Sulaiman Mitchell

Management Accounting Research 16 (2005) 422–437Utilising a typology of management accounting change: An empirical analysis Suzana Sulaiman a , Falconer Mitchell b,∗ b Faculty of Accountancy, University of Technology MARA (UiTM), Malaysia Accounting and Finance Group, 50 George Square, University of Edinburgh, Edinburgh EH4 3 SU, UK Received 8 April 2004; accepted 6 March 2005 a Abstract Management accounting change, currently an increasingly popular focus for research, is not a uniform phenomenon. Its nature and form may vary across multiple dimensions and this variation has been neglected by researchers who have tended to study change per se rather than distinguishing it though a categorisation by type. This paper explores the forms which management accounting change has taken in a sample of manufacturing companies by utilising a simple typology of management accounting system change, derived from the existing research literature, consisting of addition, replacement, output modification, operational modification and reduction. This classification is combined with information on the incidence, location, importance and success of management accounting changes to provide some analytical insights into the variety and patterns of change within these companies and to derive some guidance for future research on the topic. © 2005 Elsevier Ltd. All rights reserved. Keywords: Management accounting change; Manufacturing companies; Change typology 1. Introduction “Management accounting change has become a topic of much debate in recent years. Whether management accounting has not changed, has changed, or should change, have all been discussed.” (Burns and Scapens, 2000, p. 3) ∗ Corresponding author. Tel.: +44 131 650 8340; fax: +44 131 650 8340. E-mail addresses: [email protected] (S. Sulaiman), [email protected] (F. Mitchell). 1044-5005/$ – see front matter © 2005 Elsevier Ltd. All rights reserved. doi:10.1016/j.mar.2005.03.004 They have shown that different factors relating to the individual. 1991) to investigate how both economic and “fashion or fad” motives have been implicated in the spread of activity-based costing in Scandinavia. 1997. Institutional theory has also recently been used to explain MA change (Scapens. importance and success of MA change in a sample of manufacturing companies. Vaivio. technology. Prior research—the nature of MA change Accounting has traditionally been viewed as a bastion of conservatism. To this end it examines the volume. power (Hardy. Abrahamson. The research design and the derivation of testable propositions are then outlined and the results presented.. It has also highlighted the importance of the following factors in gaining a full understanding of MA change: the need for legitimacy. Malmi. and the ability to loosely-couple newly introduced accounting techniques. 1985.g. which define the form which MA change takes. While this study focuses on MA change its aims are more basic than an explanation of the motives for. Cooper and Zmud. 1996) and organisational politics (Burns. 1994). From this perspective. Bjornenak (1997) and Malmi (1999) used theories of innovation and diffusion (Hagerstrand. the effects of and the circumstances conducive to change. 2. To an extent this view is supported by the gap. sub-system location. 1967. the findings are analysed and some conclusions are drawn. Brown. The remainder of the paper is structured as follows. organisation. Scapens. 1990) to provide a framework for studying the introduction of activity-based costing in two USA automobile manufacturers. Innes and Mitchell. Burchell et al. This work has emphasised the need for new MA developments to become integrated into the existing routines of organisational participants if the change is to operate effectively. Ezzamel. 1990b. pace. Identification of these aspects of MA change enhances characterisation of the patterns which change can take and it is argued that this knowledge will provide a foundation for subsequent explanatory studies on MA dynamics. A novel feature of the research is the use of a typological framework to first identify and then assess the significance of the different forms which MA change can take. Scapens and Roberts. 1986) and by the suggestions of a lag in the practical adoption of new techniques (Dunk. the mimicry of others. change is likely to be slow and constrained rather than frequent and extreme. 2000). 1989. 1981. Burns and Scapens. 2001). 1999). Indeed Johnson and . Finally. which exists between theory and practice (Otley. type. A wide range of perspectives has been adopted in the conduct of MA research studies. Burns and Scapens. 2000) and the consequences resulting from changes made (e. The dynamics of the discipline provide a potentially rewarding setting for investigation of the circumstances and forces which drive the development of practice (e. It is concerned with an exploration of some fundamental characteristics. Anderson and Young (2001) employed information system theory (Kwon and Zmud. For example. 