Numbers versus Narrative: An Examination of a Controversy

• Date: 01 May 2016
• Author: John Dumay,Jim Rooney
• Published date: 01 May 2016
• DOI: http://doi.org/10.1111/faam.12086

Financial Accountability & Management, 32(2), May 2016, 0267-4424

Numbers versus Narrative:

An Examination of a Controversy

JOHN DUMAY AND JIM ROONEY∗

Abstract: Competing actor interpretations of Intellectual Capital Statements

(ICS) may explain diverse opinions on their effectiveness in practice. Adopting

Callon’s (1986) moments of translation, we find that actors in our case study adapt

ICS numbers and narrative to create specific inscriptions, privileging one over the

other to suit their interests. This allows IC controversy to survive rather than be

resolved or the network to fail.

Keywords: intellectual capital, numbers, narrative, actor network theory, inscrip-

tions, controversy

INTRODUCTION

In this paper, we examine an accounting controversy manifest during a research

project at the Land and Property Management Authority of NSW (Lands). By

controversy we use Callon’s (1986, p. 219) definition — ‘all the manifestations by

which the representativity of [a] spokesman is questioned, discussed, negotiated,

rejected’ — rather than suggesting a furious argument, as is commonly

associated with the term. We outline how we participated as researchers in

observing Lands’ implementation of intellectual capital (IC) measurement,

management and reporting practices. IC was introduced to Lands as a new

accounting, reporting and management technology, creating a controversy inside

Lands centring on the use of numbers or narrative to represent IC. It mirrors a

debate in the academic field of IC, a technology initially developed by accounting

practitioners. Hence, we present a story of accounting in action.

∗The authors are respectively from the Department of Accounting and Governance,

Macquarie University; and the Discipline of Accounting, The University of Sydney Business

School. They wish to acknowledge the helpful and constructive comments provided by two

anonymous reviewers who are in no way to blame for any mistakes or errors. The authors

also wish to thank Fiona Crawford from The University of Sydney for her insightful editorial

assistance.

Address for correspondence: Jim Rooney, Room 332, H69 - Economics and Business, The

University of Sydney, NSW 2006 Australia.

e-mail: jim.rooney@sydney.edu.au

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NUMBERS VERSUS NARRATIVE: AN EXAMINATION OF A CONTROVERSY 203

In light of the existence of many IC frameworks and differences in actor

interpretation of the role of numbers and narratives in IC representation, Actor-

Network-Theory (ANT) is used to discuss how the controversy evolved while

producing new IC accounting inscriptions. We adopt an ANT perspective because

it is an ‘analytical framework . .. particularly well adapted to the study of the

role played by science and technology in structuring power relationships’ (Callon,

1986, p.197). Further, ANT focuses on connecting intention with objects and

processes, useful when considering how actors influence the successful imple-

mentation of technology change (see Bruun and Hukkinen, 2003 p. 104). Within

this analytical perspective, the notion of translation is used to explore ‘ . . . all the

mechanisms and strategies through which an actor . . . identifies other actors or

elements and places them in relation to one another’ (Callon et al., 1983, p. 193).

The controversy presented here is not a dispute about a contentious issue in

science that needs to reach the ‘closure’ that ‘occurs when the spokesmen are

deemed to be beyond question’ (Callon, 1986 p. 220). Rather, the controversy

consists of the debates that took place within Lands following implementation

of IC Statements (ICS) as a new accounting, reporting and management tech-

nology, based on whether actors have an epistemological penchant for numbers

or narrative. There is no resolution or ‘closure’ as no one view prevails —

regardless, the accounting change is implemented.

Our research is novel because it provides evidence that a controversy does

not need to be closed in order to successfully implement technology change, an

assumption of early Actor-Network-Theory (ANT) research (Callon and Law,

2005, p. 728). Further, the network of relations does not necessarily collapse, as

is commonly found in ANT-based accounting studies (see Chua, 1995; Catas´

us,

2000; and Skærbæk and Melander, 2004). In fact, we argue that an accounting

controversy can be productive. As identified by Chua (1995, p. 115), ‘the birth of

an accounting may change the map of organizational reality, challenge existing

work traditions . . . ’.

However, unlike the case study examined in Chua (1995), such controversy

does not necessarily ‘unfold battlelike, with opposing supporters and detractors

who are intent upon vanquishing each other’. Unlike the outcome of accounting

change in the case study examined in Chua (1995, p. 141) where ‘data

generated had not been widely circulated to doctors or nurses and none of

the hospitals used it for internal management purposes’, in our case study,

the controversy continued despite the successful implementation of a new

accounting technology. The implication for practice is that managers need

not always rely on authoritative power to implement accounting change. By

understanding the power of a new accounting technology to get others to act, the

ensuing controversy that inevitably accompanies implementing change allows IC

to be debated and utilised to help achieve organisational strategy.

The paper is divided into five further sections. First, we review the IC academic

literature addressing the numbers versus narrative debate, followed by a review

of the link between ANT and the practice of accounting change. We then

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