Financialization in the workplace: Hegemonic narratives, performative interventions and th

Description
This paper uncovers how the pressures of financialization were passed from top management
to employees and achieved performative hegemony in a subsidiary of a knowledge
intensive, high technology, multinational corporation. Qualitative insights from subsidiary
directors, management and knowledge workers are presented. The paper demonstrates
that financialization is a performative phenomenon which elevates the role of accounting
in organizations. It highlights how budgets can serve as a performative mechanism through
which top management can narrate a desired reality and pass down a myriad of performative
interventions to achieve this reality. The paper uncovers how financialization can cause
insecurity, work intensification, suppression of voice and the enactment of falsely optimistic
behaviours; all of which prompt distress and anger amongst knowledge workers. The
paper also uncovers sources of counter performativity and resistance but demonstrates
that employees ultimately participate in their subordination.

Financialization in the workplace: Hegemonic narratives,
performative interventions and the angry knowledge worker
Jean Cushen
?
Business School, Dublin City University, Dublin 9, Ireland
a b s t r a c t
This paper uncovers how the pressures of ?nancialization were passed from top manage-
ment to employees and achieved performative hegemony in a subsidiary of a knowledge
intensive, high technology, multinational corporation. Qualitative insights from subsidiary
directors, management and knowledge workers are presented. The paper demonstrates
that ?nancialization is a performative phenomenon which elevates the role of accounting
in organizations. It highlights how budgets can serve as a performative mechanism through
which top management can narrate a desired reality and pass down a myriad of performa-
tive interventions to achieve this reality. The paper uncovers how ?nancialization can cause
insecurity, work intensi?cation, suppression of voice and the enactment of falsely optimis-
tic behaviours; all of which prompt distress and anger amongst knowledge workers. The
paper also uncovers sources of counter performativity and resistance but demonstrates
that employees ultimately participate in their subordination. Employees pursue ?nancial-
ized performative interventions as they interpret them as the primary method of securing
their role in a pervasively insecure work environment.
Ó 2013 Elsevier Ltd. All rights reserved.
‘His boss turned his back, at the same time saying four
words, take care of yourself, that was what he said in a
tone that was at once deferential and imperative, only
the best bosses can combine contrary feelings in such a
harmonious way’ (José Saramago, All the Names, Harcourt,
2000, p. 107).
Introduction
Saramago’s quote above elegantly illuminates the point
long made by critical theorists that workplaces are sites of
multiple, contrary interests and narratives which are not
easily reconciled. This paper documents how ?nancial
interests and narratives can achieve performative hege-
mony within the knowledge workplace.
Financialization refers to the increasingly signi?cant
role of ?nancial markets, ?nancial actors, and ?nancial mo-
tives in daily life (Epstein, 2005: 3; Lapavitsas, 2011). Orga-
nizations operating within ?nancialized capitalism interact
with ?nancial markets to secure capital from removed,
?nancially motivated investors. Early proponents of ?nan-
cialization posited that prioritizing investor returns
prompts top management to engage in productive activi-
ties that result in business success; i.e. what is good for
the investor is good for all (Welch, 1981). Critics later ar-
gued that ?nancialization is a less stable, more carnivorous
type of capitalism, in part because product markets cannot
deliver the immediate and continuous growth required by
?nancial actors (Andersson, Haslam, Tsitsianis, & Lee,
2008; Foster, 2007; Williams, 2000). Scholarship on ?nan-
cialization is burgeoning and uncovers compelling aggre-
gate trends relating to the employment relationship. It is
widely accepted that this mode of capital accumulation re-
sults in losses for labour; causing job and ?nancial insecu-
rity in particular (Batt & Appelbaum, 2013; Thompson,
2013). However explanations of the relationship between
0361-3682/$ - see front matter Ó 2013 Elsevier Ltd. All rights reserved.http://dx.doi.org/10.1016/j.aos.2013.06.001
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Tel.: +353 (0) 1 700 8447; fax: +353 (0) 1 700 5446.
E-mail address: [email protected]
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Accounting, Organizations and Society 38 (2013) 314–331
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?nancialization at the level of the economy and workplace
outcomes remain under-speci?ed. There is also a dearth of
accounts from employees meaning scholarship is at best
unaware of what employees experience on a daily basis
and is at worst encouraging a default view of employees
as hapless recipients of deterministic ?nancialized out-
comes. This article makes an empirical contribution by
documenting how ?nancialization pervaded daily life
within the Irish subsidiary of ‘Avatar’ (pseudonym), a pub-
licly listed, high-technology, knowledge intensive, multi-
national corporation (MNC). Data is presented from
annual reports, ?nancial media, interviews and
observations.
In-depth studies of ?nancialization reveal that ?nancial
actors seek ?nancial returns from organizations along with
compelling strategic narratives which indicate the organi-
zation is pursuing formulaic strategies to achieve future re-
turns (Froud, Johal, Leaver, & Williams, 2006; Zorn, Dobbin,
Dierkes, & Kwok, 2005). This paper argues that ?nancial-
ization within organizations is de?ned precisely by the
stream of performative interventions organizations take
to live the narrative, deliver returns and ultimately be a
model of shareholder value creation. Consequently, under-
standing ?nancialization within organizations requires
exploring how these interventions are co-ordinated, re-
ceived, challenged and sustained to achieve a hegemonic
in?uence and be both performative and possibly counter
performative. It is these micro level features of ?nancial-
ization that have not received suf?cient attention and
what this paper explores.
The paper ?rst presents existing scholarship on ?nan-
cialized corporate governance structures and narratives.
Secondly, it presents the case organization and details
how Avatar top management were experiencing pressures
that typify ?nancialization. Thirdly, the paper documents
how budgets were the central mechanism used to transfer
performative interventions from Group top management
to subsidiary directors and then onto lower levels. Fourthly
it explores how ?nancial narratives pervaded the knowl-
edge labour process, creating behavioural scripts and cate-
gories of knowledge work which rendered employees
accountable for their contribution. Finally it discusses the
employment outcomes, counter performativity, resistance
and the emergence of the angry, insecure knowledge
worker.
Financialization, performative accounting and
knowledge workers in the literature
Financialized corporate governance structures
Scholarship on ?nancialization and workplaces has
been dominated by quantitative studies uncovering aggre-
gate trends. The outcomes are typically explained in terms
of structurally determined causality, owner-?duciary
views of corporate governance and stakeholders as rational
agents of capital. The interests of capital dominate stake-
holders to a greater extent in ?nancialized, liberal market
economies (LMEs) (Andersson, Lee, Theodosopoulos, Yin,
& Haslam, 2012; Boyer, 2000; Gospel & Pendleton, 2003).
Publicly listed ?rms in LMEs seek capital from mobile
investors who judge organizations on share price and pro-
spective ?nancial returns (Dobbin, 2005; Zorn et al., 2005).
Distinct pressures arise in such organizations as product
markets often fail to yield suf?cient returns to satiate
investor appetites and maintain share price (Foster,
2007). Fear of divestment and hostile takeover, not to men-
tion loss of personal remuneration, has led to increased
incidence of top management boosting investor returns
by pursuing short-term, ?nancially myopic strategies. Such
strategies include taking on debt and limiting internal
investment possibly to the detriment of long-termcompet-
itiveness (Aglietta & Breton, 2001; Appelbaum, Batt, &
Clark, 2013; Bezereh & Goldstein, 2013; Carr & Tomkins,
1998; Lazonick, 2012). Indeed ?nancial actors tend not to
respond positively to complex exploratory innovation
(Gupta, 2012). Organizations are also more likely to cut
costs, downsize and engage in continuous restructuring
(Froud, Haslam, Johal, & Williams, 2000; Lazonick, 2012;
Milberg & Winkler, 2009; Shin, 2010; Thompson, 2003).
Empirically, these accounts uncover compelling trends
but do not provide an insight into how ?nancialization is
activated in different settings.
In-depth studies reveal the varying ways the logic of
?nancialization can unfold. Commentators from economic
geography (Pike & Pollard, 2010) and cultural economy
(Erturk, Froud, Johal, Leaver, & Williams, 2008: 239; Froud
et al., 2006) demonstrate that the activities and outcomes
associated with ?nancialization are not uniformly deter-
mined at the level of corporate governance. Investors
may want different things (Hendry, Sanderson, Barker, &
Roberts, 2006; Ryan & Schneider, 2003). Across LMEs there
are varying approaches to meeting the needs of ?nancial
actors (Faulconbridge & Muzio, 2009; Lutz, 2004). Further-
more, top management do not always act as rational
agents of capital; they can take careless risks (Dobbin &
Jung, 2010), exercise discretionary power (Gomez, 2004),
retain and reinvest (Froud et al., 2006) and be affected by
internal and external relationships (Pye, 2004). This is
not to say that ?nancial actors do not create distinct pres-
sures for top management. Financial actors certainly con-
strain management action by shaping performance
expectations and de?ning which ?nancial metrics matter
(Froud et al., 2006:122-136). It simply means that manage-
ment can interact with ?nancial actors in different ways
and take varying approaches to optimize investor returns.
