Description
Drawing on instances of operational management in British and German firms, this paper seeks to contrast
different styles of implicating accounting in processes of accountability. It defmes styles of accountability
as a heuristic device to conceptualise the aliient of local organisational practice and rhetoric with
wider societal discourses. As those discourses and their local alignment diier in Britain and Ge-y, two
distinct styles of accountability can be observed:
Accounting, Orgnnizatfons and Society, Vol. 21, No. 213, pp. 139-173, 19%
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STYLES OF ACCOUNTABILITY*
THOMAS AHRENS
Uni versi ty of Soutbampton
Abstract
Drawing on instances of operational management in British and German firms, this paper seeks to contrast
different styles of implicating accounting in processes of accountability. It defmes styles of accountability
as a heuristic device to conceptualise the aliient of local organisational practice and rhetoric with
wider societal discourses. As those discourses and their local alignment diier in Britain and Ge-y, two
distinct styles of accountability can be observed: The British style privileges the reality of accounting
information in judging proposals for operational action. That style is conceptualised in a rcturn-risk-
framework. Within the German style of accountability, accounting information is seen to be less capable
of capturing the perceived reality of operational proposals. Processes of accountability rely more strongly
on separately conceptualised functional expertise Copyright 0 1996 Elsevier Science Ltd.
I suppose really the old role I had was commercial
manager [...I and would have been called finance man-
ager historically, except that it just changed the tide as
we were trying to push more commercial interest into
our supply side of the business. So, for example, Chris is
commercial manager for logistics and I’ve been com-
mercial manager for manufacturing. So to take away
some of the parameters of the pure financial technical
side and give it more of a feel for tbe modem 1990s
arm of brewi ng (emphasis added).
In the relationship between accounting and
accountability much more is at stake than com-
pliance with formalized targets and budgets. To
appreciate the role of accounting in processes
of accountability we need to attend to the
wider rationales, “the giving and demanding of
reasons for conduct” (Roberts & Scapens,
1985, p. 447), in relation to which accounting
may be mobilized. In the above quotation,
recorded at the head office of one of Britain’s
largest brewers, the newly appointed corporate
project manager identities the promotion of
commercial awareness as one of the finance
department’s main tasks. She can see the
demands on the management of brewing
operations in Britain in the 1990s changing
fundamentally. Managers of the “supply side”,
viz. logistics and manufacturing, as well as
finance managers, are seen to be in need of a
certain “feel” for a different set of questions
upon which to act. Their actions should
become answerable to “modernized” organ-
isational concerns. They should become
accountable to a novel conception of organ-
isational management. In the corporate project
manager’s mind, finance managers ought to
play an important role in the process of instil-
ling this “feel for the modem 1990s arm of
brewing”. They ought to move from a primary
concern with the technicalities of accounting
and finance reports towards a more educative
role. For instance, they should try to point
towards
[...I some of the commercial opportunities that come
from the customer base of the business down the supply
chain. And I guess, with having taken experience and
having been on the sales and marketing side of the
business for a while, it was an ideal opportunity [for me]
l The author is grateful to Anthony Hopwood, Chris Chapman, and the two anonymous reviewers for advice and comments.
139
140 T. AI-IIENS
to try and pull some of those, that knowledge base Into
manufacturing and give them an insight into market
changes, market forces and try and make them a bit
more... provocative in their thought process as to why
things had to change and change at a fast pace.
In this example, finance managers are char-
acterized by their capacity to place their tech-
nical accounting knowledge into a wider,
commercially defined context. As “commercial
managers” they are expected to fuse account-
ing information and commercial acumen in
ways which can give rise to new demands, but
also answer them. As processes of exchanging
reasons for conduct become more sensitive to
those new demands, novel processes of
accountability can be seen to emerge, holding a
specific role for finance personnel. Asked to
convey a “feel” for modern times, the relative
importance of their technical accounting skills
is seen to diminish. At the same time, their
understanding of the commercial environment
and the manner in which they communicate it
to operational management is seen to become
more important. The corporate project man-
ager suggests a scenario in which finance man-
agers cease to be mere operators of a given
technology. They are asked to fashion ways in
which accounting information can convey
newly relevant images of organisational perfor-
mance to which operational management must
answer. In this scenario, accounting becomes
implicated in the creation of a particular style
of accountability.
The notion of styles of accountability is
advanced in this paper as a heuristic device to
explicate some of the ways in which quite
wide and apparently unspecific notions of
‘ ‘good management’ ’ , to which organisational
members hold themselves and each other
accountable, can be implicated in the shaping
of very different roles for management accoun-
tants and their practice. The idea for this paper
evolved from programmatic statements, like
the one that introduced this paper, in which
management accountants classified their work
as part of wider trends or traditions. Those
management accountants were at least rhetori-
cally embedding their work in such wider
trends. Most made it clear that they regarded
adherence to the postulates of those trends and
traditions as essential for the quality of their
work and the quality of management in their
organisations more genetally. In the process of
studying British and German management
accounting departments,’ it soon became
apparent, however, that interlocutors in the
two countries saw themselves as following
different postulates of good management and
management accounting practice. Experienced
management accountants and managers from
the two countries seemed systematically to
advance different views on which courses of
action to take in particular situations, the role
of management accountants, and the meaning
of management accounting information. When
observed, they also acted in different ways,
indicating that there is a link between norma-
tive discourses and organisational action. This
paper attempts to convey to the reader the
kind of cross-national contrast in organisational
discourse and practice that emerged from the
research, by conceptualizing the case material
as expressions of specific styles of organisa-
tional accountability which prevailed in the
two countries. A detailed analysis of the socio
cultural differences which are implicated in
those Anglo-German contrasts is beyond the
scope of this paper.
The paper is structured as follows. A
theoretical section suggests that the notion of
styles of accountability is a useful heuristic
i To avoid confusion I will refer to finance or management accounting departments, and betriebswirtschaftlichen,
Kostem-echnungs-, Unternehmensplanungs- or Controlling-Abteilungen as “management accounting departments”
throughout the paper. With the exception of clerical support staff, those who work there, be they finance managers, business
accountants, betriebswirtschahliche Sachbearbeiter, Kostenrechner, Untemehmensplaner or Controller will be referred to
as “management accountants”. “Senior management accountant” denotes those who report to the board of directors,
Vorstand or Geschaftsleitung directly or via one level of hierarchy.
STYLFS OF ACCOUNTABILITY 141
device to conceptualize Anglo-German con-
trasts in management accounting practice. It
defines some key characteristics of style for the
purposes of this paper and identifies some of
the characteristics which the notion of style
shares with processes of accountability in gen-
eral. Following a methodological section on
research design, an empirical section contrasts
processes of accountability suggested by the
responses of British and German interlocutors
to a concrete problem of operational manage-
ment. The following section analyses British
and German styles of accountability with refer-
ence to the accounting literature on account-
ability. It explores the extent to which British
and German interlocutors in the previous
example regarded accounting information as
ephemeral image or hard reality to which they
held themselves and others accountable. Draw-
ing on more ethnographic material, the fmal
two sections further reline the conceptions,
first of the British, then, of the German style of
accountability by advancing two frameworks
characterizing management accounting practice
in the two countries.
“IT IS ALL A QUESTION OF STYLE [...I”*
Why style?
Why do we get the impression that the cor-
porate project manager’s introductory state-
ments can be interpreted as calling for a
specific style of accountabfl fty, a distlnguish-
able way of giving and demanding reasons for
conduct? Most obvious, perhaps, is the con-
temporariness of her language, for example,
when wishing to instill organisational members
with “a feel for the modern 1990s arm of
brewing”. The impression of fashionable
novelty is reinforced by the way in which she
draws on some of the Anglo-American man-
agement jargon of the late 1980s and early
1990s in sketching her vision of accountability.
Production and logistics departments become
the “supply side of the business” and form part
of the “supply chain” which delivers to the
“customer base”. To exploit “commercial
opportunities” one needs “insight into market
changes” and to respond with organisational
“change at a fast pace.” There is a general
sense that in times of modern competition,
operational management needs to be “pro
vocative in their thought process” to facilitate
flexible responses to the market. Having gained
increasing currency over the last couple of
years, the rhetoric of the logic of the supply
chain and the search for commercial oppor-
tunities in increasingly competitive markets is
likely to be familiar to the contemporary British
and North American reader.
Maybe even more important for giving the
impression of a style of accountabi l i ty than
the contemporariness of the corporate project
manager’s language is the broadness, if not
vagueness, of the concepts invoked. Her con-
cepts are familiar and recognizable as coherent,
but is it clear how they are to be interpreted in
the concrete organisational situation? Adopting
a particular discursive stance, she makes very
general, programmatic recommendations, which
arc taken from a contemporary public discussion
of management concepts, but, at that stage, she
does not go into much detail. Instead, she sug-
gests a broad programmatic order for the future
of her organisation’s processes of account-
ability. By way of its generality and recogniz-
ability, a certain style of public argument can be
seen to be mobilized in order to import into the
organisation a particular perspective on future
priorities. In that sense, what comes over as the
recommended style of accountability could be
said to go hand in hand with the articulation of
quite general, publicly recognized problems,
debates, or programmes, in the organisational
arena.
Al i gni ng the general wi th the speci j i c
The notion of style, as it is understood here,
is thus characterized by contemporariness and
z Quoted from Bourdieu (1992, p. 105) who discusses the inadequacies of both objectivistic and subjective interpretations
of the appropriate timing and choice of objects in gift exchange.
142 T. AHRENS
broad public appeal. It unites the more
impressionistic and evanescent characteristics
with a coherence and persistence that can
become centrally implicated in processes of
accountability and organisational action. It is
likely that through the corporate project man-
ager’s articulation of publicly available dis-
course certain forms of conceptualizing
organisational practice are encouraged; a
desired shape of organisational action is made
thinkable. In this case, that articulated dis-
course revolved around demands for commer-
cialization through intensified involvement by
management accountants in operational man-
agement.
This is not to say that certain general
“schemes” can just be “implemented” in
organisations. As a case in point, in the corpo-
rate project manager’s brewing division the
general rhetoric of value chains, advocating
amongst other things a focus on value-generat-
ing activities to create “leaner” organisations,
was invoked in a recent “business process re-
engineering” programme. The programme was
introduced and organisational members were
held accountable for its progress, but, accord-
ing to a senior management accountant, it did
not proceed easily.
[ . ..I we were trying to rethink the whole business in
process terms. [...I That’s the theory, but it won’t be as
pure as that. The thinking we’re trying to get into is, if
you were starting this business again and you could start
on a clean slate. How would you do it? What systems
would you have and what ways of working would you
have? [...I The problem of course is that you start here
[he knocks on the table and laughs] and you’ve got to
get to there. You can’t just start there. And that is pre-
cisely the sort of problem we’re having now, we’re try-
ing to implement more and more of this stuff. [...I It is
taking a consultant’s methodology and trying to make it
happen. And inevitably what we’re finding, the sort of,
sort of desk top reviews that you’re doing with the help
of the consultants are very easy. Making [x] thousand
people in the business do things diierently, use new
systems, behave differently, change the culture as much
as anything, as well as the procedures and stuff... That’s
extremely difficult.
Still, “business process reengineering” had an
impact on the management style and the style
of accountability of this organisation, all of
whose employees participated in day-long
“change workshops”. In order to bring about
change in concrete operational procedures and
established ways of giving and demanding
reasons for conduct, however, general man-
agerial and consulting concepts needed to be
aligned with detailed knowledge of operational
practice. But also general accounting infor-
mation, such as the expected aggregated cost
savings, needed to be contextualized in a series
of alignments to have any effects. Significantly,
before those alignments took place their out-
comes, their effects on practice were not
known. Organisational change was brought
about through search procedures (Lindblom,
1959) in which programmatic calIs for an
improved “bottom line” were aligned in an
interplay with what was locally seen to be
practically feasible. This alignment was guided
by the organisation’s style of accountability
and, at the same time, modified it. In that sense,
the organisation’s style of accountability was
enacted (Weick, 1979) through the ahgnment.
In this example, the development of styles of
accountability could be charted as a cyclical set
of processes in which public discourses
became aligned with organisational processes
of accountability, facilitating certain courses of
organisational action, encountering resistance
by types of local operational knowledge, inter-
mingling with them, and eventually repro-
ducing structures of accountability, which
could be newly aligned with different social
discourses. To think of the ways in which
organisational members give and demand
reasons for conduct at any one time as being
recognizable by their style, directs the attention
to their temporal coherence in flux.
I ndetermi nacy and concrete effects
I have argued that the notion of styles of
accountability can capture some of the ways in
which contemporary public discourses can
become aligned with the rhetoric and practice
of specific organisations. The notion thus pro-
mises to give an insight into the intricate ways
in which such alignments can combine con-
Crete effects on practice with generality and
inconclusiveness. In the accounting literature,
the complexity of the undertaking is, for exam-
ple, demonstrated by Miller & O’Leary (1994)
who analyse the potential of a particular public
Their central recommendation is that the activities
whereby members produce and manage settings of
organized everyday a&h-s are identical with members’
procedures for making those settings “account-able”.
The “reflexive,” or “lncamate” character of accounting
practices and accounts makes up the crux of that
rhetoric in the United States to become impli- recommendation @, 1).
cated in processes of organlsational change at
Caterpillar, Inc. They report some of the orga- The realization that members act reflexively
nisational effects of public discourses around leads Garfmkel to postulate an identity of social
empowerment and the politics of the product, action and practices of accountability. Ordinary
in the context of the widely perceived short- everyday action, for instance, is recognized as
comings of the U.S. manufacturing industry dur- such because its performance follows shared
ing the 1980s. Even whilst focusing just on rules which signify it as normal. This happens,
Caterpillar, admittedly a very large and complex depending on the context, to an extent and in a
organisation, the authors repeatedly emphasize manner which allows others to recognize that
that the developments which they chart were signification. The accounting for action can be
by no means inevitable. Their outcomes are seen to reside in that action. In the light of this
regarded as fragile and temporary. The effects idea, the aforementioned cyclical nature of
of discourse are conceived of as indeterminate. processes of accountability would appear as
Some of the arguments of the public debate something to be expected rather than as an
on which Miller & O’Leary report were doubt- obstacle to analysis. If accounting practices
lessly also mobilized in other organisations. But “ [ . ..I are carried on under the auspices of, and
it would be safe to say that they were not are made to happen as events in, the same
implicated in producing the exact same out- ordinary affairs that in organizing they describe
comes. What one might be able to say is that (i bi d.) [. . .] ’ ’ , they would necessarily intermingle
in those other organlsations a similar style of with the wider rationalities of general concepts
internally mobilizing external arguments could and local operational knowledge. Indeed, from
have been observed. In that sense, style could be Garfinkel’s ethnomethodological perspective,
thought of as a mode of engagement between accountability would appear as a (feature of 3>
rhetoric and practice, concept and action social process with precisely the function to
without, however, determining any particular align wider rationalities and local operational
engagement’s effects on action. To this extent knowledge with social action.
it suggests the potential of general rhetoric to That functionality of processes of account-
penetrate organisational processes of account- ability would have to be regarded as emerging
ability, thereby facilitating real organisational out of social action. It would be judged in the
change. light of the particular type of rationality which
unites members in the pursuit of their common
Style and accountabi l i ty practice.
There is also a sociological reason for the use
of style as a category ln this context. It is related
to the question of how accountability can
generally be understood to function in the
Members’ accounts are reflexively and essentially tied for
their rational features to the sociahy organized occasions
of their use for they areJeatires of the socially organ-
ized occasions of their use (p. 4, emphasis in original).
organisational context. Garfinkel (1984) sug-
gests that accountability is a constitutive feature Defining accountability as a reflexive com-
of social action. He demonstrates this by way of ponent of ongoing social action, the rationality
a series of studies. - of which is reproduced in that action, casts a
3 Depending on how strongly one wants to emphasize the identity of social action and accountability.
STYLFS OF ACCOUNTABILITY
I43
particular light on how members can have
a sense of common understanding. Shared
meaning would emerge out of organised
action.
‘Shared agreement” refers to various social methods
for accomplishing the members’ recognition that
something was saiakaccording-to-a-rule and not the
demonstrable matching of substantive matters. The
appropriate image of a common understanding is
tberefwe an operation ratber than a common inter-
section of overlapping of sets (p. 30, emphasis in
original).
Following Garfinkel, common understanding
is reproduced in accountable acts, not by com-
paring lists of characteristics. Without operation
or action there can be no shared understand-
ing. Meaning cannot be understood as static,
only as dynamic. Therefore, to act socially,
members have to be sensitive to the way
in which action unfolds. Social meaning can,
in that sense, not simply be attached to
action from a distance (which is not to say that
distant forces cannot play roles in the local
unfolding of meaning). Rather, as action
becomes meaningful, it creates and reproduces
meaning.4
The conceptual and temporal fragility of
Garfinkel’s social rules of recognition whose
operation lies at the heart of accountability
makes one wonder whether they should be
called rules at all. They are characterized by
indeterminacy and flexibility for contingency.
Rosaldo (1993) finds a different name for
similar qualities of social interaction.
[...I ndetermlnacy shows the emergence of a cul-
turally valued quality of human relations where one can
follow impulses, change directions, and coordinate with
other people. [...I it permits people to develop timing,
coordination, and a knack for responding to con-
tingencies. These qualities constitute social grace [...I
@. 112, emphasis added),
which
[...I consists of one’s responsiveness to whims, desires,
and contingencies, whether these emanate from one’s
144 T. AHRENS
own heart or from those of one’s partners in action
(p. 114).
Again, the capacity for social understanding
is seen to emerge from the empathy with
which individuals can sense the unfolding of
social action and find creative ways of con-
tributing to its continued unfolding. If social
action is to be recognized as such, its account-
ing practices need to be reflexive. From the
perspective of the bystander, social actors need
to act as if they were accountable. They will do
so automatically, often unconsciously, if they
function socially by the standards of their peers
(cf. Czarniawska-Joerges, 1992, p. 117). Whilst
Garfinkel postulates the complex operation of
complex cognitive rules as the condition of
their accountability, Rosaldo prefers the term
“social grace” to express very similar capacities
of social actors to be accountable in a reflexive
manner.
Not entirely unlike “style”, the concept of
“grace” is meant to unite knowledge of general
rules, and conceptual structures and hier-
archies with a sense of contingency, temporary
expediency, and a recognition of individuals’
desires. Both concepts address questions of
structure and agency. Equally, both Garfinkel
and Rosaldo recognize the role of structure and
the role of agents’ strategies for the enactment
(Weick, 1979) of structures of accountability.
Their ideas of reflexiveness go beyond mech-
anical reaction. For Rosaldo, graceful action
includes the ability to judge contingency and
listen to one’s heart in considering one’s
position. Garfinkel (1984) accuses those who
portray the users of language “as either culture
bound or need compelled” (p. 71) of setting
up “cultural dopes” or “psychological dopes”
(p. 68) “by neglecting the judgemental work of
the user” (p. 71) of culturally available sym-
bols. To think of accountability in terms of its
style could thus support the articulation of the
kind of reflexiveness which is inherent in pro-
cesses of accountability and which is brought
to bear on social action through those pro-
’ “How can I know what I think until I see what I do?” (Weick, 1979, p. 134, assembled according to Weick’s Fig. 5.4)
STYLES OF ACCOUNTABILITY 145
cesses. The notion of style can contribute in
this way if it maintains the analytical tension
between the specific and the general, the con-
crete and the indeterminate. Styles of account-
abfl fty ai ms to develop an analysis in which the
users of management accounting, without
appearing simplistic, can be understood to
operate within their specific logic-in-use.
ANGLO-GERMAN CONTRASTS IN STYLES
OF ACCOUNTABILITY
De&ki ng nati onal contrast
Turning to Anglo-German contrasts in man-
agement accounting practice, the task becomes
to investigate patterns of organisational action
and reflexive accounts of such action with a
view to explicating the role and significance of
management accounting. In so far as the
reflexiveness of accounts is shared in either
the British or the German organisations studied,
the attempt will be made to characterize its
style. The presumption that organisations in
one country share such styles which give rise to
similar action and accounts of action is sup
ported by the idea that “ [...I the social, or the
environment, as it were, passes through
accounting [...I” (Burchell et al , 1985, p. 385).
This idea would support the possibility of
national patterns of organlsational processes of
accountability, since those processes, which
fuse popular discourses, general management
concepts, and perceptions of the valid&y and
reality of accounting with local operational
knowledge, unfold in many organlsations and
public arenas simultaneously. Therefore, firms
within the same national culture should at
least exhibit some similarities between their
individual organisational styles of account-
ability. Moreover, since “ [ . ..I accounting rami-
fies, extends and shapes the social” (ibid),
there exists the possibility that organisational
processes of accountability also produce
contributions to unfolding public discourses,
thus making accounting part of the (national)
context in which it operates. Whereas the
previous section explained styles of account-
ability as modes of aligning public discourse
with local rhetoric and practice in single
organisations, the focus now shifts to a group
of organisations within one country. In the
remainder of the paper, the emphasis will
be on the characteristics that they might
share as a result of those processes of align-
ment.
The question of accountability as it is under-
stood in this paper has so far not been investi-
gated in comparative management studies of
different countries. However, researchers have
compared managers’ values and patterns of
thought. Hofstede’s “programmes of the mind”
(1980) are probably the most well-known con-
cept in the management literature in this
respect. In the field of international compara-
tive work in accounting, particularly in the area
of management control and financial measures,
Hofstede is one of the most inlluential non-
accounting scholars (e.g. Chow et aZ., 1994,
1995; Fechner & Kilgore, 1994; Harrison, 1992,
1993; O’Connor, 1995; Perera, 1989; Pratt et
al , 1993; Soeters & Schreuder, 1988; Ueno &
Wu, 1993). Hofstede’s work offers the promise
to measure national culture along four vari-
ables, but it is not obvious to what extent those
four variables can describe complex national
cultures (e.g. Sorge & Warner, 1986). Whilst
most of the accounting researchers referred to
above presume that Hofstede’s work is useful
for accounting studies, some doubt that it is
relevant to regimes of organisational control
(Ueno & Wu, 1993) and others criticize the
ways in which Hofstede’s variables have often
been related to aspects of accounting by some
researchers (Fechner & Kilgore, 1994). In a
similar vein, Chow et al . (1994) conclude their
study:
Many of the observed [national] differences, however,
were inconsistent with predictions based on Hofstede’s
(1980, 1991) model. As such, the fimlings of this study
suggest that the relationship between management
control and national culture is complex and probably
influenced by many variables (p. 397).
One important obstacle in employing
Hofstede’s categories in accounting research
146 T. AHRENS
lies in the underlying conceptualization of
culture. Hofstede (1980) defines culture as the
“collective programming of the mind” and
bases the empirical work on questionnaire
data. A perspective which so decidedly privi-
leges the ideal aspects of culture over its mate-
rial and practical ones (cf. Czamiawska-Joerges,
1992) may prove problematic for theorizing in
a field as enmeshed in practice as accounting.
This paper therefore explores a route to
understanding accounting in different coun-
tries which puts more emphasis on its organi-
sational practice. In that, it goes beyond an
inquiry into “the native’s point of view” on the
significance of accounting information in Brit-
ain and Germany, as it might be consciously
expressed in answers on a questionnaire.
Rather, this study needs to consider that in
organisational practice the seemingly clearly
articulated point of view is tied together with,
and often largely submerged in, action. In order
to make that action accessible to analysis, it
needs to be observed and followed up in dis-
cussions with organisational members.
A contrast of the outcomes of potentially dif-
ferent processes of accountability in organisations
requires some attention to the tacit dimension
of organisation. Since the relationship between
general concepts of ofganisational management,
local operational knowledge, and accounting is
enacted with real organisational consequences,
and, in this process, management often need to
discharge accountability for different conflict-
ing concerns simultaneously, the correspond-
ing structures of accountability are tacitly
implicated in their action. Those structures of
accountability, which have been learned in
action, can only be verbalized with great effort.
They have been absorbed and retained so as
tv allow quick exercise of socially adequate
complex judgement (cf. Bloch, 1991). An
understanding of organisational members’ con-
ceptualizations of accounting and other forms
of organisational representation and stylization
therefore requires us to consider the wider
context of action in which multiple concerns
are answered implicitly and simultaneously. We
are looking at contexts in which experienced
managers act in accepted ways. Whilst in
action, they do not constantly question their
own conceptualization of accounting infor-
mation (Brunsson, 1982). To research the
processes of accountability in which experi-
enced organisational members become routi-
nely involved requires an exploration of the
ways in which that routine is constituted. For
this task
[...I ethnogtaphy is a particularly valuable method of
research because it problematicizes the ways that
individuals and groups constitute and interpret organ-
izations and society on a daily interactional basis
(Schwartzman, 1993, p. 3).
Through observation and, in a differently
formalized way, interviews, researchers can
pursue their particular routes of access to
the complexity of members’ categories, the
kinds of reflexiveness inherent in their
processes of accountability, and the ways in
which accounting can become implicated in
them. Ethnographic methods are necessary to
obtain data of sufficient richness to address
those questions, notwithstanding the critical
and very useful debates around ethnography’s
validity and its status as a method within the
social sciences more generally (e.g. Clifford &
Marcus, 1986; Hammersley, 1992; Silverman,
1993).
Research design
To elicit Anglo-German contrast, manage-
ment accountants and operational managers in
two groups of firms were interviewed and
observed in the two countries (cf. Appendix A).
The first group consisted of one large British
and two large German manufacturing com-
panies with large production facilities and
other operations in the other country. At the
times of the interviews, they had acquired their
foreign operation from indigenous ownership
less than five years ago. The management
accountants interviewed in those organisations
were particularly aware of Anglo-German con-
tests. The second group of organisations were
selected following the logic of the method of
comparing matched pairs of firms (Maurice,
STYLES OF ACCOUNTABILJTY 147
1979; Serge et al., 1983). The underlying idea is
to study Iirms with very similar contingent
variables such as industry, size, and technology.
Looking at a number of firms in Britain and
Germany, similarities between practice in one
country can be found and contrasted with
practice in the other country. Brewing was
identified as a suitable industry for a number of
reasons: production technology is relatively
sjmple and there is little international variation
in production methods in principle.5 In both
Germany and Britain there is little foreign
ownership of brewers. Beer is a national drink;
in terms of production and consumption
volumes the two countries occupy ranks one
and two in Europe with a large distance to
Spain as third. Annual per capita consumption
has traditionally been highest in Germany (143
litres in 1991). The U.K. ranked seventh world-
wide with 106 litres in 1991 (Beatt, 1994, p. 11).
