The role of trust in the primary adoption stage of management accounting innovations

ABSTRACT

A narrative inquiry grounded in interpersonal trust is advanced to examine the primary adoption stage of management accounting innovations in a Portuguese public sector organisation, where the adoption processes were promoted by management accountants. We studied the ways in which management accountants (trustees) built up trust in themselves in relation to the adoption of management accounting innovations (object of trust) with the intention of convincing top-level managers (trustors) to authorise their adoption. We gathered evidence to show that, through time, management accountants built up increasing levels of contractual trust, competence trust, and goodwill trust as a means of convincing top-level managers, to authorize the adoption of management accounting innovations.

RESUMEN

En este artículo se presentan los resultados de una investigación narrativa sobre el papel de la confianza interpersonal en la etapa de adopción primaria de innovaciones de contabilidad de gestión, realizado en una organización del sector público portugués, donde los procesos de adopción fueron promovidos por los contables de gestión. Así, se investigan las formas en que los contables de gestión (personas en quién confiar) construyeron confianza en su recomendación sobre la adopción de innovaciones de contabilidad de gestión (objeto de confianza) y convencieron a la alta dirección (personas que confían) para autorizar su adopción. Nuestra evidencia indica que, a través del tiempo, los contables de gestión construyeron niveles crecientes de confianza contractual, confianza en sus competencias y confianza en su buena voluntad como un medio para convencer a la alta dirección para autorizar la adopción de innovaciones de contabilidad de gestión.

KEYWORDS:

• Trust
• managementaccountant
• management accounting innovation
• primary adoption stage
• public sector organisation

PALABRAS CLAVE:

• Confianza
• contable de gestión
• gestión de la innovación contable
• etapa de adopción primaria
• organización del sector público

Acknowledgements

The authors gratefully acknowledge David Naranjo and reviewers of this journal for their comments and suggestions. The authors also thank Salvador Carmona for his supportive comments on earlier drafts of this paper. Susana Gago gratefully acknowledges the financial support of the Spanish government (2011-ECO 2010-22105-C03-C3, and 2014-ECO2013-45864-P), the Community of Madrid, and the European Social Fund (S2015/HUM-34) in the development of this research.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. There is also a calculation of costs by product (and family of products) following a full cost approach, and according to four main activities: reception, sorting, transport, and delivery. For each product, gross and net profit margins are determined. PPost submits bi-annual information on these margins to the Portuguese postal regulator.

2. We define opportunism as self-interest seeking with guile (Williamson, 1985).

3. The aims of the IS were also explicitly recognised in the external annual report of 2001 (published in March 2002), in which the BoD2 stated that ‘the new organisational model, which results from studies undertaken during the year 2001, was put in place in February 2002. The changes made by this new organisational structure have an increasing focus on, and a clear responsibility for the margins from the business. The new model will be supported by a new management information system’.

4. This primary prototype included a proposal for internal transfer prices.

5. In December 2001, the Portuguese Prime Minister unexpectedly resigned, leading to elections.

6. In this document, the PCO managers explicitly described, among other issues, the expected deliverables of the IS and the KPI as follows: ‘IS is a system which will provide monthly IS by organisational area even for the lower levels of the organisational structure and which will include an internal transfer pricing model. KPI is a system which will provide a set of KPI by organisational area on a monthly basis, so it will allow the board of directors to monitor the implementation of the strategic goals of the company’.

Additional information

Funding

This work was supported by the Spanish government [2011-ECO 2010-22105-C03-C3; 2014-ECO2013-45864-P]; Community of Madrid; European Social Fund [S2015/HUM-34].