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A study of the emergence of management accounting system
ethos and its influence on perceived system success
Alnoor Bhimani
Department of Accounting and Finance, London School of Economics and Political Science, Houghton Street,
London WC2A 2AE, UK
Abstract
This study considers how certain notional organisational culture elements became embedded in the design of an
innovative management accounting system (MAS) and how the alignment between the cultural premise of the MAS
and that espoused by MAS users influenced the perceived success of the new system. The research data for the study
were obtained over a three and half year period and derive from interviews, questionnaire responses and public as well
as internal corporate documents. The site chosen for the study is a division of Siemens—a global firm in the electronics
and electrical components industry. Two employee groups with functional expertise in engineering and business eco-
nomics respectively comprise the MAS user groups. During the development and implementation phases of the new
MAS, Siemens was actively engaged in a corporate-wide culture change programme that was supportive of the new
MAS initiative. The study results are in two parts. First they report on the manner in which the organisational pro-
gramme of culture change affected the cultural premise of the new system. Second, they indicate that the degree of
alignment between the organisational culture elements which were embedded within the MAS and the organisational
outlook of the two user groups significantly influenced the system’s perceived success. # 2003 Elsevier Science Ltd. All
rights reserved.
1. Introduction
Past research suggests that different groups of
MAS users within organisations exhibit different
rationales, priorities and cultural orientations
(Ahrens, 1996, 1997, 1999; Appleyard & Pallett,
2000; Bamber, 1993; Birnberg & Shields, 1989;
Bruns & McKinnon, 1993; Ko & Mock, 1988; Lo
¨
n-

ing environment to be consistent with those
embedded within the new system, there has been
little research on how such consistencies emerge.
The present study aims to address this concern by
exploring how certain notional organisational
culture elements became embedded features of a
newly implemented MAS within a specific organi-
sation. It also aims to investigate how the align-
ment between the organisational culture elements
which were embedded within the MAS and the
organisational outlook of two MAS user groups
influenced their perception of the success of the
new system.
The site chosen for this study is the Fibre Optics
business unit (HLFO) of the Semiconductors
Group of Siemens AG—a global electronics and
electrical components firm. Operational officers
within HLFO have specific expertise either in
engineering (Technisch) or in business economics
(Kaufmannisch). Engineering and business officers’
educational training differs in that the former tend
to possess engineering based qualifications
whereas the latter have a business economics aca-
demic background. These two distinct functional
expertises provide a basis for categorising opera-
tional officers at HLFO into two different
employee groups. The new management account-
ing system adopted by HLFO is called process-
based target costing (PBTC) which was designed
by HLFO engineering officers between September

hypotheses for investigating how the alignment
between the organisational culture elements
characterising the MAS and the system users’
orientation towards a developmental culture relate
to the new MAS’s perceived success are subse-
quently considered. Following a discussion of the
results of the investigation, the paper’s concluding
section addresses some of the implications of the
study and future research possibilities in the area.
2. Literature review
2.1. Management accounting systems and
organisational culture
The management accounting literature has only
recently started to show empirical concern with
the concept of ‘organisational culture’ (Dent,
1991; Goddard, 1997a, 1997b; O’Connor, 1995)
though the potential of studying links between
organisational culture and systems of control has
long been posited (Flamholtz, 1983; Hopwood,
1987; Markus & Pfeffer, 1983; Ouchi & Johnson,
1978). More recently, Shields (1995) and Birnberg
(1998, 2000) have reiterated the desirability of
investigating how cost management systems
adoptions and effects are conditioned by variables
such as organisational culture.
Whilst there is evidence to suggest that the per-
ceived implementation success of a new MAS is
influenced by whether its information output is
considered easy to use, accurate and timely,
investigations of organisational culture and con-

Dent, 1991).
In the context of cost management innovations,
Shields and Young (1989) and Young (1997) sug-
gest that often, novel systems are administrative
rather than technical in nature and as such, their
implementation fate is not independent of the
preferences, goals and strategies of top managers.
Foster and Swenson (1997), McGowan and
Klammer (1997) and Friedman and Lyne (1995,
1999) provide empirical support in this light.
Cooper, Kaplan, Maisel, Morrisey, and Oehm
(1992) offer some evidence that a variety of
behavioural and organisational factors are inter-
twined with the implementation of activity based
costing (ABC) systems and Anderson (1997) and
Anderson and Young (1999) explore the existence
of relationships between contextual variables
such as organisational commitment and shared
organisational values and ABC implementation
success.
Following an investigation of Canadian firms,
Gosselin (1997, p. 8) has reported that:
‘‘ administrative innovations such as ABC are
easier to adopt and implement in mechanistic
organizations’’. Based on a study of Finnish
organisations, Malmi (1997, p. 21) concludes that
user resistance can lead to ABC systems failure
and that organizational culture is ‘‘important’’ in
explaining such resistance. Argyris and Kaplan
(1994) identify organisational culture change stra-

