Article2013

Performance measurement system change in an emerging economy bank

Rahat Munir · Kevin M. Baird · Sujatha Perera

41 citations0/0 files storedAccounting Auditing & Accountability Journal

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Accounting and Organizational Management Auditing, Earnings Management, Governance Accounting Theory and Financial Reporting

Abstract

Purpose This study aims to describe and understand performance measurement system (PMS) change in an emerging economy bank. Design/methodology/approach Using institutional theory as a theoretical lens, the study uses Kasurinen's accounting change model to explain management accounting change as a product of motivators, catalysts and facilitators. The model also focuses on how confusers, frustrators and delayers inhibit PMS change and the role of leaders in the change process. Data were gathered from multiple sources including relevant internal and external documents covering a ten‐year period (1997‐2007), and semi‐structured interviews with managers from different hierarchical levels. Findings The bank's PMS experienced two significant changes from 1997 to 2007. While uncertain economic conditions, increasing competition, and pressures to improve performance and enhance accountability motivated changes in the bank's performance measurement system, the major catalysts of change were the financial losses experienced, major regulatory changes, and the appointment of a new board of directors and president. The change leader played an important role in overcoming resistance to change and in ensuring adequate technical support and training was provided to facilitate the change. Practical implications Bank managers must be aware of the influence of institutional factors on PMSs. In particular, they need to be aware of the factors that can necessitate change (motivators), initiate change (catalysts) and the prevailing conditions required to support change (facilitators) in order to maintain the utility of PMSs. Originality/value The paper provides a more detailed insight into the impact of institutional factors on changes in PMSs in the context of an emerging economy, which will assist practitioners in addressing issues concerning PMSs changes in similar contexts.

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References

1983The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields 1977Institutionalized Organizations: Formal Structure as Myth and Ceremony 2004The iron cage revisited institutional isomorphism and collective rationality in organizational fields 2004Case Study Research 2009Building theories from case study research 1991Strategic Responses to Institutional Processes 1991STRATEGIC RESPONSES TO INSTITUTIONAL PROCESSES 1987The Adolescence of Institutional Theory

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