When the supply side of a management accounting innovation fails – the case of beyond budgeting in Sweden

Abstract

Using the management fashion perspective as a theoretical lens, we explicate the limited success of the beyond budgeting (BB) concept in Sweden from a supply-side perspective. The fashion perspective assumes that management concepts do not emerge or diffuse by popular demand, instead viewing the activities of supply-side actors, such as management consultants, professional associations, and academics, as crucial to the success of management concepts in a marketplace of potential users. We conceptualize a management fashion-setting process that enabled us to explore how and why actors have selected or rejected BB, how and why BB has been processed, the channels through which BB has been disseminated, and how and why supply-side actors interact (or do not interact) with other supply-side actors and other parties in these activities. Our findings suggest that a weakly mobilized supply side has produced heavily reduced, heterogeneous packages of rhetoric and design characteristics regarding the BB concept that have reached only a small portion of the target audience of potential adopters. Our study illustrates how barriers to diffusion are created on the supply side in the absence of the localization of BB.

Keywords:

• management accounting
• beyond budgeting
• management fashions
• diffusion

Acknowledgements

We gratefully acknowledge the comments of Henrik Agndal, Sebastian Becker, Elin Funck, Jan Greve, Timo Hyvönen, Torbjörn Stjernberg and Andreas Werr on earlier versions of this paper. We thank the reviewers and the editor, Professor Sven Modell, for their comments and help with the paper. This work was supported by the Riksbankens Jubileumsfond, the Torsten and Ragnar Söderberg’s Foundations, and Stena AB.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Jan Wallander is well known in Sweden. He has been the CEO and Chairman of Svenska Handelsbanken and a Board Member or Board Chairman of Ericsson, Marieberg, MoDo, SJ, and SAS. He was an Associate Professor of Economics and has been the Head of SNS (Centre for Business and Policy Studies) and IUI (The Industrial Institute of Social and Economic Research) (Ax and Bjørnenak 2005).

2 Two separate interviews were conducted with one author/academic because he had published two books between 2003 and 2012. Two separate interviews were conducted with two authors/academics because they had published two books each during that period. Two separate interviews were conducted with two respondents because they represented two groups of supply-side actors each (authors/academics and a professional institute, and authors/academics and a professional network). Two interviews were conducted with representatives for an individual supply-side actor (a professional association). Four interviews were conducted with representatives for an individual supply-side actor (a professional institute).

3 Our own translation of the Swedish name ‘Ekonomistyrningsforum’. The forum does not have an official English name.

4 Our own translation of the Swedish name ‘Controllernätverk’. The network does not have an official English name.

5 The Association of Swedish Engineering Industries was formerly known as the Trade Association of the Swedish Mechanical and Electrical Engineering Industry (‘Sveriges Mekanförbund’).

6 Because Industry trade and employers’ associations no longer pursue issues related to the development of administrative systems and procedures (including management accounting), in this section we report no results related to this supply-side actor.

7 The label ‘beyond budgeting’, however, is mentioned in two books and Hope and Fraser’s (2003) book is mentioned. The total number of sentences directly related to BB in these books amounts to two per book.

8 Some academics have however become popular as ‘academic management gurus’. These figures include Michael Porter, Gary Hamel, C.K. Prahalad, Paul Krugman and Robert S. Kaplan. They engage primarily in publishing management ideas for practitioners, making presentations at conferences and seminars for practitioners, participating in professional organizations’ activities, and temporarily acting as management consultants.