1990b. Further studies have confirmed that the circumstances of MA change can be both varied and complex by attributing importance to concepts such as trust (Tomkins. 1987. Sulaiman. 1985. 1993. 1994. F. 2000).g. Innes and Mitchell. Mitchell / Management Accounting Research 16 (2005) 422–437 423 In the quest to understand real world management accounting (MA) it is not surprising that change has become an increasingly popular focus for research. task and external environment are influential at different stages in the implementation process. Choudhury.S. 1994. Prior research studies are reviewed with a focus on the overt forms which MA change takes and this review is used to develop the typology of change which is employed in the empirical analysis. This analysis therefore provides further empirical substance to address the above broad questions of debate identified by Burns and Scapens (2000). is likely to be gradual rather than radical as it has to become institutionalised. a set of technical changes ranging from the replacement of MA techniques to their modification and extension. An increasing volume of case study research has provided further. First. “. throughput accounting (e. 1995. target costing (e. .g. 1992). Innes and Norris. Shields. 1997. (1994) provide instances of change involving the supplementation of information in existing performance measurement packages. 1998. This latter view fits well with the notion that MA change. 1996. 1991). confirm the great variety of forms which change can take in practice.g. the level of success is another factor distinguishing change. Malmi. functional cost analysis (e. it has to fit the rules. Kaplan and Norton. shareholder value techniques (e. Shank (1996) and Jones and Dugdale (1998) observe the replacement of management decision support systems with new techniques. strategic management accounting (e.. There is now a substantial and growing literature which provides evidence that change has become a prominent feature of contemporary MA practice. 1995. Recent survey research has provided further substantiation for the existence and nature of MA change. partial and temporary change of a more modificatory type. Sulaiman.g. F. 1992. By the 1990s a stream of technical innovations were apparent and descriptions of their practical implementation were widespread. Dutton and Ferguson.. routines and common ways of thinking and doing which exist within every organisation (Scapens. 1996). 1993. Gosselin. Bromwich and Bhimani (1989) have been less dismissive of MA development during this time period although they view change in the discipline as evolutionary rather than revolutionary and therefore likely to lack the conspicuousness. 1992. activity-based cost management (e. activity-based costing (ABC) (e. The variety of these innovations means that they have encompassed most MA sub-systems. 1999) and the balanced scorecard (e. in this respect. 1995. life cycle costing (e. Innes and Mitchell.g. Bjornenak. Burns et al. 125) have proposed that MA exhibited little innovation after the first quarter of the 20th century as. McLaren. in a series of high-tech company cases. 1985). Friedman and Lyne. Bhimani. . 1999). In these corporations change varied from comprehensive costing system replacement to tentative. 1999. Simonds. 1997. Yoshikawa et al. to be effective. Burns and Scapens.. quality costing (e. Mitchell / Management Accounting Research 16 (2005) 422–437 Kaplan (1987. i. in this case traditional budgeting.e. 1995). Chenhall and Langfield-Smith. p. May and Bryan. 1992). 1997) to the achievement of different degrees of success (Friedman and Lyne..g. 1997.g. 1981). 1994.g. Case study research in ABC implementation has also revealed some other dimensions of MA change. This can range from failure (Cobb et al. 1996. Darlington et al. Finally.g. 1997.g. Malmi. For example.424 S. Wallander (1999) shows that MA change can also involve the abandonment of a technique. Innes and Mitchell (1990b) found.g.g. 1999. 1995). Foster and Swenson. Second. New technique adoption has been a focus of many surveys which reveal that practice has changed in a substantial number of firms worldwide (Bright et al. Innes . 1992. 1994. in different organisations and by different parties to the change (Friedman and Lyne. Cases. by 1925 American industrial firms had developed virtually every management accounting procedure known today”. Anderson and Young (2001) chronicle the ‘patchwork’ variation of the technical nature of ABC implementation across the production plants of two automobile producers. 1993. Green and Amenkhienan.g. 1999). Clark. Vaivio (1999) and Amat et al. 1990a). through their descriptive detail of MA changes. changes can be of different levels of importance and indeed the same type of change can be viewed differently. Drury and Tayles. Armitage and Nicholson. 2000).. 