The changing role of the management accountants becoming a business partner

PanidaChotiyanonandVassiliJoannidèsdeLautour

TheChangingRoleoftheManagementAccountants
BecomingaBusinessPartner


PanidaChotiyanon
Bangkok,Thailand
VassiliJoannidèsdeLautour
GrenobleÉcoledeManagement,Grenoble,France
QueenslandUniversityofTechnology,Brisbane,Australia

ISBN978-3-319-90299-9 e-ISBN978-3-319-90300-2
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ForKhunSuchin


ListofKeyDefinitions
Keywords Descriptions
Actions

Groupofactivities

Business
partners

The“new”roleofmanagementaccountantscharacterizedbybeingbusinessoriented(GranlundandLukka1998),
havingasignificantlevelofengagementincommercialpracticesandbeingacceptedasavalue-addingmemberby
peers

Career

Aworklifehistoryofapractitioner(Bailyn1989;Barley1989),aseriesofrelatedanddefinablestagesorphases
ofagivensphereofactivitythatagroupofpeoplegoesthroughinaprogressivefashion(thatis,onestepleadsto
another)inagivendirectionoronthewaytoamoreorlessdefiniteandrecognizableendpointorgoalorseriesof
goals.(Roth1963,p.94)

Careerpath Thecourseofthecareerwithmilestonesmarkingkeyevents.

Career
turning
point

Thepointatwhichonemakesaturnanddecidestogoonadifferentpathinone’scareer

Emotions

Manifestedfeelingassociatedmostlywithshort-termgoals

End

Thelong-termgoal,thetotalityofgoalsinHeidegger’ssense(Dreyfus1991),usuallyassociatedwithmotivations

Expertise

Thecombinationofknowledgeandskill

Goals

Theshort-tointermediate-termobjectives

Knowledge Staticknowledgemostlyacquiredfromformalsourcesinsideandoutsidetheworkplaces(suchasschools)
Know-how Thepartofthestaticknowledgethatisacquiredfromworkplaces,suchascorporatefinancialpolicyandmanuals
Orientation Stateoforienting
Orienting

Performingactionsgearedtowardaspecificgoal/end

Skill/know- Knowledgeinaction:theabilitytoapplyacquiredknowledgeandknow-howtoworkinvariouscontexts,the

how-to
equivalentofSchatzki’spracticalunderstanding
Worklife
profile

Theprofileofworklifeinchronologicalorder

References
Bailyn,L.(1989).Understandingindividualexperienceatwork:Commentsonthetheoryand
practiceofcareers.InM.Arthur,D.Hall,&B.Lawrence(Eds.),Handbookofcareertheory(pp.
477–489).Cambridge:CambridgeUniversityPress.
Barley,S.(1989).Careers,identities,andinstitutions:ThelegacyoftheChicagoSchoolof
Sociology.InM.Arthur,D.Hall,&B.Lawrence(Eds.),Handbookofcareertheory(pp.41–65).
Cambridge:CambridgeUniversityPress.
Dreyfus,H.(1991).Being-in-the-world.AcommentaryonHeidegger’sbeingandtime,division
I.Cambridge,MA:TheMITPress.
Granlund,M.,&Lukka,K.(1998).Towardsincreasingbusinessorientation:Finnish
managementaccountantsinachangingculturalcontext.ManagementAccountingResearch,9
,185–211.
Roth,J.A.(1963).Timetables:Structuringthepassageoftimeinhospitaltreatmentand
othercareers.Indianapolis:Bobbs-Merrill.


Acknowledgment
Thisbookoriginatesfromapractitioner’scuriosityassociatedwiththecareerdevelopment
ofmanagementaccountantsandtheimplicationsofthisforthefuturecareersoffinance
practitionersingeneral.Itevolvedintoafive-yearresearchcollaborationprojectentailinga
longbutfruitfuljourney,andhasresultedinrichandprofoundinsightthatisbeneficialto
boththeacademicandprofessionalcommunitiesalike.Intheprocesswewouldliketothank
ValerieSabatierandtheexcellentDBAprogramteamoftheGrenobleEcoledeManagement

forprojectsupport,DamonGolsorkhi,LukasGoretzki,andthelateBernardGumbfor
invaluablecommentsandinsights,andAnekJandrakholigaandManeshkaMahtanifortheir
valuableinsightsandsupportcontributingtothesuccessoftheresearchproject.Lastbutnot
least,wewouldliketothankourfamilies,especiallySuchinChotiyanonandRachaelde
Lautour,fornurturingourpassionandjoy,andprovidingcontinuoussupportinourquestfor
knowledge.
February8,2018
PanidaChotiyanon
VassiliJoannidèsdeLautour


Introduction
Thisbookisabouttheself-orientingprocessofmanagementaccountants,keytotheir
emergingnewroleasbusinesspartners.Contemporaryprofessionalandacademicliteratures
haveinformedofthesignificantchangeintheroleofmanagementaccountantssincethe
early1990s.Fromthetraditionalroleof“bookkeepers”(Beard1994;Bougen1994;Friedman
andLyne2001;DimnikandFelton2006;Jeacle2008;Chenetal.2012),theyhavegrown
increasingly“business-oriented”(GranlundandLukka1998),becoming“businesspartners”
(Järvenpää2007).Ineverydaypracticethenewbusiness-orientedroletakesvariousshapes,
beingspecifictolocalsitesandassociatedbusinesscontexts(Ahrens1996,1997;Ahrensand
Chapman2002,2007;JørgensenandMessner,2010;FauréandRouleau2011;Moralesand
Lambert2013;NamaandLowe2014;Janin2016).Weseethenewbreedofmanagement
accountantsasbeingactiveoutsidetheirtraditionaldomaininareasthatwouldpreviously
havebeenunthinkable,suchashelpingthesalesmanagerdecidehowtocounter-offerasales
promotionalcampaignorsolvingthesalesdiscountstructureissuewithasalesman(Ahrens
1997),workingwithbuyerstodecideonthenewmenufortherestaurantmanagers(Ahrens
andChapman2007),actingasagatekeeperingrantingloanstocustomers(Ahrens1997),
settingfinancialthresholdsfortheapprovalofnewproductdevelopment(Jørgensenand
Messner2010),assistinginthesupplychainprocessofprivateequityfundmanagement
(NamaandLowe2014),helpingmiddlemanagersinthebudgetingprocess(Ahrens1996,

