In this study the relationship between management accounting and strategy in the case site, a global high-tech firm, is tried to explore and interpret by employing functional contingency theory and interpretative institutional theory. (For contingency theory, look e.g. Thompson 1967, Perrow 1967, Child 1972, Pugh et al. 1969, Lawrence & Lorsch 1969, Emmanuel et al. 1990, Covalevski et al. 1996 and for institutional theory, look e.g. Selznick 1957, Berger & Luckman 1967, Zucker 1977, Meyer & Rowan 1977, DiMaggio & Powell 1983, Scott 1987, Scapens 1994, Covalevski et al. 1996) The rational and irrational relationships and interplay between environmental, strategic, cultural and organizational characteristics as well as employed modern managerial technologies behind the strategic management accounting practice are interpreted. These factors might give some at least seemingly rational contingency explanations to the phenomena, meanwhile institutional perspective holds the premise, that the relationship between control systems and environmental as well as company characteristics is also a complex process as well as a symbolic and interactive one. The modern strategic management accounting agenda as well as the broader relationship between accounting and strategy in the planning and control processes of the target company are analyzed in the study. The topics are studied both theoretically by conducting a literature review and empirically by applying interpretative case-study method, informed by ethnographic sociology. The main sources of information in this single case study have been semi-structured interviews. Published and internal material were used extensively as additional sources of information in order to enhance the reliability of the study by triangulation.
It has been recommended, that case studies should take place in fast-moving companies, which operate in changing environment in order to provide illustrations of best practices at the leading edge of adaptive activity. (Otley 1994, 298) The case site was selected as a representative of the most likely setting (cf. Keating 1995) in order to find modern strategic management accounting practices, with intentions to refine this way the strategic management accounting theory. A case site is one of the three business groups of a global company, which has net sales of 8,5 billion USD and employs over 35,000 people in 45 countries. The selected business group develops and manufactures infrastructure equipment and systems and it is a global leader in its technology. Net sales of the target business group was about 2 billion USD and personnel was over 15,000, while operating profit was over 0,5 billion USD, with 40-60 % annual increase of all these figures. The targeted business group is the most profitable and fastest growing part of a very profitable and fast growing company and it competes in global, rapidly growing and changing markets, because of the recent markets liberalization. The business group is organized as a matrix structure and it includes two customer segment based and production oriented divisions, which have been divided into nine strategic business units, five of them in the first division and four in the second. There are also divisions of systems platforms, and a customer service and worldwide area organization. Area organization sells the company's systems and customer service arranges the installation.
In this study, four major issues have been analyzed behind the relationship between strategic management and management accounting; environment, strategy and strategic management itself, culture with managerial philosophies, and finally organizational structure. Efforts were made in order to interpret the rational and irrational relationships and interplay between environmental, strategic, cultural and organizational characteristics as well as employed modern managerial technologies behind the strategic management accounting practice. These factors might give some at least seemingly rational contingency explanations to the strategic and other management accounting practices, but according to institutional theory, the relationship between control systems and environmental as well as company characteristics could also be very much symbolic and interactive.
Environment has been considered as a central factor affecting on the companies management control systems (Khandwalla (1972), Gordon & Miller (1976), Amigioni (1978) both in contingency and institutional oriented studies. Environment and environmental changes are reflected in company strategies, management philosophies, organizational structures and control systems. These reflections are, however not straightforward, but they are filtered through organizational and individual processes as well as very different environmental issues are affecting on the company practices simultaneously. Power relationships, legitimization efforts, mimic behavior, fashion, and institutionalized nature of existing structures and systems are affecting of these processes as well as economically rational reasons.
Common topics of discussion in recent years have been global competition, fast environmental changes, deregulation, less protectionism, emergence of trading blocks, structural changes, excess capacity, mergers and acquisitions, environmental concerns, Japanese success in world markets, increasing requirement level of customers and their changing expectations, technological changes and discontinuities, shortened life cycles of products , alliances and clusters between companies. (Prahalad & Hamel 1994, Otley 1994). Changes in competition environment were considered as the most important factor affecting on the Finnish companies' cost accounting practices (Lukka & Granlund 1996).
The concept of strategy is quite ambiguous and it has several definitions (e.g. Drucker 1954, Chandler 1962, Andrews 1971, Porter 1980, Hax & Majluf 1991) Strategy could firstly be divided into corporate, business unit and functional strategies. There could also be separated such concepts as strategic planning, strategic management, strategy formulation and strategy implementation or more broadly strategic thinking (Nasi 1987). Strategy research could be broadly divided into three phases: the classical strategy and structure research, analytic strategy research including so called generic strategies and more recent subjectivist oriented and process oriented research (Quinn & James & Mintzberg 1988). In the classical phase there could be mentioned research work carried by Chandler (1962), Wrigley (1970) and Rumelt (1974) and the writings of Ansoff (e.g. 1965). The second wave of the classical thinking came mostly in early 1980s in the form of generic strategies, most notably by Miles & Snow (1978), Porter (1980 and 1985), Miller & Friesen (1978 and 1982). The strategic management accounting literature has relied mostly on the work of Porter (1980 and 1985), who introduced five competitive forces, which determine each industries and furthermore he specified three general bases for companies to obtain sustainable competitive advantage, cost leadership, differentiation and focus strategy and the concepts of value chain and strategic cost analysis. The pivotal choice between differentiation and cost leadership strategies has since been criticized by some academics and practitioners and it has been said that in modern competition you have to be strong in both dimensions. This simultaneous differentiation and cost strategy has been called outpacing strategy by Horvath et al. (1997), meanwhile Porter (1996) has replied that the ongoing and intensifying raid for the operational efficiency could not be interpreted as strategy at all. Cooper (1996) has introduced such concepts as survival zone, confrontation strategy and simultaneous importance of product functionality, quality and price under intensive competition. Miles and Snow (1978) categorized different strategic archetypes, defenders, prospectors, analyzers and reactors, according to their responding to the environment and ways to configure technology, structure and processes. Furthermore, three strategic missions for the strategic business units have been categorized by Buzzel, Gale and Sultan (1975) and Hofer and Schendel (1978). Prahalad & Hamel (1990) introduced the concept of core competence, and suggested the building of the global strategic organizational architecture, which relies on these organizational core competencies. This idea emphasized group wide value chain arrangements, not just strategic business unit level value chain and cost management.
