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8Egan 2018(1)

Utilising Accounting and Accountants in the Management
of Water Efficiency
Matthew Egan
, The University of Sydney
This paper explores how five Australian organisations utilised accounting techniques and accountants as
they developed an increasing focus on water efficiency during a period of drought. In those cases where top
management were responsive to developing community logics that argued for the importance of efforts to
maximise water efficiency, non-accountants found space to experiment with a diversity of decision-useful
accounting initiatives. While initially bypassed, accountants ultimately became important for their ability
to link evolving initiatives to core organisational concerns. Alternatively, in those organisations where senior
responsiveness to evolving community concerns about water efficiency was limited, accountants dominated
from the outset, presiding over a limited range of responses that offered an appearance, but little substance, of
ess than 2.5% of global water is fresh, and much
of that is inaccessible within glaciers and ice
caps (Shiklomanov 1993). ‘Climate change’ science adds that rainfall levels are likely to become increasingly less dependable (IPCC 2007). As populations continue to grow, it is therefore important to
learn how we can become more water efficient. Australia provides a rich context within which to explore
how water consumers can improve water efficiencies. A
protracted period of drought occurred across much of
that continent from the 1990s into the mid-2000s (BoM
2007). Faced with declining dam levels, water authorities experimented with a range of demand management
programs, including regulation requiring industry to
develop ‘water savings plans’, and funding to support investment in water efficient infrastructure. Interestingly,
water prices were not significantly increased at this time
(Egan 2009). Demand management strategies such as
these can drive organisations to develop resource efficiency practices (Buhr 1998; Bansal and Roth 2000;
Prakash 2000). Organisations might describe such practices as an element of broader initiatives focused on
‘environmental’ or ‘sustainability’ management change1
(Smith and Lambell 1997; Schaltegger and Burritt
A range of studies call for research exploring
both the nature and drivers of corporate claims to
environmental or sustainability management change
(Broadbent and Guthrie 1992; Bouma and van der Veen
2002; Adams and Larrinaga-Gonzalez 2007; Bebbington
et al. 2007). Practices of this nature may contribute little to profit, and so empirical puzzles worth exploring
include: do claims to such practices reflect genuine
Australian Accounting Review No. 86 Vol. 28 Issue 3 2018
organisational change, and if so, how are those changes
able to be justified? Considering, for example, the question of water efficiency, as the cost of this resource
is inexpensive (Egan 2009), how could an organisation reconcile initiatives designed to maximise efficiencies with core concerns about cost effectiveness and
Of more specific interest, this study engages with debates that seek to understand the impact that both accounting and accountants might have, where drawn on
to support novel initiatives of this nature. On the one
hand, Parker (2000) and Bennett and James (1998) suggest that accounting and accountants are critical to the
success of any such novel endeavours. Alternatively, others suggest that both accounting and accountants might
limit the focus of any related initiatives, or seek realignment to core profit and cost efficiency concerns (Adams
2002; Young 2006; Qian and Burritt 2008). The value
of further research that explores how accounting and
accountants impact on novel environmental or sustainability practices (such as water efficiency) is therefore
widely noted (Gray et al. 1997; Adams and LarrinagaGonzalez 2007; Bebbington 2007; Ferreira et al. 2010;
Albelda 2011; Schaltegger et al. 2015). ‘We need more indepth studies of how the [accounting] profession and its
constituent professional bodies have mobilised around
Correspondence: Matthew Egan, Senior Lecturer, Discipline of
Accounting, The University of Sydney, Room 316, Codrington
Building, Darlington, NSW, 2006, Australia. Tel: +61 2 9036 9060;
email: [email protected]
Accepted for publication 4 May 2017.
doi: 10.1111/auar.12191
M. Egan
Utilising Accounting and Accountants in the Management of Water Efficiency
accounting for social sustainability . . . We have limited
robust evidence about how these bodies have constructed
and mobilise their engagement’ (O’Dwyer and Unerman
2016: 39).
