A hybrid profession—the acquisition of management accounting expertise by medical professi

Description
This paper argues that medical expertise in Finland was ‘‘hybridised’’ in the first half of the 1990s. It examines the
willing adoption of management accounting techniques by medical professionals in the context of the New Public
Management reforms in Finland. It documents this process of adoption, charts some of its effects for the set of practices
and legitimated competencies that make up the domain of medical expertise, and seeks to understand these by
reference to the position of management accounting within the Finnish pedagogic and institutional setting. As a
counterpoint, it notes the contrast with the UK, where medical professionals have been seen to resist the intrusion of
accounting practices into the medical domain.

A hybrid profession—the acquisition of management
accounting expertise by medical professionals
Liisa Kurunma¨ ki*
The London School of Economics and Political Science, Department of Accounting and Finance,
Houghton Street, London WC2A 2AE, UK
Abstract
This paper argues that medical expertise in Finland was ‘‘hybridised’’ in the ?rst half of the 1990s. It examines the
willing adoption of management accounting techniques by medical professionals in the context of the New Public
Management reforms in Finland. It documents this process of adoption, charts some of its e?ects for the set of prac-
tices and legitimated competencies that make up the domain of medical expertise, and seeks to understand these by
reference to the position of management accounting within the Finnish pedagogic and institutional setting. As a
counterpoint, it notes the contrast with the UK, where medical professionals have been seen to resist the intrusion of
accounting practices into the medical domain.
#2003 Elsevier Ltd. All rights reserved.
Introduction
[. . .] Only ?ve years ago we didn’t know any-
thing at all about pricing and management
accounting [. . .] You can ?nd rather good
books, about this thick (showing around two
centimetres with his ?ngers), in which these
things are explained in a very simple way.
A doctor is able to read such a book. . . and
when you have done so, you know quite a
bit more (Chief Physician in a General
Hospital).
Between 1990 and 1995, the set of practices and
legitimated competencies that made up the
domain of medical expertise in Finland was
enlarged and transformed. Medicine, at least in one
national context, was hybridised. No longer was
medicine exclusively curative in its aspirations.
Henceforth, calculative expertise became part of the
repertoire of practices that doctors could deploy.
Clinical diagnosis and treatment were com-
plemented by a set of techniques including the pre-
paration of budgets, the calculation of costs, and the
setting of prices. The willing adoption of manage-
ment accounting techniques by medical profes-
sionals in the context of the New Public
Management reforms in Finland is the focus of this
paper. The paper documents this process of adop-
tion, charts some of its e?ects for medical expertise,
and seeks to analyse the conditions which facili-
tated hybridisation by reference to the historical
development of management accounting within
the Finnish pedagogic and institutional setting.
0361-3682/03/$ - see front matter # 2003 Elsevier Ltd. All rights reserved.
doi:10.1016/S0361-3682(02)00069-7
Accounting, Organizations and Society 29 (2004) 327–347
www.elsevier.com/locate/aos
* Tel.: +44-20-7955-6394; fax: +44-20-7955-7420.
E-mail address: [email protected] (L. Kurunma¨ ki).
The forming of a ‘‘hybrid’’
1
is of considerable
signi?cance for recent debates in the sociology of
the professions. Abbott (1988) has argued that one
should study professions as an interdependent
system, rather than one at a time. Within this sys-
tem, abstract knowledge is held to provide the key
to winning jurisdictional disputes, and surviving
the unending competitive game. By remarking
that ‘‘surely accounting is today far more socially
important than medicine’’ (Abbott, 1988, p. 325),
Abbott has argued that future studies of the pro-
fessions should focus on accounting in particular.
His recommendation to stop studying single pro-
fessions, and to focus on accounting in the context
of interprofessional relations, is endorsed in this
paper and applied to the encounter between
medicine and accounting. The suggestion to study
jurisdictions is accepted also, although with the
caveat that we should study whether jurisdictional
disputes arise, rather than assuming them as an a
priori of professional life. Encounters within the
system of professions can, it is argued, take the
form of hybridisation as well as competition.
Instead of presuming a competitive model of
interprofessional relations, it is proposed that we
need to examine instances where such competitive
patterns do not appear, and that we need to
describe and understand what happens when
experts, such as accountants, do not seek to domi-
nate practice in all their possible jurisdictions.
Further, it is argued that greater attention should
be paid to the roles of techniques, and their
mobility between professional groups, rather than
focusing almost exclusively on abstract know-
ledge. Analysis of these issues will, it is hoped,
allow us to form a more complete and nuanced
picture of interprofessional relations.
The encounter between accounting and medi-
cine in the context of the New Public Management
reforms in Finland, where overt interprofessional
competition between accountants and medical
professionals has been absent, allows us to exam-
ine just such a case. It is di?cult to identify a sin-
gle and distinct group that possesses a more or less
coherent body of abstract knowledge called man-
agement accounting in Finland. These obser-
vations suggests that ‘‘jurisdictions’’ are
considerably more open, and professional bound-
aries less clearly de?ned in some contexts than
Abbott’s model indicates. The notion of an
‘‘assemblage’’ (Miller & O’Leary, 1994), a tem-
porarily stabilised set of relations formed among
diverse actors, agents and practices, is proposed as
a way of helping us to analyse the components
that interprofessional relations are composed of,
and that result in hybridisation rather than com-
petition. Attention is focussed on the inter-
dependence among the elements that make up the
assemblage, such as those between professional
organisation, a set of tools, pedagogic mechan-
isms, and the academy.
2
In place of images of
battles and competition, the transferability of
accounting techniques between one group of
experts and another takes centre stage in this way
of analysing hybridisation. In so far as manage-
ment accounting was established in some national
contexts out of tools and techniques borrowed and
adapted from other disciplines such as economics
and engineering (Hopwood, 1992; Miller, 1998,
2003), the hybridisation of medical expertise
examined here suggests that in some contexts the
tools of the management accountant can equally
be acquired by other professional groups. It is this
1
A related concept is the notion of a ‘‘hybrid manager’’,
advocated in the early 1990s by the British Computer Society
(1990). With this label, the Society addressed the perceived
need for new managerial skills that the advancement of infor-
mation technology would bring about. A new amalgam of
managerial skills was called for, and ‘‘hybrid managers’’ were
to hold both business as well as IT skills (Ennals & Molyneux,
1993). The notion of a ‘‘hybrid profession’’, as used in this
paper, is distinct from this notion of a ‘‘hybrid manager’’ in
that the ?rst term refers to the expanding knowledge basis of
any profession as a result of the acquisition of new skills and
competencies. On two distinct, but related notions of ‘‘hybrid’’,
see Baxter and Chua (2003) and Teubner (2002). Rather than
focusing on the encounter between heterogeneous bodies of
expertise, as is the case in this paper, Baxter and Chua use the
term to describe new types of organizational entities. Teubner,
using a systems approach, examines hybrid production regimes
that arise out of the coupling of the formally and empirically
distinct codes of legal and economic institutions.
2
The approach adopted here has similarities with Freid-
son’s (1986) tripartite analysis of professions, in which atten-
tion is focused on the existence of organized role
di?erentiation—the separation of membership to practitioners,
teacher-researchers, and administrators—within the profession.
328 L. Kurunma¨ki / Accounting, Organizations and Society 29 (2004) 327–347
process of transfer and adoption, and the resulting
hybridisation, that is the focus of this paper.
This study draws principally on extensive ?eld
research material (Appendix). Fieldwork was
started without the formulation of a tightly focus-
sed set of hypotheses, and it was commenced prior
to commitment to the theoretical framework and
conceptual tools that later guided the analysis of
the material collected. The speci?c research ques-
tions and objectives, as well as the theoretical per-
spectives for the interpretation of the research
?ndings, were progressively formulated during the
research process ‘‘without sacri?ce to a priori
design and without sacri?ce to imperfect and
unchangeable instrumentation’’ (Lincoln, 1985, p.