1997). Innes and Mitchell. more detailed evidence for the contemporary existence and nature of MA change. McGowan and Kalmmer. Kaplan (1986) and Granlund (2001) recount changes concerning the alteration of the operation of ongoing cost systems. Lukka and Granlund. Shields and Young. which would attract attention. Drury et al.. EVA© (e. e. The process attributes of MA change problematise the boundary identification which would facilitate definition.. While the typology used inevitably suffers from several of the shortcomings identified by Quattrone and Hopper (2001). 1996. Mitchell / Management Accounting Research 16 (2005) 422–437 425 et al. Ratings of the importance of some MA changes have also been shown to differ (Innes et al. Sulaiman. Thus. 1997. even for specific new techniques. Other recent survey-based analyses have had a focus which has extended beyond the adoption of new high profile techniques to consider the volume and prediction of MA change per se (Libby and Waterhouse. the replacement of aspects of MA (budgets by forecasts) and the supplementation of information (financial measures with non-financial measures). Indeed. Table 1 lists the five generalised components of practical level MA change. the nature. Although existing research provides plentiful empirical evidence for the existence of MA change. 1995. This approach may eventually help researchers to find ways in which the diverse nature of MA change can be more systematically accommodated in research studies. Innes and Mitchell (1995) found the adoption of ABC extending to many MA sub-systems while also in some instances being restricted to parts of the organisation. Variation in the success of changes has been found in ABC adoption surveys (Shields. they are of the view that the. These descriptive manifestations of MA change have been used to distil a set of general categories. extension or replacement of operational systems. 2000). nature of this type of change means that it may be more appropriately characterised as ‘drift’.. One way of addressing the challenge of attributing meaning and definition to MA change is to gradually create and test the validity and usefulness of alternative change typologies. should therefore be viewed as only one among many possible classifications which could be made of change in MA practice. 1997. it is derived from prior researchers’ narrations of the practical MA changes. (1999) report changes in the nature of information output (more current and more widely distributed). which make up this typology. It is also evident from survey research that. For example Gosselin (1997) discussed gradations of ABC implementation ranging from the supplementation of existing costing systems with activity analysis and activity cost analysis to their replacement with full ABC systems. Innes et al. aspects of the ‘gains and losses’ which constitute MA change lack identifiability given the obscurities of organisational complexity which hamper comparison of the states of the MA system preceding and succeeding change. often apparently purposeless and indeterminate. 2001). Even at a technical level. 2000) and in more general surveys (Chenhall and Langfield-Smith. which they have studied in the real world. Williams and Seaman. The results indicate a regular incidence of change across all of the companies’ MA sub-systems. no general categorisation of different forms of change has been made.. Moreover. MA change is also multi-dimensional and it may be studied in relation to its origins. which comprehensively encompass the different observable forms of alteration to MA practice that have been researched. a typological representation of MA change. Foster and Swenson. its participants or its consequences. 2000). 1995. The typology used in this paper has the advantage of employing . its technical nature. reduction and modification including replacement. taking pilot study form and representing modification. completeness in the specification of MA change is challenging and this creates an important limitation for research on the topic. Burns et al. McGowan and Kalmmer. it has been observed that the nature of change has been taken for granted and its definition avoided by researchers (Quattrone and Hopper. F. importance and success of MA changes can vary considerably.S. its organisational or external context. These studies have used respondent judgement to identify the volume of MA change in manufacturing companies and its location in terms of the MA sub-systems in which it occurred. Innes and Mitchell. 1998). 2001). The basis of this study. The typology covers MA system increase. The Quattrone and Hopper (2001) analysis highlights many of the challenges of attributing meaning to MA change. 