Both markets are mature with stagnating or
slightly falling annual sales volumes. The dis-
tribution channels are similar, but sales to
licensed premises are relatively more important
in Britain. For a comparative study of the inter-
pretations and mobilizations of accounting
information it is also desirable to match market
conditions. One would intuitively expect that
under conditions of greater perceived com-
petitive pressure accounting information might
receive more attention. It would appear that
the British and German brewers studied oper-
ated in markets with similarly high intensity of
competition. Firstly, the focus of the research
was on the commercially aware sector of the
industry and, secondly, both markets were
affected by extraordinary events which were
perceived to have intensified competition.
By focusing on the commercially aware
sector of the industry the research excluded the
effects of a unique feature of the German beer
market, the legendary 1290 separate German
breweries (Britain has 95). 746 of them, often
with tiny production volumes and retail areas,
are located in Bavaria alone (Beat& pp. 7 & 13).
Instead, the study focused on large British and
German brewers of similar size and complexity.
Observations were made in two of those in
each country. Interviews were made in seven of
the eight largest German groups and three of
the six largest groups in Britain. The commer-
cial awareness of the large brewers has, over
the last few years, been mainly reflected in
increased efforts at branding in both countries.
In Britain, this was marked by the arrival of
designer beers, brands without a past or from
abroad, which were established with consider-
able marketing expenditure. Commercial aware-
ness was also indicated by the considerable
advertising efforts to reverse the falling trend in
stout consumption by Guinness and Whitbread
for their stout brand Murphy’s (Beat& 1994,
pp. 37ft). In Germany, commercial awareness
has mainly been demonstrated by the rise of
medium-sized family-owned “mono-brewers”
with essentially one brand. They were the
German equivalent of premium designer beer,
but with a past. Between 1983 and 1993, the
four most successful brands in terms of sales
volume growth all belonged to family-owned
mono-brewers: Warsteiner (+187%), Kromba-
cher (+2O9%), Bitburger (+85%), and Beck’s
(+69%) (Kelch, 1995). The trend towards pre-
mium beer brands in both countries is currently
persisting @lintel, January 1993; Handelblatt,
30 June 1995; Rundschau fiir den Lebens-
mittelhandel, April 1995; various personal
communications).
The two extraordinary events which are per-
ceived to have intensified competition in the
%Itat said, different methods of brewing, and instances in which breweries changed those methods, were encountered.
However, at no time was it suggested that such changes could affect the technical nature of accounting practice or the
organisational role of management accountants in any way.
Because of market chamcteristics, there are different mixes in packaging types which has implications for the most
labour intensive part of production, filling. Germany is characterised by a greater share of returnable bottles. fn Britain,
aluminium or steel cans as well as kegs and casks have relatively higher shares. Filling lines are therefore designed differently.
Accounting practice seems unaffected by this and by the fact that the markets arc characteriscd by ditferent types of beer.
148 T. AHBENS
two brewing markets are the Beer Order in
Britain and unification in Germany.” Not sur-
prisingly under conditions of intensified com-
petition the market shares of the largest
brewers were in the process of growing at the
time of the research (cf. Appendix B). Although
market structures in Britain and Germany were
still unique worldwide, in that brewing was not
concentrated in the hands of just two or three
brewing groups’ (Beatt, 1994, p. 13), the con-
centration of market share amongst the largest
brewers in Britain was considerably larger than
in Germany. The largest six British brewers
shared 91% of sales volume, compared to 36%
in Germany. Interestingly, although one might
take this as an indication of relatively more
intensive competition in Germany, this study
suggests that German brewing managers gen-
erally relied to a lesser extent on accounting
information. Higher concentration in Britain
does therefore not seem to prejudice the
results of this paper. Also, due to the greater
overall size of the German beer market, brewers
with quite different market shares but still
similar absolute production volumes could be
studied.
The research focused on management
accounting departments. Formal interviews
with management accountants, but also opera-
tional managers, were tape recorded and tran-
scribed. Less formal interviews during field
visits were either tape recorded or notes were
taken. In meetings, notes were taken with an
emphasis on recording direct speech. Notes of
less formal conversations during field visits, for
example, in corridors, tea kitchens, cars, ware-
houses, or, very rarely, public houses, were
written as soon as the circumstances allowed.
So were notes of observations.
In order to investigate the possibility of con-
trasting styles of accountability it was useful to
confront interlocutors in one country with
instances of management action from the other
country. For example, by presenting German
management accountants with a British brewer’s
decision to not repair a leaking warehouse roof,
attempts could be elicited from the Germans to
understand the British decision as meaningful,
everyday management (accounting) practice.
The example of the leaking warehouse roof
serves to illustrate Anglo-German contrasts
rooted in practice. It both brings out contra-
dictory sentiments and logic-in-use in the two
countries, and conlirms Garfmkel’s (1984)
point that members cannot separate social
action from processes of accountability.
A LEAKING ROOF AS IMAGE AND REALITY
The Roof is leaking
We just cannotbudget everything we would like to budget
for. [...I If efficiency has gotten so bad that you can’t
carry on, you spend the money on repair and main-
tenance. [...I My biggest concern is dilapidation.
Machinery is still looked after relatively well, but
6 In Britain this is due to the Beer Order under which ceilings have been imposed on the maximum numbers of public
houses which the large brewers may own. Traditionally, they were vertically integrated businesses which controlled the
entire production and retailing process As a consequence of the legal changes, retail organisations could establish them-
selves which now control the beer purchases of large numbers of licensed premises. In a buyers market for beer, their
successful demands for volume discounts have put the brewers’ margins under considerable pressure.
In the German beer market, two developments particularly added to competitive pressure. Production capacity of West
German brewers had been further increased following additional demand for their products by East Germans after the
unification. Currently, demand in the Eastern parts of Germany is again concentrating on products from local breweries
which have in the meantime been modernized. The other development is the rise of a handful of national brands. Whereas
nationally successful brewers expand their production capacity and gain further economies of scale, many of those brewers
which followed traditional, regional marketing concepts see themselves increasingly forced to utilize capacities by producing
own-brand supermarket labels, often at prices below their estimated full costs.
’ British and Ge- brewers were not amongst the worlds 15 largest brewing groups (Beatt, 1994, p. 12). However, the
recent takeover of Courage by Scottish and Newcastle may be an indication of a more fundamental change in the British
market.
buildings aren’t... For instance, I got a number of quotes When we budget, we know it’s gonna be cut. First my
to have the warehouse roof repaired. It was going to boss cuts something out, then the brewery director. But
cost f35,000s but they said no. So we have to live with he’s under pressure from [the general manager produc-
it for another year. tion], and he’s got tough targets, too. It successively
translates down. [...I Because if we get higher budgets,
beer is more expensive [i.e. the transfer price is higher].
One and a half years after this conversation the
situation at one of Britain’s largest breweries is
unchanged. The maintenance manager is still Whereas he used to be held accountable for the
concerned about his organisation’s maln- physical upkeep of the brewery, ensuring the
tenance policy and particularly the upkeep of functioning of its productive capacities, he now
buikiings. He explains the lack of funds with sees himself as having become part of new
what he regards as internal consequences of webs of accountability. The new set of reasons
external pressures. “It’s more market driven for conduct includes, in his mind, a greater
now [ . ..I and of course [we do] statutory obli- emphasis on the task of working towards the
gations, health and safety, pollution...” Accord- lowest possible transfer price for beer, thereby
ing to him, those external pressures are related enabling the brewer’s sales units to price com-
to changes in the way in which budgets are petitively. As price competition is seen to begin
prepared. to dominate organlsational reasons for conduct, he
finds it more difficult to argue for maintenance
Three or four years ago we submitted a budget that we
believed in. [...I Iast time I gave my best estimate and
expenditure on the basis of operational reasons
the next day [the brewery director] called me in his
alone. Operational reasons seem not substan-
office. He was fuming with anger, red face. He thought
tive enough to necessitate action. Price compe-
we were hiding something in there [...I [and] told me to
tition, on the other hand, to which accounting
cut the budget. can link his expense budgets through the fic-
tion of an internal shadow market, appears as
Clearly, in this example maintenance and par- quite substantive. It becomes central to the
ticularly building maintenance are not treated new processes of accountability of which the
as areas of prime organisational concern. maintenance budget has become part.
Nobody holds the maintenance manager As it becomes more important to “meet the
accountable for failing to repair the leaking numbers” (Munro, 1994, p. 147) than worry
roof in a large, busy warehouse where filled about the upkeep of buildings, the significance
kegs and shrink-wrapped cases of canned beer of budgeting changes. “Budgeting really is
are stored. The maintenance manager’s own sharing the available maintenance money. We
efforts to become accountable, to muster just hope we meet the budget as the year goes
organisational resources for the repair are along.” Financial discipline, that is to say, the
unsuccessful. The consequences of not repair- pressure to reduce budgets, takes precedence
ing the roof seem to be regarded as relatively over attempts to model the planned resource
insubstantial. consumption in accordance with what one
According to the maintenance manager the finds operationally appropriate.
impossibility to become accountable for the
roof repair is related to a general shift within The British view
the organisational structures of accountability. Senior financial management of that brewer
He fmds that, mainly due to the newly per- reinforced this impression. In reply to my sur-
ceived market pressures, the preparation of the prise at brewery personnel’s acceptance of the
maintenance budget has become part of novel financially motivated argument against the roof
structures. repair, a senior management accountant made a
STYLES OF ACCOUNTABILITY 149
s Tbroughout this paper numbers have been changed in a way which preserves ratios between them but disguises magnitudes.
T. AHRENS 150
link between that argument
London’s profit expectations.
and the City of
So, come hell or high water we have to deliver [the
financial target], and if it means that we can’t repair a
roof, we’re not gomra repair a roof because I don’t think
the people at the very top of the company can afford to
go back to the City again and say, sorry, we gave you
some different information, we can no longer meet that
aspiration So, we will meet that figure, but some of the
action we’re gomra have to take arc fairly... dramatic. 1
know what you’re saying, but if it isn’t health and safety
and if it doesn’t damage the quality of the product,
forget it..
This senior management accountant does not
comment on the organisational members’
acceptance to not repair the roof for financial
reasons. To him, this is unremarkable. In his
mind any concern about the roof fades into
insignificance if put into the context which
matters: the relationship of financial account-
ability between the brewer and the City. As
part of this relationship, accounting informa-
tion assumes a substantiality compared to
which a leaking roof is mere image. It com-
mands little urgency.
In a separate interview, the finance director
of this brewer expands on the rationale for not
repairing the roof. He relates the issue to the
brewer’s efforts to increase revenues in an
industry characterized by increasing margin
pressure.
[...I you gave a specific example [ .] repair and main-
tenance is essential on a physical asset to retain its value
for the organisation. If you don’t repair those things
ahm.. over a period of time, you create a liability which
has to be addressed at greater cost later. So you know
that roof repair has to be done. What we’re saying is, it’s
not optimal to resources we have this year to make that
decision Ahm, we have to balance in the long term
what is going to produce the greater short term return
[i.e. expenditure to increase revenues]. And hopefully
creating for ourselves the opportunity in the future to
address the backlog of liability we’re building up.
Whilst in principle delays of repair and main-
tenance expenditure are seen to create liabil-
ities which will consume greater resources in
the future than they would in the present,
optimal use of resources in the current compe-
titive situation is seen to demand a concentra-
tion of expenditure on revenue enhancement.
The finance director goes on to generalize his
argument from brewing to property in the U.K.
retail sector.
But it’s, it’s the same with most retail based property
businesses, if you look at that, you’ll End that they go
through cycles of refurbishment and cycles of under-
investment and that tends to largely mirror the eco-
nomic cycle. What we’re saying is that in the U.K.
brewing industry there is a major [?I in that cycle which
has been caused by the beer order which we’re just
having to respond to.
He mobilizes wider support for his argument.
From his point of view, approval of funds for a
roof repair at this point in time would contra-
dict established practice for managing reces-
sions. In the face of the overwhelming reality of
the economic cycle, it becomes hard to see
why one would repair a warehouse roof if
there are opportunities to increase the revenue
stream. “I’d rather spend a pound of media on
my brands than a pound on fixing a leaking
roof. Which, after all, it’s gonna create a puddle
of water on a floor, but we can live with that in
the short term.”
Clearly, nobody is or will be held account-
able for not repairing the warehouse roof. Cur-
rently, that repair has no room in this British
brewer’s processes of accountability. It is mere
image compared with the perceived sub
stantiality of much wider issues. Amongst those
issues we find not only the brewer’s financial
accountability towards the City, which the
casual observer might discount as a quirk of
the British economy, but, much more general,
strategically motivated management practices
of resource allocation in times of fierce
competition and shrinking margins. Aligned
to familiar and quite popular ideas which
advocate cost cutting and revenue enhanc-
ing as ways of managing oneself out of
recessionary trade cycles, accounting infor-
mation on costs, transfer prices for beer, and
profits can be seen clearly to dominate pro-
cesses of accountability, certainly when it
comes to roof repairs.
STYLES OF ACCOUNTABILITY 151
The German view
Interestingly, the force of those arguments
appears to elude management accountants and
managers with whom I bad contact at German
brewers. The quality control manager of one of
Germany’s largest brewers, who also acts as the
main point of contact between the production
department as a whole and the management
accounting department, fails to understand the
situation in two respects. First, he cannot con-
ceive of operating a warehouse with a leaking
roof.
We have very clear limits of what is justifiable, what is
reasonable, how far you can go. If there arc any
problems regarding product quality [...I ifit rains into the
finished goods warehouse, then our person responsible
has a problem because he must not use this storage
space any longer. Or, if he does store something there, I
will ban those products. They arc no longer suitable for
sale. That’s it. [...I They are to be protected from the
weather [...I finished goods are on principle to be stored
indoors. [...I We have clear [legal and company] regu-
lations and... that is that. If we have certain problems in
that area they wilI need to be solved. We are not going
to drift in that dircctlon, just because of a lack of
responsibility and competence we somehow manage to
push the problem into another year or a different
department.
What competent and successful British brewing
management saw as an almost natural response
to a perceived need for financial performance
in the face of a negative economic cycle, this
German interlocutor casts into the language of
operational rules, and health and safety regula-
tions. Against strongly held views on good
practice, the failure to repair suddenly appears
irresponsible and even incompetent. Account-
ing is no longer aligned with a powerful dis-
course of economic necessity in the face of
fierce price competition. What appears to mat-
ter for the German manager is the substantiality
of well-established operational procedures as
laid down in the regulations. Compared to that,
accounting, isolated from issues of similar
popularity or prominence, can only offer infor-
mation of lesser relevance. As a result, the Ger-
man manager does not regard a leaky roof as an
issue suitable for demonstrations of one’s skills
at optimizing resource allocation. As opera-
tional management is primarily held accoun-
table to unambiguous operational procedures,
“[tlhere can be no two opinions” on the issue.
That is not to say that operational managers
at this German brewer are not also held
accountable for meeting the financial targets of
the organisation as a whole. It would appear,
however, as if the German manager is used to a
different style of reconciling operational and
financial pressures. This difference is related to
the second respect in which the German man-
ager fails to understand the British situation.
Whilst emphasizing that in principle managers
need to meet their budgets, he concedes that
unforeseeable events can require additional
unplanned expenses. With the consent of the
responsible board director those expenses
would have to be met from the unused funds
of other operational budgets. The underlying
assumption that he makes is that everyone
plans their budgets analytically and realistically,
as he calls it. Since then over- and under-
provided budgets will even out on average,
following the law of large numbers, there must
always be some budget holders with unused
funds. A situation in which funds for reallo-
cation do not exist, because budgets have
not been planned to include all activities which
would normally be identified as necessary, can
in his view only arise if one decides to let
assets dilapidate due to planned cessation of
operations.
This German manager’s understanding on the
relative substantiality of financial and opera-
tional pressures can be illustrated with his
views on how unexpected budget cuts in the
course of the financial year ought to be admin-
istered. In his view it is entirely legitimate for
senior management to demand such cuts, for
instance, to satisfy financial performance criteria.
However, whilst it is not unusual for, say, the
production department to be given the task of
finding a lump sum saving, he does not think
that such tasks can be executed in an unpro-
blematic top down fashion. Local operational
management’s judgement on proposed cuts is
seen to be crucial.
152 T. AHRENS
And then we check, how much of that can be realized?
And one really makes inroads into one’s reserves, but
everyone knows his liiits: there you are, this is what I
can do, and that is what I can’t. In the end you depend
on the robustness of judgement on the part of those
who arc responsible. And on the mentality that budgets
are not spent simply because they exist...
He is aware of the dangers of that mentality,
but that does not render operational responsi-
bilities insubstantial. Rather, those responsi-
bilities are regarded as central to current
processes of accountability. They are not seen
to be easily invalidated by financial imperatives.
This understanding of organisational prio-
rities is echoed by a senior management
accountant from another German brewer
whom I told about the British decision to not
repair the roof.
Well, we have the same problems, but that [example]
would, in such an extreme fashion... I would say that
shows extremely short termist thlnklng. If I had a, say, I
cannot imagine that the roof starts leaking in a ware-
house, in which we work actively, and we let it leak.
Suppose [he hits on the table] we had a zero result last
year. Now the roof is leaking, costs DM 50,000. I would
be wilhng to bet you that those DM 50,000 would be
invested because one would say, it’s lunacy to save
those DM 50,000 to show a zero result, and next year
the DM 50,000 will have become DM 500,000 through
rain and frost. Really, I cannot imagine that. Then, then,
then one just has to say, OK, I must show a DM 50,000
loss. Really, that is just... [he laughs].
This German senior management accountant,
too, fails to understand the British view (“I
cannot imagine”). In his mind the situation is
unambiguous. It calls for an immediate roof
repair. Saying that a delay would ultimately be
more costly, he mobilizes an economic argu-
ment for an immediate repair. It is rooted in an
appreciation of the organisation’s physical
integrity to which he sees himself accountable,
without having to be reminded by a main-
tenance manager. Rhetorically weighing the
benefits of repairing against not charging the
repair to the current year’s profit, he makes up
his mind very quickly. So convinced is he of his
view, that he disregards the alternative as
“lunacy” and, rhetorically, offers a bet, because
he perceives economic and operational argu-
ments to point towards the same recommen-
dation. Their combined weight renders the
recording of a small annual loss in the profit
and loss statement totally insignilicant, Given
the circumstances, he expects nobody to be
held accountable for that.
ACCOUNTING AS IMAGE AND REALITY IN
PROCESSES OF ACCOUNTABILITY
The example of a leaking roof gave rise to an
initial Anglo-German contrast. The British view
seemed to be that financial performance objec-
tives together with strategic ambitions to build
brands are much more important than the
repair of a leaking roof. The Germans, on the
other hand, emphasized the integrity of opera-
tional processes and expressed their indiffer-
ence towards any accounting information
which does not mirror what they regard as
the underlying operational economies of the
organisation. It appears that the British senior
management accountant and his finance
director primarily hold themselves accountable
to managing their organisation such that it
generates revenues now and in the future. The
processes of accountability are such that in the
pursuit of this goal “drastic action” is perfectly
acceptable. The German manager and the senior
management accountant both seem to hold
themselves accountable to a concept of man-
agement which puts operational integrity and
economy before reported earnings. For them
the failure to repair the roof is inconceivable.
The example of the leaking roof is also an
illustration of the reflexive nature of social
action, the identity of action and processes of
accountability. Even where possible courses of
action are just talked about, people cannot help
approaching them by imagining they are being
held accountable. There is a natural urge to
correct action to match it with, what I referred
to above as, “good management” (cf. Garfmkel,
1984, pp. 7-9). Drawing on long years of
experience, the interviewees argue their
strongly held views (“come hell or high
STYLES OF ACCOUNTABILITY 153
water”, “that is that”, “lunacy”) very per-
suasively and coherently-and contradict each
other. They seem committed to kinds of reflex-
ive processes of accountability which are
incompatible. Different circles of reasoning
seem to give rise to different styles of account-
ability. Organisational members appear to focus
on different publicly available arguments and
align them with local operational concerns.
How is accounting implicated in the construc-
tion of their opposing accounts? One might say
that there is a difference in the perceived sub-
stantiality of accounting relative to what is per-
ceived as operational and economic concerns.
The perceived substantiality of accounting
information in the British view coincides with
the emphasis that is put on the efforts to build
brands and generate revenue. In comparison
the leaking roof is mere image. In the German
view, the accounting profit seems less sub
stantial. What matters are conceptions of
physical integrity and operational economy.
Both styles of giving reasons for conduct, of
taking structures of accountability for granted,
rely on certain representations of organisation.
They test ideas for action against certain
variants of financial, strategic, economic,
operational, or bureaucratic concepts. Like all
manner of models and representations, those
concepts are reductive. They are appealed to
in attempts to simplify what happens, thus
allowing judgement on complex matters to be
passed. They can inform versions of organisa-
tional reality which are linked to particular
styles of accountability. In that sense, the ques-
tion of the perceived reality of accounting
representations of organisational action is cen-
tral to studies of accounting and accountability.
In one extreme, if accounting information was
not perceived to reflect “underlying productive
and interpersonal processes” (Roberts & Scapens,
1985, p. 453) of organisations, “the reality of
organisational life” (ibid.), it would be dis
counted as mere image, ephemeral style irrele-
vant for the giving and demanding of reasons
for conduct. If, in the other extreme, account-
ing information was seen to embody the very
substance of organisational activity, processes
of accountability would be more likely to be
dominated by measures of accounting perfor-
mance. Those extremes may be empirically
unlikely but they offer a perspective for analys-
ing and contrasting possible roles of accounting
in different styles of accountability. In analysing
styles of accountability, this perspective would
seek to explore in what ways organisational
members hold and are held accountable to
accounting measures. It would attempt to
develop an appreciation of the extent to which
accounting information is seen to mirror or,
indeed, be reality. For this, it would have to
discuss how far and under what circumstances
accounting would be regarded as mere image
or substantive reality.
Roberts & Scapens (1985) were amongst the
first to address how accounting representations
of selected types of organisational action can be
related to processes of accountability. Discuss-
ing how accounting information can be con-
stitutive of forms of accountability across
longer distances, they suggest that:
The principal potential of accounting systems lies both
in the way they reduce information about a whole
variety of situations to a common and hence comparable
form, and in the way they allow this information to
bridge physical distance by making what is physically
remote from senior managers “visible” to them, and
giving them a form or “presence” at lower levels in an
organisation. This visibility and this presence, however,
are only partial. Consequently, despite the ability of
information systems to bridge physical distance, such
distance has a decisive impact on the forms of account-
ability that emerge @. 451).
Roberts & Scapens argue that in the absence of
a “shared context of extensive mutual knowl-
edge” (i&d., emphasis in original) selectively
transmitted accounting information promotes a
stylized image of the organisation, in which
hierarchical relationships and productive act-
ivities can be recast such that novel meanings
emerge.
For these [distanced] senior managers the “results” as
recorded in the Accounts [sic] are the product, and the
underlying physical processes and social relationships
are seen merely as a means for realising this product
(p. 452, emphasis in original).
154 T. AHRENS
Such stylization raises the problem of “ [ . ..I
confusing the image or picture created by
accounting with the reality of organisation life”
(p, 453), that is to say, “[...I the underlying
productive and interpersonal processes that
the Accounts [sic] purport to mirror” (ibi~L).
The latter point has been a central concern
of the accounting literature on accountability:
the dysfunctional effects of accounting
representation that comes to be seen as orga-
nisational reality. For example, Roberts (1991)
warns of accounting representations “[...I as
having an exclusive and apparently mesmeric
grip [...I” (p. 367) as having “[...I been institu-
tionalized as the most important, authoritative
and telling means whereby activity is made
visible” (p. 359). In his view accounting’s grip
on processes of accountability frequently gives
rise to a situation in which “One can argue
with its [accounting’s] accuracy but not its
methods of production or its categories of rele-
vance” (p. 361).
Further examples of a tendency in the
accounting literature to concentrate on the
domination of processes of accountability by
accounting include Munro & Hatherly (1993).
They warn of accounting’s implication in hier-
archical contexts of accountability because it
can potentially turn practices that were asso
ciated with increasing lateral accountability
into practices of heightened surveillance. Simi-
larly, Munro (1994) discusses how an align-
ment of accounting with the discourse around
total quality management can introduce a lan-
guage game of pseudo markets which then
dominates processes of accountability. His
observations of the increasing coerciveness of
the budgetary process are reminiscent of the
budget constrained management style (Hop-
wood, 1972, p. 160).
Those authors criticize what they see as an
overemphasis on accounting representations of
organisational action in processes of account-
ability. One might call it an accounting con-
strained style of accountability, in which
organisational action is biased towards favour-
ing accounting stylization of the organisation
over others, such as socially or operationally
informed representations. However, because of
biased selection and subsequent retention of
enacted environments (Weick, 1979), any dis-
tinctions between accounting representations
and, for instance, socially or operationally
informed organisational realities are proble-
matic. Any analysis of the role of accounting in
processes of accountability would therefore
need to take into account the self-reflexiveness
of organisational action. Roberts & Scapens
(1985) refer to this in their call “ [. . .] to develop
an understanding of the way that accounting
information not only reflects, but through dif-
ferent forms of use also shapes organisational
reality” (p. 455).
This would point to the importance of
those reflexive interpretations of accounting
information in processes of accountability,
through which accounting representations
come to seem real. An understanding of
the style in which accounting information is
mobilized and functions within processes of
accountability would thus seem crucial for an
appreciation of the organisational roles of
accounting.
Empirically, the complex roles which
accounting can play within processes of
accountability have, for example, been investi-
gated by Roberts (1990). He analyses those
roles in a manufacturing company which had
just been acquired by a financial conglomerate.
He finds that the novel, financially-oriented
processes of accountability can be conceived of
as following a certain style. For instance, the
financially motivated, highly contentious resale
to the main global competitor of one part of
the acquisition, which for many members sym-
bolized the organisation’s strategic future, “[...I
fitted well with their whole style of growth
through acquisition” (p. 113).