The first two categories of strategic management literature have, however, mainly passed the deeper behavioral dimensions of strategic management or at least treated it as quite unproblematic field. Strategies are formulated in linear, rational, systematical and analytical way, they are proactive and formal plans. (Dent 1990) However, Lindblom (1959) saw strategies surviving somehow by "muddling trough" incremental and unrelated decisions and actions and Mintzberg et al. (1976) recognized, that decision making were continuously interrupted, continued and repeated, while Pettigrew (1973 and 1985) described, that the strategic decision making was constituted of conflicts and fights between different coalitions. These organizationally grounded researches see strategic decision as a messy, disorderly and disjointed activity with conflicting interests (Dent 1990). According to the incremental strategy perspective, the strategic management is not linear and rational action but the strategies are formulated or emerged through social processes, and the emphasis is thus in the process view and the role of actors in this process can be seen as increasing. (Mintzberg et al 1976, Pettigrew 1985, Johnson 1987). According to Quinn (1980) incrementalism is not born muddling through, but it is a purposeful, conscious, effective and systematic executive practice based on iterative series where strategies are generated and implemented in incremental way step by step. The interpretative strategy perspective assumes that reality is socially constructed and it holds that complexity of strategic management is due to the attitudinal and cognitive complexity among diverse stakeholders (Chaffee 1985, Johnson 1987, Santala 1996) and managers shape the minds and attitudes of the organization's members in a way that is expected to produce favorable results (Bourgeois & Brodwin 1984, Chaffee 1985, Pettigrew 1985, Santala 1996), while strategy is a mental image, an abstraction, which exists only in minds (Mintzberg 1987). Strategic management is hence a tool to manage organization culture and motivation and commitment are essential success factors and the scope of the strategic management is not just in top management, but organization-wide. (Van Cauvenberg & Cool 1982, Bourgeois & Brodwin 1984) Furthermore, Mintzberg (1985) has separated concepts of deliberately and emergent strategies and questioned (1994) the overall relevance of formal strategic planning, which have been suggested e.g. by Vancil & Lorange (1975), Lorange (1980) and Chakravarthy & Lorange (1991). Goold & Campbell (1987) studied the planning and control modes of large groups and they identified three alternatives to arrange these planning and control actions; strategic planning, financial control and strategic control. Interesting notion is also introduced by Prahalad & Bettis (1986) in the form of dominant logic.
Applied managerial philosophies might also have effects on the management accounting practices, because it might e.g. raise different issues as important and thus measurable. They might create new order, culture and visibility and they might lead to new kind of organizational solutions. Management philosophies are under continuing development process and they are often closely conceptually related to each others. According to some commentators, they might, however, affect even very dramatically on management practices. For example traditional concept of management control (Anthony 1965), which separated this concept from strategic planning and operational control has been criticized as being much too narrow for the modern business, because of environmental changes and modern management philosophies (Otley 1994), such as business process orientation, benchmarking, activity based management, JIT, continuous learning, lean-thinking, total quality management, management through values, empowerment, team management. It was said to be evident, that management control encompasses parts of both strategic planning and operational control, when manager continually reformulates the strategy to match the environment being faced and to monitors the implementation of corrective actions at an operational level. Responsibility for control and adaptation might be pushed down at relatively low levels. (Otley 1994))
In this study the concept of management philosophy is considered as a holistic action pattern (including both different kind of management and production philosophies), which is deeply intertwined with the much more broader concept of organizational culture, which is defined in this study similarly to Schein (1985) or Morgan (1986) as a shared reality construction (shared basic assumptions, beliefs, meanings, understanding and sense making). The relationship between organizational culture and management accounting could also be very multidimensional. Management accounting could impact in cultural changes and culture can foster or dilute real changes is accounting systems change projects (Partanen 1997).
Environmental factors and management philosophies configure also organizational structures and different organizations need different kind of information to support their planning, decision making and control (Hopwood 1986. 9-10) and organizational structure itself could also be considered as a control device (Emmanuel & Otley & Merchant 1990, 52). Organizational framework create requirements and special characteristics on the systems operating in it. Organization could be divided by product lines, by geographical areas, it could be combined from them (a matrix structure) or it could be a project organization. Organization could operate in only single industry, in few industries or it could be a diversified conglomerate and the scope of vertical integration could also vary a lot. By their responsibility bases, units of an organization could be cost centers, revenue centers, profit centers or investment centers. Finally the organization form could be divided into national, multinational or global organization according to its degree of internationalization (Porter 1986, Bartlett & Ghoshal 1989, Mouritsen 1995). Core competence strategy implementation could also lead to more or less formal strategic organizational architecture (Prahalad & Hamel 1990). Organizational structures have changed during decades following more or less the environmental changes e.g. from hierarchical and vertical pyramid to low and horizontally connected nets (Drucker 1988), which might make information transformation even quicker and better and enhance further the key success factors. (Young & Selto 1992) This kind of horizontal thinking could be also found in several management philosophies.
Strategic management accounting could broadly be described as a long range, future and outward looking approach which is also trying to cope with new views inside the organization as well as it might include non-financial measures. It could perhaps be generally said that ideas of strategic management accounting have been developed as one avenue to respond to the famous "crisis" discussion of management accounting by Johnson & Kaplan (1987). Bromwich (1990) has defined strategic management accounting as the provision and analysis of financial information on the firm's product markets and competitors' costs and cost structures and the monitoring of enterprise's strategies and those of its competitors in these markets over a number of periods.
This type of strategic cost (and revenue or profit) analysis had been suggested most notably by Simmonds (1981 and 1983), Bromwich (1990) and Bromwich & Bhimani (1994), and Shank & Govindarajan (1989 and 1993). Also Porter himself (1985) should be recognized as one essential contributor in the field, despite his non-accounting scientific background. Activity based cost management (Cooper et al. 1987), life cycle costing, target costing (e.g. Kato 1993 and Cooper 1996) and balanced business scorecard (Kaplan & Norton 1992 and 1993) are considered other major issues of development, which could carry strategic kind of potential as well as strategic investment appraisals (Bromwich 1990, Shank & Govindarajan 1993), and different product, customer and competitor analyses.
