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Financial Accountability & Management, 28(4), November 2012, 0267-4424

The Role of Management Accountants in New Public

Management

GERT PAULSSON∗

Abstract: Prior research indicates that the role of management accountants (MAs) has changed from a passive producer of financial information – a bean counter role – to a role that includes a broader set of issues and participation in decision making processes – a business partner role. One common explanation for this development is the introduction of new management tools. During the last decades, many public organizations have implemented New Public Management-like (NPM) management tools. This paper concerns the role of MAs, in an NPM context, and the corresponding requirements on their knowledge and skills. The empirical study is carried out in the Social Insurance Agency (SIA) in Sweden. The result shows that MAs have several roles in Central Government Agencies, but that NPM fosters a role that is more business partner-like than counter-like. Furthermore, the study clearly shows that MAs in such a context need a broad set of knowledge and skills. For example, knowledge of performance management, oral communication skills, ability to work in ‘mixed teams’ are considered to be more important than their knowledge of accounting.

Keywords: New Public Management, management accountants, public sector and central government.

INTRODUCTION

The role of management accountants (MAs)1 has been studied a lot since the early studies in the mid 1950s (e.g., Simon et al., 1954). At an overall level, the result from this research indicates a change from a role as passive producers of financial information, to a more proactive role including active participation

∗The author is Associate Professor at Lund University School of Economics and Management in Sweden. He wishes to thank the Social Insurance Agency (Försäkringskassan) for financial support and useful help during the project, and two anonymous reviewers for valuable comments.

Address for Correspondence: Gert Paulsson, Lund University School of Economics and Management, PO Box 7080, SE-220 07 Lund, Sweden. e-mail: [email protected]

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in decision making and a focus on a broader set of information than the purely financial. This is sometimes described as a move from a bean counter-role to a business partner-role. Granlund and Lukka (1998), and others discuss the differences between these arch-type roles along several dimensions. For example, the bean counter is focused on the past, while the business partner is focused on the present and the future; the bean counter is not expected to know the operations and the business, which the business partner is; the bean counter is expected to produce financial reports, while the business partner in addition to that is expected to participate in decision making processes.

Several factors have been suggested as possible drivers of this development. For example, Burns and Baldvinsdottir (2007) mention globalization, shift in technology, accounting scandals, and corporate trends, while Järvenpää (2007) provides a list of factors that include, the degree of decentralization of the accounting function, development of reporting systems, corporate culture, and introduction of new management accounting tools. Some studies focus more specifically on the relationship between management reforms, and the role of MAs (e.g., Friedman and Lyne; 1997, Grönlund and Lukka, 1998; Lapsley and Oldfield, 2000; Burns and Baldvinsdottir, 2007; Järvenpää, 2007; Byrne and Pierce, 2007; and Moll and Humphrey, 2007).

Furthermore, studies have shown that the role of MAs affects the knowledge and skills they require in order to carry out their tasks (e.g., Chenhall and Langfield-Smith, 1998; Burns et al., 1999; Lapsley and Oldfield, 2000; Pierce and O’Dea, 2003; and Burns and Baldvinsdottir, 2009). In general, it has been suggested that all MAs need ‘hard skills’ like knowledge of accounting, but that business partner-oriented MAs in addition to that need ‘soft skills’ (e.g., Grönlund and Lukka, 1998, and Järvenpää, 2001).

During the last decade, there have been a lot of management reforms in public sector organizations around the world. The development, which has been studied extensively by scholars (see e.g., Hood, 1995; Pollitt, 2000; Groot and Budding, 2008; and Lapsley 2008), is often labeled New Public Management (NPM). According to the literature, introduction of internal markets, performance management, accrual accounting and budgeting, professional management, de- centralization and output-oriented resource allocation are common components in NPM (see e.g., Hood, 1995; Bromwich and Lapsley, 1997; and Lapsley, 2008).

