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The above-mentioned limitations of OIE have encouraged, to some extent, the adoption of a new framework, created by Dillard et al. (2004). This model may be seen as a compromise between structuration theory and the OIE perspective which pays significant attention to an organisation’s formal structure and other factors that may influence behaviour and societal rules. It is characterized by a concern with continual change and a focus on political factors and social elements affecting institutionalization as a concept, including different levels and practices. Different levels also have an impact on the institutionalization process, affecting a group of factors located in

the organisational, social and political fields. Moreover, NIS considers the organisation as an institution without ignoring the environment as an institution as well. It concentrates on the influences on organisational structure and the wider institutional context. The idea of rejecting individualism as a core methodological concept in institutional analysis, which is mentioned in OIE, is also adopted in the NIS perspective (Zucker, 1987; Dillard et al., 2004).

As discussed above, NIS emphasizes formal structure and the associated societal rules to explain the role of power and professional groups in the organisation. Moreover, it takes account of the impact on change processes in the organisation of various aspects of the external environment, such as government policies (Dillard et al., 2004). Thus, NIS is more appropriate for explaining the implementation of value structures and procedures in the social environment, especially in public sector organisations such as schools and hospitals (Dillard et al., 2004). Also, it identifies two types of power linked to the relationships, factors which increase understanding of the power structure. Firstly, legitimation structure, which concentrates on defining the standards that have an impact on shaping behaviour. Secondly, signification structure, which focuses on defining models related to structure and policy that become institutionalized (DiMaggio and Powell, 1983, cited by Dillard et al., 2004, p.510).

Furthermore, there are two aspects to the explanation of the actions that are taken by an organisation in dealing with accounting practices: isomorphism and decoupling. The former focuses on the adjustment of institutional practice carried out by an organisation and can be one of three types: coercive, mimetic and normative isomorphism. A coercive adjustment occurs when the organisation has to implement a practice under pressure, a process which can be categorized as formal and informal. It is usually applied by a dependent actor. This type of adjustment arises in many

organisations as a result of political influence and legitimate government action designed to regulate organisational practices. Alternatively, mimetic isomorphism emerges when the organisation tries to adopt a practice that has already been successfully implemented by another organisation, failing to question assumptions related to meaning and structure. For example, some organisations face difficulties in setting specific goals and implementing a clear system to measure achievement; therefore, they analyse and search for organisations in similar fields which have had a successful experience of setting goals. Normative isomorphism is a process of qualified and specialized practice implementation, which can also be defined as recognition of the social responsibility to achieve certain goals. In contrast to isomorphism, decoupling refers to the separation of the realities of practice from the formal organisational and managerial processes (Dillard et al., 2004; Hopper and Major, 2007). Actually, the NIS framework has three levels, each containing a number of factors. The first is the economic and political level, covering the established societal norms. The organisational field, which is the second level of the Dillard et al. (2004) framework, is concerned with industrial and professional groups, such as motor manufacturers and police services. The third is the organisational level, which relates to the organisation itself. Figure 3 illustrates the framework which is compatible with the view of structuration theory as set out by Dillard et al. (2004).

Source: Dillard et al. (2004, p. 512)

The economic and political level, also called the top level, comprises three elements: economic, political and social systems. This level supports the organisational field level by supplying a suitable establishment. There are also criteria (CPE) at the economic and political level which influence the criteria and practices at the organisational field level through the adoption of the values and norms from the top level. Moreover, the establishing of criteria has a significant influence on effective corporate governance at this level (Dillard et al., 2004).

Subsequently, the practices (POF) and criteria (COF) at the organisational field level influence and organize the practices at the organisational level. Furthermore, the organisational field level supports the organisational level by providing a context acceptable to the organisation. The main resource allocation and; the translation of

(CPE) and (COF) also occur at the organisational field level. At the organisational level, there are two kinds of actor commonly recognized in institutional theory, the first being the innovators (I), who develop new practices according to the limitations of the organisational field level practices. The second group is the late adopters (LA), who have a different role from that of the innovators at the organisational level: they adopt the successful practices which have been developed by the innovators within the limitations of the organisational field level criteria and practices. There is a possibility of integration between late adopters and innovators (Dillard et al., 2004; Hopper and Major, 2007).