1995). Sulaiman. the use of a pre-determined as opposed to an actual overhead rate in an existing costing system or the use of regression analysis as opposed to an inspection basis for separating fixed and variable costs). May and Bryan (1999). Drury et al. Replacement Introduction of new techniques as replacements for an existing part of the management accounting system (e. Innes and Mitchell (1990b). Drury et al. 1995). Gosselin (1997). (1993). Clark (1985). F. Anderson and Young (2001). Research design 3. Dutton and Ferguson (1996). Output modification Modification of the information output of the management accounting system (e.g. This is important for the viability of this particular study as it required management accountants to classify MA changes. a segmentation of change. Yoshikawa et al. Jones and Dugdale (1998). e. This study introduces and applies the novel typology of MA change . Granlund (2001). Despite this variation and its potential significance for the explanation and understanding of MA development there has been little attempt by researchers to classify change other than by the MA sub-systems in which it has occurred. Innes and Mitchell (1995). the abandonment of budgeting or the cessation of break-even analysis). (1992). which is known to be discernable because it is based on the observations of researchers. Innes and Mitchell (1990b. e. Shank (1996). Gosselin (1997).g.g. the first-time introduction of a non-financial performance measurement package. Typology of change The empirical research reviewed above reveals that change is not only a regular feature of practice but that it is also far from homogeneous in the form which it takes and in its perceived importance and success.g. 3. Wallander (1999). the replacement of traditional costing with ABC.g. Vaivio (1999). Innes and Mitchell (1990b). in accord with the five types shown in Table 1. Mitchell / Management Accounting Research 16 (2005) 422–437 Table 1 A typology of technical level change in management accounting Addition Introduction of new techniques as extensions of the management accounting system (e. Simonds (1981). Operational modification Modification of the technical operation of the management accounting system (e. Burns et al. Bright et al. Friedman and Lyne (1995). Amat et al. Kaplan and Norton (1992). (1999). e. Darlington et al.1. Bright et al.g. e. Shields and Young (1991). Reduction The removal of a management accounting technique with no replacement (e.426 S. (1994). which have occurred in their own organisations.g. Burns et al. McLaren (1999). Innes and Mitchell (1990b.g. Anderson and Young (2001). or of a fixed budgeting system with flexible budgeting). Kaplan (1986). or of a quality costing system). (1992). Kaplan and Norton (1992). Kaplan and Norton (1992).g. (1995). e. (1999). (1992).g. the preparation of weekly as opposed to monthly variance reports or the re-presentation of numerical information in graphical form). (1993). The typology comprises change as represented by the following different forms of practical alteration to practical MA systems: addition of new components. These two extensions enabled a subsequent exploration of the patterns of frequency. which show that new MA techniques have been adopted in practice (albeit to varying extents) and have exhibited a facility for international diffusion. Research method The study was designed to gather information on a variety of the characteristics of MA change in Malaysian manufacturing companies during the period 1997–2001. These propositions are empirically evaluated in a sample of companies as a means of providing a framework for the presentation of the empirical results. by Libby and Waterhouse (1996) in Canada and Williams and Seaman (2001) in Singapore. two extensions to this prior research were incorporated in this study. 3. The findings are then subsequently used for further analysis of MA change patterns. The study is designed to identify (a) whether practical variation in the management accounting system can be classified by management accountants within these categories and (b) whether these categories may prove analytically useful in exploring change volume.S. which it takes rather than the system location in which it has occurred. Consequently this proposition suggests that the experience of change is likely to be a common feature of real world MA. from the existing research literature. It categorises change on the basis of the form. Data was obtained by a postal survey of all manufacturing companies listed on the main and second boards of the Kuala Lumpur Stock Exchange. Respondents were required to answer questions. Three standard tests indicated that non-response bias was not a significant issue. which involved categorising recent technical MA changes occurring in their companies in accordance with this typology. replacement of components. importance and success. These indicated no significant differences in the size of respondents and non-respondents. the typology of MA change described above (see Table 1) was used. respondent ratings of the importance and success of MA changes were obtained. 