FauréandRouleau2011),orevenadvisingafootballclubindealingwiththeFootball
Association’srules(Janin2016).Althoughthenewroleisprevalentinvariousorganizations
acrossindustriesworldwide,establishingsucharoleinanorganizationisnota
straightforwardmatter.Sofar,managementaccountingresearchhasshedlightonhowthe
externalelementssuchasthesociopoliticalandeconomicforces,thechangeinthe
organization,andtheagencyofkeyorganizationalplayerscaninfluencetheestablishingof
thenewroleintheorganization.Nevertheless,itisfoundthatnotallmanagement
accountantsareorientingtowardbusiness.Someofthemarefoundtohave“irreconcilable”
roleorientationtowardthenarroweraccountingrole,whileothersareorientedtowarda
broader“businesspartnering”role(Järvenpää2007;FriedmanandLyne1997;Burnsand
Baldvinsdottir2005;ByrneandPierce2007).Thisindicatestheimportanceofunderstanding
theprocessthroughwhichthemanagementaccountants“internalize”thenewrole,anarea
whichwestillhavelittleknowledgeabout(Goretzkietal.2013;Guo2017).
Thisbooktakesitsreadersalongajourneyintimethatexploresthediverseworklife
experiencesoffinancepractitioners.Forthefirsttimeitprovidesadeepinsightintohowand
whymanagementaccountantsorienttowardbusinessinordertobecomebusinesspartners.
Usingauniqueresearchmethodinfluencedbytheoralhistorytraditioncoupledwiththedata
analysisofStraussandCorbin(1998),wemobilizeSchatzki’snotionsofteleoaffective
structureandpracticememory(Schatzki2002,2006)tomakesenseofthenarrativesoffour
financepractitionersfromdifferentcareertracksandconceptualizetheBusinessPartner
DevelopingModel(BPDM).Thismodelhelpstoexplainhowmanagementaccountants
becomebusinesspartnersthroughtheirlifelongself-orientingprocesses,oneofthemost
importantaspectsofthechangingroleofmanagementaccountants.Forthefirsttime,
readerswillgainnotonlyadeepinsightintotheentireworklivesofmanagement


accountantsbutalsoanunderstandingofhowandwhyeachofthemhascopedwith
continuouslychangingworkcontextsandgraduallybecometherelevantbusinesspartner.
Althoughthebookisaimedprimarilyatfuturemanagementaccountantswhoare
embarkingonbuildingacareerinmanagementaccounting,managementcontemplatingon

establishingthenewrolewithintheirorganizations,financeeducatorsdesigningthe
programcurriculum,andthefinancecommunityingeneral,wehopethatourunique
longitudinalapproachandtheBPDMthatwehavedevelopedwillbebeneficialinhelping
researchonthepractitionersinotherpractices,thatareasequallydiverseasmanagement
accounting,therebyenrichingourknowledgeinthebroaderareaofsociologyofprofession.
Thebookisorganizedintothreeparts.PartIprovidesthebackgroundfortheemergence
ofthenewroleofmanagementaccountantsandtheirself-orientingprocesses.Webeginin
Chap.1bylookingatthephenomenonofthenewrolefromthreeperspectives:themacrolevel,concerningthesociopoliticalandeconomicenvironment,themeso-level,concerning
theorganizationalchange,andthemicro-level,focusingontheagencyofthekey
organizationalplayersinordertoidentifythekeydriversofthechange.Intheprocesswe
haveidentifiedmanagementaccountants’self-orientingprocessasoneofthemostimportant
aspectsoftheirchangingrole.Inordertogainabetterunderstandingabouttheprocesswe
reviewthecontemporarytheoreticalapproachestotheself-orientingprocessinChap.2,and
highlighttheadvantagesofSchatzki’spracticetheoryanditsnotionofteleoaffective
structureandpracticememory(Schatzki2002,2006)inmakingsenseofthelifelongselforientingprocessofmanagementaccountants.Next,inChap.3,wemobilizeSchatzki’s
frameworktotheorizetheBPDM,aproductofourresearchproject,1whichexplainsthe
phenomenonofbecomingbusinesspartnersthroughthelifelongself-orientingprocessof
managementaccountants.Themodelisbuiltonthreemicro-processes,consistingofthe
associatedpurposefulactionsofmanagementaccountantsalignedtowardbecoming
businesspartners,togetherwiththeunderlyingkeynotionofthecareerturningpoint,andit
iscapableofexplainingnotonlythelifelongself-orientingprocessbutmostimportantlythe
variationinthedegreeofbusinessorientationfoundineverydaypracticesaswell.
InPartIIweusetheBPDMtolookatthereal-lifeexperiencesofmanagementaccountants
intheirlifelongself-orientingprocesses.Fromfourdiversecareertracksweprovideadeep
insightandunderstandingintohowandwhyeachofthefourselectedfinancepractitioners
graduallyorientstowardbusinesstobecomewhohe/sheisatpresent.WebegininChap.4
withthenarrativeofCarolasshenavigatesthecourseofhercareerincorporatefinancial
service,beginningasanauditapprenticeandbecomingafinancemanager,aligningshorttermpersonalobjectivestothelong-termendwithafewsignificantturningpointsonthe
way.FollowingsuitinChap.5isthestoryofAnne,whoisonthefinancialplanningand
analysiscareertrack.Herlifelongself-orientingprocesstakesherfromafinancialapprentice

toanexpertinfinancialplanningandanalysis,uptothepointwhereshehastomakeoneof
themostimportantdecisionsinherworklife.InChap.6welookatMadelyn’scareerin
commercialfinance.Frombeingacontrollerina“mundane”chemicalindustrytoher
appointmentasthecommercialdirectorofanexcitingbutchallengingfast-movingconsumer
goodsindustry,shemaneuversthroughthedrasticchangesinthebusinesscontexts,
becomingincreasinglybusinessorientedandbeingacceptedasatruebusinesspartnerbyall
herpeers.InChap.7wefollowAlain’smanagementcontrolcareer.Withoutanypriorrelevant
backgroundinbusiness,weseehowhislifelongself-orientingprocessisinfluencedbythe


