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Abstract
This study considers how certain notional organisational culture elements became embedded in the design of an
innovative management accounting system (MAS) and how the alignment between the cultural premise of the MAS
and that espoused by MAS users inuenced the perceived success of the new system. The research data for the study
were obtained over a three and half year period and derive from interviews, questionnaire responses and public as well
as internal corporate documents. The site chosen for the study is a division of Siemensa global rm in the electronics
and electrical components industry. Two employee groups with functional expertise in engineering and business economics respectively comprise the MAS user groups. During the development and implementation phases of the new
MAS, Siemens was actively engaged in a corporate-wide culture change programme that was supportive of the new
MAS initiative. The study results are in two parts. First they report on the manner in which the organisational programme of culture change aected the cultural premise of the new system. Second, they indicate that the degree of
alignment between the organisational culture elements which were embedded within the MAS and the organisational
outlook of the two user groups signicantly inuenced the systems perceived success. # 2003 Elsevier Science Ltd. All
rights reserved.
1. Introduction
Past research suggests that dierent groups of
MAS users within organisations exhibit dierent
rationales, priorities and cultural orientations
(Ahrens, 1996, 1997, 1999; Appleyard & Pallett,
2000; Bamber, 1993; Birnberg & Shields, 1989;
Bruns & McKinnon, 1993; Ko & Mock, 1988; Loning, 1994; Markus & Pfeer, 1983; Young & Selto,
1991) and that these may inuence their perceptions
of the success of MAS changeovers (Brewer, 1998;
Broadbent, 1992; Dent, 1991; Ezzamel, 1987; Goddard, 1997a; Hopwood, 1989; Mouritsen, 1996;
OConnor, 1995; Roberts, 1990). Some researchers
suggest that changes in organisational control
0361-3682/03/$ - see front matter # 2003 Elsevier Science Ltd. All rights reserved.
PII: S0361-3682(02)00025-9
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consider the organisational values of their working environment to be consistent with those
embedded within the new system, there has been
little research on how such consistencies emerge.
The present study aims to address this concern by
exploring how certain notional organisational
culture elements became embedded features of a
newly implemented MAS within a specic organisation. It also aims to investigate how the alignment between the organisational culture elements
which were embedded within the MAS and the
organisational outlook of two MAS user groups
inuenced their perception of the success of the
new system.
The site chosen for this study is the Fibre Optics
business unit (HLFO) of the Semiconductors
Group of Siemens AGa global electronics and
electrical components rm. Operational ocers
within HLFO have specic expertise either in
engineering (Technisch) or in business economics
(Kaufmannisch). Engineering and business ocers
educational training diers in that the former tend
to possess engineering based qualications
whereas the latter have a business economics academic background. These two distinct functional
expertises provide a basis for categorising operational ocers at HLFO into two dierent
employee groups. The new management accounting system adopted by HLFO is called processbased target costing (PBTC) which was designed
by HLFO engineering ocers between September
1995 and May 1996. PBTC became operational in
August 1996.
The information collected to achieve the two
aims of the investigation is derived from dierent
sources. Interviews were carried out between early
1995 and mid-1998 with company ocers. Internal documents, accounting reports, statistical
data, graphical charts and ocial company histories were consulted. Two questionnaires were
also used for collecting data on the MAS users
organisational culture orientation. One questionnaire was administered to engineering and business ocers prior to the introduction of the new
accounting system and the other was administered
following its implementation. Whilst HLFO was
in the process of designing and implementing the
new MAS, a corporate-wide culture change pro-
2. Literature review
2.1. Management accounting systems and
organisational culture
The management accounting literature has only
recently started to show empirical concern with
the concept of organisational culture (Dent,
1991; Goddard, 1997a, 1997b; OConnor, 1995)
though the potential of studying links between
organisational culture and systems of control has
long been posited (Flamholtz, 1983; Hopwood,
1987; Markus & Pfeer, 1983; Ouchi & Johnson,
1978). More recently, Shields (1995) and Birnberg
(1998, 2000) have reiterated the desirability of
investigating how cost management systems
adoptions and eects are conditioned by variables
such as organisational culture.
