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The purpose of this paper is to gain insight into how management accountants can become relevant business partners out of respect for existing locally developed accounts of economic performance for decision-making.

The paper is based on qualitative semi-structured interviews with local business actors, in this case, families from seven financially successful Danish dairy farms. The casework and the analysis have been informed by pragmatic constructivism.

The local business actors do not use the official accounting system for ongoing cost-management-related decision-making. Instead, they use several epistemic methods that include locally developed decision models, experiences, rules of thumb and intuition. The farmers use these vernacular accountings to compensate for the cost management illusion that the formal accounting system tends to create. What the study suggests is that when management accountants engage as business partners, they are likely to enter a space where accounting is already present.

This paper argues that local business actors practice epistemic methods where they develop and use vernacular accountings to support their managerial practice, also in the absence of a professional management accountant. These vernacular accountings may lead the local actors into an illusion because the vernacular accountings do not necessarily have an inherent economic logic and theoretical reliability. The role of the management accountant in such a setting is hence to understand, support and advance local epistemic methods. Becoming a business partner requires a combination of management accounting analytical skills and a sense of empathy and sensitivity regarding what is already at play and how this can become an object of discussion without violating the values of the other.

The purpose of the paper is to analyse how the intensive use of non-financial performance measures and the lack of an economic reality among Danish farmers have contributed to a low economic performance despite high productivity. The research ambition of the paper is to contribute to a better understanding of the managerial decision-making made by family business managers, in this case farmers, and how these decisions may impact financial performance.

The study is based on a case study including farmers, agricultural consultants and bankers. The analysis uses pragmatic constructivism to analyse the economic reality of the farmers included and the business topos among Danish farmers.

The main finding of the paper is that the dominating non-financial performance management techniques and a historically based strong emotional emphasis on size and production volume as the main success criteria for being a good farmer have led to a neglect of economic rationality. In addition, this practice has made the farmers blind to alternative possibilities for taking advantage of the resources available. The result has been an un-economic utopian reality.

The paper shows how the use of non-financial performance measures can lead to prolonging of a certain reality perception that may not be economically sustainable. Small family businesses such as family farms are likely to be more exposed to such risk because such businesses are run by a set of values that include more objectives that are more dominating than the profit objective. The paper concludes that family business managers must be open towards inputs from the society around the business, because family businesses may have a tendency to create their own reality that at some point may come in conflict with society of which the family business has to co-exist within.

The purpose of this paper is to demonstrate a paradigmatic foundation for educators to prepare students of management accounting for the new demands of the role of trusted business partner in practice.

The paper argues for the use of pragmatic constructivism as a basis for development of a paradigmatic foundation for educating advanced students of management accounting. Furthermore, it contains an empirical insight through a case example of how pragmatic constructivism can be used as a pedagogical tool in different management accounting educational situations.

The analysis shows how pragmatic constructivism can be used as a less reductionist paradigm than realism to tackle the research-teaching-practice deficiencies found in conventional thinking on accounting education. Pragmatic constructivism is shown to provide important methodological and conceptual elements in developing, understanding and guiding the application of management accounting techniques in dynamic business practices. Placing an emphasis on teaching methodological skills relevant for management accountants is shown to have an important impact on students and their ability to act as business partners.

The analysis is exploratory in the sense that a new paradigmatic framework for educating students of management accounting to be business partners is outlined and illustrated through its implementation in a specific master’s degree programme. However, this analysis should be viewed as only a first step towards developing pragmatic constructivism as a paradigmatic foundation for teaching management accounting as a basis for a business partner role.

The proposed use of research on pragmatic constructivism as a basis for management accounting education to support a future business partner role is novel in the literature on management accounting. The value of its application lies in its potential to create successful utilisation of the practices of management accounting.

The study aims to assess the COVID-19 event in three European countries (Germany, Italy and the UK) by investigating the quality of their performance management of it.

Pragmatic constructivism (PC) is employed as a lens through which the performance management of each country can be examined and compared over a period encompassing the first wave of COVID-19.

Official statistics show that one of the countries has a significantly lower death rate. It developed and operated a more detailed and precise system of performance management. From the perspective of PC, this system supported efforts to build a functioning reality construction integrating facts, possibilities, values and communication.

The evaluation of different national approaches to the performance management of the COVID-19 reality is novel to the literature on management accounting. PC is used as a diagnostic tool to pinpoint strengths and weaknesses of the performance management of public sector activities in different countries.

This paper sets out to introduce the special issue on management controls and new organisational forms. It summarises and reflects on themes and findings raised in the papers in the issue.

The findings reported in the paper are based on desk research and review of the papers contained in the issue.

The paper finds that management control systems can perform various coordinating and governance roles in managing new organisational forms. However, management control systems designers must be aware of the complexities of these new organisational arrangements.

