Journal of Accounting and Organizational Change
The paper examines accounting changes in the Ashanti Gold Corporation (AGC) in Ghana over 120 years from pre-colonialism to recent times and whether the framework of management accounting transformations in Hopper et al. (2009) is applicable.
Mixed data sources are used, namely interviews, some observations of practices, historical documentation, company reports, and research papers and theses. The results are categorized according to the periods and contextual factors in the Hopper et al. framework to test whether it matches the data collected.
Despotic controls with minimal management accounting but stewardship accounting to the head office in London prevailed under colonialism. Upon independence state capitalist policies descended into politicized state capitalism. Under nationalization the performance of mines deteriorated and accounting became decoupled from operations. In the early 1980s fiscal crises forced Ghana’s government to turn to the World Bank and IMF for loans. This period marked a gradual transformation of AGC into a foreign multinational, organized along divisional lines and today exercises despotic control through supply chain management that renders labour precarious, and is neglectful of corporate social accounting issues.
The work challenges neo-classical economic prescriptions and analyses of accounting in developed countries by indicating its neglect of the interests of other stakeholders, especially labour and civil society. Accounting is important for development but the article infers other forms may better serve the public interest.
The paper tests the Hopper et al. framework with respect to a large private multinational in the commodity sector over an extended period, which differs from the case studies drawn on originally.
Emerging Markets Case Studies Collection
This case is suitable for graduate-level programmes in business management, as well as for executive education programmes.
Mabel Simpson, the sole proprietor of the award-winning mSimps fashion accessories house in Ghana, must choose from among three options for scaling up her business: an offer from a private investor for GHS 100,000 in exchange for 51 per cent stake in mSimps; or 30 per cent stake for half the amount; an offer from a fashion industry expert for GHS 10,000 in exchange for 30 per cent ownership; or a restructuring of her business model and value chain to enable her release cash to grow her business organically.
Expected learning outcomes
Students should be able to: understand the interplay of choice and trade-offs in business management and apply theory-driven frameworks in making optimal choices and analytically assess instances of tension between the art (e.g. passion, emotional stakes, psychological and other influences on business management philosophies) and science (e.g. the need for business skills, use of effective models and the quest for production efficiency) of business management.
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CSS 3: Entrepreneurship
Small business finance
Purpose - The purpose of this paper is to examine how accounting is implicated in the creation and maintenance of organizational boundaries. The analysis focuses on organizations subjected to conflicting objectives as a result of new public management (NPM) reforms.
Design/methodology/approach - The analysis is based on case studies of four cultural organizations (Show Caves) in Greece. Data are collected from semi-structured interviews, informal discussions and document analysis. The paper draws on Bourdieu's concepts of "field", "capital" and "habitus" and Llewellyn's analysis of organizational boundary maintenance.
Findings - The study observes that NPM reforms contributed to shifting organizational boundaries from cultural/archaeological to economic/financial and this resulted in conflicting organizational objectives. This subsequently created conflicts between key actors (municipal politicians, professional managers and anthropologists). These actors, depending on the positions (and habitus) they occupy, and the capital (political, cultural and symbolic) they hold, are able to bargain for resources (economic capital). The conflicting objectives (archaeological/cultural/historical, political and commercial) that emerged and the tensions that arose between the key players shaped the identities and boundaries of the Show Caves.
Originality/value - The study makes an original contribution by revealing the complexity and struggle between actors and the role of accounting in managing the boundaries. For example, the study explains how financial threshold and accountability structures function within these cultural organizations that are subjected to conflicting objectives in the context of NPM reforms.
New public management (NPM)
This paper illustrates how interventionist research can be helpful in providing managerially relevant solutions and furthers the debate about the relationship between social science research and practice. Through this use of interventionist methods, the paper contributes to knowledge by illustrating the way in which management accounting was used alongside other managerial disciplines in a UK retail organisation to promote change and influence outcomes. Specifically, the paper focuses on changes to the reverse logistics processes of the organisation and the important role that management accounting played. It also illustrates the use of management accounting in the pursuit of strategic and commercial advantage. As researchers, our work was grounded in action rather than being just observers.