In spite of the possible consequences of the NPM-movement on the MAs, few studies have focused on their role in an NPM-context. However, the studies that have been made on that issue indicate that there has been a development of the MAs role (e.g., Lapsley and Oldfield, 2000; Järvinen, 2006; Hellström and Ramberg, 2007; and Moll and Humphrey; 2007), but more research is needed.

The purpose of this paper is to improve our understanding of the role of MAs in an NPM-context, and the requirements on their knowledge and skills.

From a practical point of view these issues are important both in the organization and running of MA-functions, and in recruitment and training of MAs. From a more theoretical perspective, it is interesting to learn more

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about the relationship between the design and use of management tools and the role of MAs.

RESEARCH METHOD

The empirical study was carried out in the Social Insurance Agency (SIA) in Sweden, which is a central government agency responsible for handling most of the social insurance administration in Sweden. During the last decades that agency has undergone a lot of management reforms that are well in line with NPM, e.g., decentralization, introduction of performance management, accrual accounting and output-based resource allocation, and deliberate use of the word ‘customer’ in internal and external communications.

The empirical study included a survey, interviews with MAs and line managers, and a seminar with senior managers. The survey consisted of a web- based questionnaire which was sent to all 93 MAs in the SIA. The response rate was 82.8% (77 usable answers), and except for a very few exemptions, the respondents answered all questions. Thus the n was 77 on most questions. A majority (64.5%) of the respondents was more than 50 years old, and 67.4% had worked for more than ten years in the SIA. However, due to recent reorganizations few had worked for more than two years in their current position. More than 80% of the respondents have an academic qualification, most often in business administration and economics (40.8%). Finally, the respondents work in different parts of the organization.

The questionnaire was developed based on a literature review covering the role of MAs. The first edition of the questionnaire was sent to five MAs in different organizational units in the SIA. Comments from this group were considered when the final questionnaire was set. The questionnaire contained 86 questions covering background data about the MAs, the tasks they perform and the requirements on their knowledge and skills. Most questions, except the background questions, were designed as statements on a 5-digit Likert scale ranging from 1 (‘Full disagreement’) to 5 (‘Full agreement’). The questionnaire was written in Swedish, and the translation for this paper was made by the author.

In addition to the survey, interviews were held with 24 persons in the SIA – 12 MAs, 3 at the central agency MA-function, 5 at different levels in the LIC, 3 at different levels of NIC, and 1 in the PD, and their 12 managers (see Table 1). It was considered important to interview both MAs and managers, since the perception of the role of the MAs may differ due to organizational locus.

The interviews covered the same areas as the questionnaire, but aimed at a better understanding of some issues that are not easily investigated in a survey. Examples of such issues are the MAs’ actual role in decision making, and the interplay with their managers.

Finally, the results of the survey were discussed at a seminar with senior managers in the agency. The seminar gave a complementary picture of the way

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Table 1

The Respondent’s Organizational Units

Percent of Organizational Unit Respondents

Central management accounting unit 13.2 Central units of the National Insurance Centre (NIC), Local Insurance 22.4

center (LIC) or Customer Call and Internet Support Center (CCISC) Regional or local units of the National Insurance Centre (NIC) or Local 57.9

Insurance Center (LIC) Process Development (PD) or Insurance Processes (IP) 2.6 IT-unit 3.9

senior managers perceive the role of the MAs in the SIA. It was also a valuable opportunity to test the tentative analysis of the data from the survey.

THE ROLE OF MAs

The literature on the role of MAs often starts out with a dichotomy containing two archetype roles. The first is often labeled ‘bean counter’, ‘watch dog’, ‘corporate policeman’ or ‘number cruncher’, while the second is often labeled ‘business partner’, ‘business advocate’, ‘controller’ or the like (e.g., Friedman and Lyne, 1997; Grönlund and Lukka, 1998; Coad, 1999; Pierce and O’Dea, 2003; Burns and Baldvinsdottir, 2005 and 2007; Yazdifar and Tsamenyi, 2005; Byrne and Pierce, 2007; Järvenpää, 2007; and Zoni and Merchant, 2007). Table 2 includes some characteristics that are often associated with the two archetype roles.

