School of Accounting Seminar Series Semester 2, 2013

Messing around, calculating and strategy-making: Embodying the

past to frame future(s)

Jane Baxter / Wai Fong Chua The University of New South Wales

Date: Friday 2nd August 2013 Time: 3.00pm – 4.30pm Venue: ASB 216

Australian School of Business School of Accounting

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MESSING AROUND, CALCULATING AND STRATEGY-MAKING: EMBODYING THE PAST TO FRAME FUTURE(S)1

Jane Baxter

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School of Accounting

University of New South Wales Kensington NSW 2052

Australia Email: j.baxter@unsw.edu.au

Wai Fong Chua

Pro-Vice-Chancellor (Students) University of New South Wales

Kensington NSW 2052 Australia

Email: wf.chua@unsw.edu.au

Satoshi Horii College of Business Administration

Ritsumeikan University 1-1-1, Noji-Higashi, Kusatsu

Shiga, 525-8577 Japan

Email: horii@ba.ritsumei.ac.jp

Norio Sawabe Graduate School of Economics and Faculty of Economics

Kyoto University Yoshida-hommachi

Sakyo-ku Kyoto 606-8501

Japan Email: sawabe@econ.kyoto-u.ac.jp

July, 2013.

(First Draft. Do not quote. Not for distribution.)

1 The authors would like to acknowledge the financial support by provided by the Australian Research Council (Grant DP0774434) and JSPS KAKENH Grant in Japan. We are also particularly grateful to the organizational participants who agreed to be interviewed for this study. 2 Corresponding Author: School of Accounting, University of New South Wales, Kensington, 2025, Australia. Email: j.baxter@unsw.edu.au, phone: +61293855912 fax: +61293855925

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MESSING AROUND, CALCULATING AND STRATEGY-MAKING: EMBODYING THE PAST TO FRAME FUTURE(S)

Abstract

This paper problematizes the assumed instrumental connection between accounting calculations and strategy-making. Drawing on notions of a messy ontology, we argue that this aspect of organizational functioning is rarely a neat and singular phenomenon – appealing instead to its manifold constitutions. We argue that the extant literature characterizes a range of practices with respect to strategy-making and accounting that highlight their local and differential translations in practice. Taking this as our vantage point, we examine strategizing in a Japanese electronics organization employing interviewing and document study. We find that strategy-making was embodied in the practices of the founder of the firm, linked to and limited by his corporeality and habitus. Seeking greater engagement with this activity, a group of middle managers imitating conventional strategy formulation activities confronted rejection of their strategic plan by senior management: their plan was considered to be “boring” and without a “soul”. A further attempt at strategy-making resulted in the development of a simple strategic artifact called the “winning triangle”. This artifact was accepted by the Chairman and senior managers. Unlike the numerically laden formal strategic plan, this artifact provided a disembedded and skeletal schematic account of how the company had grown and become successful over the years. The artifact functioned as a symbolic token that was circulated between organizational participants, facilitating the multiple re-embodiment and localization of the strategic narrative that it relayed. This artifact was also significant because of the affect embedded in it. The winning triangle enabled organizational participants not only to understand but to celebrate the growth and success of the organization over the years. The artifact strengthened the accounting numbers and reconnected them to strategy, embedding them in a network of relations constituting the externalized emotional capital of the organization. As such, this paper contributes to the accounting literature by introducing the notion of embodied agency, agency that is mutually inclusive of both calculating and sensing. How things act and materialize their agency in networks of relations – how problems are defined, how actors are identified, corralled and mobilized, how tokens circulate and so-on – is governed by assemblages of both effects and affects. Agency is not only calculative; it is also sensual, felt and lived in spaces that are not calculable. For numbers to act, both calculable and non-calculable practices must be entangled in messy spaces.

KEYWORDS: strategizing; embodied agency; embodied strategy; emotional capital; messy spaces; symbolic token

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MESSING AROUND, CALCULATING AND STRATEGY-MAKING: EMBODYING THE PAST TO FRAME FUTURE(S)

1. Introducing messiness

In his monograph, After Method (2004), Law questions the naturalization of social science research – a category in which accounting research generally finds itself. In Law’s opinion, the prevailing corpus of social science research, accounting included, tends to view our world as being singular or “specific”, “determinate” and comprised of “more or less identifiable” structures and processes (2004, p.5). Arguably, this has been the case in the area that we are planning to investigate, namely, the interpenetration of strategy-making and calculation. Having said this, there are some exceptions to these manifestations of singularity to which our research seeks to be aligned (Mol, 2002; Law & Singleton, 2005).

Since the inception of Accounting, Organizations and Society, which is being used as a case in point, there has been a more or less consistent stream of studies addressing the types of calculative practices informing strategizing in organizations (see, for example, Govindarajan & Gupta, 1985; Merchant, 1985; Bromwich, 1990; Perera et al, 1997; Chenhall & Langfield-Smith, 1998; Moores & Yuen, 2001; Baines & Langfield-Smith, 2003; Skaerbaek & Tryggestad, 2010). As a result, we have come to accept, amongst other things, that a range of accounting practices generating both financial (Merchant, 1985; Moores and Yuen, 2001; Lillis, 2002) and non-financial (Davila, 2000; Baines and Langfield-Smith, 2003) measures of performance have an instrumental role to play in supporting strategy formulation and implementation. This research has tended to link the forms of calculability studied to particular environmental conditions, strategic archetypes, organizational characteristics, and/or styles of information use (see, for example, Simons, 1990; Abernethy and Lillis, 1995, 2001; Davila, 2000; Moores and Yuen, 2001). Possible tensions in practice have had little opportunity to percolate to the surface, with these being contained by predominantly contingent forms of theorization and reconciliation (see Dent, 1990). Readers of this literature are presented with relatively parsimonious sets of expectations to order our understandings of how accounting figures in organizational strategy-making (Dent, 1990; Langfield-Smith, 1997; Chenhall, 2003). Basically, the overriding narrative which this literature has aimed to sustain and will be discussed at greater length in a following section, tends towards a kind of neatness questioned by Law.

Whilst it is recognized that many researchers find a dual sense of purpose and satisfaction in developing and refining patterned forms of understandings outlining the relationship between various aspects of strategizing and accounting, such a convergent approach to the characterization of practice is not realistic from Law’s perspective. It’s too neat and tidy. But why is this so? Maybe our training as researchers and a desire to excel in the domain of peer reviewed publications has resulted in an unnecessary demarcation between what and how we know in our professional lives and what and how we know in other arenas of our lives. This partitioning of our ways of knowing

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has blunted and dulled our capacities to learn from our many everyday experiences and their abutting perceptions, sensations, emotions and physical imprints. When viewed from the totality of our lived experiences, Law’s thesis about messiness is neither out of place nor surprising. Our lives are invariably messy. Life, as it is unfolds, whether it is located in the boardroom, the accounting and finance function or in the muddle of work and personal responsibilities, is rarely straightforward, clean-cut, and clinical. Rather day to day life is complex and manifold. And such messiness is constitutive of all forms of practices – be they, in this case, the practices of a small group of Japanese managers attempting to re-craft their organization’s strategy or the practices of an even smaller group of Australian and Japanese management accounting field researchers attempting to research these practices.

So what then is messiness? To Law, messiness may be described as “[s]lippery, indistinct, elusive, complex, diffuse, messy, textured, vague, unspecific, confused, disordered, emotional, painful, pleasurable, hopeful, horrific, lost, redeemed, visionary, angelic, demonic, mundane, intuitive, sliding and unpredictable” (2004, p.6). Rather than adopting forms of language that invoke a world of orderliness imbued with a quality of “out-thereness” (Law, 2004, p.31), with this, in turn, being capable of apprehension via an array of increasingly refined and sophisticated nomothetic research methods, Law points to things that are much murkier and more sensual in their origins and effects. In comparison to the world that is presumed to inhabit our research methodology texts, Law’s messy world, the world in which everyday experiences are lived, is indefinite, multiple and overlapping in its constitution. Nonetheless, Law is at pains to point out that whilst our world is messy – it is not fragmented and anarchic. Messy worlds are “partially co-ordinated” (2004, pp.61-62), loosely bridging and maintaining multiple realities without collapsing and re-ordering them into hegemonic singularities. From the point of view of our research study, strategizing functions as a form of coordinating mechanism, which both fosters and loosely couples multiple constitutions of an organization’s trajectory from its past(s) into its future(s). Strategizing facilitates the emergence and subsistence of distributed worlds that enable variegated local accomplishments to coexist in the name of the seeming singularity of organizational growth and profitability objectives. These overlapping practices of strategizing are most aptly described by Bob Scapens, after reflecting on a lifetime’s engagement with management accounting, as a type of “mish-mash” (2006, p.10; Scapens and Roberts, 1993).

Characterizing the “mish-mash” of strategizing is at the heart of this paper. We aim to convey this through the lens of actor-network theory (Latour, 1987, 2005), a non-positivist methodology which is used to make sense of an increasing range of ‘messy’ organizational and social phenomena (Moll, 2002; Law & Singleton, 2005). Closer to home, actor-network theory has been employed by a number of researchers within our discipline (see, for example, Briers and Chua, 2001; Robson, 1992; Miller and O’Leary, 2007). Having said this, whilst the use of actor-network theory is no longer an uncommon methodological choice to be made by accounting researchers, it is still little used in that segment of the research literature which is concerned with – as are we – the connections between accounting and strategy-making (cf. Skaerbaek & Tryggestad, 2010).

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Actor network theory assembles the relations between heterogeneous actors and objects that are connected by ties of varying degrees of intensity, proximity and alignment. When compared to the literature in this field, actor-network theory allows us to examine possible and shifting associations between strategy-making and calculation in a symmetrical fashion (Latour, 2005; Law, 2004). That is, actor-network theory focuses our attention on the emergent relations between a range of different accounting and strategic objects (such as the planning documents and aspirational targets established in the focal organization), as well as a number of inter-connected human actors (in this case being the founding Chairman of the organization and a group of subordinate managers who were attempting to become more involved in strategizing). This approach is in marked contrast to many extant studies that have configured the relationships between accounting and strategizing in an asymmetrical fashion, choosing to concentrate mainly on the attributes of (sometimes inter-connected) objects, such as control systems and strategic plans (Perera et al, 1997; Chenhall & Langfield-Smith, 1998). In comparison, it is the intention of our study to couple the agency of organizational participants to the effects and affects of those objects and calculations that are implicated in the constitution of strategizing. This aim is somewhat ironic as it inverts the prevailing emphasis of many advocates of actor-network theory in other disciplines who cajole their fellow researchers to take seriously a study of the mediating capabilities of various documents and devices, in addition to an investigation of the agency of humans in the constitution of everyday life (Latour, 1987). As such, we would argue that actor-network theory is a methodological choice that enables a distinctive framing of strategizing and calculability within the accounting research literature, conjoining the agency of multiple actors with that of the various and many strategic artifacts and accounting numbers that inform strategy-making.

