Description
This essay addresses the implications of accounting and hybrids for the management of risk. We argue firstly and
most generally for a definition of hybrids that extends beyond organisational forms. The existing literature, we suggest,
has been too focused on organisational forms, and has largely neglected the hybrid practices, processes and expertises
that make possible lateral information flows and coordination across the boundaries of organisations, firms, and groups
of experts or professionals.
Accounting, hybrids and the management of risk
Peter Miller
a,
*
, Liisa Kurunma¨ki
a
, Ted O’Leary
b,c
a
Department of Accounting and Finance, London School of Economics and Political Science, Houghton Street,
London WC2A 2AE, United Kingdom
b
MBS Crawford Building, University of Manchester, Oxford Road, Manchester M13 9PL, United Kingdom
c
University of Michigan, 701 Tappan Street, Ann Arbor, MI 48109, United States
Abstract
This essay addresses the implications of accounting and hybrids for the management of risk. We argue ?rstly and
most generally for a de?nition of hybrids that extends beyond organisational forms. The existing literature, we suggest,
has been too focused on organisational forms, and has largely neglected the hybrid practices, processes and expertises
that make possible lateral information ?ows and coordination across the boundaries of organisations, ?rms, and groups
of experts or professionals. Secondly, we argue that the management of organisations is rapidly being transformed into
and formalised around the management of risk, while much of the management of uncertainty occurs through a variety
of hybrids that reside beyond the formalised practices of risk management. Thirdly, we argue that accounting practices
are central to these issues, in so far as accounting is constantly engaged in a dual hybridisation process, seeking to make
visible and calculable the hybrids that it encounters, while at the same time hybridising itself through encounters with a
range of other disciplines. We address these issues in three main stages. The ?rst section considers the ‘discovery’ of
hybrid organisational forms by researchers on management and organisations over the course of more than two dec-
ades. The second section examines the ways in which economists, lawyers and other social scientists have considered the
issue of hybrids. Here, the preoccupation with hybrid organisational forms largely continues, with its attendant neglect
of hybrid practices, processes and expertises. The third section considers the discovery of a wider range of hybrids by
researchers in accounting, and examines two speci?c arenas in which the hybridising of accounting expertise has been
central: the microprocessor industry, and the various encounters between medical and ?nancial expertise in the context
of the ‘New Public Management’ reforms. The essay concludes with a discussion of the implications of this broader
de?nition of hybrids for accounting and the management of risk.
Ó 2007 Elsevier Ltd. All rights reserved.
0361-3682/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved.
doi:10.1016/j.aos.2007.02.005
*
Corresponding author.
E-mail address: [email protected] (P. Miller).
Available online at www.sciencedirect.com
Accounting, Organizations and Society 33 (2008) 942–967
www.elsevier.com/locate/aos
Introduction
The management of organisations is rapidly
being transformed into and formalised around
the management of risk. This began in the early
1990s, and on both sides of the Atlantic. On the
UK side, it can be identi?ed by a seemingly unre-
markable event – the publication of the Report of
the Committee on the Financial Aspects of Corpo-
rate Governance (1992), produced by a body
formed by the Financial Reporting Council, the
London Stock Exchange and the accountancy pro-
fession. In the USA, and in the same year, there
was a similar event – the publication of the Report
of the Committee of Sponsoring Organisations of
the Treadway Commission, titled ‘‘Internal Con-
trol – Integrated Framework’’ (1992). Subse-
quently nicknamed the ‘‘Cadbury Report’’ (after
its Chairman) and ‘‘COSO’’ respectively, these
two weighty documents were followed by a steady
stream of writings of variable depth on matters of
corporate governance and risk. In the UK, the
Greenbury Report (Confederation of British
Industry, 1995), the Turnbull Report (ICAEW,
1999), and the Combined Code (Financial Report-
ing Council, 2003) built up momentum to address
these issues. In 2002, this ?ow of documents on
corporate governance was punctuated by an event
of massive signi?cance – the publication in the
USA of the Sarbanes-Oxley Act (2002), passed in
the wake of the Enron and WorldCom scandals,
which ensured the centrality of risk management
to corporate governance debates probably for dec-
ades to come.
Cumulatively, and in the space of little over a
decade, these diagnoses, pronouncements and
legal reforms have produced a situation in which
risk management has become almost synonymous
with ideals of good management, and for organisa-
tions as diverse as private sector companies and
public hospitals.
1
It seems as if anything can be
made into a risk by breaking down, rearranging
and re-ordering certain elements of reality. Risk
management can be viewed as the practice of a
particular type of rationality, a ‘moral technol-
ogy’, a way of making the future manageable in
a very speci?c way (Ewald, 1990, 1991; Knights
& Vurdubakis, 1993). To manage risk means no
longer to resign oneself to blows of fate or provi-
dence, but to take responsibility for one’s a?airs
by developing the means to avoid and repair its
e?ects. To manage risk means, above all, to have
available a set of tools or technologies that allow
one to intervene in the name of risk. This is a thesis
that, rather than seeking to di?erentiate advanced
modernity from previous eras (Beck, 1992),
focuses on the emergence, proliferation and link-
ing up of a set of dispersed yet generalisable tools
for identifying and di?erentiating domains, and
acting on and objectifying them qua risk. Risk
committees, risk o?cers, risk maps and assurance
frameworks are part of this still developing pano-
ply of tools for acting on the future so as to make
it manageable and calculable.
2
Faith in the man-
ageability of risks appears to go hand in hand with
a multiplication and di?erentiation of the notion
of risk, as we see the emergence of ‘operational
risk’, ‘strategic risk’, ‘reputational risk’ and so
forth (Power, 2007). Risk management as an idea
and a more or less standardised set of practices is
now central to both private sector companies
and public sector organisations, and indeed is an
important boundary-spanning activity that is
becoming a model of organisation in its own
right.
3
Hybrids are similarly ubiquitous. They can take
the form of organisational arrangements that do
not readily ?t traditional models of hierarchies or
markets. They can also take the form of hybrid
processes, practices or expertises. In all cases, how-
ever, hybrids are de?ned as new phenomena pro-
duced out of two or more elements normally
found separately. According to this view, hybrids
have distinctive and relatively stable attributes
and characteristics, and are not merely intermedi-
1
For hospitals, see Department of Health (2002, 2003) and
Monitor (2005).
2
See Power (2004) for a review and challenging critique of
this aspiration to engage in the ‘risk management of every-
thing’. See also Hood and Rothstein (2000) and Hood,
Rothstein, and Baldwin (2001).
3
On the notion of boundary objects and boundary spanning,
see Bowker and Star (1999).
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 943
ary or transitory forms that are tending towards
one pole or the other. The world is populated by
hybrids or intermediaries that constantly mix up
and link up apparently disparate and heteroge-
neous things (Callon, 1991; Latour, 1993; Miller
& O’Leary, 2007). Despite the comforting demar-
cation of domains accomplished by words such
as economy, science, technology and politics,
‘impurity’ is the rule and hybrids are the norm.
4
Actors, entities, objects, practices, processes and
bodies of expertise can all be regarded as hybrids,
in so far as they share this characteristic of impu-
rity.
5
Further, hybridising is itself a process, and
assumes variable forms. Not all practices, pro-
cesses and expertises hybridise with equal ease.
Once formed, a hybrid may revert, as in the botan-
ical world. Or the newly formed hybrid may stabi-
lise for a su?cient period of time to be termed an
‘institution’.
6
Similarly, once a hybrid is formed,
then hybridisation can commence anew, as the
recently formed hybrid comes into contact with
others. While disciplines vie with each other for
the control of domains and institutions, and worry
about their identity and self-image, the punctuated
process of hybridising carries on behind the scenes,
sometimes noisily and sometimes quietly.
Yet, while the proliferation of hybrid organisa-
tional forms is already taken for granted by
researchers and practitioners, the implications of
a broader de?nition of hybrids has been insu?-
ciently addressed, as has its implications for anal-
ysing the interrelations between accounting and
the management of risk. As risk management
comes to be de?ned increasingly as standardised
and formal process, the dynamics of organisational
life, the permeability and fuzzy nature of organisa-
tional boundaries, and the varied hybrid practices,
processes and expertises through which uncer-
tainty is actually managed within and across
organisations tend to be con?ned to the penum-
bra.
7
We suggest that the vocabulary and practices
of risk management, with their hierarchical
emphases, remain largely antithetical to the hybrid
nature of an increasing number of organisational
and inter-organisational practices, which are
thereby accorded insu?cient attention.
The arguments of this essay are threefold.
Firstly, and most generally, we argue for a de?ni-
tion of hybrids that extends beyond organisational
forms. The existing literature, we suggest, has been
too focused on organisational forms, and has lar-
gely neglected the hybrid practices, processes and
expertises that make possible lateral information
?ows and cooperation across the boundaries of
organisations, ?rms and groups of experts or pro-
fessionals. The diversity of hybrids has been given
insu?cient attention, and we suggest that this
needs to be redressed if we are to understand better
how organisations manage the di?erent types of
uncertainties they face, and how they often do so
jointly. Secondly, we argue that the management
of organisations is rapidly being transformed into
and formalised around the management of risk,
while much of the management of uncertainty
occurs through a variety of hybrids that reside
beyond the formalised practices of risk manage-
ment. The management of uncertainty does not
only happen through the now obligatory and
increasingly elaborate apparatuses of risk manage-
ment systems and assurance frameworks. As com-
pliance with more or less standardised governance
models comes to dominate increasingly the design
of risk management systems, it may well be that
the ability of these systems to manage the full
range of uncertainties that organisations face is
diminished. Thirdly, we argue that accounting
practices are central to these issues. For account-
ing, we suggest, is constantly engaged in a dual
4
Latour (1993) makes a similar point, when he speaks of both
hybrids and puri?cation, although his concern is primarily with
the hybridisation of nature and culture, of science and society.
5
The notion of ‘techno-economic network’ illustrates well the
ways in which hybrids themselves can be connected with each
other, to form a more or less coordinated set of heterogeneous
actors (Callon, 1991; Callon, Lare´do, & Rabeharisoa, 1992;
Miller & O’Leary, 2007).
6
To bring together the somewhat distinct language of actor-
network theory and institutional theory, one might say that, as
networks or assemblages come to be stabilised for reasonable
periods, they take on the characteristics of institutions (Miller,
1997).
7
A note on terminology may be appropriate here. We use the
term uncertainty to refer to a wider range of phenomena than
risk, while the term risk is used to refer to those forms of
uncertainty which have been de?ned and constituted as risks.
944 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
hybridisation process: seeking to make visible and
calculable the hybrids that it encounters, while at
the same time hybridising itself through encoun-
ters with a range of other practices and disciplines.
Indeed, accounting is itself a hybrid that was
formed and reformed at the margins of other prac-
tices and disciplines, which, in the case of manage-
ment accounting, included engineering and
economics (Miller, 1998).
This suggests an important lesson about
hybrids. Not only are hybrids more prevalent,
and more varied in type, than organisation theo-
rists have suggested. But a speci?c class of hybrids,
those formed at the intersection with the calcula-
tive practices and expertise of accounting, are of
particular signi?cance. For it is through intersec-
tions such as those between ?nancial calculation
and technological dreams, or between the ideals
and instruments of costing, curing and caring, that
a particular modality of intervening to manage
uncertainty emerges and is made possible. These
imbroglios, which do not ?t the conventional
images of risk management, somehow mix things
up in ways that go beyond the hierarchical prac-
tices of formalised risk management. The calculat-
ing self, one might say, is increasingly a hybrid, as
are the tools that the calculating self can deploy
(Miller, 1994). This, we suggest, is one of the most
distinctive features of our present, which we char-
acterise as one of hybridising rather than colonis-
ing.
8
Whether in the realm of the modern
technological economy, or the ?eld of health care,
we are increasingly aware of a particular form of
‘impurity’ in which the calculative practices of
accounting remain central.
This essay addresses these issues in three main
stages. In the following section, we consider the
‘discovery’ of hybrid organisational forms by
researchers on management and organisations
over the course of more than two decades. In the
second section, we examine the ways in which
economists, lawyers and other social scientists
have considered the issue of hybrids. Here, the pre-
occupation with hybrid organisational forms lar-
gely continues, with its attendant neglect of
hybrid practices, processes and expertises. In the
third section, we consider the discovery of a wider
range of hybrids by researchers in accounting, and
examine two speci?c arenas in which the hybridis-
ing of accounting expertise has been central: the
microprocessor industry, and the various encoun-
ters between medical and ?nancial expertise in
the context of public sector reforms. The essay
concludes with a discussion of the implications of
this broader de?nition of hybrids for accounting
and the management of risk.
The discovery of hybrid organisational forms
Management and organisation researchers have
long recognised and studied empirically the wide
variety of organisational arrangements that struc-
ture and animate economic life.
9
Over two decades
ago, Ouchi (1979) considered the mechanisms
through which organisations are managed, and
used the label ‘clan’ to designate the informal
social structures and processes that characterise
some organisations. Although Ouchi’s concern
was with intra-organisational control mechanisms,
his work none the less directed attention at an
early stage to a mode of control that did not read-
ily ?t into the traditional binary classi?cation of
markets and hierarchies. Rather than view the clan
mode of control as an anomaly or epiphenome-
non, he argued that it should be regarded as a sub-
ject of analysis in its own right.
In the 1980s, a number of writers on manage-
ment took these arguments a step further, and
pointed to the changing nature of industrial econ-
omies and the increasing importance of coopera-
tive organisational forms that do not ?t the
traditional antinomy of markets and hierarchies.
Factors such as the increasing globalisation of
the world economy, shorter product life-cycles,
the emergence of new hi-technology industries,
the increasing customisation of demand, the emer-
8
On the notion of ‘colonising’ applied to expertise, see
Mulkay, Pinch, and Ashmore (1987), Power and Laughlin
(1992) and Sugarman (1995).
9
Classi?cation by discipline is always problematic, and
particularly in this instance. The work of Oliver Williamson,
for example, draws on and contributes to economics, organi-
sation theory and law.
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 945
gence of ?exible specialisation, and changing com-
petitive conditions all helped create unprecedented
demands on traditional modes of organising pro-
duction. The ‘quasi-?rm’ was identi?ed as a dis-
tinctive governance structure in the particular
context of the construction industry (Eccles,
1981). This referred to an organisational form with
characteristics of both markets and hierarchies,
based on ‘relational contracting’ in which both
parties can bene?t from the somewhat idiosyn-
cratic investment of learning to work together
(Eccles, 1981, p. 340).
10
In the very di?erent con-
text of academic publishing, hybrid forms of orga-
nisation based on a dense network of personal ties
were identi?ed as critical to the fortunes of pub-
lishers (Coser, Kadushin, & Powell, 1982; Powell,
1985). In contexts of traditional ‘craft production’,
such as that of the German textile industry, pro-
duction systems were observed and analysed that
linked small and medium-sized ?rms in extensive
subcontracting systems. Within this subcontract-
ing system, key technologies were developed in col-
laboration, and in conjunction with overlapping
inter-industry supplier networks (Piore & Sabel,
1984). And, in the context of the commercial air-
craft industry, as well as in oil extraction, chemical
and pharmaceutical research, microelectronics,
telecommunications, and biotechnology, manage-
ment researchers provided increasing evidence of
modes of organising economic activity that did
not ?t the conventional categories of markets
and hierarchies.
11
By the late 1980s, a substantial body of research
on hybrid organisational arrangements already
existed in the management literature. Powell
(1987) re?ected on this literature, asking whether
hybrid organisational forms are a new and distinc-
tive feature of the socio-economic landscape, or
whether they are simply a transitional develop-
ment. He argued that analytical concepts such as
markets and hierarchies may provide us with dis-
torted lenses through which to analyse economic
change. By viewing economic organisation as a
choice between markets and contractual relations
on the one hand, and conscious planning within
a ?rm on the other, Powell argued that we fail to
see the rich variety that forms of cooperative
arrangements can take. He spoke of a ‘stampede’
into various alliance-type combinations, linking
large generalist ?rms and specialised entrepreneur-
ial start-ups. Borys and Jemison (1989) addressed
the speci?c issue of strategic alliances, de?ning
hybrids as organisational arrangements that use
resources and/or governance structures from more
than one existing organisation. According to this
view, hybrids are still the product of sovereign
organisations, yet they allow individual ?rms to
draw upon the capabilities of multiple, indepen-
dent organisation, whether via mergers, acquisi-
tions, joint ventures, license agreements or supplier
arrangements. Granovetter (1985) went further,
and suggested a more general argument concern-
ing economic behaviour. He suggested that all eco-
nomic behaviour, whether it takes place within
markets or hierarchies, is ‘embedded’ in interper-
sonal and social networks. Extensive and sustained
subcontracting relationships based on interper-
sonal relations and shared norms, according to
such a diagnosis, are not empirically intermediate
organisational forms but indicative of the funda-
mental ‘embeddedness’ of economic transactions
in social life (Granovetter, 1985).
12
In the 1990s, the management and organisa-
tional literature on hybrids burgeoned theoreti-
cally and empirically. There was increasing
emphasis on networks, with Powell (1990) arguing
now that the term hybrid was an inappropriate
and inaccurate way of characterising the diverse
forms of collaboration that have existed histori-
cally.
13
Rather than presuming markets as the
10
In this context, ‘somewhat idiosyncratic’ is distinguished,
following Williamson, from ‘highly idiosyncratic’, with the
latter likely to lead to full integration.
11
See Powell (1987) for an overview of some of these studies.
12
On subsequent use of the notion of ‘structural embedded-
ness’, see for instance Simsek, Lubatkin, and Floyd (2003), and
Gnyawali and Madhavan (2001).
13
See: Callon (1998) for a distinct approach to the construc-
tion of markets and the role of networks, one that has much in
common with the arguments advanced here; Nohria (1992) for
a review of the network perspective among scholars of
management and organisation; and Thompson, Frances,
Levac?ic´, and Mitchell (1991) for a useful collection of material
on markets, hierarchies and networks that spans a number of
decades and disciplines.
946 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
starting point, and viewing other forms of
exchange as arrayed on a continuum with hierar-
chies as the end point, Powell called for attention
to be directed at networks as a distinctive mode
of coordinating economic activity. In network
forms of exchange, individuals engage in recipro-
cal and mutually supportive actions, and e?ec-
tively forego the right to pursue their own
interests at the expense of others. In the case of
biotechnology, he suggested, sources of innovation
do not reside exclusively within ?rms, but are
commonly found in the interstices between
?rms, universities, research laboratories, suppliers
and customers (Powell, Koput, & Smith-Doerr,
1996). The general argument here is that, when
knowledge is broadly distributed and brings a
competitive advantage, innovation is likely to be
located in a network of inter-organisational
relationships.
Others argued in similar terms, focusing on the
social networks that enable and shape strategic
alliances (Barley, Freeman, & Hybels, 1992;
Gulati, 1995a, 1995b, 1998; Gulati & Singh,
1998; Kogut, Shan, & Walker, 1992; Nohria &
Eccles, 1992). Noting the growth of inter-organisa-
tional cooperation, and of inter-?rm strategic alli-
ances, Gulati (1995a) argued that empirical studies
in the transaction cost tradition have typically
treated each alliance as independent, and consid-
ered the activities it includes as singularly re?ecting
only the transaction costs associated with it. This
ignores the possibility of repeated alliances that
may alter the calculations of the partners when
they are choosing contracts in alliances. The social
context of alliances, according to this view,
emerges over time and can only be observed by
examining the relationships between ?rms over
time (Gulati, 1995a, 1995b; Gulati, Nohria, &
Zaheer, 2000). Uzzi (1997) argued in similar terms,
although he drew upon the notion of ‘embedded-
ness’ and argued that a more precise formulation
of the e?ect of social relations on economic action
was needed. Zaheer and Venkatraman (1995)
argued for a focus on both the structure and pro-
cess of ‘relational governance’, on the grounds that
factors such as trust complement economic factors
in the governance of exchange relations. Teece
(1996) argued that hybrid organisational forms,
such as inter?rm agreements linking ?rms with
complementary capabilities and capacities, repre-
sent a signi?cant organisational innovation.