However, the financial conglomerate did not
exclusively rely on hard-nosed demands for
financial performance. In a world of reflexive
practices of accounting this would have been
tantamount to a&&g for resistance and
shirking. A much more sophisticated style of
accountability emerges. Roberts reports that
the
STYLES OF ACCOUNTABILITY 155
[...I balance between imposing [requirements for tinan-
cial performance] and enabling [decentralised opera-
tional decision making] is helped by a style of routine
accountability that emphasises trust and autonomy
@. 118).
It would follow that an understanding of the
relationship between accounting and structures
of accountability can benefit from an apprecia-
tion of the manner in which accounting infor-
mation is selectively mobilized. That manner
and its associated communication techniques,
such as a particular use of conferences, can be
seen as central to the financial conglomerate’s
efforts of convincing the employees of the
manufacturing company of the reality of
accounting information.
Central to the argument in this paper is the
question of how far accounting information is
perceived as real by management accountants
and managers of British and German firms. How
far do organisational members privilege
accounting knowledge of the organisation over
other ways of knowing it? How does it need to
be aligned with other knowledge to sustain
claims to reality? That manner of alignment is
decisive for the enacted style of accountability.
The following two sections present more ethno-
graphic material to develop two frameworks to
relate management accounting to organisational
processes of accountability.
BRITAIN: ACCOUNTING FOR A RETURN-
RISKS-FRAMEWORK OF ACCOUNTABILIIY
According to the “Today” Programme on
BBC Radio Four (22 March 1995) around 50% of
schools in England would need roof repairs
which are not currently being carried out.
Whilst this might be taken as evidence to gen-
erally indicate a British reluctance to spend on
roof repairs, there is also evidence to the con-
trary. The management accountant of a different
British brewery, for instance, disagrees:
I think we would take the view, if it’s 25,000, do you
want to repair the roof? [...I [and] the maintenance
manager says yes; well, that’s fine. You go ahead and
repair it, but what are you not going to do now for
25,000?
No doubt, many Britons would agree with him
but that is not at issue Instead, this paper is
concerned with patterns of interpreting
accounting information and their implication
into organisational action, so that the reasoning
behind his last half-sentence (“ [. . .] but what are
you not going to do now for 25,000?“) is much
more interesting. In that sense, the above
example of a leaking roof in a British brewery
should be read as an illustration of the possi bl e
operational consequences of a particular style
of fusing accounting information with more
general, public discourses of organisational ~
purpose and management, and its mobilization
in processes of accountability. In this section,
that style will be analysed by demonstrating
how British interlocutors’ perceptions of organ-
isational action, and their interpretations and
uses of accounting can be understood by locat-
ing them in what will be called a retum-risk-
framework of accountability.
That particular mind set, which is geared
towards casting organisational action primarily
in terms of return and risk, is described on a very
general, programmatic level by a senior manage-
ment accountant, who works at the head office
of the same brewer as the management account-
ant from whom the above quotation is taken.
The whole business, and it’s actually put to them [the
employees], it is all about risk. And we are prepared to
take risks, and sane of them will pay off and some of
them won’t. But we just need to understand how big
that risk is before we actually go off down the track. And
empowerment is very much a part of a vocabulary [?]
and again it is part of the change, the whole business is
going through.
This serves as an introductory, programmatic
statement to indicate the intention of management
9 Return-risk, rather than risk-return-framework emphasizes the order of priorities which underlie the observed organisational
action. The first priority is the generation of return. Only then is it worthwhile identifying any risks to the income stream.
156 T. AHRENS
at this brewer to align the fashionable discourse
around empowerment with a company-wide
spreading of perceptions of feturn and risk.
However, to enable a more detailed apprecia-
tion of the style of accountability enacted
at that brewer, to develop an appreciation
of how return and risk can become reasons
for conduct, how the reality of financial and
operational problems can be weighted, a closer
look at organisational action and reasoning is
necessary. The focus will be on maintenance
and budgeting.
Maintenance and budgeting at a large British
brewe y
A colleague of the management accountant
quoted last, who is the senior management
accountant in a large brewery, does not
[...I actually believe that that sort of thing [leaky roofs]
would particularly crop up unexpectedly. I think they
[the engineers] would know about it. They may take a
decision to try and postpone that... expenditure,
because of financial restraints, but I don’t actually
believe they’d be caught out by it. But at the end of the
day, to answer your question, that, if we have got
something that crops up like that or a machine repair...
which suddenly comes about and we have to do it,
then... we would have to do it but we would have to
find the cash from somewhere else. So we would cut
back on something. Delay it, or push it just in the start
of the new financial year or whatever. So, yeah, we
would have to find it [...I
Here, in the brewery itself, there is a greater
readiness to accept operational requirements as
real. But their reality is not uncontested. For
example, maintenance management may already
postpone repair work because of financial
restraints. Overall, there is a limit to the volume
of resources which operational requirements
can be allowed to consume because they have
to be found from other expense budgets within
the brewery. Unlike the German manager who
theoretically justified why, following the law of
large numbers, there always must be spare
funds in the expense budgets of a properly
managed brewery, this management accoun-
tant expects that activities will have to be
pruned or delayed.
But we just have to do it and worry about it afterwards
as to: Will we be able fo find the cash? You know, it
well may be that it might be in engineering, but it might
be administration that will have to fmd the cash out of
their budget to help pay for others. You know, we’ve
got to do it that way and sort of see any cash we can
find. But obviously you got an expenditure which is
critical to the working of the brewery. And we have to
find that money. And if that means stopping something
else, then so be it...
In his mind, some activities are more critical to
the working of the brewery than others. This is
reminiscent of the German manager’s view that
when faced with requests to find budget savings
“one really makes inroads into one’s reserves”.
However, whilst he clearly thought that there
are operational limits to that, and that “in the
end you depend on the robustness of judgement
on the part of those who are responsible”, the
British management accountant emphasizes the
limits to the amount of money available to
ensure that the brewery will work. “I believe
the budget for the site is really one figure, for
the whole of the site. And then we take that to
break it down to the different sections.”
Unplanned expenditure on operations is
seen in the context of the other brewery
budgets. Whilst substantial operational prob-
lems may arise which are seen to require
resources immediately, there is equally great
awareness of a financial reality, an overall ceil-
ing on the budgets for the brewery as a whole.
The management accountant would thus see
himself accountable for a use of scarce resources
such that the revenue generating capacities of
the brewery remain intact. Those views are
based on the perception that the brewery site
is given one budget which has to suffice during
any one period. His views are thus indicative
of a style of accountability which emphasizes
overall spending limits over operational
managers’ departmental authority. He con-
ceptualizes the leaky roof in terms of a return-
expenditure-framework.
In a separate interview, the brewery’s main-
tenance manager extends that framework to
include a notion of risk. I quote a longer sec-
tion from the interview because it illustrates
STYLES OF ACCOUNTABILITY
the double-edged nature of that notion. On the
one hand, the notion of risk can be aligned with
visions of dilapidation and decline, justl@ing
“resistance” against budget cuts. But on the
other hand, perceived requirements for budget
cuts can be aligned with the notion of rel ati ve
risk in order to convince operational man-
agement, who would face relatively little risk as
a consequence of budget cuts, to give up funds.
It ls a somewhat lesser budget but nonetheless we’ve
got to paint buildiis, we’ve got to look after the roads
and gardens and [...I quite often that’s an area where the
finance people would come back and Say, well, do we
really have to paint that wall or whatever when times
are hard, you see. And again we’ve always sort of taken
money out of those budgets, but again we’ve been
neglecting it for so many years and we, we’re [...I
resisting taking money out of those budgets.
Question: “How do you do that?”
“How do we...?”
Q: “How do you get away from taking money out of
these budgets?”
How do we resist it? Ahm, because... how do I get
away from it? That’s interesting, yeah. [...I Well, because
I think we have to h@hlight the potential risk to the
business, and finance should be here as a support to the
business and not as a constraint. [...I I think that it’s
becoming increasingly more important that finance
people understand the business in its entirety and not
just figures... You see the difference? I mean to look at a
set of hgures, blindly, and say, no, you can’t have that
much money, is a very dangerous statement to make,
without understanding the implications. So now we’re
working closer with people to understand the risk to the
business by not investing that money in maintenance.
And as I say, it’s that working relationship that I think
allows us to resist, OK?
The maintenance manager regards the intro-
duction of the language of risk in budget nego-
tiations as an opportunity to move finance
personnel into a more “supportive” role, to
alert them to the “business”, by which he
means operational, implications of budget cuts.
Whereas he felt that finance personnel used to
be limited to “blindly” looking at figures, they
now, too, are seen to be able to share a wider
understanding. In the maintenance manager’s
view, the notion of risk can form a basis for a
shared understanding of “business”, such that
he and his colleagues can hold themselves, and
be held, accountable for operational problems,
and can be equipped with
address them.
adequate funds to
However, the notion of risk also allows a
comparison of the relative risks arising from
157
decisions to not address different kinds of
operational shortcomings. Such an under-
standing of risk can operate to create a com-
mon understanding of budget cuts. The
maintenance manager went on to say:
And also we do challenge our own budget, so that if we
believe, yes ahm... we have to restrict our finance this
year, because in another area there is a, a priority need,
then I have to accept what the risks are to the business.
If [...I packaging, let’s say, require within our budgets
for this site, a major investment of our tied costs, OK.?
Let’s say something to do with a large amount of over-
time to support getting beer out the gate. Or heavy
investment in some maintenance on a particular
machine or whatever... Then, if we [...I as a team, at [the
site] believe that’s where the priority goes, and that
there is a greater risk than, let’s say, somewhere within
my department, I will accept that we have to reduce our
budget and manage [emphasis in conversation] it. If I
think there is a risk to my budget, then we may need to
go back to the centre and say, well, I’m sony, we need
more money... But generally, I mean, we are able to
work as a team to, you know, concentrate on where the
priorities arc. Whereas before, we did it ln isolation. This
is my budget and you can’t touch it.”
The notion of relative risk can here be seen as a
device to conceptualize the indeterminate pro-
cess of sharing out the available scarce funds
amongst operational management. It is only
concerned with the site in as much as the
aggregated budgets of the site are seen to
represent the financial limits to operational
action. What becomes much more important is
the idea of the business for the good of which
risk is assessed. Through the notion of relative
risk, individual budgets are thus aligned with a
very general concern for the (financial) good of
the business, the firm as a whole. The style of
accountability can be seen to become asso-
ciated more strongly with centrally defined
financial measures.
Budgeti ng and soci al rel ati ons
The aggregated budgets on site do not quite
represent an absolute ceiling for funding
158 T. AHRENS
operations, but almost. Whilst it is possible to
ask head office for larger budgets, it is unpop-
ular, both at head office and on site. This is
mainly due to the admission of managerial
failure which is seen to go hand in hand with
requests for additional budgets. In the retum-
risk-framework managers are those who can
handle risk. There exists a certain macho image
of managers who can operate on shoestring
budgets and still deliver.
As a case in point, the budget for gas con-
sumption at the time of the interview had been
set before gas prices had been negotiated.
Bob [the brewery management accountant] insisted that
we took zero inflation for this year. OK. Obviously mak-
ing it challenging. But [. .] the gas bills have gone up 15%.
Q: “Very challenging.”
Yes [...I So the target there then for me and the task for
my department is to find ways of saving energy better,
to offset that cost, or to look for other areas in the
departments to save money elsewhere.
Q: “Really?”
Yeah.
Q: “That’s sort of... Ifyou forecast the price wrong
and I stick to my [energy] ratios then...”
Well, yeah. I think you could argue that that is the
right way and that’s what we are going to do, but
nonetheless we don’t like exceeding the overall budget
for the year. We want to actually beat the budget, so an
example of that is where we are saving money on our
electricity [...I and hopefully one will offset the other.
So overall we shall come good.
In other words, the maintenance manager
holds himself accountable for fulfilling a target
which follows from an unrealistic estimate
made by the management accountant. Even if it
is perfectly obvious that the accounting
representation of organisational action in the
budget is unrealistic, it is still accepted as real.
The relatively well informed forecasts of physi-
cally real energy ratios do not matter so much.
Also, the maintenance manager does not have
much control over the site’s gas consumption.
Yet he holds himself accountable for it.
[. ..] you could take the purist view and say, well we, it’s
not our fault that the gas bill has gone higher than we
predicted, [...I therefore we’ve got to predict an over-
spend. Yes, we’ll predict an overspend within there, but
we’ll try and put it back elsewhere.
In Rosaldo’s (1993, p. 112) terms, he clearly
regards it as socially ungraceful for him to
complain about this situation. Indeed, com-
plaining does not seem to be a seriously con-
sidered option at all. Even though he put the
formal forecast up, he attempted to save in his
other budgets, which are functionally unre-
lated. “Challenging” different managers to save
portions of their overtime and maintenance
budgets he attempted to “[...I try and balance
the books for the good of the company. But if
I can’t do it without putting the business at
risk, then I won’t do it.” He thus enacts, and
strengthens further, a style of accountability
which is geared towards producing very con-
crete cost savings out of very indeterminate
notions of “good management”, including the
ability to handle risk and keep operations
running despite under-funding.
Style: mai ntai ni ng the tensi ons between the
general and the speci fi c, the concrete and the
i ndetermi nate
In this case a very particular style of
accountability emerges out of quite complex
dynamics between general perceptions of
management, business, and social acceptability
on the one hand, and local concerns about
operational necessities and financial constraints
on the other. Those dynamics can be made
intelligible within the return-risk-framework
which is held to characterize the British obser-
vations generally. However, following the
notion of styles of accountability as it was
developed in the introduction, this individual
case should, and does, exhibit concrete, specific
effects of the indeterminate general retum-risk-
framework, thereby elaborating the notion of a
British style of accountability. The case illus-
trates perceptions of how “good managers”
handle (and meet) budgets, how local manage-
ment accountants and operational managers
cooperate in concrete situations, and, thereby,
how indeterminate processes of accountability
and responsibility can be. We cannot be sure
how many more “challenges” the maintenance
manager would pass on to his department. At
what point would he reject demands for cost
STYLES OF ACCOUNTABILITY 159
savings and instead demand higher budgets? In
the example of this brewery, the grace of
reflexive social action shows itself in actors’
capacity to “follow impulses, change direc-
tions, and coordinate with other people”
(Rosaldo, 1993, p. 112) who, one might add,
persuade you to accept unrealistic forecasts of
gas prices. Their style of accountability
becomes clearer as one learns how they
“develop timing, coordination, and a knack for
responding to contingencies” (iML), such as
gas price rises. It is safe to say that the main-
tenance manager’s social success (he had
recently moved into an exceptionally nicely
decorated office) partly depended on his capa-
city to recognize when he should not hold the
management accountant accountable for insist-
ing on an incorrect forecast.
I prefer to take that view and then hopefully people in
finance will accept what I say as being an accurate
measure of our budget. So, if I say, I really can’t take any
more out this year, they understand I can’t. [...I So hope-
fully by, you know, challenging yourself and working
with finance you make a better working relationship. So
I think we’re getting there, even though Bob still comes
now and again and sott of says, I need to take money out
of you [he laughs briefly]. But we’re getting better.
Upon closer inspection, processes of
accountability can be seen to be understood as
implicated in dynamic social relationships and
not governed by strict rules. The maintenance
manager regards the technically “correct”
treatment of individual budgets and the
apportionment of responsibility for forecasts
as far less important than the maintenance of
social relationships with finance. It is through
those quite complex and often fragile relation-
ships that styles of accountability are enacted:
going into more detail, there is, for instance, a
hint that that relationship may have a slightly
different meaning for the management accoun-
tant because occasionally he still comes to ask
for budget cuts. As the meaning of budgets is
negotiated within this relationship, it inter-
mingles with more general images of manage-
ment, such as the capacity to handle risk, to run
operations successfully despite under-funding.
The sharing of risk becomes central to, what is
called, site management’s “team effort”. As risk
becomes part of perceptions of organisational
purpose and management on site, the pro
grammatic statement to spread perceptions of
return and risk, which introduced this section,
can thus be seen to have concrete operational
effects as it becomes part of a particular pattern
of processes of accountability, which is recog-
nizable as belonging to a more general style.
Mani festati ons of a styl e: j ust@vi ng opera-
ti onal expendi ture i n the l i ght of return and
ri sk
For that to be true, and the notion of style to
be a useful one, there ought to be overall
implications of this style of accountability for
organisational action. Patterns of those impli-
cations ought to be discemable in other
observations at British brewers. Generally, con-
sidering a style of accountability which casts
organisational action in the light of return
and risk, one would expect it to give rise to
asymmetrical relationships between operational
management and management accountants.
Rhetorically, the return-risk-framework casts
operations, and particularly production facili-
ties, in an unfavourable light because they
would not tend to be associated with the pro
duction of returns but rather represent a “risk”
to them. Since “operational risk” can only be
evaluated and addressed within the limits of the
overall budget, the size of operational budgets
will always depend on a central assessment of
the income situation. Demands for higher
returns would narrow those limits, leaving
operations exposed to stiIl higher risks of
failure. Overall, this mind set of resource con-
straint appears to be reflected in the way in
which demands for financial justification of
operational proposals tended to be adminis-
tered in the British organisations studied.
Take, for instance, the experience of a can-
ning line manager at another large British
brewery who planned some overhaul work on
the line in the quiet period after Christmas in
order to be able to fill a high expected beer
volume the following year.
160 T. AHRENS
The further away in the future it [a likely breakdown] is,
the less likely you are to get approval for the funds [...I
When I worry about being woken up in the middle of
the night next November and all the hassle,... well,
tough. That’s my job [...I Tight budgets make you think
harder and work harder, and that’s how it should be,
isn’t it? [...I But if you turn around and say, I cannot
operate like this any more, then you get the essential
funds. But it has to be demonstrated for the specific
situation.
In his experience, one has to demonstrate
attempts to squeeze resource consumption
before funds are authorized. Again this is linked
to a conception of management which empha-
sizes the ability to operate on a constrained
budget, to handl e risk. Also, demonstrations of
the necessity of requests for maintenance funds
tend to be regarded as substantial only if they
concern the revenue generating capacity of
equipment.
A senior management accountant from a
different brewer, who was based at head office,
wondered whether the logic which underlies
this image of management is not counter-
productive. Specifically, he doubts that demon-
strations of the necessity of repair and main-
tenance work, have in the past been correctly
assessed, because
In his view, the practice of evaluating return
[,,.I if you saye some money because you haven’t done
your repair and maintenance, has anybody actually
worked out the extra efficiency, you would have got,
had you done the repair and maintenance? That
efficiency gain may actually outweigh the cost of
doing the repair and maintenance. [...I That is not a
calculation that’s done.
and risk of operational proposals is lacking
sophistication, possibly because the image of
good management is too far removed from the
measurement of resource consumption and
too close to the production of indiscriminate
savings. In that sense the tendency of an overall
return-risk-framework to be associated with the
perceived substantiality of accounting could
be seen to render operational management
accountable for the ability to engineer quick
fixes rather than economically manage opera-
tions. Implicit in this would be an accounting
oriented image of management: management
by the numbers.
Al i gni ng fi nanci al j usti fi cati ons for acti on
wi th publ i c di scourses of organi sati onal pur-
pose and management
Central to this paper’s notion of shared national
styles of accountability is the alignment between
public discourses” and organisational concerns.
In the brewers studied, the dominant concern
with return, risk, and financial justifications for
action, as outlined above, was most obviously
entwined with a discourse that favoured market-
ing over manufacturing. That discourse seemed
to draw on wider sentiments present in the
brewing groups as well as the public at large.
The production director of a large brewery
blames that discourse for the state of main-
tenance in which he sees his site. “Have you
seen the outside storage tanks over there?” He
points out of his window. Roughly half of them
look like they need some fresh paint. The others
seem relatively new. “We’ve been working on
their five-year-refurbishment programme for the
last ten years now, and nobody knows if it will
ever be finished.” According to him, opera-
tional proposals to invest in the brewery, and
particularly its infrastructure, have to overcome
head office’s dominant reservations against
large, long-term spending programmes. Finan-
cial justifications are seen to become a vehicle
for delay tactics.
They’ll never say, no. They’ll say, give me a justification,
demonstrate the benefits to me, do another study. [...I
And the decision gets delayed and drawn out. Not
because they cannot make a decision, but it’s because
given the different pressures they see themselves con-
fronted with, they do not want to commit those sums of
money now. [...I Even where they get a payback of
three years they do not commit 1% to 2 million pounds
to that project, because they compare it to other
investment opportunities such as bloody [restaurants].
” It is worth noting that those discourses are here discussed in the general form in which they had effects on organisational
action. No attempt to discuss their emergence in more detail is made.
STYLFS OF ACCOUNTABILITY 161
But in his mind, the brewer’s diversified activi-
ties do not only make it harder to account for
the necessity of investing in the brewery
because they offer alternative options for eco
nomic return. They are also seen as a way to
realize many people’s ambition to advance the
brewer’s image as a “brand company”.
For [head office] the breweries have almost become an
embarrassment because it’s manufacturing. It’s gtimy and
dirty. [. .] They’d rather spend 2 million on six 30second
advertising spots than sink the money in a brewery.
The practice of emphasizing financial justi-fica-
tions of operational proposals, which can
be seen as part of the prevalent retum-risk-
framework, is thus regarded by this production
director as aligned with very general discourses
of the unpopularity of manufacturing in Britain,
and with company-wide aspirations to strengthen
the brewer’s image as a modem brand com-
pany. As a result, he sees his brewery subjected
to a regime of accountability which asks for
almost sensationalist justifications of opera-
tional proposals.
Of course, at some stage it becomes impossible and
things will break down if you don’t repair them. This is
when the word risk comes in. Where I say, if we don’t
repair this within the next two years, then the chance of
it breaking down and causing the brewery to lose half of
its capacity over five to six months arc one to ten. [ . ..I
They will ask [the brewer at head office], so if you have
played your politics right.
Here, risk again denotes the effects of under-
funding operations. Its effects need to be quan-
tified in pounds to have any impact on the head
office’s judgement. The production director
feels that the overall effects of this style of
accountability on the brewery can be some-
what eased because of head office’s reliance on
another brewer.
His views are largely shared by a senior man-
agement accountant, who until two weeks
before the interview had been the finance
person for all of that company’s breweries.
When I mentioned in an interview that
[...I there- seems to be feeling there that [the division] is
more prone to spend money on advertising than it is on
production. [...I [Ifl for the company as a whole there is
some sort of negotiated balance [ . ..I. my impression is
that production think they arc on the losing end of this
balance.
the senior management accountant shared that
view:
Yes, they do. They probably see themselves, perhaps, at
the losing end of this balance, and I think, what we’re
trying to say to them is, you know, the U.K. beer market
is declining and we have an asset base that’s under-
utilized, in reality, and every brewer has got the same
problem in the U.K. [...I We’ve got to make sure we
squeeze our assets as much as possible. We’ve got to
invest in new types of assets to meet the dynamics of the
market place, which is the bottling side of the business,
which is very much influenced by the European and
American markets. And effectively we’ve got to build
those markets, and if you think of advertising as an
investment, that’s an investment in our hmue, just as
much as an investment in our [tangible] assets is. Now
how you make sure that balance is right, between get-
ting consumers aware of our brands and buying them,
[and] making sure you’ve got the facilities in place to
actually produce it; it’s a very difficult debate, isn’t it?
You’re juggling on unknowns to a certain degree. We
just try and make people understand the consequences.
This quotation further confirms that the style of
accountability which has emerged from the
analysis of the British material, and which is
frequently enacted by way of financial justifi-
cations of operational proposals, relies on the
alignment of concerns which go beyond
immediate attempts to measure return and risk
of concrete projects. Decisions to disregard
operational realities, or postpone judgement on
them, are informed by perceptions of the gen-
eral state of manufacturing, how manufacturing
operations can be justified in shrinking markets,
the dynamics and vagaries of those markets, the
future of branding, etc. Aligning those general
discourses around the future of this and other
brand Industries to the question of return and
risk of physical brewery maintenance reduces
the chances of having expenditure authorized.
In line with this, at alI three of the large
British brewers studied, finance personnel
expressed the perceived need for internal
change to respond to market changes. On the
162 T. AHBENS
other hand, investments in, what at two brew-
ers increasingly came to be known as the
“supply side of the business”, production and
logistics, would either have had to be seen as
essential to maintain the revenue generating
capacities of equipment or necessary to enter
new markets. At two of the three large brew-
ers, small batch bottling lines were mentioned
as examples of the latter.
In order to provide a concrete point of
contrast with German practice, this section on
Britain closes with one example of manage-
ment accounting practice that can be directly
traced to the style of accountability that
was associated with the return-risk-framework.
Again, as in the previous example of the leak-
ing roof, the following quotation should not be
seen as a necessary consequence of that frame-
work, but as one possible concrete effect of a
set of indeterminate but tendentious discourses
and practices. As such, its function is to
illustrate the kind of reasoning that can be
associated with the return-risk-framework, par-
ticularly, as in this case, in times of perceived
economic pressure. The example is taken from
an interview with a British senior management
accountant who explained the capital rationing
mechanism in his organisation.
[If a brewery manager thinks that,] it is absolutely essen-
tial that we replace the copper vessel next year, else we
would just not be able to function as a brewery, on
his submission he would put down... each project is
assigned a category, and that category would be “essen-
tial”. [...I We need to do all the essential ones, because
we cannot afford to reduce capacity, we need more
growing [...I By the time everybody has done that, we
can say, well, we can only afford to do x million pounds
worth of essential projects. And with the best brewer in
the world, somebody estimating that copper vessel will
be leaking in the next twelve months, is only a subjec-
tive judgement. So we may hold the money in a central
pool, because not all those projects marked “essential”
will go wrong [ . ..I and as and when the essential pro
jects realize their essential nature then you spend the
money [...I doing the project. There is a method in the
madness. It is a very good capital rationing mechanism.
The concern is here not so much with the
precise operational circumstances under which
an essential expenditure project would be con-
sidered to have realized its “essential nature”.
Rather, this quotation serves as one possible
illustration of the kind of organisational con-
sequences of the British style of accountability.
In explaining this British management accoun-
tant’s views on capital rationing to German
management accountants and recording the
reactions based on their experience, the aim
was to provide a possibility to contrast their
understanding of the relationships between
operational and financial realities, and pro-
cesses of accountability.
GERMANY: ACCOUNTING FOR PROCESSES
OF ACCOUNTABILITY ALONG THE LINES
OF FUNCTIONAL EXPERTISE
Advocati ng ‘khaos management”
Five senior management accountants from
different German brewers were asked for their
views on this “very good capital rationing
mechanism” (from previous quotation). All five
of them indicated that the outlined idea of a
capital rationing mechanism neglected the
reality of operational processes.