changingmanagementphilosophyandbusinesscontexts;howhisroleisextendedbeyond
businesspartnertobecomethechangeagent;howcorporatecultureinfluenceshiscourseof
actions;andhowhiscourseofactionsinturncontributestoanewcorporateculture.
InPartIII,learningfromthesereal-lifeexperiences,wemobilizetheBPDMandproposean
internalcareerdevelopmentprograminChap.8.Thisisaimedathelpingtopreparefuture
managementaccountantsforthechallengesthatcomewiththecontinuouslychanging
businessenvironment.
ThebookcloseswiththeconcludingChap.9,inwhichwediscussthekeypointsrelatedto
thelifelongself-learningprocessofmanagementaccountants,oneofthemostimportant
aspectsoftheirchangingrole,andourcontributionstoknowledgeinempirical,theoretical,
managerial,andmethodologicalterms,togetherwiththeimplications.
References
Ahrens,T.(1996).Stylesofaccountability.Accounting,OrganizationsandSociety,21(2–3),
139–173.
Ahrens,T.(1997).Talkingaccounting:Anethnographyofmanagementknowledgein
BritishandGermanbrewers.Accounting,OrganizationsandSociety,22(7),617–637.
Ahrens,T.,&Chapman,C.S.(2002).Thestructurationoflegitimateperformancemeasures
andmanagement:Day-to-daycontestsofaccountabilityinaU.K.restaurantchain.
ManagementAccountingResearch,13(2),151–171.
Ahrens,T.,&Chapman,C.S.(2007).Managementaccountingaspractice.Accounting,

OrganizationsandSociety,32(1–2),1–27.
Beard,V.(1994).Popularcultureandprofessionalidentity:Accountantsinthemovies.
AccountingOrganizationsandSociety,19(3),303–318.
Bougen,P.D.(1994).Jokingapart:Theserioussidetotheaccountingstereotypes.
AccountingOrganizationandSociety,19(3),319–335.
Byrne,S.,&Pierce,B.(2007).Towardsamorecomprehensiveunderstandingoftheroles
ofmanagementaccountants.EuropeanAccountingReview,16(3),469–498.
Burns,J.,&Baldvinsdottir,G.(2005).Aninstitutionalperspectiveofaccountants’new
roles–Theinterplayofcontradictionsandpraxis.EuropeanAccountingReview,14(4),725–
757.
Chen,C.C.,Jones,K.T.,Scarlata,A.N.,&Stone,D.N.(2012).DoestheHollandmodelof
occupationalchoice(HMOC)perpetuatetheBeancounter-Bookkeeper(BB)stereotypeof
accountants?CriticalPerspectivesonAccounting,23(4–5),370–389.
Dimnik,T.,&Felton,S.(2006).AccountantstereotypesinmoviesdistributedinNorth
Americainthetwentiethcentury.AccountingOrganizationsandSociety,31(2),129–155.
Fauré,B.,&Rouleau,L.(2011).Thestrategiccompetenceofaccountantsandmiddle
managersinbudgetmaking.Accounting,OrganizationsandSociety,36,167–182.
Friedman,A.L.,&Lyne,S.R.(1997).Activity-basedtechniquesandthedeathofthe
beancounter.EuropeanAccountingReview,6(1),19–44.
Friedman,A.L.,&Lyne,S.R.(2001).Thebeancounterstereotype:Towardsageneral
modelofstereotypegeneration.CriticalPerspectivesonAccounting,12(4),423–451.
Goretzki,L.,Strauss,E.,&Weber,J.(2013).Aninstitutionalperspectiveonthechangesin
managementaccountants’professionalrole.ManagementAccountingResearch,24,41–63.
Granlund,M.,&Lukka,K.(1998).Towardsincreasingbusinessorientation:Finnish


managementaccountantsinachangingculturalcontext.ManagementAccountingResearch,9
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Contents
PartI TheEmergingNewRoleandtheSelf-OrientingProcess
1TheEmergenceofBusiness-OrientedRole
1.​1TheEmergenceoftheBusiness-OrientedRoleofManagementAccountants
1.​1.​1SociopoliticalandEconomicInfluences
1.​1.​2OrganizationalChanges
1.​1.​3TheAgentiveForce

1.​2BusinessOrientationofManagementAccountants
1.​2.​1GeneralSelf-OrientingStrategies
1.​2.​2Self-OrientationinEverydayLife
1.​2.​3Self-OrientinginCulturalContext
1.​2.​4Self-Orienting,Culture,andPastPractices
1.​2.​5Self-OrientingasaLifeJourney
References
2Self-OrientingProcessandSchatzki’sLens
2.​1TheTurntoPractices
2.​1.​1InstitutionalTheoryStudy
2.​1.​2FoucauldianStudy
2.​1.​3TheActorNetworkTheoryStudy
2.​1.​4Bourdieu’sPracticeTheoryStudy
2.​1.​5Giddens’StructurationTheoryStudy
2.​2TakingStock
2.​3Schatzki’sPracticeTheory
2.​3.​1Practicesasthe“SiteofSocial”
2.​3.​2PracticesPerpetuatingThroughVariations
2.​3.​3PracticeMemoryLinkingActivitiesAcrossTime
2.​3.​4Self-Orienting,TeleoaffectiveStructuresOrchestrating
2.​3.​5Self-Orienting,TeleoaffectiveStructure,PracticeMemory,CulturalMemory
References
3BusinessPartnerDevelopingModel(BPDM)
3.​1ConceptualizetheSelf-OrientingProcess


3.​1.​1BecomingaFinanceApprentice
3.​1.​2BecomingaFinanceExpert
3.​1.​3BecomingaBusinessPartner
3.​2Self-OrientingProcess,TeleoaffectiveStructure

