Corporate political strategy: the roles of management accounting in relational work

ABSTRACT

Research has provided substantial evidence that firms engage in Corporate Political Activity/Strategy (CPA), as a form of relational work, to manage and influence political actors and shape political institutions in ways favourable to the firm. However, relatively little is known about how management accounting is mobilised in an organisation in order to support CPA attempts. This paper addresses this gap by investigating how management accounting is implicated in relational work. We explore this issue in a Brazilian organisation (Electra), which was privatised as part of a wider privatisation program in Brazil. We draw on the institutional work and CPA (in particular on Oliver and Holzinger’s [2008. The effectiveness of strategic political management: A dynamic capabilities framework. The Academy of Management Review, 33(2), 496–520. https://doi.org/10.5465/amr.2008.31193538] framework) literature. By doing so, we find that our focal firm used a multiplicity of relational strategy types (i.e. reactive, anticipatory, defensive, and proactive) in a more simultaneous way than has previously been reported in the literature. Moreover, we identify four roles that management accounting may play in organisations’ attempts to engage in CPA. These roles were intertwined with the relational strategies adopted in our focal company. This finding contrasts with the research in management accounting, which has dichotomised passive and active responses to external pressures. We show that these two responses were blended in our case, and management accounting may be concomitantly implicated in compliance and influence strategies. We further discuss these findings in relation to the literature on relational work/strategy and management accounting.

KEYWORDS:

• Management accounting
• regulation
• relational work
• strategy
• corporate political activity
• institutional work

Acknowledgements

Earlier versions of this paper were presented at the 10th Conference on New Directions in Management Accounting (Brussels, 2016), and Workshop on Neoliberalism and Management Accounting (University of Glasgow, 2018). Many thanks to Electra (our case company) and all the interviewees for their very valuable contributions. We are grateful to Salvador Carmona, Claire Dambrin, Kate Horton, Giovanna Michelon (the Editor), Umesh Sharma (the Associate Editor) and two anonymous referees for their insightful comments on our paper. Financial support for this investigation has been provided by the Capes Foundation (Ministry of Education of Brazil), and the Brazilian National Council for Scientific and Technological Development (CNPq – 472430/2013-0).

Disclosure statement

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

Notes

1 For confidentiality reasons, we will call it Electra.

2 In this paper, we use the term “management accounting” in its broader sense, as synonymous with “the management accounting function”, that is, a broad range of tasks and activities performed by management accountants in an organisation (CIMA and AICPA, 2014).

3 For confidentiality reasons, we will call it Energia.

4 For confidentiality reason his name was modified.

5 Technical Note no. 134/2013–SRE/ANEEL; Technical Note no. 96/2017-SGT/ANEEL; Technical Note no. 0038/2017-SRD/ANEEL; Technical Note no. 95/2017-SGT/ANEEL; Technical Note no. 133/2013-SRE/ANEEL; Technical Note no. 109-SGT/ANEEL; Electra’s Presentation Notes for the 3rd tariff review process on the 28th February 2013.