agendas, skills and the resources of dominant
employee groups (Shields, 1995). In this light,
Scapens and Roberts (1993) have investigated the
emergence of resistance to the implementation of a
new information system within an organisation
with different subcultures. They report that
although different organisational participants can
be agreed on the desirability of altered infor-
mation systems for controlling internal oper-
ations, there may be ‘‘ very different
perceptions of the precise nature of these infor-
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mation needs’’ (Scapens & Roberts, 1993, p. 31).
They document the disparity between divisional
managers’ predilection for information defined
primarily in economic terms and unit company
managers’ preference for accounting information
focusing on production factors, scheduling
resources and delivery issues. These findings lend
appeal to Argyris’s (1990, p. 503) contention that
an accounting system’s technical features will be
premised on accounting information system
designers’ ‘‘technical theory of control’’ which
may not accord with the views of users. Markus
and Pfeffer (1983) have similarly documented
instances of information system implementation
failures whereby the ethos of newly implemented

sufficiently broad as to be, in the main, identifiable
with most quantitative and/or qualitative organi-
sational culture studies (Pettigrew, 1979).
Although some researchers contend that organi-
sational culture cannot be effectively examined
using quantitative methods (Frost, Moore, Louis,
Lundberg, & Martin, 1991; Louis, 1983; Schein,
1985; Smircich, 1983) and that ‘‘culture needs to
be observed, more than measured’’ (Schein, 1996,
p. 229), others see statistical analyses as being able
to contribute significantly to investigations of
organisational culture (Hofstede, Neuigen,
Okayre, & Sanders, 1990; Rousseau, 1990; Saf-
fold, 1988; Siehl & Martin, 1988; Wilkins &
Ouchi, 1983; Zammuto & Krakower, 1991). The
present study makes use of qualitative information
regarding cultural changes within Siemens
obtained from internal corporate documents,
external publications as well as from interviews
with HLFO and other Siemens executives. The
study also derives information from the admini-
stration of two questionnaires based on a model
concerned with organisational culture elements.
Within the organisation study literature, a
number of different models exist for quantitatively
analysing organisational culture (see Xenikou &
Furnham, 1996). The present study focuses on
aspects of organisation culture which are explored
using the competing values model (Cameron &
Quinn, 1998; Quinn, 1988; Quinn & Kimberly,

development of people within the organisation to
stressing the well-being and development of the
organisation itself at the other extreme. Another
value dimension which they advance relates to
organisational structure ranging from empha-
sizing stability and control to stressing flexibility
and change. The competing values model thus
enables four resulting cultural types of organi-
sational orientations to be posited: group, develop-
mental, hierarchical and rational (see Fig. 1).
Quinn and Kimberly (1984) consider that the
‘‘group’’ culture is based on norms and values
associated with affiliation. It emphasises flexibility
and internal focus and stresses cohesion, morale
and member participation in decision making as
means and human resource development as ends.
The group culture’s strategic orientation is one of
implementation through consensus building. The
‘‘developmental’’ culture which stresses flexibility
Fig. 1. The competing values model [adapted from Quinn and Kimberly (1984)].
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and an external focus is permeated by assumptions
of dynamic change. Growth and resource acqui-
sition as ends are enabled by readiness and flexi-
bility as means. It is the ideological appeal of the
task undertaken which motivates individuals.
The ‘‘hierarchical’’ culture underscores the rele-

accounting system—process based target costing
at HLFO. Its purpose is to delineate the manner in
which the culture change programme shaped the
cultural premise upon which the new MAS fea-
tures were founded in terms of the competing
values model dimensions. Whilst the study makes
use of several sources of information, for the fol-
lowing part, general information on Siemens was
obtained from official external and internal pub-
lications as well as from published interviews with
company executives. Interviews were also under-
taken with Siemens managers both from within
and from outside the Fibre Optics unit (see
Table 2).
3. Culture change at Siemens
3.1. In pursuit of flexibility and external outlook
In early 1993, Siemens launched a company-
wide culture change programme referred to as
Table 1
Organisational culture type characteristics under the competing values model
a
Culture types
Characteristics Group Developmental Hierarchical Rational
Flexibility vs control Flexibility Flexibility Control Control
External vs internal Internal External Internal External
Means Member participation,
cohesion, morale
Adaptability, readiness Communication information
management
Planning, goal setting

