FACTORS THAT INFLUENCED THE CHANGE IN MANAGEMENT ACCOUNTING  part 3 1000w

Burns (1999) suggest that many organisations have routines in place and new changes introduced will lead to the change of the nature of the organisation. In the early 2000s a project, called the Production Cost Control Project was set up to improve the flow of acc info in Omega Plc. The project had failed because the operating managers saw the business in terms of producing-based meanings and routines. The divisional accountants viewed the business as financial term and regarded PCCP as a means of introducing accounting-based routines.

Sulaiman and Mitchell (2005) carried out study on management accounting change in Malaysian manufacturing companies. After gathering all information a four types of change had occurred. The two types occurred due to new technique introduction and two concerned existing management accounting modification. The research found that management accountant classified the level of management accounting change into five generalised components.

3.3 Institutional theory

3.3.1 Institution

Institutional theory is a theoretical framework that became more relevant in research of management accounting change. In accepting this theory there is no universally agreed definition of an institution. Scott (1995) describes “instutions are social structures that have attained a high degree of resilience” Burns and Scapens (19990 defined institution as a way of action of commonness which is surrounded in the habits of a group of people.

3.3.2 Institutional framework as a rules and routines concept

Development of the framework began by looking at the way in which order is achieved through rules and routines. The framework perceive management accounting to be a rules and routines constituted by established habits. (Kim Soin, 2002). Hodgson (1993) defined habits as ‘self-actualizing dispositions or tendencies to engage in previously adopted form of action’. Habit is a personal action where routines involve group of people as components of institution. Routines play an important role in an organisation in which management accounting was viewed as a rule concept where management accountant performed routine tasks.