We certainly don’t go as far as that [waiting for essential
projects to realize their essential nature]. If we [in the
management accounting department] receive a propo-
sal, it has been seen by my opposite number in central
production before. So I rely on them that it is really
necessary. [...I Assume a filling line really collapses [...I
then we can’t sell beer for two weeks, but you di d dri ve
that line to the last. Well, I don’t know...
Q: “But couldn’t you just do some repairs here and
there?”
Yes, but at some stage there’s enough of that! At
some stage I assume that you cannot go on like that. It’s
a question of policy. Also it is that old question of the
opti mal er Ersatzzei punkt” How far do I run it? [...I
[Because of demand] we recently produced for seven
days per week on this one Iilling line, and the lime col-
lapsed. Now that was a real problem. You can’t just say
ii A theoretical optimum defined by the German science of Betriebswirtschaftslehre (business economics), in which alI but
two of the German management accountants interviewed held a university degree. The words mean, optimaler = optimal,
Ersatz = replacement, Zeitpunkt = point in time.
to [the customer], sorry, our Iilling llne just collapsed.
[The beer had to be produced and delivered dlffercntly.]
Schedules had to be rearranged. That wasn’t so easy.
wait until the piece of machinery collapses. Incon-
ceivable! Imagine, May or June, when the brewery is
producing day and night, and this thing breaks down.
Inconceivable, simply inconceivable. That’s why you
This quotation expresses overriding concern
have to exchange parts which probably, because the
engineer says so, which probably aren’t going to run
with operational flows. Disruptions of through this season, they have to be replaced in antici-
schedules are to be avoided because they
pation. [...I It’s also a question of quality management.
could upset distribution and ultimately sales. In
[...I Just listen to this: The customer’s demand cannot
matters of equipment maintenance the issue is
be satisfied because I didn’t repair ln time! I mean, of
not seen to be the reduction of expenditure but
course, we do have delivery bottlenecks, but for differ-
ent masons, and not because of chaos management:
the economically optimal time and extent of Let’s wait until it breaks down, and before that I won’t
replacements, overhauls, and repairs. My sug-
spend. Inconceivable, that endangers the quality, the
gestion caused agitation because it is not seen
quality of the business as a whole.
to address that fundamental issue at all. Ad hoc
repairs to bridge the time before a substantial Again, the real i ty of the production process is seen
overhaul or a replacement are no solution. to dominate the issue. This reality is regarded as
Whilst economic optima may be elusive, a beyond the grasp of management accounting
coherent policy is still regarded as essential to expertise. Probabilities of equipment failure are to
integrate systematically the management of be anti ci pated and acted upon by engineers.
operational problems. Delivery bottlenecks due to operational prob-
The senior management accountant at lems are considered a sad reality, but at least
another brewer argued along similar lines. In a one does everything to avoid them. My sugges-
discussion of the problem of judging the timing tion could not seriously be considered (“Yes,
of repair or replacement of equipment he felt but at some stage there’s enough of that!“,
that “simply doesn’t work with our production pro-
cess”, “Inconceivable!“) because not only did
[...I it’s almost a question of having second sight! In
it fail to acknowledge the need to systematically
the end, it’s the engineer who decides because he
carries the responsibility. Else you get delivery bottle-
solve problems of operational uncertainty, it
necks and who wants to be responsible for those... If
actually proposed to amplify them! The sug-
that happens the engineer will be responsible, so I can’t
gested action, which from a British perspective
come along and say, you don’t get the funds. Impossible.
offers one possibility, was beyond conception: a
Also, I’m not competent.
dope’s advocacy of “chaos management” which
could not be conceived of as reasonable.”
At this point, I raised the possibility that one
might wait until a project “realises its essential Systemati c separati on of functi onal spheres
nature”, as the British senior management Those two senior management accountants’
accountant in last section’s final quotation has remarks are indicative of a style of account-
it. I was quickly interrupted because I had ability quite different from that discussed in the
unknowingly suggested to tamper with the previous section. As the reality of operational
systematic foundations of organising and thus processes is accorded a high status, there
implicitly advocated chaos. appears to exist a realm of accountability for
No, no, we won’t do that. That is something we don’t
operations that is kept quite separate from
do. Ah, that’s not on and simply doesn’t work with our
accountability for financial performance. No
production process. Who wants to be responsible for
attempt seems to be undertaken here to link
that? [...I Al so, replacement, repair is a complex matter,
those two realms, for instance, by aligning
parts of the brewery have to be stopped [...I You cannot operational proposals to wider discourses
STYLES OF ACCOUNTABIII’IY I63
i* “...plaguing subtle people with obtuse questions, is what being an ethnographer is like” (Gcertz, 1973, p. 29).
164 T. AHRENS
around market pressure, as this was done at
British brewers. This separation is further
elaborated by two German senior management
accountants from different brewers who dis-
cuss budgeting and replacement issues.
[...I which is a huge problem, that, as a management
accountant, at some stage of the budgeting process one
has to surrender to the expertise of your interlocutor. If
he stubbornly insists on his viewpoint for long enough,
for instance, a budget for external distribution of 2 mll-
lion, because we’re just going to be showered with long
distance freight charges, then that is that. If you realize
at year end that he has only used 1.5 million, you know
he was padding, but you cannot conclusively prove to
him in time that he does. Somehow you end up drawing
the short straw. [...I So the only thing left to do is
threaten with the whip of his disciplinary superior.
Here, disagreements are left to be resolved
within the operational hierarchy. The burden
of conclusive proof that expenditure is not
required is on the management accountants.
Now when a technical unit needs to be replaced, that is
a remarkably difficult topic. [...I In my opinion one cannot
calculate it. You can record repair costs per piece of
equipment and set it into relation to the replacement
cost values, and if a certain percentage is reached, it
would mean that piece of equipment needs replace-
ment. We do those things, too. But in the end it depends
on the assessment of the one who is responsible from
production. If he says it needs to be replaced, well, then
we are the management accountants, Kaufl eute’3, we
do dig deeper and ask, has it really got to be done? Can’t
we replace just a part? The other parts seem fine. [. ..I So
we go to the engineers and talk to them.
Management accounting’s “tool kit”, as it is
frequently referred to, is regarded as inade-
quate to represent questions which demand
subtle operational judgement. Of course,
British management accountants know as well
as Germans that those problems cannot be cal-
culated with certainty. Interestingly, however,
the German interlocutors tend to give that as a
reason to separate operational from financial
spheres. It seems that all they can hope for is
mere conversations, not rigorous questioning,
about technical proposals which are con-
ceptually shaped by engineers.
Several interviewees indicated that they
would regard this separation of their sphere
from operational questions as generally valid
for benefits from spending on product or pro-
cess quality.
This brings us back to the issue of technology; whether
we can comprehend it at all. I mean, we can look at the
cost aspects, but we cannot, for instance, evaluate the
quality of the product and say, because of that sales
have improved.14
(Incidentally, a senior management accountant
of the very large British manufacturing firm,
which had recently acquired a German firm
(cf. Appendix A), demanded precisely this
from the German management accountants
who worked there. He found it difficult to
convey the idea.) Another senior management
accountant at a large German brewer, who
was in favour of more Involvement from those
of his management accountants who were
technically qualified, still admitted the
problem. “ [ . ..I they [the engineers] say, you
don’t need to calculate it, it’s for reasons of
quality [.. .] Quality is always something which
nobody else can comprehend.” If, on the
other hand, a British management accountant
feels unable to quantify the effect of an invest-
ment, there is a distinct possibility that that is
taken to mean that the operational proposal
is not convincing and, therefore, cannot be
approved.
everything has got to be objectively measured, I
think. And we do try and measure even quality. And it
might be product quality. It might be line quality.
Somewhere you should get a benefit from your lnvest-
ment. Some of it may be intangible [...I we do try and be
I3 English commercial/administrative people, but can also denote graduates from BetriebswirtschaIMehre (business
economics).
I4 This is the only quotation in this paper which was recorded at the one German brewer with less than 950 employees
(cf. Appendix A).
STYIFS OF ACCOUNTABILITY 165
objective as opposed to subjective ln most of our
investment appraisal (A British senior management
accountant).
From the German remarks, however, there
seems to emerge a notion of (lncomprehen-
sible) quality which is taken to have a compel-
llng reality status in, and out of, itself. Knowing
that quallty can be improved makes it almost
necessary to act, irrespective of management
accountants’ ability to quantify the financial
consequences of this action.
Adding to the example of the leaking ware-
house roof, the first half of this section gave
further evidence of the existence of an Anglo-
German contrast regarding the role of account-
ing information in processes of giving and
demanding reasons for conduct. The German
reactions to the closing quotation of the last
section were largely a mixture of agitation and
incomprehension. Against the suggested mech-
anism for resource allocation, which could be
seen as an organisational consequence of a
British style of accountability, they held that the
operational sphere be somewhat separated from
management accounting and, in the first instance,
be judged as a reality of its own. The second
half of this section will explicate the style of
accountability which patterned their reactions by
an&sing the discourse on competence, respon-
sibility, and knowledge with which management
accounting practice in Germany is aligned.
Maintaining the functional separation: a
dahzourse on competence, responsibility, and
knowledge
From the German material an ideal of
functionally separated processes of account-
ability emerged, reflecting the different realities
of organisational spheres. Three concepts
recurred in that material: competence, respon-
sibility, and knowledge. In order to a get a
clearer view of how those concepts were
mobilized to maintain the German management
accountants’ overarching notion of functional
organisational separation, their understanding
by the German interlocutors is discussed and
contrasted with British interpretations.
Firstly, competence and judgement were
seen to be intimately linked. Those who have
no specific professional or academic knowl-
edge of processes cannot judge them as part
of their official role. This implies, for instance,
that line managers were presumed to always
know better how their function can cut
costs or increase revenues than management
accountants. There was unanimous agreement
amongst the German senior management
accountants interviewed on that: “Otherwise we
would be the better operational managers,
wouldn’t we?” Conversely, “If your manage-
ment accountants always know better than
your line managers, you should start thinking
about the qualification of your people”. A third
German senior management accountant finds
the idea that it could be otherwise rather
amusing.
The management accountant can discuss with the
expert if those heads are necessary or not. That is his
job. But in the end I cannot say, right, your personnel
plan will be reduced by five heads [.,,I because then I
would .._ what shall I say? Then the management
accountant would run the business, no longer the
experts. That doesn’t work [he laughs] You would no
longer fmd [he laughs again] That simply does not work.
Note how closely related competence and
judgement are seen to be. To suggest that
operational management’s judgement could be
shared with management accountants is imme-
diately, and without exception, taken to call
into question line management’s competence.
This alignment of a discourse of competence
with decision-making on budgets and invest-
ments strongly contrasts with views that I
found to prevail in Britain. Whilst British senior
management accountants freely acknowledged
that: “Basically we are not technically quali-
fied”, a layman’s appreciation of technically
complex projects, the opinion of the proverbial
“Man on the Clapham Omnibus”, is still valued.
He is now disguised as the Consumer:
[.,,I if we’re finance people, we bring our technical
expertise to the party, but it does not mean that we
haven’t got anything else to add. At the end of the day
we’re all consumers. We can all see and hear what goes
166 T. AHRENS
on in the organisation and, you know, we can con-
tribute outside of our [...I technical expertise.
This senior management accountant gave an
example of how such a general perspective on
operational decisions might be useful.
[...I for example, if I was trying to do the cost of some
labehing machinery [for bottles]. In terms of the detail,
the specification requirements, etc., it may not be
appropriate for me to say, we& we shouldn’t have it
because it costs too much. But what may be appro
priate, is to say, well, are we sure we want to have three
labels on this bottle? Is that really necessary for market-
ing? And it’s trying to actually bring the groups together
and have a debate, and think of different ways of doing
it. Because we have always put a [?] top on it [the
bottle], do we continue to do a [?I top on it? [...I trying
to raise people’s awareness. Do you reahse that activity
has an on-cost to our business, and therefore what is the
added value for the market place, that we’re gonna get
from actually having this bottle with [?I like this?
Similar vi ews are shared by most of the man-
agement accountants whom I met at British
brewers. They would tend to perceive them-
selves as generalists who are trying to “chal-
lenge” operational management by mobilizing
different functional or financial arguments in a
cross-functional debate.
In line with the high esteem in which gen-
eralists were held in Britain, functional exper-
tise was sometimes associated with slightly
awkward and clumsy specialism. A British
senior management accountant thus expressed
his views on how technical investment projects
ought to be handled.
The local finance people from the brewery need to get
involved because it has to be a cross-functional team
effort. We’ve seen it. Otherwise you find, one day there
is a hole in the wag and a machine installed and the
forklift truck can no longer move the pallets along that
corridor. Or the techies just buy some machine because
they like it or it’s cheap, but they don’t consider the
bottom line implications, and suddenly you have to
employ more people in production than before.
This quotation emphasizes the disadvantages of
technical specialist knowledge in isolation.
Engineers, generally respected for their com-
petence in Germany (Hutton & Lawrence,
1981), are here portrayed as a bunch of “tech-
ies”, too narrowly specialized to grasp the
complexity of both operational processes in
the brewery and doing business in Britain.
This leads on the second concept which
seems central to the style of German manage-
ment accountant’s maintenance of functional
separation of organisational spheres: responsi -
bi l i ty. It contrasts strongly with the opinion
given in the last quotation. But it also contrasts
with the insistence of the British maintenance
manager and management accountant, in the
previous section, to regard the sum of the site’s
budgets as one pool that can be spread over all
areas of the brewery, depending on where
relative risk is regarded highest. In Germany, I
found great reluctance of management accoun-
tants to give advice to line managers, or even
make demands on them. It seemed as though
the formal responsibility of the competent
foreclosed outsiders’ attempts to share their
official judgement. Statements like this could
be frequently heard: “I am not responsible for
what is planned but for bow it is done. [ . ..I Of
course we can make suggestions but we have
to acknowledge their [operational manage-
ment’s] competence”. This particular notion
of responsibility causes people to carefully
weigh whether to make cross-functional sug-
gestions at all. Depending on how they are
advanced, such suggestions could be taken as
insults to the competence of the suggestion’s
recipient. The functionally distanced style of
accountability of which this particular notion
of responsibility can become part, even
between operational managers and manage-
ment accountants who cooperate relatively
closely, is illustrated by a senior management
accountant:
I...] if the [head of internal logistics] thinks he needs 80
forklift truck drivers and in my view 75 should be suffix
cient, then we wig discuss for a while, one, two weeks
or longer, we can’t agree, the matter is escalated. Then I
say to his superior: In my opinion... ! [he hits on the
table] And then those two experts, the local expert and
his superior [in the logistics department], must say 75
or 80. And if they say 88, I would say, heck, why am I.. .?
[he hits the table with a report] I’ve done my job, I
STYLES OF ACCOUNTABILITY 167
record that as an opportunity to save [in the forecast],
but it is not considered for the [budgeted] result, and
the head count budget remains unchanged.
The impossibility to intervene formally in
someone else’s affairs also has a hierarchical
variant. One senior production engineer who
reported to the head of production for a num-
ber of breweries suggested that even he as an
engineer must be careful not to appear to be
trespassing on the boundaries of responsibility
when suggesting the deployment of technology
in individual breweries.
From my central perspective, consensus is very impor-
tant indeed. To just order people to do things in a
certain way is not good enough, because then they
really have to prove to me that it doesn’t work, if they
had originally disagreed with me.
The ditches of responsibility did not only exist
between functions but could also exist
between levels of the organisational hierarchy.
Finally, specialist operational knowl edge
could be seen to necessitate action with much
greater ease than in Britain. Much more
strongly than the British, German management
accountants and operational managers deduced
necessity from the particular expertise which
was deemed appropriate for a certain class of
issues. To return to the British example of a
mechanism for capital rationing, which closed
the previous section, even though it was
accepted in Germany that nobody can know
exactly when a technical unit finally breaks
down, it was felt that an engineer’s knowledge
would be most adequate to assess the time
when expenditure would “really” become
necessary. If one cannot prove operational
management wrong, one must trust them. Also,
as shown previously, quality issues were
conceptualized similarly. In the specific context
of responsibility and competence as outlined
above, operational expertise was elevated to
produce compelling reasons for action. Organi-
sational members held themselves and others
accountable to act upon such expertise.
This way of aligning accounting information
with the discourse of competence, responsi-
bility, and knowledge was manifest in the com-
position of five of the seven management
accounting departments at large German brewers
which participated in this study. Since func-
tional expertise was held in such high regard
that it could generate powerful arguments as a
matter of principle and without the mandatory
backup of financial calculations, three depart-
ments sought access to that expertise by
employing graduate brewing engineers with
backgrounds in business economics, two
further departments had appointed liaison
engineers in production. The head of one of
the remaining two departments thought that
employing engineers would be beneficial in
principle, but felt that he had sufficient knowl-
edge of production processes himself and that
the costs would thus outweigh the benefits.
The other head of department did not think
that employing engineers in his department
would be particularly beneficial. None of the
British management accounting departments
studied employed brewing engineers.
The particular way in which the discourse
around competence, responsibility, and knowl-
edge was aligned with the discourse and prac-
tice of budgeting and investment decision-
making at the German brewers studied was
expressive of a style of accountability quite
unlike that observed in Britain. Rather than
holding managers accountable for variances
which they could not influence and, some-
times, did not even budget for in the first
instance, the Germans seemed anxious to keep
responsibilities functionally separate. The func-
tionally organised processes of accountability
appeared to reflect a modular-systematic con-
ception of organising in which “the limits” of
the individual modules, the functions, can only
be known by their respective expertise. Even
when it became obvious that the responsible
line manager was working inefficiently, the
rigidly functional processes of accountability
could ensure the continuance of such waste.
Every year our filling manager has half a million left in
his maintenance budget. We shpw him what happened
over the last years but he won’t listen. No, no, this year
he really has something extraordinary to budget for. And
his production director just doesn’t address the issue
with him. It’s beyond our reach, we can’t help it...
Contrary to the British context, the discourse
of increasingly competitive markets was not
widely enough spread to lend it more organisa-
tional support by aligning it with this question
of budgeting for maintenance. This question
will remain unresolved until the management
accountants can convince the board, and par-
ticularly the production director, that such
wasteful budgeting can no longer be afforded.
The overall position of management account-
ing at German brewers compared to their Brit-
ish counterparts was clearly less dominant of
organisational processes of accountability.
CONCLUSION: STYLE MAKES A DIFFERENCE
When organisational members become
accountable to accounting, the numbers never
speak for themselves. They need to be com-
piled, compared, and interpreted in ways
which organisational members perceive as
reasonable. Those reasonable, accepted ways
make out an organisation’s style of implicating
accounting into processes of accountability. In
order to avoid appearing unreasonable or unin-
telligible, organisational members act and argue
such that they reproduce that style. In this
paper, an attempt was made to develop the
notion of style such that a tension between the
effects of agency and structure was maintained.
It was characterized by a balance between
generality, in order to avoid cultural determin-
ism and, specificity, in order to point towards
similarities between firms in one country,
regarding the ways in which their members
implicate accounting in processes of account-
ability. Central to the notion of style, and to the
claim that there should exist national simila-
rities, was the idea, developed from Garfinkel’s
(1984) concept of accountability, that a defin-
ing feature of organisational processes of
accountability is the alignment of organisational
168 T. AHRENS
rhetoric and practice with wider public dis-
courses. As the latter emerge, at least partly, on
a national level, nationally shared styles of
accountability can be expected. Taking the
example of the largest British and German
brewers, this paper has developed a contrast
between the roles which management
accounting plays in the reproduction of their
respective styles of accountability.
The focus of this paper was on the detailed
observation of organisational action, which was
then related to wider public discourses in the
very general, unspecific form in which they
could be observed to be mobilized by organisa-
tional members. gather than go into great detail
of the historical emergence of those discourses,
this paper has attempted to demonstrate their
unproblematic existence in everyday organi-
sational action. It was in that unproblematic
taken-for-grantedness that those discourses
unfolded their significance for concrete organi-
sational action and, thereby, processes of
accountability. Only a social scientist would try
to explain in complex detail what everybody
knows, and that is precisely what managers
and other organisational members do not do
(Garfmkel, 1984, pp. 7-9). The unproblematic
mobilization of public discourses is indicative
of the fragility of their alignments with organi-
sational concerns and, ultimately, the fragile
nature of those public discourses themselves.
For if organisational members draw on public
discourses without analysing their complex
origins, the enactment of those discourses
acquires a particular meaning: far from some
essential “realization” of that discourse in the
organisational context, the process of enacting
a discourse needs to be understood as its
creative alignment with more organisationally
based concerns. l5 As organisations communi-
cate their experiences with thus modified dis-
courses back into the public domain, they
reproduce the ambiguity of those public dis-
courses. Arguably, their suitability for further
alignments within diverse organisational con-
texts is thereby enhanced.
I5 I would like to thank the anonymous reviewer A for drawing my attention to this point
STYLES OF ACCOUNTABILJTY 169
Whilst the flexibility with which public dis-
courses can be aligned with organisational
rhetoric and practice was stressed throughout
the paper, the Anglo-German contrast was
argued to be related to two different recogniz-
able styles of alignment. They were sum-
marized in two national frameworks. Britain
was characterized by what was called a return-
risk-framework which, compared to German
brewers, privileged the reality of accounting
information in judging proposals for opera-
tional action. Within the British return-risk-
framework, ceilings of expenditure for organi-
sational subunits were seen to promote cross-
functional coordination and discussion of pro
posals on a local level with an emphasis on
financial constraints. The ceiling could be seen
to be aligned with a general appreciation and,
sometimes, domination of the layman’s point of
view, but also with wider discourses of com-
mercialism and perceived needs to respond
to market changes and become more brand
oriented. Since brand orientation was regarded
as central to a profitable future and “ [ . ..I
what we try to always do, at the end of the
day, is create shareholder value”, such gen-
eral discourses, aligned with accounting
information, were highly visible in organ-
isational management and processes of
accountability.
Central to the processes of accountability in
Germany were quite different priorities. The
brewers studied appeared to be dominated by a
differently constructed social reality. Compared
to Britain, operational considerations seemed
much more readily accepted as good reasons
for conduct . (cf. Steward et al ., 1994).
Accounting information was often not regarded
as capable of capturing the reality of individual
proposals. It seemed to offer only one of a
number of possible and credible perspectives.
Accordingly, processes of accountability were
functionally separated in a way which tended
to give inter-functional communication between
management accounting and line management
a tentatively suggestive rather than a directive
character. Functional separation could be seen
to be supported by wider discourses around
systematic knowledge as an organising prin-
ciple for management. In a context which
emphasized functional specialism, management
accountants saw their specific functional task
as providers of management information such
that organisational action could be coordinated
with a view to overall profitability. This role
gave them less direct influence in organisational
processes of accountability compared to their
British counterparts (cf. Carr et al , 1994, p. xiii).
It would thus appear that in both countries
the respective shared discourses around man-
agement are most important for the emergence
of recognizable national styles of accountability.
In Britain, “good managers” would be those
who can handle risk despite under-funding. In
Germany, “good managers” can systematically
organise specialist areas of operations. Earlier
comparative Anglo-German research, which
equally indicates a certain coherence of national
management practice, would support this (Carr
et al ., 1994; Horovitz, 1978, 1980; Lawrence,
1980; Serge & Warner, 1986; Serge et al ., 1983;
Steward et al , 1994). Particularly, Sorge &
Warner’s (1986) conclusions from their study
of organisational processes and structures of
matched pairs of manufacturing firms comple-
ment this paper’s findings:
It is apparent how the organisational arrangement is
governed by long-running continuity of respective
mechanisms of integration in large enterprises: in West
Germany, this is the technical and commercial industrial
bureaucracy of the socially coherent enterprise, In
England the cash nexus which ties subsystems and
occupational groups together (p. 200).
However, this is not to suggest a monolithic
image of national styles of organising. Cultures
are not static. For example, whilst the data from
the group of British and German firms which
had recently acquired operations in the respec-
tive other country supported the differences of
style developed in this paper, interlocutors
from those firms also hinted towards learning
processes which might see British and German
styles converge. For instance, a senior manage-
ment accountant at the head office of a large
German manufacturing firm which had recently
170 T. AHRENS
acquired a large British manufacturing firm was
initially surprised to find that general managers
of factories in Britain were in charge of overall
factory budgets without detailed control and
budgeting guidelines by head office. But he
went on to criticize the current complexity of
those guidelines for the German operations by
questioning their usefulness for management
processes. According to him, the emphasis on
formal management accounting systems in
Germany ought to be reduced, and manage-
ment accountants should, for example, assume
roles in cross-functional development teams for
new products. Management accountants might
thus become more operationally oriented. In
that sense, there may be converging tenden-
cies, for instance, through the introduction of,
what comes increasingly to be seen as, “global
practices”, such as target costing. It is an open
question how far such practices will operate
with national style.
This paper has aimed to convey an impres-
sion of contrasting national practices as they
persisted throughout the research process. To
theorize those contrasts, the distinct ways in
which accounting was implicated in processes
of accountability, as styles, served to unite two
apparently contradictory ideas: the fragility and
indeterminacy of the alignments between wider
and more local concerns, and the very real ways
in which those alignments could be seen to
pattern organisational action. To think of
national practices in terms of styles acknowl-
edges the potential of specific traditions of
accountability to explain accounting in action,
without denying the flexibility with which local
agency can incorporate social discourse into
organisational action.