144). The research process thus followed an
approach that has been termed ‘‘naturalistic’’ or
‘‘emergent’’ (Ahrens & Dent, 1999; Lincoln &
Guba, 1985, pp. 284–286). While arguments can
be advanced in favour of using concepts to ?lter
and focus the information gathered during ?eld
research (Eisenhardt, 1989, 1991), collection of the
substantial and rich qualitative research material
over a period of several years allowed the gradual
development of research ideas and objectives as
well as the ongoing analysis of the research data
(Ahrens & Dent, 1999; Ferreira & Merchant,
1992; Lincoln & Guba, 1985; Lukka & Kasanen,
1995).
The paper is structured as follows. The next
section describes the process through which the
hybridisation of medical expertise occurred in
Finland in the 1980s and 1990s. The initial stage
of this process is identi?ed with the introduction
of delegated budgets within hospitals in the late
1980s, to be followed by a more general transfor-
mation of health care provision according to mar-
ket principles in the early 1990s. The limits of
hybridisation are considered also. Section three
facilitates the analysis of the ?eld research ?ndings
by describing the historical development of
accounting within the tradition of business eco-
nomics in Finland. Albeit tentatively and provi-
sionally, this review of accounting training and
education in Finland allows us to understand how
accounting practices there have come to be viewed
as a set of transferable tools or techniques, rather
than the preserve of a particular professional
group. Section four broadens the discussion by
noting the distinctive nature of the Finnish tradi-
tion of business and management education in
relation to the traditions in Anglo-American con-
texts, the primary geographical and cultural focus
of Abbott’s own research. Section ?ve concludes.
Health care reforms: the emergence of a hybrid
profession
Attempts to transform the activities of healers
into numbers that would make medicine calcul-
able began in earnest in the 1960s (Rose & Miller,
1992). In the 1970s, however, the more or less
untrammelled in?uence of medical professionals
within health care became a matter of great con-
cern for health care ?nanciers and others in a
range of international contexts. The severe decline
in the world economy, the changing social
environment of welfare service production, and an
increased questioning of the ethics of medical
professionals by civil libertarians, feminists and
others (see e.g. Berlant, 1975; Freidson, 1975a,
1975b; Larkin, 1983; Porter, 1985), contributed to
an increasingly strong challenging of the mana-
gerial practices and ?nancial control systems
employed in hospitals. Greater accountability,
better management, and a more e?cient use of
resources were increasingly demanded from all
public service providers (Hopwood, 1984). The
expanding level of health expenditure, the per-
ceived ambiguity of health care objectives, the
problems of measuring and comparing the outputs
of health service providers, together with an
alleged lack of ?nancial responsibility on the part
of hospital doctors, made health care a special
case (Jones & Dewing, 1997; Lapsley, 1994;
Preston, Cooper, & Coombs, 1992; Van Maanen
& Barley, 1984).
The health system reforms of the 1980s and
1990s built upon the early challenges to the legiti-
macy of medical practitioners. But rather than
challenging directly the authority of medical
knowledge and decisions as in the earlier decades,
the assault was indirect. Wastefulness, arising
from inadequate managerial and accounting sys-
tems, became the focus, rather than claims to
L. Kurunma¨ki / Accounting, Organizations and Society 29 (2004) 327–347 329
abstract knowledge and clinical autonomy on the
part of medical professionals. Accounting was to
be a key element in the changes advocated by the
reformers, who aimed to lessen or remove di?er-
ences between the public and private sectors, and
to shift the emphasis from process accountability
towards output accountability (Hood, 1995, p. 94;
Olson, Guthrie, & Humphrey, 1998). In hospitals,
where the institutional culture had typically been
marked by the dominance of medical profes-
sionals, and where the role of accountants had
been limited to the secondary obligations of bud-
getary control (Orton & Weick, 1990), substantial
change was envisaged (Lapsley, 1992). Existing
costing and budgetary systems, designed primarily
to ensure probity, control total expenditure, and
provide data for the governmental authorities,
were to be replaced by systems designed to assist
managerial tasks (Perrin, 1988, p. 2). New ?nan-
cial controls were to tie medical decisions into
networks of delegated ?nancial calculation and
accountability. Clinical autonomy would be pre-
served, but it would be complemented by a novel
form of ?nancial autonomy and accountability
which would have the potential to alter the exer-
cise of power within the medical ?eld (Covaleski,
Dirsmith, & Michelman, 1993; Harrison & Pollitt,
1994; Kurunma¨ ki, 1999; Preston et al., 1992).
Two distinct stages in the reform process in
Finland are identi?ed and analysed below. Firstly,
the response of medical professionals to the
attempts to make them ?nancially responsible
through the introduction of delegated budgets—in
line with the principles of Management by Objec-
tives—is examined. Hospital-wide ?nancial
reporting systems were replaced by decentralised
budgeting mechanisms, which aimed to allocate,
document, and report the use of resources at the
speciality unit level. Secondly, the reaction of
medical professionals to the restructuring of
health service provision according to a concept of
the market is examined. The identi?cation of pur-
chasers and providers as two distinct groups, and
their formal separation, was the mechanism
through which this second stage in the transfor-
mation of health care was operationalised. Along
with the introduction of a market based resource
allocation mechanism, medical professionals were
to be introduced to a new business-like opera-
tional culture, with increased demands for more
detailed recording of costs and revenues, and the
construction of service prices. With these two dis-
tinct stages in the reform process, it is argued that
one can observe the emergence of a hybrid pro-
fession in Finland. The third and ?nal part of this
section considers the limits of hybridisation by
examining the extent of the willingness of clini-
cians to extend their knowledge of accounting
practices.
Hybridisation begins: making medical professionals
?nancially responsible through delegated budgets
The idea of centralized planning—a concept
deemed inseparable from that of a welfare
society—was introduced into the Finnish public
sector in the late 1960s. The allocation of resour-
ces through a detailed national planning system
was regarded as e?ective while the economy was
growing steadily. As in many other western socie-
ties, however, this expansive planning allocation
system came to be strongly criticized in the context
of the diminishing ?nancial resources of the mid-
1970s, following the ?rst oil crisis and subsequent
economic recession (Ha¨ kkinen, 1995, pp. 141–142;
Jablonsky & Dirsmith, 1978; Jo¨ nsson, 1982;
Linnakko & Back, 1995, p. 151; Saltman, 1987).
The comprehensive administrative reorganizations
that followed were not unique, but have been
described as a characteristic feature of twentieth
century bureaucratic life (March & Olson, 1983).
Public sector budgeting procedures have frequently
been the focus of such reforms (Jo¨ nsson, 1982).
In the Finnish context, altered economic and
social conditions led to a gradual shift in the
principles and practices of governing the public
sector. Finnish health care reforms of the late
1980s and early 1990s represented only one part of
this wider administrative reorganization process
commonly known as the New Public Management
reforms (Hood, 1995). Along with these reforms,
centralized planning was replaced by decentralized
responsibility and management, while ideas of
justice, equality and democracy were replaced by
notions of e?ciency and e?ectiveness (Kur-
unma¨ ki, 1999; Mo¨ tto¨ nen, 1997, p. 43). The initial
330 L. Kurunma¨ki / Accounting, Organizations and Society 29 (2004) 327–347
attempt to operationalise this change in the culture
of public service provision took the form of the
results management initiatives, a label used to
describe the Management by Objectives pro-
grammes launched in numerous public service set-
tings since the mid 1980s.