Actor-network theory is also a methodological choice pointing to the inherent messiness of strategizing in practice. Strategizing is invariably messy because it is a manifold practice comprised by a constellation of actors and objects that differentially engage with the meta-puzzle of how to craft an organization’s competitiveness. In the particular field study that we undertook in a Japanese listed company that is competing in the electronics industry, this multiplicity was apparent in the emergence of various local plans to achieve the Chairman’s pronouncements regarding the need to achieve a significant growth in sales and profitability by a specified time in the future. These Japanese managers struggled with the process of developing ideas and practices that made sense locally in the context of their specific milieu, whilst at the same time contributing to some semblance of organizational coherence. The problem which confronted these managers – and which arguably confronts managers in all organizations that have grown to the point where the formulation and/or implementation of strategy is necessarily constituted by a number of distributed practices – is the matter of their ‘partial co-ordination’ (Law, 2004). In the organization studied, the loose coupling of this messiness associated with strategy-making was accomplished by the development of a strategic artifact, in this case referred to as the “winning triangle”, which acted as a form of symbolic token (Giddens, 1992; Gaskell & Hepburn, 1998; Jones & Dugdale, 2002; Jeacle & Carter, 2011). As a symbolic token, the winning triangle has a capacity to be translated within the field organization’s strategy-making network as it is situated and re-situated during the process of its circulation between managers, departments and documents. The stable and durable architecture of this strategic artifact

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enabled the partial co-ordination of strategy-making in the field, allowing local constructions of it to emerge and co-exist in different organizational locales. Further, this strategic artifact was significant for other reasons too. The token provided a frame that helped organizational participants to attach both meaning and affect to accounting numbers that had been routinely calculated and reported within the organization. The past was rendered sensible and successful and, in so doing, possible futures for the organization were discovered also. We conclude that the circulation and translation of the “winning triangle” was mediated by its physical embodiment in organizational participants, leading us to develop the notion of ‘embodied strategy’.

In the remainder of this paper we will both develop the above argument and illustrate it in the context of the field work undertaken. Section two will elaborate how the accounting literature has informed our understandings of strategizing and its relationship to accounting practices. This review of the literature is distinctive and mobilisizes the idea of messiness, as proposed by Law (2004), to frame our reading of previous research. We characterize the various ways in which a prevailing desire for singularity and neatness in the extant research has never been fully realized – with the complexities, tensions and entanglement of practices emanating from the messiness embedded in accountings relations with strategizing refusing to be contained by the language, methods and narratives of singular constructions of practice. Section three situates our research and explains our choice to undertake field research with respect to this area in a Japanese manufacturing organization. The types of inscriptions of the field that have informed our research are also described in section three, in addition to the ways in which Japanese-English translations were undertaken and relied upon. Section four outlines our account of strategizing in the field organization. The dominant role of the firm’s founder in strategizing is outlined initially, with this being followed by an account of how a group of middle managers sought to participate in the process of strategy-making by formulating a comprehensive strategic plan encompassing conventional analytical and calculative technologies for apprehending the future. These efforts were to be rejected and replaced instead by a simple strategic artifact called the “winning triangle”. The materialization and circulation of the winning triangle was both effective and affective in corralling relations between a range of strategy-makers, accounting calculations, celebrations of the organization’s past successes, and desires for future growth. Section five characterizes the field work in terms of a network of practices referred to, in this case, as embodied strategizing. We contend that strategizing is constructed by a web of relations instantiated in, and mediated by, the corporeality of its exponents. Strategy-making is portrayed as a hybrid accomplishment of the entanglement of human actors, documents and artifacts. In saying this, however, we do more than rehash and resituate now familiar arguments that practices are accomplished by, and to be understood in terms of, sets of relations that fabricate and are fabricated by socio-material ‘monsters and machines’ (Law, 1991). We aim, in our small way, to augment actor-network theory and the theorization of agency that underpins our understandings of the functioning of networks. To this end, we introduce the notion of embodied agency. Embodied agency is both calculative and emotive. Objects such as strategy are incapable of working in a particular context unless they mobilize both the sensual and the sensible – that is, set of relations embodying affect as well as the calculative effect of interests. Section six concludes the paper and, in so doing, we articulate the assemblage of manifold strategies that co-

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exist and help us to make sense of strategy-making and its consequences in practice: tidy, shifting, hierarchical, democratic, tight, loose, emergent, emotional, embodied, disembodied, corporeal, virtual, lived, located, messy and multiple.

2. Understanding strategizing

Our investigation takes us into the realm of so-called “strategizing” (Whittington et al, 2003), the practices involved in strategy-making or the fabrication of strategy-in-action. This is an area of research that has been lauded during the past decade for the possibilities that it offers for renewed and different ways of learning about practices, particularly in relation to how organizations constitute their capabilities and competitiveness in terms of relatively mundane and everyday activities (Whittington et al, 2006). This strategizing project has enrolled persuasive and prolific advocates (Jarzabkowski, 2003; Johnson et al, 2003), with this enthusiasm being mirrored by similar forms of interest from within the accounting discipline (Chua, 2007). Our paper is likewise motivated by this base literature, as well as the trickle of extant empirical accounting research with similar origins and intentions (Skaerbaek & Tryggestad, 2010; Messner & Jorgenson, 2010). Correspondingly, in this section we will reflect on the notion of strategizing and its implications for how and what we know about accounting in organizations.

Arguably, Chua’s (2007) paper represents a turning point in relation to this in the accounting literature. In her paper, she urges fellow researchers to shift their attention to the practice of strategizing and its connections to accounting work. One aspect of Chua’s argument which has gained prominence – in no small part because of the title of her paper promoting the use of verbs in narrations of practices (see also Weick, 1979) – is the importance of focusing on the emergent aspects of strategy-making in particular sites. However, we contend that taking strategizing seriously requires more than a proclivity for verbs, as an undue emphasis on this aspect of Chua’s (2007) paper may have the potential to reduce research on strategizing to a grammatical form of accomplishment. Standing behind this patently obvious aspect of Chua’s (2007) argument, sits a particular way of knowing that entertains the type of messy ontology we seek to introduce into this segment of the accounting research literature. More generally, it is an argument for a shift towards a post-modernist form of enquiry about strategy-making, which is in line with changing orientations expressed within the broader organizational and strategic management literatures (see Volderba, 2004; Starkey & Tempest, 2004; Chia, 2004).

By implication, it may be argued that much of the disciplinary research to date, dealing with the important issue of strategy and its relationship to accounting, has been framed by an approach conveying the type of naturalized singularity questioned by Law (2004). At a fundamental level, this is evidenced by an unproblematic mobilization of the functionalist distinction between an organization and its environment (Knights and Mueller, 2004). This distinction has contributed to the acceptance of an externalized view of strategy in which it operates as “perhaps the pre-eminent source of contingencies for the design of organizations” (Govindarajan and Gupta, 1985, p.51),

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mediating the desired relationship between an organization and its environment. The associated logic of fit or congruence has found expression in the recurrently cited work of Simons (1990), for instance, who argues explicitly that there is a link between the nature of accounting control systems, the ways in which they are used, and the ensuing competitive advantage of organizations. Correspondingly, considerable effort has been expended by researchers to understand how accounting may be functionally aligned with various strategic archetypes, such as those proposed by Porter (1985) or Miles & Snow (1978), to promote effective and efficient organizational operations in different environmental conditions (see Davila, 2000). The legacy of such research has been distilled into a number of converging expectations about how accounting informs competitive organizational strategies. Our knowledge about accounting and strategy in this modernist paradigm has been amply and capably summarized by Chenhall (2003) who basically reiterates that: first, formal control systems are more congruent with organizations following defender or cost leadership strategies; second, more competitor-focused and integrated forms of control systems are a better fit in organizations pursuing a differentiation strategy; and, third, organizations adopting a prospector strategy require control systems that have a longer term orientation, a greater reliance on subjective assessments and an interactive style of management use of those controls (Simons, 1995). Despite the naturalization of this conventionally accepted wisdom about accounting and its connections to organizational strategy, there has been an undercurrent of occasional criticism directed at it. Otley (1999), for example, who is a leading figure in this vein of management control systems research, argued that there are no “firm conclusions” (p.367) enabling us to confidently predict that the type of congruence outlined by Chenhall (2003) will prevail in competitive organizations or induce competitiveness in situations demonstrating these forms of fit. Arguing from a contrary and non-functionalist perspective, Ahrens & Chapman (2004) maintain that these naturalized expectations hinder the pursuit of a research agenda which explores the variegation of situated practices, thereby limiting the development of more nuanced understandings of the particular ways in which accounting control systems are used in different local contexts. In short, we agree with the critical comments of both Otley (1999) and Ahrens & Chapman (2004). Stemming from this, we argue that the desire to articulate and objectify tidy sets of relationships between strategy and accounting, whilst useful for giving shape to the overall contours of this field, obscures the range and fluidity of practices constituting strategy-making in practice.

As such, the counterpoint to this dominant literary frame is to admit messiness into our understandings of accounting’s roles in strategizing. Whilst this may seem to demand a radical departure from how we have come to think about this facet of practice, it is contended that the seeds of more diffuse and textured characterizations of strategizing have been resident within this research literature for some time, providing a platform to enable more messy readings of extant research. Indications of this messiness are to be found within the very bedrock of the literature. A number of studies have quite happily proceeded to objectify and measure various attributes of organizations, their environments, strategies and management control systems (Gerdin, 2005; Naranjo-Gil & Hartmann, 2006), despite the ‘fact’ that concepts central to this endeavour remain unclear and open to a range of interpretations. Strategy is one such slippery concept. Dent’s (1990) essay reflecting on some of the puzzling results that have arisen in relation to the varying patterns of

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cost control exhibited within organizations conforming to different strategic archetypes, remarked on the “ambiguous” foundations of such research:

“Strategy” is an elusive concept. The term is employed in a variety of disciplinary literatures. ... But the term remains ambiguous. The literature abounds with definitions ranging from the general to the specific (Dent, 1990, p.4).

After more than a decade of intervening research and debate, Llewellyn and Tappin (2003) were left to draw conclusions of a similar nature, concluding that strategy remains a “contested concept” (p.978), with meanings that shift from one school of thought or author to another. And little has changed with respect to this as we write today. However, strategizing is more than a word game. The important point that Llewellyn and Tappin also make is that strategy is constituted by sets of practices that “transmute” or are differentially translated from one setting to another, becoming a manifold accomplishment “wherever it takes root and whatever its setting” (2003, p.979; emphasis added). Indeed, Whittington et al argue (by way of referencing Czarniawska & Sevon, 1996) that this messiness and local variation is a necessary aspect of corporate strategy, stating that: “Strategic discourse needs active translation and interpretation for effectiveness in particular contexts” (2003, p.399, emphasis added).

