reports. However, the results failed to show any significant differences, and they are offered si... more reports. However, the results failed to show any significant differences, and they are offered simply as a note to guide others now interested in this topic. In the experiment, we compared the decisions of student subjects where one set of subjects was provided both a confidence interval statement about the variability of a population and several observations from prior periods and the other set was provided solely with the observations. (For reasons described below the task was not set in an accounting environment.) No significant differences were found between the two disclosure conditions. The presence of a formal confidence interval statement did not yield significant differences in the subject's decision, regardless of whether the variability in the attribute reported on was set at a high or low level. The only manipulation that produced a significant result was when the size of the variance in the attribute was changed from low to high in the experiment.
Our previous reviews have been concerned with selected works of other disciplines which seem of s... more Our previous reviews have been concerned with selected works of other disciplines which seem of special interest to accountants. Similarly, here we are concerned in a general way with the emerging literature devoted to Bayesian statistical decision theory' and in particular with Schlaifer's Probability and Statistics for Business Decisions.2 Although five years have elapsed since the original publication date, this book remains as the best discussion of the subject for the nonstatistician.3 It seems of special use to accountants whenever they confront problems of decision making under uncertainty.4
While few, if any, early accounting studies were based on psychological theories of behavior, Bir... more While few, if any, early accounting studies were based on psychological theories of behavior, Birnberg and Nath [1967] conjectured that the functional fixation hypothesis proposed by Ijiri, Jaedicke, and Knight [1966] could lie at the heart of studies concerning alternative accounting techniques (e.g., LIFO and FIFO). From that point, until Ashton's recent paper at the 1976 Empirical Research Conference, only one study (Dopuch and Ronen [1973]) attempted to deal explicitly with the phenomenon. Their results confirmed the earlier conjectures. In this paper, we will reexamine the underpinnings of the functional fixity problem and offer some additional evidence concerning the existence of a fixity phenomenon. A final section will outline the implication for future research.
The authors have produced a study that focuses on a relevant issue for the modern manager and con... more The authors have produced a study that focuses on a relevant issue for the modern manager and contemporary accountants-the interaction between the budget process and employee performance and attitudes. Regardless of which school of management theory one prefers, it would appear that budgets and the budget process will be with us for the foreseeable future. Whether it is a means of communication as in Swieringa and Moncur's "active participant" manager or is a blunt instrument as in the case of their "involved exponent," the budget is an integral part of the management process. I will divide my comments on the paper into three sections. Initially I will discuss certain aspects of the studies which affect both parts of the study. Later, I will deal with the factor analytic analysis of the adapted Fertakis questionnaire, and finally, the correlation study. In this way, after sorting out the common ground, I can focus on the two facets of the study independently.
Studies in managerial and financial accounting, Apr 12, 2012
Sisaye and Birnberg (2010a, 2010b) have described the extent and scope of the innovations dimensi... more Sisaye and Birnberg (2010a, 2010b) have described the extent and scope of the innovations dimensions as the degree to which learning has affected the organizational structures and processes of the organization. Within this framework, extent has been defined as the degree to which the innovation affects the organization's management accounting administrative structures, systems, and behaviors of members or units within the organization. Extent is synonymous with the two types of learning identified by Argyris and Schon (1978) discussed earlier. Thus, the learning in the extent dimension varies from a technical change within an existing system (single loop) to the adoption of an entirely new administrative system (double loop). While this continuum extends from technical changes that affect a single process or task to administrative changes that affect organization-wide systems and structures, we will treat them as though they are dichotomous. As indicated earlier (Chapter 2), extent is associated with two types of learning: single loop (technical change within an existing system, i.e., gradual-incremental) and double loop (the adoption of an entirely new system, i.e., radical-transformational) (Argyris & Schon, 1978, 1996).