3. The first proposition reflects the consistent case and survey results.2. and reduction of the system. Mitchell / Management Accounting Research 16 (2005) 422–437 427 outlined in Table 1. Second. A foundation for this is the utilisation of four testable propositions concerning the expected nature and form of MA change (see Table 2). The survey instrument was designed to obtain results.3. It is consistent with the different types of MA change described in existing studies as the supportive referencing demonstrates. However. In total questionnaires were sent to the finance directors of 318 companies and after two follow up letters 92 useable replies (29% response rate) were obtained. which would be broadly comparable with the two recent survey studies of MA change frequency and prediction. These new techniques are varied in function and purpose and are therefore . Sulaiman. in many of the descriptive characteristics of early and late respondents or in the MA change frequencies of early and late respondents. Testable propositions The aims of this study are therefore to characterise certain aspects of MA change and to explore the implications of this characterisation for researching the topic. The propositions match the study objectives and each is derived. F. as a likely descriptor of contemporary MA change. significance and success of different types of MA change. modification of the operation of the system. modification of information outputs. First. The volume of MA change in the Malaysian companies was identified in respect of the five MA sub-systems (see Table 4) used in these two previous studies. Green and Amenkhienan (1992). which permits the identification. Anderson and Young (2001) Cobb et al. finally. MA change research also shows that different types of practical alteration to MA practice are prevalent in the real world. Gosselin (1997). output modification of. Williams and Seaman (2001) Innes and Mitchell (1990a. The four propositions are tested and in some cases modified in the following section. Jones and Dugdale (1998). MA changes have been found to have different levels of importance and success. Thus. In addition. 1990b. (1993). (1992). The variation of these characteristics substantiates proposition four.1. and analysis of certain change patterns with both practical and research implications. Bright et al. replacement of. F. Libby and Waterhouse (1996). operational modification of and reduction of MA MA change will vary in importance and success levels To ascertain that MA change varies in importance and success dispersed across the different MA sub-systems. Drury et al. Innes and Mitchell (1990a. (1992). Libby and Waterhouse (1996). Williams and Seaman (2001). 1999). Malmi (1997). Friedman and Lyne (1995. Wallander (1999). 1995). Innes et al. As argued in the final section of the paper this can both assist with the interpretation of research results and with the design of future research. Burns et al. (1999). Mitchell / Management Accounting Research 16 (2005) 422–437 Table 2 The derivation of MA change propositions Study aim To ascertain MA change volume and pace Proposition Change is a common characteristic of MA systems Supportive empirical literature Innes et al. (1994). Innes and Norris (1997). Proposition 1 (frequency)—change is a common characteristic of MA systems Eighty-nine of the 92 respondent companies reported changes in their MA during the 5-year period of the study. Granlund (2001). modification of system outputs and operation has also been observed and. Vaivio (1999). 1990b. MA systems have been changed as new techniques are introduced to extend the system or to replace existing components of it. Table 3 shows the average number of changes in each company during the period was . Foster and Swenson (1997). Chenhall and Langfield-Smith (1998). Chenhall and Langfield-Smith (1998). Shields (1995).428 S. (2000). 1995). Shank (1996). Drury and Tayles (1994). Together these four propositions allow MA change to be profiled in a manner. Sulaiman. components may have been eliminated without replacement. McGowan and Kalmmer (1997). Lukka and Granlund (1996). Innes and Mitchell (1995). This evidence underpins the second proposition that MA change will be located throughout the full MA system. (2000) To ascertain that change is located throughout the MA system To ascertain the applicability of a change typology to MA change Change will be located throughout the MA system Change will comprise the addition to. Finally. Innes et al. (2000) Kaplan (1986). the third proposition is based on the typology of MA change derived from the MA change descriptions contained in the existing literature. 4. Results 4. Amat et al. 8) Costing 162 (18. However.S.9 % 12 24 22 21 18 3 100 (1) Sub-system location of changes Planning 241 (27.9 average annual rate of change per company.5) Directing 60 (6. The planning and controlling sub-systems account for the greatest Table 4 The location of MA change MA sub-systems Number of changes (%) Average number of changes per company 2.5) Controlling 221 (25.1 1.13 1.5 Range of change in companies 0–4 0–4 0–3 0–4 0–3 0–17 n (2) Scope of changes Companies with change in all MA sub-systems Companies with change in four MA sub-systems Companies with change in three MA sub-systems Companies with change in two MA sub-systems Companies with change in one MA sub-system Companies with no changes 11 22 20 19 17 3 92 Average annual rate of change per company 0. Although MA change in the companies could not be described as uniformly voluminous these results do provide some considerable support for Proposition 1. 