Accounting and Organisation Change

Anthony G. Hopwood
London School of Economics and Political Science, UK
Preface
There is a close relation between both economical and sociological
changes with the change of technology. These days the growing of
internationalization bussiness had grown the global interdependencies and the
implication for competition, for corporate decission making, for organizational
structuring and management, and for separating the power and authority. New
knowledges brought new suggestion for new modes of organizing them which
become new sphere ofbussiness and economic activity. This changes at the next
step has shifting the political values and ideologies to the conceptions in both
public and private, the domains of economics and social, ans the border between
bussiness and govermental ocassion.
Developments which happen in almost any sectors give impact to the
financial sector. New financial instruments have been invented and bring
prominence in practical affairs. The financial markets has growing in
internasionalisation of the financial markets in all sectors the management both
bussiness organisations and national states. Ratio between the financial and the
real sectors has amazingly increased in the last decade.To be carefull is needed in
order to take a line between the uniqueness and the magnitude of the changes.
Hopwood believe that indentifying the discontinuities is more important than the
continuities causes that made changes to organisational, social, and economic
shape. The main role of the invention of the changes were its presence and its
preceived desirability.
The transformation of accounting compared to the concept of change can
be linked by the condition that for on the one hand now adays both practicioners
and researcher giving attention to the shifting patterns of organisational and
economic life are impiging on accounting practices, the uses of which are made
for them and the knowledge in which they are embedded. Attention is being given
to the needed for accounting to change.

Contents
This days accounting is recognized as an unautonomous phenomenon,
factors which known as the transformation influence on accounting were social,
political and economic factors. But in conservetism way to see, accounting is a
rigid discipline and protected and buffered from worlds pressure. As new
particular knowledge of accounting, changes in practice are often made for
provide a new allignment between accounting and the economic, organisational
and social contexts in which it is perceived to be imperfectly embedded
Hopwood considering some general roles which accounting can play on
processes of organisational change, there were three roles which particulary
giving emphasis to this change:
1. Accounting plays role in creating a quite particular visibility in the
organisation, making thins visible that otherwise would not be.
2. Accounting plays role by functioning as a calculative practice
3. Accounting plays role in creating a domain of economic action.
Analyzing accounting uses these terms is a task beyond the confines of the
present occasion. Thats why Hopwood choose to focus on three themes
illustrative of the involvement of accounting in organisational change processes.
Those themes were:
1. Some of current ways in which accounting is being involved in bringing
market pressures to bear on internal organisational affairs.
2. A number of effects of technological change on the accounting craft.
3. Some consideration given to the relationship between accounting
calculations and economic discourse.
Heres the explaination of these three themes
Reweaving the Inside in the Name of The Outside
The concerns of the external world can be permeate and give influence to
an organisations internal affairs through accountings power to shift patterns of
organisational visibility. Some information shows in accounting information and
other information such as strategic realignment of organisational structures,
internal pattern of organisational segmentation and flows of information, were the
permeation result of the language, pressures and requirements of the marketplace.

In modern organisation, enterprises being broken down into more units

for the purposes of internal coordination. The terms of organisation now can be
externally driven flows of information are entering internal organisational reports.
The uses of one cast in moere narrowly defined functional terms now been
replacing by using profit as a means for broadening management responsibilities
in such a way thet they assume a more widely conceived bussiness form.
Heres a new form of information using which used in lateral linkages;
(a) Manufacturing activities linked with marketing sphere, (b) retailing activities
being related to whole selling and the eventual manufacturing process, (c) prices
related to cost, (d) cost related to product design and changing pattern of
component sourcing, (e) quality standards linked with consumer demand.
By the configurations of organisational and accounting changes,
enterprises been made to be more market oriented. Information, including
accounting information is moderating managerial vocabularies proactively
shaping and changing their conceptions of what is important and what is not.
Accounting needs to be seen not merely as something that reflects organisational
circumtances but also as a phenomenon that can play a role in changing them.
1. Technological Perturbations and Organisational Ripples
Hopwood believe that an appreciative organisationally grounded stance is
necessary for understanding what is happening in enterprises today. Managerial
function in enterprises now become more vast, one that is increasingly isolated
from where actual productive and service activities take place, and one where the
aplication and use of modern office technologies have been centrally implicated in
the rise of that management at a distance (Latour, 1987).
The role of a new computer based technologies has amazing result in
intensification of organisational changes, speeded up rather than estavblished
asresh a number of existing organisational trends. The development of earlier
office technologies such as the filling cabinet, means for sorting, sifting,
condifying and classifying information, the typewriter and the copying machine
resulted in massive changes in patterns of organisational influence, power, and
authority.
Accounting enabling an assembling of complex physical processes and
their abstraction into the domain of paper throught the activities on planning,
budgeting, costing, and scheduling. The changes in accouting have impact to the