14
Teece, Pisano, and Shuen (1997) built on these
proposals, and outlined the ‘dynamic capabilities’
approach that sought to explain how and why cer-
tain ?rms build competitive advantage in regimes
of rapid change. Dynamic capabilities are de?ned
here as the ability of a ?rm to integrate, build
and recon?gure internal and external competence
to address rapidly changing environments (Teece
et al., 1997, p. 516). Other key contributions to
the strategic management ?eld argued that com-
petitive advantage may be based on a high degree
of inter?rm specialisation (Dyer, 1996). Or, more
generally, a ?rm’s critical resources may extend
beyond boundaries of the ?rm (Dyer & Singh,
1998).
By the end of the 1990s, and leaving aside di?er-
ences of emphasis and terminology, as well as the-
oretical preferences for building on or superseding
transaction cost modes of analysis, scholars in
management and organisational analysis had
accumulated a very substantial body of empirical
research on hybrid organisational forms. Special
issues of the Academy of Management Journal in
1995, the Academy of Management Review in
1998, and the Journal of Management Studies
in the same year are testimony to the extent of
the interest in these issues among management
researchers. The volume and scope of this litera-
ture is quite remarkable, as is its continuing exten-
sion. Some writers have focused recently on the
‘processual’ aspects of inter-organisational rela-
tionships (Das & Teng, 1998, 2002; Zajac & Olsen,
1993). Others have rea?rmed the importance of
‘trust’ (Adler, 2001; Carney, 1998). The issue of
recurrent and relational contracting has been
addressed further (Ring & Van de Ven, 1992), as
has the role of technological knowledge (Brusoni,
Prencipe, & Pavitt, 2001), the role of information
practices (Sampler & Short, 1998), and the role
of control mechanisms (Birnberg, 1998). The
detailed structure of alliances has been examined
(Sobrero & Schrader, 1998), the issue of coopera-
14
See also Pisano, Russo, and Teece (1988), and Teece (1992).
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 947
tion has been considered (Smith, Carroll, & Ash-
ford, 1995), and the wide variety of coordination
mechanisms has been emphasised (Grandori,
1997). Meanwhile, a range of hitherto neglected
topics and issues have been shown to be worthy
of attention. This includes the role of inter-organ-
isational relations in the context of patient care
(Gittell & Weiss, 2004), and the role of institutions
such as trade associations in shaping inter-organi-
sational relations (Marchington & Vincent,
2004).
15
Whether one uses the label ‘hybrids’, ‘net-
works’, or simply ‘new organisational forms’, it is
clear that the appetite of management and organ-
isational scholars for researching and analysing
this set of phenomena is undiminished even after
more than a quarter of a century of intense
activity.
While organisation theorists have not pointed
to a single factor explaining the proliferation of
hybrid organisational forms, they seem clear that
there is no tendency for them to disappear or
diminish in signi?cance. Adaptability to changing
market conditions, the limits of large-scale organi-
sation, access to specialist know-how which is
often located outside the boundaries of the large
corporation, and generalised reciprocity and repu-
tation are among the factors that have been iden-
ti?ed as important in the growth of hybrid
organisational forms. Yet, despite this extended
view of the conditions that may give rise to inter-
mediate organisational forms, it is equally clear
that the analysis is more or less restricted to organ-
isational forms. The existence of other forms of
hybrids is barely noticed, with a corresponding
neglect of the practices that may require or inspire
boundary-spanning activities, including the man-
agement of risk. The next section considers the
ways in which this concentration on organisational
forms has spilled over into other social science lit-
eratures. It considers ?rst the ways in which econ-
omists from di?erent traditions have addressed the
issue of ?rm boundaries and hybrids across the
past two decades. It then considers the ways in
which legal theorists have sought to address the
question of hybrid economic forms, by confront-
ing the issues of legal responsibility and entity
principles. Finally, it considers the ways in which
hybrids have been addressed at the intersection
of academic and political debate, in ‘third way’
arguments and their antecedents. The focus on
organisational forms, it is suggested, largely
remains in these further forays into the issue of
hybrids.
Economists, lawyers and others discover hybrids
While organisation theorists have been busy
describing and analysing the diverse ways in which
economic life can be designed, a small number of
economists have identi?ed hybrid organisational
forms as, at the very least, theoretically puzzling.
As early as 1979, Williamson argued that much
economic activity takes place via governance
structures that are intermediate between markets
and hierarchies (Williamson, 1979). He suggested
then that, if it remains interesting to ask why so
much vertical integration occurs, it is equally inter-
esting to ask why so many transactions occur in
markets and quasi-markets. While markets and
hierarchies represent two of the principal gover-
nance structures for organising transactions, Wil-
liamson proposed that a third type that he called
‘‘semi-speci?c’’ also existed (Williamson, 1979, p.
247). Semi-speci?c governance structures, he
argued, were tailored to transactions that were nei-
ther highly standardised nor highly speci?c. Sev-
eral years later, he commented that transactions
in the ‘‘middle range’’ were much more common
than he had thought a decade earlier (Williamson,
1985, p. 83).
16
By the early 1990s, he identi?ed
hybrids explicitly as one of three alternative modes
of governance (Williamson, 1991). The aim here
was to put hybrids on a similar footing to markets
and hierarchies, and to characterise the abstract
attributes that de?ne them as an alternative mode
of governance rather than a loose amalgam of
15
The implications of hybrids and network organisational
forms for business history are also currently receiving renewed
attention. See for instance Lamoreaux, Ra?, and Temin (2004),
and Sabel and Zeitlin (2004).
16
Williamson somewhat undercut this observation by adding
that ‘‘the tails of the distribution are thick’’ (Williamson, 1985,
p. 84).
948 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
market and hierarchy. The ?rm, Williamson
argued, is usefully thought of as the organisational
form or governance structure ‘‘of last resort’’ (Wil-
liamson, 2002, p. 183), driven largely by increasing
asset speci?city. Hybrids, although representing a
distinctive and generic mode of governance, are
conceived as ‘‘market-preserving credible contract-
ing modes that possess adaptive attributes located
between classical markets and hierarchies’’ (Wil-
liamson, 2002, p. 181).
Similar arguments have been advanced recently
by Holmstro¨ m and Roberts (1998), in a paper that
re-visits the classic questions in the economics of
organisations of why ?rms exist, and what deter-
mines their scope. If, as Coase (1937) argued, ?rm
boundaries and integration can be explained by
e?ciency considerations, Holmstro¨ m and Roberts
ask why so much economic activity takes place
outside the umbrella of the organisation? While
noting the lack of solid theoretical foundations,
and the anecdotal nature of their evidence, Holm-
stro¨ m and Roberts suggest that a much broader
view of the ?rm and the determination of its
boundaries are needed than is o?ered by transac-
tion cost economics and property rights theory.
17
The theory of the ?rm, they argue, has become
too narrowly focused on the hold-up problem
and the role of asset speci?city. Citing a trend they
discern towards disintegration, outsourcing, con-
tracting out, and dealing through the market
rather than integration within the ?rm, they argue
that ?rms have to deal with a rich variety of
problems.
Only a small part of the organisational change
taking place today, Holmstro¨ m and Roberts sug-
gest, can be readily understood in terms of tradi-
tional transaction cost theory in which hold-up
problems are resolved by integration. Many of
the hybrid organisations that are emerging, they
argue, are characterised by high degrees of uncer-
tainty, frequency of transaction and asset speci?c-
ity, yet they do not result in integration. Indeed,
they suggest, mutual dependency seems to support
rather than hinder ongoing cooperation across
?rm boundaries. While Holmstro¨ m and Roberts
do not advance a speci?c or singular explanation
for the phenomena they identify, it is clear that
they regard organisational knowledge and infor-
mation transfer as key. Leading economic theories
of ?rm boundaries have, they argue, paid almost
no attention to the role of organisational knowl-
edge. Moreover, information and knowledge are
at the heart of organisational design, because they
lead to contractual and incentive problems that
challenge both markets and ?rms.
More recently, and remaining with economics,
Roberts (2004) has argued in similar terms,
describing the changes in the organisation of the
?rm during the past two decades as comparable
to the invention of the M-form structure early in
the last century. The refocusing on core businesses,
and the outsourcing of many activities previously
regarded as central has, Roberts argues, led to a
shift in the nature of relationships between ?rms
and their customers and suppliers, with simple
arms length relationships being replaced by long-
term partnerships.
18
Layers of management have
been eliminated, functional units have been dis-
persed to business units, and the authority and
accountability of line managers has been
increased. To facilitate coordination and learning
in this novel organisational form, Roberts argues,
?rms have experimented with ways of linking peo-
ple through horizontal rather than hierarchical
17
Williamson (2002) responds to Holmstro¨ m and Roberts
(1998). He endorses the general arguments they advance for
taking a broader view of the ?rm and the determination of its
boundaries. He also supports their plea for avoiding a narrow
focus on the hold-up problem and the role of asset speci?city,
while defending asset speci?city as an operational concept that
‘‘serves to breathe content into the idea of transactional
‘complexity’’’ (Williamson, 2002, p. 189). Our interest in these
debates is in terms of their general endorsement of the
importance of examining and conceptualising organisational
forms that are neither classical markets or hierarchies, rather
than in terms of the extent to which either party adequately
characterises or addresses the attributes of ‘hybrids’.
18
The notion of complementarities, as set out by Milgrom and
Roberts (1995), has been taken up by organisation theorists,
who have viewed complementarities as nets of inter-relation-
ships (Pettigrew et al., 2003). Building on established traditions
in organisation theory, such as contingency theory and the
notion of ‘?t’, complementarities thinking lends itself to
explanations of inter-?rm cooperation as much as to synergies
among activities within ?rms (Miller & O’Leary, 2005a, 2005b).
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 949
communication. These organisational innovations,
he suggests, are ongoing and o?er the opportunity
for improved economic performance. They alter
the way work is done, and change people’s lives
in fundamental ways.
Legal theorists who have addressed the nature
of the ?rm and its boundaries have confronted a
similar set of issues, albeit in a distinctive manner.
Not surprisingly, the issue of responsibility is a
central preoccupation here. For Collins (1990),
the main issue is the principle of group responsibil-
ity under common law.
19
This entails the recogni-
tion of a legal person or entity as a representative
of the group, with the group in turn being held lia-
ble potentially for the acts of its members. This is
currently possible where the productive relations
are controlled and directed within one capital unit,
that is to say a ?rm in the legal form of a partner-
ship or company. Collins argues that this principle
of collective responsibility should be extended
more widely, to take account of group responsibil-
ity across di?erent capital units or ?rms. Collins
refers here to what he terms ‘complex economic
organisations’, that is, a set of economic organisa-
tions that do not constitute a single ?rm or a single
legal entity, yet none the less are integrated and
may be treated as comprising a single set of pro-
ductive relations. For instance, Collins argues,
for the purposes of ascribing legal responsibility
one might treat a set of subcontractors (for exam-
ple in the construction industry, or car manufac-
turing) as a united group. Responsibility here, he
suggests, should be viewed as a matter of group
rather than purely personal responsibility. While
acknowledging the di?culties of re-conceptualis-
ing general principles of legal responsibility, Col-
lins argues for the importance of ?nding ways to
identify integrated, yet legally separate, economic
units for the purpose of attaching obligations.
Teubner and Hutter (Teubner, 1993; Hutter &
Teubner, 1993) have argued in similar terms,
although couched more in the language of social
systems theory. They start from the premise that
hybrids are fundamentally di?erent from market
contract and hierarchical organisation, by virtue
of their coordination and control mechanisms.
They are referring here to just-in-time organisa-
tions, franchising systems, money transfer net-
works and other networks in such sectors as
energy, transportation and telecommunications.
These concerns on the part of some legal theorists
echo those of accounting researchers and practitio-
ners. For in so far as all companies must prepare
annual accounts, the legal entity principle strongly
reinforces the accounting preoccupation with the
bounded nature of the ?rm.
In a very di?erent context, and at the intersec-
tion of academic and political debate, the so-called
‘third way’ political thinking also sought to plura-
lise organisational forms. Giddens (1998) depicted
markets as merely one possible modality of gover-
nance. Much of the debate here centred on the
quality of public services, and whether markets
o?ered alternatives to state provision. The propo-
nents of the third way argued that government
should act in partnership with the agencies of civil
society and business. Such arguments built on an
earlier literature that represented the traditional
antinomy between state and market as insu?-
ciently complex for analytical and practical pur-
poses (Streeck & Schmitter, 1985). In addition to
modes of organising social and economic life
through markets, states and communities, Streeck
and Schmitter proposed the notion of ‘associa-
tions’. The guiding principle of such organisational
arrangements is ‘organisational concertation’ or
negotiation within and among a limited and ?xed
set of interest organisations that recognize each
other’s status and entitlements, and are capable
of reaching and implementing relatively stable
compromises in the pursuit of their interests. A
decade or so later Hirst (1994) argued in similar
terms, calling for ‘associationalism’ as a principle
of administrative renewal in the face of bureau-
cratic failures. State provision, he contended,
should be made more accountable to citizens,
and market provision should be embedded in a
social network of coordinative and regulatory
institutions. Market principles and mechanisms
should be combined with non-market calculations
and forms of resource allocation. Hybrid organisa-
19
See also Collins (2006) on the legal implications of the
network architecture of supply chains. See also Buxbaum
(1993) who argues pithily and normatively that network is not a
legal concept.
950 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
tional forms, which are better able to manage
uncertainty, once again appear to be the rule
rather than the exception (Hirst & Zeitlin, 1991).
The concern with hybrids on the part of econo-
mists, lawyers and other social scientists suggests
that the phenomenon is of general signi?cance
for the social sciences. Yet the limiting of the focus
to organisational forms tends to reinforce the
rather restrictive delineation of issues on the part
of organisation theorists. We turn now to consider
the ways in which accounting researchers have
addressed the issue of hybrid organisational forms,
while also addressing other forms of hybridisation.
Accountants discover more hybrids
Approximately a decade ago, Hopwood (1996)
argued that management processes frequently
transcend the boundaries of legally constituted
entities, yet most accounting practices continue
to focus on hierarchical relationships and vertical
information ?ows. Lateral information ?ows are
typically neglected, he suggested, and budgeting,
planning and performance evaluation are largely
seen in vertical terms. Even the so-called new man-
agement accountings tend to maintain this hierar-
chical orientation. To counter this, Hopwood
called for greater attention to be paid to the lateral
processing of information, and for more explicit
consideration to be accorded to the integration
of actions within networks of organisations. In
so far as planning, budgeting and control pro-
cesses ?ow from one organisation into others,
and create an interdependence of action, he argued
that a more explicit awareness of such processes is
needed to facilitate the role of joint action in
organisational success.
Building on these and other arguments, a body
of work has emerged that provides substantive
empirical analysis of the diverse ways in which
accounting adapts to and facilitates inter-organisa-
tional cooperation and the management of uncer-
tainty. Cost management across organisations,
supply chains and supplier selection practices,
open-book forms of accounting, strategic alli-
ances, budgeting, and investment appraisal have
all begun to receive attention in terms of the lateral
information ?ows they entail, and in terms of the
ways in which accounting practices today extend
beyond the boundaries of organisations (Baxter
& Chua, 2003; Cooper & Slagmulder, 2004; Dek-
ker, 2004; Ha?kansson & Lind, 2004; Ittner, Larc-
ker, Nagar, & Rajan, 1999; Kurunma¨ki & Miller,
2004; Llewellyn, 1991, 1994; Miller & O’Leary,
2005b, 2007; Mouritsen, 1999; Mouritsen, Hansen,
& Hansen, 2001; Seal, Berry, & Cullen, 2004;
Tomkins, 2001; Van der Meer-Kooistra & Vossel-
man, 2000).
Hopwood’s (1996) appeal to move beyond hier-
archical images and practices of accounting
included organisational forms, but it was not lim-
ited to them. His concern was a broader one, and
included the diverse types of information ?ows
and practices for integrating actions within the
networks that characterise contemporary eco-
nomic life. The issue of accounting itself hybridis-
ing in the process was implicit in his call to
accounting researchers to focus on the lateral pro-
cessing of information, as indeed it was over a dec-
ade earlier when he drew attention to the ways in
which accounting repeatedly ‘‘becomes what it
was not’’ (Hopwood, 1983, p. 289). Others have
argued in similar terms, suggesting that without
hybridisation accounting would lack much of its
core calculative content. During the course of the
twentieth century, management accounting was
formed and re-formed largely at the ‘margins’,
and out of a range of calculative practices drawn
from other disciplines such as engineering and eco-
nomics (Miller, 1998). Practices such as standard
costing, discounted cash ?ow, the distinction
between ?xed and variable costs, break-even anal-
ysis, and much more have been drawn from else-
where, adapted, and constituted as the core of
accounting. Accounting o?ers an ideal-typical
illustration of such hybridising. Practices that once
were at the margins of accounting seem now to be
intrinsic and fundamental to its self-identity, even
as they are beginning to be questioned, challenged
and re-shaped. Earlier battles and skirmishes over
the boundaries of accounting are soon e?aced
from the collective memory, as the profession
moves on to fret about a new set of issues regard-
ing the integrity of its self-image. This is what is
meant by the dual hybridising of accounting.
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 951
Not only are existing accounting practices called
upon and deployed to calculate across organisa-
tional boundaries and networks. Novel types of
expertise emerge too, as ?nancial expertise comes
increasingly to be mixed up with other types of
expertise which earlier were viewed as distinctive
and bounded, if not its antithesis.
The hybridising of accounting practices, pro-
cesses and expertise has been of particular concern
to those who have examined the intersection of sci-
enti?c and economic domains, and speci?cally
those who have drawn upon the science studies lit-
eratures to inform their analyses. Whether
couched in the language of ‘actor-network theory’,
‘techno-economic networks’ or the plainer lan-
guage of ‘mediating instruments’ and ‘mediating
machines’, the impulse has been the same: to
examine the range of hybrid forms that have
emerged out of the intersection between two or
more previously separate types.
20
This entails no
a priori delimiting of the ?eld, and no restricting
of hybrids to a particular class of objects. Almost
anything, it seems, can be a hybrid. This does
not exclude organisational forms, but nor does it
accord them priority. It locates them on a horizon-
tal plane, along with all the other practices and
processes that make up a body of expertise such
as accounting. For instance, Power (1994) has
remarked on the interactions between administra-
tive and scienti?c practices, while Robson (1994)
has pointed to the interactions of economic calcu-
lation and investments in science and technology
through the case of R&D expenditure. Miller
and O’Leary (1994a, 1994b) have examined a
worldwide factory modernisation project, and the
invention of a new ?nancial-engineering metric –
termed ‘investment bundling’ – to coordinate and
assess the project at a corporate level. They have
also examined the hybridising of technological
and ?nancial trajectories in the case of the micro-
processor industry (Miller & O’Leary, 2007),
which we examine in greater detail below. Briers
and Chua (2001), through a ?eld study of the
implementation of activity-based costing, have
examined the creation and maintenance of ‘bound-
ary objects’, phenomena able to reside within and
mediate among diverse actor worlds. And, in a
very di?erent context that we also return to below,
Kurunma¨ki (2004) has shown how medical and
?nancial expertise can hybridise under certain
conditions.
