Organizational Change and Management Control in a Not-For-Profit Organization:A Qualitative Field Study

In this article we report the results of an inductive field study designed to develop an understanding of organizational and accounting change in an Australian church organization. We approach this study following the insights from Burns and Scapens’ (2000) theorisation of management accounting change and the new institutional sociology perspective. The data collection and analytical methodology adopted is grounded approach that summarized interview data into shorter statements to identify themes and to reveal the emergent phenomena. Eight broad themes emerged and were the points of discussion adopted by us. The cause and effect relationships of the predominantly internally generated organisational changes within a Christian-based community service organization became apparent. The subject organization had enjoyed success through hard work, commitment, dedication and loyalty and the collective energy of the individuals and groups within. Additionally, pressures of tighter government funding and service outcome orientation moderately caused the traditional family-like structure to diminish and evolve into, or at least resembled a more corporate styled organization. However, the structuring of the funded operations within the organization had a strong grain of internal force at the time that kept these influences fairly minimal, but manageable without impacting, to a large degree, the management accounting control mechanisms. Our contribution to the accounting and organizational change literature lies in the diversity in the findings that offers a rich and colorful representation of the impact of radical change in a not-for-profit organization. We call for more empirical research into this emerging area in management accounting.Organizational change; institutional theory; management accounting change; not-for-profit organizations

The Level of Non-Mandatory Disclosures in Developing Countries: a Fijian Perspective

Purpose Investigates the influence of society, harmonization and market orientation on the level of non-mandatory disclosures in a developing country context - Fiji. Design/methodology/approach Theoretically, this paper uses legitimacy theory. A content analysis of the non- mandatory disclosures of the 15 listed public companies in Fiji was undertaken. Findings Findings indicate that outright adoption of International Accounting Standards (IASs) by Fijian public limited companies does not engender in adequate disclosure of information on a non-mandatory basis. This is largely ascribed to the differing cultural values of societies and monopolistic characteristics of markets in Fiji that discourage individuals to exercise judgement. Further, findings suggest that the influence of society, market concentration and harmonisation of accounting standards has not rendered increased disclosure of non- mandatory information than those considered mandatory by the subject listed companies. Research limitations/implications While the methods utilised delivered a great deal of useful quantitative data, it must be remembered that the results were based on 15 listed companies in Fiji’s Stock Exchange. Further studies using similar variables to this one from other developing countries would provide understanding of the extent to which these results are generalisable across other developing countries and industries. Practical implications Results provide a resource for individuals, organisations and policy makers attempting to explicate or understand what induces particular entities to voluntarily disclose non- mandatory information in their annual report. Original/value of paper Adds to our understanding of non- mandatory disclosure and therefore represents a substantial addition to, and extension of, the international literature engaged in efforts to interpret the motives for such disclosure.Harmonisation, Non-Mandatory Disclosure, Culture, Developing Economies, International Accounting Standards, Fiji

Cost Information in the New Public Sector Environment: A Case Study of Cost Accounting Change within a State Owned Teaching and Research Hospital

This paper reports on a case study of the utilisation and users of cost information in a state-owned teaching and research hospital in Australia. The findings indicate that the current utilisation of the cost inforamtion resides primarily at higher executive and managerial levels of the organisation. The major organisational change, particularly pressure for improved productivity and competitiveness driven by the wave of recent public sector reforms in Australia, is significantly filtering down throughout the subject hospital. Various productive and unproductive ways that cost information are used and impediments to the use of costing inforamtion in the hospital setting are also identified.Health sector costing, new public sector management, organisational change, accounting, Australia

Linking Environmental Uncertainty to Non-Financial Performance Measures and Performance: A Research Note

Several previous research studies have reported mixed results concerning the direct association between non-financial performance measures and performance. The presence of environmental uncertainty on this relationship has not been established. This paper makes a contribution to this area by proposing that it is in conditions of environmental uncertainty that non-financial measures are most useful in improving organisational performance. It analyses empirical data from a random sample of 52 New Zealand manufacturing firms to test the hypothesis that non-financial measures of performance would lead to improved organisational performance under conditions of increased environmental uncertainty. The findings suggest that performance should be a declining function of the size of the "mismatch" between an organisation's environment and use of the different combinations of non-financial performance measures. Further, it is suggested that prior mixed results may be attributed to the omission of environmental uncertainty.Non-financial performance measures; environmental uncertainty; performance

Changing Forms of Performance Measures and Management in the Context of New Public Management Reform in Australia: Evidence from Four Selected Government Agencies

New public financial management (or NPFM) doctrines advocate the introduction of commercial accounting practices such as accrual accounting and budgeting and meaningful performance measures and management. Within the new public management (NPM) paradigm, NPFM emphasizes financial accountability linked to performance measurement and the achievement of organizational effectiveness. However, its application varies in different organizational contexts. Using a case study methodology and content analysis technique, this paper documents the incidence of performance measurement and reporting practice of four government agencies in Australia. Evidence presented revealed performance management as a central thrust to the organization's overall strategic management systems. Further, the findings revealed a clear linkage between the organization's outputs/outcomes framework and performance measurement and reporting practice. Evidence suggests that measuring and reporting the economy, efficiency, effectiveness and competence of today's public sector organizations are crucial, and they are especially relevant when government agencies are faced with diminishing resources and rising demand for quality services.New public financial management; Accrual accounting; Public sector; Performance measurement; Government Departments; Australia

