Institutional Logics, ICT and Stability of Management Accounting

Abstract

The purpose of this paper is to study the institutional logics of how and why two case units in the Finnish Defence Forces have reacted differently to external pressures originating from the State Audit Office to change their management accounting systems. The situation is made complex due to the fact that in military organisations, accountants' tasks have traditionally consisted of bookkeeping and financial reporting, while management accounting tasks especially (e.g. planning and control) have been performed predominantly by military personnel, who can be called hybrid accountants. The data for this study consists of project memos and interviews with people involved in designing and implementing enterprise-resource-planning (ERP)-linked cost accounting and reporting systems. In the case unit where management accounting and control had become institutionalised as a part of the uniformed officer's professional sphere, various resistance strategies (i.e. compromise strategy/pacifying tactics, avoidance strategy/buffering tactics and defiance strategy/dismissing tactics) were adopted. However, where this was not the case, the response was acquiescence. Despite the differences in responses to institutional pressure, the outcome for management accounting was the same. In the first case, demands for change were resisted, and in the second case, the old management accounting system was transferred into new information and communication technology (ICT) infrastructure without any significant change in content.

Institutional Logics and Responses to Performance Measurement Systems

“…The concept of institutional logic has received increasing attention in accounting studies (Thornton, 2004; Lounsbury, 2008; Hyvönen et al, 2009; Reay and Hinings, 2009; and ter Bogt and Scapens, 2009). Institutional logic is a common guiding decision‐making principle for most organizational actors (see Lounsbury, 2008; and ter Bogt and Scapens, 2009).…”

“…The different organizational responses to institutional pressures (Oliver, 1991) allow performance measurement systems (PMSs) to be used in different ways in organizations. Moreover, PMSs confront varying organizational pressures, legitimations and logics in the public sector (Hyvönen et al, 2009; Rautiainen, 2010; and ter Bogt and Scapens, 2009). The resulting variation in PMS use can be called ‘practice variation’ (see Lounsbury, 2001 and 2008; and Johansson and Siverbo, 2009).…”

Institutional Logics in Police Performance Indicator Development: A Comparative Case Study of Spain and Finland

“…Further, there may be various professionally and organizationally developed institutional logics, i.e. specific decision-making principles, in the processes of selecting and using KPIs within organizations (see Hyvönen, Järvinen, Pellinen and Rahko, 2009;Lapsley, 2008;Modell, 2009;Reay and Hinings, 2009;Rautiainen and Järvenpää, 2012).…”

Risk-based management control in the public sector in Poland

“…Previous studies have shown that different responses can occur even within a single public sector organisation, when it is large enough (Hyvonen et al, 2009). For example, actor-network theory can be used as a conceptual framework to analyse the adoption process.…”