The paper is a summary of studies exploring the roles of management controls in new organisational forms. The issues addressed in these studies are important in furthering our understanding of the changing roles of management control systems.

This paper aims to analyse how the inherent design of the Balanced Scorecard (BSC) violates the controllability principle. The management control literature provides convincing examples of actors who breach controllability without intention. This discussion was extended by the example of the BSC. This paper focusses on the breaches that occur when actors lack the awareness or the skills to re-enforce controllability.

Taking a pragmatic-constructivist position, analytical and empirical evidence was included on controllability to analyse the normative literature on the BSC.

It was found that the BSC causes several unintended breaches of the controllability principle at the level of middle managers, both ex ante (control rationale) and ex post (fairness rationale). These breaches are not only situational or induced by how managers in the field design a BSC. They appear to be inherent in the BSC due to the way Kaplan and Norton have conceptualised it.

Practitioners are alerted that the intuitive appeal of popular management fashions such as the BSC covers their conceptual flaws. It was also proposed that failed implementations and dysfunctional applications can be due to the inherent characteristics of the concepts themselves.

This paper contributes by uncovering the unintended violations of the controllability principle by the inherent characteristics. The authors suggest using our conceptual contribution to conduct empirical research on the issues of controllability and management control systems in general. Thereby, the theory-based discussion on the BSC is advanced (Nørreklit, 2000, 2003; Nørreklit et al., 2012a).

The literature on managing inter‐organisational relationships typically suggests managing these relationships based on the formalised exchange of information across the organisational boundary with due respect to trust build‐up through successive interactions. The purpose of this paper is to argue that a focus on trust reduces the flexibility and accessibility of resources and hence ruins the advantages of inter‐organisational relationships. The paper focuses on power as a means for absorbing uncertainty when managing inter‐organisational relationships.

The paper is based on findings from a case study of inter‐organisational relationships. Governmentality is used as a framework for analysing the practise of managing inter‐organisational relationships.

A number of representations are employed along the boundary between the case study parties and thereby the boundary is emphasised. These representations are used to set the discourse for negotiating the terms of the cooperation. During negotiations a common understanding of cooperation is constructed and thereby fine‐grained information is assembled. In this specific case, the contract plays a central role as a representation of the project in focus. In the construction of the price for the product, open book and benchmark data are used. Information does not cross‐organisational boundaries at face value. Information is applied to the representations and brought into play during negotiations. Thereby managing and management accounting become significant components of the boundary between the parties.

The paper shows that power, as a means for absorbing uncertainty in inter‐organisational relationships, can solve the dilemmas regarding flexibility and access to resources that trust can cause.

The purpose of this study is to examine how the management accounting practice in an organisational unit affects the ability to conduct inter‐organisational control.

Governmentality is used as the main theoretical basis for the interpretation of empirical data. A qualitative case study is used to gather information from an electronics company.

The company enters its inter‐organisational relationships with the ambition of being in power in the relationship. To begin with, management accounting plays a central role in the negotiation process. Due to inadequate management accounting practices, the company is unable to include cost information in their response to proposals made by their suppliers during negotiations. Consequently, the cost aspect of the product fades away from negotiations as they progress.

The study concludes that an important part of management accounting practice is to reveal the intra‐organisational cost consequences of proposals made by suppliers during negotiation processes. These cost consequences are central during negotiation processes since they will keep the focus on costs and cost improvements during the negotiation process. The study indicates that accounting technologies and the physical presence of the management accountant are not sufficient to keep costs on the agenda. Constant cost consciousness requires that the management accountant actively takes part in the joint problem solving process.

This paper aims to review the literature on the balanced scorecard (BSC) system. The BSC may well be one of the most popular performance measurement systems, but this is not synonymous with successful. The inventors of the BSC, Kaplan and Norton, actually emphasize that a BSC can only really impact the organizational performance if it is linked to the actors’ intrinsic and extrinsic incentives. As BSC has existed for more than 20 years, the authors find it relevant to survey the extant literature which elaborates on the BSC-incentives link within organizations.

This paper identifies 117 empirical studies from leading academic journals published between 1992 and 2012 and then assesses 30 of these studies, which present the BSC-compensation link within the BSC literature. The authors analyze both research design (authors’ perspective) and the actual findings in the field (organizations’ perspective).

First, it was found that only 30 of 117 empirical studies have a research design that is comprehensive enough to capture a full BSC as suggested by Kaplan and Norton, and only six of these studies elaborate on the link between the BSC and compensation. Second, extant research lacks valid constructs for the BSC and focuses too much on planning (ex-ante) with the BSC and not sufficiently on evaluation and control (ex-post). Third, the authors demonstrate that empirical BSC literature relies very strongly on field research in small and medium enterprises compared to similar research. Overall, the authors claim that the “relevance” of the BSC remains unproven.

The authors synthesize the empirical BSC literature and derive a future research agenda.