Vernacular budgeting and accounting routines – a longitudinal constructive case study

PurposeThis case study aims to report a longitudinal analysis of the development and use of local “vernacular” accounting practice and a digital rolling-forecast system known as TeamBudget in a public sector organization.Design/methodology/approachThe study employs the constructive research approach which utilizes participative observation in the development of TeamBudget over the 15 years since 2004. The empirical data utilized includes eight interviews and documentary data for the system created.FindingsThe study demonstrates how the actions of employees responsible for developing a locally relevant financial planning system, TeamBudget, facilitated the emergence of new accounting routine…

Legitimacy and relevance of a performance measurement system in a Finnish public-sector case

Purpose This study investigates the difficulties involved in translating stakeholder expectations into action and maintaining legitimacy through the use of a performance measurement system (PMS) created in a Finnish regional development company (RDC). This longitudinal case study illustrates the fluctuating and socially constructed nature of legitimacy in the public sector. Design/methodology/approach This qualitative case study longitudinally analyzes the various developments occurring during and after the development of a PMS system for the case organization. Empirical data include interviews, workshops, observation and other materials relating to the case organization. Findings The init…

Business intelligence in decision making in Finnish enterprises

This exploratory study focuses on Finnish enterprises and examines how and why they are applying business intelligence today. Especially the process from data into knowledge and how business intelligence is utilized in decision making have been studied. We observed that BI tools improve the speed and quality of decision making and BI tools were coupled with actual decision making. BI tools are used frequently but those are only means to an end and in order to examine how they are used to attain specific outcomes. Most of the end users utilised the loosely-coupled approach, but half of the respondents also utilised BI with tighter coupling, structured human decisions, by using customised ana…

Cost consciousness: conceptual development from a management accounting perspective

Purpose – This paper aims to take note of the need to better understand cost consciousness from a management accounting perspective and serves as an exploratory study striving to analyze how the notion has been addressed by management accounting scholars. Design/methodology/approach – This paper presents the findings of a thorough literature review identifying the drivers, interpretations, definitions and results which management accounting scholars have associated with cost consciousness. Findings – This paper has synthesized the definitions and interpretations by considering their conceptual broadness and the subjects that cost consciousness characterizes. In addition, various potential …

Conflicting interests but filtered key targets: Stakeholder and resource-dependency analyses at a University of Applied Sciences

Stakeholder theory (SHT) emphasizes that different stakeholders and their interests need to be identified and addressed to maximize firm performance. This emphasis can make the design of performance measurement systems (PMS) challenging because the interests of stakeholders are often in conflict. Based on previous research and using stakeholder and resource dependency theories, we develop a theoretical model suggesting that resource dependency acts as a “filter” in selecting which of the PMS design measures are emphasized for decision making. We find various conflicting interests between stakeholders in our case organization (a unit of University of Applied Sciences in Finland) that affecte…

A framework for a network-level performance measurement system in SME networks

The present study aims to present a theoretical framework for a network-level performance measurement system. The suggested framework for the performance measurement system is composed of the factors that enable and cause the productivity and profitability of the network form of organisation. The framework developed in this study can be divided into six subdimensions: (1) network culture, (2) resources and competences, (3) models of action, (4) internal processes, (5) customer perspective and (6) financial indicators of the network. We argue that this framework provides research opportunities to study the performance of the network form of organisation; but even more importantly, it provide…

(Un)Routinization of the Environmental Performance Measures – A Case Study; BSC Rules but Does not Routinize

This study focuses on the (un)routinization of environmental performance measures (EPMs). It studies how new environmental measures were implemented within the new environmental management system (EMS) and how they became connected with the financial measures, like cost savings and profitability. By doing so, they were connected to the taken-for-granted profit orientation of the case company in order to overcome these values and to make them succeed in organization. Later on these new measures were also included in the new BSC. In conditions of the profit oriented taken-for-granted values, the BSC locked the rule status of the environmental measures, but it locked them at the operational le…

Antenarratives in Ongoing Strategic Change : Using the Story Index to Capture Daunting and Optimistic Futures