3.​3The“TurningPoint”andAffectivity
3.​4Self-Orienting,OrganizationalandCulturalContext,PastPractice,andAffectivity
3.​5Self-OrientingStudy,theLongitudinalApproach
References
PartII Self-OrientingProcess:TheLifelongExperiences
4CorporateFinancialServicesCareer
4.​1BecomingaCPA(2002–2005)
4.​1.​1AcquiringTechnicalKnowledge
4.​1.​2AcquiringPracticalKnow-HowandUnderstanding
4.​2BecomingtheFinancialAnalyst(2008–2010)
4.​2.​1AcquiringPracticalKnowHowandUnderstanding
4.​3BecomingaCategoryAnalysisManager(2011–2014)
4.​3.​1AcquiringAdditionalPracticalKnow-How
4.​3.​2AcquiringPracticalUnderstandingThroughSharingthePractice
4.​3.​3EngaginginCommercialPractices
4.​4BecomingIndochinaFinanceManager(2015)
4.​4.​1SharingthePractices,AcquiringAdditionalPracticalKnow-How
4.​5TheLifelongSelf-OrientingProcess
4.​5.​1Self-OrientingProcess,TeleoaffectiveStructure
4.​5.​2Self-Orienting,PersonalCharacteristics,andAffectivity
4.​5.​3Self-Orienting,theCulturalContext,andAffectivity
References
5FinancialPlanningandAnalysisCareer
5.​1BecomingaCreditAssistant(2002–2006)
5.​1.​1AcquiringPracticalKnow-HowandUnderstanding
5.​1.​2AcquiringAdditionalPracticalUnderstanding
5.​2BecomingaCreditAssessmentandControlAssistant(2009)


5.​2.​1AcquiringAdditionalTechnicalKnowledge,SharingthePractice,and

GainingAdditionalPracticalUnderstanding
5.​3BecomingaCategoryAnalysisManager(2010–2012)
5.​3.​1AcquiringPracticalKnow-How,SharingthePractice,andAcquiringPractical
Understanding
5.​3.​2SharingthePractice,AcquiringAdditionalPracticalUnderstanding
5.​4BecomingFinancialPlanningandAnalysisManager(2013–Present)
5.​4.​1EngaginginOtherPractices,AcquiringAdditionalPracticalUnderstanding
5.​4.​2SharingthePractice
5.​5TheLifelongSelf-OrientingProcess
5.​5.​1Self-OrientingProcess,TeleoaffectiveStructure
5.​5.​2Self-Orienting,PersonalCharacteristics,andAffectivities
5.​5.​3Self-Orienting,theCulturalContext,andAffectivity
6CommercialFinanceCareer
6.​1BecomingaController(1990–1999)
6.​1.​1AcquiringPracticalKnow-HowandPracticalUnderstanding
6.​2BecomingaBudgetManager(2000–2006)
6.​2.​1SharingthePractice,AcquiringPracticalUnderstanding
6.​2.​2EngaginginCommercialPractice,CreatingValue
6.​3BecomingAssociatedDirector-CommercialFinance(2007–2012)
6.​3.​1EngaginginCommercialPractice,AcquiringAdditionalPractical
Understanding
6.​3.​2SharingPractice,CreatingValue
6.​4BecomingCommercialFinanceDirector,Asia(2013–Present)
6.​4.​1SharingthePractice,CreatingValue
6.​4.​2EngaginginCommercialPractice,CreatingAdditionalValue
6.​5TheLifelongSelf-OrientingProcess
6.​5.​1Self-OrientingProcess,TeleoaffectiveStructure
6.​5.​2Self-Orienting,PersonalCharacteristics,andAffectivity
6.​5.​3Self-Orienting,CulturalContext,andAffectivity
References

7ManagementControlCareer


7.​1BecomingaPlanningManager(1973–1975)
7.​1.​1AcquiringTechnicalKnowledge
7.​1.​2AcquiringPracticalUnderstanding
7.​1.​3CreatingValue
7.​2BecomingFinanceandAccountManager(1976–1978)
7.​2.​1EngaginginOtherPractices,GainingAdditionalPracticalUnderstanding
7.​2.​2SharingthePractice,CreatingValue
7.​3BecomingDeputyAdministrationManager(1979–1981)
7.​3.​1SharingthePractice,BuildingonPracticalUnderstanding
7.​3.​2EngaginginOtherPractices,CreatingValue
7.​4BecomingCentralExecutiveCoordinatingOffice(CECO)Director(1982–1997)
7.​4.​1SharingthePractice,BuildingonPracticalUnderstanding
7.​4.​2EngaginginOtherPractices,CreatingValue
7.​5TheLifelongSelf-OrientingProcess
7.​5.​1Self-Orienting,TeleoaffectiveStructure
7.​5.​2Self-Orienting,PersonalCharacteristics,andAffectivity
7.​5.​3Self-Orienting,CulturalContext,andAffectivity
References
PartIII CraftinganOrientationProgram
8BusinessPartnerDevelopmentProgram
8.​1TheCrucialRoleoftheMentorandtheSponsor
8.​2PlanningandExecutingoftheCareerDevelopmentProgram
8.​2.​1Pre-managerialStage
8.​2.​2ManagerialStage
8.​2.​3Post-managerialStage
8.​3ManagementConsiderationandChallenges
References

9Conclusion
References
References
Index


BriefContents
PartITheEmergingNewRoleandtheSelf-OrientingProcess


Chapter1TheEmergenceofBusiness-OrientedRole


Chapter2Self-OrientingProcessandSchatzki’sLens


Chapter3BusinessPartnerDevelopingModel(BPDM)


PartIISelf-OrientingProcess:TheLifelongExperiences


Chapter4CorporateFinancialServicesCareer


Chapter5FinancialPlanningandAnalysisCareer


Chapter6CommercialFinanceCareer

Chapter7ManagementControlCareer


PartIIICraftinganOrientationProgram


Chapter8BusinessPartnerDevelopmentProgram


Chapter9Conclusion




ListofFigures
Fig.3.1BusinessPartnerDevelopmentModel(BPDM)