These di?erent studies suggest that, if we want
to understand better the dynamics of hybridisation
processes – the ways in which discrete elements get
mixed up to form something new, and how the
newly formed object is able to intervene in distinc-
tive ways to manage uncertainty – we need to
address the hybridising of the practices, processes
and expertises that makes this possible. Let us turn
now to consider in a little more detail just two are-
nas in which the hybridising of accounting exper-
tise has been central. The ?rst demonstrates the
hybridising of ?nancial and technological trajecto-
ries in the case of the microprocessor industry. The
second focuses on the hybridising of medical and
?nancial expertise, in the context of the health care
reforms of the past two decades. In both instances,
the newly formed hybrids provide novel ways of
intervening, and distinctive ways of managing
uncertainty and risk.
The hybridising of ?nancial and technological
trajectories
Consider ?rst the practice of ‘‘technology road-
mapping’’ as used to inform investment appraisal
and coordination in the semiconductor industry
(Miller & O’Leary, 2005a, 2005b, 2007). Technol-
ogy roadmapping refers to an information sharing
framework that operates internationally across
very di?erent kinds of organisations, including
large-scale semiconductor ?rms, suppliers, consor-
tia, start-up ?rms, government agencies, and uni-
versity laboratories (Semiconductor Industry
Association, 2005, p. i). Roadmaps are produced
and updated annually in what has been termed a
‘‘world-wide consensus building process’’ on the
part of delegates from ?rms and scienti?c agencies
in Europe, South Korea, Taiwan, Japan and the
USA (Semiconductor Industry Association, 2005,
p. i). The declared aim is to form shared expecta-
tions across the entities, for periods of up to ?fteen
20
On this, see for instance Callon (1991), Kaltho? (2005),
Morrison and Morgan (1999), Robson (1994) and Wise (1988).
952 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
years ahead, as to when innovations by each of the
entities must come to fruition, and how they
should inter-operate, to enable the production of
new and more powerful semiconductor devices.
The expectations in question are diverse and
multifaceted. They pertain to desired advances in
areas of applied science and engineering, such as
those concerned with increasing the diameters of
silicon wafers, ?nding new materials from which
to fabricate transistors, and developing enhanced
chemical formulations for the better resolution of
electronic features on semiconductor substrates.
These expectations are paired with others relating
to consumption and, particularly, with attempts
to envisage and shape the design of future semicon-
ductors so that they intersect with anticipated
developments in technologies for health-care,
national security, corporate information manage-
ment, personal entertainment, and ‘‘quality of life’’
(Semiconductor Industry Association, 2005, p. i).
21
And both scienti?c and marketing concerns are
linked with ?nancial trajectories, most notably with
an established norm throughout the world-wide
semiconductor industry that cost per electronic ele-
ment should continue to fall at between 25% and
29% annually, a range of decrease argued to have
been achieved now for more than three decades.
Technology roadmaps are information sharing
arrangements that are hybrids themselves, as well
as devices that help both to create hybrid organisa-
tional forms, and to act on the interrelations
among their constituents. They are central to the
formation and mediation of relations between
entities in a dense and changing set of ?rms and
organisations, a network that a senior Intel execu-
tive described in the following terms:
We [Intel] are part of an ecosystem, and you
can’t really be an outlier. You may be a lead-
ing force, a leading element.
22
Intel has sought to be a ‘‘leading force’’ in this
‘‘ecosystem’’ by participating at the most senior
levels in the preparation and updating of the
industry’s international technology roadmap. It
has done so as a critical part of managing the
?rm’s strategic investment decisions (Miller &
O’Leary, 2005a, 2005b, 2007). For it is by means
of roadmaps that Intel’s CEO seeks to coordinate
such investments with those of a host of other
?rms and agencies, thus managing the risks of
widely distributed sets of interrelated innovations:
We obviously do ROIs on products and
things of that sort, but the core decisions
the company makes, the core decisions are
basically technology roadmap decisions.
23
Roadmaps, the CEO pointed out, enable Intel to
take part in:
a managing – a partial managing – of the
resources of the virtual ?rm, the virtual ?rm
being ourselves and a bunch of others bring-
ing product to market.
24
It is through their involvement in negotiating
and updating the international roadmap, and by
scrutinising its contents before major capital com-
mitments are made, that Intel’s most senior execu-
tives interact with a hybrid organisation that
traverses the semiconductor and related industries,
and that links the ?rm with entities as diverse as
university laboratories in Europe devising immer-
sion lithography, the US Department of Energy’s
Virtual National Laboratory, Nikon, and TRW.
For unless those other entities invest in ways that
align with and complement Intel’s capital spend-
ing, the latter’s returns on investment in new pro-
cess technologies, products, and the formation of
markets, may be reduced dramatically. Technol-
ogy roadmapping practices, one might say, make
risk manageable both by the hybridising of ?nan-
cial and technological trajectories, and by making
possible the alignment of the expectations of the
various actors that make up the ‘virtual ?rm’.
Take, as an instance, a recent edition of the
international technology roadmap (see Table 1).
21
For a treatment of how the rate of semiconductor innova-
tion might be seen as crucial to national security, see Grove
(2001).
22
From an interview with the former Chief Executive of Intel
Capital, reported in Miller and O’Leary (2000).
23
Interview with the former Chief Executive (now Chairman)
of Intel Corporation; reported in Miller and O’Leary (2007).
24
See Miller and O’Leary (2007).
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 953
This edition of the international technology
roadmap noted that, in 2005, a key generic prop-
erty of microprocessor devices was that each con-
tained about 386 million transistors and other
electronic elements, manufactured at a target
full-cost of roughly 44 micro-cents per function.
25
It also indicated that, ?fteen years later, a compa-
rable device should be expected to contain
12,368 million electronic elements at a cost of
0.24 micro-cents per element (Table 1).
26
In more
than a hundred pages of dense, technical text, the
roadmap then sifted the implications of these
anticipated rates of increase in microprocessor
functionality, and reductions in cost, for innova-
tion across a diverse set of industries, ?rms and
research agencies. It probed the kinds of incremen-
tal and breakthrough advances that would be
required in such as semiconductor substrate mate-
rials, etch technologies, lithography machines,
resist chemicals, and mirrors of extremely ?ne tol-
erance. At stake were the very foundations of risk
management, both for Intel and for the industry as
a whole. Through unpacking the requirements for
enabling materials and technologies, delegates to
inter-industry consortia could review alternatives,
assess the areas of maximum vulnerability, assem-
ble venture capital syndicates to support promis-
ing avenues, and, at the limit, revise expectations
downward.
It is worth noting the stable rates of change in
both microprocessor functionality (the technologi-
cal trajectory) and cost (the ?nancial trajectory)
that underpin the roadmap. Functionality, as mea-
sured by the number of electronic elements on a
chip, is expected to double every three years with
a corresponding decrease in cost per element of
65% triennially, or 29% per year (Table 1).
Such a simple set of relations sets in train complex
negotiations on rates of investment among ?rms
and agencies around the world. It is a set of rela-
tions derived from one of the most signi?cant –
and one of the most under-researched – hybrid
practices of our time. This is the so-called Moore’s
Law, named after Intel co-founder and now chair-
man-emeritus, Gordon Moore.
27
If technology roadmapping is critical to the lat-
eral ?ow of information and the inter-organisa-
tional management of risk, then Moore’s Law is
perhaps one of the clearest examples of a hybrid
practice that combines technological and ?nancial
components. It dates back to a set of graphs
drafted by Moore during 1965, setting out his pre-
dictions for the semiconductor components indus-
try for the ensuing decade (Fig. 1). The set of
U-shaped curves re?ected a relation between the
number of electronic elements on a semiconductor
product, which he called ‘‘device complexity’’, and
the cost of manufacture. At the time of preparing
the graphs, Moore had available to him only a
very small number of historical data points.
The continued ability to miniaturize electronic
elements like transistors was at the core of the
Table 1
Extracted from international technology roadmap for semiconductors, 2005 edition
Year: 2005 2008 2011 2014 2017 2020
Technology node: (TN
0
) (TN
1
) (TN
2
) (TN
3
) (TN
4
) (TN
5
)
Elements per chip and manufacturing cost – high-volume microprocessor devices
Number of electronic elements per chip at introduction (millions of transistors): 386 773 1,546 3,092 6,184 12,368
Multiple per 3 year technology cycle: 2 2 2 2 2
A?ordable production cost per element at introduction (micro cents): 44.0 15.6 5.5 1.9 0.68 0.24
Rate of cost reduction per cycle (%): 65% 65% 65% 65% 65%
Annualized cost reduction (%) 29% 29% 29% 29% 29%
Extracted from Miller and O’Leary (2007).
25
Semiconductor Industry Association (2005, pp. 70, 84).
26
Semiconductor Industry Association (2005, pp. 71, 84).
27
Moore (1965). For an overview of the signi?cance of
Moore’s Law within the semiconductor industry, see Schaller
(1997).
954 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
industry, Moore thought. In the downward slope
of each curve, he sought to represent the industry’s
ability to e?ect steep reductions in manufacturing
cost per element by continuing to miniaturize ele-
ments and thus ?tting more of them on a chip.
Consumers could enjoy the bene?ts of dramatic
increases in the numbers of electronic elements
on a semiconductor, and thus in the power and
capability of the device, at a greatly reducing cost
per element. But, at some point, each slope bot-
tomed-out. Beyond that point, which Moore
referred to as ‘‘device complexity for minimum
component cost’’, the curve rose steeply as ?rms
were unable to manufacture more complex devices
e?ectively and with acceptable yield levels.
What was crucial, Moore thought, was that
continued innovation would make it possible to
have successive curves continue to shift downward
and to the right, such as those depicted in Fig. 1.
He saw no fundamental barriers in physics or
chemistry to a continuation of historic rates of
miniaturisation for a decade or more. Indeed, he
thought:
With unit cost falling as the number of com-
ponents per circuit rises, by 1975 economics
may dictate squeezing as many as 65,000
components on a single silicon chip.
28
That startling prediction was based on a simple,
straight-line extrapolation from the curves that
Moore had drawn in 1965. Looking back in
1975, he argued that the prediction had indeed
come to pass, and that dramatic increases in device
power and reductions in cost were set to con-
tinue.
29
It is a particular interpretation of Moore’s
Law that, even today, continues to set the essential
guideline for the industry’s international technol-
ogy roadmap.
30
His forecasts, now over forty
years old, are the basis for the estimates in the
2005 roadmap depicted in Table 1 above. Moore’s
Law is not only a hybrid practice at its core, com-
bining as it does technological and ?nancial pro-
jections. It is also used to manage risk in the
most immediate and direct manner, by providing
a set of shared expectations for all the ?rms and
industries that are involved in the production
and consumption of microprocessors.
The hybridising of costing, curing and caring
Hybrids are also found in very di?erent locales.
Take for example the encounter between medical
and ?nancial expertise in the ‘New Public Manage-
ment’ reforms of the past two decades (Hopwood,
1984; McSweeney, 1994; Perrin, 1978; Preston,
Cooper, & Coombs, 1992; Chua, 1995). Here we
?nd many hybrids, and of di?ering types. We also
?nd a hybridising process that is much more vari-
able and less stable than in the previous case, both
over time and from one country to another. We
consider here just some instances of this variation.
No doubt this variation is due in large part to var-
iation in public policy, despite the transnational
nature of the reform agenda, as well as variation
in the ways in which professional bodies de?ne,
di?erentiate and organise themselves. Hybridising
in this arena, one might say, has become both an
Fig. 1. Gordon Moore’s Curves of Device Complexity for
Minimum Cost (Moore, 1965, p. 115).
28
Schaller (1997, p. 114).
29
Moore (1975).
30
An explanation of how Moore’s Law has become embedded
in the International Technology Roadmap for Semiconductors
is provided in Miller and O’Leary (2007).
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 955
object and an objective of public policy. ‘Regu-
lated hybrids’, that is hybrids that have been
shaped in large part by explicit public policy and
regulation, are often the norm. And the formation
or encouragement of such hybrids is argued for in
terms that link them explicitly to the management
of so-called systemic risk.
31
The attempt to make medicine calculable has a
long history. Since the early 1980s, a cascade of
managerial reforms has sought to involve clinicians
in the ?nancial management of both their special-
ties and the hospital as a whole (Hopwood, 1984;
Perrin, 1978; Preston et al., 1992). For several dec-
ades, however, medics in the UK have sought to
preserve intact the boundaries of the medical enclo-
sure, and to inhibit or prevent the forming of a
medical-?nancial hybrid (Jones & Dewing, 1997;
Pollitt, Harrison, Hunter, & Marnoch, 1998; Rose
& Miller, 1992). This longstanding reluctance on
the part of clinicians in the UK to actively partici-
pate in this hybridising of medical and ?nancial
expertise persists, at least within some quarters of
the medical profession. A recent Audit Commis-
sion (2006) Report, that analyses key reasons for
the ?nancial failings of eleven NHS organisations
in 2004–5, identi?es a disengagement of senior cli-
nicians from core management processes as a reli-
able indicator of impending ?nancial trouble in
Hospital Trusts. Even today, ?nancial expertise is
typically not viewed by senior clinicians as some-
thing that they should acquire. Rather, it is consid-
ered the job of the Finance Director to produce a
‘?nancial ?x’ to keep the organisation intact until
the year end (Audit Commission, 2006), or the
job of the management accountants to rede?ne
budgetary overspends as ‘needed’ expenditure
(Kurunma¨ki, Melia, & Lapsley, 2003, 2006).
A very di?erent picture appears, however, if one
considers the encounter between clinicians and the
New Public Management reforms in the Finnish
context.
32
Here, one sees a relatively quick hybri-
dising of medical and ?nancial expertise, with sig-
ni?cant implications for the management of
systemic risk. Contrary to their UK counterparts,
senior clinicians in Finnish hospitals expressed
early on a willingness to acquire ?nancial exper-
tise. The process began in the late 1980s, when
medical professionals were made ?nancially
responsible through delegated budgets in the local-
ised settings of individual institutions. These initial
experiments, in which senior physicians and nurses
participated, took place on a voluntary basis, and
in the localised settings of individual hospitals.
Budgeting began at ward level, with individual
wards preparing their own budgets which were
then combined as clinical unit budgets. Ward sis-
ters and Chief Physicians were central to the prep-
aration of budgets, as one Chief Physician in a
general hospital remarked:
It is team work to a very large extent. . . In
practice, it is the Ward Sisters and Chief Phy-
sicians who are in key positions.
The involvement of medical professionals in the
very early stages of the budget setting process was
perceived to be important, as was the combining of
?nancial and non-?nancial measures in their
reports. At the level of the clinical unit, and in
the context of a maternity ward, budgets would
include both operational and ?nancial targets.
They would be prepared in part on the basis of
information provided by the hospital administra-
tion, and in part from information produced
locally. In another Unit (Pathology), the Chief
Physician remarked:
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. . .
Networks of calculation, in which medical experts
were central, emerged gradually as key actors
came to endorse the ideas, and the number of
participants multiplied. As the ideas of markets,
customers and contracts began to achieve accep-
tance in Finland in the early 1990s, clinicians –
with their recently acquired ?nancial expertise –
31
Hood and Rothstein (2000, p. 21) de?ne systemic risk as
follows: ‘‘risks a?ecting an industry or set of organisations (like
risks of general banking collapse), as distinct from risks to the
position of any individual organisations’’.
32
See Kurunma¨ki (2004) for a more extended discussion of
these issues. See also Lehtonen (2007).
956 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
took readily to the detailed tasks of calculating
costs, allocating overheads, and setting prices.
Senior clinicians in the Finnish hospital settings
took control of the ?nancial management of their
clinical units, and spoke proudly of the price lists
they had prepared and the average costs they
had calculated for di?erent operations. They spoke
equally proudly of the fact that they had prepared
costing and pricing information with little or no
help from the ?nance unit in the hospital. As one
Financial Manager remarked:
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
Physicians.
The acquisition of ?nancial expertise was con-
sidered to be relatively straightforward and
unchallenging, when set alongside the acquisition
of clinical skills and expertise. Medical and ?nan-
cial expertise thus hybridised relatively rapidly in
the Finnish context, as clinicians came to view it
as normal and even desirable to include the key
calculative practices of the accountant as part of
their repertoire. As one Chief Physician com-
mented:
There is no alternative, and in the training of
doctors we have to begin on a completely dif-
ferent scale, teaching doctors various things
(such as accounting), not just medicine.
Once budgeting skills had been acquired by
senior clinicians and nurses, and the process
embedded at ward level, it was only a relatively
small step to make medical professionals responsi-
ble to municipalities and hospital management for
potential ?nancial risks.
Consider a further and related example, where
hybrids have been made both a key object and
objective of public policy, with an explicit link
being forged with the management of systemic
risk. The key risk here is that individual providers
of public services may ful?l their respective respon-
sibilities, but individuals in need of services may
fall between the ‘gaps’ separating di?erent types
of service providers. The speci?c context is the
‘Modernising Government’ programme, intro-
duced in the late 1990s by the Labour government
in an attempt to promote ‘partnership’ working
among a range of service providers.
33
This was
part of a more general attempt to transform the
political lexicon in the UK. An incitation to coop-
erate took centre stage, supplanting the harsh
language of markets and competition that charac-
terised politics and public policy in the 1980s and
early 1990s. The modernising government pro-
gramme overall was originally outlined in the
White Paper Modern Public Services for Britain:
Investing in Reform (CM4011, 1998), and later pre-
sented in more detail in the Modernising Govern-
ment White Paper (CM4310, 1999). And health
care, together with the links between health and
social care, were identi?ed as central to this pro-
gramme in two separate White Papers.
34
Giving
individual departments separate responsibility for
tackling one part of a multi-faceted problem was
viewed as a ‘‘recipe for failure’’ by policy makers.
35
The answer was held to be ‘‘joined-up’’ working,
since this would match the ‘‘joined-up’’ nature of
the problems themselves, a solution that was
viewed as having widespread applicability for
issues as diverse as unemployment, homelessness
and poor health (CM4011, 1998). Service provid-
ers were called upon to cooperate, and to build ser-
vices ‘‘around the needs of those who use them’’
(Department of Health, 1998, p. 5).
This enthusiasm for so-called ‘partnership
working’ was not unique to the UK. Under vari-
ous labels and guises, the notion of cooperation
became a leitmotif for the reform of public services
in the late 1990s. Whether one looks to Australia,
Canada, New Zealand or the UK, the political
vocabulary is remarkably similar. Terms such as
‘joined-up government’, ‘connected government’,
‘networked government’, and ‘whole-of-govern-
ment’ gave voice to a widely shared political diag-
33
See Kurunma¨ki and Miller (2004, 2006) for a more extended
discussion of these issues.
34
New NHS: Modern, Dependable (CM3807, 1997); Modern-
ising Social Services: Promoting Independence, Improving Pro-
tection, Raising Standards (CM4169, 1998).
35
CM4011 (1998), chapter 4, p.2. For a review of the history
and variety of concerns expressed about ‘fragmentation’ of
services, see Ling (2002).
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 957
nosis that aspired to resolve problems as diverse as
the increasing demands and expectations of citi-
zens, budgetary pressures, globalisation, fragmen-
tation of service provision, as well as the
conservatism of public servants, risk avoidance
and lack of innovation. An avalanche of policy
documents recommended ‘horizontal manage-
ment’, ‘inter-agency’, ‘inter-sectoral’, ‘inter-depart-
mental’ and ‘multi-organisational’ cooperation.
36
Hybridisation became the watchword, even if its
precise form and labelling varied from country to
country.
In the UK, and with respect to health care, the
Health Act 1999 gave form to this incitation to
cooperate, while Section 31 of this Act proposed
a range of hybrids as the solution.
37
The hybrids
in this instance were called ‘?exibilities’, and they
were multiple. They could take the form of new
entities or organisations, new processes, or new
practices. A new duty of co-operation within the
NHS was introduced, together with an extended
duty of co-operation between NHS bodies and
local authorities. ‘Flexibilities’ could take the
shape of new organisational forms, such as inte-
grated service provision through newly created
organisations termed ‘‘Care Trusts’’, which had
as their aim to provide health care and social ser-
vices side-by-side. They could also take the form
of cooperation across organisational boundaries,
by allowing service providers to pool resources
and create ‘pooled budgets’ for speci?ed client
groups. Finally, ?exibilities could take the form
of partnership working based on the joint commis-
sioning of services, such as care home placements,
by those responsible for the provision of services.