These manifold practices are amply reflected in the research literature examining what is claimed to be the increasingly important connections between accounting and strategy (see Bromwich, 1990; Roberts, 1990). This could not be more apparent than in the multiplicity of accounting measures that have been instituted within and across organizations in an attempt to capture and convey information that may be of use to managers and other decision makers concerned with guiding an organization through its competitive environment. Lillis’ (2002) qualitative research is illustrative of this. In an examination of 36 profit centers in manufacturing firms she noted, based on her interviews, that “all of the firms in this sample translate profit centre strategy into multiple measure of manufacturing performance” (Lillis, 2002, p.507). Readers of Lillis’ paper are confronted with a wide array of the actual measures used to translate manufacturing strategy into the day to day activities of these sample firms. Accounting devices used include measures of material usage, downtime, returns, safety, delivery performance, equipment utilization, rework, and variances according to budget, to name only a few (Lillis, 2002, pp.516-7). Lillis’ analysis indicated that these multiple measures introduced a number of different perspectives and emphases into the strategizing process. Managers were required to allocate attention to strategic priorities embedded in cost-efficiency-productivity measures, as well as measures emphasizing quality and customer service. However, rather than naively narrating how accounting helped to facilitate the implementation of strategy and an alignment of behaviors with desired strategic priorities, Lillis paints a picture that is more consistent with the type of world outlined by Law (2004). She describes many of these strategy implementations as being “problematic” (p.505). The managers of the manufacturing cost centres did not find it easy to implement the varied strategic priorities and performance measures. The different priorities embedded in the multiple measures were construed as being at odds with each other. The managers responded by doing the best that they could – sometimes trading-off measures, sometimes resisting measures. Their experience of strategy-in-action was a messy and

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uncomfortable one. And this experience is not unique. The manifold nature of performance measurement in strategizing has been documented in a range of papers (Perera et al, 1997; Davila, 2000; Ittner et al, 2003), with Moores and Yuen (2001) tabulating the diverse range of management accounting control practices implicated in strategizing over an organization’s lifecycle from birth to decline.

Further to this, in one of the oft-cited and seminal empirical studies in this field, Merchant (1985) recognized at the outset of his paper that manifold accounting measures are only a small part of the overall network of accounting and “other devices” implicated in strategizing. Merchant stated, “there are many other devices other than AIS [Accounting Information Systems] that can be used in certain situations to accomplish good control” (1985, p.67). The point that Merchant makes, although not necessarily expressed in these terms, is that accounting needs to be relationally connected to a “stream” of other devices to facilitate the realization of its intended strategic effects (Skaerbaek & Tryggestad, 2010). Merchant goes on to depict the network of devices that may assist in accomplishing an organization’s control strategy. He writes:

“Among the many control devices mentioned in these works, in addition to the provision of rewards for performance, are direct supervision, enforcement of standardized policies and procedures, reviews and approvals of plans, and the building of a strong organizational culture with shared norms” (Merchant, 1985, p.67).

As such, Merchant recognizes that neither accounting nor strategizing is capable of operating in isolation. Accounting and strategizing are comprised of sets of practices that are necessarily and relationally linked to, and influenced by, a range of other devices or actors, such as the organizational routines embedded in organizational policies and procedures and the values and norms constituting culture. Each device requires the other to function and to have effects in its local context. However, it is the particular “morphology” (see Andon, Baxter and Chua, 2007) of this network of devices, which informs their unique translations in particular situations. And the interdependencies shaping the workings of various accounting devices, as well as the interpenetration of these with their ‘environment’, are a long-standing feature of the management accounting literature (see Otley, 1980).

Nonetheless, those who have chosen to recognize and explore the complexities of an intermingling of practices – generally typified in terms of an organization’s control “mix” (Abernethy and Chua, 1996) or “package” (Malmi and Brown, 2008) – have found the results of this less trodden research path difficult to explain in terms of the prevailing singularity posited by contingency forms of reasoning. Merchant, for example, states in the discussion section of his paper that the “effect of the controls did not vary as expected” (1985, p.81). Reflecting more generally, Malmi and Brown also note “a number of problems” in relation to the interpretation of the results of such research (2008, p.289). Basically, when confronted with a range of inter-connected and sometimes aligned, but at other times abutting practices, the neatly articulated directional expectations embedded in positivist control systems research are difficult to decipher in the workings of locally situated networks of devices. Merchant (1985), for instance, has no option other than to focus on the limitations of his research instrument (see p.81), which he characterized as being ill-equipped to

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characterize the messiness implied by the entanglement of controls highlighted in the qualitative interviews used to generate his hypotheses. Malmi and Brown take a slightly different tack in attempting to make sense of the “variation and inconsistencies” (p.289) embedded in such results. Malmi and Brown (2008), as have a number of researchers before them (see, for example, Dent, 1990; Simons, 1995; Abernethy and Lillis, 1995; Perera et al, 1997; Chenhall, 2003; Ahrens and Chapman, 2004; Henri, 2005; Toumela, 2005; Kober et al, 2007), attribute these diverse and potentially conflicting practices to the different uses of management accounting controls in the pursuit of organizational objectives and plans.

The multiplicity of uses of management accounting controls in various organizational contexts has been characterized in a number of ways over the years in the accounting literature. Hopwood (1974), for example, outlined a range of ways in which accounting inscriptions may be mobilized in performance evaluation and control activities, basically concerned with the implementation of strategy. He discerned three distinct patterns in relation to this, based on his own first-hand field experiences of a manufacturing operation and his analysis of previous research. He referred to these different uses of accounting controls as a “budget constrained style of evaluation”, a “profit conscious style of evaluation” and a “nonaccounting style of evaluation” (1974, p.110). The budget constrained style refers to ways in which accounting calculations are used to emphasize short-term achievement of financial targets. More holistic, longer-term and flexible uses of accounting targets and results are encapsulated in the profit conscious approach identified by Hopwood. A less prominent positioning of accounting devices in relation to the network of other devices that organizational participants may draw upon in steering organizations towards the fulfillment of their goals is characterized by Hopwood’s nonaccounting style of use. Whilst Hopwood’s research is suggestive of the possibility of a diversity of uses of accounting controls in day-to-day strategizing, his findings have primarily been interpreted in terms of the modernist logic that dominates accounting research. Hopwood partly contributed to this, invoking the notion of a “contagion effect” to imbue a more singular explanation of the use of these styles in particular organizations, whilst other researchers have subsequently proposed more elaborate explanations of various uses of accounting inscriptions that are associated with levels of environmental and task uncertainty (Hirst, 1983; Brownell, 1983; Dent, 1990; Abernethy and Lillis, 1995).

Subsequent to this, Simons’ work on the so-called ‘levers of controls’ (Simons, 1995) has created the prospect of a debate that admits the multiple uses of accounting inscriptions within as well as across different organizational contexts. Simons characterizes the uses of controls, including accounting inscriptions, as being potentially both “diagnostic” and “interactive”. A diagnostic use of controls concentrates behaviors on the pursuit of outcomes, and, ultimately, the incremental realization of intended strategic plans (Kober et al, 2007) as a result of the regular tracking and review of actual results against periodic performance targets. The purpose of diagnostic uses of controls is to highlight variances, particularly unfavorable ones, which may require remediation and management intervention. But as Simons points out, controls may be used interactively as well. The diagnostic process of ensuring that an organization is ‘on track’ can also be used in select instances, particularly those connected to “strategic uncertainties”, to initiate debate to learn more about how strategy is to

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be conceptualized and translated locally. This process of interactive dialogue increases the engagement that a range of organizational actors, especially top managers, may have with particular facets of strategizing (see Simons, 1987, 1995). As such, Simons’ research is significant because, first, he alludes to the multiple of uses of accounting calculations and, second, he highlights explicitly the multiple and shifting connections that are formed (and reformed) between accounting devices and various human agents as debate unfolds around the meaning and effects of particular accounting controls. And whilst Simons’ research emphasizes top managers’ entanglement in the process of interactive control in a manner that is consistent with traditional top-down approaches to strategy formulation and implementation (Volderba, 2004), it is acknowledged that an understanding of strategizing also requires research which focuses on the roles of organizational participants who may not necessarily occupy top management positions (see Chua, 2007; Jarzabkowski, 2003; Johnson et al, 2003, Skaerbaek & Tryggestad, 2010). Having said this, like Simons, we too will be concerned with the relational and local connections between managers and devices designed to communicate and control strategizing. However, it is our intention to distinctively theorize and develop these interactive relations in terms of a view of strategy that necessarily involves an element of corporeality, which is rarely acknowledged (Burgi & Ross, 2003). This embodied dimension of practice is, likewise, little recognized in the accounting literature (cf Baxter and Chua, 2003, 2008).

Clearly, our view on strategy and its relationship to accounting represents a departure from much of the extant research. How we view this aspect of practice is perhaps most closely affiliated with the recent studies undertaken by Skaerbaek & Tryggestad (2010) and Jorgenson & Messner (2010); two papers mobilizing a strategizing perspective. Skaerbaek & Tryggestad conducted a field study in a Danish ferry company that was facing a grim future because of the construction of a bridge (and the planned further construction of another bridge) that enabled the choice of travel by either car or rail on a route that was serviced previously by ferry only. The managers of the ferry company framed the bridge as an externalized threat that limited their strategic options to either a no-growth scenario that would most likely result in future liquidation or, at best, an opportunity to create an independent company that would use its share capital and profits to pursue development options, such as the opening of new routes and the purchase of more modern vessels. The constellation of accounting calculations, consultants and analytical strategic tools which led to these conclusions was, however, unsettled by a rival experiment conducted by the mariners whose jobs were under threat. These “accountants in the wild” (Skaerbaek & Tryggestad, 2010, p.118) made opposing calculations demonstrating the infeasibility of any prospective development strategy due to the material underestimation of anticipated retirement and retrenchment costs. These calculations had the power to convince others, such as the external auditors. The mariners, in conjunction with scientists, also engaged in laboratory simulations of the proposed bridge design, which demonstrated the likelihood of a collision with a ferry. The bridge was reconstituted as a matter of concern (Latour, 1987, 2005). The bridge and the associated financial and scientific calculations emanating from this periphery became actors with effects capable of destabilizing the centre’s legitimate accounting calculations and the strategies supported by these figures, thereby demonstrating the capacity of financial (and other) calculations to shape corporate strategy. Indeed, Skaerbaek &

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Tryggestad’s paper demonstrates how calculative devices and inscriptions are integrally related to the accomplishment of corporate strategy.

Jorgenson and Messner’s (2010) paper, likewise, outlines the importance of connections between accounting and strategy but, by way of contrast, narrates a case in which accounting calculations have a more tempered role to play in the process of day to day strategizing that was related to the development of modularized analytical equipment for use in the agricultural, chemical, food and pharmaceutical industries. Whilst product developers were repeatedly making design decisions impacting on the profitability of both particular products and families of technologies, accounting’s role was focused on the use of high level key performance indicators (such as contribution and payback) which acted as a screening and accountability mechanism at key “evaluation gates” or milestones in the life of a research and development project. Even then, it was acknowledged that accounting was but one of a number of considerations which informed strategizing and, unlike the case presented by Skaerbaek & Tryggestad, there was little overt conflict between the different interests which may ally themselves with alternative ways of framing strategizing. Considered jointly, these studies of strategizing emphasize that the over-arching connection between strategy and accounting is accomplished in many different and highly situated ways.