consciousness and more effective cost manage-
ment’’ (Innovation Management Director com-
menting on the TOP initiative, 3/6/1996). To
understand how the Siemens-wide programme of
culture change affected the design of the new MAS
at HLFO, it is essential to consider the emergence
of TOP at Siemens.
The idea that ‘‘it is essential to simplify and to
reduce decision processes and to place ourselves
closer to the market and to our customers’’ (Karl
Heinz Kaske, President of Siemens, cited in
Michel & Longin, 1990, p. 161) was a concern
which had been expressed by Siemens’ top man-
agement since the mid-1980’s. Kaske had articu-
lated a need for the organisation to become more
flexible, dynamic and competitive. He had sought:
an internal structure to enable us to dis-
cover, develop and encourage our managers’
entrepreneurial talents in order to allow them
total managerial control over projects rather
than simply partial authority (Ibid.)
Table 2
Interviews undertaken with managers at Siemens
Interviewee Siemens unit Duration (min)
Information Manager Defence Electronics 30
TOP Programme Executive Siemens Plessey Sytems 30
Innovation Management Director Siemens Nixdorf 45
Innovation Management Officer Siemens Nixdorf 30
Management Development Consultant Siemens Corporate Communications 30
General Manager—Business Improvement Siemens PLC (UK) 15

activities’’ (Ibid.). In 1989, the company put into
place further decentralization measures which cul-
minated into the present company structure con-
sisting of divisions, groups and business units.
During the 1990’s, senior company executives
continued to voice concerns similar to Kaske’s.
For instance, Siemens’ General Works Manager
indicated that:
we harbour some doubts about whether
thinking in terms of competitive, market and
cost advantages truly permeates our corpora-
tion (Siemens, 1990, p. 2).
A major problem according to him was that
‘‘personal goals and business goals often take
separate or even divergent paths’’ (Ibid., p.3). One
difficulty faced by the organisation was perceived
to relate to information exchange and communi-
cation channels. A Senior Innovations Manager
had noted that
Within the organisation, there are obvious
inter-company communication barriers.
There is talk of a wall of silence between the
upper levels and the rest of the staff, who are
left in ignorance regarding the background to
many decisions (Siemens, 1991a, p. 2).
Likewise, an Engineering Works Manager had
remarked that ‘‘stumbling blocks’’ stood in the
way of commitment and entrepreneurial action:
Many regard change primarily as a risk.
Innovative, entrepreneurial action becomes

down quality will go up. Our aim is to be
faster, better and cheaper than our competi-
tors (4/6/1996).
During the early 1990’s, senior managers within
the Semiconductors division at Siemens identified
a variety of problems including long decision pro-
cesses, excessive bureaucratic hurdles, repair and
quality problems arising from high levels of labour
demarcation, uncontrollable document complex-
ity, illogical process flows, inadequate inter-
departmental communication and ineffective
information systems structures. The TOP pro-
gramme attempted to fuel the implementation of
innovations such as ‘‘time based management’’,
‘‘total quality management’’, ‘‘total cycle time
analysis’’ and ‘‘kaizen’’ among others so as to
foster ‘‘ customer and process orientation, faster
decision making, team-oriented management,
enhanced self-initiative and self-responsibility’’
(Siemens, 1994, p. 3).
Once the implementation of TOP was under way,
it had an impact on work attitudes according to a
number of managers at Siemens. An Engineering
Manager indicated that a TOP motivated re-engi-
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neering project had led to ‘‘ teamwork, job-
rotation, group meetings, speaking your mind

which underscored the relevance of flexible work
practices and high sensitivity to the enterprise’s
external environment were to be important
characterising features of the new system. One
TOP initiative publication stated that:
Time and quality are key to improved perfor-
mance and lowered costs. Significant cost dis-
advantages with competitors are attributable
to inadequate product design and wasteful
processes. It is here that out greatest potential
lies (Siemens, 1996).
It further stressed that:
improved results are dependent not only
on costs but also on the relationship between
productivity and costs which can be improved
if infrastructure and processes are
improved as well as time and quality para-
meters (Siemens, 1996).
These elements of the TOP initiative were to
become embedded in the design of the new MAS.
3.2. Process based target costing
At HLFO, the belief that costing information of
a different type to that being provided was neces-
sary had began to be voiced from early 1995. Until
late 1994, HLFO had controlled a large portion of
the fibre optics market for IBM mainframe com-
puters. But at this time, a foreign competitor
entered the market with the objective of taking
over a major part of Siemens’ market share in this
sector primarily by offering the same products at a