The relationship between management accounting and strategic management lies not only in these normative kind of new ideas. It is also said, that fostering multiple perspectives in reporting and coordinating complexity are increasingly important for management accounting in global competition (Dent 1996) and global value chain coordination is characteristic to the management accounting of the global firms (Mouritsen 1995). Management accounting and strategic management are always parts of the same management and control processes (e.g. in the long term and short term profit planning in budgetary process) (Welsch & Hilton & Gordon 1988). Strategic management has belonged in the strategic level and management accounting traditionally more or less in tactical level (Anthony 1965). The relationship is however not so simply as classical planning model implies (e.g. Hartman 1993). According to Simons (1991), management control systems could not only be used to control current strategies, but also to formulate new strategies, if they are used interactively. Furthermore, the budgeting process is said to be strategic by quantifying and evaluating strategic plans, accounting could have strong influence on how a firm utilizes its capacity, it can be an instrument for motivation and implementation or it can promote values in organizations. (Mouritsen 1991)
Conventionally strategic planning and management accounting have been considered as belonging to different part of the management process (e.g. Anthony 1965), strategy looks also typically outwards and management accounting inwards the company. Strategy is future, qualitatively and long term and management accounting historically, quantitatively and short term oriented. Strategy tries also look to whole company or total value chain and create synergy while management accounting splits company into separate controllable parts. (Look also at e.g. Hartman 1993), thus the development disciplines for strategic management accounting can broadly be found here: it should be more future, external, total value chain and long run oriented and include also non-financial measures. The agenda of strategic management accounting will next be analyzed issue by issue in the form of theoretical literature review.
Most of the publicity of the strategic oriented management accounting innovations has been received by the activity-based costing (ABC) promoted by Cooper and Kaplan (1987). ABC has since matured into general management process called activity based-cost management (ABCM or ABM) (Cooper et al. 1992) in which the essence could be found in the process of cost management, not just in the process of costing. Despite their conceptual differences, ABC has also moved closer to Porter's value chain thinking (Mecimore & Bell 1995 Selto 1995). ABC could be part of the studying and reconfiguration of the company's value chain. Also the popular business process management seems to fit conceptually well with the ABC. The strategic relevance of the activity-based cost management could be found firstly in the potential for more accurate product cost information, which could for example lead to better pricing and product mix decisions and profitability. ABCM could also be useful in customer and segmental profitability analyses. Third central strategic element of the ABCM is the close connection with the re-engineering of the value chain, activity chain or the processes of the firm. It could be hypothesized that this kind of strategic advantage and the impetus for change from activity-based approach might well be gained from the preliminary activity analysis phase, without utilizing any routine activity-based costing system.
Shank & Govindarajan have advocated the usage of strategic cost analysis (1989) or management (SCM)(1993), which lay in the ideas of Porter (1980 and 1985). According to them, SCM involves three major steps: the identification of value chain, the diagnosis if its cost drivers and development of sustainable competitive advantage. These analyses are also linked to the broader strategic cost management concerned with the value chain. The value chain is defined as the linked set of value creating activities which stretches from raw materials to the ultimate end-use product delivered to the consumer. SCM advocates that companies should recognize their place in the total value chain and try accordingly to develop management accounting information. The emphasis is on the interactions with supplier and customer linkages. Shank & Govindarajan have in SCM created perhaps the most comprehensive single framework for strategic management accounting, even though the demonstrated empirical significance has been so far quite limited (Lord 1996) and not much accounting information has been assessed to be suitable in analyzing the value chain (Hergert & Morris 1989).
One major contribution to SMA comes from Japan in the form of target costing (TC), which should be seen as a wider concept than just a technique to set target costs. It could be seen as mechanism to integrate and control the corporate activities, in which the information flows in flexible way between marketing and market research, product research and design, production and accounting and which is deeply connected into the strategic planning and management processes. TC process could be broadly divided into three major activities: future price projection, profit planning and manufacturing experience (Kato et al. 1995). Cooper (1996) has divided TC process into price driven costing, product level target costing and component level target costing. Target costs are tried to be achieved in practice in product planning mainly through value engineering and after the production has started mainly through continuous improvement. (Lorino 1996) Target cost management is quite a unique discipline of strategic management accounting in a way that it has a clear even though culture bounded evidence behind it. Essential characteristics are also its customer oriented background, cross-functional orientation and importance of organizational learning as well as the Japanese way to carry it very systematically. Motivation and achievement are emphasized, not just control activities (Hiromoto 1988).
Life cycle thinking, one strategic analysis tool, has been applied in management accounting in the form of life cycle cost analysis. The product life cycle spans the time from initial research and development to the time which sales and support to customers are withdrawn, meanwhile accounting systems and reporting are usually calendar-based. Product life cycle costing (PLCC) tracks and accumulates the actual costs attributable to each product from its research and development to customer service and other support in the marketplace and life cycle budgeting similarly estimates those costs. Life cycle accounting budgeting could so give important information for pricing decision., and it also highlights the point that all costs from the different phases of the life cycle should be covered. It also points out the typical early commitment of costs. The linkages along the value chain as well as linkages along the life cycle could so be made visible. (Drury 1996, Horngren & Foster & Datar 1991, and Raffish & Turney 1991)
Strategic positioning and competitive advantage are also relative concepts and utilizing these has stated to need strategic level management accounting information not just about companies itself but also about their competitors. Simmonds (1981 and 1983) suggested this kind of information in order to determine the market share and competitors' cost, volume and pricing issues. He also advocated that this kind of information should be included in the management accounting reports. Competitor accounting has since been suggested in different forms e.g. by Goold (1986), Wilson (1991 and 1994), Ward 1992a-b, Bromwich & Bhimani (1994). Competitor information is receivable through public sources, such as annual reports, press, official institutions, statistics as well as informal sources, e.g. sales personnel and other business functions, customers, other competitors and suppliers, analyzing competitors' products or other physical observation, shared sources of finance, industry specialists, consultants, trade centers, competitors' old employees etc. Reliability of competitor accounting has questioned e.g. by Lord (1996). Broader concept of benchmarking is a close phenomenon to competitor accounting, but it is often based on inter organizational cooperation. Competitor accounting could perhaps also be defined as a special accounting-based form of strategic level benchmarking, which does not include cooperation with the object of this comparison activity.
