MANAGERIAL ACCOUNTING RESEARCH 307
organizations is their reconceptualization of the environments of organizations.
Earlier organizational and sociological models had emphasized technical facets.
Meyer and Rowan’s (1977) work, however, called attention to a neglected facet
of environments: institutional beliefs, rules and roles – symbolic elements capable
of affecting organizational forms independent of resource flows and technical
requirements. They emphasized (drawing from Berger and Luckmann 1967;
Garfinkel 1967) that shared cognitive systems, although created in interaction
by humans, come to be viewed as objectified and external structures defining
social reality. This is an ethnomethodological view of human action as shaped by
conventions, built up by participants in the course of interactions to the point that
much behavior takes on a taken-for-granted quality. The more institutionalized
the cognitive categories and belief systems, the more human actions are defined
by a widening sphere of taken-for-granted routines (Weber 1947).
Reflecting a theme similar to institutional theory, resource dependency theo-
rists argue that organizations are limited by a variety of external pressures (Pfeffer
and Salancik 1978; Pfeffer 1981), that environments are collectivities and inter-
connected, and that organizations must be responsive to external demands and
expectations in order to survive. Resource dependency theorists also suggest that
organizations attempt to obtain stability and legitimacy, and that organizational
stability is achieved through the exercise of power or control for purposes of
achieving a predictable inflow of vital resources and reducing environmental
uncertainty (Oliver 1991). In this tradition, Weick (1976) stated that the chief
responsibilities of organizational administrators are to provide a common lan-
guage from which to reaffirm and solidify ties with outsiders through symbol
management, consistent articulation of a common vision, and interpretation of
diverse actions in terms of common themes. In like manner, Burns (1986) observed
that such ‘‘rule systems’’ as formal control systems, rather than being neutral or
merely technical in nature, constitute power resources that actors use in advo-
cating organizational structural forms which serve their own interests. On this
theme, Boland and Pondy’s (1983, 1986) accounting studies highlight the cere-
monial, seemingly irrational, aspects of resource allocation activities where, for
example, they found that in a university case, the budget provided a context for
state agencies to exercise their legitimate authority in allocating funds to particular
priorities. At the same time the underlying flexibility was such that funds could
be diverted from one program to another at will. In short, resource dependency
theorists also have placed a strong emphasis on the role of political language,
particularly in budgeting processes.
Generally, the resource dependency tradition has recognized that budgeting is
closely linked with power, self-interest and political advocacy in contemporary
organizations (Pfeffer and Salancik 1974, 1978; Salancik and Pfeffer 1974; Rose 1977;
Pfeffer 1981; Schick 1985). More specifically, self-interest and internal power and
politics, actively expressed, for example, through budgeting systems, have been
found to play heightened roles during periods of organizational decline in terms
of resource allocation decisions made within organizations, possibly so that the
organization maintains some semblance of subunit harmony (Hackman 1985; Hills
and Mahoney 1978; Gray and Ariss 1985). In addition, not only do organizations