design engineers were being addressed, HLFO also
launched what it termed the ‘Phoenix’ project in
September 1995 which was a re-engineering exer-
cise to alter the manufacturing process. Phoenix
entailed the reconfiguration of manufacturing
such that all basic products would run on one
automated line prior to mass-customising the
product. All products were to use modularised
production steps according to individualised pro-
duct specifications.
Design engineers at HLFO had not traditionally
desired or been provided with extensive account-
ing information relating to either manufacturing
processes or to the selling prices of fibre optics
products. Their primary role had been to develop
leading edge technological innovations and to seek
ways of further improving product specifications,
performance and efficiency. The accounting sys-
tem in place at HLFO had been designed with the
object of allocating rather than tracing costs in
line with Siemens-wide accounting procedures.
This costing system divided material and produc-
tion elements into cost blocks and used volume-
based allocation methods. Direct material and
direct labour costs served as a basis for the appli-
cation of different overhead costs using predefined
overhead rates. This practice did not seek to relate
resource changes in components to changes in
production or to enable costings for different gen-
erations of re-engineered products to be com-

information output was thus intended to assist the
design and production engineering officers to relate
product function areas to the production process.
PBTC became operational in August 1996 and
by April 1997, an HLFO officer who had set up
the software requirements for producing PBTC
information reports indicated that: ‘‘All new
design projects are now using the tool and it is also
used for all existing products’’ (24.4.97).
The implementation of PBTC necessitated
interaction among different operational depart-
ments and extensive communication between
engineering and business officers. TOP’s basic
concerns included the transparency of organi-
sational processes, quality accountability, team
orientated co-operation, market competition
awareness and cost consciousness which were also
central to PBTC. PBTC reports were intended to
enable the costs of functions to be compared to
the perceived customer value for those functions.
Moreover, functional cost drivers could be back-
tracked from functions to the production pro-
cesses so as to depict the trade-offs between
materials and processes, or automation and
labour costs. PBTC was to delineate production
flows visually at the design stage by producing
graphic images of time, cost and quality resource
consumption across processes. The design engi-
neers who had traditionally only dealt with pro-
duct specifications could now obtain direct visual

was externally orientated in that it tied market
imposed time, quality and price specifications to
internal operational constraints. Under the com-
peting values model, the PBTC system might be
seen as most closely embedding external and flexi-
bility orientated values and thereby, of stressing
developmental culture characteristics.
The above discussion has focused on the manner
in which certain organisational culture change
elements became embedded within the new MAS.
This was the first objective of this investigation.
The paper now considers the methodology for
investigating how the alignment between the
organisational culture ethos of PBTC design fea-
tures and the system users’ orientation towards a
developmental culture related to the new MAS’s
perceived success.
4. Measuring perceived MAS success
4.1. Questionnaires and interviews
A questionnaire was administered in May 1996
prior to the implementation of the novel manage-
ment accounting system (PBTC) to its two groups
of users categorised as engineering officers (Tech-
nisch) and business officers (Kaufmannisch). The
questionnaire contained a series of questions
about their perceptions of the degree to which
organisational culture types as delineated by the
competing values model are representative of their
functional department (see Appendix).
1

R & D 16 T 15 T 13 T 12 T
Accounting 4 K 4 K 5 K 5 K
Quality Control 3 T 2 T 3 T 3 T
Top Management 1K 1K 1K 1K
Total 34 30 33 31
T=‘‘Technisch’’ (Engineering officer); K=‘‘Kaufmannisch’’ (Business officer)
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was administered to the same group of PBTC
information users in April 1997 (see Table 3). This
ex-post questionnaire, asked respondents once
again about their perception of the organisational
cultural types represented within their functional
departments and sought their judgement as to the
overall success of the newly implemented manage-
ment accounting system. Interviews were under-
taken prior to and following the administration of
the ex-post questionnaire to explore respondents’
views on PBTC ’s implementation process and the
system’s consequences as a further source of
information for the study.
The ex-ante and ex-post questionnaires were
administered in German. The German versions of
the questionnaires were translated from English to
German by a German academic and back trans-
lated to English by another German academic.
2
Some stylistic revisions were made to the German

