Interventionist Management Accounting Research

Theory Contributions with Societal Impact

Petri Suomala, Jouni Lyly-Yrjänäinen, Teemu Laine, Falconer Mitchell

• Publisher: Routledge
• Year: 2017
• eBook ISBN: 9781315316147
• Edition: 1
• Topic: Business
• Subtopic: Accounting
• Index: Business

Interventionist research has been proposed as one way of increasing societal impact of management accounting (MA) research. However, there are no guidelines regarding what sort of phenomena would be the most suitable ones to be studied using research interventions. This book builds on top of the methodological literature of interventionist management accounting research, as well as the published studies applying it.

Through selected case studies, Interventionist Management Accounting Research shows how societal impact of MA research can be increased by not only applying IVR approach, but also looking into how MA is used in the borderlines between MA and other organizational functions. In many cases, MA research can provide tools and concepts helping to understand contemporary trends within the business environment, thereby naturally providing potential for increasing the societal impact of scholarly work. In particular, this book discusses how to position empirical research endeavours with interventionist elements in a way to ensure important theory contributions with outcomes interesting also outside the MA academia, whether that means MA practitioners, managers in general or scholars in other fields of management.

Aimed at primarily researchers, academics and students in the fields of research methodology, management accounting and interventionist research, this book provides methodological guidance on how to execute research projects with interventionist elements, aiming at strong theory contribution with broader societal impacts. Focusing on research in accounting and management, this book also provides interesting insights to scholars and doctoral students in other fields of management research.

Part I
Intervention as a Vehicle for Enhanced Societal Impact

1 Improving Societal Impact of Management Accounting Research

Management accounting (MA) is a discipline that helps refine data into knowledge, understanding, and wisdom for decision-makers both in profit and non-profit organizations. Management accounting, therefore, is an applied science (Kasanen et al. 1993), deeply rooted in real-life problems and decision-making contexts. Thus, an interesting question is why managers and other MA practitioners often see academia as not providing interlocutors they would prefer to interact with. For some reason these two worlds seldom seem to find a connection; academics prefer to talk about their theories, whereas practitioners would like to have solutions to their more pragmatic problems. And, when academics seek for collaboration with companies, these companies are merely seen as research subjects or some sort of guinea pigs for theory development without much attempt for mutual collaboration. However, deep and intense collaboration with real-life companies and other organizations may (and often does) provide access to the most fascinating empirical data, unthinkable of at the initial stages of the collaboration, an opportunity neglected by the academics. When practitioners and academics work together on problems relevant to companies, based on our experience, such projects often tend to lead us researchers to questions that provide a starting point for some very interesting theoretical work, considered relevant not only by the managers in the company but also amongst a broader practitioner audience. At the same time, such cases provide interesting theory contributions, too. Altogether, there are so many interesting problems within the MA practice that such work should not be left only for consultants and business people.

The role of MA researchers within the evolution of the discipline is nothing new. In the 1980s some scholars were in the opinion that management accounting research had failed in providing theories of practical relevance (Hopwood 1983; Kaplan 1984; Kaplan 1986; Johnson and Kaplan 1987). Although field research gained popularity among management accounting researchers in the 1980s (Ferreira and Merchant 1992), it did not end the discussion regarding the pragmatic relevance of management accounting research. Another important academic debate on what management accounting research is or should be took place in the early 2000s (Zimmerman 2001; Hopwood 2002; Ittner and Larker 2002; Luft and Shields 2002; Lukka and Mouritsen 2002). In those days, Mitchell (2002) pointed out the need for improved integration between MA researchers and practitioners. In addition, some later studies have also approached the issue of how to increase pragmatic relevance of MA research (e.g., Inaga and Schneider 2005; Malmi and Granlund 2009; Malmi 2016).