economics and financial processes, and futher effect to organisational affairs.

Accounting is responsive to the change of the physical world, this can be seen
from this example, attention has been placed on the implications of new
manufacturing technologies for the design of accounting systems (Johnson and
Kaplan, 1987). It is a danger of being too enthusiastic and too simplistic in
approach, not least if we look at the organisational processes that are implicated in
such technological change in other areas of organisation and socila life (e.g. Sorge
and Warner, 1986) suggests that there is no simple technological determinism at
work. The impact of new technologies on accounting is likely to be mediated and
influenced by the organisational and cultural terrains into which thw technologies
are introduced.
Sorge and Warner (1986) do a comparative study of the impact of new
manufacturing technologies in Germany and United Kingdom,and found that the
introduction of simmilar changes in manufacturing technologies in the two
countries had different, indeed sometimes even opposite effects. This results
shows that is not possible to understand the implications of technological changes
without considering the organisational and cultural contexts in which the changes
occur. Changes are mediated and influenced by the circumtances prevailing in the
contexts in which they are introduced.
To see a range of consequences for accounting stemming from current
developments in manufacturing technolofy, rather than any singular effeect. Then
to both apreciate and influence such consequences we need a more subtle and
advanced insight into the organisational dynamics which mediate and shape
accounting changes in particular contexts.

2. Economic Discourse and Accounting Calculations

In this part, considered that market forces, forms of organisational
segmentations and new technologies world of ideas and body of knowledge
influence accounting. Its being changed for discursive developments. Hopwood
emphasise particular role of economic discourse in this process.
This days, one of worlds dominant features is the power of economic
thought. Economics claim to provide a positive rather than normative knowledge
of the world, in the reality economics seemingly always wants to make the world

to be more economic day by day. The relationships between accounting and

economicsts claims to know not only how the world works but also how to make
the world better. By this perspective, economics discourse were both reflective
phenomenon and also a constitutive phenomenon, which now have a major role in
making the world more economic, forging the reality that is more in line with the
economic understanding.
A role of economics discourse particulary providing a powerful basis for
accounting change, but not exclusively in public sector. Language of economics
have a lot of ambiguity when used as a basis for political action rather than a more
constrained form of intellectual activity. The ambiguity, generality and
abstractness of the concepts themselves imply that there is no one-to-one
relationship between the concepts and the specific forms of operational calculus to
which they give rise.
Efficiency phenomenon can not to be associated with the singular impact.
For political discourse, we need to consider the actual effects that occur rather
than only focusing on the seeming desirability of the intent that exist behind them.
As well as economics area, need to be prepared to recognise how a realm of
economics is possibly created rather than merely revealed and the role which
accounting and other sources of economic and financial information can play in
that process.
We can see this kind processes in health care organisations in many
countries inthe world. For example United Kingdom, recently there were few
accountings for health which given a priority in guiding the management function.
The managemen function now is in the process of changing, not least with the
development of a more finely articulated knowledge of health economics
(Ashmore, et al., 1989) and with the political mobilisation of that knowledge, it
become possible to conceive of health care as residing in the domain of
economics. It is possible that health care organisations might start to be made into
organisations of more of an economic form than they could have been.
Conclusion
Theres some role appreciation of the organisational nature of accounting
which helps to understanding important aspects of modern organisational aspects
related to accounting field. In a complex and interdependent world, it is uneasy to