business officers. Ordinarily, the university level
degree (Diplom-Kaufmann) follows the study of
business economics [Betriebswirtschaftsleher
(BWL)] which emphasises the understanding of
sophisticated economic concepts underpinning
management principles including costing approa-
ches. Traditionally, German business economics
universities do not have close relationships with
industry (Lane, 1990; Lawrence, 1989, 1994).
BWL’s science-based tradition (Wissenschaft)
stresses systematic and disciplined conceptual
research sometimes at the expense of closeness to
industrial issues or practical concerns according to
some writers (Randlesome, Brierley, Bruton, Gor-
don, & King, 1990; Sheridan, 1995). In this light,
Locke (1989, p. 249) observes that ‘‘ the Wis-
senschaft tradition isolates the German professors
of business economics from praxis’’ and notes that
German BWL today is primarily under-
graduate pre-experience and specialist research
graduate education (Locke, 1989, p. 176).
Locke (1989) provides various examples of
companies working with academic engineers but
seldom with business scholars. He cites one Sie-
mens manager who states that the firm tends not
to bring in German professors of business eco-
nomics to provide advice because they are too
‘‘inexperienced’’ (Hermann Baumann cited in
Locke, 1989, p. 171).
HLFO accountants’ predilection for a struc-

business officers employed within the Accounting
Department could not be described as sharing the
same high level of ‘‘developmental’’ culture
orientation.
Contrary to business officers’ training, the edu-
cational background of engineering officers is
more closely aligned with a flexible orientation to
structuring data which makes little appeal to regi-
mented procedures and standardised information
formats or structures of communication. This is in
line with a developmental cultural orientation
under the competing values model. Educationally,
engineering officers at HLFO possess a ‘‘Diplom-
Ingenieur’’ qualification following university level
engineering studies spread over 4–6 years. By tra-
dition, engineering education in Germany com-
bines the search for knowledge with practical
purposefulness. Consequently, German engineer-
ing degrees are characterised by a unique combi-
nation of scientific knowledge and craftsmanship
(Technik) (Head, 1992; Randlesome, 1988, 1993;
Randlesome et al., 1990; Sorge & Warner, 1986).
University engineering faculties maintain close
cooperation with industry: ‘‘Where engineering
training is concerned, there is little formal detach-
ment of academic from practical aspects of train-
ing’’ (Warner & Campbell, 1993, p. 93). In a
similar light, Lawrence (1989, p. 98) states that:
Technik is a force for integration. The Ger-
man company is Technik in organisational

trasted markedly with accountants’ prior notions
of legitimate information form and content.
There is also research evidence which indicates
that differences in cognitive styles and organi-
sational culture dimensions lead to consistent
relationships with decision making preferences
and information systems design (Dermer, 1971;
Driver & Mock, 1975; Hulin & Blood, 1968;
Huysman, 1970; Ives & Olson, 1984; Macintosh,
1985; Ouchi & Johnson, 1978; Seddon & Yip,
1992; Senn, 1978). Whilst individuals with an
‘‘internal locus of control’’ (Reitz & Sewell, 1979,
p. 73) react favourably to certain organisational
settings, others with an ‘‘external locus of control’’
do not (Reitz & Sewell, 1979, p. 73). In the light of
what the prior literature suggests about the role of
past learning, it is argued here that engineering
officers will uphold a developmental culture by
virtue of their training and functional expertise
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more so than business officers. The following
hypothesis is advanced:
Hypothesis 1. Engineering officers will indicate
higher developmental culture scores under the
competing values model than business officers
prior to PBTC implementation.
Although one might expect that engineering

training background. Hypothesis 2 is necessary to
establish that neither the ongoing cultural change
programme nor the process of PBTC imple-
mentation materially altered this relationship.
Taken together, they provide the basis for asses-
sing how the alignment between the develop-
mental orientation of MAS users and that
embedded within the MAS influenced the per-
ceived success of the new system.
Zammuto and Krakower (1991) suggest that a
departmental culture which stresses flexibility as
opposed to control is more conducive to favouring
an accounting innovation that can potentially
redirect managerial attention and alter organi-
sational processes. An internally oriented outlook
may be expected to coincide with a low inclination
to adopt management innovations which alter the
stability and continuity of control procedures as
opposed to an external orientation (Zammuto &
O’Connor, 1992). Thus a developmental culture
orientation under the competing values model can
be expected to be more receptive to any account-
ing innovation which alters the status quo espe-
cially where the accounting innovation enhances
information on the impact of external market and
customer influences on organisational activities.
Since PBTC attempts to provide enhanced
information on ways in which resources can be re-
allocated, a flexible orientation on the part of
users can be expected to heighten the relevance