Hegemonic ?nancialized narratives
An emerging body of qualitative work demonstrates
that ?nancialized capitalism is not distinguishable solely
because of pressure for high returns; what is also unique
is the signi?cant role of narratives (Erturk et al., 2008:
239; Hendry et al., 2006; O’Neill, 2001; Pike & Pollard,
2010; Roberts, Sanderson, Barker, & Hendry, 2006; Zorn
et al., 2005). For these authors, ?nancial actors such as
investors, rating agencies and ?nancial media are not a
predictable, deterministic source of discipline. Instead
?nancial actors function as co-authors of ever changing,
speculative, unstable economic, industry and company
narratives that affect estimations of an organization’s
J. Cushen/ Accounting, Organizations and Society 38 (2013) 314–331 315
worth. This makes management of investor relations, in it-
self, a route to organizational success or failure (Hendry
et al., 2006; Roberts et al., 2006; Zorn et al., 2005). Finan-
cialization, they claim, is not about management creating
value for investors by embracing strategies that have
knowable ?nancial outcomes. Instead, management con-
struct optimistic narratives proclaiming the value creation
potency of their strategy in order to shape the narratives
and subsequent valuation and investment decisions of
other ?nancial actors. A study of the relationship between
top management and institutional investors shows how
‘management set the targets against which they wanted
performance to be measured. Those targets were then
‘sold’ to ‘the market’ (Hendry et al., 2006: 1117). These nar-
ratives represent the promises of management who later
concern themselves with ensuring the ?nancial numbers
corroborate earlier narratives. However not all product
markets are amenable to ever changing narratives and con-
tinuous revenue growth. Furthermore cost cutting can
have unpredictable negative consequences within organi-
zations. Uncertainty prompts the creation of more narra-
tives as actors seek to edit and simplify the complexity
and obstacles that emerge within both the product market
and organizations. Therefore the pursuit of investor/share-
holder value is not a prescriptive functional strategy with
knowable outcomes but a rhetoric that ‘sets management
on a utopian quest for growth and high returns for capital
that has variable and uncertain consequences’ (Froud et al.,
2006, p. 65).
Whilst the narrative exchange between ?nancial actors
and top management is dynamic, ?nancialization is cer-
tainly not a narrative ‘free for all’. Ultimately ?nancial ac-
tors have to be satis?ed and the narrative pivots upon
the material exchange of ?nancial returns. Analyzing nar-
ratives prompts consideration of ‘the forms in which
knowledge is cast and the effects that these have on an
audience’ (Czarniawska, 1997: 6, and within ?nancializa-
tion narratives are consistently cast in ?nancial terms to
affect a ?nancial audience. Lower level organizational ac-
tors are not party to this process meaning they do not have
access to the actors constructing the hegemonic narratives
shaping their lives. Gramsci de?nes hegemony as ‘The
‘‘spontaneous’’ consent given by the great masses of the
population to the general direction imposed on social life
by the dominant fundamental group; this consent is ‘‘his-
torically’’ caused by the prestige (and consequent con?-
dence) which the dominant group enjoys because of its
position and function in the world of production’ (Gramsci,
1971: 12 in Mumby, 1997: 348). However, whilst hege-
monic narratives emerge hegemony is not automatic and
competing narratives always exist. This requires an under-
standing of how ?nancialized depictions of reality become
hegemonic within organizations and acquire transforma-
tive capacities with ‘performative potential’ (Thompson &
Harley, 2013: 1364).
Performative accounting
Callon, in his in?uential works on the performativity of
economics, states that exploring performativity involves
investigating the extent to which a formula or model,
rather than representing reality, directly intervenes to con-
struct the reality it purports to describe (Callon, 1998). Per-
formativity orients attention to the interventions that a
depiction of reality prompts making it a particularly valu-
able analytical lens for understanding ?nancialization in
workplaces. Financial actors seek convincing strategic nar-
ratives which indicate the organization is a model of share-
holder value creation pursuing formulaic strategies which
will achieve ?nancialized targets. Financialization in orga-
nizations is de?ned by the stream of interventions organi-
zations take to live the narrative and be a model of
shareholder value creation. These narratives and subse-
quent interventions mean ?nancialization in organizations
is precisely a performative phenomenon. To acquire per-
formative capacities narratives require ‘calculative agents’
who act according to it (Callon, 2007: 323–326). A calcula-
tive agent comprises the person and the calculative equip-
ment, such as rules or instructions, endowing them with
capacity for acting. Multiple agents deploying calculative
equipment to bring about a narrative can be considered
to be performative ‘mechanisms’ as mechanisms are:
‘. . .an assembly of elements producing an effect not
inherent in any one of them. A mechanism is not so
much about ‘nuts and bolts’ as about ‘cogs and wheel-
s’. . .the wheelwork or agency by which an effect is pro-
duced’ (Hernes 1998, p. 74 in Davis & Marquis, 2005, p.
336).
The extensive literature exploring how accounting
serves as an organizational coordination device highlights
the performative capacities of accounting (Ahrens & Chap-
man, 2006; Briers & Chua, 2001; Cooper & Hopper, 2007;
Frow, Marginson, & Ogden, 2010; Miller & O’Leary, 2005;
Skaerbaek & Tryggestad, 2010). A handful of case studies
uncover how accounting practices can be leveraged to
bring ?nancialized narratives to life. Froud et al. (2006)
present case studies detailing how organizational strategy
has become organized around achievement of priority
?nancialized metrics. However they employ secondary
sources and do not explore how the subsequent performa-
tive interventions are experienced by lower level actors.
O’Neill highlights how the ‘portfolio management model’
creates hegemonic narratives for top management around
free cash ?ow that prioritizes certain voices within the top
management community to ‘drive an organizational form
and guide management decision-making’ (2001, p. 196).
However O’Neill’s study focuses on top management only.
Faulconbridge and Muzio (2009) demonstrate how new
?nancialized narratives and practices, namely ‘pro?ts per
equity partner’ ‘reproduced the logic of ?nance capitalism
in the domain of law’ (2009, p. 658). However the law?rms
studied are not publicly listed and there is no clear link to
external capital actors or internal lower level actors. Glea-
dle and Haslam (2010) explore how narratives relating to
research and development can be centered on commercial
income and deployed to boost ?rmvaluation. However this
study does not explore wider consequences on the
employment experience. Generally these studies reveal
how accounting can endow top management with the
material practices to render a ?nancial narrative hege-
monic; yet they shed no insight into how the narratives
316 J. Cushen/ Accounting, Organizations and Society 38 (2013) 314–331
are experienced and sustained by lower levels. This is
problematic because hegemony is not automatic and
performative does not mean prophetic. Inherent in the
concept of performativity is the possibility of ‘counter-
performativity’ (MacKenzie, 2007) whereby the performa-
tive mechanism produces unexpected outcomes which
may undermine it. The literature exploring the relationship
between ?nancialization and employment outcomes
identi?es outcomes that can be considered counter
performative.
The knowledge worker
It is widely accepted that ?nancialization generates dis-
tinct priorities for investors which govern top management
decision making and results in losses for labour (Batt &
Appelbaum, 2013; Gospel & Pendleton, 2003; Thompson,
2003; 2013). Financialized corporate governance struc-
tures pull apart and polarize the interests of top manage-
ment and employees. Continuous cost cutting,
restructuring and change means ?nancialization is associ-
ated with job insecurity (Kalleberg, 2010; Lazonick, 2012;
Shin, 2010), reduced share of national income (Dünhaupt,
2013) offshoring (Milberg & Winkler, 2009) less secure
remuneration and bene?ts (Jackson, 2005; Langley,
2004), work intensi?cation (Burchell, Ladipo, & Wilkinson,
2002) and increased hierarchical command (Mintzberg, Si-
mons, & Basu, 2002; Thompson, 2003). The fragile fusion of
long term reciprocity and compromise which powers the
employment relationship in more corporatist models of
capitalism is unravelling under ?nancialization.
There are a handful of case studies exploring ?nancial-
ization and accounting within organizations. Notable for
its inclusion of the employee perspective is the study of
‘Conglom’ where hegemonic ?nancialized narratives and
accounting metrics served to ‘inculcate in staff a culture
of making the numbers’ (Ezzamel, Wilmott, & Worthing-
ton, 2008: 110). Shop?oor production operators in ‘Con-
glom’ cynically questioned the legitimacy of the
hegemonic ?nancialized discourse but came to a mutual
accommodation based largely on favourable terms and
conditions. Alvehus and Spicer (2012) claim that billable
hours in professional service ?rms function as a ?nancial-
ized form of control. However the study looks at billable
hours in isolation and makes no link to ?nancialized corpo-
rate governance or narratives. Gleadle and Cornelius
(2008) explore how the economic value added model
served as a control device through which ?nancialized tar-
gets and changes to work practices where achieved in
‘Midco’; amidst economic insecurity. However, this study
focuses primarily on management with the employee voice
articulated solely through one shop steward. Collectively
these studies highlight how accounting practices are impli-
cated in organizational control; a point long argued by crit-
ical accounting scholars (see Cooper & Hopper, 2007 for a
review). However the employee voice remains largely ab-
sent within scholarship on ?nancialization. This is prob-
lematic not solely because of the empirical void but also
because what is known about the relationship between
?nancialization and employment outcomes is fundamen-
tally at odds with organization level scholarship exploring
knowledge intensive organizations.