It is usually important for companies to launch new successful products into markets in the right time and with the right price with reasonable profit margin. Decisions concerning new products is one essential part of long range plans and strategies (eg. Horngren & Foster & Datar 1997). In the context of product strategies accounting has supported generally pricing and product mix decisions and full costing has considered relevant approach (eg. Spicer 1992). Activity-based costing, product life cycle analysis and target costing could be perhaps very useful approaches here. Bromwich (1990) and Bromwich & Bhimani (1994) had, in addition, suggested a special product attribute costing. In this approach, each of company activities or resources employed should yield benefit to customers for which they are willing to pay. The firm should therefore seek to trace the costs of enterprise activities and resources to these benefits (not just to products as in traditional approach) in order to compare the revenues generated by these benefits with their costs. Each product should, though, be seen as a bundle of characteristics offered to the consumer each of which customer is willing to pay (look also Lancaster 1979). Demand of goods are derived demands for their underlying characteristics. The emphasis used on this kind of analysis depends on a firm's strategic approach. In their demonstration (1994), costs were divided into product-volume, activity, capacity and decision related costs, while benefits were categorized into product, outlet and other benefits.
Quite similar thinking has also employed in value-based pricing, which also stems from the benefits experienced by the customer in using the product in special purpose. This method is mainly used in business to business marketing and it requires careful analysis of the benefits experienced by the customer, because different customers or segments could value the benefits in a very different way as well as different product compositions could generate very different benefits. (Webster 1991). Shapiro & Jackson (1978) have divided value based pricing into four phases: understand the total use situation of the customer, define and analyze the variables, that determine the benefits to the customer in this use, define and analyze the variables, that determine the the customer's costs in using the product and finally determine the cost/benefit tradeoffs in customer's use situation.
The selection of the targeted customers can be pivotal issue in strategic positioning. Customers could be divided into segments for example according to geographical bases, by distribution channel used or by services supplied. Different sales, administration and other overheads are not allocated into customers by traditional cost accounting methods and activity-based costing might be utilized here successfully. Customer profitability analysis investigates, how different customers or group of customers differ from by their profitability. Traditional presume has been that all costs should allocate into customers and cumulative sum of customer costs equals the total costs of a firm. Alternative approach is to apply hierarchical activity-based costing, where activities could be divided for example into enterprises-, market-, channel-, customer-, order-, parts- and direct-material related costs and profitability could be accordingly categorized into total profitability and market, channel, customer/segment profitability contribution and gross margin on parts. (Foster et al. 1994, Horngren et al. 1997, 590)
The competitiveness and success of companies are dependent on several issues and customer focus, time, quality, learning, education and innovations have been mentioned as critical success factors. Financial aspect is just one part of management control as well as management accounting is just one part of management control system. Financial measures typically reflect the result of business activities, not the activities itself. In recent years there has been a lot of discussion concerning the employment of non-financial measures in control and performance measurement activities and it has been said that these measures could give concrete measurement results of the business activities and processes, which could be therefore better controlled and developed. The terminal point for implementing such measures is the identification of the key success factors of the company, such as customer satisfaction, excellence in manufacturing, leadership in marketplace or technology, quality, reliability, fast deliveries etc. Concrete measures, which could link the performances and applied strategies together, could be defined according to them. Connection with both strategy and operations have been the pros of non financial measures, while the contradictory results between different non-financial measures as well as compared with financial measures have mentioned as negative implications. (Horngren et al. 1991, Fisher 1992, Shank & Govindarajan 1993, Vaivio 1995).
Kaplan & Norton (1992) have introduced a special balanced scorecard, which brings together financial and non-financial performance measures in scorecard. Similar ideas have applied earlier in France under the title "tableu de board" referring the idea of control panel of business (Lebas 1994), and Judson (1990) has developed Performance Pyramid System, which was further developed by Lynch & Cross (1991), utilizing similar ideas than Kaplan & Norton. In Balanced scorecard approach physical and operative measures from four perspectives (financial, customer, internal and innovation) are deducted from the corporate vision and strategy, thus the BSC is mentioned as a structured approach to measure the performance of a firm and that the leading rationale behind it is that in order to satisfy its own financial needs, the company should satisfy the customer needs with such organization, which could do this also in the long run, which requires effective value chain. One possible linkage between strategy, management accounting and non financial measures might be found also in the appraisal of costs and benefits caused by the possible strategic and operational changes indicated by the non financial measures.
There could be found clear connections between strategies, management accounting and capital budgeting decisions, which affect on the performance of the companies in the long run. Net present value method, based on the discounted cash flows, is generally suggested as theoretically sound judging method for capital investments. According to it a company should accept all investments, which generate positive net present value. In practice, however, the connections between strategy and capital budgeting decisions are noticed to be essential, a matter of fact, which has been noticed quite in quite limited way in traditional capital budgeting literature. Problems could occur also in occasions, when investment has been justified by applying DCF-method but it has been measured afterwards by accounting measures. Specially the investments made in advanced manufacturing technology have been stated to need very careful strategic conceiving, because consequences of such investment could be very hard to appraise and quantify. Investments reflect customers, markets, future products and customer needs and capital investment decision could thus be connected almost into every issue of the strategic management accounting agenda. (Tomkins 1991, Chalos 1992, Bromwich 1992, Tomkins & Carr 1996) Western companies are accused to dropping behind in global competition because of slow implementation of modern manufacturing technologies (Jaikumar 1986) and one reason for that is lack of decent investment appraisal methods described before (Abernathy & Hayes 1980).
Kaplan & Atkinson (1989) suggested the judgment of all possible benefits gained from the future investments, Porter connected the technology decisions into strategic analysis and Bromwich & Bhimani (1991) have suggested special strategic investment appraisal matrix, where in addition to monetary and non-financial judgment, less easily quantified benefits were noticed by special scoring by managers. Shank & Govindarajan (1993) and Shank (1996) have applied their value chain - strategic positioning - cost driver analysis -concept also into the investment appraisal. Tomkins & Carr (1996) have recently linked together different avenues of strategic management accounting in the form of systematic formal analysis for investment decisions. Market & competitor analysis, value chain analysis and cost driver analysis are gathered under this framework. As time has been established as one key success factor, it has had consequences also into the investment decisions and a special breakeven time analysis (BET) has suggested, which borrows from the ideas on DCF, payback-time and life cycle analysis. In addition to studies, which have concentrated on the accounting techniques used for project selections, Slagmulder (1997) has studied how management control systems are actually used to achieve alignment between single units' strategic investments and corporate strategy.