Whilst there is evidence to suggest that the perceived implementation success of a new MAS is
inuenced by whether its information output is
considered easy to use, accurate and timely,
investigations of organisational culture and control practices indicate that successful information
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A. Bhimani / Accounting, Organizations and Society
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with most quantitative and/or qualitative organisational culture studies (Pettigrew, 1979).
Although some researchers contend that organisational culture cannot be eectively examined
using quantitative methods (Frost, Moore, Louis,
Lundberg, & Martin, 1991; Louis, 1983; Schein,
1985; Smircich, 1983) and that culture needs to
be observed, more than measured (Schein, 1996,
p. 229), others see statistical analyses as being able
to contribute signicantly to investigations of
organisational culture (Hofstede, Neuigen,
Okayre, & Sanders, 1990; Rousseau, 1990; Saffold, 1988; Siehl & Martin, 1988; Wilkins &
Ouchi, 1983; Zammuto & Krakower, 1991). The
present study makes use of qualitative information
regarding cultural changes within Siemens
obtained from internal corporate documents,
external publications as well as from interviews
with HLFO and other Siemens executives. The
study also derives information from the administration of two questionnaires based on a model
concerned with organisational culture elements.
Within the organisation study literature, a
number of dierent models exist for quantitatively
analysing organisational culture (see Xenikou &
Furnham, 1996). The present study focuses on
aspects of organisation culture which are explored
using the competing values model (Cameron &
Quinn, 1998; Quinn, 1988; Quinn & Kimberly,
1984; Quinn & Rohrbaugh, 1981, 1983). The
competing values model dierentiates between
underlying values which create meaning in organisational settings and the cultural artefacts that
reect them. This model relies on the premise that
although cultural artefacts such as myths, language, rituals and symbols are specic to organisations, values are not. The model assumes that it
is not dierent sets of values which give rise to
dierent organisational cultures but varying
emphases on the limited set of values prevalent
within the larger society. This perspective is one
that is gaining favour among researchers interested in the relationships between national culture
and management accounting and control systems
(see Harrison & McKinnon, 1999).
Quinn and Kimberly (1984, p. 298) argue that
the competing values model can enable . . .such
things as the means of compliance, motives, lea-
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Version 7.51e
Fig. 1. The competing values model [adapted from Quinn and Kimberly (1984)].
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Table 1
Organisational culture type characteristics under the competing values modela
Culture types
Characteristics
Group
Developmental
Hierarchical
Rational
Flexibility vs control
Flexibility
Flexibility
Control
Control
External vs internal
Internal
External
Internal
External
Means
Member participation,
cohesion, morale
Adaptability, readiness
Communication information
management
Ends
Development of
human resources
Growth, resource
acquisition
Stability, bureaucracy,
control
Productivity eciency
Compliance
Aliation
Ideology
Rules
Contract
Motivation
Attachment
Growth
Security
Competence
Leadership
Concerned supportive
Conservative cautious
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Siemens unit
Duration (min)
Information Manager
TOP Programme Executive
Innovation Management Director
Innovation Management Ocer
Management Development Consultant
General ManagerBusiness Improvement
Human Resources Manager
Engineering Manager
TOP Programme Ocer
ManagerHuman Resources Strategy
Information Systems Manager
Finance Director
Deputy Director
Engineering Consultant
Management Training
Regional Manager (Europe)
Information Systems Manager
PBTC Software Developer
Phoenix Technical Project Leader
Head of Production Planning
Strategy and Marketing Manager
Assistant to General Manager
Product Developer A
Product Developer B
PBTC Project Leader
Financial Manager
General Manager
Head of Accounting
Defence Electronics
Siemens Plessey Sytems
Siemens Nixdorf
Siemens Nixdorf
Siemens Corporate Communications
Siemens PLC (UK)
Private Communication Systems
Siemens-Matsushita Components
Drives and Standard Products
Semiconductors
Semiconductors
Private Communication Systems
Public Communications Networks
Electronic Components
Corporate Human Resources
Development
Infrastructure Services
HLFO
HLFO
HLFO
HLFO
HLFO
HLFO
HLFO
HLFO
HLFO
HLFO
HLFO
30
30
45
30
30
15
30
20
30
45
60
30
20
45
30
30
45
45
90
45
30
30
20
45
90
90
120
90
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neering project had led to . . .teamwork, jobrotation, group meetings, speaking your mind
which were practically inconceivable before, are
now all part of a days work (3/6/1996). An Innovation Management Director noted that: Today
there is a powerful cost consciousness in the company together with a broad palette of cost controls
(3/6/1996). He nevertheless believed that:
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Version 7.51e
11
Number of users
(ex-ante)
Usable
questionnaires
Number of users
(ex-post)
Usable
questionnaries
Production
Purchasing
Marketing and Strategy
R&D
Accounting
Quality Control
Top Management
6T
1K
2 T, 1 K
16 T
4K
3T
1K
4T
1K
2 T, 1 K
15 T
4K
2T
1K
6T
1K
2 T, 2 K
13 T
5K
3T
1K
5T
1K
2 T, 2 K
12 T
5K
3T
1K
Total
34
30
33
31
organisational culture ethos of PBTC design features and the system users orientation towards a
developmental culture related to the new MASs
perceived success.