This paper studies a knowledge intensive ?rm (KIF)
where ‘most of the work is said to be of an intellectual nat-
ure and where well-educated, quali?ed employees formthe
major part of the work force’ (Alvesson, 2001: 863). Litera-
ture exploring the management of knowledge workers
tends to be ‘knowledge based’ and does not incorporate
capital market pressures and associated tensions into the
discussion. Instead knowledge based accounts position
the creation and co-ordination of knowledge as the central
purpose of the ?rm (Lam, 2000). Knowledge management
literature assumes that knowledge creates products and
services which yield pro?t via the product market; there-
fore effective knowledge management is depicted as the
primary, if not only, source of organizational wealth. KIF’s
are described as being highly dependent on employees’
valuable, tacit knowledge and it is claimed that employees
are more likely to deploy tacit knowledge in high-road, se-
cure, lucrative and engaging jobs (Alvesson, 2001). This re-
sults in optimistic depictions of knowledge workers as
holding so privileged an employment position that they
are devoid of material concerns (Drucker, 1996, p. 17). A
more sobering view of the knowledge employment rela-
tionship has emerged from studies incorporating ?nancial
pressures into the analysis. The dismantling of stable
employment under ?nancialization can provoke a crisis of
attachment for professional workers (Cushen and Thomp-
son, 2013; Kunda & Ailon-Souday, 2005; McCann, 2013).
These studies do not explain how ?nancialization is passed
down and mediated to shape knowledge work. Palpacuer,
Seignour, and Vercher (2011) claim ?nancialization is asso-
ciated with a move to ‘market-based HRM’ for skilled work-
ers in six multinationals in France. However this study does
not clearly trace howthe ?nancialized strategies of the case
organizations translated into HRM outcomes. Furthermore,
the ?ndings relating to employees are limited by the sam-
ple of interviewees not all of whomworked for the six mul-
tinationals and most of whom held management positions.
For insights into how accounting can permeate knowledge
work we must turn to scholarship on academia. Numerous
studies reveal how‘NewPublic Management’ has commod-
i?ed academic work and encroached on academic auton-
omy (Cooper & Hopper, 2007: 225–226; Deem, 2004;
Giroux & Myrsiades, 2001). Increased prominence of ?nan-
cial metrics in higher education has enhanced the insecu-
rity and individualization of academic work (Harney,
Monks, Alexopoulos, Buckley, & Hogan, 2011; Waring,
2013). Whilst universities are not (yet) listed on stock ex-
changes these studies highlight that knowledge work and
workers are not invincible to ?nancial control, insecurity
and commodi?cation. However, scholarship has been dom-
inated by the knowledge based approach which misses the
crucial point that a de?ning feature of ?nancialized capital-
ism is that ?rms are oriented towards accumulating capital
from ?nancial markets more so than product markets.
Ultimately the existing literature uncovers compelling,
even startling trends concerning employment outcomes
under ?nancialization which indicate the hegemonic force
of ?nancialized interests within organizations. Despite
these losses most studies do not capture employee
J. Cushen/ Accounting, Organizations and Society 38 (2013) 314–331 317
perspectives or explore how ?nancialization encroaches on
knowledge work. There are few insights into the micro le-
vel struggles in ?nancialized organizations which are cen-
tral to Gramsician dialectical notions of hegemony where
domination cannot be assumed (Mumby, 1997). Hege-
mony is never automatic and ‘even those in the most sub-
ordinate positions can ‘carve out spaces of controls in
respect of their day-to-day lives’ (Mumby, 1987: 117).
Existing studies of ?nancialization reveal that narratives
and associated returns often do not materialize in the man-
ner predicted prompting continuous interventions as orga-
nizations scramble to ?nd alternative routes to the
promised future. So understanding working life within a
?nancialized organization requires exploring how a con-
tinuous streams of performative interventions are co-ordi-
nated, received, challenged and sustained, amidst
uncertainty and insecurity. It is precisely these key fea-
tures of ?nancialization that have not received suf?cient
attention and what this paper seeks to explore.
Methods
Case
This paper presents data from a 6 month, mixed meth-
od ethnographic study undertaken in Avatar Ireland from
June to November 2007. Avatar is a critical case selected
as it exempli?es a ?nancialized, KIF. The parent organiza-
tion Avatar Group (Group) was established in the mid-
1980s. Group headquarters are located in a large LME. Cat-
egories of Group shares are listed on major stock ex-
changes in two LMEs. A global corporate governance
rating agency ‘Governance Metrics International’ assigned
Avatar an overall rating of ten out of ten. Avatar is a global,
market leading provider of a range of high-technology ser-
vices and products. It is one of the largest organizations in
the world and it consistently ranks highly within publica-
tions listing the largest, ‘most innovative’, ‘best known
brands’ and ‘great places to work’. The Irish subsidiary
was a distinct pro?t and loss unit tasked with meeting
?nancial targets and delivering a range of products and
services to the Irish consumer market. Avatar Ireland
had, for a number of years, generated signi?cant pro?ts
and had one of the highest product market margins within
Avatar Group. In 2007 Avatar Ireland employed approxi-
mately 850 full-time, permanent, employees in Ireland.
In terms of demographics, seventy-nine percent were un-
der forty; approximately sixty percent were male. Most
employees held a third level quali?cation and were en-
gaged in knowledge work and comfortably meet Warhurst
and Thompson’s (2006) criteria of employees who use a
body of theoretical (specialized and abstract) knowledge
that is utilized to innovate products and processes.
Data and analysis
Commentary in ?nancial media and annual reports
were analyzed. Company documents relating to the busi-
ness strategy, work and people management practices
were reviewed. Seventy-?ve semi-structured interviews,
totalling approximately one hundred hours, were con-
ducted incorporating eleven directors, twenty-two manag-
ers, thirty-nine employees and three relevant external
individuals. When presenting data the term ‘top manage-
ment’ refers to Avatar Groups’ top management team,
‘directors’ refers to the top management team within Ava-
tar Ireland, it does not refer to the Avatar board of direc-
tors, ‘senior management’ refers to the managers of
Avatar Ireland who reported directly into a director, ‘line
managers’ refers to middle level managers in the Irish sub-
sidiary who did not report into a director and ‘employees’
refers to the employees of Avatar Ireland. Avatar Ireland
comprised of a large number of distinct roles. The most
common role was that of engineer; however the sample in-
cludes knowledge workers doing different jobs in all
departments including technology, accounting, human re-
sources (HR), marketing, strategy and legal. The break-
down is broadly indicative of the overall organization
composition. Twenty-?ve meetings were attended includ-
ing management meetings, corporate governance meet-
ings, team meetings, HR management meetings and
general communication sessions. This amounted to
approximately one hundred hours of attendance at meet-
ings. The data was collated and analyzed using an NVivo
tree coding structure. Corporate governance structures
and associated ?nancial returns and narratives emerged
and these became title-nodes. Subsequent performative
mechanisms, interventions and employee outcomes be-
came tiered sub-nodes (see Scheme 1)
Avatar Group
Financialized narratives and returns
Avatar Group managed the ?nancial and narrative
exchange with external ?nancial actors. Corporate
Scheme 1. Coding structure.
318 J. Cushen/ Accounting, Organizations and Society 38 (2013) 314–331
documentation stated Group was responsible for ‘The
overall ?nancial performance of the Group in ful?lment
of strategy, plans and budgets and Group capital structure
and funding’. Group was a centralized, strategic ‘think-
tank’ which directed subsidiaries to realize the ?nancial
bene?ts of the business strategy on behalf of investors.
Group’s business strategy was to deliver premium price,
premium quality, high technology products and services
and achieve global economies of scale. They sought to be
the market leader in each consumer market they operated,
securing the revenue and cost ef?ciencies that go with
such scale.
The year 2003 was a time of strategic change in Avatar.
A new Group CEO was appointed in 2003 amidst rising un-
ease that the Avatar share price was underperforming rel-
ative to other organizations within the high technology
index that Group was listed in. Investors also expressed
concern that Avatar’s technological direction, once
ground-breaking, had reached maturation meaning prod-
ucts market would not yield growing returns. Investors
were reluctant to sell Avatar shares for fear Avatar would
outperform the index so instead they opted for ‘active
engagement’ (Hendry et al., 2006: 1113). Investors called
for the CEO to curb spending, take on debt and make higher
returns. They also sought evidence of technological inno-
vation that would yield future growth in returns. The
?nancial performance and returns made by Avatar Group
to investors in the years after the new CEO took of?ce
are highlighted in Table 1. Throughout this period they also
took on more debt and engaged in share buybacks, a tactic
known to boost share prices by decreasing the pool of
available shares which also limits opportunities for inter-
nal investment (Lazonick, 2012).
Group sought to shape ?nancial markets perception of
their strategy through ‘market story-selling’ (Froud et al.,
2006; Hendry et al., 2006). Projected returns of Avatar
market stories were announced before implementation be-
gan at subsidiary level. Speci?cally, Avatar sought to ap-
pease ?nancial actors’ concerns and boost the share price
by announcing market stories about new revenue streams
and cost savings. To make clear the projected ?nancial
bene?ts of these strategies they were framed in narratives
relating to levels of capital and operational expenditure
and associated returns. Capital expenditure (CAPEX) funds
development of new products, services, processes and
equipment and Group constructed a CAPEX narrative to
announce and defend investment in new revenue streams
and projected ?nancial returns. Operational expenditure
(OPEX) incorporates the ongoing expenses of operating a
business and includes employee costs such as salaries,
bene?ts and training; the higher this expenditure the less
cash available to return to investors or reinvest in the busi-
ness. OPEX provided a narrative for Group to outline cost
reductions. This budgetary narrative is known to yield
?nancial bene?ts. CAPEX announcements are known to
generate signi?cant abnormal positive ?nancial returns in
the UK (Akbar, Zul?qar, Shah, & Saadi, 2008) and the US
(Vafeas & Shenoy, 2005). Financial markets react positively
to stories about reductions in OPEX such as redundancy
announcements (Farber & Hallock, 1999). Furthermore,
layoff announcements are associated with higher
CEO compensation (Shin, 2010). Ultimately, throughout
this period Group top management sought to offset inves-
tor concerns by investing quickly and heavily in new reve-
nue streams and cutting costs. Indeed some of these
market stories prompted a boost in share price. Table 2
contains an overview of the market stories launched by
Group.