Late adopters and innovators play significant roles, as is demonstrated in considering the next step which is when the change process starts to occur. The new practices that are developed by innovators may affect the practices (P’OF) and criteria (C’OF) at the organisational field level, which may in turn cause new evolutionary or revolutionary changes in the environment (Hopper and Major, 2007). Moreover, the implementation of the new practices by the late adopters may influence the organisational field level. As a result of this process, change at the organisational field level will affect the criteria (C’PE) at the economic and political level, including the values and norms at the top level (Dillard et al., 2004; Hopper and Major, 2007).

According to Dillard et al. (2004), there are three axes of tension that emerge between Weber’s notions and the dynamics of structuration theory: representation, rationality and power. These notions are appropriate to the understanding of the actions taken within an organisation and are useful in analysing some kinds of decoupling behaviour. Representation, which focuses on symbolic explanations, is also related to the role played by meanings and ideas in social action. This approach posits the existence of two kinds of representation: subjective and objective. The former, subjective, relates to the

socially constructed reality and focuses on the social situation, which is related to the legitimating process that affects the individuals concerned. On the other hand, objective representation focuses on the logical aspects of the system, so that it concentrates on the legitimating process as a technical action (Dillard et al., 2004; Hopper and Major, 2007).

Rationality is the relation between the realm of ideas and meanings on the one hand and their legitimate and illegitimate motivations on the other hand. There are two kinds of rationality: formal and substantive. Formal rationality concentrates on those values that are related to empirical knowledge and is concerned with the question of economic efficiency, whereas substantive rationality focuses on the values and meanings of actions from an ethical standpoint (Dillard et al., 2004; Hopper and Major, 2007).

The third of Weber’s notions is power, which may be considered to measure the extent of control over two resources: human and material. This control differs in kind at the three levels of institutional organisation. At the economic and political level and the organisational field level, it applies to the systems themselves, which are accepted by the dominant ideology, while at the organisational level the control factors appear through the application of formal hieratical structures (Dillard et al., 2004; Hopper and Major, 2007). Also, within the three levels of social organisation, there are three dimensions which are called dimensions of contextual change. These are the legitimating grounds, representational schema and domination perspective. Firstly, at the economic and political level, the legitimating grounds relate to norms, regulations and law. Also, the representational schema links to the economic and political systems. Moreover, the domination perspective relates to the institutions that focus on resource control (Dillard, et al., 2004).

Secondly, at the organisational field level, the legitimating grounds link to the industrial norms and practices. Furthermore, the representational schema reflects the two aspects:

economic and political criteria that were translated within this level and structures that changed based on organisational actions. Also, the domination perspective relates to the institutions that focus on allocating resources within this level (Dillard, et al., 2004). Thirdly, at the organisational level, the legitimating grounds relate to the rationality. Also, the representational schema within this level reflects the representation. Moreover, the domination perspective reflects power (Dillard, et al., 2004).

A number of criticisms of NIS theory have been made. First, it distinguishes between certain concepts such as private and public organisations, as well as economic and legitimacy. As a result, it has been called a vibrant theory. There are also drawbacks in using institutional isomorphism in research that relates to private sector organisations. These arise, according to DiMaggio and Powell (1983, 1991b, cited by Hopper and Major, 2007, p. 63), because of the belief:

“…that private sector organisations have clear and measurable goals so their practices follow technical and efficiency pressures, whereas public and not-for-profit organisations have ambiguous goals and unclear means- ends relationships and therefore seek legitimacy by institutional isomorphism”.

Nevertheless, competitive isomorphism has not been the subject of clear focus by researchers. Furthermore, NIS is similar to contingency theory in that it ignores a number of real and important concepts. Another problem relates to the role of NIS in the change process; it can be seen as a threatening process for individuals who are resistant to change (Dillard et al., 2004; Hopper and Major, 2007).

Hopper and Major revised the Dillard model as a result of their investigation into the implementation of activity-based costing (ABC) in Portuguese telecommunications. There were several reasons for this revision. First, Hopper and Major found that many factors, such as culture, power and resistance, influenced the adoption of ABC and

that they were located at different levels of the organisation. Secondly, the case study organisation faced three adjustments of its institutional practice: mimetic, normative and coercive. Thirdly, the authors found that its adoption of ABC could be explained by theory triangulation in order to clarify the role of agency and the nature of the organisation’s accounting practice. In their suggested framework, therefore, Hopper and Major replaced the organisational level with the intra-organisational, in order to identify the department or section responsible for the conflict in organisational structure and to clarify the intertwined power relations and organisational dynamics (Dillard

et al., 2004; Hopper and Major, 2007).