Cooperative working was of course not an
absolute invention of the ‘modernising govern-
ment’ initiative. Well before the Health Act 1999
and its related reforms, local actors had engaged
in all sorts of informal cooperation and hybridisa-
tion, as this arose around immediate issue of ser-
vice delivery. Delayed hospital discharges, lack of
hospital beds during the winter months, and over-
due assessments of care needs that was often
linked to eligibility for continuing care placements
are just some of the issues around which it
emerged prior to the Health Act 1999. Informal
hybrids had been formed, such as local agreements
for joint targets for maximum delays, money
transfers between health care and social service
organisations, and multidisciplinary care assess-
ment and commissioning teams.
38
The contribution of the Health Act 1999 was to
make hybrids an objective of public policy. By
institutionalising and formalising locally developed
and established practices and processes, as well as
newly created ones, ‘regulated hybrids’ were to be
formed. In place of informal cooperation, the
Health Act ‘?exibilities’ required formal ‘noti?ca-
tion’ through appropriate documentation and
paperwork. The signatories to these noti?cations
were, for example, required to demonstrate that
there existed robust arrangements for governance,
regular reviews of such arrangements, agreed
terms, conditions and policies for human resources,
information sharing practices, clear identi?cation
of functions, eligibility criteria and assessment pro-
cesses, complaints procedures, dispute resolution
mechanisms, and plans for exit strategies.
39
The political language of cooperation and part-
nerships, however it was labelled in a particular
national context, was not only an abstract ideal
aimed at supplanting the harsh language of mar-
36
See for example the document titled Connecting Govern-
ment: Whole of government responses to Australia’s priority
challenges, published by the Management Advisory Committee,
Commonwealth of Australia, 2004. For New Zealand, see the
Report of the Advisory Group on the Review of the Centre,
presented to the Ministers of State Services and Finance in
November 2001. And, for Canada, see Results for Canadians: A
Management Framework for the Government of Canada, pub-
lished by the Treasury Board of Canada Secretariat, Ottawa,
Canada in 2002.
37
The Health Act 1999 built on a number of earlier initiatives
and tools, including Health Improvement Programmes, Joint
Investment Plans, Health Action Zones, and partnership
grants.
38
One such multi-agency team formed to conduct joint
assessments of eligibility for nursing home care included a
consultant geriatrician, an occupational therapist, a community
psychiatric nurse, a social services manager, a care manager, a
community care manager and a district nurse.
39
See: Application form for Section 31 Partnership Arrange-
ments, Department of Health.
958 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
kets and competition. It was also a way of posi-
tioning public service provision on the register of
risk, and systemic risk relating to service delivery
failure in particular. Coordination across the
boundaries of health and social care had been
identi?ed earlier as a fundamental issue a?ecting
the quality of service provision, as rehearsed in a
Department of Health Discussion Document in
1998:
All too often when people have complex
needs spanning both health and social care
good quality services are sacri?ced for sterile
arguments about boundaries. When this hap-
pens people, often the most vulnerable in our
society – the frail elderly, the mentally ill –
and those who care for them ?nd themselves
in the no man’s land between health and
social services. . . (Department of Health,
1998, p. 3)
The ‘modernising government’ programme
linked such longstanding diagnoses with the lan-
guage of risk. Public service providers were bera-
ted for being insu?ciently entrepreneurial and
risk averse (CM4310; Hood & Rothstein, 2000).
Civil servants and others were depicted as inhabit-
ing a culture in which rewards for success were
limited, while penalties for failure could be severe.
The ‘modernising government’ programme was in
large part presented explicitly as a counterbalance
to this culture of conservatism, caution and ‘blame
avoidance’ (Hood & Rothstein, 2000). In the
words of the Comptroller and Auditor General:
The Modernising Government programme
seeks to encourage departments to adopt
well managed risk taking where it is likely
to lead to sustainable improvements in ser-
vice delivery (HC864, 2000, p. 2)
Against the risks arising from innovation was
touted the ‘‘risk of not taking risks’’ (Su?eld &
Whitehouse, 2000, pp. 16–17). This referred to
the potential risks that might arise from not exper-
imenting with new ways of working, particularly
those that held out the promise of delivering better
and more cost e?ective public services (HC864,
2000, p. 1). As stated in the Modernising Govern-
ment White Paper:
Auditors are rightly interested whether
organisations obtain value for money. We
want them to be critical of opportunities
missed by sticking with the old ways, and
to support innovation and risk-taking when
it is well thought through. . . (CM4310, 1999)
All this, it was hoped, would improve and
encourage cooperation among service providers,
and help reduce the risks of gaps or overlaps in
service provision. Hybrids of di?ering types would
thus support the twin aims of modernising and risk
reduction. It mattered less which type of hybrid or
‘?exibility’ was utilised. Regardless of type, the
Health Act 1999, and the modernising government
programme more generally, placed hybridisation
at the heart of public policy. Whether it took the
form of new organisational entities, new working
practices or processes, or newly emergent forms
of expertise, hybridising was made both an explicit
object and objective of public policy.
40
When placed alongside the active hybridisation
of medical and ?nancial expertise in the Finnish
context on the part of clinicians, the recourse to
legislation in the UK context might at the very
least be viewed as symptomatic of a less conducive
environment for cooperation to ?ourish. But our
aim here is not to assess such matters. Nor is it
to adjudicate on the relative merits of hybridising
in the two contexts. We are concerned primarily
to identify some of the di?ering modes of hybridis-
ing, and the variety of conditions under which it
occurs. In the Finnish context, one sees a relatively
rapid hybridising of clinical expertise. In the UK
context, one sees hybrids made into an explicit
objective of public policy. Both cases reinforce
our argument for a broadening of the category
of hybrids, to include not only organisational
forms, but also hybrid practices, processes and
expertises. Both cases also extend our understand-
ing of the conditions under which hybrids emerge.
Instead of viewing them as a sort of ‘market fail-
ure’ response, whether transitory or relatively sta-
40
Our concern here is not to evaluate the extent to which this
programme achieved its objectives. On this, see Kurunma¨ki and
Miller (2004) who suggest that, at least in the early stages, take-
up of the ‘?exibilities’ was cautious and relatively slow.
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 959
ble, they are viewed here as conditioned to a signif-
icant extent by public policy. Hence the term ‘reg-
ulated hybrids’ that we have used here to
characterize such hybrids.
These brief examples are intended to be no
more than indicative of the range and multiplicity
of hybrids that we argue need to be more fully
recognised. We could no doubt have pointed to
other examples. We could have pointed to the
hybridisation of ?nancial and medical expertise
in the form of ‘Reference Costing’, which has been
given particular prominence in the context of the
‘Payment by Results’ programme recently intro-
duced for the NHS in England (Llewellyn &
Northcott, 2005). While one might view Reference
Costing as a traditional accounting calculation, it
is considerably more than the production of a con-
ventional standard cost. For Reference Costing
mixes up elements from the medical domain
(Healthcare Resource Groups, of which there exist
currently 650 groups) and the ?nancial domain
(standard costs, computed on the basis of numeri-
cal averages).
41
In this exercise, classi?cation on
the basis of a longstanding set of clinical categories
is blended with calculation on the basis of ?nancial
expertise.
42
We could equally have pointed to the hybridis-
ing of medical and ?nancial expertise in the ‘tech-
nology appraisal guidance’ issued by the National
Institute for Health and Clinical Excellence
(NICE) in the UK. While such guidance does
not ‘‘override the individual responsibility of
healthcare professionals to make decisions appro-
priate to the circumstances of the individual
patient’’, they are none the less expected to ‘‘take
it fully into account when exercising their clinical
judgement’’.
43
Recent controversies surrounding
this ‘guidance’ for drugs such as Herceptin (for
the treatment of breast cancer), Donepezil (for
the treatment of Alzheimer’s disease), and Tem-
ozolomide (for the treatment of brain tumours)
have brought ?rmly into the public domain this
hybridising of medical and ?nancial expertise
which happens at a distance from the hospital
and the individual patient. For such guidance
brings together issues of clinical and cost e?ective-
ness. This allows NICE to note for instance that,
with respect to mild to moderately severe Alzhei-
mer’s disease, the estimated cost of prescribing
Donepezil to gain ‘‘an additional year in a non-
severe state’’ ranged from £1200 to £7000 (depend-
ing on dose and starting point). This, in turn,
allows the report to conclude on the basis of a
‘‘recent economic analysis alongside a clinical
trial’’ that ‘‘the drug was not cost e?ective’’.
44
The hybridising at issue here is between health eco-
nomics and clinical judgement, which allows ‘guid-
ance’ to be issued for prescribing on the basis of
‘‘cost per quality-adjusted life years’’ relative to
the average gain in ‘‘quality-adjusted life years’’.
45
Again, our concern here is not to adjudicate on the
merits of this form of silent rationing, which has
only reached the public domain relatively recently.
It is simply to note that the hybridising of ?nancial
and medical judgement continues, behind the
scenes, even while clinicians in hospitals may seek
to distance themselves from ?nancial judgement
and expertise. Risk management occurs here
through attempts to remove the so-called ‘post
code lottery’ – whereby patients’ access to certain
treatments is a function of the health authority
in which they live – as well as through the initial
emphasis on assessing new medical technologies
that are likely to have a signi?cant impact on the
overall cost of the NHS.
46
We have deliberately taken examples from both
the private and the public sector, for hybridisation
is not con?ned to one or the other. We have sug-
gested that hybridisation can occur between the
domains of science, technology and the economy,
between medical and ?nancial expertise, and
41
Scheduled to increase to 1,400 under HRG4 (see www.ic.
nhs.uk/casemix/hrg/hrg1/syb/new_HRG4).
42
See Bowker and Star (1999) on the classi?cation of diseases.
43
NICE technology appraisal guidance 111.
44
NICE technology appraisal guidance 111, paras 4.2.2.3 and
4.2.2.4.
45
NICE technology appraisal guidance 111, para 4.2.2.2. The
basic unit of measurement here is a ‘quality-adjusted life year’
(QALY). The cost may be de?ned as drug costs only (as in an
early independent study cited in this instance), and the bene?ts
are typically de?ned as delays in the progression of disability, or
entry to residential nursing or NHS continuing care.
46
(See Rawlins (1999, p. 1079)); see also Klein (2001) and
Smith (2000).
960 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
between medical and social care agencies. In the
case of the microprocessor industry, we have
argued that Moore’s Law and technology road-
mapping practices can reduce risk by coordinating
and aligning expectations within and among ?rms.
In the context of the Finnish health care reforms,
we have argued that the hybridisation of ?nancial
and medical expertise can reduce risk by reducing
the new forms of uncertainty that arise from a
market or quasi-market based resource allocation
system. And in the UK health care reforms, we
have suggested that formal partnership working
can reduce systemic risks likely to arise through
individuals falling through the ‘gaps’ between dif-
ferent organisational, professional and administra-
tive groups. We do not conclude from these
examples that hybridisation is necessarily benign,
or that it always has positive e?ects for risk man-
agement. We do argue, however, that it demon-
strates that there is much that falls outside the
domain of formalised risk management, and that
the hybrid nature of the processes, practices and
expertises we have referred to is central to their
ability to manage uncertainty and e?ect coordina-
tion across domains and boundaries.
Conclusion and Implications
Hybridising is a continually inventive process,
in which proliferation and multiplication is the
norm. We have argued for a broader de?nition
of hybrids than typically found in the literature,
one that extends beyond organisational forms to
include hybrid practices, processes and expertises.
We have drawn attention in this essay to the
importance of hybrids in both the public and pri-
vate sectors, and across the boundaries of these
increasingly overlapping domains. In no way has
our selection aspired to be comprehensive for
either the areas or individual examples. But we
do think they indicate the considerable variety
and signi?cance of hybrids. For instance, we have
shown how technology roadmaps facilitate coordi-
nation across sub-units of the ?rm, as well as
between the ?rm and its complementors. We have
indicated how ‘‘Moore’s Law’’, which pre-dates
and broadly de?nes the contours that roadmaps
have to follow, mediates between science and the
economy, and de?nes the rules under which coop-
eration and competition occur in the microproces-
sor industry.
In a very di?erent context – an encounter
between medical and ?nancial expertise – we have
shown the process of hybridisation to be equally
important. As senior hospital clinicians in Finland
showed a willingness to acquire competence in
budgeting, costing and pricing, and to attend asso-
ciated training schemes designed speci?cally for
medics, their skill-sets changed. In countries such
as the UK at that time, and in contrast, the bound-
aries between medical and ?nancial expertise
within hospitals remained more clearly drawn.
None the less, one can discern more recently evi-
dence of a process of hybridisation of a di?erent
kind even in the UK, in the context of the ‘Mod-
ernising Government’ programme, and in the asso-
ciated calls for formal ‘partnership working’, as
well as through other rather di?erent practices
such as Reference Costing and the technology
appraisal guidance issued by the National Institute
for Health and Clinical Excellence (NICE). In the
case of partnership working, the aspiration is for a
hybridising of expertise, modes of working and
modes of delivering services. In the cases of Refer-
ence Costing and the ‘guidance’ issued by NICE, a
hybridising of expertise occurs, yet at a distance
from the face-to-face interactions between patients
and medics. In all such cases though, we have
argued that a speci?c type of hybrid – which we
have termed ‘regulated hybrids’ – is the outcome
or at least the aspiration of regulators.
Clearly these are no more than snapshots that
illustrate the diverse nature of hybrids. These
examples show, however, the importance of broad-
ening the focus beyond hybrid organisational
forms to consider also the wide range of hybrid
processes, practices and expertises that create and
enable lateral rather than vertical transfers of infor-
mation and knowledge, and that in so doing pro-
duce new forms of expertise. For hybridisation
can occur whenever two or more elements normally
found separately are combined to create something
new. The formation of relatively stable organisa-
tional forms that do not ?t readily the categories
of market and hierarchy is only one example. A
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 961
practice such as technology roadmapping in the
microprocessor industry, which draws on more
than one type of expertise, is another. The hybridis-
ing of professional expertise, whether through
‘partnership working’ or ‘technology appraisal
guidance’ in the ?eld of healthcare – with its atten-
dant blurring of professional boundaries – is a fur-
ther example, even if this is sensitive to national
context and public policy, particularly when it is
a matter of the mixing up of clinical and ?nancial
expertise.
The implications of hybrids for the accounting
and risk management literature are considerable.
We have argued that the management of uncer-
tainty happens in large part at the boundaries or
margins of conventional entities and practices. It
is clear also that accounting is being hybridised
yet again in this process, and in diverse ways in dif-
ferent locales. Coordination across sub-units of a
?rm, cooperation and the sharing of expertise
among ?rms, inter-professional knowledge transfer
and even the emergence of new bodies of expertise,
formal and informal cooperation across organisa-
tions and groups of experts, and the creation of
novel metrics that draw upon di?erent bodies of
expertise are among the multiple dimensions
of hybrids. These are only some of the examples
of accounting and hybridisation, and how this
can have signi?cant implications for the manage-
ment of risk. The literature on accounting and risk
management needs to acknowledge that the forma-
lised hierarchical models that characterise much of
the regulatory arena are at odds with the hybrids
and the lateral relations that enable the manage-
ment of organisations and the management of risk
in all its forms to ?ourish. No doubt, to the extent
that the practices we have described here come to
be increasingly stabilised and taken for granted,
they will appear less like hybrids. They may in
due course even come to be embedded in forma-
lised risk management routines. As we have sug-
gested, such is the nature of hybridisation.
But, if hybrids are where so much of the action
is, and if so many social scientists from so many
disciplines have emphasised their importance for
two decades or more, why are they not given
greater prominence in risk management? And
why are hybrids particularly neglected in the public
sector? Or, to be more precise, why is it that risk
management systems in the public sector tend to
be speci?c to a policy domain, as Hood and Roth-
stein (2000) have observed? The answer no doubt
resides in large part in the exacerbation of formal
process, as Power (2004) has argued, and the regu-
latory pressures towards standardisation according
to conventional boundaries that characterise much
of risk management. Relatedly, risk regulation
regimes may in part be a means for regulators, pub-
lic bodies and government to manage the risks to
themselves, rather than to manage the underlying
risks. If one’s organisation has in place the appro-
priate risk management committees, o?cers and
practices, then at least there exists some ex post
protection against possible accusations of reckless-
ness or neglect. But it is no doubt also because
hybrids are a challenge to risk management, for
they typically reside beyond the boundaries of
existing entities, and do not lend themselves readily
to traditional ways of sorting the world. The types
of risk and uncertainty management practices we
have documented fall between the conventional
professions of regulation such as accounting and
law. And as topics of research, they also fall
between the conventional academic disciplines of
accounting, economics, law, organisation theory
and the sociology of the professions, which may
in part explain their neglect by researchers.
Accounting is central here, as are the interac-
tions between accounting information and other
types of expertise, whether in the form of engineer-
ing, marketing, design, medicine or whatever. For
the hybridising of the calculative practices of
accounting remains one of the most in?uential
ways of rendering uncertainty and risk visible.
We need to know more about the ways in which
accounting interacts with, and at times hybridises,
as a result of encounters with other types of exper-
tise. Even competing ?rms engage in continuous
and frequent information exchange on a much lar-
ger scale than commonly acknowledged, and
information transfers of varying types may work
well without vertical integration. Much of this
information is accounting-based, albeit modi?ed
to deal with the often localised nature of the infor-
mation transfers. Moreover, some ?rms see the
opportunity to learn and share information e?ec-
962 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
tively as the key to their competitive advantage.
Yet, despite this increasing emphasis on informa-
tion and knowledge transfer and sharing, there is
little attention paid to the intrinsically hybrid nat-
ure of many of the practices, processes and exper-
tises that play such a role. We argue for increasing
attention to these mechanisms, as it is through
them that uncertainty is actually managed rather
than formally represented as manageable. We need
to know more about the industry- and ?rm-speci?c
practices that facilitate information ?ows and
communication across the boundaries of ?rms,
organisations and groups of experts or profession-
als. We need to know more about the varied and
often localised metrics and languages that facili-
tate interactions that do not respect organisational
boundaries, whether in the private or not-for-
pro?t sector or across these two sectors. We need
to know more about the locales, institutions and
conduits through which such metrics circulate,
and in which they are embedded. And we need
to pay attention to the multiple and diverse con-
stituents of such practices, which often do not ?t
the neat categories according to which we typically
order the world.
Acknowledgement
The authors would like to thank participants at:
the conference on ‘‘Sustaining Organizational
Combinations: The Forms and Features of Man-
agement Control in Hybrid Relationships’’ (held
at the University of Bocconi, September 2005);
the conference on ‘‘Coordination and Cooperation
across Organisational Boundaries’’ (held at the
Universita Cattolica del Sacro Cuore, Milan, April
2006); the University of Uppsala Annual Lectures
(September 2006); the conference on ‘‘The Social
Rule of Numbers’’ (held at the Institute for Social
Research in Frankfurt, November 2006); the Uni-
versity of Edinburgh Seminar on the ‘‘New Public
Sector’’ (December 2006); the Irish Accounting
and Finance Association Annual Conference (Uni-
versity of Limerick, April 2005); and a seminar at
Lancaster University Management School (Febru-
ary 2007). We would also like to thank Anthony
Hopwood and Mike Power for their helpful com-
ments on an early version of this paper. In addi-
tion, we would like to acknowledge the
constructive anonymous review comments re-
ceived, as well as comments received from col-
leagues at LSE in the Accounting Group, and in
the Centre for Analysis of Risk and Regulation.