Group continuously increased the dividend over this
4 year period; nonetheless they faced highly publicized
pressure from investors who were unwilling to have their
appetite for returns satiated and were sceptical about fu-
ture growth. This scepticism arose as the optimistic market
stories relating to new revenue streams largely failed to
yield the promised returns in the product market and pro-
gress with cost reductions was deemed slow. The failure of
one market story led to the creation of more and the con-
stant change exacerbated speculation that Avatar was un-
able to develop beyond their primary products and
services. The cost of write downs and the lack of signi?cant
new revenue streams saw Avatar’s share price plummet to
a level that caused some to claim Avatar was undervalued
and ripe for a hostile takeover. Avatar Group’s share price
movement during these years is outlined in Fig. 1.
Investor concerns came to a head at the 2006 annual
general meeting where protests were staged and a handful
of institutional investors, representing 15% of shareholders,
refused to back the re-election of the Group CEO. Investors
rejected the executive bonus plan, describing it as ‘easy’
and ‘disgraceful’ and claimed the board of Avatar Group
were ‘dysfunctional’ and ‘charlatans’. Group subsequently
committed to an ongoing dividend pay-out ratio of 60%
of earnings which tied up Avatar’s cash for future years.
Financial media labelled this a ruinous measure and an
indication the CEO was buying time. Ultimately the inabil-
ity of the product market to yield suf?ciently high returns
created pressure on top management to pay a high divi-
dend by reducing internal investment and cutting operat-
ing costs in order to ‘buy time’ and prevent share
divestment; all the while they sought to develop new rev-
enue streams.
The CAPEX and OPEX budgets served as a narrative tool
at the corporate governance level and were therefore key
indicators of whether Group were delivering on market
stories. Avatar Group annual reports noted the quarterly
and annual budgeting process was used to create a robust
parent-subsidiary ‘control environment’. This was impor-
tant for Group because of the need ?rst to pass down a
continuous stream of interventions and secondly to scruti-
nize and control subsidiary expenditure and returns. In the
year prior to the ethnography the Avatar Ireland CAPEX
Table 1
Avatar Group ?nancial performance.
Financial year Pro?t after tax Earnings per share Dividend
2003–2004 17% increase 34% increase 20% increase
2004–2005 7% increase 11% increase 100% increase
2005–2006
a
335% decrease 362% decrease 50% increase
2006–2007 76% increase 72% increase 11% increase
a
Due to ‘once off’ write down of the value of acquired capital assets.
J. Cushen/ Accounting, Organizations and Society 38 (2013) 314–331 319
and OPEX budgets had both been reduced by ten million
euro and were targeted for further reduction. Failure to
achieve targets reportedly made it more dif?cult for Avatar
Ireland to secure approval for future budgets and the dis-
cussions were likened to a battle. In this way, and as the
next section will further illustrate, budgets were a perfor-
mative mechanism through which market stories were
launched and lived out by lower levels via a series of per-
formative interventions.
Budgets as a ?nancialized performative mechanism
amongst directors
Controlling revenue generation via the capital expenditure
budget
Group sought to align Avatar Ireland to Group’s revenue
generation strategy in two ways. First, Group approved
subsidiary CAPEX on the basis of alignment with the strat-
egy. Secondly, Group passed down what they termed
‘mandated’ projects and targets of varying scale and conse-
quence; some of which were unforeseen. Subsidiaries were
expected to accept mandated products and services, and
associated targets, without question. The continuous
stream of seen and unforeseen mandates meant that pur-
suing revenue generation targets went hand in hand with
continuous change and work intensi?cation as one director
commented:
There is constant tension there. . .The CEO presents the
budget and gets agreement from Group and basically
that is the most important line of in?uence. The
CEO calls the shots here, however there’s lots of help
from Group by way of extra products and services or
ideas. That’s ?ne if it’s factored into the budget, then
we’ve seen it and that’s helpful so we embrace it. The
areas of dissidence are when something comes along
that wasn’t in our plan, that we didn’t have the
resources assigned to. . .Things do happen that Group
needs to do as a whole and you just have to grin
and bear it.
Table 2
Avatar Group market stories.
Financial year CAPEX OPEX
2003–2004 – New revenue streams via innovation of products and services – OPEX reduction
– ‘One Avatar’ economies of scale and centralization
2004–2005 – New revenue streams via innovation of products and services – OPEX reduction
– CAPEX reduction – Organization restructuring
– ‘One Avatar’
2005–2006 – New revenue streams via new Group function dedicated to
innovation of products and services
– OPEX reduction
– CAPEX reduction – Regional organizational restructuring
– ‘One Avatar’
– Redundancies
– Outsourcing
2006–2007 – New revenue streams via signi?cant shift in technological direction – Reduction of OPEX
– CAPEX reduction – Re-organization
– ‘One Avatar’
– Outsourcing
– Redundancies
Fig. 1. Avatar Group share price 2003–2007.
320 J. Cushen/ Accounting, Organizations and Society 38 (2013) 314–331
Some unforeseen mandates emanated from failed reve-
nue generation market stories. In such instances Group
pursued alternative ways to secure return on CAPEX in-
vested such as identifying new products and services that
could be launched from the technological infrastructure
developed for the failed market story. Other unforeseen
mandates were new ideas which contributed to the
achievement of a market story; these ideas came from
Group or other subsidiaries. The continuous change cre-
ated communication tensions as another director
commented:
We embarked on certain journeys and routes because
Group wanted us to. . .[. . .]. . .on a Group level they
decide that ‘‘No actually, this isn’t the right way’’. We
change direction, and have undermined the trust locally
because from one day to another you could ?nd your-
self in a situation standing in front of everybody saying
‘‘Yes this is de?nitely what we will do. This is so impor-
tant!’’ and then the next week you have to communi-
cate ‘‘No actually we’re not going to do that, so what I
said last week, forget about it’’.
Furthermore, the lack of consultation around Group
mandates meant they were often unsuitable and failed
in the local product market. The continuous stream of
mandates created work intensi?cation as they typically
had to be implemented within tight timelines and the
unforeseen mandates were generally not accompanied
by additional CAPEX. This often caused Avatar Ireland
to reduce certain phases of the local development pro-
cess, such as testing and functionality, which further
exacerbated the likelihood that the mandate would fail
in the Irish product market. Avatar Ireland appeared to
bear the brunt of failed mandates. For example, at the
end of the 2006–2007 ?nancial year Avatar Ireland nar-
rowly missed one of their ?nancial targets. This was
reportedly a consequence of a Group request that subse-
quently failed. Avatar Ireland underperformed by 1.7%
however a decelerating payout formula was used and
the employee bonus pool was reduced by 8.5%. A direc-
tor summarized the general perspective on Group man-
dates saying:
Group haven’t been very helpful by saying the direction
is de?nitely over there and it clearly hasn’t been
because in every [product] market the direction is sub-
tly different. There have been many changes in the Irish
market in the last while which have meant [mandates]
have been counter intuitive.
Despite the common failure of mandates Group reportedly
had little concern for the Irish product market as a senior
manager explained:
What [Group] say is ‘‘Well this isn’t just about [Ire-
land’s] numbers; this is about something that Avatar
can proclaim’’. . .The stock price went through a rather
dif?cult time and we could have been up for a hostile
takeover because the company was completely under-
valued. Then [Group] had announcements around our
technology strategy and how we’re moving into [new
product and services]. [Group] come out with
announcements in order to re-engage the analysts,
and get them to rate us higher.
In addition to implementing Group mandates Avatar Ire-
land was required to develop local revenue generation pro-
jects. Avatar Ireland directors and line managers regularly
claimed Groups desire to minimize subsidiary CAPEX cre-
ated a debilitating need to ‘prove’ return on local CAPEX
investment oftenimpedingtheir abilitytocompete inthe Ir-
ish product market. Avatar Ireland allocated CAPEXfor local
revenue generation projects via a ‘Corporate Governance’
process. Individuals hadtoapplyfor CAPEXvia an‘idea spec-
i?cation’ document which called for a range of ?nancial
analyses including the projected return on investment
(ROI) and the cross functional costs, resources and timelines
involved. Finance analysts reportedly scrutinizedthe neces-
sity of each step in the development process. The team of
directors collectively approved any project which cost more
than one million euro; projects costing less were reviewed
by a ‘Corporate Governance’ committee of two senior man-
agers from ?nance and one from each other department. A
senior manager on the committee explained how:
Unless we can see what the ROI is Corporate Gover-
nance won’t agree to that particular CAPEX. That’s
how we manage locally because it comes down from
very stringent budget discussions with Group as to
how much CAPEX we can have. . .A huge amount of it
comes down to ?nances because, at the end of the
day, our shareholders have to be happy.
Often propositions were revised and re-submitted sev-
eral times before CAPEX was granted and all individuals
going through the process claimed the need for extensive
ROI analysis paralyzed local decision-making. The other
set of market stories relating to cost cutting, were deliv-
ered largely through the budget for operational
expenditure.
Controlling cost cutting via the operational expenditure
budget
Avatar Ireland’s OPEX budget was targeted for on-going
reduction. OPEX reduction targets came largely from
Group via benchmarking consultants. Each department in
Avatar Ireland was allocated a ?nance ‘business partner’
who managed the department’s progress against budgets.