In the Hopper and Major model, innovators and late adopters at the organisational level are replaced with organisational field practice, which translates to practice. Subsequently, the practice is applied by enactment and becomes praxis, which faces two alternatives: resistance or institutionalization. Both situations may lead to conflict. Figure 3.3 illustrates these processes (Dillard et al., 2004; Hopper and Major, 2007).

Source: Derived from Dillard et al. model (2004)

3.4 Justification for Picking NIS as Theoretical Framework

The aim of this study is to investigate in depth and observe the critical factors that have a substantial impact on the successful implementation of management accounting change in public sector organisations, particularly in the Middle East. It focuses on explaining the response of the Abu Dhabi Police (ADP) as an entity undergoing change under the supervision of ADEC. Thus, the scope of the research is to understand why and how this change occurred. In order to explain these issues, the research employs the NIS framework, developed by Dillard et al. (2004), which takes into consideration the organisational level that is the essence of OIE. In addition, the NIS framework is adopted in order to avoid the shortcomings of OIE theory regarding the existence of several levels rather than just one. This is reflected in the nature of the factors that may affect the institutional process at various levels and which are outlined in the NIS framework (Powell, 1985; Dillard et al., 2004).

It is also important to mention that early studies using NIS theory paid little attention to the role of power in the institutional process. Several reasons account for this, including the fact that there are some organisation-level rules that impose certain procedures that must be applied in the organisation. Moreover, it is questionable whether such rules play a vital role in supporting the implementation of the change process in organisations and whether this support facilitates the achievement of objectives that were set in order to adapt to the new system in the organisation (Powell, 1985; Hopper and Major, 2007).

For several reasons discussed above, the alternative approaches of NCE and NIE are inappropriate to the conduct of this research. In summary, the main reason for excluding these approaches relates to their focus on individuals rather than considering other factors and the complexities of the social environment.

New institutional theory clarifies the issues that have great impact on the achievement of MACh in the public sector. This assumption is appropriate for all types of firms, focuses on structured system of the company and identifies social procedures that escort this system. It takes into account the companies in terms of the issues that influence three levels such as the economic and political level, the organisational field level and the organisational level (Dillard et al., 2004).

Alawattage et al. (2005, p. 464) argue that

“Accounting change is an essential component of market- based development policies promulgated by international agencies. However, frequent failures have cast doubt on whether Western management accounting practices can be effective, especially without adjustment to local circumstances. Work in this area is growing but is still in its infancy.”

The previous statement indicates that a few number of literatures focused on the issues that have considerable influence on MACh in order to introduce innovation accounting system in the public sector, particularly under developed countries, including the Middle East. One exception is a particular research in Egypt in the context of organisational change whose researcher called for in-depth study in order to clarify the resistance to an accounting change (Hassan, 2005). In fact, this research is based on exploring the role of management accounting in a public organisation of Abu Dhabi. Therefore, little attention was paid to the key factors associated with new accounting systems that support or impede the implementation of innovative accounting system especially in developing countries (Hassan, 2005).

Waweru et al. (2004) identified several factors influencing MACh in public sector organisations. These factors include: new markets, new shareholders, competition, and diminishing financial performance of the company. Chrusciel and Field (2006) highlight the need of identifying the issues that are significant in terms of hindering change implementation. Therefore, this research has been carried out to fill this literature gap by discovering the key factors that specifically support or hinder the implementation of accounting change related to public sector organisations in developing countries.

It is suggested by Waweru et al. (2004) that modifications in an organisational environment can have deep impact on accounting change and finding more detail on factors like this can enlarge the understanding of the role of accounting innovation in order to improve performance level of organisations. In addition, they also argued that limited research has been conducted on exploring the issue that whether companies tend to apply MACh by reproducing changes implemented by other enterprises that are focused on institutional theory (Waweru et al., 2004).

The UAE is a developing country located in the Middle East. There has been lack of literatures conducted in management accounting context particularly NIS in the public sector in the UAE. The main reason of this limited research could be a shortage of universities with lack of accounting knowledge and expertise (Jahamani, 2003). Also, the research on MACh discovers the issues associated with the common political and legal situations (Waweru et al., 2004). In addition, the existing literature also targets the private sector, but it cannot be said that the same hypothesis and theories can be applicable in the public organisations (Waweru et al., 2004). Therefore, this thesis will seek information to illuminate the key factors or issues having great influence on the introduction and implementation of management accounting change in the public sector in the UAE.