introduce the accounting change. Accounting plays invariably functions in

unanticipated ways in order to provide one of the conduits which economics
discourse enters into the world of practice. Partial tough of the new organisational
understanding can help to understand the way which accounting is embedded in
processes of organisational change. This understanding cannot give a new
predictability and precission to the accounting craft, it is sufficient to provide a
richer and more informed basis for giuding accounting in action.

Origins of The New Public Management

An International View From Public Administration / Political Science
By Michael Barzelay

History of NPM
NPM is a concept that was originally introduced by Christopher Hood in
1991, and if we look at the history that exists, which is a modern management
approach in the public sector at the beginning of the emergence in Europe of the
1980s. Which it is in response to the inadequacy of the model of public traditional
administration. NPM movement began in the late 1970s and early 1980s.
Practitioners first appeared in the UK under Prime Minister Margaret Thatcher
and municipal governments in the US (eg, Sunnyvale, California), which suffered
most from the economic recession and tax revolts. Next, the government of New
Zealand and Australia to join the movement.

Their success put NPM administrative reform on the agenda of most

OECD countries and other countries as well (OECD, 1995) . Push of NPM at that
time is decentralization, devolution and modernization of public service delivery
and it so influential. They include most of the world in Indonesia. And departing
from the downturn will be the existing system due to an existing political games
or against the public administration, in which the administrative system is given to
the peacock who has contributed to the successful conduct of the elections.
Therefore been many cases of corruption, to create a movement of political
reformation and administration, stressed for a more interventionist state, the
separation of politics and administration, the principle of merit (tenured, neutral
and competent administrator) and financial management.
Understanding of the NPM
NPM is a conceptual agregament created for the purpose of scientific
discussions related to contemporary changes in the organization and mananemen
executive government. According to (Hood 1991), they assume that the term
NPM is looking at it as an organization design in the public sector. Additionally
NPM is a decentralized management system with a device - new management
tools, such as controlling, Benchmarking and lean management. NPM can be
understood as a form of privatization of government activity, it is generally seen
as an approach in public administration to apply the knowledge and experience
gained in the world of business management and other disciplines to improve
efficiency, the Effectiveness of public service performance of a modern. Therefore
there are several opinions related to the emergence of the concept of the existence
of NPM among science and become a new ideology for him. According to Brown
as Siamese Twin, they said to be a blend of several science which halted from
philosophy, organization and administration to be able to accommodate the
presence of management relate to each other.
a. NPM as an Administrative Argument

From the scheme, it is clear that all of the opinion boils down to a
doctrines that use for the design goals of the organization, as well as any existing
elements interplay.
NPM directed mainly to colleagues in academic public administration in
the UK and Australia, many of them at the time dismissed influence public
management approach in their countries. First, they characterized NPM as
viewpoints on organizational design in government. As a point of view, NPM was
described not as a theory of administration as well as an adhoc collection of
thoughts about public management.
b. NPM as an Administrative Philosophy
In case of the politics and history before becoming the base in
performance determine a decision about part of analysis used. It means that when
creating a design is not necessarily directly to make without used a theory or a
clear basis.
c. NPM as an the Odd Couple
He argue that NPM is based on two fields of discourse or paradigm,
known as public choice and managerialism. Public option is the field of
contemporary discourse about the government with broader concerns of
management, whereas managerialism is a field of discourse originally intended to
apply to organizations in the sector. Some ideas until arguments that is used in
addition or situation existing discourse. And it is strengthened by Aucoin (1990)
and Hood (1991) that widely seen as making points equal areas of contemporary

