Title

Rationality, institutionalism and accounting change: Understanding a performance management system within an Australian public sector entity

Source of Publication

Journal of Accounting & Organizational Change

Abstract

Purpose The primary purpose of this paper is to put forward a framework grounded in new institutional sociology (NIS) theory that examines the impact of national competition policy on the design and implementation of a balanced scorecard (BSC) in a government-owned electricity corporation in Australia. It examines the importance of the rational analytical deliberation of legitimacy as a fundamental accompaniment to isomorphism in the continuing development of the new performance management system. Design-methodology-approach A single exploratory-descriptive case study with embedded multiple unit analysis is used in order to examine the adoption of a BSC as an example of the process of evolution of a new initiative. It uses DiMaggio and Powell's concept of isomorphism to explain the initial adoption of the BSC. Findings The paper highlights the importance of the deliberation of both rational analytical approaches and legitimacy as a fundamental accompaniment to isomorphism in the continuing development of accounting systems in the public sector. Originality-value These results provide useful insights into the criticism of NIS theory, that is, that it does not provide scope for organisations to adopt rationally technical practices as well as isomorphic behaviour for legitimacy. © 2009, Emerald Group Publishing Limited

Document Type

Article

First Page

362

Last Page

389

Publication Date

9-18-2009

DOI

10.1108/18325910910986972

Author First name, Last name, Institution

Wendy James, Zayed University

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