4.3) Decision-making 191 (21. Only three companies experienced no change while over 70% of respondents reported more than five changes during the 5-year period.48 0. Proposition 2 (location)—change will be located throughout the MA system Table 4 reveals that the changes are distributed across the five component parts of the MA system. Mitchell / Management Accounting Research 16 (2005) 422–437 Table 3 Volume of MA change Total number of changes Number of companies Average changes per company Range Period of study Average annual rate of change per company Frequency pattern 429 875 92 9.5 0–17 5 years 1. this distribution is not equal.35 0.5 and this translates into a 1.8 0.9 Frequency of changes 0 Number of companies 3 1 3 2 3 3 8 4 3 5 5 6 6 7 5 8 3 9 2 10 5 11 6 12 7 13 4 14 12 15 6 16 5 17 6 Total 875 92 9. The frequency pattern of change showed considerable variation across companies.9) Total 875 (100) .2.4 2.6 2.6 9. Sulaiman.42 0.52 0. F. and Planning (n = 81). the following reported some change in particular MA sub-systems: Controlling (n = 71). Proposition 3 (type)—change will comprise the addition to. Although only 11 companies (12%) experienced MA change in all of the sub-systems. ranging from change throughout the MA system to more localised change covering only some of the MA sub-systems to zero MA system change. The remaining one-quarter of the changes is also fairly evenly split between the adoption of new techniques as MA extensions and the technical modification of MA component parts.430 S. Decision-making (n = 76). Mitchell / Management Accounting Research 16 (2005) 422–437 parts of total change with costing and decision-making also reflecting lower but still substantial portions. Costing (n = 52). 4. the introduction of new techniques to replace existing methods and the modification of MA information outputs. 53 (58%) did have change in at least three of the five sub-systems. The elimination of parts of the MA system without replacement did not occur in any of the responding companies. The contrasting ratings for changes involving replacement are notable as this type of change is rated the most important but only the third most successful. Proposition 4 (importance and success)—MA changes will vary in importance and success levels The first section of Table 6 shows a range of importance and success ratings for MA change. Directing experienced a considerably smaller number of changes. Sulaiman. Around 70% of the responding companies have experienced these types of change. . The location of change is variable. With this limitation. Change has therefore maintained or increased the MA systems of the responding firms. A concentration of change is evident with three quarters of the total volume evenly divided between two types. Over 70% of the responding companies have experienced more than one of the change types.4. These results suggest a proposition revision to the following. F. The typology synthesised from the prior research literature has thus proved to be a viable way of categorising MA change. Directing (n = 35). output modification of. substantial support is therefore provided for Proposition 3. i. The modification of both the information output and the technical operation of MA systems are the most successful MA changes. operational modification of and reduction of MA Table 5 shows change occurring in four of the five types of change comprising the change typology adopted (see Table 1). the average importance and success ratings for MA change are similar although those for success are more widely distributed. These results provide support for Proposition 4. All of the four change types observed are evident across all five of the MA sub-systems. Only in the case of MA system reduction was there no evidence of change occurring. The results show considerable variation in the ratings of these different forms of change. Only a minority of the responding companies have experienced these types of change. replacement of. When combined with statistics which indicate the correlation between each of the change types and their corporate importance and success ratings it is apparent that changes involving the introduction of new techniques as replacements and those involving the modification of information output are rated as more important than the other types of change. The second section of Table 6 employs the typology of change (see Table 1) to ascertain if corporate ratings of the different types of change are associated with different levels of importance and success. Changes therefore do vary in their importance and success ratings.e.3. Of the 92 respondents. 4. However. 8 14.7 Costing 25 15.7 5 n – – – – – – % – – – – – – Total n 241 221 191 162 60 875 431 % 100 100 100 100 100 100 (1) Change type* frequency and MA sub-system location Planning 34 14. 5: reduction. F. 5.9 30. Moreover.0 8.4 28.9 325 37.3 37.4 49 30.3 Decision-making 27 14.8 38. Mitchell / Management Accounting Research 16 (2005) 422–437 Table 5 Existence of different types of MA change MA sub-systems Change types* 1 n % 2 n % 3 n 101 68 73 67 17 326 % 41.1 74 38. in one particular national location and may therefore be dependent on particular circumstances existing at that point in time in that country.6 9. 