Accounting for Rationality: Double-Entry Bookkeeping and the Rhetoric of Economic Rationality

Carruthers, Bruce G.; Espeland, Wendy Nelson

doi:10.1086/229739

Cited by 427 publications

(256 citation statements)

References 42 publications

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“…Such an approach contrasts with much of the literature which sees the development of accounting technique as a precursor or facilitator of the capitalist spirit of rationality (Sombart, 1916, Weber, 1927, Winjum, 1971, or indeed the notion of capitalism itself (Chiapello, 2007). It is however, consistent with interpretations that allow the co-existence of techniques in the same historical period so that reasoning itself is not a sufficient explanatory variable (Lemarchand, 1994), or a legitimation process for pre-existing moral attitudes (Carruthers and Espeland, 1991), or as signatures for categories of economic organisation (Bryer, 2000a(Bryer, , 2000b.…”

Section: Introductionmentioning

confidence: 79%

Calculating profit: A historical perspective on the development of capitalism

Toms

2010

Accounting, Organizations and Society

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The paper introduces the notion of different methods of calculating and analysing profitability as signatures of capitalism at different stages of development. Its point of departure is BryerÕs thesis of the capitalist mentality, which is subject to theoretical and empirical critique and developed in new directions. Interactions between the development of the productive forces and the socialisation of capital ownership jointly impact on these signatures, such that profit calculations are historically contingent. Aspects of feudalism, particularly restrictions on usury impacted upon accounting calculation, retarding their development. In the industrial revolution calculations reflected the scale and scope of specialised investment in plant, whilst the progressive socialisation of capital prompted a separate set of calculative practices. It was only in the twentieth century, with the unification of large scale industry and finance capital that the modern notion of profitability as return on capital employed finally developed.

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Section: Introductionmentioning

confidence: 79%

Calculating profit: A historical perspective on the development of capitalism

Toms

2010

Accounting, Organizations and Society

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“…strategy, wherein legitimacy and change must be precisely counterbalanced (Aldrich and Fiol 1994;Lounsbury and Glynn 2001). However, institutions emerge and evolve gradually (Carruthers and Espeland 1991), and the precarious balance between legitimacy and innovation must constantly be recalibrated. Strategies effective at early stages of institutionalization are unlikely to be as effective in later stages.…”

Section: Resultsmentioning

confidence: 99%

The Role of Analogy in the Institutionalization of Sustainability Reporting

Etzion

Ferraro

2010

Organization Science

332

319

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We study institutional entrepreneurship in an emergent field by analyzing the case of the Global Reporting Initiative (GRI) and its efforts to purposefully institutionalize the practice of sustainability reporting. We suggest that analogies affect institutionalization processes through two mechanisms. In early stages of institutionalization, analogy operates primarily as a normative mechanism and adoption is driven mainly by an instrumental logic. This emphasis on similarity to existing institutions stresses conformity and promotes legitimacy. Yet, analogies can also have a cognitive effect on institutional design, especially once initial acceptance from the environment has been secured, by directing attention towards incongruences between the emergent institution and its analogical source. Institutional entrepreneurship can spur innovation and departure from existing institutions by highlighting limitations of the analogical source and providing a compelling value-rational argument underscoring the worth of the new institution. This theoretical contribution helps explain how analogies to existing institutional practices can both provide legitimacy to novel institutions and constitute the basis for a creative process of institutional design.3 Institutional entrepreneurship is a delicate balancing act between two conflicting tasks. On the one hand institutional entrepreneurs must disguise the radical nature of their enterprise in order to engage supporters and evade the wrath of incumbents, while on the other they cannot adhere too closely to existing practices, for by doing so, they will not be able to further any meaningful change (Aldrich and Fiol 1994). Institutional entrepreneurs need to become skilled cultural operatives, fashioning stories in order to attract resources. In this work it is essential to "balance the need for legitimacy by abiding by societal norms about what is appropriate with efforts to create unique identities that may differentiate and is relatively well-studied. However, the role of analogy in shaping institutional design has not been explored in depth. Tropes like simile, analogy and metaphor can help gather political support and legitimacy, but they also lead to analytical closure (Oswick, Keenoy and Grant 2002). Remaining within the confines of a clearly defined analogy cannot lead to evolution to profoundly different institutions (Hoffman and Ventresca 1999). Furthermore, the analogy cannot be discarded at later stages (Ocasio and Joseph 2005) when deeper institutional change is being advocated, as cognitive lock-in has already limited external constituents' receptivity to alternative scenarios. How, then, do analogies shape the construction and evolution of proto-institutions? 4In this article we address the role of analogies in institutional change by presenting a longitudinal case-study of the Global Reporting Initiative (GRI) and its strategies to promote and institutionalize sustainability reporting practices. GRI, a non-profit organization headquartered in Amsterdam, ...

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“…Long-term solvency issues have been given greater importance than before. Thus, the Swedish experience may be cited in support of claims that the significance of double-entry bookkeeping is not limited to its technical features but also extends to its rhetorical or pedagogical aspects (see Carruthers and Espeland 1991).…”

Section: Concluding Commentmentioning

confidence: 99%