Changes in Leadership Style, Management Control and Management Accounting
62 Pages Posted: 13 Aug 2008
Date Written: July 30, 2008
This paper investigates how management accounting change, the leadership style of managers and the (satisfaction of) needs of employees are related. The paper is based on a case study in a multi-outlet car dealership. Accounting change concerns both an organizations' accounting rules and its routines (Burns and Scapens 2000). The way in which managers use accounting information is related to their leadership styles (Hopwood 1974). As a consequence, new accounting rules imposed on the organization by its top management can be classified in two categories: rules that fit with the leadership styles of the managers and rules that do not fit with these leadership styles. The case study in the paper demonstrates how new accounting rules can result in new accounting routines, both in a situation in which the new rules and the leadership styles of managers do fit and in a situation in which they do not fit. Leadership styles differ in how they appeal to the needs of employees: transactional leaders emphasize their employees' physical needs, whereas transformational leaders emphasize their socio-emotional needs. If, in relation to accounting change, the leadership styles of managers also change, this may affect the satisfaction of the needs of a company's employees. The case study demonstrates how accounting change and the satisfaction of the needs of employees are related. The effects of accounting change on the satisfaction of the needs of employees results in support or resistance against the change.
Keywords: accounting change, management control change, leadership style, work satisfaction
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