The Avatar business partner model was publicly celebrated
by the Chartered Institute of Management Accountants
who heralded it as a ‘best practice’ example of how
accountants can take an active role in leading all areas of
the business. In Avatar Ireland, line managers had little in-
put into their operating resources as described by a line
manager:
The information I’m getting is that the headcount is set
for this, the budget has been set for this, and that the
workload has been forecasted for the next couple of
years.
The Group led benchmarking process identi?ed head-
count reduction opportunities. In the year prior to the eth-
nography Avatar Ireland reduced OPEX largely via
J. Cushen/ Accounting, Organizations and Society 38 (2013) 314–331 321
redundancies, centralization and outsourcing. The central-
ization, outsourcing and numerous re-organizations were
Group led as one senior manager described:
We’re not in total control. We’re part of a global entity
so we can’t call all the shots. All of a sudden we have to
implement change that we don’t want to implement.
Approximately eighty individuals had been made
redundant, approximately sixty were being outsourced
and more were in scope for centralization in the coming
years. It was widely reported that there was little point
in questioning OPEX reduction interventions. A senior
manager who had made people redundant stated:
If I’d [failed to make the stated number of people redun-
dant] then the budget next year would be under a chal-
lenge . . .[. . .]. . .It was put across as a ‘fail to comply’ that
we have to get the number because next year our bud-
get for headcount is X and that’s minus these people-
. . .[. . .]. . .It was handed down as something we had to
do, it was done so quickly and then at the end of the
day the whole analysis came down and you couldn’t
see the workings behind the analysis, there was just a
[presentation] slide back, there was just a ‘here it is’.
There was considerable cynicism regarding the value of
the OPEX reduction interventions. Managers claimed that
given the nature of the product market and technology,
not to mention the unforeseen mandates, future work
was unpredictable and cost savings rarely materialized in
the manner predicted. For example, the redundancies were
justi?ed on the basis that workload in certain teams was
going to reduce however it was generally agreed that this
reduction had not happened. Certain roles were made
redundant only to be re-hired soon after. The continuation
of the work levels, the unforeseen Group mandates to de-
velop and launch new technologies and the reduction in
resources compounded the work intensi?cation. A senior
manager described work levels had:
gone way up to what it was last year and now those
people [left behind] are actually putting in longer day-
s. . .[. . .]. . .The work that [benchmarking consultants]
did that showed the work dropping off like this, the
timing they had on it was totally rubbish.
During the ethnography it was becoming apparent that
the outsourcing was proving more costly than expected.
This was because the teams that were outsourced were
still involved in developing new products and services
and the unknown aspects inherent in the work meant that
the quotes for work initially provided were inaccurate and
projects were running over time and budget. It was also
claimed that outsourcing was compounding work intensi-
?cation as it meant that instead of being able to talk with
colleagues individuals in Avatar had to con?rm whether
work fell within the scope of the outsourcing service agree-
ment and if not quotes for work had to be issued and ap-
proved all of which took additional effort and time.
Another senior manager described how outsourcing was
an important intervention but the cost saving predictions
were always dubious:
There would be things like the outsourcing; that were
promised to the [?nancial] market. We understand
those. [Group] promised all the synergies and every
year we have to do up ?gures and claim ‘‘OK, we made
this much’’ and ‘‘Does that equal what we told the mar-
ket?’’ Because obviously the worst thing the market can
be told is that you didn’t achieve your target. . .[Employ-
ees] understand the logic of it but they don’t believe it
because outsourcing is about Avatar sitting down and
going ‘‘OK, over the next ten years this is what we think
our development costs are going to be’’ and they show a
graph [going up]. Then the outsourcing company go
‘‘Well if you’re going to do all of that, we can do it for
this [less]’’. Your outsourcing savings is the gap in
between. But you haven’t actually done anything. . .I
understand that this is something [Group] have to do
for the market because everybody’s doing it.
Role insecurity and work intensi?cation was exacer-
bated by the continuous ‘re-organizations’. During the
6 month ethnography Avatar Ireland ‘re-organized’ the
structure three times meaning roles were assessed and
either ‘mapped’ onto the new structure or ‘unmapped’
meaning the role was redundant. Individuals in unmapped
roles either apply for a ‘mapped’ role, if available, or accept
voluntary redundancy. Work intensi?cation was further
exacerbated when, as part of a supply chain agreement,
Group introduced new internal technologies and equip-
ment with minimal training. Despite being in a strong
pro?t position OPEX reduction targets meant employee re-
lated costs were contained to the minimum of what was
required to compete in the external labour market. Salaries
were positioned at market median, below target bonuses
were paid, lack of formal career progression and training
was continually lamented. However Group’s stream of
constantly changing market stories meant there was little
point in attempting to assure employees of their future,
as another director stated:
Maybe we should put some simple statement out and
we’ll pretend it’s clear. . .but that would be telling the
kids it’ll be alright even though we’re driving in the dark
and the lights aren’t working and Daddy doesn’t exactly
know where he’s going.
Another director stated:
I think [employees] feel Avatar makes money, and they
don’t feel there’s much more than that. I don’t feel
there’s much more than that. I don’t think there’s a feel-
ing of ‘‘We’re on a grand mission’’. Any grand mission is
Group saying ‘‘We’ve to reduce costs and Group says
we’ve to go into [technology X]’’. That’s not visionary.
The directors’ acknowledged the tensions but continu-
ously accepted Group interventions.
Performative hegemony of ?nancialized interests amongst
directors
In Avatar, Group used a range of short and long term
?nancially indexed incentives to align Group and subsidi-
ary directors with the interests of investors. Group also
322 J. Cushen/ Accounting, Organizations and Society 38 (2013) 314–331
controlled the distribution of resources. While this might
partly explain directors acceptance of ?nancial targets it
says little about the day to day ‘micro-politics’ and ten-
sions that shape the relationship between MNC parents
and subsidiaries (Dörrenbächer & Geppert, 2006). All Ava-
tar Ireland directors professed to support Group strategy;
however Irish directors were far more likely to explain
how Group appointed expatriates on the Irish team of
directors meant local decision making was oriented in
Groups favour despite it regularly not making ?nancial
sense. During the ethnography, four of the seven members
of the Avatar Ireland team of directors were appointed to
Ireland from Group. The roles with key decision making
authority, namely the Chief Executive Of?cer (CEO) and
Chief Financial Of?cer (CFO) were ?lled by individuals ap-
pointed from Group. After a number of years, usually three
to four, expatriates typically went on to larger roles either
within Group or another subsidiary. The impact of an ex
expatriate Avatar Ireland CEO was described by an Irish
director:
For him it was always very important that we [imple-
mented Group mandates] even though commercially
it sometimes didn’t seem to make any sense because
you’d invest massive amounts into a product that some-
times didn’t work very well and there would be a lot of
people at the [Irish directors] table saying ‘‘This is a
heap of crap we’re never going to make any money on
this’’. But it would still be ‘‘Look you know we have to
do this’’. So we’d do it and we wouldn’t make any
money and it would be ‘‘We told you so’’. But we had
to be good corporate citizens and I think there would
have been more resistance if you didn’t have someone
like him there because he was not going to start being
exceptionally de?ant.
There was a widely held view that expatriates were not
concerned about the consequences of Group interventions
on lower levels. Indeed, Group appointed directors were
more likely to express irritation when questioned about
whether the pursuit of ?nancial targets had negative con-
sequences. They typically responded by discussing the
?nancial importance of such interventions and how there
was no alternative. The dominance of expatriate directors,
in numbers and status, in conjunction with the budgeting
process, meant Group narratives and interventions at-
tained performative hegemony within this key exchange
relationship. The consequences of this were lived out by
lower levels.
Budgets as a ?nancialized performative mechanism
within the knowledge labour process
The dual market stories relating to revenue generation
and cost cutting meant Avatar Ireland was working to
achieve two contrasting goals. Many roles contributed to
both but were weighted more in favour of one creating
the unof?cial categories of knowledge work which are
termed here as ’generative’ and ’operational’ work. Gener-
ative work is future oriented and involves generating
change such as creating a new product, service or process.
Employees undertaking generative work use their knowl-
edge to research, analyze, provide ideas, proposals, busi-
ness cases, project plans and undertake project work.
After new products, services or processes were developed
the integration and ongoing execution of them became
the domain of ‘operational’ knowledge work. Operational
work is oriented in the present and involves executing
the on-going processes and activities required for the
effective operation of the organization. Employees under-
taking operational work use their knowledge to complete
known, yet complex, work processes, achieving perfor-
mance standards and resolving complexities arising along
the way. Within Avatar the split between generative and
operational work appeared to be approximately 60:40 in
favour of generative work. The constant change meant that
both categories of work involved applying a body of theo-
retical (specialized and abstract) knowledge to continu-
ously innovate products and processes. Both categories
were made up of employees from a range of professions,
for example, there were accountants, engineers and mar-
keters on operational and generative teams; they were
equal in terms of explicit knowledge. Furthermore all la-
bour costs such as payroll and training for both categories
were funded by OPEX and neither category was shielded
from the cost reductions, reorganizations and the associ-
ated insecurity. A key difference between the categories
was that CAPEX was funded generative projects and this
had signi?cant consequences for the labour process.