changes in the organization and management of executive government in

countries such as England, Australia and New Zealand: first, that the changes
accepted administration doctrine occurred during the 1980s; second, this change is
an integral part of international public management trends; and third, the
arguments behind these ideas should be analyzed and assessed.
However, as we now have seen, different details of their discussion. Of it
is visible that emerged from the discussion, Aucoin tied more closely to the
fashionable discourse of public choice and managerialism and he translated these
ideas into more conventional frame of reference about organization design. More
substantively, Aucoin looks that the prevailing doctrine of administrative reform
pointed opposing directions very different from H & J assessment that NPM is
coherent, if tilted, the administration argument.
d. NPM as New Institutional Economic
In financial terms was very influential on the wheel rotation of the
organization which in this case proved that adhering to the finance department of
information and public management doctrine applied. Dal was just as happened in
1991, Jonathan Boston, John Martin, June Pallot and Pat Walsh published
Restructuring Country: New Zealand Bureaucratic Revolution. The book includes
chapters influential Boston on 'theoretical' reform of New Zealand (Boston 1991).
Which related to public management, conducted by the New Zealand government
in the 1980s. With the situation to make a choice is to be formed by the policy
proposals offered by the Ministry of Finance. In accounting for the proposal
Ministry of Finance, Boston discussed the policy development process. In
describing aspects of the policy development process, Boston shrink
organizational dynamics and highlight the reasoning involved. The description of
how the Treasury staff reasoned about public management illuminated three key
components of the New Institutional Economics (NIE): public choice theory,
transaction-cost economics and economic theory of institutions. These ideas - that
a common currency for the Treasury Department economist trained staff - a
proposal strongly influenced department and finally Zealand government policy
options new..and the case of New Zealand as an example picture of the economic
dynamic.

e. NPM Across the Pond Down Under

This is a slogan campaign created to raise a question in order to create a
Governmental organization design, by using some product its policies, such as
health, education and other services.
From what is stated above there are some things that can be learned, as
explained by As indicated earlier, the second major discussion in Barzelay (1992)
is an administrative argument. Barzelay administration argument is presented as a
body of principles and arguments in favor of the organizational strategy of
administrative functions and staff agencies. Illustrative is the principle of 'separate
service from control. This principle is like a doctrine in H & J sense, in another
perspective, we can say it framed and solved the problem of organizational design
in government, and it is presented as teaching, doctrinal In Breaking Through
Bureaucracy, the justification of the doctrine of 'making reference bit for the
academic literature professional-management and government. That to perform a
design organization of the need for a clear doctrine.
Political Analysis about Australia
Quoting from what is in the content of the journal Barlzelay about the
Australian situation at that time how the Political Leadership in the Era of
Constraints (1992), which emerged from the wings of political science of public
administration. Thus, the main task is to describe and explain the government's
decision and its impact on both public bureaucracies and public policy. Decisions
in this context included public management policies, especially in the area of
expenditure planning and financial management. Such decisions include the use of
Expenditure Review Committee of Ministers as part of the expenditure planning
process, and the initiation of Financial Management Improvement Program as part
of financial management. Australia as well as Selandia only became kiblat of
management finances for Indonesia when the Government of New Zealand or
Australia began to implement the system performance based budgeting and
financial statements are based on the actual early 1990s, the first step is
overhauled management systems and organizations government agencies to
ensure government officials who are paid from tax money to run the budget
system and public financial accountability based on the desired system people
(Kompas Newspaper; 4 Feb 2009).