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doc_703273166.pdf
This essay addresses the implications of accounting and hybrids for the management of risk. We argue firstly and
most generally for a definition of hybrids that extends beyond organisational forms. The existing literature, we suggest,
has been too focused on organisational forms, and has largely neglected the hybrid practices, processes and expertises
that make possible lateral information flows and coordination across the boundaries of organisations, firms, and groups
of experts or professionals.
Accounting, hybrids and the management of risk
Peter Miller
a,
*
, Liisa Kurunma¨ki
a
, Ted O’Leary
b,c
a
Department of Accounting and Finance, London School of Economics and Political Science, Houghton Street,
London WC2A 2AE, United Kingdom
b
MBS Crawford Building, University of Manchester, Oxford Road, Manchester M13 9PL, United Kingdom
c
University of Michigan, 701 Tappan Street, Ann Arbor, MI 48109, United States
Abstract
This essay addresses the implications of accounting and hybrids for the management of risk. We argue ?rstly and
most generally for a de?nition of hybrids that extends beyond organisational forms. The existing literature, we suggest,
has been too focused on organisational forms, and has largely neglected the hybrid practices, processes and expertises
that make possible lateral information ?ows and coordination across the boundaries of organisations, ?rms, and groups
of experts or professionals. Secondly, we argue that the management of organisations is rapidly being transformed into
and formalised around the management of risk, while much of the management of uncertainty occurs through a variety
of hybrids that reside beyond the formalised practices of risk management. Thirdly, we argue that accounting practices
are central to these issues, in so far as accounting is constantly engaged in a dual hybridisation process, seeking to make
visible and calculable the hybrids that it encounters, while at the same time hybridising itself through encounters with a
range of other disciplines. We address these issues in three main stages. The ?rst section considers the ‘discovery’ of
hybrid organisational forms by researchers on management and organisations over the course of more than two dec-
ades. The second section examines the ways in which economists, lawyers and other social scientists have considered the
issue of hybrids. Here, the preoccupation with hybrid organisational forms largely continues, with its attendant neglect
of hybrid practices, processes and expertises. The third section considers the discovery of a wider range of hybrids by
researchers in accounting, and examines two speci?c arenas in which the hybridising of accounting expertise has been
central: the microprocessor industry, and the various encounters between medical and ?nancial expertise in the context
of the ‘New Public Management’ reforms. The essay concludes with a discussion of the implications of this broader
de?nition of hybrids for accounting and the management of risk.
Ó 2007 Elsevier Ltd. All rights reserved.
0361-3682/$ - see front matter Ó 2007 Elsevier Ltd. All rights reserved.
doi:10.1016/j.aos.2007.02.005
*
Corresponding author.
E-mail address: [email protected] (P. Miller).
Available online at www.sciencedirect.com
Accounting, Organizations and Society 33 (2008) 942–967
www.elsevier.com/locate/aos
Introduction
The management of organisations is rapidly
being transformed into and formalised around
the management of risk. This began in the early
1990s, and on both sides of the Atlantic. On the
UK side, it can be identi?ed by a seemingly unre-
markable event – the publication of the Report of
the Committee on the Financial Aspects of Corpo-
rate Governance (1992), produced by a body
formed by the Financial Reporting Council, the
London Stock Exchange and the accountancy pro-
fession. In the USA, and in the same year, there
was a similar event – the publication of the Report
of the Committee of Sponsoring Organisations of
the Treadway Commission, titled ‘‘Internal Con-
trol – Integrated Framework’’ (1992). Subse-
quently nicknamed the ‘‘Cadbury Report’’ (after
its Chairman) and ‘‘COSO’’ respectively, these
two weighty documents were followed by a steady
stream of writings of variable depth on matters of
corporate governance and risk. In the UK, the
Greenbury Report (Confederation of British
Industry, 1995), the Turnbull Report (ICAEW,
1999), and the Combined Code (Financial Report-
ing Council, 2003) built up momentum to address
these issues. In 2002, this ?ow of documents on
corporate governance was punctuated by an event
of massive signi?cance – the publication in the
USA of the Sarbanes-Oxley Act (2002), passed in
the wake of the Enron and WorldCom scandals,
which ensured the centrality of risk management
to corporate governance debates probably for dec-
ades to come.
Cumulatively, and in the space of little over a
decade, these diagnoses, pronouncements and
legal reforms have produced a situation in which
risk management has become almost synonymous
with ideals of good management, and for organisa-
tions as diverse as private sector companies and
public hospitals.
1
It seems as if anything can be
made into a risk by breaking down, rearranging
and re-ordering certain elements of reality. Risk
management can be viewed as the practice of a
particular type of rationality, a ‘moral technol-
ogy’, a way of making the future manageable in
a very speci?c way (Ewald, 1990, 1991; Knights
& Vurdubakis, 1993). To manage risk means no
longer to resign oneself to blows of fate or provi-
dence, but to take responsibility for one’s a?airs
by developing the means to avoid and repair its
e?ects. To manage risk means, above all, to have
available a set of tools or technologies that allow
one to intervene in the name of risk. This is a thesis
that, rather than seeking to di?erentiate advanced
modernity from previous eras (Beck, 1992),
focuses on the emergence, proliferation and link-
ing up of a set of dispersed yet generalisable tools
for identifying and di?erentiating domains, and
acting on and objectifying them qua risk. Risk
committees, risk o?cers, risk maps and assurance
frameworks are part of this still developing pano-
ply of tools for acting on the future so as to make
it manageable and calculable.
2
Faith in the man-
ageability of risks appears to go hand in hand with
a multiplication and di?erentiation of the notion
of risk, as we see the emergence of ‘operational
risk’, ‘strategic risk’, ‘reputational risk’ and so
forth (Power, 2007). Risk management as an idea
and a more or less standardised set of practices is
now central to both private sector companies
and public sector organisations, and indeed is an
important boundary-spanning activity that is
becoming a model of organisation in its own
right.
3
Hybrids are similarly ubiquitous. They can take
the form of organisational arrangements that do
not readily ?t traditional models of hierarchies or
markets. They can also take the form of hybrid
processes, practices or expertises. In all cases, how-
ever, hybrids are de?ned as new phenomena pro-
duced out of two or more elements normally
found separately. According to this view, hybrids
have distinctive and relatively stable attributes
and characteristics, and are not merely intermedi-
1
For hospitals, see Department of Health (2002, 2003) and
Monitor (2005).
2
See Power (2004) for a review and challenging critique of
this aspiration to engage in the ‘risk management of every-
thing’. See also Hood and Rothstein (2000) and Hood,
Rothstein, and Baldwin (2001).
3
On the notion of boundary objects and boundary spanning,
see Bowker and Star (1999).
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 943
ary or transitory forms that are tending towards
one pole or the other. The world is populated by
hybrids or intermediaries that constantly mix up
and link up apparently disparate and heteroge-
neous things (Callon, 1991; Latour, 1993; Miller
& O’Leary, 2007). Despite the comforting demar-
cation of domains accomplished by words such
as economy, science, technology and politics,
‘impurity’ is the rule and hybrids are the norm.
4
Actors, entities, objects, practices, processes and
bodies of expertise can all be regarded as hybrids,
in so far as they share this characteristic of impu-
rity.
5
Further, hybridising is itself a process, and
assumes variable forms. Not all practices, pro-
cesses and expertises hybridise with equal ease.
Once formed, a hybrid may revert, as in the botan-
ical world. Or the newly formed hybrid may stabi-
lise for a su?cient period of time to be termed an
‘institution’.
6
Similarly, once a hybrid is formed,
then hybridisation can commence anew, as the
recently formed hybrid comes into contact with
others. While disciplines vie with each other for
the control of domains and institutions, and worry
about their identity and self-image, the punctuated
process of hybridising carries on behind the scenes,
sometimes noisily and sometimes quietly.
Yet, while the proliferation of hybrid organisa-
tional forms is already taken for granted by
researchers and practitioners, the implications of
a broader de?nition of hybrids has been insu?-
ciently addressed, as has its implications for anal-
ysing the interrelations between accounting and
the management of risk. As risk management
comes to be de?ned increasingly as standardised
and formal process, the dynamics of organisational
life, the permeability and fuzzy nature of organisa-
tional boundaries, and the varied hybrid practices,
processes and expertises through which uncer-
tainty is actually managed within and across
organisations tend to be con?ned to the penum-
bra.
7
We suggest that the vocabulary and practices
of risk management, with their hierarchical
emphases, remain largely antithetical to the hybrid
nature of an increasing number of organisational
and inter-organisational practices, which are
thereby accorded insu?cient attention.
The arguments of this essay are threefold.
Firstly, and most generally, we argue for a de?ni-
tion of hybrids that extends beyond organisational
forms. The existing literature, we suggest, has been
too focused on organisational forms, and has lar-
gely neglected the hybrid practices, processes and
expertises that make possible lateral information
?ows and cooperation across the boundaries of
organisations, ?rms and groups of experts or pro-
fessionals. The diversity of hybrids has been given
insu?cient attention, and we suggest that this
needs to be redressed if we are to understand better
how organisations manage the di?erent types of
uncertainties they face, and how they often do so
jointly. Secondly, we argue that the management
of organisations is rapidly being transformed into
and formalised around the management of risk,
while much of the management of uncertainty
occurs through a variety of hybrids that reside
beyond the formalised practices of risk manage-
ment. The management of uncertainty does not
only happen through the now obligatory and
increasingly elaborate apparatuses of risk manage-
ment systems and assurance frameworks. As com-
pliance with more or less standardised governance
models comes to dominate increasingly the design
of risk management systems, it may well be that
the ability of these systems to manage the full
range of uncertainties that organisations face is
diminished. Thirdly, we argue that accounting
practices are central to these issues. For account-
ing, we suggest, is constantly engaged in a dual
4
Latour (1993) makes a similar point, when he speaks of both
hybrids and puri?cation, although his concern is primarily with
the hybridisation of nature and culture, of science and society.
5
The notion of ‘techno-economic network’ illustrates well the
ways in which hybrids themselves can be connected with each
other, to form a more or less coordinated set of heterogeneous
actors (Callon, 1991; Callon, Lare´do, & Rabeharisoa, 1992;
Miller & O’Leary, 2007).
6
To bring together the somewhat distinct language of actor-
network theory and institutional theory, one might say that, as
networks or assemblages come to be stabilised for reasonable
periods, they take on the characteristics of institutions (Miller,
1997).
7
A note on terminology may be appropriate here. We use the
term uncertainty to refer to a wider range of phenomena than
risk, while the term risk is used to refer to those forms of
uncertainty which have been de?ned and constituted as risks.
944 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
hybridisation process: seeking to make visible and
calculable the hybrids that it encounters, while at
the same time hybridising itself through encoun-
ters with a range of other practices and disciplines.
Indeed, accounting is itself a hybrid that was
formed and reformed at the margins of other prac-
tices and disciplines, which, in the case of manage-
ment accounting, included engineering and
economics (Miller, 1998).
This suggests an important lesson about
hybrids. Not only are hybrids more prevalent,
and more varied in type, than organisation theo-
rists have suggested. But a speci?c class of hybrids,
those formed at the intersection with the calcula-
tive practices and expertise of accounting, are of
particular signi?cance. For it is through intersec-
tions such as those between ?nancial calculation
and technological dreams, or between the ideals
and instruments of costing, curing and caring, that
a particular modality of intervening to manage
uncertainty emerges and is made possible. These
imbroglios, which do not ?t the conventional
images of risk management, somehow mix things
up in ways that go beyond the hierarchical prac-
tices of formalised risk management. The calculat-
ing self, one might say, is increasingly a hybrid, as
are the tools that the calculating self can deploy
(Miller, 1994). This, we suggest, is one of the most
distinctive features of our present, which we char-
acterise as one of hybridising rather than colonis-
ing.
8
Whether in the realm of the modern
technological economy, or the ?eld of health care,
we are increasingly aware of a particular form of
‘impurity’ in which the calculative practices of
accounting remain central.
This essay addresses these issues in three main
stages. In the following section, we consider the
‘discovery’ of hybrid organisational forms by
researchers on management and organisations
over the course of more than two decades. In the
second section, we examine the ways in which
economists, lawyers and other social scientists
have considered the issue of hybrids. Here, the pre-
occupation with hybrid organisational forms lar-
gely continues, with its attendant neglect of
hybrid practices, processes and expertises. In the
third section, we consider the discovery of a wider
range of hybrids by researchers in accounting, and
examine two speci?c arenas in which the hybridis-
ing of accounting expertise has been central: the
microprocessor industry, and the various encoun-
ters between medical and ?nancial expertise in
the context of public sector reforms. The essay
concludes with a discussion of the implications of
this broader de?nition of hybrids for accounting
and the management of risk.
The discovery of hybrid organisational forms
Management and organisation researchers have
long recognised and studied empirically the wide
variety of organisational arrangements that struc-
ture and animate economic life.
9
Over two decades
ago, Ouchi (1979) considered the mechanisms
through which organisations are managed, and
used the label ‘clan’ to designate the informal
social structures and processes that characterise
some organisations. Although Ouchi’s concern
was with intra-organisational control mechanisms,
his work none the less directed attention at an
early stage to a mode of control that did not read-
ily ?t into the traditional binary classi?cation of
markets and hierarchies. Rather than view the clan
mode of control as an anomaly or epiphenome-
non, he argued that it should be regarded as a sub-
ject of analysis in its own right.
In the 1980s, a number of writers on manage-
ment took these arguments a step further, and
pointed to the changing nature of industrial econ-
omies and the increasing importance of coopera-
tive organisational forms that do not ?t the
traditional antinomy of markets and hierarchies.
Factors such as the increasing globalisation of
the world economy, shorter product life-cycles,
the emergence of new hi-technology industries,
the increasing customisation of demand, the emer-
8
On the notion of ‘colonising’ applied to expertise, see
Mulkay, Pinch, and Ashmore (1987), Power and Laughlin
(1992) and Sugarman (1995).
9
Classi?cation by discipline is always problematic, and
particularly in this instance. The work of Oliver Williamson,
for example, draws on and contributes to economics, organi-
sation theory and law.
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 945
gence of ?exible specialisation, and changing com-
petitive conditions all helped create unprecedented
demands on traditional modes of organising pro-
duction. The ‘quasi-?rm’ was identi?ed as a dis-
tinctive governance structure in the particular
context of the construction industry (Eccles,
1981). This referred to an organisational form with
characteristics of both markets and hierarchies,
based on ‘relational contracting’ in which both
parties can bene?t from the somewhat idiosyn-
cratic investment of learning to work together
(Eccles, 1981, p. 340).
10
In the very di?erent con-
text of academic publishing, hybrid forms of orga-
nisation based on a dense network of personal ties
were identi?ed as critical to the fortunes of pub-
lishers (Coser, Kadushin, & Powell, 1982; Powell,
1985). In contexts of traditional ‘craft production’,
such as that of the German textile industry, pro-
duction systems were observed and analysed that
linked small and medium-sized ?rms in extensive
subcontracting systems. Within this subcontract-
ing system, key technologies were developed in col-
laboration, and in conjunction with overlapping
inter-industry supplier networks (Piore & Sabel,
1984). And, in the context of the commercial air-
craft industry, as well as in oil extraction, chemical
and pharmaceutical research, microelectronics,
telecommunications, and biotechnology, manage-
ment researchers provided increasing evidence of
modes of organising economic activity that did
not ?t the conventional categories of markets
and hierarchies.
11
By the late 1980s, a substantial body of research
on hybrid organisational arrangements already
existed in the management literature. Powell
(1987) re?ected on this literature, asking whether
hybrid organisational forms are a new and distinc-
tive feature of the socio-economic landscape, or
whether they are simply a transitional develop-
ment. He argued that analytical concepts such as
markets and hierarchies may provide us with dis-
torted lenses through which to analyse economic
change. By viewing economic organisation as a
choice between markets and contractual relations
on the one hand, and conscious planning within
a ?rm on the other, Powell argued that we fail to
see the rich variety that forms of cooperative
arrangements can take. He spoke of a ‘stampede’
into various alliance-type combinations, linking
large generalist ?rms and specialised entrepreneur-
ial start-ups. Borys and Jemison (1989) addressed
the speci?c issue of strategic alliances, de?ning
hybrids as organisational arrangements that use
resources and/or governance structures from more
than one existing organisation. According to this
view, hybrids are still the product of sovereign
organisations, yet they allow individual ?rms to
draw upon the capabilities of multiple, indepen-
dent organisation, whether via mergers, acquisi-
tions, joint ventures, license agreements or supplier
arrangements. Granovetter (1985) went further,
and suggested a more general argument concern-
ing economic behaviour. He suggested that all eco-
nomic behaviour, whether it takes place within
markets or hierarchies, is ‘embedded’ in interper-
sonal and social networks. Extensive and sustained
subcontracting relationships based on interper-
sonal relations and shared norms, according to
such a diagnosis, are not empirically intermediate
organisational forms but indicative of the funda-
mental ‘embeddedness’ of economic transactions
in social life (Granovetter, 1985).
12
In the 1990s, the management and organisa-
tional literature on hybrids burgeoned theoreti-
cally and empirically. There was increasing
emphasis on networks, with Powell (1990) arguing
now that the term hybrid was an inappropriate
and inaccurate way of characterising the diverse
forms of collaboration that have existed histori-
cally.
13
Rather than presuming markets as the
10
In this context, ‘somewhat idiosyncratic’ is distinguished,
following Williamson, from ‘highly idiosyncratic’, with the
latter likely to lead to full integration.
11
See Powell (1987) for an overview of some of these studies.
12
On subsequent use of the notion of ‘structural embedded-
ness’, see for instance Simsek, Lubatkin, and Floyd (2003), and
Gnyawali and Madhavan (2001).
13
See: Callon (1998) for a distinct approach to the construc-
tion of markets and the role of networks, one that has much in
common with the arguments advanced here; Nohria (1992) for
a review of the network perspective among scholars of
management and organisation; and Thompson, Frances,
Levac?ic´, and Mitchell (1991) for a useful collection of material
on markets, hierarchies and networks that spans a number of
decades and disciplines.
946 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
starting point, and viewing other forms of
exchange as arrayed on a continuum with hierar-
chies as the end point, Powell called for attention
to be directed at networks as a distinctive mode
of coordinating economic activity. In network
forms of exchange, individuals engage in recipro-
cal and mutually supportive actions, and e?ec-
tively forego the right to pursue their own
interests at the expense of others. In the case of
biotechnology, he suggested, sources of innovation
do not reside exclusively within ?rms, but are
commonly found in the interstices between
?rms, universities, research laboratories, suppliers
and customers (Powell, Koput, & Smith-Doerr,
1996). The general argument here is that, when
knowledge is broadly distributed and brings a
competitive advantage, innovation is likely to be
located in a network of inter-organisational
relationships.
Others argued in similar terms, focusing on the
social networks that enable and shape strategic
alliances (Barley, Freeman, & Hybels, 1992;
Gulati, 1995a, 1995b, 1998; Gulati & Singh,
1998; Kogut, Shan, & Walker, 1992; Nohria &
Eccles, 1992). Noting the growth of inter-organisa-
tional cooperation, and of inter-?rm strategic alli-
ances, Gulati (1995a) argued that empirical studies
in the transaction cost tradition have typically
treated each alliance as independent, and consid-
ered the activities it includes as singularly re?ecting
only the transaction costs associated with it. This
ignores the possibility of repeated alliances that
may alter the calculations of the partners when
they are choosing contracts in alliances. The social
context of alliances, according to this view,
emerges over time and can only be observed by
examining the relationships between ?rms over
time (Gulati, 1995a, 1995b; Gulati, Nohria, &
Zaheer, 2000). Uzzi (1997) argued in similar terms,
although he drew upon the notion of ‘embedded-
ness’ and argued that a more precise formulation
of the e?ect of social relations on economic action
was needed. Zaheer and Venkatraman (1995)
argued for a focus on both the structure and pro-
cess of ‘relational governance’, on the grounds that
factors such as trust complement economic factors
in the governance of exchange relations. Teece
(1996) argued that hybrid organisational forms,
such as inter?rm agreements linking ?rms with
complementary capabilities and capacities, repre-
sent a signi?cant organisational innovation.