Correspondingly, our appreciation of strategizing is intrinsically linked to the site of such practices (Jarzabkowski, 2003; Baxter & Chua, 2009). One of the aims of scholars interested in practice-based approaches to research, such as the strategy-in-action or strategizing approach, is to ‘seek out the details of functioning systems’ of practices operating in particular local contexts (Ahrens & Chapman, 2007, p.3). There is a desire to understand “how work is “made to work”” (Orlikowski & Scott, 2007, p.466). This is driven by attempts to avoid populating the literature with “average” and “general” constructions of practice (see Kaplan, 1986; Ahrens & Chapman, 2007), instead concentrating on how accounting and strategizing are constituted in terms of specific and variable local activities. As such, practice theorists, both more generally and in the context of the strategizing literature, acknowledge that practices are highly situated and difficult to disentangle from their local context or site (see also Hopwood, 1983). Whilst the framing of such sites has been characterized in terms of a number of possibilities for their differentiation (with Schatzki (2000b), for example, characterizing variations between sites in terms of their temporal, spatial, teleological and performative elements), the basic message remains the same: the realization of practices, be they specific accounting calculations or distinct aspects of a strategic plan, is coupled inherently to the local context and set of relations in which they occur (Schatzki, 2000c; Law, 2004). The notion of a “site ontology” (Schatzki, 2000a, 2000b, 2000c) displaces ‘abstract structures’ (see Giddens, 1984), which have inhabited the literature to date, with networks of highly situated and entangled heterogeneous actors and objects instead. And it is from these local sites that messy practices are borne. Strategizing and accounting practices are messy because they are accomplished differently. They are accomplished differently because of the unique sets of relations which characterize a site (Law & Singleton, 2005).

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In the following sections, we commence the process of situating are own research in relation to strategizing and accounting.

3. Situating our research

This research was based a field study of a Japanese manufacturing organization, which operates in the electronics industry. A conscious decision was made to locate the research in a Japanese context. Part of this choice was guided by our inherent interest in, and personal desire to, appreciate business practices in Japan. A broader professional motivation for situating this project in Japan may be traced back to both the strategic management and accounting literatures. Taking the case of the strategic management literature first, it is generally acknowledged that the ways in which we have come to understand strategy-making have been underscored by research based mainly on a limited range of British and North American organizations (Wilson and Jarzabkowski, 2004), with the consequent ‘cultural’ biases entailed by this particular framing of strategizing (Bhimani, 1999; Harrison & McKinnon, 1999; cf. Baskerville, 2003, 2005). Accordingly, leading figures in the strategy literature have concluded that we know very little about how strategy and its constitutive practices differ internationally (Whittington et al, 2003; Anderson, 2004). We would further add that our lack of knowledge is quite acute when consideration is given to the very significant centers of economic activity, such as those located in Japan, that function beyond an Ango-Saxon world. Following on from this, it is argued that studying what constitutes strategizing to Japanese managers may also provide an appropriate antidote to the sentiments that have lingered since the leading Western strategist, Professor Michael Porter from the Harvard Business School, proclaimed that Japanese firms do not have a strategy and “will have to learn strategy” (2008, p.42) – or at least strategy that conforms to the “positioning school” of strategy (Mintzberg et al, 1998) in which Porter’s work on industry structure, generic strategies and the firm value chain assumes a place of central importance (see Porter, 1980, 1985, 2008). As such, our research is one small contribution towards configuring the multiplicity of practices that co-exist on a global scale to constitute the label that we have come to know as ‘strategy’.

When considered also from the perspective of so-called ‘top tier’ English language accounting journals, an interest in business practices in Japan, whilst not comprising a major research thrust, is not entirely isolated. It would be fair to state that management accounting researchers have taken a spasmodic interest in undertaking research that is situated in a Japanese context (see, for example, Chow et al, 1991; Cooper, 1996). In part, this research is motivated by a prevailing belief that ‘national culture’ makes a difference to how management accounting is performed locally. This has been highlighted by the recognition of national culture in mainstream forms of accounting research as an important contingent variable affecting the design and operation of particular management accounting control systems (Chenhall, 2003). Thus, part of the interest in conducting research in Japan is spurred by the search for some point of ‘distinction’ (Bourdieu, 1977), particularly given the extent to which Japanese manufacturing was viewed as offering capabilities to reinvigorate the

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competitiveness of Western industry, as well as management accounting (Johnson and Kaplan, 1987; Dent, 1996). Correspondingly, research into the nature of management accounting in Japan claims to highlight important differences with respect to the relative emphasis placed on group-work and harmony (Birnberg & Snodgrass, 1988; Chow et al, 1991), the alignment of accounting with quality and top-down strategies (Cooper, 1996; Daniel & Reitsperger, 1991; Ittner & Larcker, 1997), and the importance of cost management and business planning (Daniel & Reitsperger, 1991, Dent, 1996; Cooper, 1996; Wickramasinghe et al, 2004), for instance. Nevertheless, there is still much to be learned about the nature of actual practices in Japanese firms, in part because we know relatively little about the nature of accounting per se in the context in which it operates (Hopwood, 1983) and because, as Ittner & Larcker (1997) have noted, there are many presumptions and much anecdotal evidence surrounding the nature of what goes on in Japanese firms, with the connection between accounting and strategizing being no exception.

Accordingly, our research aims to engage with practices inside a Japanese firm, being undertaken as a form of field research (Baxter & Chua, 1998; Ahrens & Dent, 1998; Ahrens & Chapman, 2006; Yin, 2003). We configure these practices in terms of qualitative data that were collected by interviewing managers and studying relevant documents.3

3 The interviewees were all managers involved in the strategizing process. The study may be characterized as having a managerialist bias as a result; however, we would argue that it is important to understand the powerful role that managers play in strategizing (see Chapman, 2005; Baxter & Chua, 2006).

Fifteen interviews were conducted, with five interviews involving more than one manager. Those interviewed for this study were drawn from the senior and middle management ranks, as these managers were directly involved in the focal strategizing exercise considered in this research. The interviews were conducted in the Tokyo, Nagoya and Dutch offices of the field site. The interviews ranged from 24 minutes to 220 minutes in duration, with a total of 27 hours and 35 minutes of audio-taped interviews being generated by the research. All the interviews were conducted in Japanese, with the exception of one interview that was conducted in English with a manager who had had extensive expatriate work experience in the USA. The two Japanese researchers were present at, and conducted all of the interviews. The two Australian researchers were present for five interviews, including the one interview that was conducted in English. When the Australian researchers were present, the senior Japanese researcher summarized key aspects of the interviewees’ responses as they were being given so that the foreign researchers had a sense of the answers being provided to particular questions. The digital audiotapes were then sent to a specialist firm in New Zealand that provides marketing and language services for organizations wishing to undertake business in Japan. Each audio tape was first transcribed into Japanese by Japanese native speakers. A bi-lingual team would then provide an English adaptation of the Japanese transcript. The English adaptations, on which this research is based, excluded small talk and included what were considered to be the best English equivalent of Japanese terminology

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for which there is no direct translation. The English adaptations were then reviewed by the Director of this New Zealand-based service provider. He was a bi-lingual English native speaker with extensive business experience in Japan. His role was to ensure the quality and accuracy of the interview material that forms the basis of this project. A summary of the interview data is provided in Appendix A. The interviews were open coded using NVivo 9. In relation to the documentary data mobilized in this research, we use both publicly available information (such as financial statements, press releases and product information) and proprietary data made available to us. Considerable contextual information was provided by the two Japanese researchers who are also conducting other research studies in this organization, providing them with sustained opportunities to observe a range of organizational functioning.

The research was conducted in Electronico Corporation4

4 Electronico is a pseudonym.

, a group of companies with their headquarters in Nagoya, Japan. Electronico was established in 1975 to manufacture and sell audio equipment, but from July 1981 moved into the market for computer peripherals. With a dominant position in the Japanese domestic market, Electronico is looking to expand and strengthen its overseas sales in North America, Europe and China, as well as entering the growing Central and South American markets. The group now employs over 800 employees. Electronico has been very successful over the years. However, the group had occasion to reconsider its strategy, with the importance of this being highlighted by declining financial performance at the time of the GFC or “Lehman shock” (as it was referred to within the case site). We engaged with a small group of managers who were concerned with rethinking Electronico’s strategy at this time.

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4. jo-ha-kyu: Strategizing in five acts

Conceiving of strategy dramaturgically is not without precedent. Orlikowski and Scott (2010), for example, emphasize the ‘performative’ aspects of strategizing in which ‘strategy’ is argued to be enacted by an assemblage of various actors, both human and artifactual. The various actors and events characterizing the accomplishment of strategizing at this key juncture in Electronico’s history are conveyed in a narrative conforming to the traditional “jo-ha-kyu” structure of Japanese Noh drama. The first act, “jo”, slowly introduces the plot. The following three acts or “ha” continue the flow of events, narrating the obligatory ‘battle’ in the second act, the tragedy of routine strategy-making in the third, and the discovery of meaning through strategizing in the fourth. “Kyu”, the fifth act, aims to bring the performance to a quick conclusion, with strategy-making emerging as a way of constituting both the past and future(s) of Electronico.

jo: Enter Electronico

Electronico has emerged as a strong competitor in both Japanese and international markets with an “unquenchable determination to achieve growth” (Electronico, 2012, p.1). Over the years, Electronico’s product range has grown substantially and now incorporates: memory modules for PCs and flash memory products; a range of storage products employing external hard disk drives and network attached storage (NAS); network and broadband products (such as wireless LAN routers, hubs and adaptors); digital home products (including TV recorders and portable TV tuners for i-phones); supplies and accessories, such as mouses, keyboards, web cameras and USB cables; DOS/V parts for expert computer users; and a variety of services including maintenance, corporate support and in-home installation. Electronico has also grown geographically, both domestically and internationally, opening offices in Tokyo, Osaka, Nagoya, Fukouka, Sendai, Sapporo, Hiroshima and, more recently, via offices in Taiwan, Ireland, Britain, USA, Netherlands, Beijing and Brazil. Electronico has been amply rewarded by its growth strategy. In the run-up to the “Lehman shock”, the group recorded six consecutive years of revenue growth and near record profits. In the financial year ending March 20085

“Exactly 20 years ago Electronico Group’s sales were 2 billion yen, and this has grown to 140 billion yen in 20 years. The history started with printer adapters, followed by memory modules, and

, for example, Electronico recorded consolidated annual sales of ¥139,571 M, consolidated net income of ¥3.615 M, and a return on equity of 12.9% (Electronico, 2008). The extent of Electronico’s growth is exemplified by the change in these financial results over the past twenty years:

5 The financial and planning years run from April to March.

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after that we rapidly expanded our product categories. Hard discs, networks, and NAS called TeraStation—the company has developed as we have made more product categories”. (Interview 1)

Central to the success of this growth strategy has been the oversight and drive of the founder/Chairman, who has orchestrated the basic strategic direction of Electronico since its inception. A Director of Electronico stated: “The Corporate Strategy Office is equal to [the Chairman]. He has been making strategy decisions by himself for a long time.” Correspondingly, the Chairman is regarded as a strategic “genius” because of his proven ability to steadily steer the group and reinvent its product strategy. As the founder and “brains” of the group, he has presided over the crafting of three major corporate statements. These statements communicate the emergent and shifting direction of Electronico’s strategy to employees and stakeholders. Common to all three corporate statements is the Chairman’s belief in the centrality of the customer experience to the group’s growth. The first corporate statement involved “making the personal computer easier to use”. The printer buffer was the foundational product stemming from the first corporate statement, with the development of memory and storage products spurring this stage of the group’s growth in terms of both market share and financial returns:

“The first statement to make PCs more user-friendly came from the experience of users. It was slow and often applications got stuck. The solution we provided was to increase the memory capacity to improve the speed. Lotus123 was in use at that time, before Windows, and you had to wait until the PC finishes the printing process. That is how the printer buffer was developed, so that it could look after printing and enabled users to work on the next task on their PC.” (Interview 12)

The decision to focus on computer peripherals during the first stage of the group’s development was a conscious decision. Faced with a lack of financial resources, the founder was able to procure manufactured components via outsourcing agreements, alleviating the need to directly purchase expensive plant and equipment.