Initial experiments with decentralized budgets in
Finnish hospitals during the late 1980s were con-
ducted largely in the localised settings of individual
institutions (Enckell, 1998, p. 311). A number of
consultants, physicians, nurses and administrative
personnel were involved in studies of the imple-
mentation of the results management model in
private sector companies, and in the transfer to
the ?rst hospitals of those aspects considered
applicable. Encouraged by these early enthusiasts,
the new management model became an accepted
part of modern health care. Extensive training
sessions were arranged where participants reiter-
ated stories of the success of the model in other
hospitals (Enckell, 1998, p. 313). Management
consultants played a central role in marketing the
idea of results management to local authorities
and their numerous service provider organizations
through seminars and training sessions. According
to one Chief Physician, these consultants had been
successful in persuading large numbers of medical
professionals to accept the idea of devolved budget
responsibility:
By using a speci?c formula. . . or by discussing
the issues in a speci?c way, they managed to
get people convinced (of the idea of results
management). . .
Further experimentation with the results man-
agement initiative was supported by the Associ-
ation of Municipalities, which o?ered guidance
and recommendations for the experiments (Mo¨ t-
to¨ nen, 1997, pp. 73, 391).
Not only were these initial experiments loca-
lised, but the clinical units that participated in the
early results management programmes did so on a
voluntary basis. Through the allocation of
responsibility for budget preparation, medical
professionals were to be tied into networks of cal-
culation (Miller & Rose, 1991, p. 133). The localised
and voluntary nature of the experiments meant
that these networks of calculation emerged gradu-
ally, as key actors came to endorse the ideas and
the number of participants multiplied (Covaleski
& Dirsmith, 1981; Latour, 1996; Miller, 1997). An
outcome of the reformulated organizational roles
and responsibilities was described by the Financial
Manager of one teaching hospital as follows:
Budgeting starts, if we talk about big clinics
such as Surgery, which has eight wards plus
outpatient units. . . it is performed at ward
level. All wards prepare their budgets which
are then combined as clinical unit budgets. . .
There are those people who take responsi-
bility in practice. In many clinics those are the
Ward Sisters. . . Then we have clinics—for
example the Medical Ward—where, even
though it is big, it is the Administrative Chief
Physician who prepares the entire budget [. . .]
And then in the smaller units, such as Emer-
gency, Control and Intensive Care, it is the
Chief Physician who prepares it [. . .]
Echoing this view, a Chief Physician described
the budgeting process in one general hospital in
the following positive terms:
We can collect ready-made formulas from the
computer network, and we ?ll in those forms,
we make some calculations based on the set
expenditure limits, and our secretary makes
more. . . It is team-work to a very large
extent. . . In practice, it is the Ward Sisters
and Chief Physicians who are in key
positions. . . Those are the ones who determine
the estimates for the extent of operations. . ..
How many operations will be performed this
year etc [. . .]
The involvement of medical professionals in the
very early stages of the budget setting process was
perceived to be important. The Financial Manager
of one hospital commented as follows:
In theory, and in practice, we could prepare
those (budgets) here. It would be very easy to
make a budget for each unit and the budget
for the whole ‘‘house’’ here (in the Finance
L. Kurunma¨ki / Accounting, Organizations and Society 29 (2004) 327–347 331
Department). But we don’t want to do that
here, as a matter of principle. Instead, each
unit prepares those themselves—even if that
then causes us more work (at the stage of
combining the hospital budget), because we
have to make corrections to those ?gures on
the computer, if they (clinical unit sta?), for
example, have saved their ?les incorrectly or
if they have deleted our (spreadsheet) for-
mulas, or something similar—despite all
this. . . Just to increase their commitment.
An additional factor helped secure the commit-
ment of medical professionals at an early stage to
the idea and practice of ?nancial management:
health professionals were made responsible to
both municipal representatives and to hospital
management for keeping within their budgets. As
one Financial Manager remarked:
The managers of each pro?t area have had to
?nd out about these things (budgets and
other ?nancial matters), as they have to con-
tinuously give explanations to the Board of
Directors if they don’t mange to stay within
their budgets. . . Because of their (managerial)
position they have had to. . .
From the outset, clinical unit managers in Fin-
nish hospitals participated in the preparation of
budgets, and did so in the light of budgetary con-
straints. Also, the control systems they designed
combined ?nancial and non-?nancial measures.
As the Chief Physician of one Women’s Ward
described the operational and ?nancial control
within his clinical unit:
Over here, at the clinical unit level, we follow
the operational ?gures, for example the oper-
ations in the operating theatre (such as) the
number of births . . . the cumulative amount
from the beginning of the year, and the com-
parisons of those ?gures to the objectives set
[. . .] Here you can see a typical spreadsheet
programme. First, I have estimated our bud-
get for 1995. How many operations we have
to do in order to stay within the budget, (and)
those (operations) have unit prices [. . .] So
that’s the budget preparation stage. Then,
with these control reports, we can check
whether we have actually achieved these ?g-
ures. . . For doctors and nurses this (reporting
system) is quite enough. In this unit, we have
shared the responsibility so that our Ward
Sister is responsible for the control of expen-
ses, such as wages, the cost of medication—
whatever costs we incur—and I have taken
responsibility for following up on the revenue
side. . . Checking that we achieve our (opera-
tional and ?nancial) targets. . . So, the budget
framework represents something within
which we try to stay.
The Chief Physician of one Pathology Unit
described the ?nancial control practices within his
unit in similar terms:
We prepare our own ?nancial reports where
we compare our ?gures. . . we compare them
with the ?gures from the previous years to
check how we are doing. The months vary a
lot [. . .] and we manage by comparing several
years in a row, and that’s how we get a pretty
good idea what the total expenditure of the
current year will be [. . .] As far as our outputs
are concerned, we do the same thing again on
a monthly basis. We compare our outputs test
by test, and that is the only way we can follow
our operations. The statistics provided by
those people (pointing towards the hospital
administration) are not su?cient for us [. . .]
We collect part of the information from their
reports, even though there is some delay with
those, part of the information we get from
our billing register, and the rest we get by
using the centralized computer system, from
where we collect the necessary information
ourselves. Every month we thus check our
outputs and costs. . . We can have very little
in?uence on our outputs, as a matter of fact
[. . .], but we can in?uence our ?nances so that
if those seem to go completely wrong we can
do something. . .
As the commitment of medical professionals to
?nancial management increased, their demand for
332 L. Kurunma¨ki / Accounting, Organizations and Society 29 (2004) 327–347
accounting information intensi?ed. The response
on the part of the accounting departments in the
hospitals studied was to allow Chief Physicians and
Ward Sisters access to the ?nancial accounting
systems. As described by one Financial Manager:
We have made arrangements such that each
Chief Physician or Pro?t Centre Manager can
access our bookkeeping records from their
computers. . . Every person cancheck, on a daily
basis if they want to, all the bookkeeping mate-
rial from their computer screens. We organize
training for this if needed, and it is actually sur-
prising how many follow things up from there.
We are contacted, perhaps not quite on a daily
basis, but once a week at least, and asked why
some expense is such and such over there on the
screen, as the numbers on their papers are dif-
ferent. ‘‘What causes this?’’ (they ask).
Hybridisation thus emerged out of a number of
localised experiments with delegated budgets,
through which medical professionals became
committed to the principles and practices of
?nancial management. The process of hybridi-
sation continued by medical professionals coming
to play a central role in costing and pricing,
thereby equipping them further with some of the
key tools of the management accountant. It is to
this next step that we now turn.
