Making a difference from the sideline: A case study on accounting system integration following preservation acquisitions

Abstract: This study explores the management accounting system (MAS) integration following preservation acquisitions, and how this process affects the financial control institutions in acquired firms. Drawing upon The Process of Institutionalization (Burns & Scapens, 2000) and the insights from a single case study of a Swedish corporate group specializing in preservation acquisition, we found that financial control institutions expand in acquired firms through three processes. (1) The introduction of new financial KPIs, (2) the development of more sophisticated accounting routines, and (3) the decision-making process through the Board of Directors. Moreover, we have identified how strengthened financial control institutions were encoded into organizational activities through the introduction of business-oriented routines. In line with previous research, we found that employee resistance can arise as a result of cultural differences, or conflicting institutions. However, we also found that inadequate accounting routines can cause resistance as employees are not equipped to enact newly imposed rules. Lastly, our findings show, contrary to previous research, that following acquisitions of small firms MAS are retained rather than replaced so as to not interfere with the capabilities and autonomy of the acquired firm. This disparity relates to the fundamental differences between absorption and preservation acquisitions.