Generative knowledge workers: ‘Loud and Proud’
The market story guiding generative work centered on
the return on CAPEX investment. Generative work related
primarily to generating new revenue and emerged from
Group mandates and locally generated projects that re-
?ected Group strategy. It was organized in projects which
were funded by CAPEX. Generative teams competed for
CAPEX, as one generative employee commented ‘There’s
a lot [of people] up there competing for the same cash from
the same pool’. In order to secure CAPEX, via the previously
described corporate governance process, employees con-
tributed to the development of the proposition business
case. Generative projects were developed via a ’release
management’ system and progress on projects was re-
ported in intervals known as ‘tollgates’ when expenditure
and progress was reviewed. This meant knowledge work-
ers from non-?nancial backgrounds, such as marketing
and engineering, were required to work with ?nancial ana-
lysts to translate their knowledge into convincing, strategi-
cally aligned, budgetary ‘return on investment’ business
cases. Generative work involved signi?cant cross func-
tional work in order to identify the organization wide
activities required to deliver a project. The unpredictability
inherent in doing something new meant no business case
or project was failsafe and generative teams sought to ?ll
the indeterminacy by shrouding their business cases, and
tollgate reports in un-contradicted, wholly optimistic nar-
ratives relating to return on investment. In order to create
these optimistic narratives generative employees actively
‘canvassed’ support for their proposition, to ‘sell’ it or get
‘buy in’ and this created a need to develop informal, subtle,
J. Cushen/ Accounting, Organizations and Society 38 (2013) 314–331 323
organization wide networks. There were two terms widely
used to denote the behaviours required to enhance a gen-
erative employee’s ability to garner the cross functional
support required to have their propositions funded, devel-
oped and to get interesting work on new projects. These
were ‘managing upwards’ and ‘pro?ling’. Managing up-
wards can be understood as the action an individual
undertakes to prioritize and express their work in a way
that demonstrates commitment to management objec-
tives. Managing upwards reportedly involved prioritizing
the interests of senior personnel above peers. It shaped
how work was expressed as it involved convincingly trans-
lating and communicating work so the strategic contribu-
tion was knowable to management as a generative
employee summarized:
It’s a lot of presenting. We do PowerPoint like you’ve
never seen in Avatar. It’s getting in front of people, it’s
talking, it’s sending emails to people, it’s driving the
project forward, it’s keeping the right people informed
of the progress on the project. You would do that
through presentations into the marketing management
team, the sales and customer management department,
or into technology or then into the directors or into the
relevant governance body.
The second behaviour of ‘pro?ling’ can be understood as
the action an individual undertakes to heighten the per-
ceived value of their work throughout the organization.
Whereas managing upwards shaped how work was prior-
itized and expressed, pro?ling was about being loud as a
generative employee described:
You get yourself out there, you get yourself known. You
get whatever you’re given delivered but you make sure
everybody knows about it, even in areas that they don’t
need to know, you make your name known.
The pace of change and tight resources meant that
employees had to prioritize work and having a pro?le
meant that others assumed the work was of value and
making them more willing to provide support. Extensive
communications were also required for pro?ling including
emailing, having coffees, holding and attending meetings.
Managing upwards and pro?ling involved being visible
and making noise in order to secure CAPEX, get through
tollgates, get interesting work on high pro?le projects.
Managers agreed that these behaviours were rampant
and, given the pace of change and re-organizations, they
were critical to securing one’s position in Avatar as one se-
nior manager described:
What [employees] de?nitely need to get on is the ability
to promote yourself and manage up. There is no doubt
about that, because this is such a big organization and
there’s so many people here that you have to make
yourself known and you have to make yourself heard,
and you have to involve yourself because a lot of people
get walked over and a lot of people get pushed aside or
taken for granted or advantage of.
Generative employees also reported that when genera-
tive projects failed to realize the desired levels of return on
investment they were in a vulnerable position in the
performance review process. Ultimately generative
employees could not be certain about what they would
be working on in the future and whether this work would
be valued. This, in addition to the insecurity created by the
re-organizations, meant the generative knowledge labour
process was rife with ambiguity and uncertainty. The pri-
mary method available to generative employees to secure
their role in the organization was to continuously orient
their efforts to and vocally support the organization strat-
egy. This was how Groups ?nancialized narratives became
performative within the generative labour process. How-
ever this same process also had counter-performative con-
sequences. The newness of generative work combined
with the wholly optimistic business cases and reluctance
to critique work meant potential problems often went ig-
nored causing projects to regularly go over budget, over
time and even fail. During one corporate governance meet-
ing the committee discussed how there was no way of tell-
ing what the current release would end up costing. Once a
generative project was launched the ongoing delivery and
maintenance of the new product, service or processes be-
came the responsibility of operational knowledge workers.
Operational knowledge workers: ‘Seen but not Heard’
Operational work was about business as usual and was
funded solely by OPEX; the market story guiding OPEX was
cost reduction. Operational teams were tasked with adher-
ing to pre-established service level agreements (SLAs)
whilst integrating a constant stream of new processes,
products and services into the existing infrastructure
amidst ever diminishing resources. Whereas there was an
acknowledged uncertainty regarding the outcome of gen-
erative work, benchmarking meant operational work was
deemed to be more achievable thereby requiring less input
from senior management. IT based work?ow management
systems were used to coordinate the ?ow of operational
work and to track progress against SLAs. The budget and
performance targets shaping operational work came lar-
gely from Group and the benchmarking process meaning
they were deemed a fait accompli. As operational targets
were deemed to be more knowable operational employees
were to be quiet and compliant, seen but not heard. The
fact that tacit knowledge, judgement and ?exibility were
required for operational targets to be met amidst continu-
ously changing organizational structures, technologies,
products, services, processes, minimal training and deplet-
ing resources appeared to go unrecognized. The anaemic
resources available to undertake operational work meant
that prioritizing and permitting backlogs of work were typ-
ical features of operational work. Many operational
employees and line managers felt overburdened and
compromised. The minimal training on new technologies
meant that teams began to develop specialists rather than
generalists and work got further delayed when trained
employees were unavailable as an operational line man-
ager stated ‘It’s just constantly ?at-out, I mean constantly
re-prioritizing work’.
Operational teams did not need to court favour to
secure CAPEX investment and continuously expressed
concern that the technical infrastructure was being
324 J. Cushen/ Accounting, Organizations and Society 38 (2013) 314–331
compromised as they were only completing priority work.
This created tensions between the two categories as gener-
ative teams, in their desire to create wholly optimistic
business cases, often ignored operational concerns about
propositions as described by an operational line manager:
[Generative teams] would end up forcing a lot down to
us giving us unrealistic launch dates and sort of saying
‘‘Well look, we’ve committed to this date, we have to
have this service launched by day X’’. We know our-
selves, as engineers I mean ‘‘look, what you’re asking
is, well it’s not impossible but you’re going to put in
a system that isn’t really suitable for what you
need’’. That has happened on so many
occasions. . .[. . .]. . .Momentum gets built up behind this
project long before operations ever gets sight of it and
then it’s just this avalanche coming down.
Celebratory corporate communications focused primar-
ily on generative work as the launch of a new technology
was a more positive story than celebrating how an opera-
tional team met their SLAs despite losing team members to
redundancy and without the training required to do their
job. Operational employees had no control over the work
that came their way however they were certain their work
was not suf?ciently valued. This, in addition to the insecu-
rity created by the re-organizations and focus on reducing
operational costs, meant the operational knowledge labour
process was rife with work intensi?cation and uncertainty.
The primary method available to operational employees to
enhance their role in the organization and prevent them
from being seen as a costly dif?cult burden that should
be centralized or outsourced was to suppress their miss-
givings about generative work and continuously meet ever
changing targets. This was howGroups ?nancialized narra-
tives became performative within the operational labour
process. However this same process also had counter-per-
formative consequences. The inability of operational work-
ers to voice their concerns diminished the long-term
viability of the organizations technical and procedural
infrastructure.
Direct and responsible accountability in the knowledge labour
process
The Avatar case demonstrates how ?nancial markets
can dominate the organization of knowledge work over
and above the product market creating a distinct, tension
?lled, ?nancialized knowledge labour process. Seminal la-
bour process writings by Friedman outline two managerial
strategies to managing the labour process namely ‘direct
control’ and ‘responsible autonomy’. Friedman’s work
highlighted the relationship between the control of pro-
duction work and an organization’s position in the product
market; before ?nancialization became the prevailing
mode of capital accumulation. A characteristic of knowl-
edge work is that it is more amenable to ‘results controls’
than ‘action controls’ (Bryer, 2006). What separated the
two categories of knowledge work in Avatar was the extent
to which the results were deemed programmable and
achievable and this in turn shaped how employees were
held ‘accountable’ (Bryer, 2006). Benchmarking meant cost
reduction was deemed a wholly achievable result as it in-
volved removing costs the benchmarking process identi-
?ed as inef?cient. The benchmarking process was
positioned by Group and directors, as an accurate depiction
of the level of resources required to achieve results and
operational workers were ‘directly accountable’ for these
results. This accountability existed despite mangers claim-
ing the methodology and application of benchmarking was
?awed. Generative work was about creating something
new, primarily to generate new revenue and achieve a po-
sitive ROI. However there was less certainty that genera-
tive work would achieve the desired ROI in the product
market. The lack of certainty meant generative workers
were held ‘responsibly accountable’ meaning they were
expected to continuously demonstrate they were responsi-
bly scrutinizing their work against ROI principles and
keeping to budget in the release management process. If
a generative project failed employees had to seek out alter-
native routes to achieve results. As generative results were
less programmable directors controlled the CAPEX in-
vested in generative work and monitored subsequent pro-
jects closely. This is not to say that the product market
de?ned generative work. Both categories of work served
the same product market and both were required to deli-
ver continuous change. It was the market story and subse-
quent calculative equipment that affected the extent to
which employees could be held accountable for their ac-
tions. Bryer argues that ’accounting can represent ‘the
‘totality’ of control of the labour process which ‘institution-
alises the subordination of labour’ by making labour
wholly accountable to capital’ (2006: 552). In Avatar mar-
ket stories played a dominant role in organizing work over
and above product markets and accounting practices ren-
dered employees either directly or responsibly accountable
for their contribution to these stories.