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Appendi ces Overl eaf
172 T. AHRBNS
APPENDIX A
1
3
2
7
Details of data collection
PBBPABATION PHASE
Interviews with management
accountants
Britahl
CermanY
2 6
FIRMS WITH OPERATIONS IN THE
OTHER COUNTRY
Number of tirms
Interviews with management
accountants
BBEWEItS’
-
OBSERVATIONS
Number of lirms’ 2
2 (+I)
Weeks continuousIy observed 1+1+1 l+l+%(+%)
Single days observed 5 1
Number of meetings observed 12 5
Number of one-to-or& observed
13 7
-
INTEBVIEWS~
Number of firms
3 (+2) 7 f+l)
-
with management 22 (+2) 21 (+2)
accountants
-
with operational managers 13 13
Drawing on instances of operational management in British and German firms, this paper seeks to contrast
different styles of implicating accounting in processes of accountability. It defmes styles of accountability
as a heuristic device to conceptualise the aliient of local organisational practice and rhetoric with
wider societal discourses. As those discourses and their local alignment diier in Britain and Ge-y, two
distinct styles of accountability can be observed:
Accounting, Orgnnizatfons and Society, Vol. 21, No. 213, pp. 139-173, 19%
Copyright 0 19% Usevier Science Ltd
Printed in Great Britain. Au ri&ts reserved
0361-3682/% $15 OO+O.OO
0361~3682(95)00052-6
STYLES OF ACCOUNTABILITY*
THOMAS AHRENS
Uni versi ty of Soutbampton
Abstract
Drawing on instances of operational management in British and German firms, this paper seeks to contrast
different styles of implicating accounting in processes of accountability. It defmes styles of accountability
as a heuristic device to conceptualise the aliient of local organisational practice and rhetoric with
wider societal discourses. As those discourses and their local alignment diier in Britain and Ge-y, two
distinct styles of accountability can be observed: The British style privileges the reality of accounting
information in judging proposals for operational action. That style is conceptualised in a rcturn-risk-
framework. Within the German style of accountability, accounting information is seen to be less capable
of capturing the perceived reality of operational proposals. Processes of accountability rely more strongly
on separately conceptualised functional expertise Copyright 0 1996 Elsevier Science Ltd.
I suppose really the old role I had was commercial
manager [...I and would have been called finance man-
ager historically, except that it just changed the tide as
we were trying to push more commercial interest into
our supply side of the business. So, for example, Chris is
commercial manager for logistics and I’ve been com-
mercial manager for manufacturing. So to take away
some of the parameters of the pure financial technical
side and give it more of a feel for tbe modem 1990s
arm of brewi ng (emphasis added).
In the relationship between accounting and
accountability much more is at stake than com-
pliance with formalized targets and budgets. To
appreciate the role of accounting in processes
of accountability we need to attend to the
wider rationales, “the giving and demanding of
reasons for conduct” (Roberts & Scapens,
1985, p. 447), in relation to which accounting
may be mobilized. In the above quotation,
recorded at the head office of one of Britain’s
largest brewers, the newly appointed corporate
project manager identities the promotion of
commercial awareness as one of the finance
department’s main tasks. She can see the
demands on the management of brewing
operations in Britain in the 1990s changing
fundamentally. Managers of the “supply side”,
viz. logistics and manufacturing, as well as
finance managers, are seen to be in need of a
certain “feel” for a different set of questions
upon which to act. Their actions should
become answerable to “modernized” organ-
isational concerns. They should become
accountable to a novel conception of organ-
isational management. In the corporate project
manager’s mind, finance managers ought to
play an important role in the process of instil-
ling this “feel for the modem 1990s arm of
brewing”. They ought to move from a primary
concern with the technicalities of accounting
and finance reports towards a more educative
role. For instance, they should try to point
towards
[...I some of the commercial opportunities that come
from the customer base of the business down the supply
chain. And I guess, with having taken experience and
having been on the sales and marketing side of the
business for a while, it was an ideal opportunity [for me]
l The author is grateful to Anthony Hopwood, Chris Chapman, and the two anonymous reviewers for advice and comments.
139
140 T. AI-IIENS
to try and pull some of those, that knowledge base Into
manufacturing and give them an insight into market
changes, market forces and try and make them a bit
more... provocative in their thought process as to why
things had to change and change at a fast pace.
In this example, finance managers are char-
acterized by their capacity to place their tech-
nical accounting knowledge into a wider,
commercially defined context. As “commercial
managers” they are expected to fuse account-
ing information and commercial acumen in
ways which can give rise to new demands, but
also answer them. As processes of exchanging
reasons for conduct become more sensitive to
those new demands, novel processes of
accountability can be seen to emerge, holding a
specific role for finance personnel. Asked to
convey a “feel” for modern times, the relative
importance of their technical accounting skills
is seen to diminish. At the same time, their
understanding of the commercial environment
and the manner in which they communicate it
to operational management is seen to become
more important. The corporate project man-
ager suggests a scenario in which finance man-
agers cease to be mere operators of a given
technology. They are asked to fashion ways in
which accounting information can convey
newly relevant images of organisational perfor-
mance to which operational management must
answer. In this scenario, accounting becomes
implicated in the creation of a particular style
of accountability.
The notion of styles of accountability is
advanced in this paper as a heuristic device to
explicate some of the ways in which quite
wide and apparently unspecific notions of
‘ ‘good management’ ’ , to which organisational
members hold themselves and each other
accountable, can be implicated in the shaping
of very different roles for management accoun-
tants and their practice. The idea for this paper
evolved from programmatic statements, like
the one that introduced this paper, in which
management accountants classified their work
as part of wider trends or traditions. Those
management accountants were at least rhetori-
cally embedding their work in such wider
trends. Most made it clear that they regarded
adherence to the postulates of those trends and
traditions as essential for the quality of their
work and the quality of management in their
organisations more genetally. In the process of
studying British and German management
accounting departments,’ it soon became
apparent, however, that interlocutors in the
two countries saw themselves as following
different postulates of good management and
management accounting practice. Experienced
management accountants and managers from
the two countries seemed systematically to
advance different views on which courses of
action to take in particular situations, the role
of management accountants, and the meaning
of management accounting information. When
observed, they also acted in different ways,
indicating that there is a link between norma-
tive discourses and organisational action. This
paper attempts to convey to the reader the
kind of cross-national contrast in organisational
discourse and practice that emerged from the
research, by conceptualizing the case material
as expressions of specific styles of organisa-
tional accountability which prevailed in the
two countries. A detailed analysis of the socio
cultural differences which are implicated in
those Anglo-German contrasts is beyond the
scope of this paper.
The paper is structured as follows. A
theoretical section suggests that the notion of
styles of accountability is a useful heuristic
i To avoid confusion I will refer to finance or management accounting departments, and betriebswirtschaftlichen,
Kostem-echnungs-, Unternehmensplanungs- or Controlling-Abteilungen as “management accounting departments”
throughout the paper. With the exception of clerical support staff, those who work there, be they finance managers, business
accountants, betriebswirtschahliche Sachbearbeiter, Kostenrechner, Untemehmensplaner or Controller will be referred to
as “management accountants”. “Senior management accountant” denotes those who report to the board of directors,
Vorstand or Geschaftsleitung directly or via one level of hierarchy.
STYLFS OF ACCOUNTABILITY 141
device to conceptualize Anglo-German con-
trasts in management accounting practice. It
defines some key characteristics of style for the
purposes of this paper and identifies some of
the characteristics which the notion of style
shares with processes of accountability in gen-
eral. Following a methodological section on
research design, an empirical section contrasts
processes of accountability suggested by the
responses of British and German interlocutors
to a concrete problem of operational manage-
ment. The following section analyses British
and German styles of accountability with refer-
ence to the accounting literature on account-
ability. It explores the extent to which British
and German interlocutors in the previous
example regarded accounting information as
ephemeral image or hard reality to which they
held themselves and others accountable. Draw-
ing on more ethnographic material, the fmal
two sections further reline the conceptions,
first of the British, then, of the German style of
accountability by advancing two frameworks
characterizing management accounting practice
in the two countries.
“IT IS ALL A QUESTION OF STYLE [...I”*
Why style?
Why do we get the impression that the cor-
porate project manager’s introductory state-
ments can be interpreted as calling for a
specific style of accountabfl fty, a distlnguish-
able way of giving and demanding reasons for
conduct? Most obvious, perhaps, is the con-
temporariness of her language, for example,
when wishing to instill organisational members
with “a feel for the modern 1990s arm of
brewing”. The impression of fashionable
novelty is reinforced by the way in which she
draws on some of the Anglo-American man-
agement jargon of the late 1980s and early
1990s in sketching her vision of accountability.
Production and logistics departments become
the “supply side of the business” and form part
of the “supply chain” which delivers to the
“customer base”. To exploit “commercial
opportunities” one needs “insight into market
changes” and to respond with organisational
“change at a fast pace.” There is a general
sense that in times of modern competition,
operational management needs to be “pro
vocative in their thought process” to facilitate
flexible responses to the market. Having gained
increasing currency over the last couple of
years, the rhetoric of the logic of the supply
chain and the search for commercial oppor-
tunities in increasingly competitive markets is
likely to be familiar to the contemporary British
and North American reader.
Maybe even more important for giving the
impression of a style of accountabi l i ty than
the contemporariness of the corporate project
manager’s language is the broadness, if not
vagueness, of the concepts invoked. Her con-
cepts are familiar and recognizable as coherent,
but is it clear how they are to be interpreted in
the concrete organisational situation? Adopting
a particular discursive stance, she makes very
general, programmatic recommendations, which
arc taken from a contemporary public discussion
of management concepts, but, at that stage, she
does not go into much detail. Instead, she sug-
gests a broad programmatic order for the future
of her organisation’s processes of account-
ability. By way of its generality and recogniz-
ability, a certain style of public argument can be
seen to be mobilized in order to import into the
organisation a particular perspective on future
priorities. In that sense, what comes over as the
recommended style of accountability could be
said to go hand in hand with the articulation of
quite general, publicly recognized problems,
debates, or programmes, in the organisational
arena.
Al i gni ng the general wi th the speci j i c
The notion of style, as it is understood here,
is thus characterized by contemporariness and
z Quoted from Bourdieu (1992, p. 105) who discusses the inadequacies of both objectivistic and subjective interpretations
of the appropriate timing and choice of objects in gift exchange.
142 T. AHRENS
broad public appeal. It unites the more
impressionistic and evanescent characteristics
with a coherence and persistence that can
become centrally implicated in processes of
accountability and organisational action. It is
likely that through the corporate project man-
ager’s articulation of publicly available dis-
course certain forms of conceptualizing
organisational practice are encouraged; a
desired shape of organisational action is made
thinkable. In this case, that articulated dis-
course revolved around demands for commer-
cialization through intensified involvement by
management accountants in operational man-
agement.
This is not to say that certain general
“schemes” can just be “implemented” in
organisations. As a case in point, in the corpo-
rate project manager’s brewing division the
general rhetoric of value chains, advocating
amongst other things a focus on value-generat-
ing activities to create “leaner” organisations,
was invoked in a recent “business process re-
engineering” programme. The programme was
introduced and organisational members were
held accountable for its progress, but, accord-
ing to a senior management accountant, it did
not proceed easily.
[ . ..I we were trying to rethink the whole business in
process terms. [...I That’s the theory, but it won’t be as
pure as that. The thinking we’re trying to get into is, if
you were starting this business again and you could start
on a clean slate. How would you do it? What systems
would you have and what ways of working would you
have? [...I The problem of course is that you start here
[he knocks on the table and laughs] and you’ve got to
get to there. You can’t just start there. And that is pre-
cisely the sort of problem we’re having now, we’re try-
ing to implement more and more of this stuff. [...I It is
taking a consultant’s methodology and trying to make it
happen. And inevitably what we’re finding, the sort of,
sort of desk top reviews that you’re doing with the help
of the consultants are very easy. Making [x] thousand
people in the business do things diierently, use new
systems, behave differently, change the culture as much
as anything, as well as the procedures and stuff... That’s
extremely difficult.
Still, “business process reengineering” had an
impact on the management style and the style
of accountability of this organisation, all of
whose employees participated in day-long
“change workshops”. In order to bring about
change in concrete operational procedures and
established ways of giving and demanding
reasons for conduct, however, general man-
agerial and consulting concepts needed to be
aligned with detailed knowledge of operational
practice. But also general accounting infor-
mation, such as the expected aggregated cost
savings, needed to be contextualized in a series
of alignments to have any effects. Significantly,
before those alignments took place their out-
comes, their effects on practice were not
known. Organisational change was brought
about through search procedures (Lindblom,
1959) in which programmatic calIs for an
improved “bottom line” were aligned in an
interplay with what was locally seen to be
practically feasible. This alignment was guided
by the organisation’s style of accountability
and, at the same time, modified it. In that sense,
the organisation’s style of accountability was
enacted (Weick, 1979) through the ahgnment.
In this example, the development of styles of
accountability could be charted as a cyclical set
of processes in which public discourses
became aligned with organisational processes
of accountability, facilitating certain courses of
organisational action, encountering resistance
by types of local operational knowledge, inter-
mingling with them, and eventually repro-
ducing structures of accountability, which
could be newly aligned with different social
discourses. To think of the ways in which
organisational members give and demand
reasons for conduct at any one time as being
recognizable by their style, directs the attention
to their temporal coherence in flux.
I ndetermi nacy and concrete effects
I have argued that the notion of styles of
accountability can capture some of the ways in
which contemporary public discourses can
become aligned with the rhetoric and practice
of specific organisations. The notion thus pro-
mises to give an insight into the intricate ways
in which such alignments can combine con-
Crete effects on practice with generality and
inconclusiveness. In the accounting literature,
the complexity of the undertaking is, for exam-
ple, demonstrated by Miller & O’Leary (1994)
who analyse the potential of a particular public
Their central recommendation is that the activities
whereby members produce and manage settings of
organized everyday a&h-s are identical with members’
procedures for making those settings “account-able”.
The “reflexive,” or “lncamate” character of accounting
practices and accounts makes up the crux of that
rhetoric in the United States to become impli- recommendation @, 1).
cated in processes of organlsational change at
Caterpillar, Inc. They report some of the orga- The realization that members act reflexively
nisational effects of public discourses around leads Garfmkel to postulate an identity of social
empowerment and the politics of the product, action and practices of accountability. Ordinary
in the context of the widely perceived short- everyday action, for instance, is recognized as
comings of the U.S. manufacturing industry dur- such because its performance follows shared
ing the 1980s. Even whilst focusing just on rules which signify it as normal. This happens,
Caterpillar, admittedly a very large and complex depending on the context, to an extent and in a
organisation, the authors repeatedly emphasize manner which allows others to recognize that
that the developments which they chart were signification. The accounting for action can be
by no means inevitable. Their outcomes are seen to reside in that action. In the light of this
regarded as fragile and temporary. The effects idea, the aforementioned cyclical nature of
of discourse are conceived of as indeterminate. processes of accountability would appear as
Some of the arguments of the public debate something to be expected rather than as an
on which Miller & O’Leary report were doubt- obstacle to analysis. If accounting practices
lessly also mobilized in other organisations. But “ [ . ..I are carried on under the auspices of, and
it would be safe to say that they were not are made to happen as events in, the same
implicated in producing the exact same out- ordinary affairs that in organizing they describe
comes. What one might be able to say is that (i bi d.) [. . .] ’ ’ , they would necessarily intermingle
in those other organlsations a similar style of with the wider rationalities of general concepts
internally mobilizing external arguments could and local operational knowledge. Indeed, from
have been observed. In that sense, style could be Garfinkel’s ethnomethodological perspective,
thought of as a mode of engagement between accountability would appear as a (feature of 3>
rhetoric and practice, concept and action social process with precisely the function to
without, however, determining any particular align wider rationalities and local operational
engagement’s effects on action. To this extent knowledge with social action.
it suggests the potential of general rhetoric to That functionality of processes of account-
penetrate organisational processes of account- ability would have to be regarded as emerging
ability, thereby facilitating real organisational out of social action. It would be judged in the
change. light of the particular type of rationality which
unites members in the pursuit of their common
Style and accountabi l i ty practice.
There is also a sociological reason for the use
of style as a category ln this context. It is related
to the question of how accountability can
generally be understood to function in the
Members’ accounts are reflexively and essentially tied for
their rational features to the sociahy organized occasions
of their use for they areJeatires of the socially organ-
ized occasions of their use (p. 4, emphasis in original).
organisational context. Garfinkel (1984) sug-
gests that accountability is a constitutive feature Defining accountability as a reflexive com-
of social action. He demonstrates this by way of ponent of ongoing social action, the rationality
a series of studies. - of which is reproduced in that action, casts a
3 Depending on how strongly one wants to emphasize the identity of social action and accountability.
STYLFS OF ACCOUNTABILITY
I43
particular light on how members can have
a sense of common understanding. Shared
meaning would emerge out of organised
action.
‘Shared agreement” refers to various social methods
for accomplishing the members’ recognition that
something was saiakaccording-to-a-rule and not the
demonstrable matching of substantive matters. The
appropriate image of a common understanding is
tberefwe an operation ratber than a common inter-
section of overlapping of sets (p. 30, emphasis in
original).
Following Garfinkel, common understanding
is reproduced in accountable acts, not by com-
paring lists of characteristics. Without operation
or action there can be no shared understand-
ing. Meaning cannot be understood as static,
only as dynamic. Therefore, to act socially,
members have to be sensitive to the way
in which action unfolds. Social meaning can,
in that sense, not simply be attached to
action from a distance (which is not to say that
distant forces cannot play roles in the local
unfolding of meaning). Rather, as action
becomes meaningful, it creates and reproduces
meaning.4
The conceptual and temporal fragility of
Garfinkel’s social rules of recognition whose
operation lies at the heart of accountability
makes one wonder whether they should be
called rules at all. They are characterized by
indeterminacy and flexibility for contingency.
Rosaldo (1993) finds a different name for
similar qualities of social interaction.
[...I ndetermlnacy shows the emergence of a cul-
turally valued quality of human relations where one can
follow impulses, change directions, and coordinate with
other people. [...I it permits people to develop timing,
coordination, and a knack for responding to con-
tingencies. These qualities constitute social grace [...I
@. 112, emphasis added),
which
[...I consists of one’s responsiveness to whims, desires,
and contingencies, whether these emanate from one’s
144 T. AHRENS
own heart or from those of one’s partners in action
(p. 114).
Again, the capacity for social understanding
is seen to emerge from the empathy with
which individuals can sense the unfolding of
social action and find creative ways of con-
tributing to its continued unfolding. If social
action is to be recognized as such, its account-
ing practices need to be reflexive. From the
perspective of the bystander, social actors need
to act as if they were accountable. They will do
so automatically, often unconsciously, if they
function socially by the standards of their peers
(cf. Czarniawska-Joerges, 1992, p. 117). Whilst
Garfinkel postulates the complex operation of
complex cognitive rules as the condition of
their accountability, Rosaldo prefers the term
“social grace” to express very similar capacities
of social actors to be accountable in a reflexive
manner.
Not entirely unlike “style”, the concept of
“grace” is meant to unite knowledge of general
rules, and conceptual structures and hier-
archies with a sense of contingency, temporary
expediency, and a recognition of individuals’
desires. Both concepts address questions of
structure and agency. Equally, both Garfinkel
and Rosaldo recognize the role of structure and
the role of agents’ strategies for the enactment
(Weick, 1979) of structures of accountability.
Their ideas of reflexiveness go beyond mech-
anical reaction. For Rosaldo, graceful action
includes the ability to judge contingency and
listen to one’s heart in considering one’s
position. Garfinkel (1984) accuses those who
portray the users of language “as either culture
bound or need compelled” (p. 71) of setting
up “cultural dopes” or “psychological dopes”
(p. 68) “by neglecting the judgemental work of
the user” (p. 71) of culturally available sym-
bols. To think of accountability in terms of its
style could thus support the articulation of the
kind of reflexiveness which is inherent in pro-
cesses of accountability and which is brought
to bear on social action through those pro-
’ “How can I know what I think until I see what I do?” (Weick, 1979, p. 134, assembled according to Weick’s Fig. 5.4)
STYLES OF ACCOUNTABILITY 145
cesses. The notion of style can contribute in
this way if it maintains the analytical tension
between the specific and the general, the con-
crete and the indeterminate. Styles of account-
abfl fty ai ms to develop an analysis in which the
users of management accounting, without
appearing simplistic, can be understood to
operate within their specific logic-in-use.
ANGLO-GERMAN CONTRASTS IN STYLES
OF ACCOUNTABILITY
De&ki ng nati onal contrast
Turning to Anglo-German contrasts in man-
agement accounting practice, the task becomes
to investigate patterns of organisational action
and reflexive accounts of such action with a
view to explicating the role and significance of
management accounting. In so far as the
reflexiveness of accounts is shared in either
the British or the German organisations studied,
the attempt will be made to characterize its
style. The presumption that organisations in
one country share such styles which give rise to
similar action and accounts of action is sup
ported by the idea that “ [...I the social, or the
environment, as it were, passes through
accounting [...I” (Burchell et al , 1985, p. 385).
This idea would support the possibility of
national patterns of organlsational processes of
accountability, since those processes, which
fuse popular discourses, general management
concepts, and perceptions of the valid&y and
reality of accounting with local operational
knowledge, unfold in many organlsations and
public arenas simultaneously. Therefore, firms
within the same national culture should at
least exhibit some similarities between their
individual organisational styles of account-
ability. Moreover, since “ [ . ..I accounting rami-
fies, extends and shapes the social” (ibid),
there exists the possibility that organisational
processes of accountability also produce
contributions to unfolding public discourses,
thus making accounting part of the (national)
context in which it operates. Whereas the
previous section explained styles of account-
ability as modes of aligning public discourse
with local rhetoric and practice in single
organisations, the focus now shifts to a group
of organisations within one country. In the
remainder of the paper, the emphasis will
be on the characteristics that they might
share as a result of those processes of align-
ment.
The question of accountability as it is under-
stood in this paper has so far not been investi-
gated in comparative management studies of
different countries. However, researchers have
compared managers’ values and patterns of
thought. Hofstede’s “programmes of the mind”
(1980) are probably the most well-known con-
cept in the management literature in this
respect. In the field of international compara-
tive work in accounting, particularly in the area
of management control and financial measures,
Hofstede is one of the most inlluential non-
accounting scholars (e.g. Chow et aZ., 1994,
1995; Fechner & Kilgore, 1994; Harrison, 1992,
1993; O’Connor, 1995; Perera, 1989; Pratt et
al , 1993; Soeters & Schreuder, 1988; Ueno &
Wu, 1993). Hofstede’s work offers the promise
to measure national culture along four vari-
ables, but it is not obvious to what extent those
four variables can describe complex national
cultures (e.g. Sorge & Warner, 1986). Whilst
most of the accounting researchers referred to
above presume that Hofstede’s work is useful
for accounting studies, some doubt that it is
relevant to regimes of organisational control
(Ueno & Wu, 1993) and others criticize the
ways in which Hofstede’s variables have often
been related to aspects of accounting by some
researchers (Fechner & Kilgore, 1994). In a
similar vein, Chow et al . (1994) conclude their
study:
Many of the observed [national] differences, however,
were inconsistent with predictions based on Hofstede’s
(1980, 1991) model. As such, the fimlings of this study
suggest that the relationship between management
control and national culture is complex and probably
influenced by many variables (p. 397).
One important obstacle in employing
Hofstede’s categories in accounting research
146 T. AHRENS
lies in the underlying conceptualization of
culture. Hofstede (1980) defines culture as the
“collective programming of the mind” and
bases the empirical work on questionnaire
data. A perspective which so decidedly privi-
leges the ideal aspects of culture over its mate-
rial and practical ones (cf. Czamiawska-Joerges,
1992) may prove problematic for theorizing in
a field as enmeshed in practice as accounting.
This paper therefore explores a route to
understanding accounting in different coun-
tries which puts more emphasis on its organi-
sational practice. In that, it goes beyond an
inquiry into “the native’s point of view” on the
significance of accounting information in Brit-
ain and Germany, as it might be consciously
expressed in answers on a questionnaire.
Rather, this study needs to consider that in
organisational practice the seemingly clearly
articulated point of view is tied together with,
and often largely submerged in, action. In order
to make that action accessible to analysis, it
needs to be observed and followed up in dis-
cussions with organisational members.
A contrast of the outcomes of potentially dif-
ferent processes of accountability in organisations
requires some attention to the tacit dimension
of organisation. Since the relationship between
general concepts of ofganisational management,
local operational knowledge, and accounting is
enacted with real organisational consequences,
and, in this process, management often need to
discharge accountability for different conflict-
ing concerns simultaneously, the correspond-
ing structures of accountability are tacitly
implicated in their action. Those structures of
accountability, which have been learned in
action, can only be verbalized with great effort.
They have been absorbed and retained so as
tv allow quick exercise of socially adequate
complex judgement (cf. Bloch, 1991). An
understanding of organisational members’ con-
ceptualizations of accounting and other forms
of organisational representation and stylization
therefore requires us to consider the wider
context of action in which multiple concerns
are answered implicitly and simultaneously. We
are looking at contexts in which experienced
managers act in accepted ways. Whilst in
action, they do not constantly question their
own conceptualization of accounting infor-
mation (Brunsson, 1982). To research the
processes of accountability in which experi-
enced organisational members become routi-
nely involved requires an exploration of the
ways in which that routine is constituted. For
this task
[...I ethnogtaphy is a particularly valuable method of
research because it problematicizes the ways that
individuals and groups constitute and interpret organ-
izations and society on a daily interactional basis
(Schwartzman, 1993, p. 3).
Through observation and, in a differently
formalized way, interviews, researchers can
pursue their particular routes of access to
the complexity of members’ categories, the
kinds of reflexiveness inherent in their
processes of accountability, and the ways in
which accounting can become implicated in
them. Ethnographic methods are necessary to
obtain data of sufficient richness to address
those questions, notwithstanding the critical
and very useful debates around ethnography’s
validity and its status as a method within the
social sciences more generally (e.g. Clifford &
Marcus, 1986; Hammersley, 1992; Silverman,
1993).
Research design
To elicit Anglo-German contrast, manage-
ment accountants and operational managers in
two groups of firms were interviewed and
observed in the two countries (cf. Appendix A).
The first group consisted of one large British
and two large German manufacturing com-
panies with large production facilities and
other operations in the other country. At the
times of the interviews, they had acquired their
foreign operation from indigenous ownership
less than five years ago. The management
accountants interviewed in those organisations
were particularly aware of Anglo-German con-
tests. The second group of organisations were
selected following the logic of the method of
comparing matched pairs of firms (Maurice,
STYLES OF ACCOUNTABILJTY 147
1979; Serge et al., 1983). The underlying idea is
to study Iirms with very similar contingent
variables such as industry, size, and technology.
Looking at a number of firms in Britain and
Germany, similarities between practice in one
country can be found and contrasted with
practice in the other country. Brewing was
identified as a suitable industry for a number of
reasons: production technology is relatively
sjmple and there is little international variation
in production methods in principle.5 In both
Germany and Britain there is little foreign
ownership of brewers. Beer is a national drink;
in terms of production and consumption
volumes the two countries occupy ranks one
and two in Europe with a large distance to
Spain as third. Annual per capita consumption
has traditionally been highest in Germany (143
litres in 1991). The U.K. ranked seventh world-
wide with 106 litres in 1991 (Beatt, 1994, p. 11).
