Introduction

This paper argues that information technology has a significant impact on organizational practices. Extant research has shown that the use of information technology improves performance (Gunasekaran et al., 2006; Hyvönen, 2007), creates competitive advantages (Ruivo et al., 2014), and results in organizational control (Granlund, 2011). Several studies that have focused on the use of information technology in organizations have noted a complex relationship between information technology and management accounting (Granlund, 2011) and argued that information technology is involved in many, if not most, processes in modern organizations (Dechow et al., 2007). Other researchers have focused on the interorganizational field. For example, Cuganesan and Lee (2006) reported how information technology takes relations across organizational boundaries, can reshape the enactment of controls, and mediate more complex network settings and interorganizational collaboration. Several literature streams have emphasized how information technology affects both interorganizational relationships and management accounting rules and routines.

The first literature stream investigates the relationship between management accounting and information technology. These research studies illustrated various effects of information systems, including that they have only a small impact that does not result in revolutionary change (Granlund & Malmi, 2002; Hyvönen, 2003; Quattrone & Hopper, 2005; Quattrone &

Hopper, 2006) or that they have a large impact on organizational practices (Granlund &

Mouritsen, 2003; Nicolaou, 2008). In this field, few studies have analyzed how information technology results in change from a more longitudinal perspective or understood its long-term effects. Therefore, the actual long-term effect of information technology remains unclear when establishing its role and impact on organizational practices such as management accounting.

A second literature stream focuses on the relation between information technology and interorganizational relationships. Frances and Garnsey (1996), in establishing the role of information technology in the interorganizational field, focused on the relationship between control mechanisms and information technology and showed how their interconnection strengthens interorganizational linkages. Cuganesan and Lee (2006), in analyzing control mechanisms, argued that interorganizational collaboration is increasingly mediated and influenced by information technology; furthermore, Dechow et al. (2007) showed how the control mechanism in the interorganizational field is, in many ways, reliant on information technology. However, this literature did not fully capture the dominant role of information technology in the interorganizational field and the fact that it can control complex interorganizational relationships and move boundaries far beyond the organizational sphere. To understand these settings, it is necessary to address the wider literature in network accounting and the interorganizational field.

In a third literature stream, Caglio and Ditillo (2008) extensively reviewed literature on accounting in interfirm networks. Their review noted that most studies focused on the upstream and the singular relationship between buyer and supplier (Seal et al., 1999; Mouritsen et al., 2001; Dekker, 2003; Cooper & Slagmuller, 2004; Caglio & Ditillo, 2012). However, few studies have focused on downstream relationships. For example, Kulp (2002) mainly used quantitative methods for “…analyzing the different stages of the supply chain and the relationships between manufacturers and retailers” (Caglio & Ditillo, 2008, p. 884). Downstream relations are important for understanding changes in the larger interorganizational field, because in the

modern world, they comprise a large part of the ever-developing and complex relationships created in the interorganizational field. Research on the effect of both upstream and downstream relations is much less common, and it has not focused on the complexity in the interorganizational field by analyzing relations as being both horizontal and vertical.

To understand the ongoing changes in the interorganizational field, more attention should be placed on the complexity of the role of information technology in orchestrating relations.

Therefore, this study is motivated by three factors: the longitudinal perspective of information system implementation, the organizational effect of multiple information system implementation, and how information technology orchestrates complexity in the interorganizational field. Toward this end, this study answers the following research question to further understanding and advancement in the field of technology, accounting, and networks:

How does information technology affect management accounting rules and routines and the structuring of interorganizational relationships over time?

To establish the implications of information technology in the interorganizational field, this research study particularly draws upon Lind and Thrane’s (2010) study, because their framework provides a systematic way to analyze and categorize multiple and complex relationships. Furthermore, this research study uses institutional theory to analyze how information technology affects management accounting practices and network relations. To fully understand these changes, Burns and Scapens’ (2000) study is useful for understanding the changes in management accounting rules and routines (Busco et al., 2006). The use of this framework enables an analysis of how change occurs as a consequence of technology and how this affects organizational practices and interorganizational settings.

This case study analyzes multiple implementations that are useful when understanding the long-term effects of information technology. A few studies on the interorganizational field (Coad &

Cullen, 2006; Thrane, 2007) and on information technology in the interorganizational field (Scapens & Jazayeri, 2003) have applied a longitudinal perspective. In addition, several researchers have emphasized the need for a longitudinal approach to understand the role of information technology in this field (Granlund & Malmi, 2002; Kulp, 2002; Dekker, 2004;

Hyvönen, 2007; Caglio & Ditillo, 2008; Vosselman & Van der Meer-Kooistra, 2009).

Currently, there is a lack of literature that applies a longitudinal perspective in network accounting and information technology; existing longitudinal studies only span a few years, and they examine only a single information system and its implementation.

The case study analysis focuses on information technology in the interorganizational field, and it establishes three findings. First, the central and dominant role that information technology plays in the interorganizational field and its ability to take relationships far beyond organizational boundaries show how information technology does not simply play a passive role. Second, the change in management accounting practices owing to shifts in information technology extends existing literature through its emphasis on the active role of technology in the management accounting field. Third, the longitudinal perspective establishes how the change in information systems results in unintended consequences and how this has a profound positive and negative impact on management accounting practices. The empirical study can clarify these findings, because the analysis is based on multiple system implementations and a longitudinal perspective. This approach can illustrate in more detail how these management technologies can control the interorganizational field and affect organizational practices such as management accounting.

The remainder of this paper is structured as follows. First, literature on information technology and management accounting is examined. Second, literature on accounting in interfirm networks is discussed. Third, institutional theory is presented, and the role it plays in accounting research is explained. Finally, the longitudinal case study is analyzed through three individual information systems that are used to manage and control organizational and interorganizational settings.

7.2 Literature review: Accounting, networks, and information technology