سه جنبه از بازخورد رسمی و غیر رسمی در حسابداری مدیریت

In management accounting, feedback has been analysed mostly as a loop between measurable outputs and pre-set goals within cybernetic control theory. This article calls for a wider framing of feedback, one which includes both formal and informal feedback loops. Prior literature on formal and informal feedback offers many overly dichotomous and heterogeneous usages of these two notions. We argue that instead of treating formal and informal as a strict dichotomy, they should be analysed together. In this article, we develop an analytical framework of formal and informal feedback along three dimensions – source, time, and rule. Our exploratory and interpretive case study is used for combining, analysing, and putting flesh on these dimensions, as well as introducing typical examples of formal and informal feedback practices in management accounting. Our findings indicate that formal and informal feedback coexist in a multifaceted manner and have room for many interpretations in practice. Our central contribution is an analytical matrix for understanding and examining formal and informal feedback in an intertwined manner.

In management accounting, the discussion of feedback has its basis in systems thinking and more specifically, in the mechanistic cybernetic control theory (Tuomela, 2005, Otley, 1999, Luckett and Eggleton, 1991, Otley et al., 1995 and Otley and Berry, 1980). The widely cited model of organisational control developed by Flamholtz, 1996 and Flamholtz, 1983 is a good example of the cybernetic models used in management accounting. In this model, the flows of corrective and evaluative feedback are illustrated in a formal core control system between the planning system (predefined goals and objectives), operations, the measurement system, and the evaluation-reward system. Noteworthy in the model is that all explicit feedback flows pass through the formal measurement system. In other words, all systematic feedback is viewed to be based on mechanistic and calculative practices. This kind of a simple linkage between the measurement of outputs and feedback has been typical of management accounting thinking for decades (e.g. Anthony, 1965 and Emmanuel et al., 1990), yet remains visible in the most recent accounts of management accounting and control (Simons, 2000, Simons, 1995, Kaplan and Norton, 2001, Kaplan and Norton, 1996 and Kaplan and Norton, 1992). However, the wider management accounting literature has for long also provided examples of the incompleteness of formal control systems to produce adequate information, as they are considered untimely, unreliable, and too general or limited for managers (e.g. Burns and Vaivio, 2001, Preston, 1986, Clancy and Collins, 1979 and Mintzberg, 1975). Above all, Preston (1986) was the one to argue that instead of the formally produced official documents, people in organisations do keep themselves and the others informed by informal interaction and socially produced routines. While the current literature in management accounting involves many studies on formal and informal control (see e.g. Lukka, 2007, Tuomela, 2005, Alvesson and Kärreman, 2004, Burns and Scapens, 2000, Vaivio, 1999, Simons, 2000 and Simons, 1995),1 the discussion focusing precisely on feedback in management accounting seems to have been largely left to one side since the 1990s and the rapidly increased understanding of the coexistence of the formal and the informal domains has not yet penetrated research on feedback in management accounting. This paper seeks to address this omission. Our research seeks to refresh and extend the discussion of formal and informal feedback by analysing the existence, dimensions, and interplay of formal and informal feedback processes in management accounting. We underline our view that feedback in management accounting should not only be seen mechanistically as a formal control loop, but also as a set of formal and informal feedback practices mastered by managers in organisations, coexisting in an intertwined manner. Although formal feedback loops may be considered more objective, visible and easier to study (Langfield-Smith, 1997), and informal feedback loops more difficult to codify (Hall, 1977, p. 162), we agree with Otley, 1999Otley (1999, p. 369) who states: “Nor should the less formal uses of information be neglected; organisational cultures form and are reproduced, at least in part, by the use of approving and disapproving feedback signals of many types.” Despite the recently increased understanding of the collaboration between the formal and the informal domains in the research literature of management accounting, there are indications of trends that even add to the dominance of the formal in the management accounting mindset in general. Such dominance of the formal may be linked to the idea that we need to measure things in order to better control them, in the name of progress (Kearney, 1986 and Smart, 1990). The domain of formal feedback in organisations has been developed with more transparent and comparable information and management systems, such as ERP-systems. The balanced scorecard (BSC) by Kaplan and Norton (1992), for instance, has been marketed as a comprehensive, holistic, and multidimensional measurement framework, which aims to quantify processes even further, thereby stressing the role of formal performance measures. In line with the notion of action at a distance (e.g. Roberts and Scapens, 1985, Robson, 1992 and Cooper, 1992) based on accounting systems, the dissemination of managerial technologies and systems like the BSC can be viewed as squeezing the domain of informal feedback while it widens the domain of formal feedback with non-financial measures (Vaivio, 2001 and Hopwood, 2008). Given this background we feel it is indeed timely to revisit the somewhat neglected research area of feedback in management accounting in order to clarify the relevance of the informal also in this field. Despite the rapid development of more efficient measurement systems, the relevance and the role of the informal domain in the production and communication of feedback in organisations has hardly ceased to exist. The challenges of feedback practices are not just related to the functionality of systems, but also to how people interact with each other. As the literature review will indicate, the concepts of formal and informal feedback are complex and ambiguous, having diverse interpretations. The research question we set out to explore is: What kinds of formal and informal feedback practices are there in management accounting and how are they related to each other? In order to address this research question, the concepts around formal and informal feedback need to be clarified. We will develop an analytical framework of formal and informal feedback along three dimensions. The dimensions are developed and named after first reviewing different definitions for formal and informal feedback from previous literature and then combining, analysing, and putting flesh on these dimensions with the help of empirical findings from an exploratory and interpretive case study centred on a business unit called Division Steelco. The interviews and observations offer a way to both validate and further develop the evolving analytical framework as they allow us to hear various interpretations of formal and informal feedback from managers. Our analysis is entirely based on the claim that formal and informal feedback should not be viewed as a dichotomy, but as things that coexist and collaborate. The paper concludes with an analytical matrix for understanding and examining formal and informal feedback in an intertwined manner. The paper is structured as follows. In Section 2, the concepts and dimensions of formal and informal feedback are outlined. Division Steelco, our case organisation, and the research methods applied are introduced in Section 3. Section 4 provides the analysis of formal and informal feedback practices through three dimensions in Division Steelco. Analytical findings are discussed and summed up in Section 5. Finally, conclusions are provided in Section 6.