Both markets are mature with stagnating or
slightly falling annual sales volumes. The dis-
tribution channels are similar, but sales to
licensed premises are relatively more important
in Britain. For a comparative study of the inter-
pretations and mobilizations of accounting
information it is also desirable to match market
conditions. One would intuitively expect that
under conditions of greater perceived com-
petitive pressure accounting information might
receive more attention. It would appear that
the British and German brewers studied oper-
ated in markets with similarly high intensity of
competition. Firstly, the focus of the research
was on the commercially aware sector of the
industry and, secondly, both markets were
affected by extraordinary events which were
perceived to have intensified competition.
By focusing on the commercially aware
sector of the industry the research excluded the
effects of a unique feature of the German beer
market, the legendary 1290 separate German
breweries (Britain has 95). 746 of them, often
with tiny production volumes and retail areas,
are located in Bavaria alone (Beat& pp. 7 & 13).
Instead, the study focused on large British and
German brewers of similar size and complexity.
Observations were made in two of those in
each country. Interviews were made in seven of
the eight largest German groups and three of
the six largest groups in Britain. The commer-
cial awareness of the large brewers has, over
the last few years, been mainly reflected in
increased efforts at branding in both countries.
In Britain, this was marked by the arrival of
designer beers, brands without a past or from
abroad, which were established with consider-
able marketing expenditure. Commercial aware-
ness was also indicated by the considerable
advertising efforts to reverse the falling trend in
stout consumption by Guinness and Whitbread
for their stout brand Murphy’s (Beat& 1994,
pp. 37ft). In Germany, commercial awareness
has mainly been demonstrated by the rise of
medium-sized family-owned “mono-brewers”
with essentially one brand. They were the
German equivalent of premium designer beer,
but with a past. Between 1983 and 1993, the
four most successful brands in terms of sales
volume growth all belonged to family-owned
mono-brewers: Warsteiner (+187%), Kromba-
cher (+2O9%), Bitburger (+85%), and Beck’s
(+69%) (Kelch, 1995). The trend towards pre-
mium beer brands in both countries is currently
persisting @lintel, January 1993; Handelblatt,
30 June 1995; Rundschau fiir den Lebens-
mittelhandel, April 1995; various personal
communications).
The two extraordinary events which are per-
ceived to have intensified competition in the
%Itat said, different methods of brewing, and instances in which breweries changed those methods, were encountered.
However, at no time was it suggested that such changes could affect the technical nature of accounting practice or the
organisational role of management accountants in any way.
Because of market chamcteristics, there are different mixes in packaging types which has implications for the most
labour intensive part of production, filling. Germany is characterised by a greater share of returnable bottles. fn Britain,
aluminium or steel cans as well as kegs and casks have relatively higher shares. Filling lines are therefore designed differently.
Accounting practice seems unaffected by this and by the fact that the markets arc characteriscd by ditferent types of beer.
148 T. AHBENS
two brewing markets are the Beer Order in
Britain and unification in Germany.” Not sur-
prisingly under conditions of intensified com-
petition the market shares of the largest
brewers were in the process of growing at the
time of the research (cf. Appendix B). Although
market structures in Britain and Germany were
still unique worldwide, in that brewing was not
concentrated in the hands of just two or three
brewing groups’ (Beatt, 1994, p. 13), the con-
centration of market share amongst the largest
brewers in Britain was considerably larger than
in Germany. The largest six British brewers
shared 91% of sales volume, compared to 36%
in Germany. Interestingly, although one might
take this as an indication of relatively more
intensive competition in Germany, this study
suggests that German brewing managers gen-
erally relied to a lesser extent on accounting
information. Higher concentration in Britain
does therefore not seem to prejudice the
results of this paper. Also, due to the greater
overall size of the German beer market, brewers
with quite different market shares but still
similar absolute production volumes could be
studied.
The research focused on management
accounting departments. Formal interviews
with management accountants, but also opera-
tional managers, were tape recorded and tran-
scribed. Less formal interviews during field
visits were either tape recorded or notes were
taken. In meetings, notes were taken with an
emphasis on recording direct speech. Notes of
less formal conversations during field visits, for
example, in corridors, tea kitchens, cars, ware-
houses, or, very rarely, public houses, were
written as soon as the circumstances allowed.
So were notes of observations.
In order to investigate the possibility of con-
trasting styles of accountability it was useful to
confront interlocutors in one country with
instances of management action from the other
country. For example, by presenting German
management accountants with a British brewer’s
decision to not repair a leaking warehouse roof,
attempts could be elicited from the Germans to
understand the British decision as meaningful,
everyday management (accounting) practice.
The example of the leaking warehouse roof
serves to illustrate Anglo-German contrasts
rooted in practice. It both brings out contra-
dictory sentiments and logic-in-use in the two
countries, and conlirms Garfmkel’s (1984)
point that members cannot separate social
action from processes of accountability.
A LEAKING ROOF AS IMAGE AND REALITY
The Roof is leaking
We just cannotbudget everything we would like to budget
for. [...I If efficiency has gotten so bad that you can’t
carry on, you spend the money on repair and main-
tenance. [...I My biggest concern is dilapidation.
Machinery is still looked after relatively well, but
6 In Britain this is due to the Beer Order under which ceilings have been imposed on the maximum numbers of public
houses which the large brewers may own. Traditionally, they were vertically integrated businesses which controlled the
entire production and retailing process As a consequence of the legal changes, retail organisations could establish them-
selves which now control the beer purchases of large numbers of licensed premises. In a buyers market for beer, their
successful demands for volume discounts have put the brewers’ margins under considerable pressure.
In the German beer market, two developments particularly added to competitive pressure. Production capacity of West
German brewers had been further increased following additional demand for their products by East Germans after the
unification. Currently, demand in the Eastern parts of Germany is again concentrating on products from local breweries
which have in the meantime been modernized. The other development is the rise of a handful of national brands. Whereas
nationally successful brewers expand their production capacity and gain further economies of scale, many of those brewers
which followed traditional, regional marketing concepts see themselves increasingly forced to utilize capacities by producing
own-brand supermarket labels, often at prices below their estimated full costs.
’ British and Ge- brewers were not amongst the worlds 15 largest brewing groups (Beatt, 1994, p. 12). However, the
recent takeover of Courage by Scottish and Newcastle may be an indication of a more fundamental change in the British
market.
buildings aren’t... For instance, I got a number of quotes When we budget, we know it’s gonna be cut. First my
to have the warehouse roof repaired. It was going to boss cuts something out, then the brewery director. But
cost f35,000s but they said no. So we have to live with he’s under pressure from [the general manager produc-
it for another year. tion], and he’s got tough targets, too. It successively
translates down. [...I Because if we get higher budgets,
beer is more expensive [i.e. the transfer price is higher].
One and a half years after this conversation the
situation at one of Britain’s largest breweries is
unchanged. The maintenance manager is still Whereas he used to be held accountable for the
concerned about his organisation’s maln- physical upkeep of the brewery, ensuring the
tenance policy and particularly the upkeep of functioning of its productive capacities, he now
buikiings. He explains the lack of funds with sees himself as having become part of new
what he regards as internal consequences of webs of accountability. The new set of reasons
external pressures. “It’s more market driven for conduct includes, in his mind, a greater
now [ . ..I and of course [we do] statutory obli- emphasis on the task of working towards the
gations, health and safety, pollution...” Accord- lowest possible transfer price for beer, thereby
ing to him, those external pressures are related enabling the brewer’s sales units to price com-
to changes in the way in which budgets are petitively. As price competition is seen to begin
prepared. to dominate organlsational reasons for conduct, he
finds it more difficult to argue for maintenance
Three or four years ago we submitted a budget that we
believed in. [...I Iast time I gave my best estimate and
expenditure on the basis of operational reasons
the next day [the brewery director] called me in his
alone. Operational reasons seem not substan-
office. He was fuming with anger, red face. He thought
tive enough to necessitate action. Price compe-
we were hiding something in there [...I [and] told me to
tition, on the other hand, to which accounting
cut the budget. can link his expense budgets through the fic-
tion of an internal shadow market, appears as
Clearly, in this example maintenance and par- quite substantive. It becomes central to the
ticularly building maintenance are not treated new processes of accountability of which the
as areas of prime organisational concern. maintenance budget has become part.
Nobody holds the maintenance manager As it becomes more important to “meet the
accountable for failing to repair the leaking numbers” (Munro, 1994, p. 147) than worry
roof in a large, busy warehouse where filled about the upkeep of buildings, the significance
kegs and shrink-wrapped cases of canned beer of budgeting changes. “Budgeting really is
are stored. The maintenance manager’s own sharing the available maintenance money. We
efforts to become accountable, to muster just hope we meet the budget as the year goes
organisational resources for the repair are along.” Financial discipline, that is to say, the
unsuccessful. The consequences of not repair- pressure to reduce budgets, takes precedence
ing the roof seem to be regarded as relatively over attempts to model the planned resource
insubstantial. consumption in accordance with what one
According to the maintenance manager the finds operationally appropriate.
impossibility to become accountable for the
roof repair is related to a general shift within The British view
the organisational structures of accountability. Senior financial management of that brewer
He fmds that, mainly due to the newly per- reinforced this impression. In reply to my sur-
ceived market pressures, the preparation of the prise at brewery personnel’s acceptance of the
maintenance budget has become part of novel financially motivated argument against the roof
structures. repair, a senior management accountant made a
STYLES OF ACCOUNTABILITY 149
s Tbroughout this paper numbers have been changed in a way which preserves ratios between them but disguises magnitudes.
T. AHRENS 150
link between that argument
London’s profit expectations.
and the City of
So, come hell or high water we have to deliver [the
financial target], and if it means that we can’t repair a
roof, we’re not gomra repair a roof because I don’t think
the people at the very top of the company can afford to
go back to the City again and say, sorry, we gave you
some different information, we can no longer meet that
aspiration So, we will meet that figure, but some of the
action we’re gomra have to take arc fairly... dramatic. 1
know what you’re saying, but if it isn’t health and safety
and if it doesn’t damage the quality of the product,
forget it..
This senior management accountant does not
comment on the organisational members’
acceptance to not repair the roof for financial
reasons. To him, this is unremarkable. In his
mind any concern about the roof fades into
insignificance if put into the context which
matters: the relationship of financial account-
ability between the brewer and the City. As
part of this relationship, accounting informa-
tion assumes a substantiality compared to
which a leaking roof is mere image. It com-
mands little urgency.
In a separate interview, the finance director
of this brewer expands on the rationale for not
repairing the roof. He relates the issue to the
brewer’s efforts to increase revenues in an
industry characterized by increasing margin
pressure.
[...I you gave a specific example [ .] repair and main-
tenance is essential on a physical asset to retain its value
for the organisation. If you don’t repair those things
ahm.. over a period of time, you create a liability which
has to be addressed at greater cost later. So you know
that roof repair has to be done. What we’re saying is, it’s
not optimal to resources we have this year to make that
decision Ahm, we have to balance in the long term
what is going to produce the greater short term return
[i.e. expenditure to increase revenues]. And hopefully
creating for ourselves the opportunity in the future to
address the backlog of liability we’re building up.
Whilst in principle delays of repair and main-
tenance expenditure are seen to create liabil-
ities which will consume greater resources in
the future than they would in the present,
optimal use of resources in the current compe-
titive situation is seen to demand a concentra-
tion of expenditure on revenue enhancement.
The finance director goes on to generalize his
argument from brewing to property in the U.K.
retail sector.
But it’s, it’s the same with most retail based property
businesses, if you look at that, you’ll End that they go
through cycles of refurbishment and cycles of under-
investment and that tends to largely mirror the eco-
nomic cycle. What we’re saying is that in the U.K.
brewing industry there is a major [?I in that cycle which
has been caused by the beer order which we’re just
having to respond to.
He mobilizes wider support for his argument.
From his point of view, approval of funds for a
roof repair at this point in time would contra-
dict established practice for managing reces-
sions. In the face of the overwhelming reality of
the economic cycle, it becomes hard to see
why one would repair a warehouse roof if
there are opportunities to increase the revenue
stream. “I’d rather spend a pound of media on
my brands than a pound on fixing a leaking
roof. Which, after all, it’s gonna create a puddle
of water on a floor, but we can live with that in
the short term.”
Clearly, nobody is or will be held account-
able for not repairing the warehouse roof. Cur-
rently, that repair has no room in this British
brewer’s processes of accountability. It is mere
image compared with the perceived sub
stantiality of much wider issues. Amongst those
issues we find not only the brewer’s financial
accountability towards the City, which the
casual observer might discount as a quirk of
the British economy, but, much more general,
strategically motivated management practices
of resource allocation in times of fierce
competition and shrinking margins. Aligned
to familiar and quite popular ideas which
advocate cost cutting and revenue enhanc-
ing as ways of managing oneself out of
recessionary trade cycles, accounting infor-
mation on costs, transfer prices for beer, and
profits can be seen clearly to dominate pro-
cesses of accountability, certainly when it
comes to roof repairs.
STYLES OF ACCOUNTABILITY 151
The German view
Interestingly, the force of those arguments
appears to elude management accountants and
managers with whom I bad contact at German
brewers. The quality control manager of one of
Germany’s largest brewers, who also acts as the
main point of contact between the production
department as a whole and the management
accounting department, fails to understand the
situation in two respects. First, he cannot con-
ceive of operating a warehouse with a leaking
roof.
We have very clear limits of what is justifiable, what is
reasonable, how far you can go. If there arc any
problems regarding product quality [...I ifit rains into the
finished goods warehouse, then our person responsible
has a problem because he must not use this storage
space any longer. Or, if he does store something there, I
will ban those products. They arc no longer suitable for
sale. That’s it. [...I They are to be protected from the
weather [...I finished goods are on principle to be stored
indoors. [...I We have clear [legal and company] regu-
lations and... that is that. If we have certain problems in
that area they wilI need to be solved. We are not going
to drift in that dircctlon, just because of a lack of
responsibility and competence we somehow manage to
push the problem into another year or a different
department.
What competent and successful British brewing
management saw as an almost natural response
to a perceived need for financial performance
in the face of a negative economic cycle, this
German interlocutor casts into the language of
operational rules, and health and safety regula-
tions. Against strongly held views on good
practice, the failure to repair suddenly appears
irresponsible and even incompetent. Account-
ing is no longer aligned with a powerful dis-
course of economic necessity in the face of
fierce price competition. What appears to mat-
ter for the German manager is the substantiality
of well-established operational procedures as
laid down in the regulations. Compared to that,
accounting, isolated from issues of similar
popularity or prominence, can only offer infor-
mation of lesser relevance. As a result, the Ger-
man manager does not regard a leaky roof as an
issue suitable for demonstrations of one’s skills
at optimizing resource allocation. As opera-
tional management is primarily held accoun-
table to unambiguous operational procedures,
“[tlhere can be no two opinions” on the issue.
That is not to say that operational managers
at this German brewer are not also held
accountable for meeting the financial targets of
the organisation as a whole. It would appear,
however, as if the German manager is used to a
different style of reconciling operational and
financial pressures. This difference is related to
the second respect in which the German man-
ager fails to understand the British situation.
Whilst emphasizing that in principle managers
need to meet their budgets, he concedes that
unforeseeable events can require additional
unplanned expenses. With the consent of the
responsible board director those expenses
would have to be met from the unused funds
of other operational budgets. The underlying
assumption that he makes is that everyone
plans their budgets analytically and realistically,
as he calls it. Since then over- and under-
provided budgets will even out on average,
following the law of large numbers, there must
always be some budget holders with unused
funds. A situation in which funds for reallo-
cation do not exist, because budgets have
not been planned to include all activities which
would normally be identified as necessary, can
in his view only arise if one decides to let
assets dilapidate due to planned cessation of
operations.
This German manager’s understanding on the
relative substantiality of financial and opera-
tional pressures can be illustrated with his
views on how unexpected budget cuts in the
course of the financial year ought to be admin-
istered. In his view it is entirely legitimate for
senior management to demand such cuts, for
instance, to satisfy financial performance criteria.
However, whilst it is not unusual for, say, the
production department to be given the task of
finding a lump sum saving, he does not think
that such tasks can be executed in an unpro-
blematic top down fashion. Local operational
management’s judgement on proposed cuts is
seen to be crucial.
152 T. AHRENS
And then we check, how much of that can be realized?
And one really makes inroads into one’s reserves, but
everyone knows his liiits: there you are, this is what I
can do, and that is what I can’t. In the end you depend
on the robustness of judgement on the part of those
who arc responsible. And on the mentality that budgets
are not spent simply because they exist...
He is aware of the dangers of that mentality,
but that does not render operational responsi-
bilities insubstantial. Rather, those responsi-
bilities are regarded as central to current
processes of accountability. They are not seen
to be easily invalidated by financial imperatives.
This understanding of organisational prio-
rities is echoed by a senior management
accountant from another German brewer
whom I told about the British decision to not
repair the roof.
Well, we have the same problems, but that [example]
would, in such an extreme fashion... I would say that
shows extremely short termist thlnklng. If I had a, say, I
cannot imagine that the roof starts leaking in a ware-
house, in which we work actively, and we let it leak.
Suppose [he hits on the table] we had a zero result last
year. Now the roof is leaking, costs DM 50,000. I would
be wilhng to bet you that those DM 50,000 would be
invested because one would say, it’s lunacy to save
those DM 50,000 to show a zero result, and next year
the DM 50,000 will have become DM 500,000 through
rain and frost. Really, I cannot imagine that. Then, then,
then one just has to say, OK, I must show a DM 50,000
loss. Really, that is just... [he laughs].
This German senior management accountant,
too, fails to understand the British view (“I
cannot imagine”). In his mind the situation is
unambiguous. It calls for an immediate roof
repair. Saying that a delay would ultimately be
more costly, he mobilizes an economic argu-
ment for an immediate repair. It is rooted in an
appreciation of the organisation’s physical
integrity to which he sees himself accountable,
without having to be reminded by a main-
tenance manager. Rhetorically weighing the
benefits of repairing against not charging the
repair to the current year’s profit, he makes up
his mind very quickly. So convinced is he of his
view, that he disregards the alternative as
“lunacy” and, rhetorically, offers a bet, because
he perceives economic and operational argu-
ments to point towards the same recommen-
dation. Their combined weight renders the
recording of a small annual loss in the profit
and loss statement totally insignilicant, Given
the circumstances, he expects nobody to be
held accountable for that.
ACCOUNTING AS IMAGE AND REALITY IN
PROCESSES OF ACCOUNTABILITY
The example of a leaking roof gave rise to an
initial Anglo-German contrast. The British view
seemed to be that financial performance objec-
tives together with strategic ambitions to build
brands are much more important than the
repair of a leaking roof. The Germans, on the
other hand, emphasized the integrity of opera-
tional processes and expressed their indiffer-
ence towards any accounting information
which does not mirror what they regard as
the underlying operational economies of the
organisation. It appears that the British senior
management accountant and his finance
director primarily hold themselves accountable
to managing their organisation such that it
generates revenues now and in the future. The
processes of accountability are such that in the
pursuit of this goal “drastic action” is perfectly
acceptable. The German manager and the senior
management accountant both seem to hold
themselves accountable to a concept of man-
agement which puts operational integrity and
economy before reported earnings. For them
the failure to repair the roof is inconceivable.
The example of the leaking roof is also an
illustration of the reflexive nature of social
action, the identity of action and processes of
accountability. Even where possible courses of
action are just talked about, people cannot help
approaching them by imagining they are being
held accountable. There is a natural urge to
correct action to match it with, what I referred
to above as, “good management” (cf. Garfmkel,
1984, pp. 7-9). Drawing on long years of
experience, the interviewees argue their
strongly held views (“come hell or high
STYLES OF ACCOUNTABILITY 153
water”, “that is that”, “lunacy”) very per-
suasively and coherently-and contradict each
other. They seem committed to kinds of reflex-
ive processes of accountability which are
incompatible. Different circles of reasoning
seem to give rise to different styles of account-
ability. Organisational members appear to focus
on different publicly available arguments and
align them with local operational concerns.
How is accounting implicated in the construc-
tion of their opposing accounts? One might say
that there is a difference in the perceived sub-
stantiality of accounting relative to what is per-
ceived as operational and economic concerns.
The perceived substantiality of accounting
information in the British view coincides with
the emphasis that is put on the efforts to build
brands and generate revenue. In comparison
the leaking roof is mere image. In the German
view, the accounting profit seems less sub
stantial. What matters are conceptions of
physical integrity and operational economy.
Both styles of giving reasons for conduct, of
taking structures of accountability for granted,
rely on certain representations of organisation.
They test ideas for action against certain
variants of financial, strategic, economic,
operational, or bureaucratic concepts. Like all
manner of models and representations, those
concepts are reductive. They are appealed to
in attempts to simplify what happens, thus
allowing judgement on complex matters to be
passed. They can inform versions of organisa-
tional reality which are linked to particular
styles of accountability. In that sense, the ques-
tion of the perceived reality of accounting
representations of organisational action is cen-
tral to studies of accounting and accountability.
In one extreme, if accounting information was
not perceived to reflect “underlying productive
and interpersonal processes” (Roberts & Scapens,
1985, p. 453) of organisations, “the reality of
organisational life” (ibid.), it would be dis
counted as mere image, ephemeral style irrele-
vant for the giving and demanding of reasons
for conduct. If, in the other extreme, account-
ing information was seen to embody the very
substance of organisational activity, processes
of accountability would be more likely to be
dominated by measures of accounting perfor-
mance. Those extremes may be empirically
unlikely but they offer a perspective for analys-
ing and contrasting possible roles of accounting
in different styles of accountability. In analysing
styles of accountability, this perspective would
seek to explore in what ways organisational
members hold and are held accountable to
accounting measures. It would attempt to
develop an appreciation of the extent to which
accounting information is seen to mirror or,
indeed, be reality. For this, it would have to
discuss how far and under what circumstances
accounting would be regarded as mere image
or substantive reality.
Roberts & Scapens (1985) were amongst the
first to address how accounting representations
of selected types of organisational action can be
related to processes of accountability. Discuss-
ing how accounting information can be con-
stitutive of forms of accountability across
longer distances, they suggest that:
The principal potential of accounting systems lies both
in the way they reduce information about a whole
variety of situations to a common and hence comparable
form, and in the way they allow this information to
bridge physical distance by making what is physically
remote from senior managers “visible” to them, and
giving them a form or “presence” at lower levels in an
organisation. This visibility and this presence, however,
are only partial. Consequently, despite the ability of
information systems to bridge physical distance, such
distance has a decisive impact on the forms of account-
ability that emerge @. 451).
Roberts & Scapens argue that in the absence of
a “shared context of extensive mutual knowl-
edge” (i&d., emphasis in original) selectively
transmitted accounting information promotes a
stylized image of the organisation, in which
hierarchical relationships and productive act-
ivities can be recast such that novel meanings
emerge.
For these [distanced] senior managers the “results” as
recorded in the Accounts [sic] are the product, and the
underlying physical processes and social relationships
are seen merely as a means for realising this product
(p. 452, emphasis in original).
154 T. AHRENS
Such stylization raises the problem of “ [ . ..I
confusing the image or picture created by
accounting with the reality of organisation life”
(p, 453), that is to say, “[...I the underlying
productive and interpersonal processes that
the Accounts [sic] purport to mirror” (ibi~L).
The latter point has been a central concern
of the accounting literature on accountability:
the dysfunctional effects of accounting
representation that comes to be seen as orga-
nisational reality. For example, Roberts (1991)
warns of accounting representations “[...I as
having an exclusive and apparently mesmeric
grip [...I” (p. 367) as having “[...I been institu-
tionalized as the most important, authoritative
and telling means whereby activity is made
visible” (p. 359). In his view accounting’s grip
on processes of accountability frequently gives
rise to a situation in which “One can argue
with its [accounting’s] accuracy but not its
methods of production or its categories of rele-
vance” (p. 361).
Further examples of a tendency in the
accounting literature to concentrate on the
domination of processes of accountability by
accounting include Munro & Hatherly (1993).
They warn of accounting’s implication in hier-
archical contexts of accountability because it
can potentially turn practices that were asso
ciated with increasing lateral accountability
into practices of heightened surveillance. Simi-
larly, Munro (1994) discusses how an align-
ment of accounting with the discourse around
total quality management can introduce a lan-
guage game of pseudo markets which then
dominates processes of accountability. His
observations of the increasing coerciveness of
the budgetary process are reminiscent of the
budget constrained management style (Hop-
wood, 1972, p. 160).
Those authors criticize what they see as an
overemphasis on accounting representations of
organisational action in processes of account-
ability. One might call it an accounting con-
strained style of accountability, in which
organisational action is biased towards favour-
ing accounting stylization of the organisation
over others, such as socially or operationally
informed representations. However, because of
biased selection and subsequent retention of
enacted environments (Weick, 1979), any dis-
tinctions between accounting representations
and, for instance, socially or operationally
informed organisational realities are proble-
matic. Any analysis of the role of accounting in
processes of accountability would therefore
need to take into account the self-reflexiveness
of organisational action. Roberts & Scapens
(1985) refer to this in their call “ [. . .] to develop
an understanding of the way that accounting
information not only reflects, but through dif-
ferent forms of use also shapes organisational
reality” (p. 455).
This would point to the importance of
those reflexive interpretations of accounting
information in processes of accountability,
through which accounting representations
come to seem real. An understanding of
the style in which accounting information is
mobilized and functions within processes of
accountability would thus seem crucial for an
appreciation of the organisational roles of
accounting.
Empirically, the complex roles which
accounting can play within processes of
accountability have, for example, been investi-
gated by Roberts (1990). He analyses those
roles in a manufacturing company which had
just been acquired by a financial conglomerate.
He finds that the novel, financially-oriented
processes of accountability can be conceived of
as following a certain style. For instance, the
financially motivated, highly contentious resale
to the main global competitor of one part of
the acquisition, which for many members sym-
bolized the organisation’s strategic future, “[...I
fitted well with their whole style of growth
through acquisition” (p. 113).