Hybridisation is reinforced: involving medical
professionals in costing and pricing
Towards the late 1980s, New Public Manage-
ment reforms intensi?ed in Finland, paralleling
developments in a large number of western
economies (Olson et al., 1998). The public ?nan-
cing of welfare services was to be retained, but the
system of service provision was to change. The
state, or the local authorities, would become pri-
marily only purchasers of services, with public
provision being replaced by independent providers
who would compete with one another. E?ciency
was to be encouraged, as was the expectation that
clinicians would be even more involved in manage-
rial activities. But this was no longer a matter only
of the ‘‘social good’’. Good ?nancial management
within the Finnish health care sector, as well as
within the health care systems of other countries
experimenting with similar internal market
reforms, was to become essential for the survival
of those hospitals that wished to continue operat-
ing in the reorganized health care ?eld (Buxton,
Packwood, & Keen, 1991, p. 11).
In Finland, the market reforms of the early
1990s were introduced at a time of exceptionally
severe economic crisis (Enckell, 1998, p. 312;
Ha¨ kkinen, 1995, pp. 141–142). The rolling 5-year
national planning system for health care resource
allocation, and the supporting governmental sub-
sidy system—both created during the era of wel-
fare state construction—were altered to ?t the
ideologies of the market. Ideas, concepts, and
practices of contractualization, competition, and
customers were introduced in the health service
provision as part of the renewed State Subsidy Act
(1992). From the beginning of 1993, state funding
for health care was directed no longer to service
providers but to local authorities, who were
assigned the role of service purchase agents.
During the planning allocation era that began in
the late 1960s, the main focus of hospital admini-
stration was on cash management. Cost account-
ing was typically limited to the production of
average in-patient day and out-patient visit costs
on an annual basis. These calculations were used
by the hospitals for state subsidy applications, and
for charging local authorities for those operational
costs not covered by the state. In the new compe-
titive environment of the 1990s, these aggregated
calculations were to be replaced with more
sophisticated costing to support the pricing of
services. As with the process of budget prepa-
ration at the outset of the results management
initiative, the medical profession was accorded a
central role in developing these systems within clin-
ical units. According to one Financial Manager:
In our pricing we apply the idea that what is
priced, and how the pricing is done, is the
territory of those who use these prices, in the
?rst place the territory of the Chief Physi-
cians. They decide what is included in each
service package. They decide that, and they
know how the system works as a whole [. . .]
L. Kurunma¨ki / Accounting, Organizations and Society 29 (2004) 327–347 333
The interest already shown by Finnish clinical
unit representatives in budget setting and control
was matched by their willingness to take charge of
generating and developing cost accounting and
pricing systems. As described by the Chief Physician
of one Pathology Unit:
[. . .] We created our cost accounting at the
same time as we started our results manage-
ment experiment. For us it seemed essential
to know what our expenditure consisted of,
and that was the time when we started doing
cost accounting, and we got our costing sys-
tem ready. After that it was then, of course,
very easy to construct the prices as we had the
costing system there [. . .]
This Chief Physician elaborated further on the
allocation of overheads and the calculation of unit
costs for individual tests within his unit as follows:
Those (overhead allocations) are given to us
from above. I mean that the administration
allocates various costs based on salary
expenses [. . .] Then the technical unit allo-
cates its costs based on square metres. We
then divide these costs up according to indi-
vidual tests [. . .] We have two types of tests.
We have cytological tests, i.e. smear tests, and
we have histological tests. Those two types of
tests use di?erent laboratories, and so we can
divide the laboratory costs for these two
categories. Within laboratories it (the alloca-
tion process) has then been simpli?ed so that
we have very carefully checked how much time
each test takes because, in fact, time is the most
relevant factor. . . In some speci?c tests we take
into account (the cost of) some expensive
chemicals [. . .] Based on the time factor, the
costs allocated to an individual laboratory are
then allocated further to di?erent tests.
Similarly, the process of setting up a costing
system was described by the Chief Physician of an
Anaesthetics unit as follows:
We have this (price) booklet. We have pre-
pared this all by ourselves and I am actually
quite proud of the price list for anaesthesia.
This took several years to develop. We had to
start by organizing our system of recording
various operations. We had to think what
operations we have [. . .] And (then) we had to
consider what the basis of pricing could be
[. . .] So we did a huge amount of background
work, i.e. we analysed what is done here, we
found out how much time di?erent types of
operations take, and to what extent those tie
up our sta?. . . On the basis of these numbers
we calculated the average costs (for di?erent
operations); and so, based on the time con-
sumption (of each operation), we now have
this price list so that every time our secretary
makes an entry in our operations register the
price which we have calculated for this oper-
ation appears over there too.
A computer-based programme for cost
accounting and pricing had been developed for the
use of Radiology Units by physicians in one
teaching hospital. A Chief Physician in one gen-
eral hospital described the process of putting this
system into operation with the following words:
I participated with the Ward Sister on a
course organized by the Hospital Association
to learn how to use it (the computer program).
The ?rst year was quite di?cult, because dur-
ing that year we had to identify all the factors
which in?uence costs, whereas now we only
change those which need changing [. . .]
The absence of uniform costing or pricing rules
across hospitals, and the autonomy of clinical
units within hospitals to organize their operations
as they saw ?t, had resulted in the use of a variety
of costing and pricing techniques. A common fea-
ture of the costing projects appeared, however. This
was the dominant role of health professionals, and
the marginalized role of accountants in the process
of setting up the systems within clinical units. As
expressed by one Administrative Leading Nurse:
[. . .] The ?nance unit had nothing to do with
that. . . No role whatsoever in the whole pro-
cess (of creating cost accounting and pricing
334 L. Kurunma¨ki / Accounting, Organizations and Society 29 (2004) 327–347
systems) over there (in the clinical units). The
only thing they did was that they collected
this information for the (hospital’s) price
booklet [. . .]
Limited ?nancial resources, and the high pro-
portion of expenditure regarded as ?xed, were
concerns of all Chief Physicians interviewed. Yet,
the overall perception of the reforms, seen as having
increased the freedom of medical professionals to
manage resources through decisions taken at clin-
ical unit level, was positive. The reforms were
considered as having encouraged e?ciency in the
use of resources, as well as increased the sense of
?nancial responsibility among medical practi-
tioners. As stated by one Chief Physician:
Those (referring to the reforms introduced)
have given us much more freedom [. . .] Pre-
viously (during the planning allocation era) it
was so easy to say ’’we don’t have enough
quotas, we possibly can’t. . .’’ and to throw up
one’s hands, but now we have di?erent
problems. . . Now the problem is lack of
money, and we cannot just blame (the small
quotas). . . In a way this used to be so very
easy, because one used to be able to hide
behind the teaching hospital queue, claiming
that the queue doesn’t move[. . .] Now one can
only either blame the politicians by saying
that they haven’t given enough money, or
another possibility is to criticise oneself, to
think that one is perhaps unable to organize
things. There are these two possibilities left
now. If things don’t work out, one has to go
in front of a mirror and have a look. . .
A command of accounting was seen as an
increasingly important skill in health care settings.
A suggestion was made by one Chief Physician
that formal training in accounting should be made
part of the syllabus of medical professionals:
Certainly the future generations (of Chief
Physicians) will do this job much more on the
basis of accounting information—income
statements etc.— than I do [. . .] There is no
alternative, and in the training of doctors we
have to begin on a completely di?erent scale,
teaching doctors various things (such as
accounting), not just medicine.
The eagerness of Finnish medical practitioners
to develop their managerial skills had already been
recognized at the institutions providing training in
management and accounting. As stated by a Pro-
ject Manager at the further education centre of
one business school:
Within our Executive Education programmes
we now have a speci?c programme for health
care management. We educate hospital man-
agers, health centre managers, leading physi-
cians, and other health professionals in
managerial positions to think in a business-
like manner, and to consider things from the
?nancial point of view [. . .] There has been a
huge demand for this course during the past
few years. It is wonderful that this pro-
gramme became so well known, and it looks
now as if almost all doctors, who possibly
can, want to participate in it.