Grönlund and Lukka (1997) present a few additional similarities and differences between the two archetype roles. Reliability, honesty, purposefulness, prudence and accurateness are among the similarities, while the differences concern e.g., the need for communication skills, working methods, organizational boundaries and the primary aim of communication.

Nilsson et al. (2010) identify two main dimensions that are related to the characteristics in Table 2. The first one concerns the type of information MAs handle, ranging from financial information, to all information that is relevant to the business. The second dimension concerns the role of MAs in various organizational processes, e.g., decision making. According to Nilsson et al. (2010) MAs either limit themselves to analyze and disseminate information, or actively affect others, by e.g., participating in the decision making processes. Based on these two dimensions they identify four roles – accountant, educator, analyst and coach (see Figure 1).

The studies that are referred to in this section indicate a development from the traditional bean counter- or accountant-oriented role, to a role as business

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Table 2

Characteristics Associated with Bean Counters and Business Partners

Character Bean Counter Business Partners

Temporal orientation Emphasis on the past Emphasis on the present and the future

Knowledge of the business in which the firm operated

Not expected Expected

The primary aim of communication

Fulfilling of formal information requirements

Active attention attraction in order to get the message through

Felt (sic) scope of responsibility

Narrow; covers the production of correct accounting reports in time

Wide; covers both the production of relevant accounting figures and their application in business decisions

Cross-functional appreciation

Limited; based often on fear High for an active and capable person

General operating style Information collector and processor

A member of the management team and a change agent.

Source: Granlund and Lukka (1998, p 202).

Figure 1

Four Roles of Management Accountants

Type of information

Financial and non- Analyst Coach

financial information

Financial information Accountant Educator

Analysis Affect the thinking Attention to

of others group processes

Source: Based on Nilsson et al. (2010, p. 249).

partner, analyst, educator or coach. However, several studies show that the actual development is far more complex.

Firstly, Granlund and Lukka (1998) argue that there has been an expansion of roles rather than a move from one role to another. Burns et al. (1999)

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and Burns and Baldvinsdottir (2005 and 2007) label MAs with such expanded roles ‘hybrid accountants’ since they are expected to participate not only in accounting oriented tasks but also in issues that are related to the operations in the organization. This expansion of roles has been confirmed in studies in public sector organizations in Sweden, as well. For example, studies in the local government by Ramberg (2000) and Hellström and Ramberg (2007) show that the traditional role is still important, while additional roles have been added.

Secondly, in order to fully understand the role of MAs it is also important to consider that management accountants’ tasks nowadays are handled not only by MAs, but also by managers (e.g., Burns et al., 1999; Lapsley and Oldfield, 2000; Kurunmäki, 2004; Järvinen, 2006; and Burns and Baldvinsdottir, 2007). This development, too, is sometimes called ‘hybridization’ since it means that managers, without formal education in that area, get involved in management accounting tasks (Friedman and Lyne, 1997; Coad, 1999; Chenhall and Langfield-Smith, 1998; and Pierce and Odea, 2003).

Thirdly, Granlund and Lukka (1997) argue that the perception of the role may differ between different actors in the organization:

in the local part of the line organization a controller is the business oriented member of the managerial team and a financial adviser; in the accounting organization a controller is more like the local guardian, ensuring that the corporate interests are not forgotten (p. 239).

This is also highlighted by Pierce and O′Dea (2003) who focus especially on differences in the perception of the roles between line managers and MAs.

Fourthly, Burns and Baldvinsdottir (2005) argue that viewing changes in the role of MAs as a simple move from one role to another:

would be to ignore the cumulative nature of change events where the context, history, institutional embeddedness and transformational agency all matter (p. 751).

Granlund and Lukka (1998) confirm this by showing that there is a relation- ship between ‘Finnishness’, the management accounting culture in Finnish companies, and the expectations on MAs. Ahrens and Chapman (1999), too, are interested in the relationship between culture, management accounting and the role of MAs.