Strategic management accounting has been studied also from contingency and subjectivist approaches, in addition to the normative and analytical "schools" described before. Contingency approach could be characterized also partly as normative, but it could be separated from SMA, which aimed at help strategic decision making. Contingency oriented studies concentrates on describing how accounting systems should optimally be built in order to support the chosen strategy. For example in studying the meaning of management accounting for strategic decision making, it has been stated that management uses verbal, qualitative, general and external information in identifying strategic problems and quantitative, special and detailed information in implementing phase (Gordon et al. 1978). According to Khandwalla (1973), the intensity of competition affects the employment of control mechanisms and according to Gordon & Miller (1978) the rapidly changing environment emphasizes more frequent and future oriented reporting. For Amigioni (1978) increasing organizational complexity leads to expanding the accounting systems by adding new elements, while environmental discontinuities would require often adaption of new and relevant accounting system. The relationships between different strategies (hold, harvest and build) and measures for incentive plans have been studied by Govindarajan & Gupta (1985). According to Anthony et al. 1992 and Shank & Govindarajan (1993), long term and subjective measures were found to be more suitable for building strategy and short term quantitative measures for harvest strategy. Under the build mission budgeting is used for short term planning, not for surveillance control, unit managers played wider role in preparation and revision of budgets, strategic planning is important, because of growth-related conditions of high uncertainty, and finally capital budgeting decisions are based on subjectivist and qualitative issues. The harvest mission was linked with opposite extreme of management control system characteristics. Relationship between Porters generic strategies (differentiation and cost leadership) and cost management were discussed by Shank & Govindarajan (e.g. 1993), where traditional cost accounting (standard costing, product costing) was related with cost leadership strategy and marketing cost analysis and related issues with differentiation. Connection between different strategic archetypes of Miles and Snow (1978) and their management control systems (Simons 1987), and also more broader set of archetypes systems (Porter 1980, Mintzberg 1973 and Utterback and Abernathy 1975) were linkaged to their management control in following study of Simons (1990). Forecast data, wide commitment to strategic planning, frequent budget revisions were typical for prospectors and related archetypes (differentiation and entrepreneurial) and cost control and more top down oriented planning methods for the opposite archetypes (defender, cost leadership and adaptive strategies). Goold & Campbell (1987) have separated different styles of strategic management of large enterprises; strategic planning, financial control and strategic control style, which have impacts also for management control systems employed in these archetypes.
The normative strategic management accounting literature is mainly based on normative and technical strategic analysis literature, and thus it is rather objectivist and mechanical by nature. In this sense, interpretative and incremental strategy perspective could deepen and enrich the picture of strategic management accounting. Some studies of this kind have also conducted. In these more subjectivist oriented studies the accounting has been used as a device for strategy implementation, when closing coal mines (Tomlinson 1993) or for attention directing to strategically relevant issues (Simons 1990) or for offering the language and support for legitimization, when strategies are negotiated compromises in organizations (Dermer 1990). According to this subjective point of view, strategic management accounting could (perhaps) support organizational learning and incremental processes of change by promoting values through language it offers. (e.g. Hartman 1993, Pellinen 1996)
Value chain, cost driver and product attribute analysis, target cost management, balanced scorecard, competitor accounting and strategic investment appraisal are all avenues, which hold clear position in strategic management accounting literature. Activity-based cost management, target cost management and customer profitability analysis have perhaps the widest empirical evidence about their the strategic relevance, and recently the balanced scorecard approach is also increasingly adopted by the companies. Implementation of competitor accounting, strategic investment appraisal, value chain, cost driver and product attribute analysis and life cycle accounting seem to face large amount of technical or behavioral barriers in organizations, because they are very different from existing management accounting practices and systems. ABC and customer profitability analysis seem to are closer to the traditional management accounting practices, and thus they could be psychologically and technically easier applied. Compared with them, balanced scorecard might require more changes to the traditional ways of management accounting thinking, e.g. because of non-financial aspects. Most of the information required in balanced scorecard, might, however, be already gathered by different organizational functions. Thus, from the management accountants' point of view, it might technically be merely a question of combining and reporting this data.
It could be said, according to the conducted literature review, that strategic management accounting literature is rather fragmented by nature, and it includes many different - but often very close and overlapping - avenues. It could also be noticed, that strategic management accounting literature of the 90s relies mainly on the academic strategic discussion of the 70s and 80s, which is later strongly criticized, particularly from the subjectivist point of view, but also due to the changing competition environment. More realistic framework for studying management accounting in supporting strategic management accounting could be outlined by taking into consideration the complex nature of management and decision making. Strategic management is e.g. usually connected with high uncertainty and disagreement of objectives (Thompson & Thuden 1959, Burchell et al. 1980), and the individual or organizational actions might usually be described as only bounded rational (Simon 1972). Decision makers do not have all the needed relevant information or the information is unconscious or ill-structured (Pihlanto 1983). Such concepts as individual commitment, values and strategic intent have been increasingly weighted in strategic management literature (c.f. Bourgeois & Brodwin 1984, Prahalad et al 1989). In this sense, from the point of view of strategic management, the impetus of management accounting might only be indirect by nature. Strategic consequences could, however, be seen e.g. in creating, legitimizing, promoting or stopping the strategies, shared values or strategic intent by giving visibility to some intended or unintended issues. According to the normative literature, changing contingency factors seem to guide management accounting practitioners and academics to the fascinating developments and relevance seeking. On the other hand we have evidence, that it could be very hard and only partially successful to really change institutionalized systems like accounting in organizations and there could also be other than economically rational reasons to arrange accounting systems in organizations in some particular way. Furthermore, external influences are reflected in organizations through complex and sometimes unanticipated processes.
Several simultaneous changes in the 90's brought huge opportunities and challenges to this particular industry and also lead to industry restructuring. Deregulation, combined with new technologies and new services, has created new environment. With deregulation, there emerged a need for target company and its rivals to supply not only products for established customers but also to supply complete systems with the services and technologies for new customers. The industry could be characterized by high technological complexity and intense competition. Successful focus strategy has led the target company to the path of high growth, increasing uncertainty and high profitability. Growth means also global, world wide competition and globalization of business activities, not only in sales but in production and R&D activities. This kind of growth means severe challenges for control systems and practices. Case site is thus operating under high uncertainty, which might lead to higher institutional isomorphism according to DiMaggio and Powell (1983). Global activities mean also new normative and mimic pressures to the target company. Company should follow international as well as different local accounting regulation and it also has to match competitors in quality and speed of the financial reporting. Thus, while management and financial accounting are deeply interconnected, this has many consequences on the management reporting. Also the importance of competitor analysis increases. The domination of the technical matters hinders the importance of the management accounting in decision making, but also states enormous requirements for the finance & control function to understand complex technology and business. System supply business means, that single projects are very important.
