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Part 2 Reections on Organizational Shifts This page intentionally left blank 7 Management Accounting Inscriptions and the Post-Industrial Experience of Organizational Control Paul Andon, Jane Baxter, and Wai Fong Chua Introduction The idea that management accounting information may be used to control organizational functioning is not new—indeed, this has constituted one of the cornerstones of our disciplinary discourse (Emmanuel et al. 1990; Horngren et al. 2000). However, given that the so-called post-industrial economy is sustaining ‘new’ modes of interand intra-organizational functioning (Castells 1996; Harvey 1989; Rifkin 2000), the process of organizational control, and accounting's role in it, becomes a topic of renewed interest. Will accounting continue to be connected to organizational functioning in familiar ways or will accounting control emerge in new and different forms? This chapter explores such issues. In this chapter we argue that organizational control, and accounting's role in it, has become an increasingly digitized and technologically enabled process. New ‘centres of calculation’ (Latour 1987: 216) have arisen within post-industrial organizations which, in turn, are facilitating more disembedded and intensified forms of accounting control. We examine and illustrate this post-industrial phenomenon of organizational control within a call centre context. Data have been drawn from a case study of an Australian call centre operation, which processes in excess of 12 million customer enquiries each year. The remainder of the chapter is structured in the following way. We commence with an overview of accounting and control in industrial organizations. This is followed by an outline of the emerging nature of accounting and control in post-industrial organizations. This is then illustrated in the context of the changing practices of the case organization. We conclude by considering the disciplinary implications of this account. Accounting and Control in the Industrial Organization There have been many different constructions of organizational functioning and accounting's connection to it within the literature. Burchell et al. (1980), 136 INSCRIPTIONS AND THE POST-INDUSTRIAL EXPERIENCE for example, outline a variety of organizational roles for accounting: first, accounting may assume a decision-support role within organizations; second, accounting may promote dialogue within organizations; third, organizational learning may be facilitated by accounting; and, finally, accounting information may provide the impetus for novel forms of organizational functioning. However, the most enduring characterization of accounting's role in the industrial organization has been as an enabler of ‘efficiency’ and ‘effectiveness’ (Emmanuel et al. 1990: 29). The dual mantras of ‘efficiency’ and ‘effectiveness’ have endowed accounting with a central role in maintaining organizational control—in ensuring that organizational objectives are pursued and that resources are used wisely in moving towards such ends. And whilst subsequent and sporadic debate may have emerged to question this means–end relationship between accounting and organizational functioning (Cooper et al. 1981), such debate has been conducted at the disciplinary periphery and in counterpoint to this entrenched and prevailing viewpoint. Indeed, the ways in which the rhetoric of efficiency and effectiveness connects accounting to the industrial organization has become a central part of the contemporary research agenda. Whilst a number of different research approaches have been adopted to investigate this issue (e.g. see Covaleski and Dirsmith 1983, 1988; Hopper and Armstrong 1991), we will confine our attention to that research, which draws upon the writings of the late French social scientist, Michel Foucault. This is the literary corpus which articulates most closely with the ideas that we will draw upon in our investigation of accounting in post-industrial organizations. Foucault's work on ‘discipline’ (1977) has provided a platform for many interesting renderings of accounting control in industrial organizations. More particularly, Foucault's description of Bentham's panoptican (a type of building that enables an overseer in a central tower to watch the activities of all the occupants—such as the incarcerated, the insane, or the industriously employed) provides a metaphor that has recast accounting control and its quest for efficiency and effectiveness into a more dismal and constraining language. Foucault writes: the major effect of the Panoptican: to induce . . . a state of consciousness and permanent visibility that assures the automatic functioning of power. So to arrange things that the surveillance is permanent in its effects, even if it is discontinuous in its action; that the perfection of power should tend to render its actual exercise unnecessary; that this architectural apparatus should be a machine for creating and sustaining a power relation independent of the person who exercises it. (1977: 201) Drawing on this, systems of accounting control have been examined for the ways in which they create and perpetuate an unrelenting form of organizational surveillance from a distance. As a consequence, accounting inscriptions have become associated with the regulation or ‘governance’ of organizational functioning, as well as the unequal power/ knowledge relationships between the controller and the controlled. PAUL ANDON ET AL. 137 The seminal work by Miller and O'Leary (1987) illustrates the application of this perspective in a study of the emergence of standard costing and budgeting systems in the early 1900s. Miller and O'Leary argue that standard costing and budgeting have embedded a detailed knowledge of individual organizational participant's behaviour in accounting systems. Accounting systems became the panoptican of the industrial organization, highlighting