Finally, the authors of a CIMA report (Baldvinsdottir et al., 2009a and 2009b) conclude that:

business partnering might be a fad. Maybe it is only the fantasy of those who are seeking a new image, since the core values of the traditional management accountant have never really disappeared (2009b, p. 34).

Thus, the literature shows that the role of MAs is both diverse and complex. In spite of that, the above-mentioned classifications can be useful as a broad framework for analysis.

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MANAGEMENT AND THE ROLE OF MAs

Several studies have shown a relationship between management and the role of MAs (e.g., Friedman and Lyne, 1997; Grönlund and Lukka, 1998; Lapsley and Oldfield; 2000, Burns and Baldvinsdottir, 2007; Järvenpää, 2007; Byrne and Pierce, 2007; and Moll and Humphrey, 2007).

Lapsley and Oldfield (2000) discuss the role of MAs in different types of public sector organizations. Drawing on the work by Ferlie et al. (1996) they identified different roles for MAs at different stages of organizational reform. Closely related to overall organizational issues is the organization of the MA-function and its effects on the role of MAs (see e.g., Hopper, 1980; Granlund and Lukka, 1998; Järvenpää, 2007; and Lindvall, 2009). Two alternative types of organization structures are presented for that function (e.g., Anthony and Govindarajan, 2007). In the first one MAs are included in the ordinary line structure. Thus, they report to line managers and have a ‘dotted-line relationship’ with MAs at other levels of the organization. The other main alternative is that MAs are part of a separate structure, report to MAs at the next level of the organization, and have a ‘dotted-line relationship’ with line managers (see Figure 2).

Figure 2

Organization of the Management Accounting Function

Ordinary structure Separate structure

CEO Head CEO Head management accountant management accountant

Line Management accountant Line Management accountant manager manager

Research on the organization of the MA-function indicates that a separate structure tends to strengthen the bean counter-oriented role, while the inclusion of the MAs in the ordinary line structure tends to support a more business partner-oriented role (e.g., Burns and Baldvinsdottir, 2005).

Another common explanation for changes in the role of MAs is the introduction of new management tools (e.g., Friedman and Lyne, 1997; Lapsley and Oldfield, 2000; Järvenpää, 2007; Kurunmäki, 2004; Järvinen, 2006; Burns and Baldvinsdottir, 2005; and Moll and Humphrey, 2007).

For example, introduction of performance management has been identified as one possible driver for change in the role of MAs (e.g., Granlund and Lukka, 1998; Burns et al., 1999; Chenhall and Langfield-Smith, 1998; Lapsley and Oldfield, 2000; Vaivio, 2004; and Burns and Baldvinsdottir, 2007). The explanation for

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this is that development and use of non-financial performance measures usually require knowledge about the operations in the organization. Thus, when MAs get involved in this task they have to have a wider focus in their work. Furthermore, Järvinen (2006) found that the role of MAs changed in connection with the introduction of so called Diagnosis Related Groups (DRGs),2 in Finnish hospitals, while Moll and Humphrey (2007) found that introduction of public-private partnerships in the UK required MAs to be more sensitive to the political context and commercial considerations. Finally, Friedman and Lyne (1997) found that the introduction of Activity Based Costing (ABC) affected the image of MAs.

Despite the widespread introduction of NPM-like management tools, few studies have been made of the effect of this development on the role of the MAs. To be sure, the study by Järvinen (2006) is carried out in a public sector organization, but makes no attempt to discuss the link between the role of MAs and NPM. Kurunmäki (2004), too, touches upon the subject in her study of a public health care organization. However, she focuses on the interplay between professionals and accountants. Solli (1999), Ramberg (2000), Lapsley and Oldfield, 2000, Hellström and Ramberg (2007) and Moll and Humphrey (2007) are among the exceptions since they look at the development of the role of MAs in organizations that have made NPM-like reforms. The results of some of these studies indicate that the role is affected by such reforms, but that there has been an expansion of the role rather than a move from one role to another.