The limits of hybridisation: de?ning the boundaries
between medical and accounting expertise
By the late 1990s, the hybridisation of medical
expertise in Finland had occurred. The tools of
management accounting were seen as transferable
to other groups of experts, and the boundaries of
medical expertise were more broadly de?ned than
at the start of the 1980s. The hospital doctors
interviewed felt able and willing to acquire the
necessary accounting skills and combine them
with their existing clinical knowledge basis. This
con?dence regarding the ability of medical pro-
fessionals to acquire and master accounting skills
was re?ected in a statement of a Chief Physician,
who was asked whether his unit requires support
for ?nancial management from the hospital’s
?nance unit:
We don’t want it because we don’t need it
[. . .] And, because we have trained ourselves
(in accounting), we don’t need their help.
L. Kurunma¨ki / Accounting, Organizations and Society 29 (2004) 327–347 335
Similarly, a Chief Physician, who was asked
whether accountants should be hired in clinical
units, replied as follows:
We haven’t even discussed the matter. . . It
hasn’t crossed our minds to long for that. . .
The conception on the part of medical profes-
sionals that they could acquire, with relative ease,
a command of core management accounting tech-
niques and skills was not only shared, but also
further reinforced by the accountants interviewed.
According to one Financial Manager:
Those people are extremely skilled. . . Much
better at budgeting than I am!
Another Financial Manager stated his views
similarly, as follows:
If we think about the education of doctors,
we realise that learning these things (such as
cost accounting and pricing) is, besides
everything else, such a small e?ort that, I
think, it is a question of attitude [. . .]
This extension of the set of practices and legiti-
mated competencies deployed by medical profes-
sionals was not unlimited, however. Despite the
willingness of medical professionals to acquire
competence in a range of accounting tasks such as
budgeting, costing and pricing, hybridisation
encountered certain limits in Finland. According
to one Chief Physician:
There are lots of calculations that I’m happy
to let them (accountants in hospital central
administration) do, the calculations that we
(medical practitioners) don’t have time to do,
and for which my mental capacity and struc-
ture are not su?cient. But certain lines have
to be drawn here [. . ..] The very sharp
edge[. . .] that must be so clear and visible, and
it has to be made in such a simple way that it
can be done here.
One Clinical Unit Manager voiced his concern
over medical professionals becoming too involved
in ?nancial and accounting issues, while also indicat-
ing that issues of power and autonomy were at stake:
It is not self evident that is has to be the doc-
tor who takes care of these things (such as
?nancial management and cost accounting)
[. . .] Of course there is always a question of
autonomy, how much in?uence one has on
these things. . . discussion about who are the
ones who make the decisions. . . the role of
Finance, whether it is to support and help, or
to make decisions. . .
The strong sway of Finance Managers in private
hospitals was cited as a warning example by yet
another Chief Physician:
In situations where there is a question of
money, and where there is a Finance Man-
ager in a dominant position in deciding how
things are taken care of in the ‘‘house’’. . . if
then a doctor disagrees, he becomes an ex-
employee of that ‘‘house’’ [. . .]
Calculative expertise thus became part of the
repertoire of practices that medical professionals
in Finland could deploy. In place of interprofes-
sional competition and jurisdictional disputes,
hybridisation occurred. But hybridisation was not
a matter of turning doctors into accountants. Nor
was it a matter of medical professionals acquiring
a new body of abstract knowledge. The traditional
skills of the clinician were complemented by a new
set of techniques that enabled them to prepare
budgets, calculate costs, and set prices. A new
assemblage was formed among medical profes-
sionals, medical expertise, and a set of calculative
practices. To analyse tentatively the conditions that
made possible the forming of this particular assem-
blage in the Finnish context, and how it depended
on the transferability of a particular set of tools
rather than a competitive and jurisdictional battle
underpinned by abstract knowledge claims, the next
section explores brie?y the historical development of
accounting within business economics and the
academy in Finland. The distinctiveness of this tra-
dition, particularly in relation to Anglo-American
contexts, is explored in section four.
336 L. Kurunma¨ki / Accounting, Organizations and Society 29 (2004) 327–347
Accounting: a profession or a set of transferable
tools and techniques?
In?uenced strongly by the German tradition of
business economics, accountancy in Finland
emerged as part of a discipline that included mar-
keting and management (Kukkonen & Franck-
Mo¨ ller, 1995, pp. 16, 20; Granlund & Lukka,
1997). Re?ecting correspondingly the central role
of state sponsored educational institutions in pro-
fessional training within Germany (McClelland,
1990), accounting started to be taught in com-
mercial schools and institutes, the ?rst of which
was founded in Turku in 1839. Subsequently,
accountancy came to be taught at graduate level in
the context of the new specialized business
schools. The perceived need and the possibilities
for higher business education were addressed by
two committees in the late nineteenth century, the
?rst of these reporting in 1889 and the second in
1898 (Na¨ si & Na¨ si, 1996). However, the ?rst Fin-
nish business school was not established until
1911. This school was established in Helsinki fol-
lowing an initiative that came from the business
community. A further two business schools, both
for Swedish speaking minorities, were founded in
Helsinki and Turku in 1927, while a business
school for the Finnish speaking population of
Turku was established soon after the second
World War. Financing for these schools was pro-
vided by the business community, matched with
substantial state subsidies until 1950, when formal
responsibility for ?nancing business schools was
transferred through legislation to the state (Kuk-
konen & Franck-Mo¨ ller, 1995, pp. 17, 37).
With the advent of specialized business schools
in the early decades of the twentieth century,
accounting gained an undisputed place in Finnish
education. Graduate level business education in
the wider university context started in the mid
1960s, with the establishment of business eco-
nomics units in the Universities of Tampere and
Jyva¨ skyla¨ . Since the 1960s, the number of educa-
tional intitutions providing business education has
increased rapidly. Postgraduate programmes in
business economics are currently provided in 12
higher education institutions, as well as through a
number of MSc and MBA programmes organized
by further education centres mostly attached to
existing universities and business schools (Erola,
2001).
Accounting curricula and textbooks in the early
years of business economics education were
mainly in the area of ?nancial accounting (Na¨ si &
Na¨ si, 1996). The worldwide economic recession of
the late 1920s and early 1930s, however, gave
support to those who emphasized the importance
of a knowledge of costs for pricing decisions. Yet
the lack of both knowledgeable people and a pre-
scriptive literature in the area of cost accounting
constrained the development of detailed costing
systems within Finnish manufacturing enterprises
(Fellman, 1999, p. 145). Things were altered dra-
matically by Finland’s involvement in World War
II, which provided the stimulus for a major
increase in the pro?le of cost accounting. Absorp-
tion costing was made compulsory for industrial
companies in 1943, and cost accounting based on
full costing principles was required for purposes of
price regulation during wartime. Together with
cost calculations that provided the basis for deter-
mining values for war reparations during the post-
war era, these costing exercises played a sub-
stantial role in furthering the knowledge of costing
techniques in Finnish enterprises (Na¨ si, 1990,
pp. 108–110). The rapid development of costing
practices in industrial companies during the post-
war era was commented on in the contemporary
business journal Liiketaito as follows (I. Harki,
Liiketaito, 1946, p. 198):
I have been pleased to note that during the
past two years of war reparations, cost
accounting has developed as much as during
the previous twenty years.
After World War II, costing developments were
consolidated through a reform of Finnish
accounting legislation. Preparations for the
Accounting Act and Statute of 1945 began during
the war, and the Act came into force in 1947. A
statutory requirement to perform continuous cost
accounting was introduced with this Act, bringing
a knowledge of costing practices to an increasingly
broad audience. In parallel with these legislative
changes, new concepts and ideas were imported
L. Kurunma¨ki / Accounting, Organizations and Society 29 (2004) 327–347 337
from abroad. Notions of ‘‘modern’’, ‘‘current’’, or
‘‘complete’’ cost accounting were blended with
ideas of ‘‘rationalization’’ through articles that
promoted cost accounting in a growing number of
business publications, and in an expanding
accounting literature. The extent of these
developments allows one to characterize the 1940s
as the golden decade of Finnish cost accounting
(Na¨ si, 1990).