14
Teece, Pisano, and Shuen (1997) built on these
proposals, and outlined the ‘dynamic capabilities’
approach that sought to explain how and why cer-
tain ?rms build competitive advantage in regimes
of rapid change. Dynamic capabilities are de?ned
here as the ability of a ?rm to integrate, build
and recon?gure internal and external competence
to address rapidly changing environments (Teece
et al., 1997, p. 516). Other key contributions to
the strategic management ?eld argued that com-
petitive advantage may be based on a high degree
of inter?rm specialisation (Dyer, 1996). Or, more
generally, a ?rm’s critical resources may extend
beyond boundaries of the ?rm (Dyer & Singh,
1998).
By the end of the 1990s, and leaving aside di?er-
ences of emphasis and terminology, as well as the-
oretical preferences for building on or superseding
transaction cost modes of analysis, scholars in
management and organisational analysis had
accumulated a very substantial body of empirical
research on hybrid organisational forms. Special
issues of the Academy of Management Journal in
1995, the Academy of Management Review in
1998, and the Journal of Management Studies
in the same year are testimony to the extent of
the interest in these issues among management
researchers. The volume and scope of this litera-
ture is quite remarkable, as is its continuing exten-
sion. Some writers have focused recently on the
‘processual’ aspects of inter-organisational rela-
tionships (Das & Teng, 1998, 2002; Zajac & Olsen,
1993). Others have rea?rmed the importance of
‘trust’ (Adler, 2001; Carney, 1998). The issue of
recurrent and relational contracting has been
addressed further (Ring & Van de Ven, 1992), as
has the role of technological knowledge (Brusoni,
Prencipe, & Pavitt, 2001), the role of information
practices (Sampler & Short, 1998), and the role
of control mechanisms (Birnberg, 1998). The
detailed structure of alliances has been examined
(Sobrero & Schrader, 1998), the issue of coopera-
14
See also Pisano, Russo, and Teece (1988), and Teece (1992).
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 947
tion has been considered (Smith, Carroll, & Ash-
ford, 1995), and the wide variety of coordination
mechanisms has been emphasised (Grandori,
1997). Meanwhile, a range of hitherto neglected
topics and issues have been shown to be worthy
of attention. This includes the role of inter-organ-
isational relations in the context of patient care
(Gittell & Weiss, 2004), and the role of institutions
such as trade associations in shaping inter-organi-
sational relations (Marchington & Vincent,
2004).
15
Whether one uses the label ‘hybrids’, ‘net-
works’, or simply ‘new organisational forms’, it is
clear that the appetite of management and organ-
isational scholars for researching and analysing
this set of phenomena is undiminished even after
more than a quarter of a century of intense
activity.
While organisation theorists have not pointed
to a single factor explaining the proliferation of
hybrid organisational forms, they seem clear that
there is no tendency for them to disappear or
diminish in signi?cance. Adaptability to changing
market conditions, the limits of large-scale organi-
sation, access to specialist know-how which is
often located outside the boundaries of the large
corporation, and generalised reciprocity and repu-
tation are among the factors that have been iden-
ti?ed as important in the growth of hybrid
organisational forms. Yet, despite this extended
view of the conditions that may give rise to inter-
mediate organisational forms, it is equally clear
that the analysis is more or less restricted to organ-
isational forms. The existence of other forms of
hybrids is barely noticed, with a corresponding
neglect of the practices that may require or inspire
boundary-spanning activities, including the man-
agement of risk. The next section considers the
ways in which this concentration on organisational
forms has spilled over into other social science lit-
eratures. It considers ?rst the ways in which econ-
omists from di?erent traditions have addressed the
issue of ?rm boundaries and hybrids across the
past two decades. It then considers the ways in
which legal theorists have sought to address the
question of hybrid economic forms, by confront-
ing the issues of legal responsibility and entity
principles. Finally, it considers the ways in which
hybrids have been addressed at the intersection
of academic and political debate, in ‘third way’
arguments and their antecedents. The focus on
organisational forms, it is suggested, largely
remains in these further forays into the issue of
hybrids.
Economists, lawyers and others discover hybrids
While organisation theorists have been busy
describing and analysing the diverse ways in which
economic life can be designed, a small number of
economists have identi?ed hybrid organisational
forms as, at the very least, theoretically puzzling.
As early as 1979, Williamson argued that much
economic activity takes place via governance
structures that are intermediate between markets
and hierarchies (Williamson, 1979). He suggested
then that, if it remains interesting to ask why so
much vertical integration occurs, it is equally inter-
esting to ask why so many transactions occur in
markets and quasi-markets. While markets and
hierarchies represent two of the principal gover-
nance structures for organising transactions, Wil-
liamson proposed that a third type that he called
‘‘semi-speci?c’’ also existed (Williamson, 1979, p.
247). Semi-speci?c governance structures, he
argued, were tailored to transactions that were nei-
ther highly standardised nor highly speci?c. Sev-
eral years later, he commented that transactions
in the ‘‘middle range’’ were much more common
than he had thought a decade earlier (Williamson,
1985, p. 83).
16
By the early 1990s, he identi?ed
hybrids explicitly as one of three alternative modes
of governance (Williamson, 1991). The aim here
was to put hybrids on a similar footing to markets
and hierarchies, and to characterise the abstract
attributes that de?ne them as an alternative mode
of governance rather than a loose amalgam of
15
The implications of hybrids and network organisational
forms for business history are also currently receiving renewed
attention. See for instance Lamoreaux, Ra?, and Temin (2004),
and Sabel and Zeitlin (2004).
16
Williamson somewhat undercut this observation by adding
that ‘‘the tails of the distribution are thick’’ (Williamson, 1985,
p. 84).
948 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
market and hierarchy. The ?rm, Williamson
argued, is usefully thought of as the organisational
form or governance structure ‘‘of last resort’’ (Wil-
liamson, 2002, p. 183), driven largely by increasing
asset speci?city. Hybrids, although representing a
distinctive and generic mode of governance, are
conceived as ‘‘market-preserving credible contract-
ing modes that possess adaptive attributes located
between classical markets and hierarchies’’ (Wil-
liamson, 2002, p. 181).
Similar arguments have been advanced recently
by Holmstro¨ m and Roberts (1998), in a paper that
re-visits the classic questions in the economics of
organisations of why ?rms exist, and what deter-
mines their scope. If, as Coase (1937) argued, ?rm
boundaries and integration can be explained by
e?ciency considerations, Holmstro¨ m and Roberts
ask why so much economic activity takes place
outside the umbrella of the organisation? While
noting the lack of solid theoretical foundations,
and the anecdotal nature of their evidence, Holm-
stro¨ m and Roberts suggest that a much broader
view of the ?rm and the determination of its
boundaries are needed than is o?ered by transac-
tion cost economics and property rights theory.
17
The theory of the ?rm, they argue, has become
too narrowly focused on the hold-up problem
and the role of asset speci?city. Citing a trend they
discern towards disintegration, outsourcing, con-
tracting out, and dealing through the market
rather than integration within the ?rm, they argue
that ?rms have to deal with a rich variety of
problems.
Only a small part of the organisational change
taking place today, Holmstro¨ m and Roberts sug-
gest, can be readily understood in terms of tradi-
tional transaction cost theory in which hold-up
problems are resolved by integration. Many of
the hybrid organisations that are emerging, they
argue, are characterised by high degrees of uncer-
tainty, frequency of transaction and asset speci?c-
ity, yet they do not result in integration. Indeed,
they suggest, mutual dependency seems to support
rather than hinder ongoing cooperation across
?rm boundaries. While Holmstro¨ m and Roberts
do not advance a speci?c or singular explanation
for the phenomena they identify, it is clear that
they regard organisational knowledge and infor-
mation transfer as key. Leading economic theories
of ?rm boundaries have, they argue, paid almost
no attention to the role of organisational knowl-
edge. Moreover, information and knowledge are
at the heart of organisational design, because they
lead to contractual and incentive problems that
challenge both markets and ?rms.
More recently, and remaining with economics,
Roberts (2004) has argued in similar terms,
describing the changes in the organisation of the
?rm during the past two decades as comparable
to the invention of the M-form structure early in
the last century. The refocusing on core businesses,
and the outsourcing of many activities previously
regarded as central has, Roberts argues, led to a
shift in the nature of relationships between ?rms
and their customers and suppliers, with simple
arms length relationships being replaced by long-
term partnerships.
18
Layers of management have
been eliminated, functional units have been dis-
persed to business units, and the authority and
accountability of line managers has been
increased. To facilitate coordination and learning
in this novel organisational form, Roberts argues,
?rms have experimented with ways of linking peo-
ple through horizontal rather than hierarchical
17
Williamson (2002) responds to Holmstro¨ m and Roberts
(1998). He endorses the general arguments they advance for
taking a broader view of the ?rm and the determination of its
boundaries. He also supports their plea for avoiding a narrow
focus on the hold-up problem and the role of asset speci?city,
while defending asset speci?city as an operational concept that
‘‘serves to breathe content into the idea of transactional
‘complexity’’’ (Williamson, 2002, p. 189). Our interest in these
debates is in terms of their general endorsement of the
importance of examining and conceptualising organisational
forms that are neither classical markets or hierarchies, rather
than in terms of the extent to which either party adequately
characterises or addresses the attributes of ‘hybrids’.
18
The notion of complementarities, as set out by Milgrom and
Roberts (1995), has been taken up by organisation theorists,
who have viewed complementarities as nets of inter-relation-
ships (Pettigrew et al., 2003). Building on established traditions
in organisation theory, such as contingency theory and the
notion of ‘?t’, complementarities thinking lends itself to
explanations of inter-?rm cooperation as much as to synergies
among activities within ?rms (Miller & O’Leary, 2005a, 2005b).
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 949
communication. These organisational innovations,
he suggests, are ongoing and o?er the opportunity
for improved economic performance. They alter
the way work is done, and change people’s lives
in fundamental ways.
Legal theorists who have addressed the nature
of the ?rm and its boundaries have confronted a
similar set of issues, albeit in a distinctive manner.
Not surprisingly, the issue of responsibility is a
central preoccupation here. For Collins (1990),
the main issue is the principle of group responsibil-
ity under common law.
19
This entails the recogni-
tion of a legal person or entity as a representative
of the group, with the group in turn being held lia-
ble potentially for the acts of its members. This is
currently possible where the productive relations
are controlled and directed within one capital unit,
that is to say a ?rm in the legal form of a partner-
ship or company. Collins argues that this principle
of collective responsibility should be extended
more widely, to take account of group responsibil-
ity across di?erent capital units or ?rms. Collins
refers here to what he terms ‘complex economic
organisations’, that is, a set of economic organisa-
tions that do not constitute a single ?rm or a single
legal entity, yet none the less are integrated and
may be treated as comprising a single set of pro-
ductive relations. For instance, Collins argues,
for the purposes of ascribing legal responsibility
one might treat a set of subcontractors (for exam-
ple in the construction industry, or car manufac-
turing) as a united group. Responsibility here, he
suggests, should be viewed as a matter of group
rather than purely personal responsibility. While
acknowledging the di?culties of re-conceptualis-
ing general principles of legal responsibility, Col-
lins argues for the importance of ?nding ways to
identify integrated, yet legally separate, economic
units for the purpose of attaching obligations.
Teubner and Hutter (Teubner, 1993; Hutter &
Teubner, 1993) have argued in similar terms,
although couched more in the language of social
systems theory. They start from the premise that
hybrids are fundamentally di?erent from market
contract and hierarchical organisation, by virtue
of their coordination and control mechanisms.
They are referring here to just-in-time organisa-
tions, franchising systems, money transfer net-
works and other networks in such sectors as
energy, transportation and telecommunications.
These concerns on the part of some legal theorists
echo those of accounting researchers and practitio-
ners. For in so far as all companies must prepare
annual accounts, the legal entity principle strongly
reinforces the accounting preoccupation with the
bounded nature of the ?rm.
In a very di?erent context, and at the intersec-
tion of academic and political debate, the so-called
‘third way’ political thinking also sought to plura-
lise organisational forms. Giddens (1998) depicted
markets as merely one possible modality of gover-
nance. Much of the debate here centred on the
quality of public services, and whether markets
o?ered alternatives to state provision. The propo-
nents of the third way argued that government
should act in partnership with the agencies of civil
society and business. Such arguments built on an
earlier literature that represented the traditional
antinomy between state and market as insu?-
ciently complex for analytical and practical pur-
poses (Streeck & Schmitter, 1985). In addition to
modes of organising social and economic life
through markets, states and communities, Streeck
and Schmitter proposed the notion of ‘associa-
tions’. The guiding principle of such organisational
arrangements is ‘organisational concertation’ or
negotiation within and among a limited and ?xed
set of interest organisations that recognize each
other’s status and entitlements, and are capable
of reaching and implementing relatively stable
compromises in the pursuit of their interests. A
decade or so later Hirst (1994) argued in similar
terms, calling for ‘associationalism’ as a principle
of administrative renewal in the face of bureau-
cratic failures. State provision, he contended,
should be made more accountable to citizens,
and market provision should be embedded in a
social network of coordinative and regulatory
institutions. Market principles and mechanisms
should be combined with non-market calculations
and forms of resource allocation. Hybrid organisa-
19
See also Collins (2006) on the legal implications of the
network architecture of supply chains. See also Buxbaum
(1993) who argues pithily and normatively that network is not a
legal concept.
950 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
tional forms, which are better able to manage
uncertainty, once again appear to be the rule
rather than the exception (Hirst & Zeitlin, 1991).
The concern with hybrids on the part of econo-
mists, lawyers and other social scientists suggests
that the phenomenon is of general signi?cance
for the social sciences. Yet the limiting of the focus
to organisational forms tends to reinforce the
rather restrictive delineation of issues on the part
of organisation theorists. We turn now to consider
the ways in which accounting researchers have
addressed the issue of hybrid organisational forms,
while also addressing other forms of hybridisation.
Accountants discover more hybrids
Approximately a decade ago, Hopwood (1996)
argued that management processes frequently
transcend the boundaries of legally constituted
entities, yet most accounting practices continue
to focus on hierarchical relationships and vertical
information ?ows. Lateral information ?ows are
typically neglected, he suggested, and budgeting,
planning and performance evaluation are largely
seen in vertical terms. Even the so-called new man-
agement accountings tend to maintain this hierar-
chical orientation. To counter this, Hopwood
called for greater attention to be paid to the lateral
processing of information, and for more explicit
consideration to be accorded to the integration
of actions within networks of organisations. In
so far as planning, budgeting and control pro-
cesses ?ow from one organisation into others,
and create an interdependence of action, he argued
that a more explicit awareness of such processes is
needed to facilitate the role of joint action in
organisational success.
Building on these and other arguments, a body
of work has emerged that provides substantive
empirical analysis of the diverse ways in which
accounting adapts to and facilitates inter-organisa-
tional cooperation and the management of uncer-
tainty. Cost management across organisations,
supply chains and supplier selection practices,
open-book forms of accounting, strategic alli-
ances, budgeting, and investment appraisal have
all begun to receive attention in terms of the lateral
information ?ows they entail, and in terms of the
ways in which accounting practices today extend
beyond the boundaries of organisations (Baxter
& Chua, 2003; Cooper & Slagmulder, 2004; Dek-
ker, 2004; Ha?kansson & Lind, 2004; Ittner, Larc-
ker, Nagar, & Rajan, 1999; Kurunma¨ki & Miller,
2004; Llewellyn, 1991, 1994; Miller & O’Leary,
2005b, 2007; Mouritsen, 1999; Mouritsen, Hansen,
& Hansen, 2001; Seal, Berry, & Cullen, 2004;
Tomkins, 2001; Van der Meer-Kooistra & Vossel-
man, 2000).
Hopwood’s (1996) appeal to move beyond hier-
archical images and practices of accounting
included organisational forms, but it was not lim-
ited to them. His concern was a broader one, and
included the diverse types of information ?ows
and practices for integrating actions within the
networks that characterise contemporary eco-
nomic life. The issue of accounting itself hybridis-
ing in the process was implicit in his call to
accounting researchers to focus on the lateral pro-
cessing of information, as indeed it was over a dec-
ade earlier when he drew attention to the ways in
which accounting repeatedly ‘‘becomes what it
was not’’ (Hopwood, 1983, p. 289). Others have
argued in similar terms, suggesting that without
hybridisation accounting would lack much of its
core calculative content. During the course of the
twentieth century, management accounting was
formed and re-formed largely at the ‘margins’,
and out of a range of calculative practices drawn
from other disciplines such as engineering and eco-
nomics (Miller, 1998). Practices such as standard
costing, discounted cash ?ow, the distinction
between ?xed and variable costs, break-even anal-
ysis, and much more have been drawn from else-
where, adapted, and constituted as the core of
accounting. Accounting o?ers an ideal-typical
illustration of such hybridising. Practices that once
were at the margins of accounting seem now to be
intrinsic and fundamental to its self-identity, even
as they are beginning to be questioned, challenged
and re-shaped. Earlier battles and skirmishes over
the boundaries of accounting are soon e?aced
from the collective memory, as the profession
moves on to fret about a new set of issues regard-
ing the integrity of its self-image. This is what is
meant by the dual hybridising of accounting.
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 951
Not only are existing accounting practices called
upon and deployed to calculate across organisa-
tional boundaries and networks. Novel types of
expertise emerge too, as ?nancial expertise comes
increasingly to be mixed up with other types of
expertise which earlier were viewed as distinctive
and bounded, if not its antithesis.
The hybridising of accounting practices, pro-
cesses and expertise has been of particular concern
to those who have examined the intersection of sci-
enti?c and economic domains, and speci?cally
those who have drawn upon the science studies lit-
eratures to inform their analyses. Whether
couched in the language of ‘actor-network theory’,
‘techno-economic networks’ or the plainer lan-
guage of ‘mediating instruments’ and ‘mediating
machines’, the impulse has been the same: to
examine the range of hybrid forms that have
emerged out of the intersection between two or
more previously separate types.
20
This entails no
a priori delimiting of the ?eld, and no restricting
of hybrids to a particular class of objects. Almost
anything, it seems, can be a hybrid. This does
not exclude organisational forms, but nor does it
accord them priority. It locates them on a horizon-
tal plane, along with all the other practices and
processes that make up a body of expertise such
as accounting. For instance, Power (1994) has
remarked on the interactions between administra-
tive and scienti?c practices, while Robson (1994)
has pointed to the interactions of economic calcu-
lation and investments in science and technology
through the case of R&D expenditure. Miller
and O’Leary (1994a, 1994b) have examined a
worldwide factory modernisation project, and the
invention of a new ?nancial-engineering metric –
termed ‘investment bundling’ – to coordinate and
assess the project at a corporate level. They have
also examined the hybridising of technological
and ?nancial trajectories in the case of the micro-
processor industry (Miller & O’Leary, 2007),
which we examine in greater detail below. Briers
and Chua (2001), through a ?eld study of the
implementation of activity-based costing, have
examined the creation and maintenance of ‘bound-
ary objects’, phenomena able to reside within and
mediate among diverse actor worlds. And, in a
very di?erent context that we also return to below,
Kurunma¨ki (2004) has shown how medical and
?nancial expertise can hybridise under certain
conditions.