The advent of the internet provided a catalyst for the pronouncement of a revised and renewed corporate statement. The second corporate statement revolved around Electronico’s intention of “making the internet more user-friendly”. Accordingly, Electronico developed wireless network products that were easy for consumers to install and connect to their personal computers. More recently, the group’s strategy has shifted again as the markets for memory, storage, and network products have matured:

“At that time, our message from the top was that the market for memory, storage, and network has matured, and under these conditions, and if we are limited by a market that will not increase, we cannot grow ourselves. We have to do it in another area. When we say another area, our first assumption was that it would be the Digital Home market.” (Interview 10)

Correspondingly, a third corporate statement has since been released and enshrines the credo of “making digital life more comfortable”, with the concept of the digital home being at the centre of

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Electronico’s pursuit of future growth. The digital home is based on the idea of ‘connect, store and share’ (Electronico Group, 2010) – that is, connecting digital applications in the home using wireless LAN, storing content via NAS thereby enabling the sharing of music, videos, photographs and documents within a household. This third reincarnation of Electronico’s corporate statement is particularly significant because it represents a change in thinking. The third corporate statement conveys a realisation that if the group is to grow as desired then it must compete successfully via higher-value adding products than has been the case previously. Also Electronico needs to contemporaneously confront the challenge of building its brand internationally to accomplish further growth:

“Frankly speaking, we came to the conclusion that we are not making much profit because we only sell inexpensive products. 90% of the products we sell in Japan are in the low price range. We might be able to sell a lot of them, but that doesn’t make much profit. So we realised that we have to make more value-added products. Also our market share in Japan is 60%, so our performance depends on the market situation. To grow bigger, we have to move overseas.” (Interview 11)

However, the relentless growth that Electronico had come to expect from its core products was not to continue as readily as expected. The global financial crisis of 2008-9 wrought a dramatic and unparalleled decline in the group’s financial performance. In the financial year ended March 2009, Electronico’s sales declined by 13.8%, operating income declined by 59.3% and net income plummeted by a very substantial 80.4% to ¥707 M:

“In October to December last year, after the Lehman Shock, we have gone deep into the red. We made 2.3 billion yen profit, I think, in the first half of the year, but in the second half the deficit was close to 2 billion yen. ... Making a profit is the most important thing as a company, so we had to quickly think what to do to make a profit.” (Interview 11)

Clearly, Electronico’s established ways of working were no longer sustainable in the light of such a decline in returns and the general uncertainty and turbulence pervading the global and Japanese economies. The group was confronting a crisis in its psyche: it had ceased to grow. Accordingly, Electronico was forced to confront its approach to strategizing and how it would fashion a viable sense of future direction:

“... we had reasonably good experience in growth ... – up until the global crisis. We didn’t need to discuss anything like this [strategizing] in the past, but the growth is to come to an end.” (Interview 15)

The revered founder and Chairman assumed leadership and dictated the immediate reaction to be adopted throughout the group in response to the declining global and local economic situations.

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His seemingly breath-taking solution to this deficit was even further and more rigorous cost management than had characterised Electronico’s past:

“There is no replacement for [the Chairman]. It is impossible for someone to take over his role. He doesn’t do actual work in detail any more. In October, the figures had gone into the red, and then he said like this at first ‘Expenditure cut and cost cut’. And he said the figures straight away. ‘Cut labour cost [2x]%, cut expenditure [2x]%, reduce costs [x]%. But this [x]% means to take [x]% out of the costs which are hard to reduce, not just the one which are easy to reduce, that’s it.’ After that we asked ‘Is that serious?’ but he replied ‘Just do it’ to the question”. (Interview 11)

Even more dramatically, the Chairman reiterated his previous commitment to the sheer scope of the growth that he wished the group to achieve in the future, despite the global turmoil prevailing at the time:

“200 billion yen sales and five percent as the ordinary profit rate – it is currently four percent so we need to improve it a little more to reach 10 billion [¥].” (Interview 1)

By March, 2009 the desired cost cuts had been achieved. Electronico’s deficit was erased. What hadn’t been achieved, however, was a broad-scale understanding of how the group was to achieve this order of magnitude growth in sales: “What we have been doing is nothing to do with how to grow in the future”. The process of reinvigorating the financial performance of Electronico, whilst being a creditable and significant accomplishment, had only made Electronico leaner and ‘fitter’. It had not made Electronico wiser – in terms of equipping its managers with shared strategic insights and capabilities. In fact, the “Lehman shock” triggered anxiety about the future of the group. The Chairman’s decisiveness had highlighted the extent of Electronico’s dependency on him:

“The Chairman is the owner of the company. Looking back ..., we always relied on the owner. The company has expanded with the owner’s ideas, and new markets have been created by the owner’s policy, so now we had become a 100 billion yen revenue company. This is one of the company’s unique features. Of course, the owner is a human being and can’t live forever. His charisma led the company until now, but if we are to aim at 200 billion, 300 billion yen revenue in the future, we have to work together as a team.” (Interview 2)

There was genuine concern expressed amongst managers about the extent to which strategy-making had been dominated by the founder, embodied in his inaccessible thought processes and imaginings: “He grasped maybe all of the details of the companies within his brain” (Interview 10). As such, the Lehman shock had fortified a desire for a more collective and explicit understanding of, and managerial engagement with, the processes of strategizing within the group. Yet this was to be an outcome that was not to be achieved so readily. There were two significant impediments working against this undercurrent for “generational change” (Interview 10) and increased managerial involvement in Electronico’s strategy-making.

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First, the legacy of the founder’s and owner’s centrality in setting the direction of the group over the last thirty-odd years was the emergence of a managerial cohort with little experience in company-wide strategic thinking:

“The current General Managers and Deputy General Managers are the people who started to work in this company when it was a 10 billion yen company. At that level, just following the Chairman’s orders was enough. They still do that now when they are managers. It’s hard to break that custom. They still have to follow his orders but they should think by themselves, and do more than he orders.” (Interview 7)

This capability gap was compounded by the abstract and general nature of the Chairman’s strategizing, with staff feeling as if they were required to second guess his intentions and “read between the lines” (Interview 15). Even the Chairman was to openly acknowledge that years of unbridled growth had acted as a disincentive for the managerial cohort to become more reflective in their day to day work:

“As the Chairman has said from time to time, we were too busy to reflect on ourselves because our business was in rapid growth ... the transactions were growing in square values.” (Interview 15)

Second, shared strategic insight within the group had been impeded by Electronico’s increasingly large and complex structure: “[Electronico] often changes the structure” (Interview 8). The most significant of these restructurings took place in 2003 when the organization adopted the holding company structure, which is comprised of a holding company, 18 subsidiary companies and many outsourcing relationships. The aim was to achieve a “management system that is similar to a forest” in order to promote Electronico’s agility:

“Each tree stands on its own. But together, they create a forest. And if one tree dies, others will grow to take its place and preserve the forest.” (Electronico, 3/2012)

However, many managers felt that they could not ‘see the forest for the trees’. Managers claimed that they had a very poor understanding of what occurred in other parts of the group – “it has been getting so ambiguous” – with this being compounded by poor intra-organizational communication processes. The root of this problem was attributed to the treatment of the organizational chart as “intellectual property” by the managerial elite:

“We don’t even have a chart; it is treated as confidential information. Access to the chart is limited to the General Manager or those in higher positions. ... It is not clear what is going on and who is doing it – especially for younger staff, it is difficult to find the right person to approach. They have to guess every time and ask around to get some help. ... It is only luck that gives you the big picture; otherwise you will be lost in the organization.” (Interview 9)

A growing sense of the Chairman’s mortality and increasing frustration surrounding a lack of knowledge of the group’s processes and activities, created a desire for greater participation in

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strategizing. Correspondingly, a cohort of middle managers, emboldened by this desire, pushed for an active role in strategy development. This yearning and willingness to become involved in strategy-making was echoed by a growing sense of organizational strategic readiness, with the 2008 Business Report recognising that, “Making real inroads globally will require comprehensive domestic and overseas strategies across the entire spectrum” (Electronico, 2008, p.1).

ha: Battle of and for the minds

A small cadre of managers, described as “the core members”, emerged to fulfill this growing urge for a more inverted approach to strategizing. In all, nine ‘middle managers’ were to actively drive and diffuse strategy-making in Electronico. Their particular involvement in strategizing was an organic outcome of the ties bringing and holding them together. They were drawn together initially as members of a forum called the General Managers’ Meeting. The General Managers Meetings were described as “fighting sessions” in which “positive and strong opinions were being received”, whilst trying to fathom the roles and interrelationships characterizing the group’s operations:

“The bigger our company became, the more noticeable the sectionalism among the departments and divisions became. As a result, it became hard to see each other’s issues and the goals of each department, which caused various problems. Not only in Japan but also offshore. … Each department was very confused about what their role was [in relation to mission]. We set up Department General Manager’s Meetings for the purpose of addressing issues and sharing our understanding of such issues.” (Interview 2)

An immediate outcome of the initial General Management meetings was an appreciation of the others’ work:

“We have just started to understand what each other is saying at the General Managers Meeting, and share the ideas about what we have to do. Until now, there were “they are getting in our way” or “they are just dumping work on us” type of feelings among the Operational Divisions and Departments. We have just started to see each other as comrades who work towards the same goal, and realize we should understand what each other is thinking.” (Interview 3)

Correspondingly, these General Managers realized rapidly that they knew very little about how the group, as a whole, and each of their divisions would confront the future. Whilst it was acknowledged that intentions were clear and well understood, the General Managers had little sense of how their divisions could function to accomplish organizational goals in a coherent way:

“Goal setting itself was not a big problem. At that time we were expected to reach 20 billion yen in three years, but we did not know what the role of each department/division would be to accomplish the company goal.” (Interview 6)

The consensus was that Electronico needed a strategy and that the General Managers should be empowered to formulate it, “we, the next generation, have to get up and lead the company”. The timing of

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this initiative was propitious and in alignment with top management’s concerns for human resource development:

“Our General Managers and Deputy General Managers haven’t had enough training in drawing up a scenario based on the company’s basic principles. …. They have so much daily routine work, and aren’t used to thinking ahead and planning things, nor have they got enough training.” (Interview 7)

Accordingly, the debate within the General Management Meetings, from the fourth meeting onward, focused overtly on strategizing. As such, the group perceived a need to develop a “Mid-Term Management Plan” (MTMP) or Chuuki Keiei Keikaku. However, this solution was not novel. Electronico had a series of MTMPs in the past:

“[T]he first MTMP was created around year 1998. Then I think the following year and a year after that we made the MTMP every time – we made a MTMP for three years as one term, then reviewed and updated it the following year. We repeated this process twice in 1998, 1999, and 2000. But we stopped it around 2002 when the company’s performance dropped sharply. This was because we had to eliminate operations and revitalize the company with a limited number of staff, so the MTMP process was stopped at that time.” (Interview 1)

Yet there was a lingering perception that previous MTMPs had been “dropped down” on managers who then struggled to “understand what they meant and what their intentions were” (Interview 2). In comparison, the General Managers believed that the MTMP they wished to develop would be different – “it would show the whole picture relating to the near future and it will give every department/division concrete ideas about what needs to be done”.