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2
This was the case as the questions draw on the competing
values model instrument used in prior Anglophone studies.
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embedded within the MAS inuenced the perceived success of the new system.
Zammuto and Krakower (1991) suggest that a
departmental culture which stresses exibility as
opposed to control is more conducive to favouring
an accounting innovation that can potentially
redirect managerial attention and alter organisational processes. An internally oriented outlook
may be expected to coincide with a low inclination
to adopt management innovations which alter the
stability and continuity of control procedures as
opposed to an external orientation (Zammuto &
OConnor, 1992). Thus a developmental culture
orientation under the competing values model can
be expected to be more receptive to any accounting innovation which alters the status quo especially where the accounting innovation enhances
information on the impact of external market and
customer inuences on organisational activities.
Since PBTC attempts to provide enhanced
information on ways in which resources can be reallocated, a exible orientation on the part of
users can be expected to heighten the relevance
and potential success perceived of PBTC more so
than a control orientation. In this respect, a
developmental culture orientation can be expected
to be more receptive to PBTC since it does not
favour structured information and extensive calculative procedures and rules which characterise a
control orientation.
A developmental orientation does not favourably view the running of internal operations via
formalisation, structure and extensive administrative rules. Such characteristics are antithetical
to the design and objectives of PBTC. PBTC provides information by integrating nancial, operational, internal and market-based data. Its reports
are structured as a dynamic mix of visual, graphical,
quantitative and qualitative information. Financial
content is blended with operational data in PBTC
reports. Thus a user group with a high developmental culture orientation will tend to consider
PBTC as more successful relative to a user group
which is less developmentally oriented. A low developmental orientation would suggest lesser receptivity
to viewing PBTC as successful as this new MAS
stresses an external and exible orientation rather
than an internal and control oriented outlook.
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Engineering
Business
39.04 (20.99)
41.00 (24.87)
19.05 (11.15)
18.89 (14.16)
t (P-value)
3.291 (0.004)
3.115 0.005
a
A two-sided t test was used to test the hypotheses, H1 and H2, that the true means of the developmental scores under the competing values model of the engineering ocers group is signicantly higher than the business ocer group before and after PBTC
implementation.
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Accountants only want to use standard Siemens accounting tools. They focus on existing
products and they full standard Siemens
functionsand there are a lot of standard
functions at Siemens (24.4.97).
In commenting on the type of information
provided by the Accounting Department, a product developer from the R & D Department
(here referred to as Product Developer A) stated
that:
Accountants are more conservative because
of their structure and their approach. But
nothing is more deadly than columns and
columns of numbersthese are the so-called
number cemeteries (Zahlenfriedhof). Conversely, PBTC shows us the results more
clearlythis helps (27.6.97).
In echoing this view, the Head of Production
Planning indicated that:
Accountants have their rules and nancial
report regulations. You cannot expect exibility in their representation of data (3.7.97).
He pointed in humour that: . . .only if they
have time and they are bored, will they help us
(3.7.97) and noted that a specic type of
. . .accounting information is needed by R and
D, but accountants do not really care where
the costs come from (3.7.97).