the economic contribution of organizational participants and the extent of their wastefulness and inefficiency. Behavioural deviations from prescribed norms, such as standard costs or budgetary targets, are made visible by accounting systems. This enables subsequent management intervention in ‘out-of-control’ work processes. In brief, accounting systems are characterized by Miller and O'Leary as being instrumental in the production of ‘docile’ and compliant organizational participants in the industrial age. As a further illustration, Knights and Collinson (1987) adopt a Foucauldian lens in their study of the impact of accounting systems on male manual workers in a heavy manufacturing context. Faced with the possibility of their own redundancy, these workers accepted unquestioningly financial data that demonstrated the need for greater stringency and cost control, particularly with respect to the level of total labour costs. The workers were unable to rally against the ‘concreteness’ of the accounting figures, as Knights and Collinson describe it (1987: 472). They had implicitly accepted the classification of labour as an ‘expense’ to be minimized at the discretion of management. Knights and Collinson correspondingly argue that accounting had become a way of ‘disciplining the shopfloor’ (1987: 457). In effect, these workers were participants in their continued subordination to the extant managerialist power/knowledge regime that characterized their organization in particular, and industrial society more generally. As such, it may be argued that accounting prospered in industrial organizations, such as those considered by Knights and Collinson (1987) and Miller and O'Leary (1987), because accounting inscriptions sustained the networks of interests and power/knowledge relationships that were embedded in their design—strong vertical hierarchies, authoritarian management roles, and Taylorized production functions (Harvey: 1989). Accounting was an efficient and effective form of discipline: it ensured the bodily engagement of workers in the production function in parsimonious ways, but it also ensured that management remained ever watchful and vigilant with respect to prevailing interests of capital. Accounting in the Post-Industrial Organization However, the argued transition to a post-industrial economy is transforming organizational functioning in radical ways (Castells 1996; Harvey 1989). Organizational boundaries have become less distinct as various forms of 138 INSCRIPTIONS AND THE POST-INDUSTRIAL EXPERIENCE outsourcing and strategic partnering grow to be more commonplace (Doz and Hamel 1998). Organic designs reflect the emergence of knowledge-based forms of organizational leadership (Drucker 1998). The product/service offerings of the post-industrial organization are subject to continued pressures for change and innovation (Christensen 1997). Overall, post-industrial organizations confront more time-intensive and globalized forms of competition (Harvey 1989). And quantum leaps in information processing technology have contributed to this revolution in organizational functioning (Castells 1996). These changes in organizational functioning, in turn, have generated debate about the emerging nature of control in post-industrial organizations. In particular, we will outline an argument that organizational control is becoming an increasingly disembedded and intensified process. The increasing disembeddedness of organizational control is attributed to the ‘lifting out’ (Giddens 1991: 18)—or replication across time and space—of local systems of surveillance. A quest for competitive advantage, through the diffusion of ‘best practice,’ has resulted in many post-industrial organizations adopting systems of organizational control from leading-edge business units or external consulting firms and business solution providers, such as SAP. The relatively recent digitization of accounting inscriptions has accelerated the translation of systems of surveillance from one time and place to another, contributing to a sense of intensification that accompanies the disembedding of post-industrial organizational controls. It is of significance to note, moreover, that the digital translation of accounting inscriptions is a feature of contemporary organizational functioning that was absent from the pre-industrial and industrial contexts analysed by Foucault, and his influential followers within the accounting literature. Vast amounts of information about customers, employees, production processes, and so-on are now stored in the digitized databases of post-industrial organizations. And it is a reliance upon this particular media to accumulate, process, and disseminate information that is changing the constitution of organizational control. As Poster has stated, digitized repositories constitute a form of ‘Superpanoptican, a system of surveillance without walls, windows, towers or guards’ (1990: 93). In short, digitization has enabled organizational control to be exercised in almost any place and at almost any time. As such, virtual representations of organizational functioning have changed the post-industrial experience of the spacing and timing of organizational control (Giddens 1991; Lyon 2001; Poster 1990). The post-industrial experience of organizational control is no longer as local or as partial as it was once perceived. Lyon argues that this has been brought about, in part, by the integrative capabilities of organizational databases or their ‘leaky’ quality (2000 : 8). Huge amounts of digitized information can be passed with ease from one application to another, and from one site to another. Also the ability to retrieve, process, and analyse this information at any time or place means PAUL ANDON ET AL. 139 that surveillance does not need to occur in real-time or in its real-life context. Rather surveillance may now take place within the boundaries of the computer screen