Fig.3.2Turningpointsincareer


Fig.3.3Worklifeprofile


Fig.4.1Self-orientingprocessandgoalaligning–corporatefinancialservicemanager


Fig.4.2Turningpoint–corporatefinancialservicemanager

Fig.5.1Self-orientingprocessandgoalaligning–financialplanningandanalysismanager


Fig.5.2Turningpoint—financialplanningandanalysismanager


Fig.6.1Self-orientingprocess,commercialfinancedirector


Fig.6.2Turningpoint:Asiancommercialfinancedirector


Fig.7.1Self-orientingprocessandgoalaligning-CECOdirector


Fig.7.2Turningpoint–CECOdirector


Fig.8.1Levelofengagementinpracticesandcareerchoices




ListofTables
Table2.1Comparativetheoreticallens


Table2.2Comparativetheoreticallenses-extended

Table3.1Teleoaffectivestructuresunderlyingtheself-orientingprocess


Table3.2Profilesoftheselectedfinancialpractitioners


Table4.1Listofactionsandkeymilestonesofthecorporatefinancialservicecareer


Table4.2Self-orientingandteleoaffectivestructure–corporatefinancialservicemanager


Table5.1Listofactionsandkeymilestonesoffinancialplanningandanalysiscareer


Table5.2Self-orientingandteleoaffectivestructure–financialplanningandanalysismanager


Table6.1Listofactionsandkeymilestonesofcommercialfinancecareer


Table6.2Self-orientingandteleoaffectivestructure–commercialfinancedirector


Table7.1Listofactionsandkeymilestonesofthemanagementcontrolcareer


Table7.2Self-orientingandteleoaffectivestructure–CECOdirector

Table8.1Businesspartnerdevelopmentprogram




Footnotes
1 Chotiyanon,P.(2018).BecomingaBusinessPartner,alifelongself-orientingprocess.(Doctoraldissertation)GrenobleEcole
deManagement,Grenoble,France.




PartI
TheEmergingNewRoleandtheSelf-Orienting
Process


©TheAuthor(s)2018
PanidaChotiyanonandVassiliJoannidèsdeLautour,TheChangingRoleoftheManagementAccountants
/>
1.TheEmergenceofBusiness-OrientedRole
PanidaChotiyanon1 andVassiliJoannidèsdeLautour2,3
(1) Bangkok,Thailand
(2) GrenobleÉcoledeManagement,Grenoble,France
(3) QueenslandUniversityofTechnology,Brisbane,Australia


Contemporarymanagementaccountingresearchinformsusoftherecentemergenceofthe
newroleofmanagementaccountants.Fromthetraditionalroleof“bookkeepers”theyhave

becomemore“business-oriented”(GranlundandLukka1998)moreofa“businesspartner”
type(Järvenpää2007;Beard1994;Bougen1994;FriedmanandLyne2001;Dimnikand
Felton2006;Jeacle2008;Chenetal.2012).Ineverydaypractice,thenewbusiness-oriented
roletakesvariousshapes,beingspecifictolocalcontexts(Ahrens1996,1997;Ahrensand
Chapman2002,2007;JørgensenandMessner2010;FauréandRouleau2011;Moralesand
Lambert2013;NamaandLowe2014;Janin2016).Managementaccountingresearchhas
suggestedafewkeydriversthathavecontributedtotheemergenceofthisnewroleovertime
(ByrneandPierce2007).Onthemacro-level,therearethebroadchangesinthesociopolitical
environmentandeconomicforces(Loft1986;MillerandO’Leary1987;BerlandandChiapello
2009).Withintheorganizationthenewrolehasbeenassociatedwiththechangesin
corporateculture,broaderorganizationrestructuring,andgeneralchangesinmanagement
philosophy(Simonetal.1954;GranlundandLukka1998;AhrensandChapman2002;Burns
andBaldvinsdottir2005;Järvenpää2007;Nor-AziahandScapens2007;AhrensandMollona
2007;LambertandPezet2011;LambertandSponem2012;Goretzkietal.2013).Atthe
micro-level,significancehasbeenplacedontheagencyofkeyplayers,suchastheleadersof
organizationsandinparticulartheleadersofthefinancefunctions(HopperandMacintosh
1993;Chua1995;BriersandChua2001;BurnsandBaldvinsdottir2005;BaxterandChua
2008;Goretzkietal.2013),theoperationalmanagers(Hopper1980;Windecketal.2015),as
wellasthemanagementaccountantsthemselves(ByrneandPierce2007;Goretzkietal.2013;
MoralesandLambert2013;Janin2016;Guo2017).
Beingbusinessoriented(GranlundandLukka1998;AhrensandChapman2000;Burnsand
Baldvinsdottir2005;ByrneandPierce2007;Goretzkietal.2013)fortoday’smanagement
accountantsmeansplacinganincreasingemphasisonamorestrategic,forward-looking,and
collaborativeroleorientation(GranlundandLukka1998;BurnsandBaldvinsdottir2005;
ByrneandPierce2007).However,becomingbusinessorientedmightnotbestraightforward.
Ithasbeenfoundthatnotallmanagementaccountantsareorientingtowardbusiness.Some
ofthemarefoundtohave“irreconcilable”roleorientationtowardthenarroweraccounting
role,whiletheothersareorientedtowardabroader“businesspartnering”(Järvenpää2007;
FriedmanandLyne1997;BurnsandBaldvinsdottir2005;ByrneandPierce2007).This
indicatestheimportanceofunderstandingtheprocessthroughwhichmanagement

accountantsinternalizetheirnewrole,anareaaboutwhichwestillhavelittleknowledge
(Goretzkietal.2013;Guo2017).

