Abstract:
Purpose – The purpose of this paper is to report on two institutional change scenarios of
performance measurement (PM) systems, namely, subversion and integration. Subversion represents
insiders’ use of existing institutional logic whereas integration represents insiders’ use of imported
institutional logic.
Design/methodology/approach – The scenarios are drawn from two case studies: BAE Systems
(a large UK manufacturing company) and Alpha (a medium-sized Sri Lankan manufacturing
company). The data were collected through in-depth interviews and documentary sources.
Findings – An internal “culture change programme” led to a business value scorecard (BVS) in BAE
Systems, and an external knowledge diffusion programme gave rise to a balanced scorecard (BSC) in
Alpha. The culture change programme was facilitated by a particular institutional logic resulting in a
successful BVS practice. In contrast, at Alpha, the BSC project was externally imposed, although it was
designed with the blessing of the owner-manager. This triggered internal controversies and the
workforce became unreceptive. Consequently, attention was diverted to other management fads such as
total quality management, Six Sigma, and enterprise resource planning but these were also short lived.
Research limitations/implications – While this paper provides evidence on practice variation
and adds to neoinstitutional-based management accounting research, the empirical materials,
however, did not allow the authors to trace all four scenarios in the typology.
Practical implications – PM systems, such as the BSC, seem to be malleable and adaptable to local
requirements subject to organisational and managerial flexibility and democratic possibilities.
Originality/value – This research highlights how the institutional environment is fragmented
and contested, in different organisational and political conditions and spaces, resulting in variation
in practices.