Strategic organizational change is a complex, future-oriented phenomenon that is critical for any organization. Traditional means of inquiry have struggled with the difficulty of capturing the future; thus, the methods for managing things to come remain scarce. In this chapter, we contribute to managing strategic change, and thereby the future of the organization, by developing the Story Index (SIX) method. The method facilitates a better understanding of how organizational change takes shape in the discursive reality before materializing in concrete terms. SIX is an analytical process combining antenarratives and narrative rationality to reveal the emerging meanings and rationales of chang…

Employee Sensemaking on the Importance of Sustainability Reporting in Sustainability Identity Change

This study examines employee sensemaking processes in order to understand the role of sustainability reporting in organizational identity change. Through an analysis of 52 interviews with employees in two Finnish companies we develop sensemaking frames for understanding the role of sustainability reporting in organizational identity change. The three sensemaking frames are individualistic, relational and decoupled. Each of these sensemaking frames differs in stakeholder orientation. They indicate that sensemaking influences the interpretation of how important sustainability reporting is for organizational identity change towards sustainability. The study showed how the individualistic and r…

Legitimointistrategioiden käyttö kuntien ympäristöraportoinnissa

Legitimation strategies in the environmental reports of Finnish townsThis paper focuses on the legitimation strate­gies used in the environmental reports of the five biggest towns in Finland. The data consist of environmental reports published by Helsinki, Tampere, Espoo, Vantaa and Oulu. The results of the content analysis show that the towns use strategies whose purpose is to modify the public’s perception of the organization in a pos­itive direction. The purpose of this study is to increase critical knowledge of the legitimation strategies in environment reports.

Greening the balanced scorecard

Environmental management issues have received an increased amount of attention in recent years, as have various performance measurement systems (PMS) such as the balanced scorecard (BSC). However, implementation of these systems is challenging due to the differences found amongst the companies and users of PMS. This study investigates how the presence of particular supporting factors served to facilitate a PMS change that incorporated environmental measures. Utilization of extant change models enables us to investigate different change factors like advancing and hindering forces, momentum, and the leaders of change. We found two models appropriate for investigating environmental management …

Accounting in Identity Regulation : Producing the Appropriate Worker

It is acknowledged that identity regulation in organizations relies on discursive resources. This study moves beyond discourse – illustrating how discourse and accounting measurements are mobilized together in revising identity. Measurement produces persistence, clarity, transparency and comparability, as well as direction: Accounting’s quantitative knowledge ‘amplifies’ discourse. We explain the Great Alliance between words and numbers in a case study addressing events in an organization’s transformation. This extends our understanding of what takes place on the interface between identity and accounting. peerReviewed

The institutional pillars of management accounting function

PurposeThe purpose of this paper is to theorize the institutional pillars of management accounting function.Design/methodology/approachThe paper adopts a comparative case study approach.FindingsInstitutional pillars of management accounting are explored on the basis of two longitudinal case studies. Competitive/economic forces and three analytical elements of institutional theory are composing institutions: regulative, normative and cultural‐cognitive pillars. Each element is important, and all of them may work in combination, but they operate through distinctive mechanisms and processes. This paper illustrates how they provide the basis for compliance, order and the legitimacy of not the w…

Controllers’ role in managerial sensemaking and information trust building in a business intelligence environment

This study explores how an organization’s controllers (management accountants) give sense to the information provided by its business intelligence (BI) system, and thus shape the construction of information trust. A qualitative case study was conducted within a Finnish food manufacturing company, building on the notion of trust related to management accounting information and sensemaking theory. The study was informed through open-ended interviews and an examination of internal accounting and management reports. The authors found that the company used an integrated BI system that enabled the production of information in a timely and perceivably standardized manner. Controllers managed this …

Collective action in implementation of a “greener” performance management system.

