Searching for Legitimacy in the telecommunications industry: evidence from a case study

Major, Maria Joao and Hopper, Trevor (2005) Searching for Legitimacy in the telecommunications industry: evidence from a case study. American Accounting Association: Management Accounting Section Midyear Meeting, Clearwater Beach, Florida, January 6–7, 2006. Published in: SSRN Electronic Journal. Elsevier ISSN 1556-5068

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This paper is the result of an intensive, in-depth case study in a Portuguese telecommunications firm (Marconi), which, with the liberalisation of the national and European telecommunications industries, was pressured to change its management accounting system (MAS). Both institutional and economic forces lay behind the profound changes that occurred in Marconi's MAS. An interpretive theoretical framework - New Institutional theory - was adopted to inform this investigation. With the liberalisation of the telecommunications industry at the end of the 1990's, Marconi was pressed to adopt ABC by several of its constituencies, in particular by its managers, the Portuguese telecommunications regulator (ICP), the European Union (EU), its parent company (PT - Portugal Telecom), and the consultants. While coercive, isomorphic management accounting change was imposed by the national and European regulator, and by Marconi's parent company, mimetic pressures were imposed by the consultants. This investigation showed that ABC was adopted by Marconi for a threefold reason: (1) as a means for Marconi to enhance its efficiency in the highly competitive Portuguese and European telecommunications markets; (2) to gain social legitimacy regarding the way costs are calculated and interconnection prices are established, in the eyes of public opinion, the regulator and capital markets; and (3) to prove to its constituencies that it is a 'modern' and efficient operator.

Item Type: Conference Proceedings
Schools and Departments: University of Sussex Business School > Accounting and Finance
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Date Deposited: 28 Jan 2022 09:18
Last Modified: 28 Jan 2022 09:18

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