Despite an uneven level of enthusiasm amongst “the core members”, much energy was exerted on this strategizing activity to develop a three year plan that would extend organizational participants’ thinking and practices beyond the time frame of the annual budget in a coordinated and concerted fashion. These middle managers set about to “boldly develop” a MTMP that would function as a “company bible for the next few years” (Interview 3). After three months of collecting information from managers and many late nights and weekends working on the task, the middle managers were ready to unveil their MTMP to senior managers.

ha: “Like sheep without a shepherd”

The resulting “middle-up” MTMP was constituted by a 13 page document densely populated with diagrams and multi-column tables nested with many figures extracted from spreadsheets. It had seven main sections. The first section canvassed the market environment over time, examining how major product lines contributed to turnover and the overall size of the market for personal computers in Japan, USA and other regions. The second part contained an analysis of the competitive environment with Electronico’s core brand being rated as 5th internationally behind

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Western Digital, Kingston Technology, Seagate and D-Link respectively. This section concluded that the group’s strengths resided in the fact that it was a general supplier of computer peripherals with an ability to equally participate in the markets for memory, NAS and network products. The third section considered Electronico’s strengths and weaknesses and claimed that a number of potential strengths remained unrealized, in addition to the extant strengths of brand image, reliability, and low price. The image of the company was explored diagrammatically in the fourth section. This was followed by a fishbone-like diagram in the fifth section, outlining the main tasks required to move the company from targeted sales of ¥1,450,000 M in 2008 to ¥2,000,000 M in 2011. This was supported by the sixth section containing many detailed targets (including sales volumes and values, variable costs, fixed costs and operating profits) for the group’s product lines, divisions and geographic regions. These targets would need to be met to achieve the Chairman’s vision for Electronico’s growth. The seventh and concluding section of the MTMP contained an area for both senior and middle management sign-off and agreement on how to proceed. Diagrams and figures further outlining the bases of Electronico’s image, cost structures and human resource profiles followed in a series of Appendices.

This fastidiously produced plan, which the middle managers believed outlined an integrated and cohesive “draft of the business”, did not receive the enthusiastic reception that was craved. Somewhat unceremoniously, the MTMP was rejected by senior management. It was described as “boring”, “textbook”, and “very ordinary”. The Directors concluded that the managers involved in its formulation were like “sheep without a shepherd”. They were also derided as “gutless” and possessing very little idea as to what was required of them in the process of strategizing. Crest-fallen, the middle management collective acknowledged that their strategizing efforts were inadequate and a failure. Imitating the practices of routine strategy formulation – “the ‘normal’ procedure” enshrined in (Japanese) management textbooks – had failed to realize the vision required to generate a sense of “future direction”. On reflection, one of the managers who had participated in this unconvincing process, summed up the inadequacies of the MTMP by concluding that, “We could say it [the MTMP] did not have a ‘soul’.” (Interview 6)

The “core members”, nonetheless, were to be given a second chance and an opportunity to redeem themselves. A Director stated:

“Their MTMP at that point just contained what the Chairman had been saying. They didn’t understand why he let them do this. If it is just about writing up what he said, anybody could do it. They were expected to come up with something that the Chairman would never even imagine.” (Interview 7)

The process of “rejection” led to an epiphany amongst the middle managers; they now understood what must be done:

“At the moment of rejection, we had to change our perspectives. We suddenly realized that we were actually expected to come up with something exciting and straightforward.” (Interview 6)

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ha: Discovering Electronico’s “soul”

“The core members” pondered how they might redeem themselves in the eyes of the Chairman and Directors. Their atonement was sought by aiming to produce a strategy that would endure without the necessary presence of the Chairman:

“…if the Chairman suddenly passed away tomorrow, what would we take as the flagship? That should be the goal for us, otherwise the MTMP is nothing more than achieving figures.” (Interview 6)

The middle managers spent the following two months seeking an answer to this question:

“The main force amongst the core members ... visited the executives to hear their thoughts. The interviews gave us the foundation to work on the next step. Each core member acted as a coordinator for several departments/divisions. I was in charge of sales relations. Not only explaining the basic direction of the company, I also gathered information to see what they could do.” (Interview 15)

Ironically, the vision they sought for the reinvention of Electronico’s future was discovered through an examination of its past:

“We tried to see inside his brain, and research what he [the Chairman] did in chronological order. … For example, when the memory board was first developed … at that time what did the Chairman think about such development, what had he done, what did he suggest, how did it turn into a product, and how was the new market developed – we researched such factors in chronological order, and finally found out a certain formula. It was very surprising, like suddenly the light coming on in the dark. We realized the key factors we researched were our ‘winning pattern’. We thought if we followed this ‘winning pattern’, we could keep our company going continuously. The method of this ‘winning pattern’ may be varied across the ages, but the ‘winning pattern’ itself could be the stable concept of our vision for the future.” (Interview 2)

From the past, the middle managers discerned a repeated pattern that had become the winning pattern of the group. This winning pattern was represented diagrammatically in terms of a “winning triangle” (see Figure 1 below).

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Enterprise

ConsumerCorporate

Figure 1: The winning triangle

The winning triangle, however, was more than a recipe for success; it constituted Electronico’s “culture” and “soul”. It offered fundamental insight into the group’s capability for developing high-end technology for large corporations (“enterprise”) and then promptly offering these technologies at a higher volume and lower prices to end users (“consumers”) and creating a pull effect to smaller businesses or “corporate” customers. This triangle explained how the group had succeeded in both the market for PCs and internet products in the past, as well as offering the potential to guide Electronico’s transition into product markets offering the promise of a more comfortable digital life for both Japanese and internationally-based consumers. The triangle was a revelation to organizational participants:

The winning triangle provided a necessary form of coherence in Electronico’s strategizing, providing an overview of the group’s basic “business philosophy”. Yet this coherence was only part of its appeal. The winning triangle also enabled different managers to frame the unique repeated patterns which contributed to the success of their particular divisions. Each department developed and came to an understanding of its local “winning pattern”. For example, the Production manager stated:

“The Chairman doesn’t explain from one to ten, he tells us only the points, like three corners of a triangle. The people heard only the points from the Chairman, and the points are not connected to each other, because they sound like different things.” (Interview 2)

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“If we ask what is the Winning Pattern for the Production Department, we say it is Mets [a supply chain approach]. If [Electronico’s] Winning Pattern is the triangle, ours is Mets.” (Interview 5)

“At last!” was the verdict of the Chairman.

The document circulated to management, which conveyed the winning triangle, was far more economical than the original and rejected MTMP. The re-worked strategic plan was two pages in length and comprised by copies of four PowerPoint slides. And despite the expression of much anxiety concerning the sufficiency of the substantial calculative content in the first iteration of the MTMP, the winning triangle was accompanied by only two modest charts depicting and recounting the historical pattern of growth in Electronico. Accounting numbers were conspicuous by their absence.

kyu: “Pine, bamboo, plum” 6

The winning triangle’s eventual fate was both complex and opaque. On the one hand, its impact was swift and obvious. The triangle provided a compelling logic that Electronico relied on “pull” marketing strategies. Based on this “repeated pattern”, price reductions were argued and implemented six months later to build consumer demand for products, especially in relation to the digital home. On the other hand, the scope and nature of the winning triangle’s imprint on organizational functioning was more varied. In some senses, the winning triangle was a short-lived phenomenon. “The core’s” work on it effectively stalled whilst managers were compelled to focus on ongoing cost management to revive the group’s profitability because of the negative financial ramifications of the “Lehman shock”. However, in other ways the winning triangle triumphed and endured. It was deemed to be successful in diffusing strategizing more globally within the group and helping to “separate the company and the owner” (Interview 15). It also helped managers to frame and make sense of “numbers and strategies” that had existed previously “in parallel” (Interview 5). The exercise of working on the development of the winning triangle also contributed to the training and acculturation of the next generation of managers. These managers had not had the experience of being trained by the Chairman or exposure to the company policy manuals of a previous era. As a result of practising strategizing, a new generation of the “Electronico-man” was borne:

6 “Pine, bamboo, and plum” is a reference made in Asia to these three resilient plants that flower in, and survive the hardships of winter, pointing to the prospects of spring. This phrase is being used in this context, rather than as a reference to the Japanese rating system of gold (pine), silver (bamboo) and bronze (plum), to signal the hopes that were embedded in strategizing for the future.

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“As an Electronico-man, I maintain a young and hungry spirit; feel the joy of improving myself to be a top professional; understand the position in the team; accomplish the mission in my role …”. (Interview 9).

5. Embodying strategizing

The fundamental challenge confronting the organizational participants studied in this research was the transformation of the strategizing processes that had characterized Electronico’s operations. A key driver of this desire for transformation was the increasing age of the founder. Hitherto, strategizing within Electronico had been dominated by the founder and Chairman. His involvement in strategizing was all encompassing, extending from the crafting of corporate statements to the development of new products for the fledgling markets for personal computing and both wired and wireless networking. The Chairman had been very successful, over a sustained period of time, developing a niche for Electronico’s products in the growing Japanese and international technology markets. As a consequence, he has presided over phenomenal growth in terms of product range, geographic scope and financial results. However, it was remarked that the founder “doesn’t do actual work in detail any more”. Yet there is only a small cohort of senior managers who have been imprinted with the Electronico-way of working, having been trained personally by the Chairman during the start-up phase of the business. But Electronico is now a large organization and one that aspires to grow by becoming more complex and global in its nature. As such, a capability in distributed organizing is required (Orlikowski, 2002), equipping a range of managers with the potential to enact Electronico’s strategy in their distinctive local mileux. It is the development of this capability that the middle managers actively sought through their participation in the formulation of a MTMP.