One methodological research stream introduced in the 1990s attempted to increase pragmatic relevance of MA research. Constructive research introduced by Kasanen et al. (1993) emphasized development of MA constructs solving problems identified in case companies participating in such collaborative research venues. The truth-value of these constructs was argued based on managers willing to implement such tools (i.e., commit resources to them), called a weak market test. In the best scenarios, the researchers were to argue how such MA constructs helped the organization improve its financial performance, fulfilling the prerequisites of a strong market test. In constructive research, the MA-related tool, model, or framework developed by the researcher was argued as the theory contribution of the study.

Constructive research, however, has not gained much foothold in the MA academia. One likely challenge has been to convince academic peers on whether the tool, model, or framework developed by the researcher is truly valid and can be generalized in a larger population. The idea of pragmatic truth—if it works it is true—faces the issue that an organization can prosper regardless of a framework developed by the researcher. Convincingly arguing ceteris-paribus in such a context becomes overwhelmingly difficult; there simply are too many variables impacting the financial success (or non-success) that pointing out the impact of one construct becomes practically impossible. In the worst-case scenario, the construct works and provides good financial outcomes (as expected) for the company, yet is cancelled out by some other factors the researcher had no influence over. In other words, such constructs often not only have intended but also unintended outcomes, and some of the outcomes that erode the utility value of the construct may be totally unrelated to the construct itself nor influenced by the researcher.

Interventionist Research for Pragmatic Relevance

Despite the difficulties in fulfilling the criteria set for the theory contributions (e.g., the idea of market test and the challenges in creating such a ceteris-paribus setup for the studies), constructive research was an important initiative in the attempt to find better connection between academics and practitioners. Later one of the authors behind the idea of constructivist MA research, Professor Kari Lukka from Turku School of Economics, together with Professor Sten Jönsson from University of Gothenburg, broadened the interest on connecting practitioners and academics by introducing the concept interventionist research (IVR). In IVR, the researcher still actively collaborates with the case organization, but her role is now seen more broadly both in terms of what to offer to the case organization and also regarding how to position the theory contribution (see Jönsson and Lukka 2007). Unlike constructivist research, interventionist MA research has gained some visibility in academia, though still remaining at the outskirts of the MA domain.

In 2006, Chartered Institute of Management Accountants (CIMA) announced their Interventionist Research Initiative, providing funding for projects using an interventionist research approach. As part of their interventionist research initiative, CIMA provided funding for a book focusing on practical experiences in conducting interventionist MA research (Suomala and Lyly-Yrjänäinen 2012). The book wrapped up the lessons learnt during the ten years of interventionist research collaboration with industry partners. In that book, the focus was on the interventionist research process, strength of intervention, and its focal point in the process of contributing to the MA domain, to be more precise.

Soon after the CIMA research initiative, Qualitative Research in Accounting and Management (QRAM) dedicated a special issue on the topic with the focus on (1) how to construct an interventionist study, (2) justify and position it methodologically, (3) execute such studies, and (4) how to theorize on what is going on in the field (Westin and Roberts 2010). In that special issue, Baard (2010) developed the epistemological foundations of IVR by linking the discussion to the intervention theory used in social sciences. In addition to the methodological discussion, empirical studies using IVR were provided by Dumay (2010), Sunding and Odenrick (2010), and Suomala et al. (2010). Finally, the special issue was concluded with a paper written by one of the architects of the IVR approach (Jönsson 2010).

A few years ago, in his final editorial, Professor Robert Scapens reflected back to his experience as an editor-in-chief of Management Accounting Research (Scapens 2014). In his editorial, he pointed out the concerns on how MA research contributes to the MA practices and acknowledged the calls for IVR. However, he also pointed out the challenges in combining theory with practice, a fact noticeable as an editor subjected to manuscripts following the IVR approach. He proposed to overcome this problem by exploring how the theoretical knowledge of the researcher can be combined with the ‘craft knowledge’ of the practitioners and, in that way, create theory contributions with pragmatic relevance.