REQUIREMENTS ON MAs′ KNOWLEDGE AND SKILLS

The relationship between the role of MAs and the requirements on their knowledge and skills has been studied a lot (see e.g., Järvenpää, 2001; Pierce and O’Dea, 2003; Siegel, 2003; Byrne and Pierce, 2007; Burns and Baldvinsdottir, 2007; and Lindvall, 2009). Usually, these studies focus on differences in the requirements depending on whether the MAs are bean counting-oriented or business partner-oriented.

Most studies end up in a similar set of requirements. For example, Järvenpää (2001) suggests that ‘analytical skills’, ‘instrumental accounting competence’ and ‘independency’, are characteristics that are important for all MAs, but that business partner-oriented MAs in addition to that require ‘communication skills’, ‘cooperation and interpersonal skills’, ‘wide business management skills’ and an ‘ability to see big pictures and understand large entities’. Grönlund and Lukka (1998) and Siegel et al. (2003) show similar results. In general, studies of the requirements on MAs show that bean counter-oriented MAs may rely on ‘hard skills’ while business partner-oriented MAs need both ‘hard’ and ‘soft skills’.

NPM AND MAs IN THE SIA

The Central Government in Sweden was an early adopter of NPM, introducing semi-autonomous agencies many years ago, and starting to look at programme

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budgeting already in the 1970s. Since then there has been a lot of reform endeavours that have resulted in the introduction of other NPM-like manage- ment tools (see e.g., Olson and Sahlin-Andersson, 1998; Modell and Grönlund, 2006; and Paulsson, 2006). Performance management was introduced in the late 1980s. In the early 1990s accrual accounting and frame appropriations were introduced, and a major change was made in the capital budgeting system. Furthermore, the severe financial crisis in Sweden in the early 1990s led to changes in the state budget procedure. Altogether, this development led to major changes in the management of the Central Government.

Parallel to these changes, many Director Generals made changes in the internal organization and management of their agencies. However, since they are free to organize and manage their agencies in whatever way they want there have been differences in this development. Thus, in order to be able to study NPM in the SIA, it is important to take a closer look at the development in that specific agency.

The SIA is a central government agency responsible for the administration of a large part of the social insurance system in Sweden. This means that the agency is responsible for investigations, decisions and payment of the subsidies that are included in the social insurance, e.g., health and family allowances.

The agency has about 12,500 employees. Its head-quarter is located in Stockholm, but the operations are spread throughout the country in regional and local offices. The agency is led by a Director General who is appointed by the Government, and a management team that is chosen by the Director General.

The SIA is governed by two important formal documents that are issued by the Government – the Instruction and the Approval Letter. The former is a document that delineates the long term responsibilities for the agency, which means that it is not changed frequently. The Approval Letter, on the other hand, is decided by the Government in the yearly budget process. It focuses on the up- coming year and includes financial restrictions and non-financial objectives. The financial restrictions are budget targets which define the financial responsibility for the Director General. The non-financial objectives are often formulated in either output- or outcome-terms and are complemented with reporting requirements for the agency. Within the frame of these two documents, the Director General is free to organize and manage the agency.

The SIA has undergone several large organizational reforms during the last few years. The most important one was the merger of the 21 regional agencies and the Central Social Insurance Agency in 2005. The second reform was a reorganization of the agency in 2008 when the regional structure was replaced by three ‘customer-oriented branches’ – LIC, NIC and CCISC – and two process oriented units – PD and IP leading to a matrix structure.

The LIC is responsible for complex matters that require personal contact with the client, and has about 60 local offices throughout the country. The NIC deals with large volumes of standard matters that do not require personal contact with the clients. There are around 20 such centers, all specializing in

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certain parts of the social insurance. Finally, the CCISC, which is responsible for taking care of less complicated matters, has a few offices in different parts of Sweden. In addition to these branches, the SIA has two process oriented units – PD and IP – that are responsible for development, implementation and revision of the activity processes in the customer-oriented branches.

