An institutional perspective on the accounting practices in a finance shared service centre organization
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Date
2010
Authors
Kee, Swee Lin
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Abstract
The intention of this research is to explain the process of institutionalization of the accounting practices in an accounting organization which went through a transformation from being a traditional accounting department to a finance shared service centre in a multinational company located in Malaysia. The study focused on specific elements of the accounting practices of a shared service centre (SSC). This study also aims to link the past and the present institutions to show that the connections have an impact on the implementation of the SSC accounting practices.
The method used is an explanatory case study and analysis was made based on the data collected through interviews, document reviews, informal conversations and observations. An analysis of the data showed that the SSC accounting practices in the new organization is not fundamentally different from the prior accounting group. The underlying values and behaviours of the previous institution still lives on in the current SSC organization. As a result of this, there was no significant resistance among the employees in receiving the SSC accounting practices and supporting the business model.
There were changes in the SSC institution whereby there the accounting practices were enhanced to a more detailed and sensitive manner with the support of the accounting management. This drove the employees to change their behavior towards placing more importance over accounting practices such as meeting indicator targets, being more customer orientated and cost conscious, and striving to contribute beyond executing transaction work. These accounting practices were in existence in prior accounting organization before the SSC was implemented, but did not receive as much focus as they do today. These were considered minor changes to existing
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routines and institutions, which was one of the main reasons that led to the conclusion that the organization experienced an evolutionary change.
This study lends support to the assumption that the effort to institutionalize a new practice is relatively easier when the new practice mirrors the fundamental values and norms of an existing institution. The tendency to resist will still be there whenever there is a change but may be overcome through less complex solutions.
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Keywords
Business Administration , Finance , Accounting