Financialization, competing narratives and the insecure,
angry knowledge worker
Competing narratives
Within Avatar optimistic narratives relating to ‘best
practice’ human resource management were competing
to exist alongside the ?nancialized narratives and subse-
quent performative interventions. Avatar Group heralded
the importance of ‘employee engagement’ in annual re-
ports and their aim was for engagement, as measured by
external consultants, to be in the top quartile in each sub-
sidiary. HR practices were described and celebrated in an-
nual reports as an indication that Avatar was a value
driven, globally aligned, committed organization. Group
Human Resources (HR) directed subsidiary people man-
agement practices. They won external awards for their em-
ployee communications which were described as
‘stunning’ and ‘inspiring’. Group people management prac-
tices featured in ‘best HR practice’ publications produced
by the Chartered Institute of Personnel and Development.
A ‘People Strategy’ claimed that Avatar was a meritocracy
and employees were in control of their destiny. The Avatar
Ireland HR practices ranked in the top 5% in the Irish ‘Great
J. Cushen/ Accounting, Organizations and Society 38 (2013) 314–331 325
Place to Work’ competition and benchmarking revealed
that the Avatar Ireland HR department was larger than
what was typical for an organization of their size and sec-
tor. Group developed an explicit global employer brand
which detailed the desired behavioural traits of employees
(Cushen, 2009). The employer brand also served as a com-
munications framework meaning all decisions were por-
trayed as being ‘on brand’ thus signifying decisions were
positive regardless of consequences as described by a se-
nior HR manager:
‘We ?nd it hard to say that things are not going as well
as we thought they would. . .We try and put a gloss on
it. We’d say ‘‘Well actually this is good news that we’re
going to [for example] outsource the IT department’’.
All directors adhered to the optimistic communication
conventions. The of?cial name of the redundancy program
was ‘Shaping our Future’ and it was referred to as an
achievement Avatar Ireland should be proud of, outsourc-
ing was portrayed as an opportunity for career develop-
ment and centralization was a positive development. The
optimistic narrative glossed over the negative conse-
quences of decisions which were referred to only as ‘chal-
lenges’; challenges were then portrayed as wholly positive,
valuable opportunities for personal growth. When talking
about the recent cost cutting and resulting job insecurity
one director stated ’I think a lot of people mistake what’s
gone on in the last 12 to 18 months. If you’re someone
who likes a challenge it’s a challenging business’.
The angry insecure knowledge worker
Far from being in the upper quartile, engagement in
Avatar Ireland had been lower than the national average
for a number of years. Some of the lowest scores related di-
rectly to the upheaval and insecurity driven by the market
stories. In terms of the constant change, 38% of employees
had a favourable opinion of how change was managed. In
terms of employment, ?nancial and role security, 34% felt
they had a future in Avatar, 25% had a favourable percep-
tion of their opportunity for promotion and 36% felt their
total reward package was fair when compared to similar
roles in other organizations. Despite being a high-technol-
ogy organization, only 21% of employees from the technol-
ogy department felt they had the training to do their job.
Employees expressed less trust and con?dence in Group
management and local directors than in lower levels of
management. However there was no ambiguity about per-
formance expectations and the highest positive survey re-
sponse related to the statement ‘I know the results
expected of me in my job’ to which 85% indicated that they
‘more than agreed’. The second highest was ‘I understand
why cost effectiveness is a key strategic objective for Ava-
tar Ireland’ to which 84% agreed. It was not possible to seg-
ment the employee survey by the categories of knowledge
work however in interviews employees from each category
offered similar perspectives. Generative workers were not
more secure in their job, nor were they in receipt of higher
remuneration. The higher status afforded to generative
work was undermined by employees’ perception that man-
aging upwards and pro?ling nurtured falseness, dishonesty
and lack of genuine social ties within the organization. All
but one interviewee condemned the need to pro?le and
manage upwards. Operational workers reported stronger
social ties within their own teams but resented their lack
of voice in the organization.
In interviews employees typically attributed the survey
results to the hegemonic force of ?nancial targets. Employ-
ees claimed top management were only concerned with, as
one employee stated ‘money, cost cutting, improving the
share price’. Far from having their subjectivity appropri-
ated by the HR narrative employees could rationally artic-
ulate how ?nancialized capitalism structurally prioritized
shareholder interests as was articulated by another
employee:
Let’s be honest, at the end of the day if a company’s
quoted on the stock exchange, it answers to sharehold-
ers. . .[. . .]. . .If the shareholders are feeding back to Ava-
tar [Group] . . .[. . .]. . .that their labour costs are too high
and that they need to reduce operational expenditure;
it’s only a matter of time and unfortunately that is the
nature of the beast. . .[. . .]. . .I must say the company
did not communicate it that way. It’s my take on the sit-
uation. I didn’t dream it up, I didn’t read it on Google
last night. My take is backed up with years of reading;
I have got [multiple degrees]. So these aren’t just words
I throwout, these are a belief system, ‘the shareholder is
king’ and they are.
In terms of market stories relating to revenue genera-
tion employees were exasperated by the continuous
change and hyping of generative propositions as the ‘next
big thing’, the work intensi?cation and the silence over
wastage of CAPEX when propositions failed. The cost cut-
ting meant employment insecurity was rife as employees
continually claimed that Group could outsource, centralize,
reduce headcount or even close the subsidiary at any mo-
ment. The continuous re-organizations resulted in ‘role
insecurity’ as re-organizations rendered employees’ role
and status in the organization unstable even where
employment security was not of?cially threatened. Re-
organizations were often implemented within tight time-
lines and without consultation meaning mistakes were
made and decisions were often reversed or changed
numerous times. Whole teams would vanish, only to reap-
pear later when it was brought to managements’ attention
and this created signi?cant resentment amongst employ-
ees and repeated claims that management were ‘making
it up as they went along’. Financial insecurity was also pre-
valent and employees expressed contempt for the median
levels of remuneration given the signi?cant pro?t levels
achieved in Avatar Ireland. The pervasive insecurity
clashed with the baselessly optimistic HR narrative to pro-
voke anger and vitriol. A handful of studies explore how
corporate cultural narratives can be met with employee
cynicism characterized as a distrust of motives (Fleming
& Spicer, 2003; McCabe, 2011). However the employee
sentiment in Avatar went beyond cynicism. The HR narra-
tive was interpreted as an indication that not only did
Group and directors afford employees little consideration
in decision making but they did not respect employees en-
ough to acknowledge any negative consequences. The
326 J. Cushen/ Accounting, Organizations and Society 38 (2013) 314–331
excessive optimism was considered a hypocritical affront
to their understanding of themselves as intelligent, edu-
cated professionals as another employee stated:
For professionals like me or relatively intelligent people
it really is insulting. . .[. . .]. . . I’ve been to college and
I’ve done all these things and I’ve quali?ed and there’s
people even more quali?ed than me and they’re suffer-
ing this.
The optimistic narrative was interpreted as a sign that
higher management considered employees to be ‘of below
average intelligence’ unable appreciate their material real-
ity of their employment:
They’re telling you one day how important you are to
them and the next day they’re making more redundant.
They’re telling you there’s not enough people to do the
job, and they’re agreeing that they’re trying to do some-
thing about it. Then they’re letting all these people go
and they’re not taking people on to replace them. It’s
just hypocrisy after hypocrisy; they don’t eat their
own dog food.
Communication events in Avatar Ireland were poorly
attended as they were considered infuriating, one employ-
ee described how when at one event the HR director
claimed the redundancies should be viewed as an achieve-
ment they wanted to shout out:
You are so out of touch. You’re actually meant to be in
charge of the people, not the pro?t or the margin or
whatever else, you’re actually meant to be in charge
of the actual human beings in the building and you’re
so out of touch.
Employees’ rejection of the human resource narrative
resembles Knights and Collinson’s (1987) account of how
?nancial narratives can discipline workers over and above
a human relations narrative. In Avatar the human resource
narrative was universally rejected by all knowledge work-
ers as it was considered a contemptuous insult to their in-
formed, educated ability to understand the model of
capitalism they were operating within and the subsequent
insecure ‘reality’ of their employment. Ultimately employ-
ees were insecure, angry and understood themselves as a
distinct, vulnerable organization stakeholder whose inter-
ests were marginalized. One employee neatly summarized
the general sentiment:
Employee: Avatar doesn’t have any heart and soul and
it’s not really somewhere I want to be long term.
Author: You say it doesn’t have any ‘heart and soul’;
what’s there in its place?
Employee: Capitalism. . .isn’t it everywhere.
Hegemonic struggles, counter-performativity and resistance
The Avatar case highlights the pertinence of Gramsican
dialectics whereby hegemony should not be equated with
ideological domination. Mumby (1997) calls for examina-
tion of the ‘hegemonic struggle’ which is ‘concerned with
the extent to which actors can discursively penetrate their
material conditions (Mumby, 1997: 350). The Avatar
employment experience was de?ned precisely by the ten-
sions arising from the hegemonic struggle. The performa-
tive hegemony of the ?nancialized narrative created the
pervasive insecurity as employees were painfully aware
of the commodi?ed, insecure status of their employment.
