studying ongoing contradictions that carve changes through institutional entrepreneurs and external change agents (Seo & Creed, 2002).…”

“…Initial change to commercial MACS routines was resisted and it took some years for TFL actors to assimilate commercial MACS routines when the organization was corporatised. The literature dealing with MACS changes has mostly portrayed changes as occurring without much resistance (Abernethy & Chua, 1996;Busco, Riccaboni & Scapens, 2006). However, MACS changes at TFL took several years to be institutionalized, partly because of cultural and political factors specific to Fiji.…”