ACCOUNTING CHANGE IN ORGANIZATION TODAYS

By the configurations of organisational and accounting changes,
enterprises been made to be more market oriented. Information, including
accounting information is moderating managerial vocabularies proactively
shaping and changing their conceptions of what is important and what is not.
The role of information technology in helping the process of accounting in
the company / organization has long been underway. The main reason is the use of
IT in accounting efficiency, saving time and costs. Other reasons include
increased effectiveness, achieving results / output of financial statements
correctly. Another reason is that coupled with the protection of corporate assets.
In short the benefits of IT in Accounting is:
1. Make work easier (makes job Easier).
2. Helpful (usefull).
3. Adding productivity (Increase productivity).
4. Enhance the effectiveness (enchance effectiveness).
5. Develop job performance (improve job performance)
There are some examples of accounting and organization change today ;
1. Just In Time (JIT)
Retail sales system similar to the quick response inventory system just-in-time
(JIT) manufacturing used. This system purchase orders for goods inventory is

based on the concept of "demand-pull" rather than by a fixed interval (monthly or

weekly) in a "push" to meet a certain level of inventory.
Characteristics:
-

JIT environment is an environment of continuous flow rather than a batch

environment.

Require continuous processing operations, to minimize or eliminate the

inventory as a whole.

Eliminate whispering accomplishes in the manufacturing process and

emphasize the development of continuous operation.

A concept similar to TQM, and in many ways as important aspects of

TQM.

Processing activity emerged with the concept of "pull". Activities (such as

ordering new products) occurs only when needed to meet customer
demand. Customer demand, which is characterized by a sales order at this
time, "interesting" (causing triggers) from processing orders repeated
requests. Consequently perform the order to the supplier. Orders to
suppliers based on actual sales to replenish inventories that have been sold.
Current sales demand "pull" (automatic triggering) the occurrence of
orders to replenish inventory. So that retailers can be ordered with the
purchase of a basic tendency is the case today.

2. Web Commerce
Also called trading with the Internet network. Net sales through the Internet
(World Wide Web) is an integral part of the economy. The sale provides many
advantages for both consumers and providers of goods.
Advantages for consumers:
-

No need to queue to be served by a salesperson or product information.

Internet-based software through a sophisticated network, a customer can

obtain quick answers to the questions regarding the product concerned
complex.

Web-based transactions are usually protected with encryption facilities for

security reasons.

The advantage for providers of goods:

-

Cost savings due to reservations automatically.

Electronic encoding automatically on transaction data.

The low overhead. The entire internet shop can be accommodated in a

single desktop computer.

Goods can be marketed to all corners of the world.

Updates, new product introductions and price changes can be done

quickly.

That much public concern in purchasing via the Web is the safety and protection
of personal data. Based on these reasons, the American Institute of Public
Accountants is sponsoring the "label approval" Web of Trust that may be issued
by a public accountant who has been specifically trained, to be given to a Web site
that meets the criteria.
Conclusion :
Technical problems, organizational, and project management will appear in
implementing information systems. New information systems pose new working
arrangement relationship among existing personnel, changes in duty, and perhaps
change the formal organizational structure. Technical factors, behaviors,
situations, and related personnel should be considered entirely. Failure to do so
will lead to no useful output of the system, though technically quite good system.
Furthermore, the necessary cooperation from the user continuously to operate the
system (providing input, output verification) after the system was implemented.

Bibliography
Barzelay, M. (n.d.). New public management, current trends and future propetes
proledge : London and New York.
Ellicia, N. (2012, Oktober 06). Akuntansi Ekonomi. Retrieved November 01,
2014, from Perilaku Etika Dalam Bisnis.
Hood, C. (1991). A Public management for all the season public administration
69. 3-19.
Hopwood, A. G. (n.d.). Accounting and Organization Change. London School of
Economics and Political Science, UK .
Perubahan dalam Organisasi. (2009, February 09). Retrieved November 10,
2015, from Kompas: www.kompas.com
http://ejournal.unud.ac.id/abstrak/naniek%20noviari%281%29.pdf
http://www.scribd.com/doc/33211434/Penggunaan-Teknologi-Informasi-DalamSistem-Informasi-Akuntansi

MULTIPARADIGM ACCOUNTING
Accounting and Organization Change

by :
Alfa
Farrah Sidny Anirya
Henny

MAGISTER OF ACCOUNTING
ECONOMY AND BUSINESS FACULTY
BRAWIJAYA UNIVERSITY
MALANG
2015