2: introduction of new techniques as replacements.S.4 11. support the growing evidence from the research literature that contemporary MA is not static in nature. In the large majority of the companies studied change has been a reasonably common feature of MA both over time and throughout many of . Further analysis and conclusion The above results are based on a postal survey of accountants in manufacturing firms and therefore the limitations of any survey research apply.3 89 40.1 80 33. of respondent companies % of respondents 45 70 67 28 Nil % of respondents (2) Number of responding companies experiencing specific types of change 1 41 2 64 3 63 4 26 5 Nil Number of different change types experienced Number of responding companies experiencing this number of change types (3) Variety of change types experienced by responding companies 0 3 1 23 2 34 3 25 4 7 92 3 25 37 27 8 100 * 1: introduction of new techniques as additions.3 33 55. Others. Sulaiman. While bearing in mind these caveats. the results of this study.2 41. The results also relate to one particular time period. 4: operational modifications to techniques. such as the managerial information user. may have different views on and assessments of MA change.2 Controlling 31 14.3 4 n 26 33 17 21 5 102 % 10.1 No.0 Total Change types* 122 13.2 Directing 5 8.0 13. 3: modification in information outputs. they represent the views of accountants who are only one interested party in the MA change process. Two-concerned new technique introduction and two concerned existing MA modification. may explain the high volumes of change observed and the prominence of planning system change. p < 0. it should be characterised by a relatively high frequency and positive importance and success ratings. 1 = medium. The higher level of change was particularly evident in the planning.00 0.84 25 Type of change Pearson correlation matrix 0.76 Pearson correlation matrix 0.54 Based on a three-point Likert scale (0 = low. p < 0. change frequency had a relatively even division between new technique introduction and existing MA modification.336* 0.313** 0.264* 0. 2 = high).70 1.81 (1) Overall ratings 0. to some extent.184 0.90 0. First. Sulaiman. However. and therefore. the most frequent types of change were also the most important. Mitchell / Management Accounting Research 16 (2005) 422–437 Table 6 The importance and success of management accounting changes Importance Average Rating a Success Distribution (%) Average a Distribution (%) Low success Medium success High success 36 47 Success 17 Low importance Medium importance High importance Rating 66 9 Importance Average ratinga 0. 27% and 58% higher than those in Canadian and Sinaporean companies. Second. When these descriptive factors are aligned with the change typology adopted (see Table 8) the following.134 Average ratinga 0.58 0.01 0.05. there was some consistency apparent in the location of changes with decisionmaking. only modificatory change was considered relatively successful. insightful patterns are revealed. If change is to significantly enhance MA value. controlling and costing sub-systems.432 S.019 0. This indicates an efficient prioritisation of change projects. their sub-systems.157 0. Third. respectively. Table 7 indicates that the Malaysian companies surveyed had an average annual rate of MAS change which was. The extreme economic conditions precipitated by this event may have stimulated managerial information demands. F. Problematic change was therefore more likely to be encountered in the introduction of new techniques both as additions and replacements . The heterogeneity of MA change is also emphasised by the quinary typology of change introduced in this study.265* (2) Change typology analysis Introduction of new techniques as additions Introduction of new techniques as replacements Modification of information output Operational modification a * ** 0.54 1.01. Its application indicated that four distinct types of change had occurred. This analysis allows some further conclusions to be drawn. This incidence of MA change confirms its potential importance as a continuing focus for MA research. There were no reductionist changes involving the elimination of parts of the MA system without replacement. The findings also reveal a notably higher rate of MA change than that found in recent. planning and controlling occupying the first three rankings in all of the studies. comparable studies. This study is the most recent of the three studies and it encompassed the period of the Asian exchange rate crisis. 28 0. r = 34 No.42 0.15 1.19 1.3 100. of changes Planning Controlling Decision-making Costing Directing 241 221 191 162 60 875 Average annual changes per company 0.8 18. 