Despite the relatively early establishment of the
?rst commercial and business schools in Finland,
their student numbers remained small. Prior to
World War II, formal education in business sub-
jects was not commonly required from those
working in an administrative capacity within
companies (Fellman, 1999, p. 146). However, the
sudden growth in the perceived importance of
costing within ?rms during the 1940s, combined
with the new requirements introduced by the
Accounting Act 1947, brought with them a
demand for skilled labour. Cost accounting was
now publicly recognised as an important part of
the management of business enterprises, and a
network of institutions existed within which it
could be taught and learned. While commercial
institutes and business schools had established
their position as the principal providers of busi-
ness quali?cations, an increase in their student
numbers and the attaching of cost accounting to
the syllabuses of these schools was not regarded as
su?cient. Training of those already in work had
to be organized also, as was discussed on the front
page of Liiketaito in 1946:
[. . .] But the enhancement of the occupational
skills of our business employees is by no
means important only from the future point
of view. Rather, it is a burning question for
the present [. . .] Action has to be taken in our
business enterprises immediately, and there
are more possibilities than generally may be
thought. Our professional literature in the
area of business is regrettably limited, but
even now there are some notable practical
works, and, based on advance information, it
is known that within our occupational area
numerous modern works, some of which are
already in the process of being printed, are
developing the literature further. The man-
agement of business enterprises thus has an
opportunity to acquire professional know-
ledge by purchasing for employees the bur-
geoning literature on business administration
[. . .] Further, there is a possibility to improve
the occupational skills of business employees
by means of commercially related correspon-
dence courses, particularly those which can be
studied in spare time, outside of work [. . .]
A number of organizations and associations
promoted similar ideas during the 1940s. Publi-
cations, public lectures, training sessions and
correspondence courses, company visits, as well as
guidance for companies in designing and imple-
menting costing systems, were frequently featured
on the pages of the contemporary business journals.
Yet cost accounting was perceived as too
important to be left just to the accountants. In
some companies it was placed under the control of
technical management (Fellman, 1999, p. 140).
One of the prominent organizations, Teollisuusta-
loudellinen Yhdistys (The Industrial Economics
Association), was established in 1943 to advance
the skills of the members of various occupational
groups who shared an interest in developing cost
accounting in industrial enterprises. The founding
meeting of this Association, attended by around
50 people, as well as subsequent events including
association meetings, public lectures and company
visits, had participants from varying educational
backgrounds and organizational positions,
including managing directors of industrial enter-
prises, technical managers, o?ce managers, chief
?nancial accountants and bookkeepers, auditors,
unit managers, full-costing engineers, and the like
(Tehostaja, 1944, p. 35; Liiketaito, 1946, p. 109).
The question of who should be given responsi-
bility for accounting related tasks produced lively
discussions in the 1940s. Close co-operation
between accountants and engineers was empha-
sized as crucial in manufacturing enterprises, to
avoid problems of communication and coopera-
tion. The engineer and the accountant should
work together in the interests of the business, as
emphasized in a presentation by I. Harki in the
meeting of the Finnish Technicians’ Association in
338 L. Kurunma¨ki / Accounting, Organizations and Society 29 (2004) 327–347
December 1943, where he remarked: ‘‘An engineer
has to know precisely the cost accounting system
of the factory and control its functioning in close
cooperation with accountants.’’ (presentation
summarised in Tehostaja, 1944, p. 28). In the
forum of the autumn meeting of Teollisuustalou-
dellinen Yhdistys in 1945, Harki underlined how
technicians should learn the principles of cost
accounting and analysis, just as accountants
should be introduced to industrial processes and
manufacturing problems (Harki, Liiketaito, 1946,
p. 198). More radically, substantial additions to
the curricula of both accountants and engineers
were being proposed. As suggested by A.O. Sten-
back in his presentation to the autumn meeting in
1945:
The way ahead to advance mutual under-
standing (between engineers and accoun-
tants), in the longer term, is to widen the
education of both expertises at the graduate
level. Unfortunately, therefore, we have to
plan for increasing the number of disciplines
to be taught to the students at the higher
education level, either by organizing short
courses for them in the other discipline, or
on a grander scale than so far, aiming to
educate them ?rst in one school and then
send them to another to further their know-
ledge by studying shortened courses in the
other discipline.
Even at this early stage, the tools and techniques
of the cost accountant were thus regarded as
readily transferable to other occupational groups.
As remarked by Harki (Liiketaito, 1946, p. 198):
In the younger generation of engineers we can
already ?nd promising signs of technical
brains starting to think in a commercial way.
And there is no reason to deny, or seek to
underestimate, the ability of commercial
brains to learn to think in a technical way
[. . .]
A requirement for di?erent occupational groups
to acquire the skills and knowledge of cost account-
ing has since been a recurring topic. Engineers have
repeatedly been encouraged to learn accounting
techniques (cf Immonen, in Tehostaja, 1964, p. 20).
The creation of a hybrid breed of engineer-
accountant was facilitated by the start of a gradu-
ate level training of Industrial Engineering and
Management at the Helsinki University of Tech-
nology in the mid 1960s, and by the subsequent
establishment of similar study programmes in a
number of other Technical Universities. By the
end of the 1950s, comparable demands had been
extended to much lower levels of the organiza-
tional hierarchy. Foremen within industrial enter-
prises were invited to study budgeting and other
accounting skills. As remarked by A. Teuronen in
the context of a series of articles published in one
of the current business journals (Tehostaja, 1959,
p. 33):
Foremen can in a direct way in?uence the
reduction of many manufacturing costs.
Therefore, it is important that they partici-
pate in budgeting and cost analysis [. . .] Bud-
geting from the bottom-up, and the related
cost analysis, requires some basic training,
however, which clari?es some key concepts of
business activity. As a consequence of this
training, cooperation (with other occupational
groups) can develop, and with the progress of
commercial thinking the foremen can start
taking into account business factors in an
improved way.
While proposals to equip di?erent occupational
groups in industrial enterprises with calculative
skills had existed since the 1940s, public service
providers escaped similar demands until the
advent of the New Public Management reforms
during the 1980s. Emerging demands for greater
accountability, better management, and more e?-
cient use of resources, combined with delegation
of ?nancial responsibility to lower levels of the
organizational hierarchy, fuelled demands and
expectations that various groups of experts within
the public sector should become acquainted with
basic accounting tools and techniques. Financial
considerations came to be seen as the concern of a
range of professional groups, not just accountants,
in both private and public sector contexts.
L. Kurunma¨ki / Accounting, Organizations and Society 29 (2004) 327–347 339
The developments prompted by World War II
had led to a substantial extension in the know-
ledge and practice of cost accounting in Finland.
Cost accountants there did not, however, take this
opportunity to organize themselves as a distinct
professional group. Located within the academy
as part of the much broader discipline of business
economics, and lacking independent professional
representation, calculating skills were not regarded
as the preserve of a separate and self-de?ning
group. Cost accounting was made available, at
least in principle, to all. Commercial and technical
schools, polytechnics, business schools, uni-
versities, and schools of technology provided the
main institutional locales within which accounting
skills and techniques could be taught and learned.
Cost accounting was established as a set of tools
that was a key part of business economics, and
one that could be available to any individual or
occupational group.