Both differentiation and cost strategies were emphasized in the target company, even though differentiation has a dominating role. It was thus interpreted in the study, that the case site followed the differentiation strategy, but was simultaneously increasingly trying to enhance it's operative efficiency. By focusing, the company had also turned into its new core competencies and was constructing global organizational architecture based on these core competencies (Prahalad & Hamell 1990) and could thus be seen as having global organization (Bartlett & Ghoshall 1989). New innovations and technological leadership are determinants of success but the voice of customer is the key. In this sense the strategy is close to that of prospector's strategy according to the typology of Miles & Snow (1978) According to the strategic mission, the target company could be clearly categorized into that of build strategy. Global core competence thinking leads to growing importance of the whole interconnected corporation instead of single units. This tension could be seen in several issues discussed in this paper. The target company has an extensive and well defined formal strategic planning system as well as an annual planning system (including budgeting). The control practice could be described strategic planning (Goold & Campbell 1987) and global organization arhetypes (Bartlett & Ghoshall 1989) Planning is conducted with wide involvement, and commitment to plans are strongly emphasized, which reminds closely culture or crescive models of Bourgeois & Brodwin (1984) and prospector and differentiation archetypes (Simons 1990).
The target company was characterized as a company with an engineer's culture. Engineers consists of the largest group in the firm's personnel. Thus, the technology, products and production have traditionally been considered very important in the target company, while commercial and financial voices have played minor roles. Engineers were, however, characterized as number oriented and exact persons, a matter which was considered to be good thing for accounting, which produces needed exact-like calculations in order to create order in uncertain world of the target company. New ways of acting were generally allowed and encouraged in the target company's culture, also in the case of accounting. Company was felt as extreme creative in strategic issues. Cross functional teamwork is characteristic to the target company. It is promoted by management, and it is also necessary due to the matrix organization structure and the nature of a business.
Ideas of total quality management, process management and continuous improvement, value management and customer focus were applied in the target company. To conclude, the target company's corporate culture supports strongly a new kind of thinking and acting, also in management accounting, but engineer's culture was dominant and financial issues have not commonly been judged as high as they perhaps should in decision making. The business process thinking seemed to highlight the overall need for management accounting to take active role in also customer and product processes. The customer oriented philosophy has been heavily promoted by the top management during recent years. This idea is a part of a corporate wide attempt to create a culture for continuous improvement. There were four corporate values: customer satisfaction, respect for individual, achievement and continuous learning. The organization was intended to be re-engineered in order to create more value, and moreover corporate values and strategies should be supported by performance management. Performance management related measurement had started. Business process oriented management philosophy is also part of this agenda. Finance & control function is also aligned to these general business development processes. It was stated that finance & control function should take part also in the customer and product processes, in addition to its traditional support process. People share skeptic attitude towards new managerial technologies, such as process management and activity based costing, which were commonly smiled. However, the promoted corporate values were usually well respected and understood. The diffusion of customer oriented philosophy had so far reached in the upper level of organization. The earlier, technical oriented ways of thinking were still strong in lower levels of the organization. The customer orientation was also a logical consequence of the new business phase where liberalization of markets had created lots of new customers competing against each other by differentiating themselves through services.
According to the institutional theory, new action patterns could be adapted because of fashion, competitors or more generally for managing the uncertainty. Without questioning the rationality of the implementation in the target company, we can conclude, that new managerial technologies were merely seen as empty fads and slogans in the target company and particularly in the finance & control function. Real organizational action patterns changed slowly and not always in intended or predicted way. There could be found much evidence from the differences between promoted and real organizational cultures.
Target group was organized as a matrix structure and it was also clearly moved into global organization type. The rapidly changing matrix structure was stated to be problematic to be supported by management accounting system and the routine activities of reporting were massive. Different organizational dimensions had different needs, and it was difficult to support them all with one system and clear tensions between dimensions exist e.g. in the form of separate local reporting systems. Severe needs to foster these multiple perspectives in global target firm exists (cf. Dent 1996). Complex and changing organizational structure was hard to support with formal management accounting systems. Organization leads, however, to active cross-functional teamwork, and organizational structure were considered mentally as low and flexible.
The strategically oriented development and practice of management accounting in target company was quite different than was suggested in the literature. The management accounting's contribution to formal strategic planning process did not seem not to be very active, rather, it was on quite marginal level. Mainly, it took place just when the long range plans were translated into long term profit plans. In broad terms, signs of strategic management accounting could be seen, when management accounting was used to quantify the strategic plans and options, and also future markets and customers. Future orientation was seen very important, but long range calculations were, however experienced to be very hard and frustrating to produce, because of huge amount of uncertainty, environmental change and corporate growth. The dominant logic of the top management (personal and interpersonal experience, pure will, strong visions of the future, technology and market conditions) were most essential issue in strategic decision making, which thus was hard to support with accounting calculations, (c.f. Mintzberg 1994).
Several important strategic challenges for the management accounting of the case site could, however, finally be pointed out. There were need for
Strategic planning was formalized and broad process, which had essential importance for group wide core competencies as well as business group control. (c.f. global organization type of Bartlett & Ghoshall 1989, and Porter 1986, strategic planning type of Goold & Campbell 1987 and differentiation and prospector of Simons 1990). Budgeting was seen primarily as planning and coordination device, not performance monitoring device, which was in the line with suggestions of Goold & Campbell (1987) made for strategic planning type of control mechanism, global organization type (Siitonen 1993) and build-mission by Anthony et al. (1992 ).
Future orientation was at best reached in monthly and quarterly made latest estimate statements in management accounting reporting. This emphasized highly the importance of the forecast data and budget updates during the year, which was earlier stated to be typical for strategic archetype of prospector by Simons (1990). Furthermore, according to Simons (1990, 1991, 1995), management could use formal management control systems not only to implement and control existing strategies, but also to guide the emergence of the new strategies by focusing the organizational attention to strategic uncertainties. Thus management with clear vision of their businesses use control systems selectively in a sense that they typically use one and only control system interactively and other systems only diagnostically and these interactive control systems could also formulate new strategies. In target company, budgeting could at the moment be defined as an interactive control system in the target company, because information gathered by it was typically important and recurring agenda addressed by the highest levels of management, the process demands frequent and regular attention from operating managers, data are interpreted and discussed in face-to-face meetings and the process relies on continual challenge and debate of underlying data, assumptions and action plans. There were however signs, that both the planned new logistics system or applied new performance measurement might be the next interactive control systems in the future.