Purpose – The purpose of this paper is to investigate how different actors influenced the implementation of an environmental management system (EMS) and a performance measurement system (PMS) in a case company when the systems are eventually integrated. Another purpose is to illustrate how the frameworks of Gibson and Earley and Lovaglia et al. can be utilized to investigate the implementation of different management systems in practice. Design/methodology/approach – This paper is an interpretative case study, which utilizes qualitative methods such as semi‐structured interviews and internal documents. Findings – The results indicate the importance of maintaining a separation between the po…

Hei, me mennään kunnan tilitehtaaseen! : taloushallinnon työn uudelleenorganisoinnin vaikutukset työntekijöiden kokemana

Tämän tutkimuksen kohteena on kuntien taloushallinnon työn uudelleenorganisointi. Erityi­senä teemana tarkastelussa on, kuinka lasken­tatoimen työntekijät tämän muutoksen kokevat ja millaisia vaikutuksia tällä on organisaation sisäiseen työnjakoon? Aihe on erittäin ajankoh­tainen ja koskee tässä tarkasteltavan kunta-alan lisäksi yhtä lailla myös valtion laitoksia ja yri­tyksiä. Suomessa monet kunnat ovat lähivuo­sina keskittäneet tai parhaillaan keskittämässä taloushallinnon työtehtäviä. Samaa kehitystä on tapahtunut monissa suurissa yrityksissä ja mm. yliopistosektorilla on olemassa vastaavia suun­nitelmia. This case study examines the reorganization of accounting work into Shared Service …

Integrating greenness into a balanced scorecard in a food processing company

PurposeThe purpose of this paper is to investigate how and why a case company integrated an environmental management system (EMS) into a performance management system (PMS), specifically a balanced scorecard (BSC).Design/methodology/approachThis interpretative case study utilized qualitative methods in semi‐structured interviews, internal documents and e‐mails.FindingsThe company integrated its environmental measures into the process perspective in its BSC. The integration centralized its fragmented PMS, stimulated its strategic control and complemented its financial reporting. This integration also crystallized the causality between the company's environmental actions and financial perform…

The Chain of Control in Results-based Management in Finnish Universities*

This chapter deals with the results-based management implemented in Finnish universities as a part of the neo-liberal managerial idea of a “corporate university.” Analyzing the entire chain of control – from the government level (planning) to the university level (performance management) before finally addressing the personnel level (perceptions of control) – the chapter acknowledges the conflicting views of different stakeholders and the potential for confrontation concerning the different goals as reflected by performance measurement. The key findings of the chapter indicate that the chain of control does not function as planned – that the perceptions and intentions of control among stake…

ERP in action — Challenges and benefits for management control in SME context

ERP systems have fundamentally re-shaped the way business data is collected, stored, disseminated and used throughout the world. However, the existing research in accounting has provided only relatively few empirical findings on the implications for management control when companies implement ERP systems as the technological platform. Especially scarce are the findings concerning the production phase, after implementation, when the information processes, related work practices and the new information contents can be seen as established. In this paper we explored and theorized the benefits, challenges and problems for management control when an ERP system is in use, four years after the impl…

Institutional Logics and Responses to Performance Measurement Systems

:  This comparative study analyzes institutional logics and categorizes organizational responses to performance measurement systems (PMSs) in two Finnish cities. We refine the typology of organizational responses and suggest how the choice of response depends on the institutionalized logic in the public sector accounting context (cf. Oliver, 1991). Further, we discuss and refine the types of successful co-operation under competing institutional logics (cf. Reay and Hinings, 2009). Our study also sheds light on practice variation in public sector accounting such as how and why PMS use materializes in different forms in units with different institutional logics.

Making Business Partners: A Case Study on how Management Accounting Culture was Changed

Abstract There has been a lot of debate on the new business-oriented role of management accountants during recent years. This paper examines how a case company is trying to change its management accounting culture in practice. Furthermore, it illustrates how accounting practices are woven into the cultural fabric of an organization and the great diversity of practices constituting its business orientation. This longitudinal case study explores and theorizes the multiple cultural change interventions related to management accounting, including how the case company reorganized the management accounting organization, implemented new accounting systems and innovations, pursued a new kind of hum…

Organizational identity construction as a control mechanism

This study examines how identities become constructed and regulated during a strategic organizational change process. Planning and implementing a strategy is a social process, which consists of constructing, delivering, compelling, receiving, resisting and multiple contradicting meanings. The process includes multiple social factors influencing the strategy. The visions, notions, images, conceptions, assumptions and appreciation of members of an organization make the process dynamic and flexible. Thus, the strategy process is also always a matter of organizational change. By participating in the strategy process, the members produce meanings for the process and receive meanings produced som…