Hypothesis 3. officers with higher developmental
culture scores under the competing values model
will consider PBTC to be more successful than will
those with lower developmental scores.
To provide a deeper organisational perspective
to the questionnaire results, interviews were held
with users of the PBTC system following the
administration of the ex-post questionnaire. These
interviews were semi-structured in that questions
generally attempted to retain some focus on the
users’ outlook toward PBTC’s usefulness and
consequences. The interviewees included employ-
ees with Research & Development, Production and
Marketing & Strategy responsibilities. In addition,
interviews were held with individuals who had
played a role in the design and implementation of
the PBTC system. The next section discusses the
questionnaire results and their implications for the
hypotheses being tested in the light of the qualitative
information derived from these interviews.
5. Questionnaire results and interview analyses
The ex-ante questionnaire was distributed to the
34 relevant PBTC accounting information users at
HLFO identified in Table 3. Four questionnaires
were returned partially filled and were excluded
from the analysis. The ex-post questionnaire was
distributed to the corresponding group of 33 rele-
vant PBTC information users. Of the 33 ques-
tionnaire returns, two were partly filled and
unusable.

that accountants are ‘‘ conservative. They fulfil
their function and manage by the numbers but do
not accept new ideas easily’’ (23.4.97). He indi-
cated that traditionally: ‘‘ the accountants’ tasks
Table 4
t-Tests of developmental culture orientation of engineering and business officers
a
Engineering Business t (P-value)
Mean (standard deviation) Mean (standard deviation)
Ex-ante developmental orientation (H1) 39.04 (20.99) 19.05 (11.15) 3.291 (0.004)
Ex-post developmental orientation (H2) 41.00 (24.87) 18.89 (14.16) 3.115 0.005
a
A two-sided t test was used to test the hypotheses, H1 and H2, that the true means of the developmental scores under the com-
peting values model of the engineering officers group is significantly higher than the business officer group before and after PBTC
implementation.
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are defined by formal constraints’’ (23.4.97) and
observed that:
before, we used to use overhead allocations
and when there were questions, the accoun-
tants simply analysed the problem in more
cost detail (23.4.97).
The Head of Production Planning offered a
similar view of the accountants:
PBTC had to come from one of us in R and
D or Production or from somebody in Sales
or Marketing but not from the Accounting

mens accounting tools. They focus on existing
products and they fulfil standard Siemens
functions—and there are a lot of standard
functions at Siemens (24.4.97).
In commenting on the type of information
provided by the Accounting Department, a pro-
duct developer from the R & D Department
(here referred to as Product Developer A) stated
that:
Accountants are more conservative because
of their structure and their approach. But
nothing is more deadly than columns and
columns of numbers—these are the so-called
‘‘number cemeteries’’ (Zahlenfriedhof). Con-
versely, PBTC shows us the results more
clearly—this helps (27.6.97).
In echoing this view, the Head of Production
Planning indicated that:
Accountants have their rules and financial
report regulations. You cannot expect flexi-
bility in their representation of data (3.7.97).
He pointed in humour that: ‘‘ only if they
have time and they are bored, will they help us’’
(3.7.97) and noted that a specific type of
accounting information is needed by R and
D, but accountants do not really care where
the costs come from (3.7.97).
The Head of Production Planning commenting
on the accountants’ cultural outlook noted that:
‘‘The accountant is cool. He is not emotionally

had to procure data in a form and depth they
have not been used to (25.4.97).
The tenor of these interviews are indicative of
perceived differences between engineering officers
and accountants and between traditional account-
ing information produced by the accountants and
the form and nature of PBTC information. Engi-
neering officers in R and D, Production and Sales
and Marketing considered themselves as being
more open than accountants to departing from
traditional precepts governing accounting infor-
mation content and form. Under the competing
values model, this view of accountants accords
with a lower developmental orientation in com-
parison with engineering officers. The ques-
tionnaire based results of hypotheses 1 and 2
therefore find some corroboration by way of the
interview results.
The results suggest that the enterprise-wide cul-
ture change programme was not significantly asso-
ciated with changes in the organisational outlooks
of engineering and business officers over the eleven
month time period between the two questionnaire
administrations. As might be expected, the orga-
nisational value orientations of the functional offi-
cers are not subject to change over short periods of
time. It is plausible also that any association
between organisational value orientation and per-
ceived MAS success which is tested in hypothesis 3
will remain equally stable over short time periods.