1.1 TheEmergenceoftheBusiness-OrientedRoleof
ManagementAccountants
Therealmofmanagementaccountants’activitieshasbeeninternallyorientedtowardtheir
internalclients,forexamplethegeneralmanagers,productionmanagers,andsalesmanagers;
providingsupportin“scorekeeping,”thatis,traditionalperformancerecordkeepingand
producingperiodicfinancialreportssuchasbudgetandactualnumbers;“attention
directing,”suchasperformingvarianceanalysis,and“problem-solving”orinternal
consulting,intermsofpreparingspecialfinancialanalysestoaidindecision-making—such
aswhethertoinvestinaparticularmachineornot(Simonetal.1954).Theseactivitiescan
alsobebroadlycategorizedas“controlling”(scorekeepingandattentiondirecting),whichis
detachedfromthebusiness,and“consulting”(problem-solving),whichismoreoriented
towardthebusiness,asmanagementaccountantsalignthemselvesmorewiththeoperating
managers(Mouritsen1996;Ahrens1996,1997).Insomecasestherealmofactivitieshas
broadenedtoincludespecializedfinancialareasofbanking,internationalcashmanagement,
capitalstructure,andadministration,withdirectinvolvementincustomercreditand
suppliers’relationshipsaswell.Managementaccountingresearchhasattributedthese
developmentsmainlytobroadsociopoliticalandeconomicforces,organizationalchanges,
andtheagencyofkeyorganizationalplayers.

1.1.1 SociopoliticalandEconomicInfluences
Themanagementaccountants’roleorientationhasbeenassociatedwiththebroader
developmentinthesociopoliticalsituation.Forexample,ithasbeensuggestedthat
managementaccountingpracticesuchasbudgetingemergedoutofconcernforthefailureof
capitalismduringthe1930sto1950s,whichcausedmajoreconomicproblemssuchas
unemploymentafterthetwoworldwars.Insteadofgoingbacktothepriorsystem,which

favoredtheprivilegedfew—theowners,ratherthantheemployees—socialreformers
decidedto“fix”capitalismbyimplementingbudgetcontrolsystems,responsibility
accounting,andmanagementbyobjectives,whichenabledtheemployeestosharewealth
withtheowners.Inthiscontextofthenew“spiritofcapitalism”(BerlandandChiapello
2009),managementaccountingpracticeemergednotjustasacalculativepracticebutalsoas
adisciplinarypractice(Loft1986;MillerandO’Leary1987),withmanagementaccountants
tendingtoorienthierarchicallytowardtopmanagementtohelpintheprocessofmonitoring
andcontrollingastheyworkedtowardtheoverallcorporategoals(HopperandMacintosh
1993).

1.1.2 OrganizationalChanges
Thewaveofeconomicforcesduringthe1980sand1990saffectedcorporatecultureand
managementphilosophyinsuchawaythatitledtobroadorganizationrestructuring,which
inturnprovidedanopportunityforthegeneralincreaseinbusinessorientationof
managementaccountants(GranlundandLukka1998;Järvenpää2007).Duringthisperiodbig


companiesexpandedtheiroperationsacrossnationalbordersandbecameinternationalized
orglobalized.Facedwithfiercercompetitionathomeandabroad,managementsshiftedtheir
attentiontowardcustomersandcostmanagement.Inthebeginningthisdevelopmentledto
decentralizationofformerlycentralizedfunctions,suchasproduction,sales,andfinance,to
accommodatethehigherneedforcontrolandcooperationamongdispersedunitsof
operationthatspannednationalborders.Managementaccountants’teamswerealso
reorganizedintothosewhowerelocatedcentrally,performingtraditionalbookkeepingand
preparingreports,andthoselocatedwithinthedispersedoperatingunitstowatchoverthe
company’swell-being,takingpartinmanagementdecision-makingandbecomingadvisors
andsometimeschangeagents.Thislattergroupoflocalizedmanagementaccountantswas
characterizedasbeing“businessoriented”;thatis,placingmoreemphasisonthefutureand
strategicimperatives,forexamplebyusingfinancialforecastorestimatesforstrategic
decision-makingratherthanbeingconcernedabouttheaccuracyofthepastdataastheir

colleaguesatthecorporatecenterwere;beinggoodatcross-boundarycollaborationand
comfortablecommunicatingacrossfunctionallinestocoordinateactivitieswithinthe
dispersedunitsaswellasatthecentralizedunitwheretheyfunctionallybelonged(Granlund
andLukka1998).
Globalizationandtherapidlychangingmarketssituationduringthe1990sprovideda
backdropfromwhichanewbusiness-orientedroleofbusinesspartner(Järvenpää2007)
emerged.Forexample,inthetelecommunicationindustry,deregulationcoupledwithnew
technologiesandthenewkindofservicesavailableintheindustryforcedaFinnishglobal
leaderintelecommunicationbusinesstofocusmoreonthecustomerdimensionofthe
business,providinganopportunityforthemanagementaccountantstotakeupthenewrole
ofbusinesspartners.Thebusinessorientationinthiscompanyevolvedovertheperiodoften
yearsfrom1992to2001alongwithabroadorganizationalrestructuring,whichledtoa
continuousimprovementculturethatwassharedwithinthecompany.Thisnewcustomerorientedphilosophyputpressureonmanagementaccountantstobemoreinlinewiththe
newcustomerfocus.Thechangebeganwiththedecentralizationofcontrollingfunctionsinto
thestrategicbusinessunitsofthecompanyintheearly1990sinordertoprovidededicated
supporttothebusiness.Between1994and1995,afterthecustomeraccountmanagement
teamswereestablishedtocapturethespecificneedsofcustomers,thecontrollersweregiven
theopportunitytomovetoamorebusiness-orientedrolebytakingpartincustomeraccount
teammeetingsandpreparingcustomerfinancialanalyses.Besidesbeingpartofthecustomer
accountmanagementteamstheyalsotookpartintheappraisalofnewproductalternatives
andincontrollingnewproductsdevelopment,actingasresearchanddevelopment(R&D)
controllers.Theyactedasalinkbetweenthemarketingandtheresearchanddevelopment
activities,providingthemuch-neededanswerstomanagementonquestionsoftiming,risk,
andmostimportantlytheeconomicconsequenceofalternativeactions.Thentherewasthe
bigchangewhenbasicaccountingsuchasbookkeepingandpayrollwasorganizedintoa
sharedservicecenterin1998.Thishadtheeffectofclearlyseparatingthepromisingnewrole
ofbusinesspartnerfromthetraditionalbookkeepingroleintheorganization.Atthesame
timetherewasanoverhauloftheaccountingsystembroughtaboutbytheimplementationof
theintegratedSAPinformationsystem(anenterpriseresourceplanningsoftwaredeveloped
byaGermancompany,SAPSE),whichhelpedtosimplifyandhomogenizethebasic

