IPOs, institutional complexity, and management accounting in hybrid organisations: A field study in a state-owned enterprise in China

Abstract

An initial public offering (IPO) is an important milestone for an organisation. In addition to pressures from capital markets unavoidably imposed onto newly listed firms, other beliefs, rationales, and prescriptions deriving from the institutional environment where they operate may prevail and guide organisational practices. Drawing on the perspective of institutional logics, this paper investigates the implementation of management accounting (MA) within firms that face multiple institutional demands following an IPO. By studying a Chinese state-owned enterprise (SOE) that was recently listed, this paper demonstrates that the interplay of multiple logics, including State, corporate, and capital market logics, shapes the manner in which MA operates. This study also reveals that different MA practices tend to encompass institutional demands in diverse ways and to varying degrees. However, regardless of whether MA practices are implemented to simply respond to plural institutional expectations, connect different organising principles, or balance elements of multiple logics, they function as hybrid practices, helping to maintain the hybrid nature of the firm as a 'listed SOE'. This study makes two main contributions. First, it extends the literature on IPOs by providing an in-depth analysis of how MA is implemented and why it functions in particular ways in firms following an IPO, and by exploring the influences of a wider set of beliefs, rationales, and expectations on the MA practices of newly listed companies. Second, by drawing on the perspective of institutional logics, this paper extends prior research addressing the dynamics between institutional complexity and MA adoption by individual organisations and enriches our understanding of how hybrid organisations may maintain their hybridity through the deployment of MA practices.

Managing Multiple Institutional Logics and the Use of Accounting: Insights from a German Higher Education Institution

“…The initial starting point of the research was the organizational crisis that Alpha experienced in 2015, and which resulted in a complete spending freeze for all faculties between September and December of that year. Thus, the majority of data was collected ex‐post, that is, through partial observation of the crisis as it occurred and partial retrospective reconstruction through interviews (Liguori and Steccolini, ; Dai et al ., ). We acknowledge that this reconstruction of events ‘could be influenced by agents’ ex post rationalization' (Liguori and Steccolini, , p. 32) and might lead us to draw inaccurate conclusions, as interviewees might recall events under the influence of uncontrollable external factors given that it is some time since the event took place (Glick et al ., , p. 302).…”

“…() and Dai et al . (), we tried to identify the potential effects of multiple logics on Alpha and its accounting, as well as the use of accounting in the management of logics through discourses in our interviews, but without directly asking about these logics. Following Amans et al .…”

“…This process of combining and layering practices from multiple logics at the organizational level, which has been observed to also result in hybrid practices (Miller et al ., ; Dai et al ., ), has often been labeled ‘blended hybridization’ (Greenwood et al, , p. 352). Fossestøl et al .…”

“…There is an emerging stream of research in the accounting literature investigating its role in institutional complexity. Scholars have highlighted that institutional complexity leads to variations in accounting practices (e.g., Lounsbury, ; Miller et al ., ; Ezzamel et al ., ; Dai et al ., ) . In addition, the literature has emphasized that accounting may be used as a mechanism for managing institutional complexity through decoupling (Siti‐Nabiha and Scapens, ), compromise (Ezzamel et al ., ; Amans et al ., ), or a combination of multiple logics (Busco et al ., ).…”

“…Second, conceptually, the present paper contributes to the literature on the role of accounting in organizational responses to institutional complexity by drawing on the institutional logics perspective (e.g., Carlsson‐Wall et al ., ; Narayan et al ., ). Recent accounting research has primarily focused on the various ways in which the hybrid nature of organizations impacts accounting and how accounting may be used to maintain the hybrid nature of organizations (e.g., Amans et al ., ; Dai et al ., ). By contrast, we aim to enhance the understanding of how the deployment of accounting in organizational responses to institutional complexity may impact organizational hybridization.…”