cess: regression results
a
Expected sign Coefficient (S.E.)
Intercept 5.058 (0.340)
Develop – À0.041*** (0.006)
Adjusted R-square=0.638; ***P< 0.01.
a
The model is Perceived PBTC success=b
o
+b
1
DEVEL-
OP+e. Perceived PBTC success is measured on a scale from
one to five (1=totally successful, 2=mainly successful, 3=nei-
ther successful nor unsuccessful, 4=mainly unsuccessful,
5=totally unsuccessful). DEVELOP is measured by the aggre-
gate score from 0 to 100 allotted to Department B which cor-
responds to ‘‘developmental’’ culture in the questionnaire
instrument. The significance level of the coefficient of
DEVELOP was determined using two-tailed t-test.
A. Bhimani / Accounting, Organizations and Society 17
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Marketing and Purchasing talk to each other
This is a tool which creates an ‘‘aha’’
effect—what a sheet of paper with only rows
and columns would never be able to do
(25.4.97).
Product Developer A likewise thought that with

(3.7.97). A similar opinion was expressed by the
Phoenix Technical Project Leader from the R and
D Department who viewed PBTC as enabling to
‘‘look for the reason for a deviance within a pro-
cess and to look at how to reach our target’’
(25.4.97). The Phoenix Technical Project Leader
added that it is a tool to show the Strategy and
Marketing people ‘‘what we are good at’’
(25.4.97).
Another Product Developer (here referred to as
Product Developer B) believed that:
PBTC as a product calculation tool, has to be
accepted and hence integrated into Siemens’
standard procedures (13.1.98).
Product Developer B stressed that control
responsibility was an important issue:
PBTC should be used not only for the plan-
ning of new products but also for cost con-
trolling. From this controlling, the
optimisation of processes can be achieved
(13.1.98).
He thought that PBTC helped match processes
and product functions to different individuals and
departments and that with the new MAS:
problems such as the question of who is the
cost responsible person will be resolved
(13.1.98).
Such a view did not depart from one of the TOP
initiative’s aims to replace ‘‘division of labour with
division of responsibility’’ (Siemens, 1995, p. 5).

associated with this, made attentive to possi-
ble cost drivers and have got through this, a
higher awareness of cost origins (13.1.98).
The PBTC Project Leader had commented that
‘‘ the way in which data is communicated, that
is, visually as opposed to just numbers, is very
important to some departments’’ (25.4.97). A
similar view had been expressed by the Head of
Production Planning who thought that ‘‘PBTC’s
visual approach is very user friendly’’ (3.7.97).
In line with the structuring of information con-
ventionally adhered to by engineers, PBTC’s
structuring of information output was graphic and
visually diverse. The imagery of process flows, the
visual depictions of the magnitude of resource
allocations at different process steps and the dia-
grammatic displays of cost incursions at various
operational stages are characteristic features of
PBTC reports. Engineering officers’ predilection
for integrating numerical and diagrammatic
representations is a hallmark of PBTC that is not
independent of their involvement in its design and
development. It is likely that prior conceptions of
the nature and role of the Accounting Department
and engineering officers’ contrasting perceptions
of the potential role of cost management infor-
mation influenced their judgements concerning the
new MAS. Engineering officers were predisposed
to consider the viability of an accounting system
which not only departed from the structural

successful by that group. The study however goes
beyond the scope of prior investigations in that it
considers quantitative and qualitative information
collected prior to and following the implementa-
tion of the MAS under study.
Within the organisation investigated, there were
context specific factors underpinning the results of
the study. The TOP programme of culture change
at Siemens for instance, played a role in shaping
the MAS’s design features and by upholding cer-
tain notional culture elements, influenced what
came to be deemed as successful accounting
change within the organisation. During the time
period between the first and second questionnaire
administration, Siemens was actively engaged in a
programme of enterprise-wide culture change. A
principal objective of this programme was to alter
the form and extent of communication between
different parts of the organisation. Siemens’ TOP
initiative sought to ‘‘ design more efficient
structures, decision patterns and processes’’ (Sie-
mens, 1994, p. 2) and ‘‘new forms of co-operation’’
A. Bhimani / Accounting, Organizations and Society 19
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(Siemens, 1995, p. 5). It encouraged organisational
participants across the enterprise to develop
greater sensitivity to external market changes,
increased flexibility in carrying out work activities

