حسابداری در بازار، سلسله مراتب و شبکه ها: نقش حسابداری در حاکمیت فراملی معاملات پستی

We examine the changing role of accounting in the development of the international postal system between 1840 and the emergence of the Universal Postal Union (UPU) in 1875. We use the distinction between mundane and opportunistic transaction costs to explain why accounting disappeared as a coordinating mechanism as postal transactions migrated from spot market exchanges, through bilateral contracts (treaties) between nations, into a network of domestic post offices coordinated by the UPU. Our analysis refines the application of transaction cost economics to the understanding of the role of management accounting in different governance mechanisms

Williamson (1996) suggests that there exists a set of discrete governance mechanisms through which transactions can be completed. Each governance mechanism has its own capabilities and limitations such that different types of transactions are handled by specific governance mechanisms at lowest cost. The polar types of governance mechanisms are markets and hierarchies but hybrid forms of governance are common. These hybrid governance mechanisms include relationships, alliances and networks. Hybrid governance mechanism may have different information and control requirements than markets and hierarchies. Hopwood (1996), among others, has expressed the need to understand the implications of these types of governance mechanisms for management accounting information and control systems: To date accounting research has largely ignored such changes and their implications for financial decision making and control. Having earlier given little or no consideration to the informational implications of matrix structures and the financial aspects of project oriented forms of organization, the accounting research community is largely continuing to be satisfied with its fixation on the traditional hierarchical organization (Hopwood, 1996, pp. 589–590). In response to this call for a better understanding of the role of accounting in inter-organizational relationships, accounting researchers, drawing on a variety of theoretical perspectives, have examined how accounting information is used to facilitate “cooperative coordination” (Hakansson & Lind, 2004) within hybrid structures and the impact of these cooperative undertakings on management accounting practices. In doing so, some researchers looked at the constitutive role of management accounting information by probing into “how accounting is a ‘force’ – an actor – in establishing and developing inter-organizational relationships” (Mouritsen & Thrane, 2006, p. 242) or explored the enactment of accounting controls in alliances that are part of larger networks and the effect of these alliances on accounting practices (Chua & Habib, 2007). Others, drawing on economic theories, including transaction cost economics (TCE), have explored the governance role of the management accounting information and controls in alliances and networks ( Anderson and Dekker, 2005, Dekker, 2004 and Hakansson and Lind, 2004). In studying the role of management accounting systems within specific governance structures, however, these studies do not problematize the change in use of accounting as transactions migrate from one governance mechanism (i.e. markets or hierarchies) to another (i.e. networks). To overcome this gap in our understanding of the existence and role of accounting techniques in inter-organizational relationships, we explore the effect of a series of changes in governance structure on the use of accounting information. We identify a setting, the international postal market, in which we are able to trace “longue durée” changes (Braudel & Matthews, 1982) in the use of accounting as transactions migrate from spot market exchanges to bilateral treaties/contracts between national postal providers and, finally, to a network of national postal providers coordinated by the Universal Postal Union (UPU). Unlike the empirical observations in extant accounting literature on networks, in this setting, accounting technologies are eliminated when transactions move from bilateral agreements to a network in an attempt to facilitate interaction among participants. Concurring with Dekker (2004) on the limitations of current interpretations of TCE to explain the use of accounting in networks, we expanded on the use of TCE in the accounting literature by introducing the concepts of “mundane” and “opportunistic” transaction costs (Baldwin, 2008). This distinction allows us to theorize the disappearance of accounting as transactions shift from the market into network forms of governance. This paper is structured as follows. We begin with a discussion of current work on the role of accounting in markets, hierarchies and networks. A key assumption of this literature is that management accounting information emerges as a replacement for market prices when transactions migrate from the market to other forms of governance. We identify gaps in this literature: to date the literature has not examined changes in accounting when transactions shift from one governance structure to another and do not account for instances where accounting is eliminated as a result of this transition. We then identify a key elaboration of transaction cost economics that has not been used in the accounting literature: the distinction between mundane and opportunistic transaction costs. Next the use of the case method to explore accounting in the international postal system is discussed. In particular, we argue for the use of case analysis as a theory testing method when theories make non-probabilistic predictions and as a theory elaboration method through its emphasis on mechanisms and processes. We then describe our data set. Our main results are presented in three sections describing the state of the postal system in the time period 1840–1875, the transactional issues that arose, and, finally, the change in rules and accounting procedures that were implemented in the first UPU Convention in 1875. Our discussion and conclusion draw the lessons from this case for the application of TCE to accounting phenomena.