accountinginformationsystemandprovidedanopportunityformanagementaccountantsto


providevalue-addedservicesintermsofarollingforecast,thestandardizationofthecost
system,andaccountinginnovationssuchasactivity-basedcosting.Inaddition,intermsof
performancemeasurementthemanagementaccountantsbegantoplayanimportantrolein
target-settingandmeasurement,involvingnon-financialmeasureswhichwererelevantto
thebusinessoperation.Tofacilitatethechangeprocesses,humanresourcemanagement
providedmanagementaccountantswithtrainingonthebusiness,customers,and
competitors,includingcareerplanning,makingsurethateachofthemwasreadyforthis
business-orientedrole.Aspartofthecorporateculturalchange,thetopmanagement
providedrolemodelsbybeinghands-onandproactivelyparticipatinginbusiness.Moreover,
therewasstorytellingaboutthesuccessofthemanagementaccountantswhobecame
businesspartnersinthesubsidiaries.Boththerolemodelingandstorytellingbytop
managementhelpedtoinspirethemanagementaccountantstowardbeingmorebusiness
orientedandtakingupthenewroleofbusinesspartner,beingcharacterizedasequaland
activemembersofthemanagementteam,havingabusinessmind,beingcooperative,and
havinggoodbusinessunderstanding.
Theemergenceofthenewbusiness-orientedroleseemstobeprevalentinallkindsof
industriesacrossnationalborders:examplesareaUKrestaurantchain(AhrensandChapman
2002),aMalaysianpublicutilityfirm(Nor-AziahandScapens2007),andaUKmining
company(AhrensandMollona2007)ataboutthesametime.Mostofthetimeineverydaylife
thisnewbreedofmanagementaccountantssitclosebytheirbusinesscounterpartsdealing
withday-to-dayoperationissuesindomainsthatwouldpreviouslyhavebeenunthinkable.
Examplesincludehelpingthesalesmanagerdecidingonhowtocounter-offerasales
promotionalcampaignorsolvingasalesdiscountstructureissuewiththesalesman(Ahrens
1997),workingwithbuyerstodecideonthenewmenufortherestaurantmanagers(Ahrens
andChapman2007),actingasagatekeeperingrantingloanstocustomers(Ahrens1997),
settingfinancialthresholdsfortheapprovalofnewproductdevelopment(Jørgensenand
Messner2010),assistinginthesupplychainprocessforprivateequityfundmanagement

(NamaandLowe2014),helpingmiddlemanagersinthebudgetingprocess(Ahrens1996;
FauréandRouleau2011),orevenadvisingafootballclubinhowtodealwiththefootball
association’srule(Janin2016).Ingeneral,theyspendlesstimeonthetechnicalsideofthe
practice,suchaspreparinginformationandscorekeeping,andmoreonanalyzingand
consulting.Theyareactiveoutsidetheirtraditionaldomain,contributingtovariousbusiness
achievementssuchasstrategicformulation,systemdevelopment,organizationaldesign,and
changemanagement.Thisbroadenedroleisforward-looking(ByrneandPierce2007;
GranlundandLukka1998),requiresawiderbusinesspointofview(Vaivio1999,2006;Vaivio
andKokko2006),agoodknowledgeaboutthebusinessareainwhichthefirmoperates,good
communicationskills,andademonstratedappreciationforcross-functionalactivities
(GranlundandLukka1998)astheirresponsibilityexpandsbeyondtheaccountingfigures
productionofthepasttotheapplicationofthesefiguresinbusinessdecisions.
Thisbusiness-orientedrole,generallyreferredtoasa“businesspartner”roletype,canbe
describedas“anequalmemberofthedecisionmakingteam”with“theauthorityand
responsibilitytotelltheoperatingexecutivewhyparticulartypesofinformationmayormay
notberelevanttothebusinessdecisionathandandisexpectedtosuggestwaystoimprove
thequalityofthedecision”(SiegelandSorensen1999;BurnsandBaldvinsdottir2005;Weber
2011;Goretzkietal.2013).Itisrecognizableinmanagementaccountantsatentrylevelas


wellasinthetopechelons,suchaschieffinancialofficers(CFOs)(AhrensandChapman2000;
BaxterandChua2008),whoaremembersofmanagementteamsthatmakedecisions
affectingthewholeorganization(GranlundandLukka1998).Theyallshareacommon
understandingoftheirmainroleasbringingan“economicconsciousness”tooperating
managerswithintheirownorganizations(Ahrens1996,1997;AhrensandChapman2000).

1.1.3 TheAgentiveForce
Onthemicro-level,prominentmanagementaccountingresearch,suchastheworksofHopper
andMacintosh(1993),BurnsandBaldvinsdottir(2005),Goretzkietal.(2013),andBriersand
Chua(2001)haveshownhowtheagencyofkeyorganizationalplayers,thatis,thetop