Manager, 4/6/96) and to attain ‘‘effective cost
management at all levels and in all functions’’
(Innovation Management Director, 3/6/96). Like
the Phoenix project, PBTC’s aims were also char-
acterised by objectives subsumed within the TOP
programme of cultural change. The ability of the
PBTC system to achieve its aims was, in this light,
not independent of Siemens’ pursuit of TOP
objectives.
Aside from altered information monitoring and
reporting, Siemens’ progression towards a merito-
cratic and individualistic rewards-based culture
whereby traditional functional boundaries are
transcended in the pursuit of effectiveness and
transparency also affected the form and effects of
PBTC. Accountants had traditionally internalised
a professional conception of the need to econom-
ically map the organisation in terms of functional
boundaries and to allocate costs based on generic
procedural rationales. PBTC by contrast, repre-
sented an attempt at connecting and linking
resource flows by focusing on processes rather
than functional demarcations. The object was on
integrating time, resource, quality and cost con-
cepts rather than on merely reporting on overhead
allocations across individualised cost objects.
PBTC’s embodiment of engineering officers’ infor-
mation structuring and reporting idiosyncrasies
contrasted with the procedural formality which
had permeated the Accounting Department’s

the new MAS’s form and content brought into
sharp focus the absence of representations of
20 A. Bhimani / Accounting, Organizations and Society
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purely economic data which had traditionally been
provided by the Accounting Department.
The analysis suggests that the interview com-
ments of PBTC system users are broadly in line
with the questionnaire results which indicate that
different users’ organisational outlooks affected
their perception of the success of the newly imple-
mented MAS. The interviews provided a backdrop
of organisational detail to the statistical analyses of
respondent replies. The qualitative comments are
indicative of the perceived success of PBTC as hav-
ing been possibly tied to the pre-existing proclivities
of the engineering officers toward information
representation and how they sought to understand
the cost implications of design changes. The study
is, in this regard, indicative of the potential of
methodological triangulation whereby quantitative
and qualitative analyses can be coupled to shed
greater light on the subject under investigation
(Ashton, 1982; Bamber, 1993; Birnberg, Shield, &
Young, 1990; Brownell & Trotman, 1988).
A void continues to exist in our knowledge of
the diversity of factors which can affect user
receptivity to novel accounting systems. The pre-

study leans more toward an examination of forces
conditioning an emerging MAS from within the
organisation. The predisposition of engineering
officers to structuring information in ways that
contrast with accountants’ notions of appropriate
accounting data representation has here been
argued to find possible origins outside the organi-
sation. This investigation suggests that a variety of
intra-organisational forces shaped the new MAS’s
form, content and effects. Siemens’ historical shift
from being highly centralised to adopting a
decentralised form with more autonomous busi-
ness units, its ongoing programme of culture change
and its traditionally focussed and detailed standard
accounting procedures were instrumental in influ-
encing the structure and consequences of process
based target costing. The emergence and receptivity
of the new MAS can in this light, be argued to have
been conditioned by intra-organisational forces
which themselves are partially shaped by more pro-
tracted extra-organisational factors. This study is
thereby suggestive of accounting change being tied
to transformations that are multifaceted in origin
and which inhere it with a specificity that is intra- as
well as extra-organisationally rooted.
Acknowledgements
The comments made on an earlier draft of this
paper by Thomas Ahrens, Robert Chenhall,
Maurice Gosselin, Graeme Harrison, Anthony
Hopwood, Peter Miller, Cedrik Neike, Neale

______ Department D is very production-oriented. A major concern is with getting the job done. People are not
very personally involved.
(b) Department Leader (Please distribute 100 points)
______ The head of Department A is generally considered to be a mentor,asage,orafather or mother figure.
______ The head of Department B is generally considered to be an entrepreneur,aninnovator,orarisk taker.
______ The head of Department C is generally considered to be a coordinator,anorganiser,oranadministrator.
______ The head of Department D is generally considered to be a producer,atechnician,orahard driver.
(c) Department ‘‘Glue’’ (Please distribute 100 points)
______ The glue that holds Department A together is loyalty and tradition. Commitment to this institution runs
high.
______ The glue that holds Department B together is commitment to innovation and development. There is an
emphasis on being first.
______ The glue that holds Department C together is formal rules and policies. Maintaining a smooth running
operation is important here.
______ The glue that holds Department D together is the emphasis on tasks and goal accomplishment.A
production orientation is commonly shared.
(d) Department Emphases (Please distribute 100 points)
______ Department A emphasises human resources. High cohesion and morale in the institution are important.
______ Department B emphasises growth and acquiring new resources. Readiness to meet new challenges is
important.
______ Department C emphasises performance and stability. Efficient, smooth operations are important.
______ Department D emphasises competitive action and achievement. Measurable goals are important.
3
Used with permission from Zammuto and Krakower (1991).
22 A. Bhimani / Accounting, Organizations and Society
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