or the perimeters of a paper report (Ihde 1998). As a result, organizational control becomes a more disembodied or ‘over-there’ process (Ihde 1998: 351) as technologically mediated interactions enable the physical separation of the controller and the controlled (Wiley 1999). But it is the ‘invisibility’ (Lyon 2001: 25) of digitization that most acutely reinforces the post-industrial experience of the timing and spacing/disembedding and intensification of organizational control. Indeed, some of the organizational participants interviewed in our case study will comment on their uncomfortable sense of an omniscient and omnipresent form of ‘Big Brother’ embedded in the technology that enables their work. However, before moving to a consideration of the case study and the ways in which it exemplifies this post-industrial experience of organizational control, we consider briefly the continued connection between accounting and organizational control. How may we account for accounting's resilience? Arguably, it is the nature of accounting inscriptions which provides part of the clue. Accounting generates numerical inscriptions of organizational functioning, for example, production output, sales revenue, cost expenditure, and so-on. And these inscriptions are particularly useful in the process of surveillance because of their mobility, stability, and combinability (Latour 1987: 223). Accounting inscriptions are mobile in that they can be moved quite readily to the sites where surveillance takes place, such as a particular manager's office or personal computer. Accounting inscriptions are also stable—numbers travel well, they do not deteriorate or change as they are moved around organizations. And accounting inscriptions are combinable, such numbers may be added, subtracted, divided, and multiplied to provide relevant and additional insights into organizational functioning (for instance, the level of profitability, sales growth, return on investment, gearing, and so-on). Additionally, the numerical nature of accounting inscriptions has allowed their digital translation to occur with relative ease, and this has served to intensify the mobility, stability, and combinability of accounting inscriptions and their role in virtual forms of organizational control. Accounting and Control in a Post-Industrial Organization An Outline of the ‘Old’ We were monitored fairly closely in those days—for our supervisors used to walk, and do the walk around, and make sure that you were doing . . . your work and didn't have a break. You only had a break every three hours and that was just a ten minute break and then you had your meal break. . . . They just stood at a, like a podium and overlooked the floor. 140 INSCRIPTIONS AND THE POST-INDUSTRIAL EXPERIENCE This is an excerpt from an interview with a ‘call girl’ who has worked in the call centre operation of our Australian case organization for over 30 years.42 Her descriptions of the working conditions that she encountered early in her career are typical of the ways in which we have come to think of control in the industrial organization. Control was a very physical process. It involved the copresence of the controller and the controlled; the call girls were clearly visible to their supervisor and the supervisor's continued watchfulness was conveyed to the call girls through his pacing and strategic placement in their work environment. This resulted in the production of ‘docile bodies’ (Foucault 1977: part 3). The call girls submitted to a work regime that involved sitting in a defined place for a relatively long period of time. Any breaks were monitored closely and timed. Managing time, and managing the ways in which the call girls used their time, became the key to control in this organization.43 In many respects, surveillance, and its goals of efficiency and effectiveness, involved ensuring that the call girls were busy and answered all incoming calls quickly.44 As this call girl stated, it was important that ‘you were on the boards, doing your work all the time’. An Elaboration of the ‘New’ Thirty years later, the basic construction of organizational control in this call centre operation remains unaltered. The management of labour and time continues to dominate the discourse. As the Financial Controller explained, 95 per cent of the call centre budget is comprised of labour costs. And a recent activity-based analysis of the call centre cost structure confirmed that time was the ‘ultimate driver’ of the consumption of call centre resources. Yet things were different, the process of surveillance within the call centre operation had changed and these changes may be attributed, in the main, to advances in technology. Advances in technology have enabled telephony to become a digitized process, rather than one dominated by ‘plugs and cords’ or ‘desktops’ and ‘pushbuttons’. Highly accurate and invisible surveillance of a ‘consultant's’45 calls is now undertaken, providing a rich repository of data for analysis and management intervention. The daily activities of each consultant are monitored by ‘the system’ at 5 min intervals. The next day, a team leader is 42 Refer to Appendix for information on the research site and method. 43 There was a very brutish aspect to organizational control in this case organization. Another interviewee indicated that the supervisor would often walk around with a ruler in his hands. There were also reports of supervisors who would pinch the legs of the call girls to ensure that they were wearing stockings and appropriately attired for work. 44 The manager of the call centre operation indicated that 'speed of answer' had remained a dominating priority for the last 20 years. 