However, the financial conglomerate did not
exclusively rely on hard-nosed demands for
financial performance. In a world of reflexive
practices of accounting this would have been
tantamount to a&&g for resistance and
shirking. A much more sophisticated style of
accountability emerges. Roberts reports that
the
STYLES OF ACCOUNTABILITY 155
[...I balance between imposing [requirements for tinan-
cial performance] and enabling [decentralised opera-
tional decision making] is helped by a style of routine
accountability that emphasises trust and autonomy
@. 118).
It would follow that an understanding of the
relationship between accounting and structures
of accountability can benefit from an apprecia-
tion of the manner in which accounting infor-
mation is selectively mobilized. That manner
and its associated communication techniques,
such as a particular use of conferences, can be
seen as central to the financial conglomerate’s
efforts of convincing the employees of the
manufacturing company of the reality of
accounting information.
Central to the argument in this paper is the
question of how far accounting information is
perceived as real by management accountants
and managers of British and German firms. How
far do organisational members privilege
accounting knowledge of the organisation over
other ways of knowing it? How does it need to
be aligned with other knowledge to sustain
claims to reality? That manner of alignment is
decisive for the enacted style of accountability.
The following two sections present more ethno-
graphic material to develop two frameworks to
relate management accounting to organisational
processes of accountability.
BRITAIN: ACCOUNTING FOR A RETURN-
RISKS-FRAMEWORK OF ACCOUNTABILIIY
According to the “Today” Programme on
BBC Radio Four (22 March 1995) around 50% of
schools in England would need roof repairs
which are not currently being carried out.
Whilst this might be taken as evidence to gen-
erally indicate a British reluctance to spend on
roof repairs, there is also evidence to the con-
trary. The management accountant of a different
British brewery, for instance, disagrees:
I think we would take the view, if it’s 25,000, do you
want to repair the roof? [...I [and] the maintenance
manager says yes; well, that’s fine. You go ahead and
repair it, but what are you not going to do now for
25,000?
No doubt, many Britons would agree with him
but that is not at issue Instead, this paper is
concerned with patterns of interpreting
accounting information and their implication
into organisational action, so that the reasoning
behind his last half-sentence (“ [. . .] but what are
you not going to do now for 25,000?“) is much
more interesting. In that sense, the above
example of a leaking roof in a British brewery
should be read as an illustration of the possi bl e
operational consequences of a particular style
of fusing accounting information with more
general, public discourses of organisational ~
purpose and management, and its mobilization
in processes of accountability. In this section,
that style will be analysed by demonstrating
how British interlocutors’ perceptions of organ-
isational action, and their interpretations and
uses of accounting can be understood by locat-
ing them in what will be called a retum-risk-
framework of accountability.
That particular mind set, which is geared
towards casting organisational action primarily
in terms of return and risk, is described on a very
general, programmatic level by a senior manage-
ment accountant, who works at the head office
of the same brewer as the management account-
ant from whom the above quotation is taken.
The whole business, and it’s actually put to them [the
employees], it is all about risk. And we are prepared to
take risks, and sane of them will pay off and some of
them won’t. But we just need to understand how big
that risk is before we actually go off down the track. And
empowerment is very much a part of a vocabulary [?]
and again it is part of the change, the whole business is
going through.
This serves as an introductory, programmatic
statement to indicate the intention of management
9 Return-risk, rather than risk-return-framework emphasizes the order of priorities which underlie the observed organisational
action. The first priority is the generation of return. Only then is it worthwhile identifying any risks to the income stream.
156 T. AHRENS
at this brewer to align the fashionable discourse
around empowerment with a company-wide
spreading of perceptions of feturn and risk.
However, to enable a more detailed apprecia-
tion of the style of accountability enacted
at that brewer, to develop an appreciation
of how return and risk can become reasons
for conduct, how the reality of financial and
operational problems can be weighted, a closer
look at organisational action and reasoning is
necessary. The focus will be on maintenance
and budgeting.
Maintenance and budgeting at a large British
brewe y
A colleague of the management accountant
quoted last, who is the senior management
accountant in a large brewery, does not
[...I actually believe that that sort of thing [leaky roofs]
would particularly crop up unexpectedly. I think they
[the engineers] would know about it. They may take a
decision to try and postpone that... expenditure,
because of financial restraints, but I don’t actually
believe they’d be caught out by it. But at the end of the
day, to answer your question, that, if we have got
something that crops up like that or a machine repair...
which suddenly comes about and we have to do it,
then... we would have to do it but we would have to
find the cash from somewhere else. So we would cut
back on something. Delay it, or push it just in the start
of the new financial year or whatever. So, yeah, we
would have to find it [...I
Here, in the brewery itself, there is a greater
readiness to accept operational requirements as
real. But their reality is not uncontested. For
example, maintenance management may already
postpone repair work because of financial
restraints. Overall, there is a limit to the volume
of resources which operational requirements
can be allowed to consume because they have
to be found from other expense budgets within
the brewery. Unlike the German manager who
theoretically justified why, following the law of
large numbers, there always must be spare
funds in the expense budgets of a properly
managed brewery, this management accoun-
tant expects that activities will have to be
pruned or delayed.
But we just have to do it and worry about it afterwards
as to: Will we be able fo find the cash? You know, it
well may be that it might be in engineering, but it might
be administration that will have to fmd the cash out of
their budget to help pay for others. You know, we’ve
got to do it that way and sort of see any cash we can
find. But obviously you got an expenditure which is
critical to the working of the brewery. And we have to
find that money. And if that means stopping something
else, then so be it...
In his mind, some activities are more critical to
the working of the brewery than others. This is
reminiscent of the German manager’s view that
when faced with requests to find budget savings
“one really makes inroads into one’s reserves”.
However, whilst he clearly thought that there
are operational limits to that, and that “in the
end you depend on the robustness of judgement
on the part of those who are responsible”, the
British management accountant emphasizes the
limits to the amount of money available to
ensure that the brewery will work. “I believe
the budget for the site is really one figure, for
the whole of the site. And then we take that to
break it down to the different sections.”
Unplanned expenditure on operations is
seen in the context of the other brewery
budgets. Whilst substantial operational prob-
lems may arise which are seen to require
resources immediately, there is equally great
awareness of a financial reality, an overall ceil-
ing on the budgets for the brewery as a whole.
The management accountant would thus see
himself accountable for a use of scarce resources
such that the revenue generating capacities of
the brewery remain intact. Those views are
based on the perception that the brewery site
is given one budget which has to suffice during
any one period. His views are thus indicative
of a style of accountability which emphasizes
overall spending limits over operational
managers’ departmental authority. He con-
ceptualizes the leaky roof in terms of a return-
expenditure-framework.
In a separate interview, the brewery’s main-
tenance manager extends that framework to
include a notion of risk. I quote a longer sec-
tion from the interview because it illustrates
STYLES OF ACCOUNTABILITY
the double-edged nature of that notion. On the
one hand, the notion of risk can be aligned with
visions of dilapidation and decline, justl@ing
“resistance” against budget cuts. But on the
other hand, perceived requirements for budget
cuts can be aligned with the notion of rel ati ve
risk in order to convince operational man-
agement, who would face relatively little risk as
a consequence of budget cuts, to give up funds.
It ls a somewhat lesser budget but nonetheless we’ve
got to paint buildiis, we’ve got to look after the roads
and gardens and [...I quite often that’s an area where the
finance people would come back and Say, well, do we
really have to paint that wall or whatever when times
are hard, you see. And again we’ve always sort of taken
money out of those budgets, but again we’ve been
neglecting it for so many years and we, we’re [...I
resisting taking money out of those budgets.
Question: “How do you do that?”
“How do we...?”
Q: “How do you get away from taking money out of
these budgets?”
How do we resist it? Ahm, because... how do I get
away from it? That’s interesting, yeah. [...I Well, because
I think we have to h@hlight the potential risk to the
business, and finance should be here as a support to the
business and not as a constraint. [...I I think that it’s
becoming increasingly more important that finance
people understand the business in its entirety and not
just figures... You see the difference? I mean to look at a
set of hgures, blindly, and say, no, you can’t have that
much money, is a very dangerous statement to make,
without understanding the implications. So now we’re
working closer with people to understand the risk to the
business by not investing that money in maintenance.
And as I say, it’s that working relationship that I think
allows us to resist, OK?
The maintenance manager regards the intro-
duction of the language of risk in budget nego-
tiations as an opportunity to move finance
personnel into a more “supportive” role, to
alert them to the “business”, by which he
means operational, implications of budget cuts.
Whereas he felt that finance personnel used to
be limited to “blindly” looking at figures, they
now, too, are seen to be able to share a wider
understanding. In the maintenance manager’s
view, the notion of risk can form a basis for a
shared understanding of “business”, such that
he and his colleagues can hold themselves, and
be held, accountable for operational problems,
and can be equipped with
address them.
adequate funds to
However, the notion of risk also allows a
comparison of the relative risks arising from
157
decisions to not address different kinds of
operational shortcomings. Such an under-
standing of risk can operate to create a com-
mon understanding of budget cuts. The
maintenance manager went on to say:
And also we do challenge our own budget, so that if we
believe, yes ahm... we have to restrict our finance this
year, because in another area there is a, a priority need,
then I have to accept what the risks are to the business.
If [...I packaging, let’s say, require within our budgets
for this site, a major investment of our tied costs, OK.?
Let’s say something to do with a large amount of over-
time to support getting beer out the gate. Or heavy
investment in some maintenance on a particular
machine or whatever... Then, if we [...I as a team, at [the
site] believe that’s where the priority goes, and that
there is a greater risk than, let’s say, somewhere within
my department, I will accept that we have to reduce our
budget and manage [emphasis in conversation] it. If I
think there is a risk to my budget, then we may need to
go back to the centre and say, well, I’m sony, we need
more money... But generally, I mean, we are able to
work as a team to, you know, concentrate on where the
priorities arc. Whereas before, we did it ln isolation. This
is my budget and you can’t touch it.”
The notion of relative risk can here be seen as a
device to conceptualize the indeterminate pro-
cess of sharing out the available scarce funds
amongst operational management. It is only
concerned with the site in as much as the
aggregated budgets of the site are seen to
represent the financial limits to operational
action. What becomes much more important is
the idea of the business for the good of which
risk is assessed. Through the notion of relative
risk, individual budgets are thus aligned with a
very general concern for the (financial) good of
the business, the firm as a whole. The style of
accountability can be seen to become asso-
ciated more strongly with centrally defined
financial measures.
Budgeti ng and soci al rel ati ons
The aggregated budgets on site do not quite
represent an absolute ceiling for funding
158 T. AHRENS
operations, but almost. Whilst it is possible to
ask head office for larger budgets, it is unpop-
ular, both at head office and on site. This is
mainly due to the admission of managerial
failure which is seen to go hand in hand with
requests for additional budgets. In the retum-
risk-framework managers are those who can
handle risk. There exists a certain macho image
of managers who can operate on shoestring
budgets and still deliver.
As a case in point, the budget for gas con-
sumption at the time of the interview had been
set before gas prices had been negotiated.
Bob [the brewery management accountant] insisted that
we took zero inflation for this year. OK. Obviously mak-
ing it challenging. But [. .] the gas bills have gone up 15%.
Q: “Very challenging.”
Yes [...I So the target there then for me and the task for
my department is to find ways of saving energy better,
to offset that cost, or to look for other areas in the
departments to save money elsewhere.
Q: “Really?”
Yeah.
Q: “That’s sort of... Ifyou forecast the price wrong
and I stick to my [energy] ratios then...”
Well, yeah. I think you could argue that that is the
right way and that’s what we are going to do, but
nonetheless we don’t like exceeding the overall budget
for the year. We want to actually beat the budget, so an
example of that is where we are saving money on our
electricity [...I and hopefully one will offset the other.
So overall we shall come good.
In other words, the maintenance manager
holds himself accountable for fulfilling a target
which follows from an unrealistic estimate
made by the management accountant. Even if it
is perfectly obvious that the accounting
representation of organisational action in the
budget is unrealistic, it is still accepted as real.
The relatively well informed forecasts of physi-
cally real energy ratios do not matter so much.
Also, the maintenance manager does not have
much control over the site’s gas consumption.
Yet he holds himself accountable for it.
[. ..] you could take the purist view and say, well we, it’s
not our fault that the gas bill has gone higher than we
predicted, [...I therefore we’ve got to predict an over-
spend. Yes, we’ll predict an overspend within there, but
we’ll try and put it back elsewhere.
In Rosaldo’s (1993, p. 112) terms, he clearly
regards it as socially ungraceful for him to
complain about this situation. Indeed, com-
plaining does not seem to be a seriously con-
sidered option at all. Even though he put the
formal forecast up, he attempted to save in his
other budgets, which are functionally unre-
lated. “Challenging” different managers to save
portions of their overtime and maintenance
budgets he attempted to “[...I try and balance
the books for the good of the company. But if
I can’t do it without putting the business at
risk, then I won’t do it.” He thus enacts, and
strengthens further, a style of accountability
which is geared towards producing very con-
crete cost savings out of very indeterminate
notions of “good management”, including the
ability to handle risk and keep operations
running despite under-funding.
Style: mai ntai ni ng the tensi ons between the
general and the speci fi c, the concrete and the
i ndetermi nate
In this case a very particular style of
accountability emerges out of quite complex
dynamics between general perceptions of
management, business, and social acceptability
on the one hand, and local concerns about
operational necessities and financial constraints
on the other. Those dynamics can be made
intelligible within the return-risk-framework
which is held to characterize the British obser-
vations generally. However, following the
notion of styles of accountability as it was
developed in the introduction, this individual
case should, and does, exhibit concrete, specific
effects of the indeterminate general retum-risk-
framework, thereby elaborating the notion of a
British style of accountability. The case illus-
trates perceptions of how “good managers”
handle (and meet) budgets, how local manage-
ment accountants and operational managers
cooperate in concrete situations, and, thereby,
how indeterminate processes of accountability
and responsibility can be. We cannot be sure
how many more “challenges” the maintenance
manager would pass on to his department. At
what point would he reject demands for cost
STYLES OF ACCOUNTABILITY 159
savings and instead demand higher budgets? In
the example of this brewery, the grace of
reflexive social action shows itself in actors’
capacity to “follow impulses, change direc-
tions, and coordinate with other people”
(Rosaldo, 1993, p. 112) who, one might add,
persuade you to accept unrealistic forecasts of
gas prices. Their style of accountability
becomes clearer as one learns how they
“develop timing, coordination, and a knack for
responding to contingencies” (iML), such as
gas price rises. It is safe to say that the main-
tenance manager’s social success (he had
recently moved into an exceptionally nicely
decorated office) partly depended on his capa-
city to recognize when he should not hold the
management accountant accountable for insist-
ing on an incorrect forecast.
I prefer to take that view and then hopefully people in
finance will accept what I say as being an accurate
measure of our budget. So, if I say, I really can’t take any
more out this year, they understand I can’t. [...I So hope-
fully by, you know, challenging yourself and working
with finance you make a better working relationship. So
I think we’re getting there, even though Bob still comes
now and again and sott of says, I need to take money out
of you [he laughs briefly]. But we’re getting better.
Upon closer inspection, processes of
accountability can be seen to be understood as
implicated in dynamic social relationships and
not governed by strict rules. The maintenance
manager regards the technically “correct”
treatment of individual budgets and the
apportionment of responsibility for forecasts
as far less important than the maintenance of
social relationships with finance. It is through
those quite complex and often fragile relation-
ships that styles of accountability are enacted:
going into more detail, there is, for instance, a
hint that that relationship may have a slightly
different meaning for the management accoun-
tant because occasionally he still comes to ask
for budget cuts. As the meaning of budgets is
negotiated within this relationship, it inter-
mingles with more general images of manage-
ment, such as the capacity to handle risk, to run
operations successfully despite under-funding.
The sharing of risk becomes central to, what is
called, site management’s “team effort”. As risk
becomes part of perceptions of organisational
purpose and management on site, the pro
grammatic statement to spread perceptions of
return and risk, which introduced this section,
can thus be seen to have concrete operational
effects as it becomes part of a particular pattern
of processes of accountability, which is recog-
nizable as belonging to a more general style.
Mani festati ons of a styl e: j ust@vi ng opera-
ti onal expendi ture i n the l i ght of return and
ri sk
For that to be true, and the notion of style to
be a useful one, there ought to be overall
implications of this style of accountability for
organisational action. Patterns of those impli-
cations ought to be discemable in other
observations at British brewers. Generally, con-
sidering a style of accountability which casts
organisational action in the light of return
and risk, one would expect it to give rise to
asymmetrical relationships between operational
management and management accountants.
Rhetorically, the return-risk-framework casts
operations, and particularly production facili-
ties, in an unfavourable light because they
would not tend to be associated with the pro
duction of returns but rather represent a “risk”
to them. Since “operational risk” can only be
evaluated and addressed within the limits of the
overall budget, the size of operational budgets
will always depend on a central assessment of
the income situation. Demands for higher
returns would narrow those limits, leaving
operations exposed to stiIl higher risks of
failure. Overall, this mind set of resource con-
straint appears to be reflected in the way in
which demands for financial justification of
operational proposals tended to be adminis-
tered in the British organisations studied.
Take, for instance, the experience of a can-
ning line manager at another large British
brewery who planned some overhaul work on
the line in the quiet period after Christmas in
order to be able to fill a high expected beer
volume the following year.
160 T. AHRENS
The further away in the future it [a likely breakdown] is,
the less likely you are to get approval for the funds [...I
When I worry about being woken up in the middle of
the night next November and all the hassle,... well,
tough. That’s my job [...I Tight budgets make you think
harder and work harder, and that’s how it should be,
isn’t it? [...I But if you turn around and say, I cannot
operate like this any more, then you get the essential
funds. But it has to be demonstrated for the specific
situation.
In his experience, one has to demonstrate
attempts to squeeze resource consumption
before funds are authorized. Again this is linked
to a conception of management which empha-
sizes the ability to operate on a constrained
budget, to handl e risk. Also, demonstrations of
the necessity of requests for maintenance funds
tend to be regarded as substantial only if they
concern the revenue generating capacity of
equipment.
A senior management accountant from a
different brewer, who was based at head office,
wondered whether the logic which underlies
this image of management is not counter-
productive. Specifically, he doubts that demon-
strations of the necessity of repair and main-
tenance work, have in the past been correctly
assessed, because
In his view, the practice of evaluating return
[,,.I if you saye some money because you haven’t done
your repair and maintenance, has anybody actually
worked out the extra efficiency, you would have got,
had you done the repair and maintenance? That
efficiency gain may actually outweigh the cost of
doing the repair and maintenance. [...I That is not a
calculation that’s done.
and risk of operational proposals is lacking
sophistication, possibly because the image of
good management is too far removed from the
measurement of resource consumption and
too close to the production of indiscriminate
savings. In that sense the tendency of an overall
return-risk-framework to be associated with the
perceived substantiality of accounting could
be seen to render operational management
accountable for the ability to engineer quick
fixes rather than economically manage opera-
tions. Implicit in this would be an accounting
oriented image of management: management
by the numbers.
Al i gni ng fi nanci al j usti fi cati ons for acti on
wi th publ i c di scourses of organi sati onal pur-
pose and management
Central to this paper’s notion of shared national
styles of accountability is the alignment between
public discourses” and organisational concerns.
In the brewers studied, the dominant concern
with return, risk, and financial justifications for
action, as outlined above, was most obviously
entwined with a discourse that favoured market-
ing over manufacturing. That discourse seemed
to draw on wider sentiments present in the
brewing groups as well as the public at large.
The production director of a large brewery
blames that discourse for the state of main-
tenance in which he sees his site. “Have you
seen the outside storage tanks over there?” He
points out of his window. Roughly half of them
look like they need some fresh paint. The others
seem relatively new. “We’ve been working on
their five-year-refurbishment programme for the
last ten years now, and nobody knows if it will
ever be finished.” According to him, opera-
tional proposals to invest in the brewery, and
particularly its infrastructure, have to overcome
head office’s dominant reservations against
large, long-term spending programmes. Finan-
cial justifications are seen to become a vehicle
for delay tactics.
They’ll never say, no. They’ll say, give me a justification,
demonstrate the benefits to me, do another study. [...I
And the decision gets delayed and drawn out. Not
because they cannot make a decision, but it’s because
given the different pressures they see themselves con-
fronted with, they do not want to commit those sums of
money now. [...I Even where they get a payback of
three years they do not commit 1% to 2 million pounds
to that project, because they compare it to other
investment opportunities such as bloody [restaurants].
” It is worth noting that those discourses are here discussed in the general form in which they had effects on organisational
action. No attempt to discuss their emergence in more detail is made.
STYLFS OF ACCOUNTABILITY 161
But in his mind, the brewer’s diversified activi-
ties do not only make it harder to account for
the necessity of investing in the brewery
because they offer alternative options for eco
nomic return. They are also seen as a way to
realize many people’s ambition to advance the
brewer’s image as a “brand company”.
For [head office] the breweries have almost become an
embarrassment because it’s manufacturing. It’s gtimy and
dirty. [. .] They’d rather spend 2 million on six 30second
advertising spots than sink the money in a brewery.
The practice of emphasizing financial justi-fica-
tions of operational proposals, which can
be seen as part of the prevalent retum-risk-
framework, is thus regarded by this production
director as aligned with very general discourses
of the unpopularity of manufacturing in Britain,
and with company-wide aspirations to strengthen
the brewer’s image as a modem brand com-
pany. As a result, he sees his brewery subjected
to a regime of accountability which asks for
almost sensationalist justifications of opera-
tional proposals.
Of course, at some stage it becomes impossible and
things will break down if you don’t repair them. This is
when the word risk comes in. Where I say, if we don’t
repair this within the next two years, then the chance of
it breaking down and causing the brewery to lose half of
its capacity over five to six months arc one to ten. [ . ..I
They will ask [the brewer at head office], so if you have
played your politics right.
Here, risk again denotes the effects of under-
funding operations. Its effects need to be quan-
tified in pounds to have any impact on the head
office’s judgement. The production director
feels that the overall effects of this style of
accountability on the brewery can be some-
what eased because of head office’s reliance on
another brewer.
His views are largely shared by a senior man-
agement accountant, who until two weeks
before the interview had been the finance
person for all of that company’s breweries.
When I mentioned in an interview that
[...I there- seems to be feeling there that [the division] is
more prone to spend money on advertising than it is on
production. [...I [Ifl for the company as a whole there is
some sort of negotiated balance [ . ..I. my impression is
that production think they arc on the losing end of this
balance.
the senior management accountant shared that
view:
Yes, they do. They probably see themselves, perhaps, at
the losing end of this balance, and I think, what we’re
trying to say to them is, you know, the U.K. beer market
is declining and we have an asset base that’s under-
utilized, in reality, and every brewer has got the same
problem in the U.K. [...I We’ve got to make sure we
squeeze our assets as much as possible. We’ve got to
invest in new types of assets to meet the dynamics of the
market place, which is the bottling side of the business,
which is very much influenced by the European and
American markets. And effectively we’ve got to build
those markets, and if you think of advertising as an
investment, that’s an investment in our hmue, just as
much as an investment in our [tangible] assets is. Now
how you make sure that balance is right, between get-
ting consumers aware of our brands and buying them,
[and] making sure you’ve got the facilities in place to
actually produce it; it’s a very difficult debate, isn’t it?
You’re juggling on unknowns to a certain degree. We
just try and make people understand the consequences.
This quotation further confirms that the style of
accountability which has emerged from the
analysis of the British material, and which is
frequently enacted by way of financial justifi-
cations of operational proposals, relies on the
alignment of concerns which go beyond
immediate attempts to measure return and risk
of concrete projects. Decisions to disregard
operational realities, or postpone judgement on
them, are informed by perceptions of the gen-
eral state of manufacturing, how manufacturing
operations can be justified in shrinking markets,
the dynamics and vagaries of those markets, the
future of branding, etc. Aligning those general
discourses around the future of this and other
brand Industries to the question of return and
risk of physical brewery maintenance reduces
the chances of having expenditure authorized.
In line with this, at alI three of the large
British brewers studied, finance personnel
expressed the perceived need for internal
change to respond to market changes. On the
162 T. AHBENS
other hand, investments in, what at two brew-
ers increasingly came to be known as the
“supply side of the business”, production and
logistics, would either have had to be seen as
essential to maintain the revenue generating
capacities of equipment or necessary to enter
new markets. At two of the three large brew-
ers, small batch bottling lines were mentioned
as examples of the latter.
In order to provide a concrete point of
contrast with German practice, this section on
Britain closes with one example of manage-
ment accounting practice that can be directly
traced to the style of accountability that
was associated with the return-risk-framework.
Again, as in the previous example of the leak-
ing roof, the following quotation should not be
seen as a necessary consequence of that frame-
work, but as one possible concrete effect of a
set of indeterminate but tendentious discourses
and practices. As such, its function is to
illustrate the kind of reasoning that can be
associated with the return-risk-framework, par-
ticularly, as in this case, in times of perceived
economic pressure. The example is taken from
an interview with a British senior management
accountant who explained the capital rationing
mechanism in his organisation.
[If a brewery manager thinks that,] it is absolutely essen-
tial that we replace the copper vessel next year, else we
would just not be able to function as a brewery, on
his submission he would put down... each project is
assigned a category, and that category would be “essen-
tial”. [...I We need to do all the essential ones, because
we cannot afford to reduce capacity, we need more
growing [...I By the time everybody has done that, we
can say, well, we can only afford to do x million pounds
worth of essential projects. And with the best brewer in
the world, somebody estimating that copper vessel will
be leaking in the next twelve months, is only a subjec-
tive judgement. So we may hold the money in a central
pool, because not all those projects marked “essential”
will go wrong [ . ..I and as and when the essential pro
jects realize their essential nature then you spend the
money [...I doing the project. There is a method in the
madness. It is a very good capital rationing mechanism.
The concern is here not so much with the
precise operational circumstances under which
an essential expenditure project would be con-
sidered to have realized its “essential nature”.
Rather, this quotation serves as one possible
illustration of the kind of organisational con-
sequences of the British style of accountability.
In explaining this British management accoun-
tant’s views on capital rationing to German
management accountants and recording the
reactions based on their experience, the aim
was to provide a possibility to contrast their
understanding of the relationships between
operational and financial realities, and pro-
cesses of accountability.
