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Open book accounting in practice – exploring the faces of openness

Author

Listed:
  • Petri Suomala
  • Tommi Lahikainen
  • Jouni Lyly‐Yrjänäinen
  • Jari Paranko

Abstract

Purpose - In spite of the increased research activity on inter‐organizational cost management (IOCM) and open‐book accounting (OBA), detailed evidence on the application of these tools in real‐life settings is still relatively sparse. Increased outsourcing and supplier responsibilities call for more thorough understanding on the possibilities and variations of supply chain cost management. As a research avenue, in‐depth case studies have been invited to elaborate the cost management interaction between companies. This paper aims to address these issues. Design/methodology/approach - This paper is based on an interventionist research within two supply networks. By making research interventions on the development of cost management practices among the suppliers, the researchers have set the ground for implementation of OBA, which, then, has provided a box seat to observe the process of OBA and its associations with the different forms of control. Within these two networks, this paper focuses on two OBA episodes portraying different facets of openness in IOCM. Findings - This paper presents OBA as an accounting template with a seemingly flexible character. By relying on the empirical study, the paper shows how OBA might be used for mitigating the component's price increasing pressures and, thus, controlling the costs of the end product in hybrids resembling very much market conditions. However, the very similar OBA procedures can be applied for achieving the long‐term goals of partnering in hybrids resembling to a great extent hierarchical structures. As the paper shows, the best corresponding control archetype for a given OBA application largely depends on the purpose defined for the IOCM activity by participating stakeholders. Originality/value - Thus, far, there are no interventionist studies on OBA and, hence, the research setting provides an interesting new element to the extant literature on OBA and IOCM. However, the research method does not have intrinsic value. Thus, the contribution, and therefore also the originality, of this paper is based on new aspects provided to the theory on OBA.

Suggested Citation

  • Petri Suomala & Tommi Lahikainen & Jouni Lyly‐Yrjänäinen & Jari Paranko, 2010. "Open book accounting in practice – exploring the faces of openness," Qualitative Research in Accounting & Management, Emerald Group Publishing Limited, vol. 7(1), pages 71-96, April.
    • Handle: RePEc:eme:qrampp:v:7:y:2010:i:1:p:71-96
    DOI: 10.1108/11766091011034280
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    References listed on IDEAS

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    1. Dekker, Henri C., 2004. "Control of inter-organizational relationships: evidence on appropriation concerns and coordination requirements," Accounting, Organizations and Society, Elsevier, vol. 29(1), pages 27-49, January.
    2. Cooper, Robin & Slagmulder, Regine, 2004. "Interorganizational cost management and relational context," Accounting, Organizations and Society, Elsevier, vol. 29(1), pages 1-26, January.
    3. Chapman, Christopher S., 1997. "Reflections on a contingent view of accounting," Accounting, Organizations and Society, Elsevier, vol. 22(2), pages 189-205, February.
    4. Jönsson, Sten & Lukka, Kari, 2005. "Doing interventionist research in management accounting," GRI-rapport 2005:6, University of Gothenburg, Gothenburg Research Institute GRI.
    5. Mouritsen, Jan & Thrane, Sof, 2006. "Accounting, network complementarities and the development of inter-organisational relations," Accounting, Organizations and Society, Elsevier, vol. 31(3), pages 241-275, April.
    6. Quattrone, Paolo, 2006. "Corrigendum to "Accounting for God: Accounting and accountability practices in the Society of Jesus (Italy, XVI-XVII centuries)" [Accounting, Organizations and Society 28 (2004) 169-249]," Accounting, Organizations and Society, Elsevier, vol. 31(1), pages 105-105, January.
    7. repec:dau:papers:123456789/1041 is not listed on IDEAS
    8. Spekle, Roland F., 2001. "Explaining management control structure variety: a transaction cost economics perspective," Accounting, Organizations and Society, Elsevier, vol. 26(4-5), pages 419-441.
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    Cited by:

    1. Romano, Pietro & Formentini, Marco, 2012. "Designing and implementing open book accounting in buyer–supplier dyads: A framework for supplier selection and motivation," International Journal of Production Economics, Elsevier, vol. 137(1), pages 68-83.
    2. Giuliani, Marco & Skoog, Matti, 2020. "Making sense of the temporal dimension of intellectual capital: A critical case study," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 70(C).

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