Studies in managerial and financial accounting, Apr 12, 2012
Researchers in the social sciences have studied the process by which new ideas are adopted (imple... more Researchers in the social sciences have studied the process by which new ideas are adopted (implemented) and how acceptance is generated among those charged with accepting and implementing an innovation. Sociology, in particular, has developed an extensive literature on diffusion analysis which examines how innovations are diffused (see Coleman, Katz, & Menzel, 1966; Leagans & Loomis, 1971; Rogers, 1971; Rogers & Shoemaker, 1971). While many of these studies dealt with the adoption and diffusion of a new product, for example, seed corn or drugs, the same analysis has been applied to process innovations, that is, system and organizational change.
Emerald Group Publishing Limited eBooks, Apr 12, 2012
The resource-based view of an organization suggests that differences in resources among organizat... more The resource-based view of an organization suggests that differences in resources among organizations affect the propensities for organizations to undertake strategic planning initiatives in response to environmental changes. Organizational resources may be used less effectively when organizations engage in “exploitation” of knowledge that they already have acquired or when they try to use their resources to improve the products and/or services they already produce or provide rather than to undertake new or radically altered activities. Kraatz and Zajac (2001) suggest that organizations relatively well endowed with resources are less likely to engage in major strategic changes to adapt to environmental changes. This, may be because the abundance of (slack) organizational resources may permit them to survive environmental changes without undertaking any strategic changes. These organizations need to respond/innovate only when the environmental change is perceived to create a significant threat to the organization's survival and/or growth. Kraatz and Zajac (2001) noted that organizations having the most success in the past are the least likely to change their goals because of their commitment to the current strategies that maximize the utilization of existing resources, even in situations that involve environmental uncertainty (p. 636). Most of the time, resources-rich large organizations are more likely to survive external threats from environmental change. Nevertheless, this does not rule out the fact that successful strategic changes are initiated/undertaken by resources-endowed firms. When resource-endowed firms do undertake a strategic innovation, their superior resources can facilitate the innovation and increase the likelihood of its success. Thus when the resource endowed organizations do undertake the changes, they are likely to be adaptive to change and to benefit from strategic changes.
Studies in managerial and financial accounting, Apr 12, 2012
OD refers to cell 3 of the adoption-diffusion innovation typology defined in Table 1. It has an a... more OD refers to cell 3 of the adoption-diffusion innovation typology defined in Table 1. It has an administrative extent and an autonomous scope. OD has been used pre-dominantly in organizational change and sociology literature to describe cultural innovation programs that are directed toward a change in individual employee behavior. In accounting, the OD approach is important because accounting innovations, such as ABC, are directed toward a change in managers' behavior and the use of accounting data to evaluate performance. The OD approach is applicable in the use of ABC data at the divisional or unit level. Before explaining the application and use of OD in accounting innovations, we will define OD and summarize its innovation approaches as described in organizational sociology and behavior literature.
Studies in Managerial and Financial Accounting, 2012
Strange and Soule (1998) outlined the processes of innovations as follows. “Innovations are novel... more Strange and Soule (1998) outlined the processes of innovations as follows. “Innovations are novel (at least to the adopting community), making communication a necessary condition for adoption. Innovations are also culturally understood as progressive, strengthening the hand of change agents. And since innovations are risky and uncertain, adopters carefully weigh the experience of others before acting” (p. 267).
... Jacob G. Birnberg Robert W. Murphy Jr. Professor of Management Control Systems University of ... more ... Jacob G. Birnberg Robert W. Murphy Jr. Professor of Management Control Systems University of Pittsburgh birnberg@katz.pitt.edu Michael D. Shields Eli Broad Professor of Accounting Michigan State University shields@msu.edu November 2005 ...