Future orientation and tight frequency of reporting were also in line with the high environmental uncertainty (c.f. Gordon & Miller 1976). The reporting speed had intensified due to the needs of interim financial reporting required for stock exchanges and fast interim disclosure of competitors. Fast reporting causes severe problems but it also reserves more time for management accountant's other activities. Most important measures for strategic and financial control in business group headquarters as well as in the business units were order inflow, sales, sales margin and operating profit. Managerial needs of management accounting information seems to be at least in some occasions quite primitive in a nature, when contrasted with suggested sophisticated SMA methods, but they still are hard to satisfy, because of artificial allocations, consolidations and multiple needs of information.
Activity-based costing was largely considered as consultant's "another fad", which have only little managerial relevance. People were rather well aware of the fashionable character of the ABC, and they like to resist it in different ways. It was, however, considered to be potentially suitable for the process management efforts of the company and as time to time made analysis, but not as another routine reporting system. The ABC system was implemented or the project has started in some plants, and the felt usefulness varied from unit to unit and from person to person. ABC did not carry strategic, but merely operational plant-level importance in the target company. Potential future usage for ABC in case site could, however, be found in customer profitability analysis.
Some value chain analysis has been made in strategic planning processes, but not in sense of management accounting. Value chain thinking was appraised to be potentially useful as making the dependencies between different functions visible. The value chain of the business group is so complex and interdependencies such a mesh, that the potential usefulness of value chain based cost analysis was considered very limited. In sister business group, which has much simpler value chain, these concepts were proved to be more useful. It proved to be very difficult to find any evidence for such activities as strategic cost management by applying interview method. Strategic cost management seemed to be hidden in general management decisions, and was usually practiced intuitively and unconscious way. The institutionalized business unit-based reporting structure with massive consolidations dominated accounting thinking and left value chain thinking distant from the world of finance & control people. Value chain thinking were also treated as a fad in a similar way than ABC by some people interviewed.
The concrete link between value chain and management accounting was found merely in the form of budgeting and profit planning, where management accounting seemed to help in coordinating the value chain by integrating the global marketing and production activities. The sales forecast data and estimate reporting were essential elements of this process. This kind of activities, typical for global firm, have been described earlier by Mouritsen (1995). Management accounting has been expanded also into exploring customer's business (discussed with more details later), which could also be interpreted as the SCM-type extension to the investigation of the total value chain.
Additionally, there were signs of phenomena, which could be described as a special "cost management thinking" in target company. The overall need for cost and profit-related knowledge was said to be increasing in target organization. People were increasingly interested how their activities affect on the profitability of the company. In this sense, it could be talk about the need for overall "organizational profit consciousness", which might be one main additional managerial contribution potential for management accounting function in the future. The importance of the corporate bottom line profitability could, however, be merely seen as a device of the group to control different units and unit managers to maximize the wealth of the wholeness instead of their own units. Executive compensation system were also connected with annual earnings and the value of shares of the whole group. The importance of the wholeness and the strategic architecture were in this sense put above the unit performance. Long term managerial view and long term goal congruence were tried to achieve through additional options plan issued for the top executives.
Target cost thinking was said to be constructed into this industry "by definition", price erosion is well known in this industry and cost management is becoming more and more important. Target prices and costs are conceptually used in corporate planning and budgeting processes and some special cost management programs have been started in single plants. The research project raise further a question concerning the existing western cost management practices and need for further comparison with Japanese practice. In some occasions, product life cycle cost analysis had been made ex ante or during the product development process in ad hoc bases outside the formal reporting systems. Typically, however, the volume of product's demand has exceeded the planned volumes and the profitability has been high. This has led to only little interest to any ex post calculations of this kind. Furthermore, the allocation of R & D costs was considered very problematic in life cycle costing, because the products typically form product families with different generations and variations and the heaviest R & D resources had to be sacrificed into the first generations and the following ones could be further developed on these bases with less costs.
One important separate aspect of life cycle thinking was the felt need to calculate life time profitability of customers. This was however considered as complicated calculation problem, due to the long business relationships with customers, characteristic of the industry.
Competitor analyses were noticed to carry great importance and they were made in target company, but mainly by the marketing, not accounting people. This kind of data was systematically gathered by almost all possible sources. Financial information was included in these analyses mainly from competitors' annual reports. Trade finance department was the key link between finance & control function and the competitor analysis in the company. Competitor oriented seminar sessions, including simulated competition games, were one special form of competitor analysis. Benchmarking was in a wider sense rather extensively used in target company.
Usage of coherent theory of product attribute costing as such could not be found in a case site, but, however, overall additional opportunity and need for management accountants was said to be in appraising new products alternatives and new lines of businesses. Management accounting function is one of the supporting information channels between customers and R & D function and the support was needed in questions related to timing, risks and economic consequences of different alternatives of action. Concrete development of target costing or life cycle accounting approaches might be helpful in the product decisions and product processes in the future. Described new product decisions were proposed to be in existing business to the target company. Appraisal of more radical and undoubtedly strategic change in the form of entering into totally new business was stated to need also management accounting support, but here the information needs, uncertainty and education of management accountants was said to be highly problematic. New pricing methods were currently in debate in target company, specially in the case of software products. Here some development work had already been carried out and value-based pricing approach was planned, where customer's use of the product and the use situation could define the price as supplementary or complementary to the traditional more or less cost-based price.
Customer analysis was seen as an essential part of management accounting's future development. Central issues in this sense were customer and segmental profitability analysis and analysis of the long term viability of customers business. It was considered very important to develop proper global customer and segmental profitability analysis in target company, while business units were the main dimension of formal monthly reporting. The existing reporting system produced monthly transfer price-based customer (or account) profitability report by business units. Global customer profitability analysis from important customers were made on ad hoc basis. Allocation of research and development costs, which were essential part of target company's cost structure were seen as a problem for customer profitability analysis. Customer analyses also bind together the efforts of the global value chain and highlighted the business group profitability, and thus it was in this sense suitable tool to emphasize the global architecture and overcome centrifugal tendencies in single units.
