PDF Ebook The Sociology of Enterprise, Accounting, and Budget Rules: Implications for Organizational Theory
The sociology of organizations has ignored the evolution of and variation in enterprise rules, budget systems and accounting rules. This paper takes a broad approach to accounting rules, arguing that they are related to large variations in enterprise forms and in industry problems. The rule making and enforcement apparatus of. modern society is described. Both external and internal aspects of accounting rules and ' budget sys tems are explored.
Every manager spends a good deal of his time worrying about budget allocations and the applicationof specific rules. The overall budget system and the specific allocation policies are for the individual manager an accounting-budgeting regime. For many purposes, and at most times, they are treated as from God - timeless and unchangeable, possibly arbitrary, but determinative. Even if the manager tries to evade them or manipulate them, he does so with a sense of testing the fates. Moreover, sovereigns, supreme authorities, spend much time creating budgets, reviewing accounting information, creating and thinking about accounting systems, and processing information 'derived from these systems.
But it is striking how little at tention sociologists of organizations have given to the analysis of accounting and budgeting systems, how little attention they have given to the rules governing ownership, the transfer of property rights from one gro.up or individual to another. For instance, if one examines the index of leading books written by sociologists of organizations one finds little mention of money, finances, accounting, or budget. None of these terms appear in W. Richard Scott's, Organizations: Rational, Natural, and Open Systems (1981), and this is an extraordinarily fine book. Or again, if one examines the index of Charles Perrow's important, Complex Organizations: A Critical Essay (1979), there is one reference to budget, none to accounting, and none to financing. There is a single reference to . fundraisingl. Richard Hall's textbook, Organization, Structure and Process (1981) has no references to accounting, budgeting, or finance; one does find two references to economic factors. There are several references to resources. The same lacuna is found in James D. Thompson's classic book, Organizations in Action (1967). There is a brief discussion of planning and budgeting under the discussion of coordination by planning; but that is more a general discussion of scheduling than it is of budgeting. There may be 'in these books some discussion of resource acquisition, but very little discussion of the rules governing resource acquisition and - allocation. Even among theorists who make power dependence and resource balance issues central to the analysis, such as Jeffrey Pfeffer, there is little discussion of specific accounting systems, budget rules, allocation schemas, as these operate to shape the operation of organizations, their growth and transformation. In the index of Pfeffer's Organizations and Organization Theory. (1982), there are three pages cited on budget allocation, no discussion of accounting rules, .one reference to capital allocation, no reference to finance," and' no reference to money.
The reasons for this neglect of accounting and budget rules as shapers of organizational behavior and as major sources of variation between organizations are complex. Note that political scientists (Wildavsky, 1979) and economists (Niskanen,-l971), dealing with public organizations and public expenditures, have developed a substantial literature dealing with budget systems. But for the private sector, until recently, accounting and budget systems have been treated as outside the domain of political scene and sociology.
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