Discussion
In the space of less than a decade, medical pro-
fessionals in Finland had acquired many of the
tools of managerial accounting. A set of calcu-
lative practices, which in many other contexts
would be viewed as the preserve of the professional
accountant, had become part of the repertoire of
hospital doctors. Without so much as a skirmish,
let alone a jurisdictional battle, medicine in Fin-
land had been hybridised. The principle mechan-
ism of this transformation had been the transfer of
techniques, while abstract knowledge seems to
have played little or no part.
Experiences in the UK, as documented in
numerous ?eld studies, are di?erent. Attempts
there to make public service providers, including
medical professionals, ?nancially responsible
through budgetary reforms have taken various
forms over a number of years.
3
Medical profes-
sionals in the UK, however, showed little interest
in acquiring the skills of the management accoun-
tant. Their initial lack of enthusiasm for budgetary
responsibility, which at times verged on outright
hostility, largely persisted despite the readiness of
the reformers to reframe and re-name their initia-
tives (Cm 555, 1989, p. 16; DHSS, 1983; Fizgerald,
1994; Harrison & Pollitt, 1994, pp. 82–83;
HN(86)34; McSweeney, 1994; Pollitt, Harrison,
Hunter & Marnoch, 1988; Preston et al., 1992;
Wickings, 1983; Wickings, Coles, Flux, &
Howard, 1983; Young, 1983). The broad restruc-
turing of the NHS in the early 1990s in the UK
according to the ideology of the market (National
Health Service and Community Care Act, 1990;
NHS Management Executive, 1993; NHS Review,
1989a, 1989b) helped reinforce the antagonistic
stance on the part of medical associations towards
the increasing use of accounting, or accountants,
in hospital management (Jones & Dewing, 1997;
Kurunma¨ ki, Lapsley, & Melia, 2002; Lapsley,
1992). These reforms have been characterised as
’’sweeping’’, ’’uniform’’, ’’compulsory’’ and ’’cen-
trally imposed’’, and they have been seen as hav-
ing been forced through at ’’high intensity’’,
overriding widespread resistance and criticism
(Pollitt, 1999, pp. 40–41, 51). Market based
reforms seemed to give the medical profession, or
at least that part of it based within the hospital,
the opportunity to signal repeatedly its distinction
from disciplines such as accounting and manage-
ment (Bartlett & Le Grand, 1993). Doctors
a?rmed that they considered themselves accoun-
table to themselves, and to their clinical judgment,
not to a set of accounting practices and proce-
dures (see Bloom?eld, Coombs, Cooper, & Rea,
1992; Buxton, Backwood, & Keen, 1989, pp. 50–51;
Harrison, 1988, pp. 122–125; Kitchener, 2000;
Perrin, 1988, pp. 89–90, 109–111; Pollitt, 1993, pp.
69–71; Pollitt et al., 1988; Rea, 1994).
Comparable encounters within the system of
professions can thus take di?erent forms. The
hybridisation observed in the Finnish context is
contrasted with a clearly de?ned jurisdictional
encounter in the UK. It has been suggested in this
paper that the mobility of the calculative practices
of budgeting, costing, and pricing, and the possi-
bility of hybridisation of medical expertise in Fin-
land, could be due in part to the historical
3
See e.g. Cm 555, 1989; Cm 3807, 1997; Cmnd 3638, 1968;
Cmnd 7615, 1979; Cmnd 8616, 1982; HC 535, 1977; HC(84)13,
1984; HN(85)3, 1985; HN(86)34, 1986; Royal Commission on
the NHS, 1978.
340 L. Kurunma¨ki / Accounting, Organizations and Society 29 (2004) 327–347
development and institutional location of
accounting within the Finnish academy. Encour-
aged by demands for costing information during
and after World War II, Finnish cost and man-
agement accounting emerged within the business
economics tradition. The institutional domains of
the business school, the university, as well as
technical and commercial schools, came to pro-
vide the principal locales in which to study
accounting.
This system of accountancy training in Finland,
similar to that in many Nordic and Continental
European countries, di?ers from the traditions of
educating accountants within Anglo-American
countries. The speci?c history and political econ-
omy of the latter—characterised by a market
economy, a comparatively passive and decen-
tralized state apparatus, and a small civil service—
encouraged emerging occupations to organize
their own training and credentialing institutions
(De Beelde, 2002; Freidson, 1986; Jarausch, 1983;
Konttinen, 1991; Puxty, Willmott, Cooper, &
Lowe, 1987).
4
A well-documented history of the
British accounting profession records how
accountancy bodies in the UK played a central
role in reproducing accounting expertise through
their training programmes since their formation in
the nineteenth century (Armstrong & Jones, 1992;
Loft, 1986, 1990, 1994; Walker & Shackleton,
1995, 1998). Accountants looked to law, in parti-
cular the solicitors’ profession, as a model for
professional formation and organisation, creating
training systems that closely paralleled those of
the Law Society (Engel, 1983, p. 294; Napier &
Noke, 1992, pp. 36–37). Professional quali?cations
came to be granted subject to a training that com-
bined exams organised by a professional body with
practical experience gained through apprenticeship.
The identity, distinction, and position of accoun-
tants in the marketplace came to be attached to their
membership of particular, corporately organised
institutions (Freidson, 1986, pp. 32–35). These
training programmes, and the status of profes-
sional institutions as qualifying bodies of ‘‘profes-
sional accountants’’, have continued until the 21st
century, despite increasing interest on the part of
British universities in accountancy education
(Matthews, Anderson, & Edwards, 1998).
The success of accountants in establishing and
sustaining distinction and jurisdictional claims in
Britain, and the strong perception of accountancy
as a professional practice there, may explain, in
part, the unwillingness of medical professionals to
challenge the knowledge base of management
accountants. Over the years, UK accountants
have improved their position in both public and
private enterprises. In terms of numbers, accoun-
tancy was the fastest growing of all the major
professions in the UK during the twentieth cen-
tury, outdistancing doctors, lawyers, teachers and
engineers/scientists. An international comparison
of the seven leading industrial countries in the
1990s reveals Britain having the highest propor-
tion of accountants relative both to the workforce
generally and to the size of the national income
(Matthews, Anderson, & Edwards, 1997; Willmott
& Sikka, 1997). As far as the location of accoun-
tants within organisational hierarchies is con-
cerned, studies of the leadership characteristics of
UK companies since the 1920s have shown a dra-
matic rise in the number of accountants in posi-
tions of company chairmen, directors, and
managing directors (Ahrens, 1996; Armstrong,
1985, 1987; Matthews et al., 1998).
While the concept of jurisdiction seems readily
applicable in such a context, it is much less easy to
apply to the Finnish case considered here. Rather
than training and practice being located within the
territory of a particular professional entity, or
being the preserve of a particular professional
group, accountancy can be learned in Finland
within various institutions independently of con-
nections with exclusive professional bodies. Loca-
ted alongside marketing and management, cost
accounting received public recognition as part of
business economics and as part of the more general
management of business enterprises. Prior to the
demands of the NewPublic Management reforms to
equip medical professionals with calculative skills, a
4
The very presence of an organized ‘‘profession’’ in a
society is seen to depend upon distinctive histories and institu-
tional speci?ties of di?erent nations which produce varying
constellations of the four formally incompatible, yet sub-
stantially interdependent organizing principles of social order,
state, market, community and associations (Streeck & Schmit-
ter, 1985).
L. Kurunma¨ki / Accounting, Organizations and Society 29 (2004) 327–347 341
command of accounting techniques within busi-
ness enterprises was already shared by di?erent
occupational groups. Financial considerations, it
had been argued, should concern all adminis-
trative personnel, not just accountants (Granlund
& Lukka, 1997). The willingness of medical pro-
fessionals to acquire a particular set of calculative
practices, and their perceived ability to do so, was
made possible within this educational and insti-
tutional context. Instead of a professional practice
controlled by an organised professional group,
with a clearly de?ned jurisdiction and perceived
possession of a body of abstract knowledge, man-
agerial accounting in Finland has been viewed for
decades as a set of techniques and tools that is
mobile and transferable across professional
boundaries.