The second tension was caused by the clash of narratives
whereby the optimistic ?nancial and HR narratives were
so contradictory to employees’ lived experience of the per-
formative interventions it was considered a repellant af-
front to their intelligence.
However employees also claimed there was little point
in overtly resisting or critiquing the ?nancialized perfor-
mative interventions as targets were a fait accompli long
before they reached employees. The employee survey
was the primary avenue for capturing employee voice
and the survey revealed that 37% felt the information used
from previous employee surveys was used. However the
reluctance to openly critique Group mandates and locally
generated ideas also had counter-performative conse-
quences as it meant potential problems often went ignored
enhancing the likelihood that new products and services
would fail and diminishing the long-term viability of the
organizations infrastructure. The reluctance to critique
also allowed employees to distance themselves from man-
agerial objectives. Remaining quiet became a form of resis-
tance through work avoidance as some employees claimed
it was possible to ?nd solutions to problems but they felt
no inclination to put in the required effort, as one employ-
ee described:
What’s the point anyway?. . . It’s not my problem, once
my parts of it work I don’t really care if it’s a great suc-
cess or it falls ?at on its face.
Numerous projects went signi?cantly awry during the
course of the ethnography. Prior to the launch of these pro-
jects problems were reportedly predicted but were never
raised with directors. These projects were labelled, what
one director called, ‘plausible failures’ whereby it was dif-
?cult to apportion blame for a failure as the problem had
never been identi?ed. For employees, fake positivity was
both a form of work avoidance and a form of self-protec-
tion as one senior manager stated ‘It’s very hard to give
negative feedback to a positive person’.
Discussion and conclusion
Fig. 2 sets out the performative trajectory of ?nancial-
ization in Avatar. The Avatar case demonstrates how ?nan-
cialization elevates the role of accounting in organizations.
Financialization is a performative phenomenon and
accounting targets are is the starting point, the vehicle
and the destination.
Avatar top management were facing a dilemma that
typi?es ?nancialized capitalism namely ?nancial actors
sought levels of ?nancial returns beyond what the product
market could deliver. In the ?nancial year preceding the
ethnography Avatar Group generated approximately thirty
billion in revenue and ten billion in operating pro?t. None-
theless investor scepticism regarding Avatar’s ability to
grow revenue prompted share price volatility. This
J. Cushen/ Accounting, Organizations and Society 38 (2013) 314–331 327
prompted top management to provide deleteriously high
dividends and to script ever changing optimistic narratives
about future revenue growth and cost cutting. This paper
demonstrates that ?nancialization in organizations is de-
?ned by the performative interventions taken in an at-
tempt to make the organization become the model of
shareholder value creation management narratives claim
it to be; as Callon states ‘the world conveyed by the state-
ment is only realized after a long collective effort’ (2007:
313). Consequently, exploring how interventions are co-
ordinated, received, challenged and sustained yields in-
sights into how ?nancialization achieves performative
hegemony within organizations. In Avatar Ireland these
performative interventions included continuous Group
mandated changes to products and services, locally devel-
oped revenue generating initiatives, redundancies, out-
sourcing, centralization, re-organizations and on-going
reduction of operational expenditure.
The paper documents how budgeting practices served
as the performative mechanism through which this myriad
of performative interventions were transmitted and deliv-
ered by lower levels. In his explorations of how hegemonic
systems emerge Mumby states ‘the groups with the most
power will be those that are best able to integrate their
sectional claims into the very structuring of the organisa-
tion’ (1987: 116). The Avatar case identi?es how budgets
enable the structures and narratives which prioritize capi-
tal interests at the corporate governance level to be repli-
cated inside the organization. In Avatar subsidiary
directors were required to continuously justify and reduce
subsidiary expenditure, craft optimistic narratives and
achieve a myriad of performative interventions to secure
capital investment from Group. Line managers and
employees were required to deliver ever changing perfor-
mative interventions, cut costs and also craft optimistic
narratives to secure capital investment and work on pro-
jects. In Avatar a ‘continuous budgeting’ (Frow et al.,
2010) process was leveraged by management to the estab-
lish structures and calculative equipment that enabled
them to pass down and continually scrutinize progress
against ever changing performative interventions.
The paper also highlights how ?nancial narratives and
accounting practices can dominate the knowledge labour
process. All roles in Avatar contributed to the revenue gen-
erating and cost cutting market stories but were weighted
more in favour of one resulting in the categories of gener-
ative and operational knowledge work. The approach taken
to control work was based on the extent to which account-
ing practices rendered desired results knowable to man-
agement. The lack of certainty in generative work meant
employees were held ‘responsibly accountable’ required
to continuously demonstrate responsible minimization of
risk through ongoing scrutiny of their work against ROI
principles. Operational outcomes were deemed wholly
achievable and operational workers were held ‘directly
accountable’ for achieving operational targets. The
accounting practices also created behavioural scripts
whereby generative workers were required to loudly ‘man-
age upwards’ and ‘pro?le’ and operational workers were to
be quiet and compliant. Both behaviours prompted
• Corporate
Governance:
Provision of
deletriously high
returns.
• Narrative
Exchange:
• 'Selling' of
optimistic market
stories relating to
CAPEX and
revenue growth
and OPEX
reduction
Financialized
Model of
Capital
Accumulation
• Calculative
Equipment:
Budgeting
process and
associated
ROI and
benchmaking
calulations
• Calculative
Agents:
deploying
calculative
equipment
amidst
narrative of
optimism
Performative
Mechanisms
• Mandates
• Internal
corporate
governance
• Redundancies
• Outsourcing
• Centralization
• Re-
organizations
• Ongoing cost
reduction
Performative
Interventions
• Categories of
Knowledge
Work
• Voice
Supression
• Anger
• Distress
• Job, financial
and role
Insecurity
• Work
Intensification
Employment
Outcomes
Optimistic Narratives:
Facilitating voice suppression, a
reluctance to identify problems and
subsequent failure within the product
market
Cost Reduction:
Facilitating inadequate product
development and t failure within the
product market.
Sources of
Counter
Performativity
Fig. 2. Performative trajectory of ?nancialization in Avatar.
328 J. Cushen/ Accounting, Organizations and Society 38 (2013) 314–331
suppression of voice and a reluctance to highlight con-
cerns. In Avatar the performative interventions created
constant, not just change, but upheaval in the labour pro-
cess. The case demonstrates how embedding accounting
practices at the core of the labour process can compel
employees to comprehend change and their contribution
to it in terms of costs and ROI; thereby rendering ?nancial
measures omnipotent amidst continuous upheaval.
Finally the paper documents how performative inter-
ventions created the employment outcomes associated
with ?nancialization. By specifying how these outcomes
came about the Avatar case highlights that ?nancialization,
in addition to creating employment insecurity, ?nancial
insecurity and work intensi?cation, can also prompt role
insecurity, suppression of voice and enactment of falsely
optimistic behaviours. The continuous stream of performa-
tive interventions caused employees to feel anything could
happen to their role at a moment’s notice; the cumulative
effect of which was insecurity and distress. This distress
was exacerbated by the competing high road HR narrative
which was considered an affront to their informed ability
to discern the material ‘reality’ of their employment condi-
tions within ?nancialized capitalism. The clash of narra-
tives de?ned the employment experience creating a
perception that management ?rst did not value employees
and secondly considered employees to be naïve and even
stupid. Contrary to the knowledge based literature
employment in knowledge intensive organizations need
not be characterized by secure, empowering employment.
Within ?nancialization knowledge and knowledge work-
ers, as a source of organization success, are secondary to
the appeasement of ?nancial actors. Instead, the daily
mindset of knowledge workers labouring within a ?nan-
cialized organization can be one of anger and distress.
Nonetheless employees can participate in their subordina-
tion and accept the ?nancialized narratives and performa-
tive interventions if they interpret them as the primary
method of securing their role in a pervasively insecure
organization. This is how ?nancialization achieved perfor-
mative hegemony within Avatar.
Hegemony is never automatic and performative does
not mean prophetic. In Avatar the avoidance of open cri-
tique enabled the hegemony of ?nancialized interests but
also had counter-performative consequences as it meant
potential problems often went ignored enhancing the risk
of failure in the product market and diminishing the
long-term viability of the organizations infrastructure.
The reluctance to critique also allowed employees to dis-
tance themselves from managerial objectives and became
a form of resistance through work avoidance. Identifying
‘counter performative’ outcomes is a valuable step as it
draws attention to the unintended consequences of ?nan-
cialization and prompts consideration of the acceptability
of these consequences. The Avatar case demonstrates
how counter performativity and resistance can simulta-
neously weaken and perpetuate the performative hege-
mony of ?nancialized interests.
Avatar was one organization operating at a speci?c
point in time. However the manner in which the ?ndings
corroborate other literatures points to the wider relevance
of the case. More micro level studies, perhaps of singular
interventions, could shed additional light on the ways
?nancialization is transmitted, mediated, challenged and
sustained in workplaces.
As the Saramago quote posited at the outset ‘only the
best bosses can combine contrary feelings’. The performa-
tive hegemony of ?nancialized interests in Avatar resulted
in the marginalization of contrasting feelings and interests;
to the detriment of employees. Financialization can place
real limits on the extent to which organizations can com-
bine contrasting interests and be a ‘good boss’. In the ?nan-
cialized workplace investors dominate, accounting
narratives permeate and knowledge workers are not that
special after all.
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