Non-IFRS and changes in accounting institutions : Lessons from Nokia

We analyse the lessons learned from Nokia to illustrate the changing focus in accounting and organisational practices that affect the perceptions of relevant accounting work and the key measures of success. In the course of an analysis covering 25 years, the introduction of management accounting innovations was first emphasised regarding managerial relevance but were later replaced by financial accounting emphasis and innovations (e.g. non-IFRS reporting). Our data includes public reports, newspaper articles and 21 interviews made between 1996 and 2019. We present a framework for analysing shifts in the focus of accounting. Our case analysis on changing accounting practices, on shifting pe…

The development of mobile banking services in a large Finnish financial organization

The chapter, based on an ongoing qualitative study, provides answers to the following questions: what are the case organizations’ rationales in developing mobile banking services? how are customer perspectives considered in developing them? and what are the implications of digitalization and m-banking for the bank and the client? Based on the findings, m-banking is seen to allow ubiquitous availability and efficiency of service provision, offering a sound rationale for their development. The flipside is that digital and m-banking services dilute the human interaction, which challenges the rationale of improving the customer experience. The service development follows the software industry m…

Kultahippuja laskentatoimen takamailta : professori Aila Virtanen 60 vuotta

Narratives on the Accounting Worldview of Practising Managers

This paper examines management accounting from the perspective of its most important user: practising managers. We seek to enhance the understanding of the relationship between managerial work and accounting. This interpretative and qualitative study takes a unique approach by using narrative texts for building an understanding of how managers view accounting in their work. First, a deeper understanding of accounting and managerial work is sought on the basis of learning experiences of managers. Second, a wider point of view is achieved by looking at managers’ perspectives on organizational development. Third, the study addresses managers’ objectives for building their personal competence i…

Quality management in the public sector accounting department - (un)avoidable quality costs and unlikely financial impacts

This paper investigates the nature of quality costs and the likelihood of their having financial impacts in the public sector. An illustrative quality development case project in an accounting department of a Finnish city administration is presented. The empirical data includes answers to a qualitative project question sheet, workshop material and participative observation. Quality problems are classified according to their quality cost category and the extent to which they are avoidable. Some of the quality costs proved unavoidable and some are likely to lack financial impact, exhibiting sticky cost behaviour. The study indicates that certain prevention and appraisal costs in the public se…

Arvot suoritusmittareiden aiheuttamien ohjausjännitteiden hallinnassa suuressa osuustoiminnallisessa organisaatiossa

Machine learning in management accounting research: Literature review and pathways for the future

This paper explores the possibilities of machine learning (ML) methods in management accounting research and showcases one future avenue in practice by applying ML-based textual literature review to ML/AI research in accounting. The review reveals that machine learning methods in management accounting (MA) are still in their infancy, and current research in accounting has progressed in and focused mainly on three areas related to ML and AI: 1) effects on the field of accounting and the development of the accounting profession, 2) textual analysis related to accounting data/reports, and 3) prediction methods. Based on our literature review and recently published related ML research from othe…

Sustainability in executive remuneration : A missing link towards more sustainable firms?

This paper contributes by showing simultaneously the interlinked challenges of sustainability-based (based on long-term economic, social and environmental targets) executive remuneration and the problems of transparency in remuneration reporting. Our empirical data, analyzed using qualitative content analysis, consists of the published remuneration statements and sustainability reports of 43 Finnish companies reporting according to the Global Reporting Initiative (GRI) framework. Our results indicate that comprehensive sustainability remuneration is still rare in Finnish large companies: long-term financial targets are implemented at most companies, but social or environmental targets were …

Efficiency vs. values : Institutional logics, situated rationality, and performance measurement in a cooperative bank

This qualitative case study explores how situated rationality is achieved and maintained between two coexisting institutional logics, ‘global’ financial efficiency and ‘local’ customer-owners, around a performance measurement system in a large cooperative bank. We focus especially on the relationship between financial performance measures and softer, cooperative and communal organisational values. The results highlight that communal values may be effectively used to smooth and manage managerial contradictions; thus, situated rationality for operations can be achieved and maintained. This may also explain the resilience and success of communal values and cooperatively formed organisations in…