managers,theoperationalmanagers,andthemanagementaccountants,themselves
influencetheroleorientationofmanagementaccountants.
ByanalyzingtheautobiographyofHaroldGeneen,anaccomplishedaccountantandthe
chiefexecutiveoftheInternationalTelephoneandTelegraph(ITT),HopperandMacintosh
(1993)describetheprocessbywhichapowerfulactorestablishedmanagementaccounting
asadisciplinarypracticeandconstitutedmanagersasamenable,docile,obedientsubjects
withintheorganizationduringthe1970s.Thecasestudybeginsbyprovidingtheeducational
andprofessionalbackgroundfromwhichGeneenemergedasa“disciplineddisciplinarian”
whowaswellversedinthedisciplinarydisciplines(ibid.,p.182),beforedemonstratinghow
hesetupaverytightcontrollingsystemnotunlikethosedescribedbyFoucault’s“Discipline
andPunish:TheBirthofthePrison”(Foucault1979).Forexample,thedisciplineofthespace
ortheenclosureprinciple,whichisthefirstofthethreeprinciplesofFoucault’smodel,canbe
seenintheformofresponsibilitycentersthatheestablishedforhierarchicalcontrol.
Discipliningtime,whichisthesecondprincipleofanefficientbody,canbeseeninthebudget
schedule,inwhichhespecifiedwhenthebudgetwastobesubmitted,reviewed,approved,
andfinallycascadeddowntothemembersoftheorganization.Tomonitorperformance,the
operationalmanagerswererequiredtosubmitmonthlyoperatingreportsagainstthebudget
toGeneenandhisteamforregularreview.WealsoseehowGeneenestablishedasurveillance
system,withthecomptrollerandotherstafffromtheheadquartersauditingthebusiness
managers.Geneen’sPanopticontookvariousforms,bothdirectandindirect,andhis
managershadnoideawhetherhewaslookingornotlookingatthem,orwhethersomeone
elseatheadquarterswaswatching.1Thecomptrollersthemselveswerealsowatchedoverin
thesamemanner;andinadditiontohavingadirectreportinglinetoGeneen,theywere
subjectedtoaspecificratingsystemcalled“ComptrollerGrid.”Thisdecidedtheirfate:
promotionordemotion.Suchasystemrenderedthemobedient,disciplined,andwilling,not
unliketherestoftheorganizationalmembers(ibid.,p.205).Inshort,management
accountantsatITTwerecompletelyembeddedinthesystem,beingpassiveandoriented
towardtopmanagement—inotherwordsHaroldGeneen.
Studyingtheimplementationprocessforanewbusiness-orientedroleformanagement
accountantsinthemanufacturingdivisionofapharmaceuticalsorganizationduringthe

1990s,BurnsandBaldvinsdottir(2005)adoptthemodelofSeoandCreed(2002)toidentifya
few“contradictions”thatmotivatetheembedded“institutionalentrepreneurs”totake
certainactionsaimedtowardorganizationalchange.2Suchcontradictionsarefoundinthe
contradictinginstitutionallogics,3thatis,researchversusmarketingandcustomeroriented
versuscostorientation,andotherinterinstitutionalincompatibilitieswhichbecome


apparentafteraslowdownineconomicperformance.Inthiscontextthestudyhighlightshow
aseniorfinancemanagerwithbroadbusinessacumenandlinkswithbusinessschoolsenacts
theroleoftheinstitutionalentrepreneurininstitutingthechangeintheroleofmanagement
accountantstowardamorebusiness-orientedrole.Sucharolechangeispartoftheoverall
organizationalrestructuringprocessthatthecompanyhasundertakenoverfiveyearsfrom
themid-tolate1990s,whichisnecessitatedbyabusinessdownturn.Thisinturniscaused
byeconomicpressurefromgovernmentpricecontrolandtheexpiryofthecompany’smajor
drugpatents.Withtheaimofincreasingefficiencyinitsbusinessprocessandbeingmore
responsivetothemarketanditscustomers,thecompanystreamlinesitsoperationby
implementingtheso-called“processwayofworking,”reorientingallfunctionstowardthe
productsandintroducingabusinessplanthatrealignsallfunctionsinthesamedirection.
Underthisstrategy,anentirebusinessprocesschainfromcustomerorderthroughtoafterdeliveryserviceforeachindividualproductisrealignedtoasinglesite.Seizingthis
opportunitytocapitalizeonthecontradictinglogics,andsensingthesupportfromtop
management,aseniorfinancemanagerskillfullymobilizesinternalandexternalsupportin
ordertointroducethenewroleof“hybridaccountants,”whogetsmoreinvolvedinthedayto-dayoperationofthe“productstream”asopposedtoprevioustransaction-oriented
activities.Hereorganizesthefinancefunctionbycentralizingthetransaction-relatedservice
andstatutoryreportingononesiteandintegratingtherestofthefinanceteamintothe
“productstream.”Thelatterteamconsistsoffinancemanagers,whoprovideadvice
supportingtheproductstreamleadersinstrategicdecision-making,andfinancialanalysts,
dealingwithday-to-dayoperationalissuesandworkingsidebysidewithotherproduct
streamteammembers.Supportingthischangearethehumanresourcedepartment’sefforts
in“skilltransfer,”involvingrecruitingmanagersfromoutsideandofferinginternalfinancial
trainingprogramsfornon-financemanagers,covering,amongothersubjects,budgetsetting

andmanagement,productcosting,andcapitalexpenditure,inordertocreatefinancial
awarenessamongthebusinessmanagersandthecultureof“moneydoesmatter”inthe
organization.Inanalyzingtheroleofanembeddedagencyintheprocessofchange,thiscase
alsohighlightstheimportanceoftheseniorfinancemanager’smicro-levelactivitiesin
changingothers’andmanagementaccountants’perceptionofthisnewrole,throughselfreorientingandinbuildingtrustandrelationshipwithinandamongtheprocessstream
teams.Thisovercomesculturalobstaclesandcontributestothesuccessfulimplementationof
thenewroleovertheyears.
FromtheinstitutionalperspectiveGoretzkietal.(2013)addavaluableinsightintohowa
newCFO,anexternalagent,institutesthenewbusinessorientedroleofmanagement
accountants,overtheperiodofsevenyearsfrom1993to2010throughlegitimizingthe
“businesspartner”role,re-constructingthemanagementaccountants’roleidentitiesand
linkingtheintra-organizationallevelwithaninstitutionalenvironmentsharingthedesirefor
therolechange.Theirstudyalsohighlightstheimportanceofre-orientingofthemanagement
accountants’roleidentityininstitutingthenewrole.TheprocessbeginswhenthenewCFO
introducesanewintegratedenterpriseresourceplanning(ERP)system,whichhelpstofree
managementaccountantsfromdatainconsistencyissuescreatedbythelegacysystemso
theycanspendmoretimecreatingandanalyzingthevalue-addedreportsthattheoperating
managerswant.Thisnewinformationandthestatisticscompiledaresharedandappreciated
byoperationalmanagersaswellasbycustomers,therebysolidifyingthemanagement