The investigation of customers long term viability was born due to the liberalization of the industry's market. Old customers were typically well rated state owned or public companies. After liberalization, new customers are not as solid, and not every of them will be viable in the future, the risks are hence enormously increased. Also the overall understanding of the customer's existing and future needs in order to find right products and action patterns in right time was seen essential for the future of the target company. This has created demands for management accounting function to take more actively part in planning and analysis of customer's future business. Basic financial statement analyses were employed if possible, but this was not, however, useful for newcomers without any historical records in this particular business. There has been built entire hypothetical business plans for customers and the role of management accountant has been to bring his financial knowledge in this discussion. He/she was expected to contribute to this plan and whole discussion process by constructing hypothesized financial statement and cash flow analysis according to different presumes concerning the cost structures and investment plans. The business plan was also an important base for making the commercial and financial bids for the customer. This kind of development for management accounting was in its early stages but signs were said to be encouraging. Here the focus of management accounting along the value chain was expanding outside the target company and the cooperation with other functions and overall business knowledge of management accounting were increased alongside activities described. Huge problem was, that there were hardly any enough sophisticated controllers for this kind of activities, because of very challenging and novel job description.
Non-financial performance measurement was widely used in target company in order to measure customer satisfaction, operative efficiency and people involvement. They were used group wide, and they were combined with the traditional financial measures. Unit specific non-financial measures had also employed. The goal of employment of this scorecard was to measure excellence in performance by breaking targets into concrete measures and linking them to processes of the target company. Non-financial measures were understood very useful, because they make the processes more visible and shake the existing beliefs. Management accountant function was, however, with some exceptions, very little involved with these measures. Accounting people shared commonly the view of their potential, but also stated serious notions about the reliability of the non-financial measurement.
No formal strategic investment appraisals were found in target company. Global corporate strategy and the alignment of the unit investments with it, market factors, and the subjective dominant logic of executives dominated the strategic capital budgeting decisions, not formal investment analyses and quantitative aspects. These notions find their references from literature concerning core competence (Prahalad & Hamel 1990) global strategy (e.g. Bartlett & Ghoshall 1989) group-unit tensions (Slagmulder 1997), build strategic mission and related uncertainty (e.g. Anthony et al. 1992) and subjectivist view (Lumijarvi 1990, Wikman 1993).
The case site was selected as a representative of the most likely setting in order to find modern strategic management accounting practices. However, relatively little evidence about strategic management accounting was found. Closer to the strategic level some literature-based innovation was considered, it was more unlikely adopted in the target company as management accounting (SCM, TC and product attribute analysis, strategic investment appraisal). More strategic the utilized innovation was, it was more unlikely, that management accounting function got involved in it (e.g. competitor analysis, BSC and SCM). More sophisticated or distant from the traditional practices and existing systems the advocated practice was, more unlikely it was adopted. With some exceptions, the case site needed only little strategic management accounting and the strategically most relevant accounting practices were found from rather surprising directions, such as budgeting and customer interface. The budgeting could be defined as having concrete strategic relevance because it was used relatively interactively and it thus was important tool for guiding the development of new strategic initiatives. Customer concern yielded two important features; customer profitability accounting and customer analysis. These strategic kind of accounting topics include in principle quite conventional accounting methods, which were, however, used in innovative way (profit planning was done interactively, global customer profitability analysis was made to highlight the profitability of the whole business group, and cash flow and breakeven analyses were used for analyzing the customers' business). The management accounting function's involvement in the strategy process of the target company was relatively weak and the strategic impetus of the management accounting took place mainly in the form of few individual interventions. In stead of strategic management accounting, there was need of business and performance management-oriented management accounting, which was in many occasions rather operative and even rather simple by nature. In this sense, despite the intended most likely research setting, this study does not give much support to the existing normative strategic management accounting literature as such.
Some important strategic (and operational) challenges for the management accounting of the case site were, however, finally pointed out. These are 1) the need for well defined strategic control measures, 2) supporting the business from measuring and analyzing simultaneously multiple perspectives, 3) promoting strategic intent and commitment, 4) interactive scanning of strategic uncertainties, 5) controlling and coordinating the global value chain and resource allocation and finally 6) ability to give some real substantial content to the strategy process, related to product and customer processes of the target company.
Environmental and strategic changes and modern managerial philosophies were reflected in a complex way to the development of management accounting, which was influenced also heavily by the organizational structure and culture and their ongoing changes in the target company. There could be found both similarities and differences between the normative agenda of strategic management accounting, used as a framework for categorizing the case findings, and between the practice of target company. The strategic management accounting tools suggested in the literature were mainly not used and even not needed in the case site. Target company is however a very successful firm. In this sense we can say, that this study does not support very much the normative strategic management accounting literature. Merely there found out several barriers and problems concerning the strategic management accounting application and implementation. According to the rhetoric of the contextual generalization, even the overall relevance of some of the suggested business unit or plant level SMA-tools in studied context (high tech industry, global, core competence and differentiation strategy) could finally be questioned. In this context central managerial issues are related with innovation, organizational learning, creativeness, personnel commitment, technology and skill combinations and transformation, promotion of strategic intent, coordination of global corporate value chain and societal lobbying. A step towards new theory concerning the accounting and strategy in described environment could, thus, be suggested. This kind of ideas of global challenges for management accounting has earlier been suggested by e.g. Dent (1996). Also the subjective nature of strategic management sets several limitations to the normative strategic management accounting development.
Management accounting practice and systems of the target company were mainly in line with suggested strategic characteristics of the contingency theory, but the formulation mechanism of control systems could be very different than which could be expected from the rational-based assumptions. Environmental changes and uncertainty had affected on management accounting and had caused pressures to change in target company. Organizational complexity and organizational changes set also severe challenges and also limitations to management accounting systems. Entrepreneur culture and free atmosphere gave high possibilities to develop new kind of management accounting practices. Dominant engineer culture set, however, pivotal frame for the managerial roles of accounting. Adapted new managerial philosophies set new demands for performance measurement. Uncertain and ambiguous management situations, which are typical for the company, might lead to mimetic behavior and institutional routines in order to control these situations. Environmental changes and strategic choices have lead to global business, which leads to new reporting environment with global coordination and control problems, new regulation, new owners and also new competitor-related reporting pressures. The adaptation of customer orientation and other managerial philosophies and also strategy formulation itself might thus be affected by this mimetic behavior or legitimization efforts. Fads are sometimes promoted and applied, even tough not deeply believed by personnel. Embedded institutionalized practices, such as accounting change slowly and often through conflicts.
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