This paper approaches innovations as an organizational learning and change processes that organiz... more This paper approaches innovations as an organizational learning and change processes that organizations employ to adapt to new and changing environments. Learning is related to adoption-diffusion analysis in sociology, which studies how innovations are disseminated within organizations and divisions. The paper suggests these two innovations stages related to the demand (adoption) and diffusion (dissemination) help us understand the management accounting innovations processes in organizations.
reports. However, the results failed to show any significant differences, and they are offered si... more reports. However, the results failed to show any significant differences, and they are offered simply as a note to guide others now interested in this topic. In the experiment, we compared the decisions of student subjects where one set of subjects was provided both a confidence interval statement about the variability of a population and several observations from prior periods and the other set was provided solely with the observations. (For reasons described below the task was not set in an accounting environment.) No significant differences were found between the two disclosure conditions. The presence of a formal confidence interval statement did not yield significant differences in the subject's decision, regardless of whether the variability in the attribute reported on was set at a high or low level. The only manipulation that produced a significant result was when the size of the variance in the attribute was changed from low to high in the experiment.
Our previous reviews have been concerned with selected works of other disciplines which seem of s... more Our previous reviews have been concerned with selected works of other disciplines which seem of special interest to accountants. Similarly, here we are concerned in a general way with the emerging literature devoted to Bayesian statistical decision theory' and in particular with Schlaifer's Probability and Statistics for Business Decisions.2 Although five years have elapsed since the original publication date, this book remains as the best discussion of the subject for the nonstatistician.3 It seems of special use to accountants whenever they confront problems of decision making under uncertainty.4
While few, if any, early accounting studies were based on psychological theories of behavior, Bir... more While few, if any, early accounting studies were based on psychological theories of behavior, Birnberg and Nath [1967] conjectured that the functional fixation hypothesis proposed by Ijiri, Jaedicke, and Knight [1966] could lie at the heart of studies concerning alternative accounting techniques (e.g., LIFO and FIFO). From that point, until Ashton's recent paper at the 1976 Empirical Research Conference, only one study (Dopuch and Ronen [1973]) attempted to deal explicitly with the phenomenon. Their results confirmed the earlier conjectures. In this paper, we will reexamine the underpinnings of the functional fixity problem and offer some additional evidence concerning the existence of a fixity phenomenon. A final section will outline the implication for future research.
The authors have produced a study that focuses on a relevant issue for the modern manager and con... more The authors have produced a study that focuses on a relevant issue for the modern manager and contemporary accountants-the interaction between the budget process and employee performance and attitudes. Regardless of which school of management theory one prefers, it would appear that budgets and the budget process will be with us for the foreseeable future. Whether it is a means of communication as in Swieringa and Moncur's "active participant" manager or is a blunt instrument as in the case of their "involved exponent," the budget is an integral part of the management process. I will divide my comments on the paper into three sections. Initially I will discuss certain aspects of the studies which affect both parts of the study. Later, I will deal with the factor analytic analysis of the adapted Fertakis questionnaire, and finally, the correlation study. In this way, after sorting out the common ground, I can focus on the two facets of the study independently.
Studies in managerial and financial accounting, Apr 12, 2012
Sisaye and Birnberg (2010a, 2010b) have described the extent and scope of the innovations dimensi... more Sisaye and Birnberg (2010a, 2010b) have described the extent and scope of the innovations dimensions as the degree to which learning has affected the organizational structures and processes of the organization. Within this framework, extent has been defined as the degree to which the innovation affects the organization's management accounting administrative structures, systems, and behaviors of members or units within the organization. Extent is synonymous with the two types of learning identified by Argyris and Schon (1978) discussed earlier. Thus, the learning in the extent dimension varies from a technical change within an existing system (single loop) to the adoption of an entirely new administrative system (double loop). While this continuum extends from technical changes that affect a single process or task to administrative changes that affect organization-wide systems and structures, we will treat them as though they are dichotomous. As indicated earlier (Chapter 2), extent is associated with two types of learning: single loop (technical change within an existing system, i.e., gradual-incremental) and double loop (the adoption of an entirely new system, i.e., radical-transformational) (Argyris & Schon, 1978, 1996).
