Social perspective

Question 1

What theories have been discussed in the social perspective on accounting and financial management?

Answer 1

Burns & Scapens (2000): Rules and routines

DiMaggio & Powell (1983): Isomorphism

Lounsbury (2008): Institutional logics

Question 2

Different levels to study the social perspective

Answer 2

Macro-level, focuses on the larger-scale more general features of society such as organizations, institutions and culture

Meso-level, focuses on the relationship between makro and micro

Micro-level, focuses on the personal and immediate aspects of social interaction in daily life

Question 3

Micro-level

Answer 3

• What does society expect from an accountant and how to become one?
• How is accounting used in communication?
• How does accounting influence behavior and practice?
• What does accounting make visible and what not?
• What does accounting mean to us?

Question 4

Makro-level

Answer 4

• How do certain accounting practices become institutionalized in society
  (politics of standards, management accounting trends)
• How do macro-level changes shape and get shaped by accounting practices?

Question 5

Meso-level

Answer 5

• How people and processes are put together or separated by systems and structures
• How individual actors drive social change

Question 6

DiMaggio & Powell (1983): Institutional theory

Answer 6

• Organizations are influenced by their institutional context where they behave rationally by abiding to appropriate conduct to gain legitimacy
• Isomorphism may force the organization into an economically inefficient direction
• Might be viable in the long run (preserving legitimacy, solving uncertainty)
• Or just be for show (signal that we follow isomorphic forces but keep doing what we think is best, decoupling rules and routines to protect the core)

Question 7

What are the two types of isomorphism?

Answer 7

• Competitive isomorphism – we do as others since we believe it will increase efficiency
• Institutional isomorphism – we do as other since we perceive it as the way it should be done

Question 8

What are the three isomorphic processes?

Answer 8

• Coercive – pressure from entities the organization is dependent upon (formal or informal). “Protecting the core” is a common reaction
• Mimetic – when we don’t know what to do
  (uncertainty -> imitation)
• Normative – professions, people with similar jobs tend to think and act the same way (same education, network)

Question 9

Explain the difference between structure and agency

Answer 9

• Structure – aspects of life taken for granted

- Agency – acting out of our own interest and will

Question 10

Lounsbury (2008): Institutional logics

Answer 10

• Beliefs and rules that structure cognition and guide decision-making in an organizational field
• Isomorphism is still relevant but miss a lot when used “blindly”
• An organization might contain multiple, competing ideas which opens for agency

Question 11

What’s the difference between institutional logics and institutional work?

Answer 11

Institutional logics – Structural/Makro perspective, where different logics create variation in what is understood as rational

Institutional work – micro perspective where social actors have power to influence (maintain or disrupt) institutions

Question 12

Burns & Scapens (2000): Conceptualising management accounting change: an institutional framework

Answer 12

• Organizations as comprising a multitude of (interacting) rules and routines

Over time, the interaction between rules and routines can take on normative traits and become institutionalized.
Change can happen, in terms of new rules and routines. However, most importantly is to understand that “no change” does not mean a static state. Institutional change is more difficult and less likely to occur.

Question 13

Explain rules and routines

Answer 13

Rules – the formally recognized way of how things should be done
Routines – An established way of how things are actually done

• When rules and routines overlap, the organization is in a stable mode
• Rules can be changed momentarily which routines cant
• New routines can be formalized into rules
• New rules gain impact on routines over time
  (an organization is never in a static state)

Question 14

Dimensions worth considering when exploring change

Answer 14

Formal / Informal – rules change routines or vise versa

Evolutionary / Revolutionary – where revolutionary change can break current institutions

Regressive / Progressive – regressive enforces current power structures, thus, hindering further development, meanwhile progressive uses new routes of development that make new people come in power

Question 15

When discussing multiple institutional logics, there are two aspects to consider:

Answer 15

• Compatible and incompatible logics
  Logics are shaped by the structure of organizational fields
  Tension will depend on how logics are enacted within the organization (relative power, strength of ties)
  (the theory concludes that logics are not compatible or incompatible per se, but are accorded different priorities in different situations, which leads to unambiguous or ambiguous consequences
• Managing tension between logistics
  Decoupling - managing according to one logic and only adhere symbolically to the other
  Structural differentiation - separate organizational units so each can act independently (horizontal decoupling).
  (However, integration will always be necessary)
  Compromise - full adherence to one logic and partly full-fill the demands of the other

Question 16

Management accountings purpose

Answer 16

Reduce uncertainty (support decisions) 
Reduce goal incongruence (monitoring and incentivising) 
Facilitate coordination (communication)

Question 17

Accounting is…..

Answer 17

The process of identifying, measuring and communicating information to permit judgement and decision making by users
(This implies neutrality but is that true?)

Question 18

The definition of accounting implies neutrality but is it really neutral?

Answer 18

Well no, since what accounting produces is written by a human with a purpose

Question 19

Social theory

Answer 19

Concerned with systemising knowledge about structural relationships in society by understanding how and why we engage in, and might be affected by accounting practises

Question 20

How is accounting performative?

Answer 20

Because it is actively engaged in constructing reality

Question 21

Innovations in the organisational field (DiMaggio & Powell)

Answer 21

New accounting technique, new organisational form, new roles in the organisation or new processes established

• Early adopters (take a risk)
• Late adopters (group pressure)

Question 22

What happens if an organisational field contains multiple, competing ideas?

Answer 22

It opens up for agency