GERMANY: ACCOUNTING FOR PROCESSES
OF ACCOUNTABILITY ALONG THE LINES
OF FUNCTIONAL EXPERTISE
Advocati ng ‘khaos management”
Five senior management accountants from
different German brewers were asked for their
views on this “very good capital rationing
mechanism” (from previous quotation). All five
of them indicated that the outlined idea of a
capital rationing mechanism neglected the
reality of operational processes.
We certainly don’t go as far as that [waiting for essential
projects to realize their essential nature]. If we [in the
management accounting department] receive a propo-
sal, it has been seen by my opposite number in central
production before. So I rely on them that it is really
necessary. [...I Assume a filling line really collapses [...I
then we can’t sell beer for two weeks, but you di d dri ve
that line to the last. Well, I don’t know...
Q: “But couldn’t you just do some repairs here and
there?”
Yes, but at some stage there’s enough of that! At
some stage I assume that you cannot go on like that. It’s
a question of policy. Also it is that old question of the
opti mal er Ersatzzei punkt” How far do I run it? [...I
[Because of demand] we recently produced for seven
days per week on this one Iilling line, and the lime col-
lapsed. Now that was a real problem. You can’t just say
ii A theoretical optimum defined by the German science of Betriebswirtschaftslehre (business economics), in which alI but
two of the German management accountants interviewed held a university degree. The words mean, optimaler = optimal,
Ersatz = replacement, Zeitpunkt = point in time.
to [the customer], sorry, our Iilling llne just collapsed.
[The beer had to be produced and delivered dlffercntly.]
Schedules had to be rearranged. That wasn’t so easy.
wait until the piece of machinery collapses. Incon-
ceivable! Imagine, May or June, when the brewery is
producing day and night, and this thing breaks down.
Inconceivable, simply inconceivable. That’s why you
This quotation expresses overriding concern
have to exchange parts which probably, because the
engineer says so, which probably aren’t going to run
with operational flows. Disruptions of through this season, they have to be replaced in antici-
schedules are to be avoided because they
pation. [...I It’s also a question of quality management.
could upset distribution and ultimately sales. In
[...I Just listen to this: The customer’s demand cannot
matters of equipment maintenance the issue is
be satisfied because I didn’t repair ln time! I mean, of
not seen to be the reduction of expenditure but
course, we do have delivery bottlenecks, but for differ-
ent masons, and not because of chaos management:
the economically optimal time and extent of Let’s wait until it breaks down, and before that I won’t
replacements, overhauls, and repairs. My sug-
spend. Inconceivable, that endangers the quality, the
gestion caused agitation because it is not seen
quality of the business as a whole.
to address that fundamental issue at all. Ad hoc
repairs to bridge the time before a substantial Again, the real i ty of the production process is seen
overhaul or a replacement are no solution. to dominate the issue. This reality is regarded as
Whilst economic optima may be elusive, a beyond the grasp of management accounting
coherent policy is still regarded as essential to expertise. Probabilities of equipment failure are to
integrate systematically the management of be anti ci pated and acted upon by engineers.
operational problems. Delivery bottlenecks due to operational prob-
The senior management accountant at lems are considered a sad reality, but at least
another brewer argued along similar lines. In a one does everything to avoid them. My sugges-
discussion of the problem of judging the timing tion could not seriously be considered (“Yes,
of repair or replacement of equipment he felt but at some stage there’s enough of that!“,
that “simply doesn’t work with our production pro-
cess”, “Inconceivable!“) because not only did
[...I it’s almost a question of having second sight! In
it fail to acknowledge the need to systematically
the end, it’s the engineer who decides because he
carries the responsibility. Else you get delivery bottle-
solve problems of operational uncertainty, it
necks and who wants to be responsible for those... If
actually proposed to amplify them! The sug-
that happens the engineer will be responsible, so I can’t
gested action, which from a British perspective
come along and say, you don’t get the funds. Impossible.
offers one possibility, was beyond conception: a
Also, I’m not competent.
dope’s advocacy of “chaos management” which
could not be conceived of as reasonable.”
At this point, I raised the possibility that one
might wait until a project “realises its essential Systemati c separati on of functi onal spheres
nature”, as the British senior management Those two senior management accountants’
accountant in last section’s final quotation has remarks are indicative of a style of account-
it. I was quickly interrupted because I had ability quite different from that discussed in the
unknowingly suggested to tamper with the previous section. As the reality of operational
systematic foundations of organising and thus processes is accorded a high status, there
implicitly advocated chaos. appears to exist a realm of accountability for
No, no, we won’t do that. That is something we don’t
operations that is kept quite separate from
do. Ah, that’s not on and simply doesn’t work with our
accountability for financial performance. No
production process. Who wants to be responsible for
attempt seems to be undertaken here to link
that? [...I Al so, replacement, repair is a complex matter,
those two realms, for instance, by aligning
parts of the brewery have to be stopped [...I You cannot operational proposals to wider discourses
STYLES OF ACCOUNTABIII’IY I63
i* “...plaguing subtle people with obtuse questions, is what being an ethnographer is like” (Gcertz, 1973, p. 29).
164 T. AHRENS
around market pressure, as this was done at
British brewers. This separation is further
elaborated by two German senior management
accountants from different brewers who dis-
cuss budgeting and replacement issues.
[...I which is a huge problem, that, as a management
accountant, at some stage of the budgeting process one
has to surrender to the expertise of your interlocutor. If
he stubbornly insists on his viewpoint for long enough,
for instance, a budget for external distribution of 2 mll-
lion, because we’re just going to be showered with long
distance freight charges, then that is that. If you realize
at year end that he has only used 1.5 million, you know
he was padding, but you cannot conclusively prove to
him in time that he does. Somehow you end up drawing
the short straw. [...I So the only thing left to do is
threaten with the whip of his disciplinary superior.
Here, disagreements are left to be resolved
within the operational hierarchy. The burden
of conclusive proof that expenditure is not
required is on the management accountants.
Now when a technical unit needs to be replaced, that is
a remarkably difficult topic. [...I In my opinion one cannot
calculate it. You can record repair costs per piece of
equipment and set it into relation to the replacement
cost values, and if a certain percentage is reached, it
would mean that piece of equipment needs replace-
ment. We do those things, too. But in the end it depends
on the assessment of the one who is responsible from
production. If he says it needs to be replaced, well, then
we are the management accountants, Kaufl eute’3, we
do dig deeper and ask, has it really got to be done? Can’t
we replace just a part? The other parts seem fine. [. ..I So
we go to the engineers and talk to them.
Management accounting’s “tool kit”, as it is
frequently referred to, is regarded as inade-
quate to represent questions which demand
subtle operational judgement. Of course,
British management accountants know as well
as Germans that those problems cannot be cal-
culated with certainty. Interestingly, however,
the German interlocutors tend to give that as a
reason to separate operational from financial
spheres. It seems that all they can hope for is
mere conversations, not rigorous questioning,
about technical proposals which are con-
ceptually shaped by engineers.
Several interviewees indicated that they
would regard this separation of their sphere
from operational questions as generally valid
for benefits from spending on product or pro-
cess quality.
This brings us back to the issue of technology; whether
we can comprehend it at all. I mean, we can look at the
cost aspects, but we cannot, for instance, evaluate the
quality of the product and say, because of that sales
have improved.14
(Incidentally, a senior management accountant
of the very large British manufacturing firm,
which had recently acquired a German firm
(cf. Appendix A), demanded precisely this
from the German management accountants
who worked there. He found it difficult to
convey the idea.) Another senior management
accountant at a large German brewer, who
was in favour of more Involvement from those
of his management accountants who were
technically qualified, still admitted the
problem. “ [ . ..I they [the engineers] say, you
don’t need to calculate it, it’s for reasons of
quality [.. .] Quality is always something which
nobody else can comprehend.” If, on the
other hand, a British management accountant
feels unable to quantify the effect of an invest-
ment, there is a distinct possibility that that is
taken to mean that the operational proposal
is not convincing and, therefore, cannot be
approved.
everything has got to be objectively measured, I
think. And we do try and measure even quality. And it
might be product quality. It might be line quality.
Somewhere you should get a benefit from your lnvest-
ment. Some of it may be intangible [...I we do try and be
I3 English commercial/administrative people, but can also denote graduates from BetriebswirtschaIMehre (business
economics).
I4 This is the only quotation in this paper which was recorded at the one German brewer with less than 950 employees
(cf. Appendix A).
STYIFS OF ACCOUNTABILITY 165
objective as opposed to subjective ln most of our
investment appraisal (A British senior management
accountant).
From the German remarks, however, there
seems to emerge a notion of (lncomprehen-
sible) quality which is taken to have a compel-
llng reality status in, and out of, itself. Knowing
that quallty can be improved makes it almost
necessary to act, irrespective of management
accountants’ ability to quantify the financial
consequences of this action.
Adding to the example of the leaking ware-
house roof, the first half of this section gave
further evidence of the existence of an Anglo-
German contrast regarding the role of account-
ing information in processes of giving and
demanding reasons for conduct. The German
reactions to the closing quotation of the last
section were largely a mixture of agitation and
incomprehension. Against the suggested mech-
anism for resource allocation, which could be
seen as an organisational consequence of a
British style of accountability, they held that the
operational sphere be somewhat separated from
management accounting and, in the first instance,
be judged as a reality of its own. The second
half of this section will explicate the style of
accountability which patterned their reactions by
an&sing the discourse on competence, respon-
sibility, and knowledge with which management
accounting practice in Germany is aligned.
Maintaining the functional separation: a
dahzourse on competence, responsibility, and
knowledge
From the German material an ideal of
functionally separated processes of account-
ability emerged, reflecting the different realities
of organisational spheres. Three concepts
recurred in that material: competence, respon-
sibility, and knowledge. In order to a get a
clearer view of how those concepts were
mobilized to maintain the German management
accountants’ overarching notion of functional
organisational separation, their understanding
by the German interlocutors is discussed and
contrasted with British interpretations.
Firstly, competence and judgement were
seen to be intimately linked. Those who have
no specific professional or academic knowl-
edge of processes cannot judge them as part
of their official role. This implies, for instance,
that line managers were presumed to always
know better how their function can cut
costs or increase revenues than management
accountants. There was unanimous agreement
amongst the German senior management
accountants interviewed on that: “Otherwise we
would be the better operational managers,
wouldn’t we?” Conversely, “If your manage-
ment accountants always know better than
your line managers, you should start thinking
about the qualification of your people”. A third
German senior management accountant finds
the idea that it could be otherwise rather
amusing.
The management accountant can discuss with the
expert if those heads are necessary or not. That is his
job. But in the end I cannot say, right, your personnel
plan will be reduced by five heads [.,,I because then I
would .._ what shall I say? Then the management
accountant would run the business, no longer the
experts. That doesn’t work [he laughs] You would no
longer fmd [he laughs again] That simply does not work.
Note how closely related competence and
judgement are seen to be. To suggest that
operational management’s judgement could be
shared with management accountants is imme-
diately, and without exception, taken to call
into question line management’s competence.
This alignment of a discourse of competence
with decision-making on budgets and invest-
ments strongly contrasts with views that I
found to prevail in Britain. Whilst British senior
management accountants freely acknowledged
that: “Basically we are not technically quali-
fied”, a layman’s appreciation of technically
complex projects, the opinion of the proverbial
“Man on the Clapham Omnibus”, is still valued.
He is now disguised as the Consumer:
[.,,I if we’re finance people, we bring our technical
expertise to the party, but it does not mean that we
haven’t got anything else to add. At the end of the day
we’re all consumers. We can all see and hear what goes
166 T. AHRENS
on in the organisation and, you know, we can con-
tribute outside of our [...I technical expertise.
This senior management accountant gave an
example of how such a general perspective on
operational decisions might be useful.
[...I for example, if I was trying to do the cost of some
labehing machinery [for bottles]. In terms of the detail,
the specification requirements, etc., it may not be
appropriate for me to say, we& we shouldn’t have it
because it costs too much. But what may be appro
priate, is to say, well, are we sure we want to have three
labels on this bottle? Is that really necessary for market-
ing? And it’s trying to actually bring the groups together
and have a debate, and think of different ways of doing
it. Because we have always put a [?] top on it [the
bottle], do we continue to do a [?I top on it? [...I trying
to raise people’s awareness. Do you reahse that activity
has an on-cost to our business, and therefore what is the
added value for the market place, that we’re gonna get
from actually having this bottle with [?I like this?
Similar vi ews are shared by most of the man-
agement accountants whom I met at British
brewers. They would tend to perceive them-
selves as generalists who are trying to “chal-
lenge” operational management by mobilizing
different functional or financial arguments in a
cross-functional debate.
In line with the high esteem in which gen-
eralists were held in Britain, functional exper-
tise was sometimes associated with slightly
awkward and clumsy specialism. A British
senior management accountant thus expressed
his views on how technical investment projects
ought to be handled.
The local finance people from the brewery need to get
involved because it has to be a cross-functional team
effort. We’ve seen it. Otherwise you find, one day there
is a hole in the wag and a machine installed and the
forklift truck can no longer move the pallets along that
corridor. Or the techies just buy some machine because
they like it or it’s cheap, but they don’t consider the
bottom line implications, and suddenly you have to
employ more people in production than before.
This quotation emphasizes the disadvantages of
technical specialist knowledge in isolation.
Engineers, generally respected for their com-
petence in Germany (Hutton & Lawrence,
1981), are here portrayed as a bunch of “tech-
ies”, too narrowly specialized to grasp the
complexity of both operational processes in
the brewery and doing business in Britain.
This leads on the second concept which
seems central to the style of German manage-
ment accountant’s maintenance of functional
separation of organisational spheres: responsi -
bi l i ty. It contrasts strongly with the opinion
given in the last quotation. But it also contrasts
with the insistence of the British maintenance
manager and management accountant, in the
previous section, to regard the sum of the site’s
budgets as one pool that can be spread over all
areas of the brewery, depending on where
relative risk is regarded highest. In Germany, I
found great reluctance of management accoun-
tants to give advice to line managers, or even
make demands on them. It seemed as though
the formal responsibility of the competent
foreclosed outsiders’ attempts to share their
official judgement. Statements like this could
be frequently heard: “I am not responsible for
what is planned but for bow it is done. [ . ..I Of
course we can make suggestions but we have
to acknowledge their [operational manage-
ment’s] competence”. This particular notion
of responsibility causes people to carefully
weigh whether to make cross-functional sug-
gestions at all. Depending on how they are
advanced, such suggestions could be taken as
insults to the competence of the suggestion’s
recipient. The functionally distanced style of
accountability of which this particular notion
of responsibility can become part, even
between operational managers and manage-
ment accountants who cooperate relatively
closely, is illustrated by a senior management
accountant:
I...] if the [head of internal logistics] thinks he needs 80
forklift truck drivers and in my view 75 should be suffix
cient, then we wig discuss for a while, one, two weeks
or longer, we can’t agree, the matter is escalated. Then I
say to his superior: In my opinion... ! [he hits on the
table] And then those two experts, the local expert and
his superior [in the logistics department], must say 75
or 80. And if they say 88, I would say, heck, why am I.. .?
[he hits the table with a report] I’ve done my job, I
STYLES OF ACCOUNTABILITY 167
record that as an opportunity to save [in the forecast],
but it is not considered for the [budgeted] result, and
the head count budget remains unchanged.
The impossibility to intervene formally in
someone else’s affairs also has a hierarchical
variant. One senior production engineer who
reported to the head of production for a num-
ber of breweries suggested that even he as an
engineer must be careful not to appear to be
trespassing on the boundaries of responsibility
when suggesting the deployment of technology
in individual breweries.
From my central perspective, consensus is very impor-
tant indeed. To just order people to do things in a
certain way is not good enough, because then they
really have to prove to me that it doesn’t work, if they
had originally disagreed with me.
The ditches of responsibility did not only exist
between functions but could also exist
between levels of the organisational hierarchy.
Finally, specialist operational knowl edge
could be seen to necessitate action with much
greater ease than in Britain. Much more
strongly than the British, German management
accountants and operational managers deduced
necessity from the particular expertise which
was deemed appropriate for a certain class of
issues. To return to the British example of a
mechanism for capital rationing, which closed
the previous section, even though it was
accepted in Germany that nobody can know
exactly when a technical unit finally breaks
down, it was felt that an engineer’s knowledge
would be most adequate to assess the time
when expenditure would “really” become
necessary. If one cannot prove operational
management wrong, one must trust them. Also,
as shown previously, quality issues were
conceptualized similarly. In the specific context
of responsibility and competence as outlined
above, operational expertise was elevated to
produce compelling reasons for action. Organi-
sational members held themselves and others
accountable to act upon such expertise.
This way of aligning accounting information
with the discourse of competence, responsi-
bility, and knowledge was manifest in the com-
position of five of the seven management
accounting departments at large German brewers
which participated in this study. Since func-
tional expertise was held in such high regard
that it could generate powerful arguments as a
matter of principle and without the mandatory
backup of financial calculations, three depart-
ments sought access to that expertise by
employing graduate brewing engineers with
backgrounds in business economics, two
further departments had appointed liaison
engineers in production. The head of one of
the remaining two departments thought that
employing engineers would be beneficial in
principle, but felt that he had sufficient knowl-
edge of production processes himself and that
the costs would thus outweigh the benefits.
The other head of department did not think
that employing engineers in his department
would be particularly beneficial. None of the
British management accounting departments
studied employed brewing engineers.
The particular way in which the discourse
around competence, responsibility, and knowl-
edge was aligned with the discourse and prac-
tice of budgeting and investment decision-
making at the German brewers studied was
expressive of a style of accountability quite
unlike that observed in Britain. Rather than
holding managers accountable for variances
which they could not influence and, some-
times, did not even budget for in the first
instance, the Germans seemed anxious to keep
responsibilities functionally separate. The func-
tionally organised processes of accountability
appeared to reflect a modular-systematic con-
ception of organising in which “the limits” of
the individual modules, the functions, can only
be known by their respective expertise. Even
when it became obvious that the responsible
line manager was working inefficiently, the
rigidly functional processes of accountability
could ensure the continuance of such waste.
Every year our filling manager has half a million left in
his maintenance budget. We shpw him what happened
over the last years but he won’t listen. No, no, this year
he really has something extraordinary to budget for. And
his production director just doesn’t address the issue
with him. It’s beyond our reach, we can’t help it...
Contrary to the British context, the discourse
of increasingly competitive markets was not
widely enough spread to lend it more organisa-
tional support by aligning it with this question
of budgeting for maintenance. This question
will remain unresolved until the management
accountants can convince the board, and par-
ticularly the production director, that such
wasteful budgeting can no longer be afforded.
The overall position of management account-
ing at German brewers compared to their Brit-
ish counterparts was clearly less dominant of
organisational processes of accountability.
CONCLUSION: STYLE MAKES A DIFFERENCE
When organisational members become
accountable to accounting, the numbers never
speak for themselves. They need to be com-
piled, compared, and interpreted in ways
which organisational members perceive as
reasonable. Those reasonable, accepted ways
make out an organisation’s style of implicating
accounting into processes of accountability. In
order to avoid appearing unreasonable or unin-
telligible, organisational members act and argue
such that they reproduce that style. In this
paper, an attempt was made to develop the
notion of style such that a tension between the
effects of agency and structure was maintained.
It was characterized by a balance between
generality, in order to avoid cultural determin-
ism and, specificity, in order to point towards
similarities between firms in one country,
regarding the ways in which their members
implicate accounting in processes of account-
ability. Central to the notion of style, and to the
claim that there should exist national simila-
rities, was the idea, developed from Garfinkel’s
(1984) concept of accountability, that a defin-
ing feature of organisational processes of
accountability is the alignment of organisational
168 T. AHRENS
rhetoric and practice with wider public dis-
courses. As the latter emerge, at least partly, on
a national level, nationally shared styles of
accountability can be expected. Taking the
example of the largest British and German
brewers, this paper has developed a contrast
between the roles which management
accounting plays in the reproduction of their
respective styles of accountability.
The focus of this paper was on the detailed
observation of organisational action, which was
then related to wider public discourses in the
very general, unspecific form in which they
could be observed to be mobilized by organisa-
tional members. gather than go into great detail
of the historical emergence of those discourses,
this paper has attempted to demonstrate their
unproblematic existence in everyday organi-
sational action. It was in that unproblematic
taken-for-grantedness that those discourses
unfolded their significance for concrete organi-
sational action and, thereby, processes of
accountability. Only a social scientist would try
to explain in complex detail what everybody
knows, and that is precisely what managers
and other organisational members do not do
(Garfmkel, 1984, pp. 7-9). The unproblematic
mobilization of public discourses is indicative
of the fragility of their alignments with organi-
sational concerns and, ultimately, the fragile
nature of those public discourses themselves.
For if organisational members draw on public
discourses without analysing their complex
origins, the enactment of those discourses
acquires a particular meaning: far from some
essential “realization” of that discourse in the
organisational context, the process of enacting
a discourse needs to be understood as its
creative alignment with more organisationally
based concerns. l5 As organisations communi-
cate their experiences with thus modified dis-
courses back into the public domain, they
reproduce the ambiguity of those public dis-
courses. Arguably, their suitability for further
alignments within diverse organisational con-
texts is thereby enhanced.
I5 I would like to thank the anonymous reviewer A for drawing my attention to this point
STYLES OF ACCOUNTABILJTY 169
Whilst the flexibility with which public dis-
courses can be aligned with organisational
rhetoric and practice was stressed throughout
the paper, the Anglo-German contrast was
argued to be related to two different recogniz-
able styles of alignment. They were sum-
marized in two national frameworks. Britain
was characterized by what was called a return-
risk-framework which, compared to German
brewers, privileged the reality of accounting
information in judging proposals for opera-
tional action. Within the British return-risk-
framework, ceilings of expenditure for organi-
sational subunits were seen to promote cross-
functional coordination and discussion of pro
posals on a local level with an emphasis on
financial constraints. The ceiling could be seen
to be aligned with a general appreciation and,
sometimes, domination of the layman’s point of
view, but also with wider discourses of com-
mercialism and perceived needs to respond
to market changes and become more brand
oriented. Since brand orientation was regarded
as central to a profitable future and “ [ . ..I
what we try to always do, at the end of the
day, is create shareholder value”, such gen-
eral discourses, aligned with accounting
information, were highly visible in organ-
isational management and processes of
accountability.
Central to the processes of accountability in
Germany were quite different priorities. The
brewers studied appeared to be dominated by a
differently constructed social reality. Compared
to Britain, operational considerations seemed
much more readily accepted as good reasons
for conduct . (cf. Steward et al ., 1994).
Accounting information was often not regarded
as capable of capturing the reality of individual
proposals. It seemed to offer only one of a
number of possible and credible perspectives.
Accordingly, processes of accountability were
functionally separated in a way which tended
to give inter-functional communication between
management accounting and line management
a tentatively suggestive rather than a directive
character. Functional separation could be seen
to be supported by wider discourses around
systematic knowledge as an organising prin-
ciple for management. In a context which
emphasized functional specialism, management
accountants saw their specific functional task
as providers of management information such
that organisational action could be coordinated
with a view to overall profitability. This role
gave them less direct influence in organisational
processes of accountability compared to their
British counterparts (cf. Carr et al , 1994, p. xiii).
It would thus appear that in both countries
the respective shared discourses around man-
agement are most important for the emergence
of recognizable national styles of accountability.
In Britain, “good managers” would be those
who can handle risk despite under-funding. In
Germany, “good managers” can systematically
organise specialist areas of operations. Earlier
comparative Anglo-German research, which
equally indicates a certain coherence of national
management practice, would support this (Carr
et al ., 1994; Horovitz, 1978, 1980; Lawrence,
1980; Serge & Warner, 1986; Serge et al ., 1983;
Steward et al , 1994). Particularly, Sorge &
Warner’s (1986) conclusions from their study
of organisational processes and structures of
matched pairs of manufacturing firms comple-
ment this paper’s findings:
It is apparent how the organisational arrangement is
governed by long-running continuity of respective
mechanisms of integration in large enterprises: in West
Germany, this is the technical and commercial industrial
bureaucracy of the socially coherent enterprise, In
England the cash nexus which ties subsystems and
occupational groups together (p. 200).
However, this is not to suggest a monolithic
image of national styles of organising. Cultures
are not static. For example, whilst the data from
the group of British and German firms which
had recently acquired operations in the respec-
tive other country supported the differences of
style developed in this paper, interlocutors
from those firms also hinted towards learning
processes which might see British and German
styles converge. For instance, a senior manage-
ment accountant at the head office of a large
German manufacturing firm which had recently
170 T. AHRENS
acquired a large British manufacturing firm was
initially surprised to find that general managers
of factories in Britain were in charge of overall
factory budgets without detailed control and
budgeting guidelines by head office. But he
went on to criticize the current complexity of
those guidelines for the German operations by
questioning their usefulness for management
processes. According to him, the emphasis on
formal management accounting systems in
Germany ought to be reduced, and manage-
ment accountants should, for example, assume
roles in cross-functional development teams for
new products. Management accountants might
thus become more operationally oriented. In
that sense, there may be converging tenden-
cies, for instance, through the introduction of,
what comes increasingly to be seen as, “global
practices”, such as target costing. It is an open
question how far such practices will operate
with national style.
This paper has aimed to convey an impres-
sion of contrasting national practices as they
persisted throughout the research process. To
theorize those contrasts, the distinct ways in
which accounting was implicated in processes
of accountability, as styles, served to unite two
apparently contradictory ideas: the fragility and
indeterminacy of the alignments between wider
and more local concerns, and the very real ways
in which those alignments could be seen to
pattern organisational action. To think of
national practices in terms of styles acknowl-
edges the potential of specific traditions of
accountability to explain accounting in action,
without denying the flexibility with which local
agency can incorporate social discourse into
organisational action.
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Appendi ces Overl eaf
172 T. AHRBNS
APPENDIX A
1
3
2
7
Details of data collection
PBBPABATION PHASE
Interviews with management
accountants
Britahl
CermanY
2 6
FIRMS WITH OPERATIONS IN THE
OTHER COUNTRY
Number of tirms
Interviews with management
accountants
BBEWEItS’
-
OBSERVATIONS
Number of lirms’ 2
2 (+I)
Weeks continuousIy observed 1+1+1 l+l+%(+%)
Single days observed 5 1
Number of meetings observed 12 5
Number of one-to-or& observed
13 7
-
INTEBVIEWS~
Number of firms
3 (+2) 7 f+l)
-
with management 22 (+2) 21 (+2)
accountants
-
with operational managers 13 13