Managers’ views on ABC in an insurance company: A grounded theory case study

Abstract

This is an in‐depth case study using a grounded theory approach to explore managers’ views of ABC as part of the control system in an insurance company. Relevant issues are allowed to emerge from the data rather than imposing a theoretical framework upon them. Hypotheses are derived rather than confirmed. Issues emerging from this case study include: the relevance of ABC to managers, increased cost awareness coupled with the problem of taking qualitative factors into account, and the existence of different perceptions of managers within the same department. One hypothesis is how an understanding of ABC can affect job satisfaction by influencing the impact of ABC on managers’ actions. In this case study process and non‐process managers had different levels of understanding and use of ABC information. A second hypothesis is that how managers view ABC information depends on whether they adopt a personal or an organisational perspective.

Managers divided: Implementing ABC in a Portuguese telecommunications company

“…But this will not necessarily guarantee consent (Malmi, 1997). Consistent with McGowan, (1998), Norris and Innes (2002), Norris (1994), and Anderson and Young (1999) managers' criteria for evaluating ABC varied by function and hierarchy. The parent company, top managers, and accountants evaluated ABC favourably for it satisfied external constituents, not least regulators, and promoted consolidation.…”

“…Previous studies noted that criteria for evaluating ABC vary by function and hierarchical level (McGowan, 1998;Norris and Innes, 2002;Norris, 1994;Anderson and Young, 1999). This was so in Marconi.…”

“…Armstrong (2002) accuses ABC of a strong 'productionist' orientation at odds with models of organisational functioning from other functions. If so, it is unsurprising that managers' criteria for assessing ABC vary by function and hierarchical levels (McGowan, 1998;Norris and Innes, 2002;Norris, 1994). For example, Anderson and Young (1999) found production personnel assessed ABC in terms of accuracy whereas support personnel emphasised its use in cost reduction.…”

Remaining consistent with method? An analysis of grounded theory research in accounting

“…It must be acknowledged that some accounting researchers do give detailed explanation of the process of data analysis and theory building (Norris et al , 1996; Innes et al , 1996). Norris et al (1996) does not follow the iterative process of data collection and analysis as interviews were completed before data analysis commenced but we do know the method used and can choose to accept it as credible or not.…”

“…It must be acknowledged that some accounting researchers do give detailed explanation of the process of data analysis and theory building (Norris et al , 1996; Innes et al , 1996). Norris et al (1996) does not follow the iterative process of data collection and analysis as interviews were completed before data analysis commenced but we do know the method used and can choose to accept it as credible or not. Although Lye et al (2005) did use iterative data collection and analysis there is no evidence that theoretical sampling was used – the sample appears to have been selected before any interviewing was started.…”