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

Abstract

This paper examines the use of accounting in managing the co-existence of different institutional logics in a German higher education institution (HEI), and its impact on the HEI. The study is of particular interest as the HEI analyzed pursued its own corporatization through a reorganization from a state into a foundation university. We show that this corporatization through the adoption of new public management related ideas leads to institutional complexity arising from the co-existence of extant state and emergent business logics. Our study suggests that HEIs may deploy particular accounting practices shaped by business logic only superficially, so as to satisfy stakeholders such as governmental authorities in order to enhance their legitimacy following a self-imposed reform, while the operation of the HEI remains rooted in state logic. Specifically, the findings suggest that in the case of actual changes to the budgetary process arising through the corporatization and an emergent logic, failure to replace abandoned accounting practices shaped by a previously dominant logic with equivalent practices adhering to either extant or emerging logic(s), may put the organization at risk. Overall, our study contributes to a better understanding of the dangers of an organizational response to institutional complexity, referred to as reactive decoupling, in the management of institutional complexity and points to its negative impact on organizations' hybridization capability.

Reporting practices in situations of conflicting institutional logics: the case of a German federal authority

“…Chenhall et al (2013) show how debates about the design and operation of accounting practices can be productive and destructive for compromise between conflicting logics. Chenhall et al (2013, p. 271) note that while debate over accounting practices “has the potential to facilitate productive friction, this depends on whether and how the convention comes to be (and continues to be) viewed as an ‘acceptable’ compromise.” Therefore, it is not surprising that other studies show that multiple logics cannot always be sustained over time (Reay and Hinings, 2005; Conrath-Hargreaves and Wüstemann, 2019a).…”

“…Decoupling is a process by which organisations separate their normative or prescriptive structures from their operative actions – the way they actually do things (Meyer and Rowan, 1977; Bromley and Powell, 2012). Thus, when facing institutional conflicts, organisations symbolically endorse practices legitimised by one logic while enacting practices prescribed by another logic (Lander et al , 2013; Conrath-Hargreaves and Wüstemann, 2019a). A major assumption of decoupling strategies is that all members of the organisations adhere to the same “old” logic and are willing to protect it.…”

Organisational hybridity and fluidity: deriving new strategies for dynamic knowledge management

“…Contradictions may take place at the individual level, such as between managerial and professional logics (e.g., Noordegraaf, 2015). Moreover, at the organisational level, contradictions may arise, such as between business and non-profit logics (e.g., Conrath-Hargreaves & Wüstemann, 2019;Skelcher & Smith, 2015) or professional service and commercial logics (Greenwood et al, 2011). Hybrids incorporate elements from different institutional logics (Battilana & Dorado, 2010), and, therefore, it is critical that knowledge management understand how institutional logics enable and constrain social action (Thornton & Ocasio, 2008) to determine how organisations should be structured, steered, and controlled (Bacharach & Mundell, 1993).…”

“…Recently, many studies have elaborated on the implications of co-existing institutional logics for management accounting (e.g., Kastberg & Siverbo, 2016), performance management (e.g., Giacomelli et al, 2019), and organisational identity (e.g., Kallio et al, 2020). The contexts of these studies are typically knowledgeintensive and professional industries or organisations, such as the finance sector (Battilana & Dorado, 2010;Lounsbury, 2002), health care (D'Aunno et al, 2018;, law firms (Cooper et al, 1996), higher education (Conrath-Hargreaves & Wüstemann, 2019), and various types of public-private partnerships (Johanson & Vakkuri, 2017) in which institutional complexity requires a new kind of organisational response (Greenwood et al, 2011). Despite the dominance of knowledge-intensive sectors and organisations in the literature on institutional logics, there are only a few studies explicitly investigating the implications of institutional logics for knowledge management (e.g., Currie & Suhomlinova, 2006;Mangen & Brivot, 2015;Oostervink et al, 2016).…”

Accounting for the Public Sector at a Time of Crisis

“…Certainly, this is an easier way to operate, and one which is likely to be embraced by central university managers who know little about academic research and wish to exert control over academics (Muller, ). The tensions between managerialism and the desire to protect traditional academic values are explored in both the German system (Conrath‐Hargreaves and Wüstemann, ) and in the UK system (Du and Lapsley, ) in this Special Issue…”