Management accounting practice
Managerially relevant solutions
Strategic and commercial advantage
This paper reports on the results of a case study that examines the effect of the contract and accounting on inter-organisational trust in an international joint venture (IJV). The empirical setting of the research was an IJV relation between a United Arab Emirates (UAE) firm and its western partner. Data were gathered from multiple sources, including documents, observations, interviews and discussions with managers. The paper aims to explore the process of trust development and the role of the contract and accounting in this. We find that trust developed differently for the partners. Moreover the trust concerns of the partners were not the same. Based on this we conclude that trust was not automatically reciprocated. Instead it needs relating to other items such as the contract, accounting and also the institutional environment. The open-book accounting we observed could only be termed ‘partial’ because the western partner had access to the local partner's books but not the vice versa. But this partial open-book accounting created conflicts between the partners. We argue that developing one kind of trust through one particular medium may help one party but may damage the relationship between the partners.
International joint ventures
Less developed countries
United Arab Emirates
The perspectives of the expert contributors reflect the strong growth of research on the topic, as accounting is increasingly recognised as an important factor in development. The book draws commentary and analyses together to inform future research, practice and policy and raises awareness of the actual and potential role of accounting in formulating and executing development policy.
Mining was the focus of Ashanti Goldfields Corporation’s (AGC) business — until it hit a financial crisis. Falling gold prices and rising mining costs in the late 1990s pushed AGC to become more oriented toward finances. However, inter-departmental rivalries and clashes arising from the shift from production to finances expanded into the ethnic and cultural realms. The case presents a series of problems that AGC was confronted with during this transitional period, such as unrealistic budget proposals, lower level employees’ lack of budgeting knowledge, slack budget controls, delays in budget reports, frequent changes in reporting structures, and problems of co-ordination and communication. How should AGC have coped with these challenges brought by the shift from a production orientation to a financial one? What measures should AGC have taken to tackle the misalignment between the production functions and management accounting teams? Ashanti Goldfields Corporation was set up by two merchants from Cape Coast, Joseph Ellis and Joseph Biney, and their accountant, Joseph Brown. In 1895 they reached an agreement with Edwin Cade for the sale of the mine, which was then called the Ellis Mine. The company was listed on the London Stock Exchange shortly after the sale in 1897. Following years of fluctuation in the composition of shareholders of the company, Ashanti Goldfields merged with AngloGold of South Africa in 2004. The merger led the new entity to adopt the name AngloGold Ashanti. The management accounting system was initially centralized at the London HQ. Things did not improve even after the HQ was transferred to Accra, and the system broke down repeatedly in times of emergency. The listing on the stock exchanges of Ghana, London and New York in 1994 brought some changes in the MA system, such as the appointment of financial controllers at the mines who reported to the Chief Operating Officer at the HQ. Each mine was also given more autonomy: the executive board would provide output targets while the mines could determine the means of achieving those targets. Overall, however, these changes did not significantly affect the use of management accounting (MA) information in the mine. For example, MA information continued to be disregarded in day-to-day operations. The significant changes in MA that were noted in the company occurred when it experienced financial crisis in the late 1990s. Unlike the previous practice where cost accountants were disregarded by mine captains and managers, each mining section was assigned a cost accountant to assist the mine captain and managers tally up their costs and interpret budget performance reports. These measures were put in place to create an awareness of costs at AGC since initially the cost controls were relaxed. The case takes a look at the management accounting practices at AGC, such as the budgeting process and its effects on operations in the Company. The case also discusses the attitudes of employees towards the budgeting process and the problems that arose as a result of that in AGC. In addition, it brings to light the tensions that arose in AGC between the accounting team and the miners, and how these and other problems were addressed. The case can be used in MBA and EMBA programs, and can be used in executive development programs and in other postgraduate courses in management accounting.