Strategy implementation as fantasising – becoming the leading bank

In this empirical case study we explore the fantasy nature of strategy work and propose fantasising as a framework contributing to the nascent literature dealing with the previously overlooked fantasy nature of strategy. More specifically, our interest is on examining how the meaning of official strategy gets constructed as it is being implemented, as well as and how and why the perceptions may evolve during implementation. Our data consists of official strategy documents and interviews from Finland's largest financial services group and its largest unit. The interviews cover all organisational levels, enabling us to reveal the variations of perceptions of strategy as it is being implemente…

Ympäristölaskentatoimen kehittämisen arkea

Artikkelissa esitellään yhdessä Aapo Länsiluodon kanssa tekemääni tutkimusprojektia, josta olemme julkaisseet useita artikkeleita. Hankkeessa tutkimme yhden suuryrityksen ympäristösuoritusmittauksen kehittymistä. Tutkimme ympäristösuoritusmittauksen ja tuloskortin käyttöönottoon vaikuttaneita syitä, ympäristömittareiden integrointia tuloskorttiin, muutokseen vaikuttaneita tekijöitä, yhteistoimintaa kehittämisprojekteissa sekä ympäristöasioiden kehystämistä taloudellisiin arvoihin. Tutkimushankkeemme herätti minut pohtimaan yrityksen vastuullisuutta ja eettisiä kysymyksiä laajemminkin. nonPeerReviewed

BSC in good and stony municipal grounds

Employee Sensemaking on the Importance of Sustainability Reporting in Sustainability Identity Change

This study examines employee sensemaking processes in order to understand the role of sustainability reporting in organizational identity change. Through an analysis of 52 interviews with employees in two Finnish companies, we develop sensemaking frames for understanding the role of sustainability reporting in organizational identity change. The three sensemaking frames are individualistic, relational and decoupled. Each of these sensemaking frames differs in stakeholder orientation. They indicate that sensemaking influences the interpretation of how important sustainability reporting is for organizational identity change towards sustainability. The study shows how the individualistic and r…

Goodwill and Ethics : Evidence from Finland

Goodwill appears as an intangible asset in the parent company balance sheet after purchasing a company, especially with big expectations of growth and synergy. However, there are ethical issues involved in presenting and accounting for goodwill. For example, if the manager pays too much for a company in the hubris of closing a deal in order to obtain his/her bonuses, the excess amount paid can currently be “hidden” into the parent company balance sheet under the name of goodwill. In this paper, we analyse the possible ethical dilemmas of goodwill accounting, valuation, impairments and risks. In particular, we ask, what ethical considerations are related to goodwill accounting, implied by go…

Big data and HR analytics in the digital era

Purpose The purpose of this paper is to focus on how the HR function takes advantage of human resource analytics (HRA), including big data (BD), and discuss factors hindering HRA and data utilization. Moreover, the authors discuss the implications of the HRA-induced role transformation of the human resource (HR) function. Design/methodology/approach This is an explorative case study based on qualitative interviews in nine leading Finnish companies. Findings The results indicate that both technical and human obstacles, operating with very basic HR processes and traditional information systems and poor data quality, hinder adoption of advanced HRA. This, combined with lacking skills in analy…

From vernacular accounting to standardized PMS : Logic multiplicity in a cooperative bank

In this chapter we analyze how local member banks shifted from local, vernacular, accounting, and performance measurement systems to centralized and standardized performance measurement systems in a cooperative bank organization. The member banks reduced the use of vernacular accounting systems (VAS) to achieve greater cost-efficiency and to meet regulation requirements, but they still maintained their strong local logics beside the cooperative unity logic, with only minimal or moderate conflict. We suggest that the power of individual actors, i.e., CEOs, affected the balance of these logics, and the way performance measurement (PM) targets were chosen at the local level from the standardiz…

Linkages between the Elements of Management Control Systems in a Non-Profit Organization

This qualitative case study examines the emergence of MCS package. We apply the MCS package framework of [Malmi, T. and Brown, D.A. (2008) Management control systems as a package-Opportunities, challenges and research directions, Management Accounting Research, Vol. 19, Iss. 4, pp. 287-300] and investigate the linkages between different control elements of MCS package. The control elements of MCS package, particularly governance structures and cybernetic systems became often overlapping and redundant. All the control elements remained in the MCS package when they were once constructed. Even tough a large number of cybernetic controls (i.e. balanced scorecard, budgets, quality management sys…