The organization of the MA-function follows the overall organization structure. There is a central MA-function with about 10 MAs and a head MA. The two largest customer-oriented branches – LIC and NIC – have small MA-functions at the central level. In addition to that they have MAs at lower levels of their organizations. However, the internal structure of the MA-function is different in the two branches. In LIC, MAs are organized in the regional units, serving several local offices, and reporting to the head MA in their region. Thus, they have a ‘dotted line relationship’ with the line managers. In the NIC, each of the 20 centers has their own MA, which means that they are part of the ordinary line structure, report to their line managers and have a ‘dotted line-relationship’ with the other MAs. The CCISC, the IP, PD and IT-support unit have a few MAs, at the central level.

Parallel to the organizational changes, several management reforms have been made in the SIA. Decentralization, which is a cornerstone in NPM, has long been an important philosophy in the agency. Though there have been signs of a recentralization of certain administrative issues during the last few years, managers at all organizational levels have a lot of authority when it comes to the handling of individual matters and management of their units.

The establishment of the process oriented branches was motivated by a need for improved activity processes, and during the last few years there has been a lot of focus on these processes. One outcome of this work is the identification of ‘optimal activity steps’ and calculation of ‘optimal time’ for each step. That information has then been used as a basis for an output oriented resource allocation process within the SIA.

During the last decade performance management was implemented in all organizational units. This means that there is a formal structure of non-financial performance measures from the Approval Letter for the entire agency to the Activity Plans for each organizational unit.

A related reform is the introduction of planning and follow-up dialogues between managers at different organizational levels in the SIA, starting with dialogues between the Director General and the managers of the three customer oriented branches and the two process oriented branches. These dialogues focus on both financial and non-financial issues.

In addition to the changes in the formal parts of management, there has also been a deliberate attempt to change the organization culture. The use of the word ‘customer’ in the Approval letters from the Government, in balanced score cards, activity plans and dialogues at all levels of the agency is one sign of this. By using that word, the agency management wants to improve the service orientation of the employees.

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RESULTS

This paper concerns the roles of MAs. In order to unravel these roles the respondents were asked about their current and expected future tasks. Fourteen different tasks were identified in the literature.

Table 3 shows that the MAs in the SIA perform a diverse set of tasks, and this is also confirmed by the interviewees. Follow-up and reporting of non-financial figures is very important, and that is expected to be the case in five years, as well. Furthermore, there is relatively limited variation between the MAs in the SIA when it comes to this task. The explanation for this, that is provided in the interviews, is that almost all MAs in the SIA are involved in this task in one way or the other.

Financially oriented tasks like forecasting, budgeting and follow-up and reporting financial figures are important, too, and are expected to grow in

Table 3

Tasks of MAs

Current Tasks Expected Tasks in

5 Yrs Expected

Tasks Mean Std. Dev. Mean Std. Dev. Changes

Follow-up and reporting non-financial figures

4.43 0.89 4.25 0.99 −0.18

Forecasting 3.91 1.10 4.12 1.13 +0.21 Budgeting 3.71 1.35 3.74 1.26 +0.03 Formulation of goals 3.68 1.10 3.68 1.19 0

Activity planning 3.63 1.17 3.82 1.23 +0.19 Production planning 3.62 1.31 3.76 1.38 +0.14 Follow-up and reporting financial

figures 3.61 1.37 3.75 1.34 +0.14

Investigations 3.49 0.87 3.74 1.06 +0.25 Strategic planning 3.42 1.00 3.51 1.14 +0.09 Organizational development 3.29 1.05 3.54 1.15 +0.25 Quality assurance 3.04 0.91 3.53 1.12 +0.49 Other tasks 2.59 0.92 2.21 1.35 +0.38 Business intelligence 2.33 0.91 2.96 0.99 +0.63 Internal education 2.26 0.81 2.51 0.98 +0.25

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importance during the next five years. However, several of these tasks vary more among the MAs. One explanation for this, which is provided by the interviewees, is that the financially oriented work is concentrated to a smaller group of MAs. This group handles both financial and non-financial information, while a majority of MAs only handle non-financial information.

