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A privatization success story: accounting and narrative expression over time

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  • Russell Craig
  • Joel Amernic

Abstract

Purpose - This paper is the third in a trilogy of papers to explore the use of accounting as a fundamental element in senior management's narrative regarding the privatization of a major transportation enterprise, Canadian National Railway (CN). The paper aims to examine how two accounting performance benchmarks (the operating ratio, and free cash flow) were deployed to help sustain a rhetoric of post‐privatization success. The aptness (and the danger) of accounting language in strategic narrative is highlighted. Design/methodology/approach - The paper describes the importance of senior management discourse in the aftermath of a privatization. A narrative perspective is adopted, in which an imagined future post‐privatization era initially articulated in accounting language is then told and re‐told as the post‐privatization years unfold. Accounting performance measures highlighted in the story of success of the privatization in the Annual Letters to Shareholders by the CEOs of CN in the ten years following privatization in 1995, and celebrated in the Annual Report, are examined critically. Findings - The results emphasize the important features and role of accounting language and accounting‐based performance benchmark measures in the narrative construction of the success of a privatization by corporate leaders. Research limitations/implications - Case studies possess the strength of specific instance detail and interpretation, and the ostensible weakness of interpretation of a sample of one. But such research can provide for a reframing of conceptual perspectives and stimulate additional efforts to interrogate the role of accounting language in events of major social change. Practical implications - The paper strongly endorses the adoption of a critical analytical perspective by those affected by a major social change (such as a privatization) in which the role of accounting language is subtle, but nonetheless persuasive and enduring. Originality/value - The paper examines a case study in which the narrative framing of success is made rhetorically potent by deploying accounting performance measures. The paper reinforces the view that accounting is not an innocent bystander in the political and narrative manoeuvrings associated with a privatization. Accounting does not axiomatically provide an objective measure of some underlying financial truth, but is part of an arsenal of rhetoric to achieve political ends.

Suggested Citation

  • Russell Craig & Joel Amernic, 2008. "A privatization success story: accounting and narrative expression over time," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 21(8), pages 1085-1115, October.
    • Handle: RePEc:eme:aaajpp:v:21:y:2008:i:8:p:1085-1115
    DOI: 10.1108/09513570810918779
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    References listed on IDEAS

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    1. Russell Craig & Joel Amernic, 2006. "The mobilization of accounting in preening for privatization," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 19(1), pages 82-95, January.
    2. Knights, David & Collinson, David, 1987. "Disciplining the shopfloor: A comparison of the disciplinary effects of managerial psychology and financial accounting," Accounting, Organizations and Society, Elsevier, vol. 12(5), pages 457-477, August.
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    4. Hines, Ruth D., 1988. "Financial accounting: In communicating reality, we construct reality," Accounting, Organizations and Society, Elsevier, vol. 13(3), pages 251-261, April.
    5. Thompson, Grahame, 1991. "Is accounting rhetorical? Methodology, Luca Pacioli and printing," Accounting, Organizations and Society, Elsevier, vol. 16(5-6), pages 572-599.
    6. Morgan, Gareth, 1988. "Accounting as reality construction: Towards a new epistemology for accounting practice," Accounting, Organizations and Society, Elsevier, vol. 13(5), pages 477-485, August.
    7. Russell Craig & Joel Amernic, 2006. "The mobilization of accounting in preening for privatization," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 19(6), pages 82-95, November.
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    Cited by:

    1. Niamh Brennan & Doris M. Merkl-Davies, 2013. "Accounting Narratives and Impression Management," Open Access publications 10197/4949, Research Repository, University College Dublin.
    2. Doris M. Merkl-Davies & Niamh M. Brennan, 2011. "A conceptual framework of impression management: new insights from psychology, sociology and critical perspectives," Accounting and Business Research, Taylor & Francis Journals, vol. 41(5), pages 415-437, December.
    3. Merkl-Davies, Doris M. & Koller, Veronika, 2012. "‘Metaphoring’ people out of this world: A Critical Discourse Analysis of a chairman's statement of a UK defence firm," Accounting forum, Elsevier, vol. 36(3), pages 178-193.
    4. Tregidga, Helen & Milne, Markus & Lehman, Glen, 2012. "Analyzing the quality, meaning and accountability of organizational reporting and communication: Directions for future research," Accounting forum, Elsevier, vol. 36(3), pages 223-230.
    5. Niamh M. Brennan & Doris M. Merkl-Davies, 2014. "Rhetoric and argument in social and environmental reporting: the Dirty Laundry case," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 27(4), pages 602-633, April.
    6. Gustavo Alberto Ruiz Rojas, 2016. "Retórica y contabilidad: de la crítica retórica a la retórica crítica," Revista Facultad de Ciencias Económicas, Universidad Militar Nueva Granada, vol. 25(1), pages 243-270, December.
    7. Hashem Salarzadeh Jenatabadi & Peyman Babashamsi & Datis Khajeheian & Nader Seyyed Amiri, 2016. "Airline Sustainability Modeling: A New Framework with Application of Bayesian Structural Equation Modeling," Sustainability, MDPI, vol. 8(11), pages 1-17, November.
    8. Yan Luo & Linying Zhou, 2020. "Textual tone in corporate financial disclosures: a survey of the literature," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 17(2), pages 101-110, September.
    9. Amernic, Joel & Craig, Russell, 2009. "Understanding accounting through conceptual metaphor: ACCOUNTING IS AN INSTRUMENT?," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 20(8), pages 875-883.
    10. Josiah, J. & Gough, O. & Haslam, J. & Shah, N., 2014. "Corporate reporting implication in migrating from defined benefit to defined contribution pension schemes: A focus on the UK," Accounting forum, Elsevier, vol. 38(1), pages 18-37.
    11. Niamh M. Brennan & John P. Conroy, 2013. "Executive hubris: the case of a bank CEO," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 26(2), pages 172-195, February.
    12. Matilal, Sumohon & Adhikari, Pawan, 2020. "Accounting in Bhopal: Making catastrophe," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 72(C).
    13. Janni Grouleff Nielsen & Rainer Lueg & Dennis van Liempd, 2019. "Managing Multiple Logics: The Role of Performance Measurement Systems in Social Enterprises," Sustainability, MDPI, vol. 11(8), pages 1-23, April.

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