45 The call centres were now staffed by 'consultants' (both male and female). PAUL ANDON ET AL. 141 presented with a computerised simulation of each consultant's performance.46 A variety of time-based performance measures—'the stats’—are compiled. Measures of the call centre performance include: average calls per hour; the percentage of call time that a customer spends on hold; ‘wrap time’ or the amount of time that a consultant spends doing any paper work after a customer hangs up; ‘adherence to schedule’ or the extent to which a consultant is logged on to the system in conformance with their schedule (that specifies starting times, breaks, and lunch times); and ‘average handling time’ or the average time spent both on a call and its subsequent ‘wrap up’). The most closely monitored measure of performance, however, is the average handling time (AHT). Very clear performance benchmarks have been established for this. Consultants are expected to conform to an AHT of approximately 235 seconds per call. Unacceptable deviations from this standard become the subject of management investigation. One team leader outlines her rules for managing time: ‘we only need to focus on people outside the bell curve. So yeah, I mean you have, if you go through the stats it's easy to pick out—I look at anyone over 300 [seconds] and that's being generous . . . Anyone who's particularly low, maybe 170 [seconds], again that's being really generous’. Despite the availability of such detailed ‘stats’ about a consultant's daily activities, team leaders rely on other forms of surveillance as well. Team leaders conduct regular ‘ride ons’ with a consultant: a team leader will sit next to a consultant for about 45 min each month and monitor the verbal interaction between the customer and a consultant,47 in addition to assessing the consultant's procedures.48 Team leaders also continue to invoke and preserve the more visceral tradition of control within the call centre. Direct observation remains an important part of the team leader's management repertoire.49 As one team leader put it: it is easy for a person to do it right [during a ride on], you might be sitting with him and he might be spot on but the minute you turn your back—that is why the team manager's role is so crucial because it is not just on the time that he spends monitoring him, how he talks to a customer. It's every minute of every day, observing how people react to situations and to people around them. So that's where observation, call it observation, but by observation means, I mean, watching your people and getting to know your people. That's going to tell you who has got the attitude I think and who doesn't. So that is something that can't be measured or can't be taken away from the role of team manager. Part of the job has to be that. 46 A team leader is responsible for the performance of 16–20 consultants within the call centre operation. 47 The team leader would wear headphones to monitor calls. 48 Remote monitoring of calls, whilst technologically possible, was not undertaken because of extensive trade union resistance to the process. 49 Direct observation was facilitated by the fixed seating plan and the cell-like layout of the call centre. 142 INSCRIPTIONS AND THE POST-INDUSTRIAL EXPERIENCE Experiencing the ‘New’ Participants in the case organization experienced the transition to a more technologically enabled system of surveillance in a variety of ways. For those organizational participants who worked in a support capacity within the call centre operation, the detailed performance information was perceived as being particularly beneficial. By normalizing consultant behaviour around the AHT, much of the ‘variability’ in organizational functioning has been removed, facilitating the planning process. Scheduling has become easier and there is now less risk associated with the management of labour costs. Greater casualization of the labour force is possible as a consequence, and excess capacity has been shed through a series of redundancies. But there are more reservations than approbations expressed about ‘the system’ by call centre consultants—those organizational participants whose behaviour is digitized and monitored. Consultants are particularly concerned by the way in which ‘the system’ is changing the nature of customer relationships. One interviewee perceived them as less ‘friendly’. Predominantly, however, consultants were concerned that they could not offer a ‘quality’ service within the 235 seconds time frame. A consultant stated: I don't like the time schedule, that's all. You know, like monitoring your own time because sometimes it is not always possible because of the calls that you have, so it is very hard to keep to that deadline, you know; they really want you to. I think that it is going away from the customer service to time and I don't think that you can give both. I'm from the old school . . . I think the focus is going off customers . . . Always in the back of our mind is time, time, time. And whilst one team leader indicated that some flexibility accompanies the evaluation process, she was adamant that service could be accomplished ‘in the time frames’. Consultants, on the other hand, are generally united in their perception that such time-based measures of performance are ‘too rigid’. Assessing consultants on their ability to manage time only, in their opinion, gives an inaccurate and incomplete representation of their role in customer relationships. Measures, such as AHT, do not take into account a consultant's ability to: ‘win back’ customers; solve difficult problems on the spot (and thereby save more expensive forms of follow-up); build rapport; follow procedures; or cross-sell other products and/or services. One consultant was particularly outspoken in this regard: ‘But the best service hasn't got a measure. The best service is relative, if you like, to the customer's perception.’ As a consequence, consultants attributed a decline in ‘morale’ to the performance measurement regime. Nonetheless, the consultants responded to their situation in a relatively understanding way: ‘the statistical data is important to the business. We really need