A cross tabulation does not show any significant differences in the tasks performed by MAs in different organizational units. The only notable difference is that local and regional MAs score higher than the central level MAs on follow-up and reporting non-financial figures (4.68), production planning (3.98), and organizational development (3.49). In the discussion about the role of MAs, the type of information they use is another key dimension (see Figure 1).

Table 4 indicates that MAs are more focused on non-financial information than financial information. This confirms the result in Table 3 about the tasks they perform. Another dimension that is often discussed when it comes to the role of MAs is their involvement in decision making and other organizational processes (see Figure 1).

Table 5 shows that MAs in the SIA are involved in compiling, analyzing and disseminating information, to a larger extent than they participate in decision making. Thus, they primarily serve decision makers with information. However, the table shows that active participation in decision making is the activity that

Table 4

Type of Information

Proposition Mean Std. Dev.

I use primarily non-financial information in my work 3.80 1.05

I use both financial and non-financial information in my work 3.41 1.05

I use primarily financial information in my work 3.00 1.12

Table 5

Involvement in Decision Making

Proposition Mean Std. Dev

I compile, analyze and disseminate information to various decision makers

3.75 0.85

I compile and disseminate information to various decision makers 3.72 0.84

I participate actively in decision making 3.08 1.04

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Table 6

Required Knowledge and Skills

Importance Currently Importance in Five

Years

Knowledge and Skill Mean Std. Dev. Mean Std. Dev.

Written communication skills 4.33 0.59 4.34 0.60

Oral communication skills 4.32 0.60 4.34 0.55

Ability to work in ‘mixed teams’ 4.14 0.66 4.33 0.61

Knowledge of performance management 4.11 0.84 4.33 0.60

Knowledge of the operations in the SIA 4.11 0.66 4.16 0.64

Knowledge of accounting 3.13 0.96 3.32 0.87

varies most between the MAs, which indicates that some of them are involved in decision making to a relatively large extent.

The interviews give a slightly different picture. According to the managers, the MAs are very influential since they select the information that is used in decision making processes. In addition to that several interviewees emphasize that many MAs are members of management teams and, thus, participate actively in discussions that precede the decisions and that they, therefore, in practice influence the decision making.

The second question in this paper concerns the knowledge and skills that are required for the MAs. Table 6 shows that knowledge of accounting is far less important than knowledge of performance management and knowledge of the operations. This is true for both the current situation and the expected situation five years ahead. The standard deviation on the knowledge of accounting probably mirrors that some MAs hardly work on financially oriented tasks at all.

Furthermore, it is obvious that soft skills like communication skills and ability to work in ‘mixed teams’ already are very important, and is expected to be even more important in the future. The figures also show that there are rather small variations between the MAs in this respect. This is confirmed by the interviews and the seminar with senior managers.

DISCUSSION AND CONCLUSION

This paper deals with two related issues – the role of MAs in a NPM-context, and the requirements on their knowledge and skills.

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The Role of MAs in a NPM-Context

At an overall level, the study confirms the result of other studies, i.e., that MAs perform a diverse and expanding set of tasks (e.g., Granlund and Lukka, 1998; and Hellström and Ramberg, 2007) and often are ‘hybrid accountants’ (e.g., Burns and Baldvinsdottir, 2007). Furthermore, in large organizations like the SIA, different MAs have different roles. Thus, it is difficult to find one single label like bean counter or business partner that fits the role of the MAs. In spite of that, it is possible to identify some roles that are more important than others.

Two main groups of MAs can be identified in the SIA – one that deals with both financial and non-financial information, and one that deals with non-financial information alone. Refering to the framework by Nilsson et al. (2010) this means that there are very few pure ‘accountants’ and ‘educators’ in the SIA.

The second dimension in that framework concerns the involvement of MAs in ‘group processes’ like decision making. The survey indicates that MAs to a larger extent compile, analyze and disseminate information, than participate actively in decision making. However, interviews reveal that many MAs are members of management teams and, thus, are engaged in discussions that precede the formal decision making. The interviews with MAs indicate that their answers in that section of the survey were affected by the fact that they are not the formal decision makers. Thus, when asked during the interviews, they agree that they probably have a lot of informal influence on many decisions. The interviews with line managers, as well as the seminar with senior managers, confirm this. During the seminar some managers even argued that the MAs have too much influence on some decisions.