Most recently, a stream of literature has emerged that seeks to examine the potential of combining an IVR approach with certain theoretical lenses, in order to increase the theoretical impact and relevance of the accounting research (see, e.g., Laine et al. 2016a; Lukka and Vinnari 2017; Rautiainen et al. 2017). Lukka and Vinnari (2017) and Laine et al. (2016a) have examined the IVR approach in use with different theoretical lenses (actor network theory in Lukka and Vinnari 2017, and pragmatic constructivism in Laine et al. 2016a) and concluded that the IVR approach holds potential when used together with approaches that feature different actors and their interplay. Quite essentially, in line with Suomala et al. (2014), the recent studies highlight that the interventionist researcher should be interpreted as one actor, with a multifaceted, yet active role that evolves over time (Laine et al. 2016a; Lukka and Vinnari 2017). Theoretical underpinnings related to such a role of the interventionist researcher represent interesting avenues for further studies (see, e.g., Laine et al. 2016 for the interventionist researcher as a boundary subject in organizational interfaces). Besides, as Rautiainen et al. (2017) recently pointed out, the relevance of IVR approach and its applications requires comprehensive examination from different perspectives, such as societal and theoretical perspectives, in addition to narrow ‘market tests’ adopted from a constructive research approach.

In sum, the debate around interventionist research has emphasized the importance of ensuring theory contributions, not only practically relevant constructs (Jönsson and Lukka 2007; Suomala and Lyly-Yrjänäinen 2012; Scapens 2014; Lukka and Vinnari 2017). In other words, descriptions of the cases (though supported with deep involvement in the field) alone do not make IVR research. Nevertheless, despite the published studies applying interventionist elements in them, hence providing theory contributions (see, e.g., Cullen et al. 2013; Suomala et al. 2014; Laine et al. 2016), the practical outputs developed by the researchers tend to remain only in very local contexts. In other words, while such projects enable theorizing, the new practices developed and also published are not diffusing into the business environment, not to speak of society more in general.

This brings us to the main topic of this book; can IVR be seen as a tool for not only contributing to the theory and practice but also impacting the society more generally? As pointed out by Flyvbjerg (2001), social science should not focus on providing a theoretical mirror for the society but rather provide a society with knowledge that can be used as input to the dialogue on topical social challenges and solutions. In the same spirit, instead of a theoretical mirror on MA practices, MA research should aim to provide the society with knowledge that could be used as input to the dialogue on topical social challenges and solutions. As Scapens pointed out in his final editorial (2014), research in most countries is funded from various government sources and, as a result, the questions concerning the societal impact of research work may become more relevant in the future.

Towards Improving the Societal Impact of MA Research

Interestingly, the discussion on pragmatic relevance seems to have focused (at least implicitly) on how interventionist MA research can contribute to the (1) MA practices in companies participating in these case studies or (2) MA practices in contexts similar to the published studies (see, e.g., Jönsson and Lukka 2007). The role of MA research can, however, be seen more broadly.

In this book, we wish to continue the discussion on pragmatic relevance by not only discussing how MA research can produce theories with relevance to MA practitioners or managers. On the contrary, we wish to set the target one step higher and discuss how empirical MA research can help to make an impact on the society more broadly, not just within the companies participating in these empirical inquiries or managers who find themselves in similar decision-making situations to published studies. We see interventionist research opening up interesting venues that enable theorizing with not only pragmatic relevance but also potential to impact the society more broadly. The book will be based on five case studies showing how interventionist MA research not only benefits the case companies and provides potential for theory contributions but also enables participation in contemporary societal discussions, hence providing a voice in the society. In doing so, the book acknowledges recent calls for impactful interventionist research in MA literature (Scapens 2014; Lukka and Vinnari 2017), and provides an encouraging, yet critical examination on the potential of IVR in producing relevant theoretical, practical, and societal contributions.

