In this article we discuss the evolutionary foundation of the OIE-guided management accounting change research building on the framework of [Scapens R.W. 1994. Never mind the gap: towards an institutional perspective on management accounting practice. Management Accounting Research, 5, 301–321.] and [Burns, J. and Scapens, R.W., 2000. Conceptualizing management accounting change: an institutional framework. Management Accounting Research, 11, 3–25.]. We argue that research on management accounting change should be based on evolutionary theory, but that the full potential of evolutionary theory has not yet been described or used in management accounting research. The conceptualisation and understanding of management accounting change can be improved and expanded if the evolutionary approach is developed beyond the general belief that it describes only small and gradual, often slow, changes. In this article we show that an evolutionary perspective on management accounting change implies that management accounting’s development is explained as the interaction between the evolutionary sub processes of retention (inheritance), variation and selection. Thus, both continuity and change are seen as evolutionary outcomes. These processes follow the cumulative causality that Charles Darwin proposed and Thorstein Veblen applied to the social sciences. Such a comprehensive theory, here labelled Universal Darwinism, must, however, be given substance with supporting details.
In 1898, in an article in The Quarterly Journal of Economics, Thorstein Veblen asked why economics is not an evolutionary science. That article, together with Veblen’s other writings, laid an important foundation for both Evolutionary Economics and other institutional theories, not least Original (Old)1 Institutional Economics (OIE). A commonality of these theories is the assumption that economic behaviour is formed by institutions and it is argued forcefully and persistently against the fundamental assumptions of neo-classical economics concerning profit-maximizing actors and economic equilibrium. Scapens (1994) introduced these ideas into accounting research when he advocated an institutional economics perspective in such research. Burns and Scapens (2000) developed these ideas further when they proposed a framework to explain why (or why not) management accounting changes in organisations. They emphasised that their framework was a starting point and urged researchers to continue with its development. Responding to their request, several researchers extended and refined the framework in a number of articles (e.g., Burns, 2000, Soin et al., 2002, Johansson and Baldvinsdottir, 2003, Burns and Baldvinsdottir, 2005, Siti-Nabiha and Scapens, 2005, Scapens, 2006, Ribeiro and Scapens, 2006, Coad and Cullen, 2006, Busco et al., 2006 and Yazdifar et al., 2008). Guided by Burns and Scapens’ framework, many important observations have resulted that increase our understanding of what happens when new management accounting techniques are introduced in organisations.
In this article we discuss an idea that has been introduced in the OIE-guided management accounting change research but that has not been much developed. What we are referring to is the evolutionary foundation that the framework of Scapens (1994) and Burns and Scapens (2000) rests on and that is implicit in much OIE research in management accounting. We argue, in agreement with Burns and Scapens and others such as Coad and Cullen (2006), that research on management accounting change should be based on evolutionary theory. However, we also claim that the full potential of evolutionary theory or an evolutionary ontology still has not been described or used in management accounting change research. The conceptualisation and understanding of management accounting change, in general and from an institutional economics perspective in particular, can be improved and expanded if the evolutionary approach is developed beyond the general belief that it describes only small and gradual, often slow, changes. It should be stressed that there is an immense difference between applying evolutionary theory in the development of management accounting and studying the evolution (through space and time or spacetime) of management accounting in more common terms. The latter does not imply any specific ontology, theory or methodology, whilst the former does.
In this article we show that an evolutionary perspective on management accounting change implies that management accounting’s development is explained as the interaction between the evolutionary sub processes of retention (inheritance), variation and selection. Thus, both continuity and change are seen as evolutionary outcomes. These processes follow the cumulative causality that Charles Darwin proposed and Thorstein Veblen applied to the social sciences. Such a comprehensive theory, here labelled Universal Darwinism, must, however, be given substance with supporting details.
Drawing upon evolutionary theory in general and recent developments in evolutionary economics and institutional theory, the purpose of our article is to describe the significance of an explicitly evolutionary perspective on the conceptualisation of management accounting change and to derive implications from such a perspective. Our aim is not to falsify existing efforts but rather to take the next step in the development of an evolutionary and institutional economics of management accounting change. Inspired by Veblen, and following the management accounting OIE-tradition introduced by Scapens (1994), we modestly pose the question: Why is research on management accounting change not explicitly evolutionary?
In the next section, we present Burns and Scapens’ framework for management accounting change as well as some observations from the research that has followed their work. Thereafter, we describe how the evolutionary trains of thought have arisen and developed in the social sciences and why evolutionary theory sometimes has had difficulty in making a breakthrough in this science. In the three following sections, we present a deeper explanation of the evolutionary ideas of retention, variation and selection. After focusing on these three sub processes, we combine them to illustrate how they interact through time. The article concludes with implications and limitations.
More than one hundred years ago Thorstein Veblen (1898) proposed that the economic science should be evolutionary. About twenty-five years ago Nelson and Winter (1982) published their now classic book on evolutionary economic change. Several years have also passed since Scapens (1994) and Burns and Scapens (2000) introduced OIE as a way to increase our understanding of management accounting change, or more correctly, the lack of it. Since its introduction, the OIE framework has been the object of further development as well as criticism; it is no exaggeration to state that the OIE framework has initiated a strong and lively management accounting research tradition. In this article, we have taken the next step in this tradition by introducing an explicit evolutionary perspective on management accounting change. In this section we present some implications of this perspective.
