IPOs, Institutional Complexity, and Management Accounting in Hybrid Organisations: A Field Study in a State-Owned Enterprise in China
50 Pages Posted: 27 Jul 2016
Date Written: July 25, 2016
An initial public offering (IPO) is an important milestone for an organisation. In addition to pressures from capital markets unavoidably imposed onto newly listed firms, other beliefs, rationales, and prescriptions deriving from the institutional environment where they operate may prevail and guide organisational practices. Drawing on the perspective of institutional logics, this paper investigates the implementation of management accounting (MA) within firms that face multiple institutional demands following an IPO. By studying a Chinese state-owned enterprise (SOE) that was recently listed, this paper demonstrates that the interplay of multiple logics, including State, corporate, and capital market logics, shapes the manner in which MA operates. This study also reveals that different MA practices tend to encompass institutional demands in diverse ways and to varying degrees. However, regardless of whether MA practices are implemented to simply respond to plural institutional expectations, connect different organising principles, or balance elements of multiple logics, they function as hybrid practices, helping to maintain the hybrid nature of the firm as a ‘listed SOE’. This study makes two main contributions. First, it extends the literature on IPOs by providing an in-depth analysis of how MA is implemented and why it functions in particular ways in firms following an IPO, and by exploring the influences of a wider set of beliefs, rationales, and expectations on the MA practices of newly listed companies. Second, by drawing on the perspective of institutional logics, this paper extends prior research addressing the dynamics between institutional complexity and MA adoption by individual organisations and enriches our understanding of how hybrid organisations may maintain their hybridity through the deployment of MA practices.
Keywords: IPOs, management accounting, Chinese state-owned enterprises, institutional logics
JEL Classification: M4
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