However, the process of enabling the distribution and diffusion of strategizing throughout the group was not to be an easy task. Basically, strategizing was a black box (Latour, 1987) in Electronico; it was an activity that was poorly understood. This was because strategizing was the personal domain of the Chairman. Strategizing was an obscure and mysterious activity that took place within the recesses of the Chairman’s “brain”. It was in this very inaccessible, private and personal space that he decided on the strategic direction of the group, accumulating and refining the nuances of the strategic wisdom of Electronico for over thirty years. Whilst the Chairman communicated the overall architecture of his strategizing in the form of the corporate statements, which outlined the general thrust of how Electronico would engage with its future, managers within the group acknowledged that they had very little understanding of either how these corporate statements were constituted or how they were to be accomplished in terms of their everyday work. As a result, strategizing was firmly embodied in the founder, both enabled and constrained by the boundaries of his corporeality. The ‘black box’ of strategizing was colonized by the Chairman’s habitus (Bourdieu, 1977; Baxter & Chua, 2008) or disposition for sensing, feeling, thinking and acting in distinctive ways.

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Even as the magnitude and diversity of activities in the group expanded over time, creating a very real practical barrier to the personal involvement of the Chairman in the full ambit of the group’s day to day activities, he continued to approve the group’s product budgets. The possibility of accomplishing distributed strategizing as Electronico grew in size was, in effect, counterbalanced by these processes of centralized and paternalistic referral, review and authorization. In so doing, the Chairman had become an obligatory passage point (Latour, 1987) in the functioning of the group. Significant bottom-up practices, such as product development and detailed financial planning, which envisaged slices of Electronico’s future and various divisions’ and products’ trajectory into it, were all funneled through the position and persona of the Chairman. He was thereby able to tame Electronico’s vision of its future, coupling these planning activities to his vision in an aligned, integrated, cohesive and singular way. Strategizing was both inscribed on and by the body of the Chairman in this process. He embodied the vision that had and would continue to mobilize organizational functioning across time. However, the future of Electronico was effectively linked to, and limited by, the Chairman’s corporeality. And this was the conundrum that the middle managers needed to address.

Spurred by a desire to participate in the assembling of the strategizing practices of the group, the middle managers confronted two practical barriers in attaining their wish for a strategic voice. The more readily circumvented issue that stood between the middle managers and their involvement in strategizing was the fact that strategizing had been a “privileged” activity (Beath & Orlikowski, 1994), essentially controlled by the position of the Chairman and a small group of powerful senior managers who were his confidantes. This barrier was relatively unproblematic and readily distilled. The organizational elite acceded to a request from the middle managers to construct a MTMP based on a perceived need for their “training” in the realm of strategic thinking. More problematic, however, were the highly private understandings of Electronico’s strategizing practices embodied in the Chairman’s habitus and imagination. These were not readily transferred to, and circulated between the middle managers. However, the middle managers showed little recognition of the importance of the Chairman’s “imaginings” (Andon, Baxter & Chua, 2010) to the strategizing activities of the group and instead set out to imitate the strategic planning rituals embedded in standardized text books. Following somewhat predictably from this course of action, the middle managers endeavored to map out a systematic pathway into the future by constructing SWOT analyses and detailed forecasts and targets. Perhaps equally unsurprising was the Chairman’s and senior management’s rejection of these attempts to inscribe strategizing in terms of the standardized tools and techniques of Western organizations and strategy advocates (Grant, 2008; Johnson & Scholes, 2002; Porter, 1985). These singular techniques were incapable of conveying the “soul” of Electronico’s strategy and why the organization was successful.

Somewhat fortuitously and as a result of brainstorming sessions between key members of the middle management group, the apparent mystery of how Electronico traversed its future was deciphered as a result of an examination of the group’s past. A “repeated pattern” was discerned: top end enterprise products were made affordable and in sufficiently high volumes for the consumer and then the corporate markets. This repeated pattern was inscribed diagrammatically in terms of a

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“winning triangle”. The winning triangle was sparse, skeletal and recursive, unlike the dense and predominantly numerical vector that moved Electronico towards the future in the MTMP. Yet the ostensible simplicity of the winning triangle was acknowledged as providing a solution to the riddle of strategy-making in Electronico. How may we account for the acceptance of the winning triangle as a critical artifact informing the process of strategizing?

Put simply, the winning triangle was accepted within Electronico, by and large, because organizational participants were able to understand it. It made sense to them: “The triangle helped me to understand and set my mind in accordance to the company policy. Now I can see where we are heading …”. The winning triangle provided managers and others involved in day-to-day operations with a way of ensuring their activities contributed to the accomplishment of Electronico’s strategy of making its customers’ lives easier through the use of technology. The winning triangle provided a “frame” (Goffman, 1981) that helped organizational participants impute the “emergent strategy” (Mintzberg et al, 1998) that characterized the group’s successful past, as well as providing a frame that enabled them to anticipate their engagement with its futures. For the first time, managers within Electronico were able to possess some insight into the “genius” of the founder/Chairman and how he operated as a strategist: identifying and developing products for niche high-margin users and then quickly making these products available at competitive prices for mass markets. By recognizing this repeated pattern and representing it in the form of the winning triangle, the middle managers were effectively able to disembody strategizing from its corporeal constraints in terms of the habitus of the founder. And one manager remarked on this capacity of the winning triangle to disembody strategizing, noting that it helped to “separate the company and the owner”.

The process of disembodying strategy was facilitated by the inscription of Electronico’s “repeated pattern” in terms of this triangle. The winning triangle was an artifact (Orlikowki & Iacano, 2001; Whittington et al, 2006) created by the middle managers, allowing them and others to visualize this disembodied strategy. Its ease of representation, both materially and digitally, facilitated its circulation throughout the organization. Consequently, strategizing shifted from being a private activity, tightly held and controlled by the Chairman and his inner cadre, to one that was now public and shareable. And the circulation of the winning triangle throughout the group was increasingly amplified over time. First, the winning triangle was shared initially between core members of the middle management group, next it was shared by the middle managers with the senior managers whose approbation they sought and then, ultimately, it was shared by the Chairman with all of the employees of Electronico in one of his start of year addresses. As such, the winning triangle had become a “symbolic token” (Giddens, 1992; Gaskell & Hepburn, 1998; Jones & Dugdale, 2002; Jeacle & Carter, 2011) or a medium of interchange between the actors in the organization. It enabled strategy to circulate from one person to another, from one place to another and from one time to another. Top management ratification vested this symbolic token with the necessary trustworthiness required to initiate its circulation between and within the divisions of the group.

Whilst the winning triangle enabled a simple and “stable business concept” to emerge from and characterize strategizing, it would be misleading to construe the winning triangle as implying the

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institution of a strategic singularity. The circulation of the winning triangle not only facilitated its diffusion within Electronico, the winning triangle also required and made possible its translation (Harmon, 2002) and democratization. Understanding the winning triangle necessitated each manager to find his or her division’s winning or repeated pattern. So, for one divisional manager the winning pattern involved the elimination of stock in his division. For another, the winning pattern required achieving chronic cost reductions and remaining lean. For yet another manager, the winning triangle was characterized in terms of delivering timely customer service. Consequently, as the winning triangle circulated, it was localized and anchored differentially and flexibly within Electronico. Sharing the winning triangle enabled this winning pattern to be repeated – from one place and person to another. The upshot of this was that the circulation of this symbolic token also resulted in the re-embodiment of the winning triangle. As this symbolic token was relayed throughout Electronico, the winning triangle was variously enacted and reenacted by organizational participants accepting the token during meetings, presentations, managerial debriefs or presidential addresses. Strategizing was vested with a capability to live on and endure in Electronico; it was instantiated in many rather than one or a few. Arguably, this is a case of not only the “body multiple” (Mol, 2002) but also the body multiplied. Local and multiple strategic ontologies were allowed to develop and co-exist as the “winning triangle” was transported, transformed and localized. It was the “stable vision” of product innovation traveling from enterprise to consumer and then to corporate markets that served to reassemble and loosely co-ordinate these various engagements with the future. The perceived “core” of Electronico’s strategizing was written on many bodies – those of the new Electronico men and women. The Chairman’s ideals were embodied in another generation of organizational participants, both decentralizing yet centralizing strategizing. The winning triangle served to function as the Chairman’s avatar in the peripheries of the group, enabling the founder to be both corporeally absent yet perennially present in a mythogenic-like state in the process of strategizing.

The winning triangle also helped organizational participants to frame and make sense of the many numbers that the keiei karnribu (management control department) generated on a routine basis. These accounting numbers had been mobilized abundantly by the middle managers, forming a key part of the original MTMP. This MTMP was colonized by many accounting numbers, which constituted targets to be achieved during the three-year period of the plan, that is, 2008-2011. There were detailed targets for sales volumes, sales revenue, cost of product, variable costs, fixed costs, marginal profit, and operating profit. These were deconstructed by time period and marketing channel, major product lines, and geographic regions in a bid to align the activities of different parts of operations with the overall dual financial targets of realizing two billion yen in sales and 100 million yen in profits by the end of the 2011 financial year. In spite of the many numbers already included in the MTMP, their quantum was a source of anxiety for some of the members of the middle management group: “I have looked at other companies’ MTMPs, and couldn’t help wondering if ours was good enough, if it needed more numbers” (Interview 3). Should there be even more numbers? Despite the enthusiasm for, and perceived necessity of, a proliferation of numerical inclusions in the MTMP, in the end, these accounting numbers made very little sense to organizational participants. As had been mentioned previously, the numbers generated by the accountants were disconnected and

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“existing in parallel” to the strategic machinations of the Chairman. Also the accounting numbers that had been included in the MTMP possessed very little persuasive power in conveying innovative and fresh strategic thinking to the senior managers who ultimately rejected the MTMP as a form of strategizing. It was at this point that the middle managers concluded that “just numbers and targets did not work for us. It was not a matter of simple calculations” (Interview 4). Recourse to calculation was rejected in favor of the development of the winning triangle, an artifact capable of conveying the “fundamental concept of the company” (cf. Smith, 2003). Although the winning triangle was fashioned as means of moving away from “intricate calculations”, it ultimately provided a frame that gave the numbers a renewed strength and sense of purpose by transforming the routine calculations of the keiei karnribu into calculative stories conveying how Electronico had been successful and how success was to be anticipated and repeated as each product line and division confronted their joint and several futures. It coupled substantive management decisions with the once disembedded and decoupled financial inscriptions that projected and deconstructed the group’s future into units of sales and ultimately profitability. The winning triangle possessed the capability to couple and loosely co-ordinate accounting(s) and strategizing(s) throughout Electronico.