Studies in managerial and financial accounting, Apr 12, 2012
Researchers in the social sciences have studied the process by which new ideas are adopted (imple... more Researchers in the social sciences have studied the process by which new ideas are adopted (implemented) and how acceptance is generated among those charged with accepting and implementing an innovation. Sociology, in particular, has developed an extensive literature on diffusion analysis which examines how innovations are diffused (see Coleman, Katz, & Menzel, 1966; Leagans & Loomis, 1971; Rogers, 1971; Rogers & Shoemaker, 1971). While many of these studies dealt with the adoption and diffusion of a new product, for example, seed corn or drugs, the same analysis has been applied to process innovations, that is, system and organizational change.
Emerald Group Publishing Limited eBooks, Apr 12, 2012
The resource-based view of an organization suggests that differences in resources among organizat... more The resource-based view of an organization suggests that differences in resources among organizations affect the propensities for organizations to undertake strategic planning initiatives in response to environmental changes. Organizational resources may be used less effectively when organizations engage in “exploitation” of knowledge that they already have acquired or when they try to use their resources to improve the products and/or services they already produce or provide rather than to undertake new or radically altered activities. Kraatz and Zajac (2001) suggest that organizations relatively well endowed with resources are less likely to engage in major strategic changes to adapt to environmental changes. This, may be because the abundance of (slack) organizational resources may permit them to survive environmental changes without undertaking any strategic changes. These organizations need to respond/innovate only when the environmental change is perceived to create a significant threat to the organization's survival and/or growth. Kraatz and Zajac (2001) noted that organizations having the most success in the past are the least likely to change their goals because of their commitment to the current strategies that maximize the utilization of existing resources, even in situations that involve environmental uncertainty (p. 636). Most of the time, resources-rich large organizations are more likely to survive external threats from environmental change. Nevertheless, this does not rule out the fact that successful strategic changes are initiated/undertaken by resources-endowed firms. When resource-endowed firms do undertake a strategic innovation, their superior resources can facilitate the innovation and increase the likelihood of its success. Thus when the resource endowed organizations do undertake the changes, they are likely to be adaptive to change and to benefit from strategic changes.
Studies in managerial and financial accounting, Apr 12, 2012
OD refers to cell 3 of the adoption-diffusion innovation typology defined in Table 1. It has an a... more OD refers to cell 3 of the adoption-diffusion innovation typology defined in Table 1. It has an administrative extent and an autonomous scope. OD has been used pre-dominantly in organizational change and sociology literature to describe cultural innovation programs that are directed toward a change in individual employee behavior. In accounting, the OD approach is important because accounting innovations, such as ABC, are directed toward a change in managers' behavior and the use of accounting data to evaluate performance. The OD approach is applicable in the use of ABC data at the divisional or unit level. Before explaining the application and use of OD in accounting innovations, we will define OD and summarize its innovation approaches as described in organizational sociology and behavior literature.
Studies in Managerial and Financial Accounting, 2012
Strange and Soule (1998) outlined the processes of innovations as follows. “Innovations are novel... more Strange and Soule (1998) outlined the processes of innovations as follows. “Innovations are novel (at least to the adopting community), making communication a necessary condition for adoption. Innovations are also culturally understood as progressive, strengthening the hand of change agents. And since innovations are risky and uncertain, adopters carefully weigh the experience of others before acting” (p. 267).
... Jacob G. Birnberg Robert W. Murphy Jr. Professor of Management Control Systems University of ... more ... Jacob G. Birnberg Robert W. Murphy Jr. Professor of Management Control Systems University of Pittsburgh birnberg@katz.pitt.edu Michael D. Shields Eli Broad Professor of Accounting Michigan State University shields@msu.edu November 2005 ...
This paper approaches innovations as an organizational learning and change processes that organiz... more This paper approaches innovations as an organizational learning and change processes that organizations employ to adapt to new and changing environments. Learning is related to adoption-diffusion analysis in sociology, which studies how innovations are disseminated within organizations and divisions. The paper suggests these two innovations stages related to the demand (adoption) and diffusion (dissemination) help us understand the management accounting innovations processes in organizations.
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