These di?erent studies suggest that, if we want
to understand better the dynamics of hybridisation
processes – the ways in which discrete elements get
mixed up to form something new, and how the
newly formed object is able to intervene in distinc-
tive ways to manage uncertainty – we need to
address the hybridising of the practices, processes
and expertises that makes this possible. Let us turn
now to consider in a little more detail just two are-
nas in which the hybridising of accounting exper-
tise has been central. The ?rst demonstrates the
hybridising of ?nancial and technological trajecto-
ries in the case of the microprocessor industry. The
second focuses on the hybridising of medical and
?nancial expertise, in the context of the health care
reforms of the past two decades. In both instances,
the newly formed hybrids provide novel ways of
intervening, and distinctive ways of managing
uncertainty and risk.
The hybridising of ?nancial and technological
trajectories
Consider ?rst the practice of ‘‘technology road-
mapping’’ as used to inform investment appraisal
and coordination in the semiconductor industry
(Miller & O’Leary, 2005a, 2005b, 2007). Technol-
ogy roadmapping refers to an information sharing
framework that operates internationally across
very di?erent kinds of organisations, including
large-scale semiconductor ?rms, suppliers, consor-
tia, start-up ?rms, government agencies, and uni-
versity laboratories (Semiconductor Industry
Association, 2005, p. i). Roadmaps are produced
and updated annually in what has been termed a
‘‘world-wide consensus building process’’ on the
part of delegates from ?rms and scienti?c agencies
in Europe, South Korea, Taiwan, Japan and the
USA (Semiconductor Industry Association, 2005,
p. i). The declared aim is to form shared expecta-
tions across the entities, for periods of up to ?fteen
20
On this, see for instance Callon (1991), Kaltho? (2005),
Morrison and Morgan (1999), Robson (1994) and Wise (1988).
952 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
years ahead, as to when innovations by each of the
entities must come to fruition, and how they
should inter-operate, to enable the production of
new and more powerful semiconductor devices.
The expectations in question are diverse and
multifaceted. They pertain to desired advances in
areas of applied science and engineering, such as
those concerned with increasing the diameters of
silicon wafers, ?nding new materials from which
to fabricate transistors, and developing enhanced
chemical formulations for the better resolution of
electronic features on semiconductor substrates.
These expectations are paired with others relating
to consumption and, particularly, with attempts
to envisage and shape the design of future semicon-
ductors so that they intersect with anticipated
developments in technologies for health-care,
national security, corporate information manage-
ment, personal entertainment, and ‘‘quality of life’’
(Semiconductor Industry Association, 2005, p. i).
21
And both scienti?c and marketing concerns are
linked with ?nancial trajectories, most notably with
an established norm throughout the world-wide
semiconductor industry that cost per electronic ele-
ment should continue to fall at between 25% and
29% annually, a range of decrease argued to have
been achieved now for more than three decades.
Technology roadmaps are information sharing
arrangements that are hybrids themselves, as well
as devices that help both to create hybrid organisa-
tional forms, and to act on the interrelations
among their constituents. They are central to the
formation and mediation of relations between
entities in a dense and changing set of ?rms and
organisations, a network that a senior Intel execu-
tive described in the following terms:
We [Intel] are part of an ecosystem, and you
can’t really be an outlier. You may be a lead-
ing force, a leading element.
22
Intel has sought to be a ‘‘leading force’’ in this
‘‘ecosystem’’ by participating at the most senior
levels in the preparation and updating of the
industry’s international technology roadmap. It
has done so as a critical part of managing the
?rm’s strategic investment decisions (Miller &
O’Leary, 2005a, 2005b, 2007). For it is by means
of roadmaps that Intel’s CEO seeks to coordinate
such investments with those of a host of other
?rms and agencies, thus managing the risks of
widely distributed sets of interrelated innovations:
We obviously do ROIs on products and
things of that sort, but the core decisions
the company makes, the core decisions are
basically technology roadmap decisions.
23
Roadmaps, the CEO pointed out, enable Intel to
take part in:
a managing – a partial managing – of the
resources of the virtual ?rm, the virtual ?rm
being ourselves and a bunch of others bring-
ing product to market.
24
It is through their involvement in negotiating
and updating the international roadmap, and by
scrutinising its contents before major capital com-
mitments are made, that Intel’s most senior execu-
tives interact with a hybrid organisation that
traverses the semiconductor and related industries,
and that links the ?rm with entities as diverse as
university laboratories in Europe devising immer-
sion lithography, the US Department of Energy’s
Virtual National Laboratory, Nikon, and TRW.
For unless those other entities invest in ways that
align with and complement Intel’s capital spend-
ing, the latter’s returns on investment in new pro-
cess technologies, products, and the formation of
markets, may be reduced dramatically. Technol-
ogy roadmapping practices, one might say, make
risk manageable both by the hybridising of ?nan-
cial and technological trajectories, and by making
possible the alignment of the expectations of the
various actors that make up the ‘virtual ?rm’.
Take, as an instance, a recent edition of the
international technology roadmap (see Table 1).
21
For a treatment of how the rate of semiconductor innova-
tion might be seen as crucial to national security, see Grove
(2001).
22
From an interview with the former Chief Executive of Intel
Capital, reported in Miller and O’Leary (2000).
23
Interview with the former Chief Executive (now Chairman)
of Intel Corporation; reported in Miller and O’Leary (2007).
24
See Miller and O’Leary (2007).
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 953
This edition of the international technology
roadmap noted that, in 2005, a key generic prop-
erty of microprocessor devices was that each con-
tained about 386 million transistors and other
electronic elements, manufactured at a target
full-cost of roughly 44 micro-cents per function.
25
It also indicated that, ?fteen years later, a compa-
rable device should be expected to contain
12,368 million electronic elements at a cost of
0.24 micro-cents per element (Table 1).
26
In more
than a hundred pages of dense, technical text, the
roadmap then sifted the implications of these
anticipated rates of increase in microprocessor
functionality, and reductions in cost, for innova-
tion across a diverse set of industries, ?rms and
research agencies. It probed the kinds of incremen-
tal and breakthrough advances that would be
required in such as semiconductor substrate mate-
rials, etch technologies, lithography machines,
resist chemicals, and mirrors of extremely ?ne tol-
erance. At stake were the very foundations of risk
management, both for Intel and for the industry as
a whole. Through unpacking the requirements for
enabling materials and technologies, delegates to
inter-industry consortia could review alternatives,
assess the areas of maximum vulnerability, assem-
ble venture capital syndicates to support promis-
ing avenues, and, at the limit, revise expectations
downward.
It is worth noting the stable rates of change in
both microprocessor functionality (the technologi-
cal trajectory) and cost (the ?nancial trajectory)
that underpin the roadmap. Functionality, as mea-
sured by the number of electronic elements on a
chip, is expected to double every three years with
a corresponding decrease in cost per element of
65% triennially, or 29% per year (Table 1).
Such a simple set of relations sets in train complex
negotiations on rates of investment among ?rms
and agencies around the world. It is a set of rela-
tions derived from one of the most signi?cant –
and one of the most under-researched – hybrid
practices of our time. This is the so-called Moore’s
Law, named after Intel co-founder and now chair-
man-emeritus, Gordon Moore.
27
If technology roadmapping is critical to the lat-
eral ?ow of information and the inter-organisa-
tional management of risk, then Moore’s Law is
perhaps one of the clearest examples of a hybrid
practice that combines technological and ?nancial
components. It dates back to a set of graphs
drafted by Moore during 1965, setting out his pre-
dictions for the semiconductor components indus-
try for the ensuing decade (Fig. 1). The set of
U-shaped curves re?ected a relation between the
number of electronic elements on a semiconductor
product, which he called ‘‘device complexity’’, and
the cost of manufacture. At the time of preparing
the graphs, Moore had available to him only a
very small number of historical data points.
The continued ability to miniaturize electronic
elements like transistors was at the core of the
Table 1
Extracted from international technology roadmap for semiconductors, 2005 edition
Year: 2005 2008 2011 2014 2017 2020
Technology node: (TN
0
) (TN
1
) (TN
2
) (TN
3
) (TN
4
) (TN
5
)
Elements per chip and manufacturing cost – high-volume microprocessor devices
Number of electronic elements per chip at introduction (millions of transistors): 386 773 1,546 3,092 6,184 12,368
Multiple per 3 year technology cycle: 2 2 2 2 2
A?ordable production cost per element at introduction (micro cents): 44.0 15.6 5.5 1.9 0.68 0.24
Rate of cost reduction per cycle (%): 65% 65% 65% 65% 65%
Annualized cost reduction (%) 29% 29% 29% 29% 29%
Extracted from Miller and O’Leary (2007).
25
Semiconductor Industry Association (2005, pp. 70, 84).
26
Semiconductor Industry Association (2005, pp. 71, 84).
27
Moore (1965). For an overview of the signi?cance of
Moore’s Law within the semiconductor industry, see Schaller
(1997).
954 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
industry, Moore thought. In the downward slope
of each curve, he sought to represent the industry’s
ability to e?ect steep reductions in manufacturing
cost per element by continuing to miniaturize ele-
ments and thus ?tting more of them on a chip.
Consumers could enjoy the bene?ts of dramatic
increases in the numbers of electronic elements
on a semiconductor, and thus in the power and
capability of the device, at a greatly reducing cost
per element. But, at some point, each slope bot-
tomed-out. Beyond that point, which Moore
referred to as ‘‘device complexity for minimum
component cost’’, the curve rose steeply as ?rms
were unable to manufacture more complex devices
e?ectively and with acceptable yield levels.
What was crucial, Moore thought, was that
continued innovation would make it possible to
have successive curves continue to shift downward
and to the right, such as those depicted in Fig. 1.
He saw no fundamental barriers in physics or
chemistry to a continuation of historic rates of
miniaturisation for a decade or more. Indeed, he
thought:
With unit cost falling as the number of com-
ponents per circuit rises, by 1975 economics
may dictate squeezing as many as 65,000
components on a single silicon chip.
28
That startling prediction was based on a simple,
straight-line extrapolation from the curves that
Moore had drawn in 1965. Looking back in
1975, he argued that the prediction had indeed
come to pass, and that dramatic increases in device
power and reductions in cost were set to con-
tinue.
29
It is a particular interpretation of Moore’s
Law that, even today, continues to set the essential
guideline for the industry’s international technol-
ogy roadmap.
30
His forecasts, now over forty
years old, are the basis for the estimates in the
2005 roadmap depicted in Table 1 above. Moore’s
Law is not only a hybrid practice at its core, com-
bining as it does technological and ?nancial pro-
jections. It is also used to manage risk in the
most immediate and direct manner, by providing
a set of shared expectations for all the ?rms and
industries that are involved in the production
and consumption of microprocessors.
The hybridising of costing, curing and caring
Hybrids are also found in very di?erent locales.
Take for example the encounter between medical
and ?nancial expertise in the ‘New Public Manage-
ment’ reforms of the past two decades (Hopwood,
1984; McSweeney, 1994; Perrin, 1978; Preston,
Cooper, & Coombs, 1992; Chua, 1995). Here we
?nd many hybrids, and of di?ering types. We also
?nd a hybridising process that is much more vari-
able and less stable than in the previous case, both
over time and from one country to another. We
consider here just some instances of this variation.
No doubt this variation is due in large part to var-
iation in public policy, despite the transnational
nature of the reform agenda, as well as variation
in the ways in which professional bodies de?ne,
di?erentiate and organise themselves. Hybridising
in this arena, one might say, has become both an
Fig. 1. Gordon Moore’s Curves of Device Complexity for
Minimum Cost (Moore, 1965, p. 115).
28
Schaller (1997, p. 114).
29
Moore (1975).
30
An explanation of how Moore’s Law has become embedded
in the International Technology Roadmap for Semiconductors
is provided in Miller and O’Leary (2007).
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 955
object and an objective of public policy. ‘Regu-
lated hybrids’, that is hybrids that have been
shaped in large part by explicit public policy and
regulation, are often the norm. And the formation
or encouragement of such hybrids is argued for in
terms that link them explicitly to the management
of so-called systemic risk.
31
The attempt to make medicine calculable has a
long history. Since the early 1980s, a cascade of
managerial reforms has sought to involve clinicians
in the ?nancial management of both their special-
ties and the hospital as a whole (Hopwood, 1984;
Perrin, 1978; Preston et al., 1992). For several dec-
ades, however, medics in the UK have sought to
preserve intact the boundaries of the medical enclo-
sure, and to inhibit or prevent the forming of a
medical-?nancial hybrid (Jones & Dewing, 1997;
Pollitt, Harrison, Hunter, & Marnoch, 1998; Rose
& Miller, 1992). This longstanding reluctance on
the part of clinicians in the UK to actively partici-
pate in this hybridising of medical and ?nancial
expertise persists, at least within some quarters of
the medical profession. A recent Audit Commis-
sion (2006) Report, that analyses key reasons for
the ?nancial failings of eleven NHS organisations
in 2004–5, identi?es a disengagement of senior cli-
nicians from core management processes as a reli-
able indicator of impending ?nancial trouble in
Hospital Trusts. Even today, ?nancial expertise is
typically not viewed by senior clinicians as some-
thing that they should acquire. Rather, it is consid-
ered the job of the Finance Director to produce a
‘?nancial ?x’ to keep the organisation intact until
the year end (Audit Commission, 2006), or the
job of the management accountants to rede?ne
budgetary overspends as ‘needed’ expenditure
(Kurunma¨ki, Melia, & Lapsley, 2003, 2006).
A very di?erent picture appears, however, if one
considers the encounter between clinicians and the
New Public Management reforms in the Finnish
context.
32
Here, one sees a relatively quick hybri-
dising of medical and ?nancial expertise, with sig-
ni?cant implications for the management of
systemic risk. Contrary to their UK counterparts,
senior clinicians in Finnish hospitals expressed
early on a willingness to acquire ?nancial exper-
tise. The process began in the late 1980s, when
medical professionals were made ?nancially
responsible through delegated budgets in the local-
ised settings of individual institutions. These initial
experiments, in which senior physicians and nurses
participated, took place on a voluntary basis, and
in the localised settings of individual hospitals.
Budgeting began at ward level, with individual
wards preparing their own budgets which were
then combined as clinical unit budgets. Ward sis-
ters and Chief Physicians were central to the prep-
aration of budgets, as one Chief Physician in a
general hospital remarked:
It is team work to a very large extent. . . In
practice, it is the Ward Sisters and Chief Phy-
sicians who are in key positions.
The involvement of medical professionals in the
very early stages of the budget setting process was
perceived to be important, as was the combining of
?nancial and non-?nancial measures in their
reports. At the level of the clinical unit, and in
the context of a maternity ward, budgets would
include both operational and ?nancial targets.
They would be prepared in part on the basis of
information provided by the hospital administra-
tion, and in part from information produced
locally. In another Unit (Pathology), the Chief
Physician remarked:
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. . .
Networks of calculation, in which medical experts
were central, emerged gradually as key actors
came to endorse the ideas, and the number of
participants multiplied. As the ideas of markets,
customers and contracts began to achieve accep-
tance in Finland in the early 1990s, clinicians –
with their recently acquired ?nancial expertise –
31
Hood and Rothstein (2000, p. 21) de?ne systemic risk as
follows: ‘‘risks a?ecting an industry or set of organisations (like
risks of general banking collapse), as distinct from risks to the
position of any individual organisations’’.
32
See Kurunma¨ki (2004) for a more extended discussion of
these issues. See also Lehtonen (2007).
956 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
took readily to the detailed tasks of calculating
costs, allocating overheads, and setting prices.
Senior clinicians in the Finnish hospital settings
took control of the ?nancial management of their
clinical units, and spoke proudly of the price lists
they had prepared and the average costs they
had calculated for di?erent operations. They spoke
equally proudly of the fact that they had prepared
costing and pricing information with little or no
help from the ?nance unit in the hospital. As one
Financial Manager remarked:
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
Physicians.
The acquisition of ?nancial expertise was con-
sidered to be relatively straightforward and
unchallenging, when set alongside the acquisition
of clinical skills and expertise. Medical and ?nan-
cial expertise thus hybridised relatively rapidly in
the Finnish context, as clinicians came to view it
as normal and even desirable to include the key
calculative practices of the accountant as part of
their repertoire. As one Chief Physician com-
mented:
There is no alternative, and in the training of
doctors we have to begin on a completely dif-
ferent scale, teaching doctors various things
(such as accounting), not just medicine.
Once budgeting skills had been acquired by
senior clinicians and nurses, and the process
embedded at ward level, it was only a relatively
small step to make medical professionals responsi-
ble to municipalities and hospital management for
potential ?nancial risks.
Consider a further and related example, where
hybrids have been made both a key object and
objective of public policy, with an explicit link
being forged with the management of systemic
risk. The key risk here is that individual providers
of public services may ful?l their respective respon-
sibilities, but individuals in need of services may
fall between the ‘gaps’ separating di?erent types
of service providers. The speci?c context is the
‘Modernising Government’ programme, intro-
duced in the late 1990s by the Labour government
in an attempt to promote ‘partnership’ working
among a range of service providers.
33
This was
part of a more general attempt to transform the
political lexicon in the UK. An incitation to coop-
erate took centre stage, supplanting the harsh
language of markets and competition that charac-
terised politics and public policy in the 1980s and
early 1990s. The modernising government pro-
gramme overall was originally outlined in the
White Paper Modern Public Services for Britain:
Investing in Reform (CM4011, 1998), and later pre-
sented in more detail in the Modernising Govern-
ment White Paper (CM4310, 1999). And health
care, together with the links between health and
social care, were identi?ed as central to this pro-
gramme in two separate White Papers.
34
Giving
individual departments separate responsibility for
tackling one part of a multi-faceted problem was
viewed as a ‘‘recipe for failure’’ by policy makers.
35
The answer was held to be ‘‘joined-up’’ working,
since this would match the ‘‘joined-up’’ nature of
the problems themselves, a solution that was
viewed as having widespread applicability for
issues as diverse as unemployment, homelessness
and poor health (CM4011, 1998). Service provid-
ers were called upon to cooperate, and to build ser-
vices ‘‘around the needs of those who use them’’
(Department of Health, 1998, p. 5).
This enthusiasm for so-called ‘partnership
working’ was not unique to the UK. Under vari-
ous labels and guises, the notion of cooperation
became a leitmotif for the reform of public services
in the late 1990s. Whether one looks to Australia,
Canada, New Zealand or the UK, the political
vocabulary is remarkably similar. Terms such as
‘joined-up government’, ‘connected government’,
‘networked government’, and ‘whole-of-govern-
ment’ gave voice to a widely shared political diag-
33
See Kurunma¨ki and Miller (2004, 2006) for a more extended
discussion of these issues.
34
New NHS: Modern, Dependable (CM3807, 1997); Modern-
ising Social Services: Promoting Independence, Improving Pro-
tection, Raising Standards (CM4169, 1998).
35
CM4011 (1998), chapter 4, p.2. For a review of the history
and variety of concerns expressed about ‘fragmentation’ of
services, see Ling (2002).
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 957
nosis that aspired to resolve problems as diverse as
the increasing demands and expectations of citi-
zens, budgetary pressures, globalisation, fragmen-
tation of service provision, as well as the
conservatism of public servants, risk avoidance
and lack of innovation. An avalanche of policy
documents recommended ‘horizontal manage-
ment’, ‘inter-agency’, ‘inter-sectoral’, ‘inter-depart-
mental’ and ‘multi-organisational’ cooperation.
36
Hybridisation became the watchword, even if its
precise form and labelling varied from country to
country.
In the UK, and with respect to health care, the
Health Act 1999 gave form to this incitation to
cooperate, while Section 31 of this Act proposed
a range of hybrids as the solution.
37
The hybrids
in this instance were called ‘?exibilities’, and they
were multiple. They could take the form of new
entities or organisations, new processes, or new
practices. A new duty of co-operation within the
NHS was introduced, together with an extended
duty of co-operation between NHS bodies and
local authorities. ‘Flexibilities’ could take the
shape of new organisational forms, such as inte-
grated service provision through newly created
organisations termed ‘‘Care Trusts’’, which had
as their aim to provide health care and social ser-
vices side-by-side. They could also take the form
of cooperation across organisational boundaries,
by allowing service providers to pool resources
and create ‘pooled budgets’ for speci?ed client
groups. Finally, ?exibilities could take the form
of partnership working based on the joint commis-
sioning of services, such as care home placements,
by those responsible for the provision of services.
