Reconceptulising Accounting and its Connections to Strategy

Wai Fong Chua Wai Fong Chua

University of New South Wales

Aim

To reconceptualise how we research accounting and its

connections to strategy.

Accounting, Measuring, Reporting and Strategizing – Re-Using Verbs

Accounting – verb or noun?

Over-emphasis on noun form.

Strategy – verb or noun?

Over-emphasis on noun.

What is wrong with the over-emphasis on nouns? Accounting and strategy become black boxes.

We ignore an analysis of:

Activities.

Connections between activities.

Connections among activities.

Connections among actors, actants in particular space-times.

Multiple translations and transformations of accounting and strategy.

We ignore accounting and strategising.

What does it mean to study accounting/strategy as verbs?

Localizing the global (Latour 2005).

Redistribute the local (Latour 2005).

Connecting sites and time.

Globalising the local.

Accounting / Strategy

Mediator

↓

Active

Translator

Transformer

Mediated Activities

Translated Activities

What does it mean to study accounting/strategy as verbs?

The enactment of strategy is:

A constant movement; circulates in networks.

A fluid translation and re-translation.

Occurs in multiple sets and times.

Is mediated by numerous actors (human and non-human), texts, numbers.

Research Design and MethodsLocalising the global co-product

The field study

OzCom

Major telecommunications carrier

Incorporated in Australia in 1991

Large capital investments in early years averaging AUD$600 million per annum

Market capitalization of AUD$20 billion (as at 2000)

The alliance: OzCom Infrastructure

OzCom, Atlantic, EuroCom, Suppliers A and B

Research Design and Methods Data collection

Data Analysis

NUDIST

Strauss and Corbin’s coding framework

Approximate Period Covered October 1997 - December 1999 Length of Time 26 Months Interviews 27 Meetings and Presentations attended 61 Observation Days (ranging from ½ day to full day) 28 Documents ##

Network of Relationships in OzCom Infrastructure

OzCom Infrastructure

OzCom

Finance Engineering

Procurement

Suppliers

Accounting Technologies

Project Milestones

BPIs Price Schedules

Cost Experiments

Buyer Group

Market Demand

Government

EuroCom

Atlantic Ready-made Technology

Ready-made Prices

Global Prices

License

More Expertise

‘Inadequate’ Forecasting Technology

Benchmarking

Benchmarking

Local Support 80% Australian Content

80% Australian Content

Analyzing OzCom Infrastructure in its Action Net

The formative years

Building a telecommunication network “Ready-made” technology “Value generating” partners “Ready-made” prices

An attempt to manage: “time is the essence” Project milestones measure Privileging time over cost

Cost overruns

Analyzing OzCom Infrastructure in its Action Net (Cont’d)

Designing two control frameworks

Fixed price schedules Business performance indices (BPIs)

Idiosyncratic interpretation of “value” and “BPI failure”

Ambiguities Asymmetries

Control frameworks as sources of controversy and conflict

Analyzing OzCom Infrastructure in its Action Net (Cont’d)

Devising accounting control measures

Cost per subscriber measure

Focusing on committed/capacity cost

Total cost does not matter! Cost per subscriber will control costs

“Low success” with the cost per subscriber measure Growth in the subscriber base Inadequate sales forecasting system

Analyzing OzCom Infrastructure in its Action Net (Cont’d)

Operation break-even (OBE) measure

Focusing on committed cost and “network support cost”

Struggles to define OBE Inviting suppliers to craft a measure Accessing vital commercially-sensitive data Cooperation??

Abandoning OBE

Analyzing OzCom Infrastructure in its Action Net (Cont’d)

Incentive scheme and budget constraints

Recasting the cost problem as an incentive problem Segregating ‘total’ cost into:

“network support costs”, and “other network costs”

Linking payment for “network support costs” to BPIs Weak diagnostic capacity Ambiguity

Analyzing OzCom Infrastructure in its Action Net (Cont’d)

Incentive scheme and budget constraints (Cont’d)

Imposing budget constraints on “other network costs” Asymmetrical distribution of knowledge Growth in market demand for ICT

Linking BPIs and total spend to supply managers’ compensation

Analyzing OzCom Infrastructure in its Action Net (Cont’d)

Enlisting the support of allies

“Internal” support Engineering vs. Finance

“International user group” Benchmarking

EuroCom Negotiating “global prices”

Localizing the Global

Embedding a ‘strategic alliance’ in local action.

Redistributing the local

The unseen presence of EuroCom, Atlantic

Diverse actors

Struggles over accounting

Remaking of accounting

Remaking of strategic alliance.

Connecting sites and times

Atlantic, EuroCom. Then and now.

Globalizing the local?

Theorizing the empirics