Overcoming the symbolic violence of orthodox accounting practice: an intellectual capital perspective
| Date | 12 March 2018 |
| Pages | 248-271 |
| Published date | 12 March 2018 |
| DOI | https://doi.org/10.1108/JIC-02-2017-0026 |
| Author | John Dumay,Jim Rooney |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & Finance,Accounting/accountancy,Behavioural accounting |
Overcoming the symbolic violence
of orthodox accounting practice:
an intellectual capital perspective
John Dumay
Macquarie University, Sydney, Australia, and
Jim Rooney
Department of Accounting, University of Sydney, Sydney, Australia
Abstract
Purpose –While intellectual capital (IC) accounting research has concentrated on private enterprise, it is also
germane to the public sector given pressures to create government business enterprises. However, despite the
impetus for change, IC accounting is not a widespread practice in any sector. To understand the paradox, the
purpose of this paper is to present a longitudinal narrative of IC accounting practice at an Australian public
sector organisation.
Design/methodology/approach –Bourdieu’s theory of practice is adopted in a single longitudinal case
study to examine orthodox and heterodox accounting processes along with the resultant “field of opinion”
created by IC discourse.
Findings –For an innovation such as IC accounting to be utilised, the social capital associated with it must
be able to overcome the symbolic violence of orthodox financial accounting practices. In essence, IC exists
alongside accounting and does not replace it. However, not all actors learn about and adopt IC in the same
way. Therefore, organisations cannot learn if the actors themselves cannot see how IC should not replace
accounting but exists alongside it.
Practical implications –On reflection, the study supports a conclusion that IC should not be viewed as a
heretical accounting practice. Rather, it serves discrete purposes that can be utilised by academics and
practitioners to achieve particular ends rather than viewed as an alternative form of accounting.
Originality/value –With increasingawareness of accountingof the importance of intangibleresources in the
“new economy”,this study emphasises the teleologicalaims of IC as a complementary accounting technology.
Keywords Social Capital, Intellectual capital, Practice theory, Bourdieu, Symbolic violence
Paper type Research paper
1. Introduction
After more than 30 years of research (Guthrie et al., 2012), the debate on whether intellectual
capital (IC) accounting is a legitimate, mainstream practice continues (Dumay, 2014). Ho and
Taylor (2014, p. 78) summarise this sentiment in IC’s leading academic journal, the Journal of
Intellectual Capital:
The question of recognition and measurement of the financial consequences to firms of their
investments in IC has been a long-standing debate among accounting standards setters,
practitioners and researchers.
The debate is many-sided. At one end of the spectrum, IC is viewed as being irrelevant,
when considered in terms of financial reporting and accounting (see Dumay, 2012, p. 12;
Marzo, 2013 p. 576) to IC as a valuable intangible asset to be reported on the balance sheet
(see Lev et al., 2009). For example, Walker (2009, p. 301) asserts that, “improvements will not
come from importing into balance sheets a series of items that are not subject to legal rights
and are not saleable”. In light of these contrasting perspectives, the authors explore the
debate over the perceived “usefulness”of IC practice.
Some accounting innovations are easier to implement than others (Pina et al., 2009,
p. 765), especially when driven by external pressures such as changes to laws (Caccia and
Steccolini, 2006). However, IC accounting is concerned with “properties and effects the
Journal of Intellectual Capital
Vol. 19 No. 2, 2018
pp. 248-271
© Emerald PublishingLimited
1469-1930
DOI 10.1108/JIC-02-2017-0026
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1469-1930.htm
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JIC
19,2
authors cannot account for”(Mouritsen and Roslender, 2009, p. 801). Further, the authors
consider IC accounting to be heterodox –an idea or practice that goes against the
established order –making its adoption all the more difficult.
New public management(NPM), for example, with its neo-liberalfoundations is supported
by orthodoxaccounting practices, suchas accrual accounting (Barton,2006). Here, the focus is
on managerial notionsof economic efficiency, i.e., assigning numerical valuesto public assets
as a basis for decision making. Consistent with this focus on numbers, Guthrie et al. (2012)
reveal how early IC accounting research followed suit, concentrating on developing
quantitative reporting frameworks, such as the Meritum Project (2002) and the Danish IC
Statement Guidelines (Mouritsen et al.,2003). However, they also arguethat IC’s potential will
not be realised if practice relies on existing economics-oriented IC frameworks (see Guthrie
et al., 2003; Chaharbaghi and Cripps, 2006; Guthrie et al., 2012). Arguably,
IC accounting requires differentiated theories of practice (Llewelyn, 2003; Dumay, 2012).
Given this tension between individual and collectiveviews, and the orthodox values given to
organisational knowledge by academics and practitioners (Mouritsen et al., 2001), IC
accounting research and practice is problematic.
Understanding how fundamental internal change to accounting practice emerges and
persists requires analyses that link the social relations that are driving accounting
innovation with the impact of change at an organisational level. Without the perspective of
the actors involved, research will not reveal the social reality hidden behind a veneer of
common sense understandings, discourses and narratives ( Jenkins, 1994). The analysis
benefits from examining both perspectives –the actors that are committed to existing
accounting practice, and those that advocate change.
Using the implementation of IC accounting in a public sector organisation as a case
study, the authors analyse a heterodox innovation in accounting practice, and explore the
reasons for adopting IC, and its impacts on accounting and organisational routines, through
what Bourdieu refers to as the symbolic violence of orthodox accounting and its advocates.
This paper is divided into four further sections. First, the authors review the academic
literature that identifies and discusses the practice known in IC research as “the third stage
of IC research”(Guthrie et al., 2012; Dumay and Garanina, 2013; Guthrie and Dumay, 2015)
and how IC links to a “theory of practice”(Bourdieu, 1977). Section 3 provides the context for
the study. In Section 4, the authors present a narrative of empirical observations taken
during one public sector organisation’s six-year journey to adopt IC accounting. Section 5
presents a discussion on IC accounting’s struggle to overcome orthodoxy. Section 6
concludes this study, and outlines its limitations and avenues for future research.
2. Linking IC to Bourdieu’s theory of practice
According to Petty and Guthrie (2000), early IC research had two distinct stages. The first
stage helped develop a discourse about the importance of IC in creating competitive
advantage, including identifying types of capital. The second stage expanded this typology
to establish IC research as a legitimate undertaking (Petty and Guthrie, 2000, pp. 155-156;
Mouritsen and Larsen, 2005). Thus, over two decades, from the mid-1980s to the mid-2000s,
research into IC accounting defined and established IC’s measures and frameworks
(Chatzkel, 2004; Sveiby, 2010), and provided some limited insights into IC practice.
Mouritsen (2006, p. 820), in particular, theorises that IC research is problematic because
researchers view IC as the application of a pre-set idea, rather than investigating how IC
works and what is involved in transforming organisations and society. This critique can be
found in other business-focussed literature, an example being accountability practices
where, as Shenkin and Coulson (2007, p. 300) identify, “for a constructive element to emerge
from the existing critique, it must be constituted by practices that challenge the very
meaning of information”.
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Orthodox
accounting
practice
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