But why was the winning triangle effective in conscripting allies and corralling interests within the middle management group and senior management team? We would argue that this was possible because the winning triangle enabled the attachment, entanglement and materialization of an affective aspect of strategizing in Electronico (Anderson & Harrison, 2006; Burkett, 1997; Emirbrayer & Goldberg, 2005). The bland and stereotypical enunciation of strategy contained in the MTMP was without a soul, failing to assemble a positive and energizing emotional response in the network of relations between the senior and middle managers. Rather the MTMP invoked a sense of boredom and ordinariness amongst the senior managers, producing a corresponding sense of failure and rejection in the middle managers. This emotional milieu produced a stultifying affect, blocking and impeding the circulation and interessement required to mobilize the MTMP – despite an ostensible alignment of interests between these management groups both willing and seeking middle management engagement in strategy-making. The winning triangle, in comparison, however, constituted the materialization and movement of affect. The winning triangle generated excitement: it was an actor that celebrated Electronico’s success. The development and circulation of the winning triangle enabled managers to collectively and affectively engage with those practices that had fostered growth and profitability over the years, likewise anticipating their ongoing participation in, and contribution to, a narrative of success. The winning triangle was powerful because it built and embedded a form of “emotional capital” (Zembylas, 2010; Wetherell, 2012) in Electronico. It was this institutionalization of affect, enabled by the winning triangle in this situation, which facilitated managerial identification with Electronico’s strategy. Strategy was no longer something that was only the Chairman’s concern; it now concerned and engaged a more diverse managerial cohort, driving also a renaissance of a highly committed Electronico-man with a stronger sense of purpose and direction. However, like all forms of capital, such as the economic, social and cultural forms of capital discussed by Bourdieu (1997, 1998), emotional capital is unevenly distributed also in organizations (Zembylas, 2010). And the managers who were included in the strategy-making exercise at Electronico recognized this quite explicitly. Reflecting on the differential impact of the

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winning triangle and its more tentative association in relation to actors at the periphery of the winning triangle’s organizational trajectory, one manager made the following telling insight:

“They understand through the diagram [winning triangle] from a mental perspective, even though some don’t seem to be quite convinced emotionally.” (Interview 12)

Correspondingly, it may be argued that the concept of emotional capital and how it materializes and embodies affect in networks of organizational relations may provide a useful starting point for further research that assists us to understand why it is that some strategies act – metaphorically breaking out of the bottom drawer and mediating organizational functioning – whereas other strategies are only weakly connected, at best, to the networks of relations shaping an organization’s possible futures.

Recognizing the importance of emotions and the materialization of affect to acting and the functioning of networks also provides us with an opportunity to reconsider the notion of agency embedded in extant actor-network theory. Drawing on our experiences of strategy-making in Electronico, we question the calculative construction of interests which prevails in the literature. Rather the calculative agency embedded in the processes of translation, extending from the identification of practices that are problematic to the subsequent interessement and enrolment of actors and objects into the fabrication and mobilization of solutions for these matters of concern, is insufficient to understand how people and things act. Cognitive forms of calculation are an important element of agency but they do not tell the whole story, as the ascendance of the winning triangle attests. Agency must meld calculation with emotional affect. Emotions – those bodily forces, energies and sensations manifest in relations towards other actors and objects (Emirbayer & Goldberg, 2005) – are important drivers of acting also. Acting is both sensual and sentient, felt and thought out. To us, agency is invariably embodied. There is no Cartesian division between bodies and brains: calculation and affect form an entangled assemblage, each obliging the other to act relationally (Baxter & Chua, 2008). By proposing the notion of embodied agency we wish to signal our embarkation upon future projects in which we, as researchers, aim to understand acting and its consequences in the context of relations wherein reason and emotion are considered to be mutually inclusive. As such, this line of thought both challenges and augments explanations that have been taken up in the accounting literature positing the supremacy of a calculative agent (Skaerbaek & Tryggestad, 2010). Emotional affects constitute non-calculable spaces that need to be conjoined with the workings of calculable spaces (cf. Miller & O’Leary, 1987) to understand how it is that numbers act in organizations. The affective is neither an irrational aspect of organizational functioning nor an overflow that can somehow be tamed through improved calculative technologies or the reframing of problems. It is time to pull back from the ‘accountingization of everything’ – including our explanations of how accounting numbers and their constitutive calculations function in organizations. Instead, we need to situate our understandings of practices in the realm of messy spaces (Law, 2004). Messy spaces are inhabited conjointly by the sensible and the sensual – webs of mutually entangled and relationally diverse accomplishments of the effective and affective, “partially co-ordinated” (Law, 2004, pp.61-62) by bridging practices, such as the circulation of the winning triangle in this instance. Whilst messiness is not intended to convey anarchic spaces that defy our

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research gazes, messiness challenges scholars of accounting and organizational functioning. There is an absence of an ample, adequate and convincing language to constitute messiness. But the challenge is more substantial than developing an accepted language for framing the emerging ‘affective turn’ in the social sciences at large (see Wetherell, 2012). A further challenge, which offers great scope for researchers working in the accounting discipline, involves articulating the construction of messiness in terms of the attachment/interpenetration of both affective and calculative practices.

6. Strategy and strategizing

Finally, this research provides a useful opportunity to reflect on the saliency of archetypal portrayals of strategy and strategizing (see Langfield-Smith, 1997; 2005). In accordance with literary expectations, this small group of middle managers engaged in the machinations necessary to produce a document enshrining the practices expected of a formal exercise in strategy formulation. Markets were analyzed and competitive positions were considered. Internal strengths and weaknesses were arrayed. Formal financial targets were established to guide the organization across the forthcoming years. However, the MTMP was rejected and this was despite its adherence to a form that we have come to associate with strategy formulation. It was rejected because it was too textbook-like and, more cardinally, because it was “boring”. Going through the motions, so to speak, whilst bestowing the mantle of seeming legitimacy on the MTMP, was not enough. Strategy-making was deemed to be more than a mimetic activity that could be aped in a formulaic fashion. Rather, what was accepted as strategy-making possessed none of the outward markers of how we have come to think of competitive strategy. The senior management group was persuaded and affected by an ostensibly simple artifact in the form of the winning triangle. The winning triangle was a significant device. It travelled readily across the different divisions, assuming the role of a symbolic token in circulating a stable yet localizable understanding of the organization’s “core”. In comparison, the comprehensive formal strategic plan, contained in the first version of the MTMP, did not gain traction within the organization. It remained disembedded and disaffected from the lived experiences and sensations of the organizational participants. The winning triangle, in comparison, was an important mediator (Latour, 2005). The winning triangle connected and transformed “streams” (Merchant, 1985) of previously disparate and unconvincing accounting inscriptions and business analyses. Yet its impacts were more profound than this. The winning triangle (re-)embodied and resituated strategy. The circulation of this symbolic token colonized and transformed, albeit to varying the degrees, the habitudes – and ultimately the habitats – of organizational participants relationally connected to the token’s exchange. Strategy was both lived and located as a result of the winning triangle. It is not inconceivable to argue that furthering our understanding of lived and located forms of strategy, in which bland artifacts corall and relationally connect embodied and embedded devices, may go some way to furthering our understanding of the micro strategizing practices that enable some organizations to achieve what has been labeled as “congruence” or “fit” between an organization’s strategy and its environment (Chenhall, 2003), as well as the emergence of workable and effective

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constellations of accounting and other devices for controlling strategy (Abernethy and Chua, 1996; Malmi and Brown, 2008).

This case study also helps us to appreciate that strategy has manifold contemporaneous forms. As the situation in Electronico illustrates, strategy can assume the form of neat and tidy devices, contained by the borders of reports such as the MTMP or artifacts, like the compact and austere winning triangle. Yet strategy is also a messy shape-shifter, which is transformed and localized as it is translated and located in the different recesses of an organization. Each of the divisional managers within Electronico crafted their own version of the winning triangle. They situated what worked for them. Strategy is also both hierarchical and democratic. Strategy conveys hierarchy and its attendant privileges. Formal strategy-making is the province of the select and, more often than not, organizational elite. Strategy was the role of the founder/Chairman and the senior management team. Yet strategy may be democratized through officially sanctioned participation in the process, as was the case with the middle managers studied. But as this case also indicates, strategy is also invariably democratic, being translated as it travels through an organizational milieu. Accordingly, strategy is tight and loose. It is tight in that it is controlled in a disciplinary space monitored by managers who have established accounting targets for strategy’s intended realisation. Yet strategy is also loose, drifting, experimental and local. Strategy is similarly emergent and emotional. Strategy can emerge from an understanding of the patterning of the past and also evoke emotions generating excitement about desired futures. Strategy is likewise embodied and disembodied. Strategy was embodied in embodied in its ‘designers’ and then re-embodied in other organizational participants as it circulates. For strategy to function and work in organizations, it must take root in corporeal forms. Yet it circulates from one person, place and time to another in disembodied artifacts, such as plans. Correspondingly, strategy is both corporeal and virtual simultaneously. So, if we may, we will speak on behalf of Electronico in response to Porter (2008). Did this Japanese firm have a strategy? It would seem that the answer has to be no. Rather this Japanese firm had many strategies – tidy, shifting, hierarchical, democratic, tight, loose, emergent, emotional, embodied, disembodied, corporeal, virtual, lived, and located. And from these counterpoints to a strategic singularity emerged a messy space in which accounting numbers were seen as meaningful.

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Appendix A: Overview of Interviews

Table 1: Interview Information

# Date Interviewee Length Location 1 20/12/07 Manager A, Corporate Planning 94 mins Nagoya office 2 22/05/08 Manager B, Divisional General Manager 85 mins Nagoya office 3 02/07/08 Manager C, Divisional General Manager 119 mins Nagoya office 4 02/07/08 Manager D, Divisional General Manager 116 mins Nagoya office 5 05/08/08 Manager E, Deputy Divisional Manager 110 mins Nagoya office 6 05/08/08 Manager F, Deputy Divisional Manager 124 mins Nagoya office 7 05/08/08 Manager G, Senior Managing Director

Manager H, Corporate Planning 133 mins Nagoya office

8 07/08/08 Manager I, Divisional General Manager 124 mins Tokyo office 9 28/08/08 Department Head Communication

Meeting (with Chair, Manager C, Divisional General Manager, Mr. J, Communications Expert, Others)

116 mins Teleconference between the Nagoya and Tokyo offices

10 19/11/09 Manager K, Director 90 minutes Nagoya office 11 19/11/09 Manager G, Senior Managing Director 88 minutes Nagoya office 12 19/11/09 Manager B, Divisional General Manager

Manager C, Divisional General Manager 110 minutes

Nagoya office

13 20/11/09 Manager L, Group Leader 24 minutes Tokyo office 14 20/11/09 Manager L, Group Leader

Manager M, Group Leader 102 minutes

Tokyo office

15 17/05/2010

Manager N, Divisional Leader Manager A, Corporate Planning

220 mins Netherlands Office

TOTAL = 1,655 minutes (27hr 35 mins)

43

Enterprise

ConsumerCorporate

Figure 1: The winning triangle