Accounting for Managing Change in the Public Sector: A Case Examining Issues of Organisational and Social Accountability and Employee Resistance

This article focuses on organizational and social accountability reforms and employee behaviour in an Australian local authority. Using the institutional theory and behavioural literatures, it sought to understand how recent local government reforms in Australia influenced a local city council authority to restructure its internal practices, which in turn caused employees' motivational and morale problems. Our findings suggest that the organization implemented two management control designs: (1) accural-based budgeting; and (2) the Balanced Scorecard type performance management system in order to appear modern, rational, and legitimate. The findings suggest that when employee behavioral issues are not addressed adequately changes tot he internal practices of an organization may have far reaching impact on its employees, which in turn may foster a strong employee resistance and de-motivation. Several social, organizational and behavioral issues are generated for policy makers and practitioners.Public sector reform, employee behavior; Accounting change, Local Government, Australia

Securing Institutional Legitimacy or Organisational Effectiveness? A Case Examining the Impact of Public Sector Reform Initiatives in an Australian Local Authority

The article considers the impact of a major initiative (the National Competition Policy) and pieces of legislation (the Local Government Act and the Local Government Finance Standards) on the internal practices of a large Australian local authority. A theoretical framework is developed using new public management (NPM) and neo-institutional theory literatures to explain the findings. A case study approach was applied to collect the data for the research. The findings reveal that the National Competition Policy 1993, the Local Governemtn Act 1993 and the Local Government Finance Standards 1994 mainly have brought about significant changes to the organisation's internal management control processes such as financial reporting, budgeting and performance appraisal. These changes brought in appeared to be coincidentally similar to NPM ideals. Furthermore, senior managers (such as the chief executive and divisional heads) played a major role in implementing new accounting technologies (the activity-based costing and the balanced scorecard type performance measurement system). These exploratory findings will have some value to both public sector managers and policy makers.Public sector reform, New public management, Local government; Public sector accounting, Australia

Quality management and accounting in a New Zealand service organization: Towards an institutional perspective on management accounting

Recently, the concept of quality and its management have received considerable attention from business organizations in countries around the world seeking to remain competitive in both local and international markets. Accounting researchers have become interested in understanding how accounting systems are implicated within a quality management system. This paper, which reports on the quality management systems in a New Zealand service organization, provides empirical evidence of how an organization adopts quality principles and subsequently evaluates organizational approaches to espouse quality as a strategic option and the role of accounting therein. The paper argues that once an organization introduces quality management, it may influence other aspects of an organization, such as accounting and reporting processes, to serve the managers' need on quality issues. This paper suggests that quality management in the organization was "institutionally induced" as well as affected by the organizational climate and individuals' quality-related behaviour

Incarnation and Decay: Reconciling the Organizational Decision-Making and Organizational Institutional Theory Perspectives on Budgetary Research

Purpose The organizational decision-making perspective (ODM) has a legacy regarding its concern for budgeting as an essential organizational routine in decision-making. Budgeting has also become a direct concern to organizational institutional theory (OIT) because of its prominent role in institution building, where budgeting can build trust in inter-organizational relationships. This paper builds on these two perspectives to explore organizational budget processes\u27 formation, disruption, and re-creation over time. Design/methodology/approach We conducted a comprehensive review and critical analysis of the ODM and OIT perspectives, focusing on a fundamental paradox between ODM\u27s emphasis on stability through organizational routines and OIT\u27s focus on organizational legitimacy through the decoupled expression of organizational values. We then expanded on these paradoxical concerns in the context of budgeting, formalizing them into specific research propositions for future studies. Findings Tensions around the stability, decay, and re-creation of budgets as organizational routines emerge as a pressing issue requiring further empirical investigation from the ODM perspective. A critical issue in the OIT perspective is the potential for organizational budgets to provide an opportunity to decouple from practice through routinized expressions of rationality and to facilitate loose coupling in practice. These findings offer a fresh perspective and open up new avenues for future research in this area. Originality/value This paper contributes to the accounting and organizational research literature by shedding light on how organizations respond to the potential decay of budget routines and the manifestation of organizational values in decoupling processes by further re-creating and elaborating budget processes

The Industrial Relations and Budgeting Interface: An Empirical Study

While previous contingency accounting studies conceived external environmental factors as affecting budgeting in terms of markets, technology, or task uncertainty, industrial relations environment has been rarely considered as an important influential factor in accounting research. Nonetheless, industrial relations activities - work stoppages, union officials' actions and conflicts between unions - could be expected to play a significant role in an organisation's management control systems and performance. This study sought to search for a contingent relationship between industrial relations and two important elements of an organization's management control systems - budgetary participation and budget use in performance evaluation. Through a detailed analysis of a sample of 55 Australian coal miners, we examine the moderating role of budgetary participation in the relationship between industrial relations and budget use. The hypothesis in this study postulates managers' use of budgets in performance evaluation being affected by a two-way interaction between industrial relations and budgetary participation. We found that industrial relations environment influences the extent of budget use in performance evaluation, but the magnitudes of this influence depends on levels of managers' participation in setting their organization's budgets.Industrial relations, budgetary participation, budget use, managerial performance, coal mining, Australia