Laughlin’s model was chosen as the mode of interpretation, because while it draws, and draws together existing research on organisational change, it also adds a new dimension via a consideration of the social elements which pervade organisational life, and its consideration of the hidden elements which are part of the change process. Change is clearly not a programmable exercise. This view is therefore quite different from the work carried out by Tranfield and Smith (1987). Much of their work is derived from the
traditional organisational change literature with a programmable view of morphogenic change which is very prescriptive. Laughlin's contribution will be discussed in depth later in the thesis but one of the strengths of Laughlin's model and one feature which is absent from the other organisational change models is the way in which Laughlin conceptualises organisations.
Both Laughlin and Pettigrew concur on the need for research on organisational change that emphasises the dynamics o f changing, or in Laughlin’s terms, the "processual dynamics” (p209) of change. This point of agreement however, also seems to be a point of departure. Pettigrew’s work, (unlike Laughlin's), is very descriptive and does not seem to have a clear theoretical element.
Of the models discussed here, all have elements which are relevant to the approach taken in this research, but it is the processual dynamics of change on which attention is
focused. Laughlin's (1991) model provides a theoretical framework in which it is possible to establish exactly what processes are at work and identify the different levels at which change is taking place.
Conclusion
This chapter has sought to narrow down the organisational change perspective that is central to this research. The model that is used to evaluate the research was discussed in detail, but other models which impact on the case study have also been highlighted. A full theoretical justification for the model is given in chapter 5.
The next chapter provides a review of the literature on Activity Based Costing (ABC). ABC forms a very important element of the research because it is one way in which change has been embraced and achieved in this case study, and is a key design archetype change.
Chapter 3
Activity Based Costing Introduction
Since the 1980s, industry in the Western world has had to respond to a number of major challenges relating to competitive pressures, research and development, making
investments in new technology, changes in organisational structure, rationalisation and increasing productivity. Similarly, management accounting has been subject to major challenges. One response to these challenges faced by management accounting is activity based costing which is the focus of this research, but there have been other management accounting responses like target costing (which has been used extensively in Japan), functional analysis and cost tables8. These challenges are discussed at length in
Bromwich and Bhimani (1994). Cooper and Turney (1990) argue that Activity Based Costing systems have emerged in firms facing increased competition and where
management have decided that the fastest way to become more profitable was to gain a better understanding of what it costs to make their products. This chapter provides a broad review of the literature on ABC. It is not a discussion of the technical aspects of ABC which has been discussed in detail elsewhere (Innes and Mitchell 1991), but highlights the key uses of, and issues surrounding ABC.
Activity Based Costing forms a very important element of the research since it embodies one way in which organisational change has been embraced and achieved in this
organisation and the way in which new visibilities and meanings have been created. Added to this, perceptions relating to the role of management accounting, costing and
8Other responses include throughput accounting (Galloway and Waldron, 1988) Backflush accounting (Foster and Homgren 1988), Life-cycle costing (Berliner and Brimson 1988), non-cumulative costing and total quality control techniques.
control systems have been, and are being, re-evaluated in the UK Clearing Banks. ABC is a response to the changing attitudes towards management accounting and the types of information that management accounting provides.
As an approach to cost information, it has been argued that ABC provides accurate and relevant cost information as a guide for making profitable decisions about products or services and revenues and costs. It has been seen to provide a way to organise the collection, processing and reporting of cost information that supports decision-making and strategy formulation. Furthermore, it is thought to yield accurate and relevant
information for managers who may not be cost accountants, but who must utilise cost information to improve the competitive position of their financial institution. Mabberley (1992) argues that cost reduction is only one element within the wider framework of cost management. In the Clearing banks, cost reduction has tended to be a short, sharp
initiative that seems to have had a short-term effect, because the underlying causes of the problem were not addressed; one of the strengths of an ABC exercise is that it should provide the basis for better on-going cost management. Figure 7 illustrates some of the factors that have led to the development of ABC.
This chapter starts by comparing ABC to traditional costing systems and highlights the advantages that ABC is purported to offer. It then draws attention to the relationship between accounting input and organisational strategy that is, the relationship between ABC and strategic management accounting. The chapter goes on to highlight the results of some case study and field research to date. The discussion then moves on to the organisational and behavioural consequences of ABC, which is particularly important to this research. The next substantive section narrows the focus to the Financial Services