However, the interviewees indicate that involvement of MAs in decision making is partly dependent on their organizational locus. For example, MAs at the regional and local levels of the LIC are often members of the management teams and, thus, participate in meetings where most decisions are made. On the other hand, MAs at the central level of the SIA are most often not members of the management team and are, therefore, farther away from the decision making processes.

Thus, if we use the framework by Nilsson et al. (2010) it seems like MAs in the SIA are either ‘analysts’ or ‘coaches’. The ‘analysts’ are primarily those who work in teams with other MAs, e.g., in the central MA units and who are not members of any management teams, while the ‘coaches’ are those who are members of local and regional management teams and report to line managers.

NPM and the Role of MAs

A key question in this paper is in what ways NPM affects the role of MAs. When it comes to organizational issues, decentralization is a cornerstone in NPM, as well as in the central government in Sweden. This means that managers at all levels of the SIA have extensive responsibilities, though they most often

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have another educational background than management. This means that they require support in that area, and in practice it is often the MAs who provide that support. The organization of the MA-function in the SIA is closely related to this general requirement, and means that most MAs work closely together with their line-mangers and, thus, get involved in ‘organizational processes’ that are far beyond a passive compilation and dissemination of financial information. Altogether, a NPM-related decentralization seems to foster a business partner- or coach role for the MAs.

The relationship between management tools and the role of MAs has been focused in several studies, e.g., Mouritsen (1996) and Lapsley and Oldfield (2000). The most significant NPM-like tool that is used in the SIA is performance management, and the empirical study shows that MAs are highly involved in that task. For example, follow-up and reporting of non-financial figures are the task they perform most, and they use non-financial information to a larger extent than financial information. Altogether, the study clearly shows that the NPM-related performance management to a large extent affects the role of the MAs.

To sum up, if we use the framework by Nilsson et al. (2010), there are indications that NPM-like tools, e.g., a decentralized organization and extensive performance management leads to a role for MAs that is close to the ‘coach-role’.

Finally, the empirical study shows that financially oriented tasks are still performed by some MAs. For example, forecasting, budgeting, and follow-up and reporting financial figures still scores high. One possible explanation for this is that some of the NPM-reforms in the central government in Sweden, as well as in public sector organization in other countries have been rather financially oriented (see e.g., Olson et al., 1998), leading to the introduction of relatively advanced financial management tools that requires an expertise that neither line managers nor many MAs have. Thus, financially oriented NPM- reforms like the introduction of accrual accounting and new models for cash management, require a group of MAs specialized in more advanced financial tasks.

The Requirements on MAs’ Knowledge and Skills

The study shows that NPM-related decentralization and use of performance management place special requirements on the MAs. In order to support their managers in various kinds of ‘organizational processes’ like decision making, they need knowledge of the operations in the organization. In addition to that, in order to be key actors in performance management they need knowledge about non-financial performance measurement systems.

Furthermore, in order to work in mixed teams with managers and specialists, the MAs need ‘soft skills’ like oral and written communication. This confirms the results of previous research which indicate that business partner- or coach- oriented MAs require a broader set of knowledge and skills than traditional

THE ROLE OF MANAGEMENT ACCOUNTANTS 393

MAs (e.g., Pierce and O’Dea, 2003). Furthermore, the empirical study indicates that these requirements are expected to become even stronger in the future. If that is the case, public sector organizations that introduce NPM must actively consider this when recruiting and training their MAs in the future.

NOTES

1 International Federation of Accountants (IFAC) presents a list of titles that are used for employees carrying out management accounting tasks including ‘management accountant’, ‘controller’ and almost 20 other titles (IFAC, 2005). In this paper, the term ‘management accountant’ is used throughout the paper.

2 Diagnosis Related Groups (DRGs) is a tool for classifying in-patient care according to the diagnosis of the patient.

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