We have examined the role of accounting in transnational governance focusing on the restructuring of the international postal system between 1840 and 1875. During this period international mail transactions were initially completed as market transactions but this quickly gave way to bilateral contracts to reduce the frequency and cost of contracting. An examination of a time series of bilateral treaties between countries demonstrates a growing recognition of the deadweight losses associated with accounting procedures to track mail flows and to divide revenue among stages of the value chain according to an approximation of the actual cost of delivery of each letter. The attempts to simplify accounting in bilateral treaties culminated in the creation of the UPU Convention which created a network of national postal organizations and eliminated accounting between national posts. The UPU Convention, and associated structures for administration of postal agreements, constitutes a relational contract in which assumptions about mutuality of purpose, equality of mail flows and the integrity of sovereign states, and the standardization of key attributes of the mail, substituted for detailed accounting for costs and revenues. Our case analysis supports the conclusion that the changes in the governance structure for international mails were largely an attempt to reduce mundane transaction costs where accounting for the cost and revenue of mail flows was the major component of such costs. Contrary to much of the extant research on accounting from a transaction cost perspective, accounting information was not used to replace market prices to coordinate activities and accounting was not used primarily as a means to reduce opportunism between parties. Our work, although differing in its theoretical framing, confirms several studies of accounting in networks that finds that accounting may be reduced or absent in network governance structures. The case illustrates several key points which refine our interpretation of the role of accounting within TCE. First, accounting was associated with the use of contracts in the early international postal market. It was not the case that accounting emerged simply to replace market prices as transactions migrated from the market to other governance structures. Our work confirms the importance of adopting the comparative institutional approach advocated by Williamson (1991) and establishing the baseline use of accounting in one discrete governance system before assessing the use in a second governance system. The “failure” of any governance structure, i.e. the migration of transactions to another governance structure, will only occur if there are “remedial” transaction costs, i.e. transaction costs that can be avoided or reduced in an alternative governance structure. The empirical issue is the relative use and mode of use of accounting within different governance structures but this can only be assessed when compared with an actual or counterfactual, i.e. theoretical, alternative. Second, networks are often conceptualized as hybrids between markets and hierarchies. Our study suggests that networks are a distinct form of governance structure in which organizations are embedded, specifically in our case national postal operators continue to function as independent hierarchies embedded in a network that governs their interaction with each other. The concept of organizations being embedded in a network allows for the possibility that the use of accounting at the network level is independent of the use within members of the network. In our case, the reduction in the use of accounting within the international postal network did not reduce the need for accounting within the national postal operators that comprised the network. The barter arrangement implicit in the UPU’s lack of accounting for mail flows between national postal operators created incentives for each postal operator to improve the efficiency of their internal delivery system. The adoption of a fixed postage rate for international postage meant that national postal operators could achieve a surplus or profit by reducing the cost of providing the service within their own borders. However, the barter system did not provide incentives for trading partners to achieve equivalent cost savings and, in the long run, the difference in the cost efficiency of different national postal systems created incentives for “remail” and the emergence of private mail carriers that undermined the assumptions on which the UPU network was premised. Third, contrary to most interpretations of TCE in accounting that management accounting arises to replace market prices when transactions migrate from the market to other governance mechanisms, we find that governance mechanisms such as bilateral contracts and networks can be associated with a reduction and even elimination of accounting. We suggest that prior interpretations the role of accounting from a TCE perspective have focused on the opportunistic transaction costs envisioned by Williamson as the key source of costs and benefits of governance mechanisms. An alternative perspective on transaction costs based on Coase (1937) and developed by Baldwin (2008) differentiates between mundane and opportunistic transaction costs. Mundane transaction costs are the costs of defining, measuring and compensating for transactions and are incurred even in the absence of opportunism. We suggest that the change in the use of accounting in the evolving governance structures affecting the international mail system was driven primarily by mundane transaction costs. We have identified studies that have observed an absence or a decrease in use of accounting (c.f. Hakansson and Lind, 2004 and Mouritsen and Thrane, 2006) but, contrary to our work, they have not addressed the mechanisms underlying these observations. We posit that accounting technologies will be employed within organizational structures only when the mundane transaction costs incurred by their use are less than the opportunistic transaction costs avoided by their use and if the total cost of opportunistic and mundane transaction costs is less than the benefits gained from the transaction.