This paper makes an attempt to extend the discussion of feedback in management accounting and move it forward from the mechanistic cybernetic perspective that leans predominantly on formal reports and measures. Not only do we stress that both formal and informal feedback need to be recognised in the organisational context (Roberts and Scapens, 1985), but also that the dividing lines between formal and informal feedback practices are ambiguous, as they are formed of various intertwined elements. This kind of grey area between formal and informal feedback leads us to analyse the formal and the informal together. We underline our view that instead of treating the formal and the informal as a strict dichotomy, in practice they interact along a continuum, in which they are specified by qualifiers like formal, semi-formal, and informal, or formal, more formal, less formal, and informal. Similarly, our three analytical dimensions – source, time and rule – are not intended to be mutually exclusive categories, but they highlight the different aspects of the formality or informality of feedback. When operating in a grey area, much informality is included, even in those feedback procedures considered formal at first glance. Our case study indicated that there may be two contradictory interpretations of formality close to any everyday life communication situation, especially if the parties represent different levels of the hierarchy of the organisation. Some subordinates may easily regard daily discussions with their superior as formal, while superiors may regard them as informal. According to the case analysis, different interpretations of the concepts of formal and informal feedback among managers can be summarised as arising from different hierarchical positions, superior–subordinate relations, individual feedback attitudes, abilities and preferences, and organisational feedback culture. The main contribution of this article is to offer a framework of formal and informal feedback along three analytical dimensions: source, time, and rule. While these dimensions were identified and grouped based on our review of the prior literature on formal and informal feedback (Fig. 1), we developed these ideas further by including our empirical findings. Our exploratory field work with Division Steelco allowed us to combine, analyse, and “test” interpretations regarding formal and informal feedback received from the managers of the case company on those dimensions and to make sense of various conceptualisations. In our case, the rule dimension was surprisingly dominant in defining formal feedback, while the prior literature included clearer definitions of formal and informal feedback associated with source or time dimensions. Our central contribution is summarised in the analytical matrix for understanding and examining formal and informal feedback, presented in Fig. 2. It depicts a space, where feedback can “travel” rather fluidly along its two axes: formality vs. informality and the three analytical dimensions of feedback, relating to source, time and rule. Our field work reflects the logic of practice regarding formal and informal feedback in a Finnish metal engineering unit and naturally we have to be cautious regarding how far they can be generalised. However, as our analysis is neatly connected to the prior literature on feedback – and we thereby faithfully followed the idea of contextual generalisation (Lukka and Kasanen, 1995) – it is probably not too courageous to suggest that the developed analytical matrix can form a solid platform for further testing and refinement. It may well be that the specific patterns of formal and informal feedback practices vary in different settings (for example, in service companies relying heavily on team performance and team management), but it is an open question as to how much such contingencies affect the core structure of our model. Hence, even more important than exploring how specific features change from one setting to another, is the question of whether the three analytical dimensions we suggest are the most suitable ones to make sense of how formal and informal feedback can be most accurately defined. In addition, since people tend to define and interpret these concepts in various ways, we encourage researchers to explicate more clearly what they mean by formal and informal feedback (or control) in each case.