The contrast between the UK and Finland is
signi?cant as an empirical counterpoint to the
hybridisation process described in this paper. It
also has important implications for more general
theoretical debates concerning interprofessional
encounters and the notion of a ‘‘system of profes-
sions’’ as proposed by Abbott (1988). Once hybri-
disation is viewed as a possible or likely outcome
of interprofessional relations, the system of pro-
fessions appears as a more variable phenomenon
than Abbott suggests. If we broaden the empirical
coverage beyond that o?ered by Abbott to include
a country such as Finland, jurisdictional and com-
petitive battles come to be seen as relatively loca-
lised events, rather than inevitable and universal
consequences of professional encounters. As case
studies of jurisdictional encounters accumulate, we
may come to observe considerable variability in
the forms these take. Other interprofessional
encounters, such as that between management and
law (Edelman, Fuller, & Mara-Drita, 2001), have
been shown to have a similar transformative
capacity. The language of battles, competition and
control, may serve only to characterise encounters
in particular contexts and national settings.
This study may also have implications for the
way in which accounting is viewed within the sys-
tem of professions. One can only make tentative
comments on the basis of the material presented in
this paper, but at the very least it would seem that
the contrast proposed by Abbott between crafts
and professions warrants further consideration.
Abbott suggests that the control of techniques
de?nes a craft, whereas professions exert their
control through possession of abstract knowledge
that generates practical techniques. In the case of
management accounting, not only have many of
its de?ning techniques been borrowed from other
disciplines (Hopwood, 1992; Miller, 1998, 2003), it
seems from the material presented here that in
some contexts its techniques are readily transfer-
able to other occupational groups. The process of
hybridisation analysed in this paper depended
principally on the mobility of a particular set of
practices or techniques. This suggests that abstract
knowledge may not play such a pivotal role—and
techniques the subordinate role—that Abbott
attributes to them. The availability and mobility
of techniques, albeit in certain contexts, can help
shape the very nature of professional life. This
mobility, in turn, is shown to depend on a parti-
cular con?guration or assemblage of techniques,
institutional locations, pedagogic mechanisms and
professional associations. In place of the hier-
archical imagery between abstract knowledge and
techniques used by Abbott, the term assemblage
seems to capture well the loose and reciprocal
relations that hold among a particular set of tech-
niques, abstract knowledge claims, and the insti-
tutional and pedagogic arenas within which they
are propagated. Moreover, the signi?cant role
played by the transfer and accumulation of tech-
niques in the development of management
accounting itself, and in the hybridisation descri-
bed in this paper, suggests that we should at least
pose the question of whether managerial account-
ing should more properly be described as a craft
than a profession.
Conclusion
This paper has examined the encounter between
medical professionals and the calculative practices
of managerial accounting in the context of the
Finnish New Public Management reforms during
the late 1980s and early 1990s. Instead of the
competitive or jurisdictional battle between doc-
tors and accountants that one would expect from
342 L. Kurunma¨ki / Accounting, Organizations and Society 29 (2004) 327–347
Abbott’s (1988) analysis of the ‘‘system of profes-
sions’’, a process of hybridisation of medical
expertise was observed. The principal mechanism
of this transformation was a transfer of tech-
niques, while abstract knowledge played little or
no part. Commencing with the delegation of bud-
gets to the clinical units, and developing through
the costing and pricing of hospital services, medical
professionals acquired much of the calculative skills
often regarded as the preserve of management
accountants. The term ‘‘hybridisation’’ has been
used to characterise the outcome of this process.
Empirically, the paper has shown that a hybri-
disation of professional expertise can occur in a
speci?c setting within a particular national con-
text. More generally, this has been held to have
possible implications for analysing the ‘‘system of
professions’’ and the interprofessional encounters
that occur within it. If the outcome of professional
encounters is not always a battle, or if abstract
knowledge does not, at all times, play the domi-
nant role attributed to it by Abbott, we seem to
need a more nuanced and detailed understanding
of interprofessional encounters than is currently
available. We may ?nd that the ‘‘system of pro-
fessions’’, in a particular national setting and at a
speci?c time, more closely resembles a temporarily
stabilized assemblage of skills and techniques,
abstract knowledge claims, educational institu-
tions, and academic disciplines.
Acknowledgements
Thanks are due to Thomas Ahrens, Royston
Greenwood, Anthony G. Hopwood, Irvine Laps-
ley, Peter Miller, Elias Mossialos, Rauno Tammi-
nen and the two anonymous reviewers of this
paper. I have also bene?ted from comments by
participants at the Annual Conference of the Eur-
opean Accounting Association in Copenhagen, a
workshop on Knowledge-Intensive ?rms at the
University of Oxford, ‘Accounting Reforms in
Professional Settings’ Seminar at the University of
Uppsala, a CIMA sponsored Public Sector
Workshop at the University of Edinburgh, and a
post-graduate research seminar at the London
School of Economics. Comments and feedback in
the context of the medical professionals at the
Vaasa Central Hospital and Turku University
Hospital are also greatly appreciated. This study
would not have been possible without the willing
co-operation provided by sta? at the hospitals
studied, as well as those interviewed outside these
hospitals. Financial support was provided by the
University of Jyva¨ skyla¨ , the Finnish Academy,
and the Foundation for Economic Education.
The author also acknowledges the ?nancial sup-
port of the research network ‘Accounting in the
Reform of European Health Care Systems’, fun-
ded by a grant from the European Commission,
‘Training and Mobility of Researchers’ Pro-
gramme, Contract no. ERBFMRXCT970152.
This support is greatly appreciated.
Appendix
The ?eldwork on which this study is based was
conducted in two stages. The ?rst stage took place
during the second half of 1995, and included 32
semi-structured interviews with persons working
in three publicly funded hospitals and related
organisations. Those interviewed included hospital
managers, ?nancial managers, doctors, nurses,
health economists, an accountant, and a municipal
representative. In addition, 41 meetings were
observed. These included hospital management
group meetings, meetings between hospital repre-
sentatives and municipal decision-makers, between
hospital managers and clinical unit representa-
tives, as well as between chief physicians and ward
sisters. The second stage of the ?eldwork lasted
from autumn 1998 till early 1999, and was con-
ducted in three additional publicly funded hospi-
tals. A total of 16 interviews were conducted at
this stage. Those interviewed during this second
stage of the ?eld research included doctors as well
as nurses, ?nancial managers, and an IT manager.
Also, a project manager in an institute involved
with training hospital and clinical unit managers
in ?nancial management was interviewed. Con-
ducting interviews in two distinct stages and over
a lengthy period of time allowed a pattern of
interview responses to be observed. Interviews
were discontinued at the stage when analysis of
L. Kurunma¨ki / Accounting, Organizations and Society 29 (2004) 327–347 343
further interviews was seen to not reveal new
information. Some interview questions in the sec-
ond stage of the ?eld research were designed to
test the emerging ?ndings and interpretations of
the researcher.
The ?eld research material collected by means of
interviews and observation of meetings was sup-
plemented by extensive documentary material
gathered from hospitals and various governmental
sources. Material collected from hospitals inclu-
ded documents as diverse as the internal and
external price lists of hospitals, budgetary reports,
investment proposals, benchmarking circulars,
and strategy outlines. Material gathered from
governmental sources consisted mainly of com-
mittee reports and related policy proposals, which
documented the aims of the various initiatives to
reform the health care sector as well as the princi-
ples and reasoning on which these reforms had
been based.
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