Extending institutional analysis through theoretical triangulation: regulation and activity-based costing in Portuguese telecommunications

This paper examines why a Portuguese telecommunications company - Marconi - adopted activity-based costing (ABC). The focus lies in new institutional sociology (NIS), particularly the institutional change model of Dillard et al. (Accounting, Auditing and Accountability Journal, 17(4), pp. 506-542, 2004), supplemented by theoretical triangulation involving economic, labour process and actor network theories to enrich observations and extend theory. Why Marconi adopted ABC lay in a complex, interrelated chain of institutions, including the parent company, management consultants, national and European Union regulators, financial markets and consumer associations during market liberalization. ABC was a means and symbol of improved competitiveness and efficiency but its diffusion and adoption also involved mimetic, coercive and normative factors. In regulated environments external legitimacy and efficiency were intertwined and demonstrating efficiency using accounting symbols is problematic. The results confirm criticisms of early NIS research for dichotomizing economic and institutional pressures, assuming private organizations are exempt from institutional pressures and neglecting internal organizational dynamics. The Dillard et al. model accommodated many features of institutionalization but needed extension to incorporate the public interest, the role of boundary spanners across social levels and how intra-organizational factors and properties of the technology derived following translation and praxis play a part.