One case of the book comes from University of Edinburgh Business School. In that case, IVR is applied to find a practical solution to a problem posed by an external agency, hence making it a classic implementation of IVR. Professor Falconer Mitchell, also as a past Chairman of the CIMA Research Board, is among the active scholars who have brought up the need for improving integration and communication between management accounting research and practice (see, e.g., Mitchell 2002). He has been continuously involved in challenging, re-thinking, and refining the paradigmatic foundations of MA research, towards increased relevance in practice (see, e.g., Baldvinsdottir et al. 2010; Nørreklit et al. 2010), in line with the idea of the IVR.

Four cases of the book take advantage of research projects conducted by Cost Management Center (CMC), a research group in Tampere University of Technology employing about ten full-time researchers focusing on cost management and MA research projects. The research group was established in 1998 and has completed more than 50 long-term research projects. Since day one, research projects have involved some industrial partners, with the fieldwork typically focusing on development of cost management or management accounting and control practices more broadly. Uniquely, the research projects have focused on timely management challenges that could potentially be supported by management accounting, and the focus of the projects has been on managerial work outside the financial department. At the same time, importantly, all the projects have focused on accounting development, at least in a broad sense. Therefore, the research projects can be labeled as management accounting research, with versatile research, practical, and societal implications. Based on these research projects, dozens of refereed articles and in total more than 200 research papers have been published.

This development work carried out with companies has led into opportunities to deepen the researchers’ access to interesting events taking place inside these organizations as well as mutual learning opportunities. In other words, the development work itself is not the main outcome of interventionist research processes. The development work serves rather as a starting point for interesting dialogue with management, thus providing access to new problems, with significant potential for theory contribution and societal impacts. These potential impacts are essentially the starting point of this book as well. Besides, the longitudinal process underlying the impacts of the IVR process highlights the need for better understanding the antecedents of different kinds of impacts of the IVR research. Besides, the evolving role of the interventionist researcher within the IVR processes requires further attention.

Indeed, there are some unique characteristics with regards to the research funding in Finnish universities. Especially in the universities of technology, a significant amount of research funding is channeled through the Finnish Funding Agency for Technology and Innovation (TEKES). Also, other sources of funding, such as EU programs and Academy of Finland, play an increasingly important role in funding research in engineering. However, due to the peculiarities of the funding structure, engineering research in Finland has a long tradition in industry-university collaboration.

CMC, being a management-accounting-focused research group within a university of technology with most researchers having an industrial engineering background, has since its beginning conducted ‘engineering-style’ research, characterized with close industry-university collaboration. Thus, quite naturally, all the projects conducted by CMC have included at least some interventionist elements in them, though in some cases complemented with interview studies and even survey studies. Altogether, the scholars involved in (CMC’s) research projects have further refined and utilized different kinds of methods, within the IVR approach, in order to take full advantage of the emerging opportunities of the research projects. In addition to these opportunities, the companies and other organizations involved in the projects have taken advantage of different opportunities stemming from the research projects, including ideas for new offerings, commercialization of new products, adopting new practices in networks or within single organizations, not to mention various ways of producing and utilizing financial information in decision-making and managerial work. Due to the successful mutual learning processes among researchers and industrial organizations, the number of participant organizations and university partners that have been involved in the projects has significantly increased over time.

Altogether, this book builds on and elaborates upon the rationale of IVR as presented in the MA literature during the past decades. The authors of the book and their teams have been active contributors in refining and utilizing IVR in management accounting. This book, in particular, takes advantage of numerous interventions undertaken in different business contexts, in connection with timely business phenomena. The analyses of the IVR processes and their outcomes, including examinations on the role of the interventionist researchers along with the process, thus enable novel discussions on interventionist research and its theoretical and societal impacts. Such discussion represents the contribution of this book.

References

Baard, V., 2010. A critical review o...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of Figures and Tables
• Preface
• Part I Intervention as a Vehicle for Enhanced Societal Impact
• Part II Theory Contribution with Societal Impact Through Research Interventions
• Part III Lessons Learnt