433 .9 31.13 1.90 % Rank Libby and Waterhouse (Canada) n = 24. r = 29 No.31 0.0 23.3 21.9 15.44 0.12 0.0 9.35 0.0 3 2 1 4 5 25. r = 45 No.1 100. of changes 17 32 34 13 11 107 Average annual changes per company 0.48 0.47 0.5 6. of changes 86 79 93 34 52 344 Average annual changes per company 0.24 0.23 % Rank 27.52 0.S. Mitchell / Management Accounting Research 16 (2005) 422–437 Table 7 Change in MA sub-systems MAS sub-systems Sulaiman and Mitchell (Malaysia) n = 92. F. Sulaiman.48 % Rank Williams and Seaman (Singapore) n = 93.18 0. r: percentage response rate.1 10.0 1 2 3 4 5 15.0 2 3 1 5 4 n: number of respondents.9 100.9 29.5 25.8 12.0 27.33 0. the degree of voluntarism characterising the change. Fourth. From a practical perspective. Its categories may also be refined (e. the Asian exchange rate crisis) then over time MA design will become heavily oriented to cope with these adverse circumstances.434 S. The absence of any MA elimination without replacement could also be investigated more generally. studies leading to prescriptions for handling change involving the introduction of new techniques are needed as it is in this type of change that success has been relatively low. Different types of change may be distinguishable in respect of the factors. Mitchell / Management Accounting Research 16 (2005) 422–437 Table 8 Insights from the adopted typology of MA change Type of change New techniques as additions New techniques as replacements Modification of information outputs Operational modification Reduction Frequency Relatively low Relatively high Relatively high Relatively low Nil Importance Relatively low Relatively high Relatively high Relatively low – Success Relatively low Relatively low Relatively high Relatively high – to the MA system.g.and intra-organisational sources of change) designed and applied. high economic growth) therefore merit investigation. Its application could be extended to other locations and periods. F.g. change involving the addition of new techniques may be more likely to reflect a “fad or fashion” motive and. 1994). The typology used in this paper also has the potential to enhance behavioural study of MA change. which characterise change as being largely confined to existing MA frameworks and successful change as being more commonly of a modificatory type. This could be achieved by examining the importance and use made of the various component parts of MA. The typology of change proposed in this study has proved analytically useful (see Table 8 and surrounding discussion). This is a significant issue as if it is as prevalent as found in this study it may be indicative of a reluctance to dispose of underused MA elements and consequently of the potential existence of redundancy within parts of the MA systems of many organisations. change involving . based on the uses and users of outputs. Incremental change does occur through new technical extension but is of minor overall significance both in frequency and importance ratings. are consistent with notions of institutional theory which suggests that MA change has to become embedded in the existing operational routines of the organisation in which it occurs (Scapens. on a longitudinal basis covering the economic cycle. This means that the general framework of MA is more likely to be preserved over time. being relatively more radical in nature. modifications could be split to reflect information content changes and information frequency changes) and indeed alternative typologies (e. this type of change may also be more susceptible to both loose coupling and resistance and these factors may contribute to its relatively low success ratings. as this type of change has both a relatively high frequency and importance. the accountant’s legendary reputation for conservatism may also be supported by the above analysis because change in the forms of replacement and modification predominate.g. There also appears to be a ratchet-like mechanism in operation. Sulaiman. introduced during difficult economic conditions. On the other hand. The appropriateness of changes made for this purpose in other circumstances (e. the levels of complexity/simplification inherent in the change or the extra. If change is a phenomenon often prompted by economic difficulty (e. which drive them. These patterns.g. For example. Some avenues of future research are suggested by the findings of this study. This finding has particular significance for the replacement of existing techniques. which preserves the MA system from reduction. Implementing Management Innovations. Nicholson. Anderson.G.A. 1993. Brown. 2000.. 2001) can compromise the comparability and assessment of research results and problematise their generalisability. 1981. R. Bromwich.. Society of Management Accountants of Canada. The dynamics of accounting change: inter-play between new practices. Accounting. S. Organisations & Society 24. Management Accounting Research 8. R.M. The deployment of costing techniques and practices: a UK study.. different types of change may be associated with different behavioural circumstances. M.. References Abrahamson.M. Oxford. Management Accounting (UK). Bright. Downes. (Ed. J. Scapens. R.. H.. 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