Cooperative working was of course not an
absolute invention of the ‘modernising govern-
ment’ initiative. Well before the Health Act 1999
and its related reforms, local actors had engaged
in all sorts of informal cooperation and hybridisa-
tion, as this arose around immediate issue of ser-
vice delivery. Delayed hospital discharges, lack of
hospital beds during the winter months, and over-
due assessments of care needs that was often
linked to eligibility for continuing care placements
are just some of the issues around which it
emerged prior to the Health Act 1999. Informal
hybrids had been formed, such as local agreements
for joint targets for maximum delays, money
transfers between health care and social service
organisations, and multidisciplinary care assess-
ment and commissioning teams.
38
The contribution of the Health Act 1999 was to
make hybrids an objective of public policy. By
institutionalising and formalising locally developed
and established practices and processes, as well as
newly created ones, ‘regulated hybrids’ were to be
formed. In place of informal cooperation, the
Health Act ‘?exibilities’ required formal ‘noti?ca-
tion’ through appropriate documentation and
paperwork. The signatories to these noti?cations
were, for example, required to demonstrate that
there existed robust arrangements for governance,
regular reviews of such arrangements, agreed
terms, conditions and policies for human resources,
information sharing practices, clear identi?cation
of functions, eligibility criteria and assessment pro-
cesses, complaints procedures, dispute resolution
mechanisms, and plans for exit strategies.
39
The political language of cooperation and part-
nerships, however it was labelled in a particular
national context, was not only an abstract ideal
aimed at supplanting the harsh language of mar-
36
See for example the document titled Connecting Govern-
ment: Whole of government responses to Australia’s priority
challenges, published by the Management Advisory Committee,
Commonwealth of Australia, 2004. For New Zealand, see the
Report of the Advisory Group on the Review of the Centre,
presented to the Ministers of State Services and Finance in
November 2001. And, for Canada, see Results for Canadians: A
Management Framework for the Government of Canada, pub-
lished by the Treasury Board of Canada Secretariat, Ottawa,
Canada in 2002.
37
The Health Act 1999 built on a number of earlier initiatives
and tools, including Health Improvement Programmes, Joint
Investment Plans, Health Action Zones, and partnership
grants.
38
One such multi-agency team formed to conduct joint
assessments of eligibility for nursing home care included a
consultant geriatrician, an occupational therapist, a community
psychiatric nurse, a social services manager, a care manager, a
community care manager and a district nurse.
39
See: Application form for Section 31 Partnership Arrange-
ments, Department of Health.
958 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
kets and competition. It was also a way of posi-
tioning public service provision on the register of
risk, and systemic risk relating to service delivery
failure in particular. Coordination across the
boundaries of health and social care had been
identi?ed earlier as a fundamental issue a?ecting
the quality of service provision, as rehearsed in a
Department of Health Discussion Document in
1998:
All too often when people have complex
needs spanning both health and social care
good quality services are sacri?ced for sterile
arguments about boundaries. When this hap-
pens people, often the most vulnerable in our
society – the frail elderly, the mentally ill –
and those who care for them ?nd themselves
in the no man’s land between health and
social services. . . (Department of Health,
1998, p. 3)
The ‘modernising government’ programme
linked such longstanding diagnoses with the lan-
guage of risk. Public service providers were bera-
ted for being insu?ciently entrepreneurial and
risk averse (CM4310; Hood & Rothstein, 2000).
Civil servants and others were depicted as inhabit-
ing a culture in which rewards for success were
limited, while penalties for failure could be severe.
The ‘modernising government’ programme was in
large part presented explicitly as a counterbalance
to this culture of conservatism, caution and ‘blame
avoidance’ (Hood & Rothstein, 2000). In the
words of the Comptroller and Auditor General:
The Modernising Government programme
seeks to encourage departments to adopt
well managed risk taking where it is likely
to lead to sustainable improvements in ser-
vice delivery (HC864, 2000, p. 2)
Against the risks arising from innovation was
touted the ‘‘risk of not taking risks’’ (Su?eld &
Whitehouse, 2000, pp. 16–17). This referred to
the potential risks that might arise from not exper-
imenting with new ways of working, particularly
those that held out the promise of delivering better
and more cost e?ective public services (HC864,
2000, p. 1). As stated in the Modernising Govern-
ment White Paper:
Auditors are rightly interested whether
organisations obtain value for money. We
want them to be critical of opportunities
missed by sticking with the old ways, and
to support innovation and risk-taking when
it is well thought through. . . (CM4310, 1999)
All this, it was hoped, would improve and
encourage cooperation among service providers,
and help reduce the risks of gaps or overlaps in
service provision. Hybrids of di?ering types would
thus support the twin aims of modernising and risk
reduction. It mattered less which type of hybrid or
‘?exibility’ was utilised. Regardless of type, the
Health Act 1999, and the modernising government
programme more generally, placed hybridisation
at the heart of public policy. Whether it took the
form of new organisational entities, new working
practices or processes, or newly emergent forms
of expertise, hybridising was made both an explicit
object and objective of public policy.
40
When placed alongside the active hybridisation
of medical and ?nancial expertise in the Finnish
context on the part of clinicians, the recourse to
legislation in the UK context might at the very
least be viewed as symptomatic of a less conducive
environment for cooperation to ?ourish. But our
aim here is not to assess such matters. Nor is it
to adjudicate on the relative merits of hybridising
in the two contexts. We are concerned primarily
to identify some of the di?ering modes of hybridis-
ing, and the variety of conditions under which it
occurs. In the Finnish context, one sees a relatively
rapid hybridising of clinical expertise. In the UK
context, one sees hybrids made into an explicit
objective of public policy. Both cases reinforce
our argument for a broadening of the category
of hybrids, to include not only organisational
forms, but also hybrid practices, processes and
expertises. Both cases also extend our understand-
ing of the conditions under which hybrids emerge.
Instead of viewing them as a sort of ‘market fail-
ure’ response, whether transitory or relatively sta-
40
Our concern here is not to evaluate the extent to which this
programme achieved its objectives. On this, see Kurunma¨ki and
Miller (2004) who suggest that, at least in the early stages, take-
up of the ‘?exibilities’ was cautious and relatively slow.
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 959
ble, they are viewed here as conditioned to a signif-
icant extent by public policy. Hence the term ‘reg-
ulated hybrids’ that we have used here to
characterize such hybrids.
These brief examples are intended to be no
more than indicative of the range and multiplicity
of hybrids that we argue need to be more fully
recognised. We could no doubt have pointed to
other examples. We could have pointed to the
hybridisation of ?nancial and medical expertise
in the form of ‘Reference Costing’, which has been
given particular prominence in the context of the
‘Payment by Results’ programme recently intro-
duced for the NHS in England (Llewellyn &
Northcott, 2005). While one might view Reference
Costing as a traditional accounting calculation, it
is considerably more than the production of a con-
ventional standard cost. For Reference Costing
mixes up elements from the medical domain
(Healthcare Resource Groups, of which there exist
currently 650 groups) and the ?nancial domain
(standard costs, computed on the basis of numeri-
cal averages).
41
In this exercise, classi?cation on
the basis of a longstanding set of clinical categories
is blended with calculation on the basis of ?nancial
expertise.
42
We could equally have pointed to the hybridis-
ing of medical and ?nancial expertise in the ‘tech-
nology appraisal guidance’ issued by the National
Institute for Health and Clinical Excellence
(NICE) in the UK. While such guidance does
not ‘‘override the individual responsibility of
healthcare professionals to make decisions appro-
priate to the circumstances of the individual
patient’’, they are none the less expected to ‘‘take
it fully into account when exercising their clinical
judgement’’.
43
Recent controversies surrounding
this ‘guidance’ for drugs such as Herceptin (for
the treatment of breast cancer), Donepezil (for
the treatment of Alzheimer’s disease), and Tem-
ozolomide (for the treatment of brain tumours)
have brought ?rmly into the public domain this
hybridising of medical and ?nancial expertise
which happens at a distance from the hospital
and the individual patient. For such guidance
brings together issues of clinical and cost e?ective-
ness. This allows NICE to note for instance that,
with respect to mild to moderately severe Alzhei-
mer’s disease, the estimated cost of prescribing
Donepezil to gain ‘‘an additional year in a non-
severe state’’ ranged from £1200 to £7000 (depend-
ing on dose and starting point). This, in turn,
allows the report to conclude on the basis of a
‘‘recent economic analysis alongside a clinical
trial’’ that ‘‘the drug was not cost e?ective’’.
44
The hybridising at issue here is between health eco-
nomics and clinical judgement, which allows ‘guid-
ance’ to be issued for prescribing on the basis of
‘‘cost per quality-adjusted life years’’ relative to
the average gain in ‘‘quality-adjusted life years’’.
45
Again, our concern here is not to adjudicate on the
merits of this form of silent rationing, which has
only reached the public domain relatively recently.
It is simply to note that the hybridising of ?nancial
and medical judgement continues, behind the
scenes, even while clinicians in hospitals may seek
to distance themselves from ?nancial judgement
and expertise. Risk management occurs here
through attempts to remove the so-called ‘post
code lottery’ – whereby patients’ access to certain
treatments is a function of the health authority
in which they live – as well as through the initial
emphasis on assessing new medical technologies
that are likely to have a signi?cant impact on the
overall cost of the NHS.
46
We have deliberately taken examples from both
the private and the public sector, for hybridisation
is not con?ned to one or the other. We have sug-
gested that hybridisation can occur between the
domains of science, technology and the economy,
between medical and ?nancial expertise, and
41
Scheduled to increase to 1,400 under HRG4 (see www.ic.
nhs.uk/casemix/hrg/hrg1/syb/new_HRG4).
42
See Bowker and Star (1999) on the classi?cation of diseases.
43
NICE technology appraisal guidance 111.
44
NICE technology appraisal guidance 111, paras 4.2.2.3 and
4.2.2.4.
45
NICE technology appraisal guidance 111, para 4.2.2.2. The
basic unit of measurement here is a ‘quality-adjusted life year’
(QALY). The cost may be de?ned as drug costs only (as in an
early independent study cited in this instance), and the bene?ts
are typically de?ned as delays in the progression of disability, or
entry to residential nursing or NHS continuing care.
46
(See Rawlins (1999, p. 1079)); see also Klein (2001) and
Smith (2000).
960 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
between medical and social care agencies. In the
case of the microprocessor industry, we have
argued that Moore’s Law and technology road-
mapping practices can reduce risk by coordinating
and aligning expectations within and among ?rms.
In the context of the Finnish health care reforms,
we have argued that the hybridisation of ?nancial
and medical expertise can reduce risk by reducing
the new forms of uncertainty that arise from a
market or quasi-market based resource allocation
system. And in the UK health care reforms, we
have suggested that formal partnership working
can reduce systemic risks likely to arise through
individuals falling through the ‘gaps’ between dif-
ferent organisational, professional and administra-
tive groups. We do not conclude from these
examples that hybridisation is necessarily benign,
or that it always has positive e?ects for risk man-
agement. We do argue, however, that it demon-
strates that there is much that falls outside the
domain of formalised risk management, and that
the hybrid nature of the processes, practices and
expertises we have referred to is central to their
ability to manage uncertainty and e?ect coordina-
tion across domains and boundaries.
Conclusion and Implications
Hybridising is a continually inventive process,
in which proliferation and multiplication is the
norm. We have argued for a broader de?nition
of hybrids than typically found in the literature,
one that extends beyond organisational forms to
include hybrid practices, processes and expertises.
We have drawn attention in this essay to the
importance of hybrids in both the public and pri-
vate sectors, and across the boundaries of these
increasingly overlapping domains. In no way has
our selection aspired to be comprehensive for
either the areas or individual examples. But we
do think they indicate the considerable variety
and signi?cance of hybrids. For instance, we have
shown how technology roadmaps facilitate coordi-
nation across sub-units of the ?rm, as well as
between the ?rm and its complementors. We have
indicated how ‘‘Moore’s Law’’, which pre-dates
and broadly de?nes the contours that roadmaps
have to follow, mediates between science and the
economy, and de?nes the rules under which coop-
eration and competition occur in the microproces-
sor industry.
In a very di?erent context – an encounter
between medical and ?nancial expertise – we have
shown the process of hybridisation to be equally
important. As senior hospital clinicians in Finland
showed a willingness to acquire competence in
budgeting, costing and pricing, and to attend asso-
ciated training schemes designed speci?cally for
medics, their skill-sets changed. In countries such
as the UK at that time, and in contrast, the bound-
aries between medical and ?nancial expertise
within hospitals remained more clearly drawn.
None the less, one can discern more recently evi-
dence of a process of hybridisation of a di?erent
kind even in the UK, in the context of the ‘Mod-
ernising Government’ programme, and in the asso-
ciated calls for formal ‘partnership working’, as
well as through other rather di?erent practices
such as Reference Costing and the technology
appraisal guidance issued by the National Institute
for Health and Clinical Excellence (NICE). In the
case of partnership working, the aspiration is for a
hybridising of expertise, modes of working and
modes of delivering services. In the cases of Refer-
ence Costing and the ‘guidance’ issued by NICE, a
hybridising of expertise occurs, yet at a distance
from the face-to-face interactions between patients
and medics. In all such cases though, we have
argued that a speci?c type of hybrid – which we
have termed ‘regulated hybrids’ – is the outcome
or at least the aspiration of regulators.
Clearly these are no more than snapshots that
illustrate the diverse nature of hybrids. These
examples show, however, the importance of broad-
ening the focus beyond hybrid organisational
forms to consider also the wide range of hybrid
processes, practices and expertises that create and
enable lateral rather than vertical transfers of infor-
mation and knowledge, and that in so doing pro-
duce new forms of expertise. For hybridisation
can occur whenever two or more elements normally
found separately are combined to create something
new. The formation of relatively stable organisa-
tional forms that do not ?t readily the categories
of market and hierarchy is only one example. A
P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967 961
practice such as technology roadmapping in the
microprocessor industry, which draws on more
than one type of expertise, is another. The hybridis-
ing of professional expertise, whether through
‘partnership working’ or ‘technology appraisal
guidance’ in the ?eld of healthcare – with its atten-
dant blurring of professional boundaries – is a fur-
ther example, even if this is sensitive to national
context and public policy, particularly when it is
a matter of the mixing up of clinical and ?nancial
expertise.
The implications of hybrids for the accounting
and risk management literature are considerable.
We have argued that the management of uncer-
tainty happens in large part at the boundaries or
margins of conventional entities and practices. It
is clear also that accounting is being hybridised
yet again in this process, and in diverse ways in dif-
ferent locales. Coordination across sub-units of a
?rm, cooperation and the sharing of expertise
among ?rms, inter-professional knowledge transfer
and even the emergence of new bodies of expertise,
formal and informal cooperation across organisa-
tions and groups of experts, and the creation of
novel metrics that draw upon di?erent bodies of
expertise are among the multiple dimensions
of hybrids. These are only some of the examples
of accounting and hybridisation, and how this
can have signi?cant implications for the manage-
ment of risk. The literature on accounting and risk
management needs to acknowledge that the forma-
lised hierarchical models that characterise much of
the regulatory arena are at odds with the hybrids
and the lateral relations that enable the manage-
ment of organisations and the management of risk
in all its forms to ?ourish. No doubt, to the extent
that the practices we have described here come to
be increasingly stabilised and taken for granted,
they will appear less like hybrids. They may in
due course even come to be embedded in forma-
lised risk management routines. As we have sug-
gested, such is the nature of hybridisation.
But, if hybrids are where so much of the action
is, and if so many social scientists from so many
disciplines have emphasised their importance for
two decades or more, why are they not given
greater prominence in risk management? And
why are hybrids particularly neglected in the public
sector? Or, to be more precise, why is it that risk
management systems in the public sector tend to
be speci?c to a policy domain, as Hood and Roth-
stein (2000) have observed? The answer no doubt
resides in large part in the exacerbation of formal
process, as Power (2004) has argued, and the regu-
latory pressures towards standardisation according
to conventional boundaries that characterise much
of risk management. Relatedly, risk regulation
regimes may in part be a means for regulators, pub-
lic bodies and government to manage the risks to
themselves, rather than to manage the underlying
risks. If one’s organisation has in place the appro-
priate risk management committees, o?cers and
practices, then at least there exists some ex post
protection against possible accusations of reckless-
ness or neglect. But it is no doubt also because
hybrids are a challenge to risk management, for
they typically reside beyond the boundaries of
existing entities, and do not lend themselves readily
to traditional ways of sorting the world. The types
of risk and uncertainty management practices we
have documented fall between the conventional
professions of regulation such as accounting and
law. And as topics of research, they also fall
between the conventional academic disciplines of
accounting, economics, law, organisation theory
and the sociology of the professions, which may
in part explain their neglect by researchers.
Accounting is central here, as are the interac-
tions between accounting information and other
types of expertise, whether in the form of engineer-
ing, marketing, design, medicine or whatever. For
the hybridising of the calculative practices of
accounting remains one of the most in?uential
ways of rendering uncertainty and risk visible.
We need to know more about the ways in which
accounting interacts with, and at times hybridises,
as a result of encounters with other types of exper-
tise. Even competing ?rms engage in continuous
and frequent information exchange on a much lar-
ger scale than commonly acknowledged, and
information transfers of varying types may work
well without vertical integration. Much of this
information is accounting-based, albeit modi?ed
to deal with the often localised nature of the infor-
mation transfers. Moreover, some ?rms see the
opportunity to learn and share information e?ec-
962 P. Miller et al. / Accounting, Organizations and Society 33 (2008) 942–967
tively as the key to their competitive advantage.
Yet, despite this increasing emphasis on informa-
tion and knowledge transfer and sharing, there is
little attention paid to the intrinsically hybrid nat-
ure of many of the practices, processes and exper-
tises that play such a role. We argue for increasing
attention to these mechanisms, as it is through
them that uncertainty is actually managed rather
than formally represented as manageable. We need
to know more about the industry- and ?rm-speci?c
practices that facilitate information ?ows and
communication across the boundaries of ?rms,
organisations and groups of experts or profession-
als. We need to know more about the varied and
often localised metrics and languages that facili-
tate interactions that do not respect organisational
boundaries, whether in the private or not-for-
pro?t sector or across these two sectors. We need
to know more about the locales, institutions and
conduits through which such metrics circulate,
and in which they are embedded. And we need
to pay attention to the multiple and diverse con-
stituents of such practices, which often do not ?t
the neat categories according to which we typically
order the world.
Acknowledgement
The authors would like to thank participants at:
the conference on ‘‘Sustaining Organizational
Combinations: The Forms and Features of Man-
agement Control in Hybrid Relationships’’ (held
at the University of Bocconi, September 2005);
the conference on ‘‘Coordination and Cooperation
across Organisational Boundaries’’ (held at the
Universita Cattolica del Sacro Cuore, Milan, April
2006); the University of Uppsala Annual Lectures
(September 2006); the conference on ‘‘The Social
Rule of Numbers’’ (held at the Institute for Social
Research in Frankfurt, November 2006); the Uni-
versity of Edinburgh Seminar on the ‘‘New Public
Sector’’ (December 2006); the Irish Accounting
and Finance Association Annual Conference (Uni-
versity of Limerick, April 2005); and a seminar at
Lancaster University Management School (Febru-
ary 2007). We would also like to thank Anthony
Hopwood and Mike Power for their helpful com-
ments on an early version of this paper. In addi-
tion, we would like to acknowledge the
constructive anonymous review comments re-
ceived, as well as comments received from col-
leagues at LSE in the Accounting Group, and in
the Centre for Analysis of Risk and Regulation.
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