The Head of Production Planning commenting
on the accountants cultural outlook noted that:
The accountant is cool. He is not emotionally
involved and hence, not as committed (3.7.97).
He indicated that:
I hope I did not give a too bad blow to any
accountant from the Accounting Department
but we could expect that they could help us a
little more in cost controlling. They are too
involved in their nancial regulations. Their
transparency is only nancial and thats the
big problem (3.7.97).
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between organisational value orientation and perceived MAS success which is tested in hypothesis 3
will remain equally stable over short time periods.
Hypothesis 3 is tested by reference to the following regression model:
PBTC
Success bo b1 DEVELOP e
Intercept
Develop
Expected sign
Coecient (S.E.)
5.058 (0.340)
0.041*** (0.006)
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A. Bhimani / Accounting, Organizations and Society
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aected their predisposition to accounting information stemming from the PBTC system. Beliefs
about the propriety and success of the new MAS
were conditioned by its origins as much as its form
and substance. The business versus engineering
subcultures within HLFO in this light could be
dierentiated in terms of their perception of the
new MASs success.
6. Discussion
The study has considered how certain notional
organisational culture elements became embedded
within the PBTC systems design features at
HLFO. It has also suggested that the degree to
which the notional organisational culture elements
embedded within the new MAS aligned with the
organisational outlook of the user groups was
signicantly associated with the perceived success
of the new system. The study results support those
of other investigations which suggest that dierent
employee groups can subscribe to dierent organisation cultural values and that a MAS which is
more reective of the organisation culture values
of one group is likely to be seen as being more
successful by that group. The study however goes
beyond the scope of prior investigations in that it
considers quantitative and qualitative information
collected prior to and following the implementation of the MAS under study.
Within the organisation investigated, there were
context specic factors underpinning the results of
the study. The TOP programme of culture change
at Siemens for instance, played a role in shaping
the MASs design features and by upholding certain notional culture elements, inuenced what
came to be deemed as successful accounting
change within the organisation. During the time
period between the rst and second questionnaire
administration, Siemens was actively engaged in a
programme of enterprise-wide culture change. A
principal objective of this programme was to alter
the form and extent of communication between
dierent parts of the organisation. Siemens TOP
initiative sought to . . .design more ecient
structures, decision patterns and processes (Siemens, 1994, p. 2) and new forms of co-operation
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A. Bhimani / Accounting, Organizations and Society
21
arise from outside and from within the organisation. Whereas a number of past studies have
focused on the external origins of internal
accounting changes and on the inuencing forces
at the margins of accounting (see Hopwood &
Miller, 1994; Luft, 1997; Miller, 1998), the present
study leans more toward an examination of forces
conditioning an emerging MAS from within the
organisation. The predisposition of engineering
ocers to structuring information in ways that
contrast with accountants notions of appropriate
accounting data representation has here been
argued to nd possible origins outside the organisation. This investigation suggests that a variety of
intra-organisational forces shaped the new MASs
form, content and eects. Siemens historical shift
from being highly centralised to adopting a
decentralised form with more autonomous business units, its ongoing programme of culture change
and its traditionally focussed and detailed standard
accounting procedures were instrumental in inuencing the structure and consequences of process
based target costing. The emergence and receptivity
of the new MAS can in this light, be argued to have
been conditioned by intra-organisational forces
which themselves are partially shaped by more protracted extra-organisational factors. This study is
thereby suggestive of accounting change being tied
to transformations that are multifaceted in origin
and which inhere it with a specicity that is intra- as
well as extra-organisationally rooted.
Acknowledgements
The comments made on an earlier draft of this
paper by Thomas Ahrens, Robert Chenhall,
Maurice Gosselin, Graeme Harrison, Anthony
Hopwood, Peter Miller, Cedrik Neike, Neale
OConnor, Michael Shields and Holger Vieten are
gratefully acknowledged. The paper has also
greatly beneted from the comments of participants at the Manufacturing Accounting Seminar
held at the University of Edinburgh in June 1997
and at the Manufacturing Accounting Workshop
held at the Copenhagen Business School in March
1999. The review suggestions of two anonymous
reviewers have greatly contributed to the paper.
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A. Bhimani / Accounting, Organizations and Society
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