Ordering collective performance manipulation practices: How do leaders manipulate financial reporting figures in conglomerates?

Abstract

International audienceThis article explores some of the resources, tactics and skills used by managers involved in the manipulation of performance reporting by looking at management accounting practices in a conglomerate. Prior research on reporting manipulation in large corporations has focused on why executives manipulate figures. The present paper documents how BU leaders compensate for the uncertainties impacting the performance of their activities. Empirical evidence comes from a field study of a diversified French conglomerate. Performance reporting practices within and between a parent company and two subsidiaries are analyzed. The article shows that the conglomerate constitutes a strategic action field ( Fligstein and McAdam, 2011) where skillful group leaders use the resources granted by their power position to frame other actors' interests and identities to initiate stable cooperation around manipulation practices. This study clarifies the collective and collaborative dimensions of practices granting greater control over reporting figures.Cet article étudie les ressources, les tactiques et les savoir-faire mobilisés par les managers impliqués dans le pilotage des indicateurs de performance en observant les pratiques de reporting au sein d'un groupe de sociétés. Les recherches portant sur le pilotage des chiffres dans les grandes entreprises ont jusqu'à présent surtout insisté sur la question du " pourquoi " observe-t-on des manipulations. Cet article s'intéresse au " comment " les responsables de centres de responsabilité compensent les incertitudes qui pèsent sur les performances de leurs activités. Les données empiriques proviennent d'une étude de cas d'un conglomérat français. Les pratiques associées au reporting des indicateurs de performance entre une maison mère et deux de ses filiales sont étudiées. L'article montre que le groupe de société constitue un " champ d'action stratégique " (Fligstein and McAdam, 2011) sur lequel des managers " socialement compétents " se saisissent de ressources liées à leur position hiérarchique pour orienter les intérêts et l'identité des autres acteurs en faveur de coopérations stables permettant un pilotage des données du reporting. Cette étude clarifie le caractère collectif et collaboratif des manipulations faites des données dans le but de se doter d'un plus grand contrôle sur les chiffres du reporting

Systems of secrecy: Confidences and gossip in management accountants’ handling of dual role expectations and MCS limitations

“…Accounting is therefore confirmed as a technology for building trust not merely in inter-firm relationships (see Langfield-Smith and Smith, 2003;Velez et al, 2008;Vosselman and Van der Meer-Kooistra, 2009) (Hartmann and Maas, 2010). The case also confirms that arrangements exist to collectively manage part of the financial latitude available in peripheral units (Puyou 2014). However, the Elevator case is original in this respect because it shows that this can be done through a careful filtering of information regarding managers' agendas and not necessarily through consensus or the alignment of their preferences.…”

How management accountants exert influence on managers – a micro-level analysis of management accountants’ influence tactics in budgetary control meetings

“…Nevertheless, management accountants have to flexibly and situationally decide what role should be emphasized more in a particular situation and respectively adapt their influence tactics. We suggest that this specific finding also has implications for the education or training of management accountants who need to be adequately prepared – especially in terms of their political and social skills (Fligstein, 2001; Puyou, 2014) – to “juggle” with different orientations or roles and develop interactional capabilities as well as appropriate tactics to deal with their sometimes-difficult position. Future research could in this vein examine, for instance, how junior management accountants learn to cope with this challenge and how senior management accountants or Chief Financial Officers train them to do so.…”

You too can have a critical perspective! 25 years of Critical Perspectives on Accounting

“…Traditional enterprises have been transformed into speculators on financial markets (Froud et al, 2004). In this context, profit manipulation, a practice usually seen as problematic, is seen as ethical (Macintosh, 1995) in that it allows accountants to protect the core business from the unreasonable expectations of their headquarters (Puyou, 2014) and shareholders (Lambert & Sponem, 2005).…”