This paper responds by considering how five food
and beverage producing organisations located in
Sydney, Australia in the late 2000s drew on accounting techniques and accountants, as they responded to
drought conditions. Specifically, we explore the role for
accounting techniques, the roles assumed by accountants, the factors motivating each organisation to seek
that input from accounting and accountants, and the
impact that accounting and accountants had in each
case. Responding to calls for the use of novel theoretical frameworks in sustainability research (Unerman
and Chapman 2014), and to those by Greenwood et
al. (2011) for studies that explore how institutional
forces shape organisational complexity, we draw on concepts from ‘institutional logics’ to help articulate our
Of relevance to practice, our study suggests that
while accountants may be initially reluctant to engage,
non-accountants including engineers, environment
managers and production managers, are capable of developing creative, decision-useful water accounting initiatives. We argue that effective reconciliation of the
multiple logics impacting on water usage in these organisations required the development of a broad complement of physical, monetary and qualitative accounting
initiatives. Where state and market logics dominated,
water accounting initiatives were limited, and focused
on little more than monitoring usage. Where top management also sought active engagement with evolving
community logics, non-accountants were given space
to develop a range of novel accounting techniques, enabling informed efficiency investigations. In all five cases,
accountants sought to limit water accounting to narrow technical conceptions focused on cost efficiency.
Accountants were therefore excluded in those organisations where top management support for maximising
water efficiency was clear. However, in those cases where
support for water efficiency was limited, accountants
were able to preside over a limited accounting toolkit,
offering little substance for effective efficiency decision
The remainder of this paper is structured as follows.
The following section reviews existing understandings
of how accounting might either contribute to, or narrow, an organisation’s focus on environmental or sustainability management initiatives. That is followed by a
review of literature exploring the impact of accountants
on such developments. An institutional logics framework is developed thereafter, leading to the formation of four research questions for this study. Further
sections provide methodology, insights from the cases,
and conclusions.
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How Can Accounting Contribute to Water
Efficiency Goals?
The impact that accounting technologies might have,
where drawn on to support a developing focus on environmental or sustainability initiatives (such as water
efficiency), is the subject of debate. On the one hand, accounting might provide ‘categories for discourse’ to assist with ‘ordering and interpreting’, and with imposing
‘coherence on chaotic organisational processes’ (Boland
and Pondy 1983: 224). Alternatively, management’s goals
in drawing on the legitimacy of accounting technologies
might be to silence those that threaten power (Dillard
and Roslender 2011). These alternative perspectives are
explored here.
Optimistic studies in this field argue that accounting tools are critical to the development of novel
management initiatives (such as practices seeking to
maximise water efficiency), in order to ‘render transparent the formerly invisible’ (Parker 2000: 48).
Accounting technologies might improve decision making by revealing the ‘economic and environmental irrationality of most organisation’s waste management
practices’ (Duncan and Thomson 1998: 5). New or
adapted accounting technologies might include investment proposal frameworks, budgets, performance
measurement and risk management systems (Gond
et al. 2012; Arjalies and Mundy 2013). Thomson and
Georgakopoulos (2010) suggest that while most of
these techniques are not indivudually complex, a welldeveloped and systematic information system can incentivise more environmentally sensitive organisational
Hopwood et al. (2010: 18) suggest that ‘organisations
that are really serious about addressing issues of sustainability’ will design accounting tools that complement
existing financial accounting systems, and ‘embed sustainability considerations within strategic decision making’. By highlighting resource usage in both physical and
monetary units, the organisation might shift from compliance to performance improvement, and might come
to understand both its impact on the environment, and
the impact of the environment on the organisation’s economic health (Schaltegger and Burritt 2000; Burritt et al.
2002; Adams and Frost 2008; Jasch and Savage 2008; Lee
2011; Fries et al. 2010).
Alternatively, management’s objective in drawing on
accounting may be to rein in errant organisational dialogue, to narrowly focus on the ‘business-case’ for
action (Fries et al. 2010; Bebbington and Thomson
2013; Contrafatto and Burns 2013; Thomson and
Georgakopoulos 2010, 2014). Any suggestion of accounting change may simply reflect ‘re-labelling’, while
‘business as usual’ may persist as the overarching goal
(Milne 1996; Albelda 2011). Gray et al. (1995: 233) argue that while accounting may increase visibility, the
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Utilising Accounting and Accountants in the Management of Water Efficiency
trade-off is often a ‘constraining of environment to a
safe and controllable issue’. In a case study, LarrinagaGonzalez et al. (2001: 234) argue that accounting was
implicit in ‘limiting and controlling the influence that
the environment would have on the company’.
Others suggest that novel accounting developments
might have limited impact unless line management is
held accountable for achieving related targets (Chang
and Deegan 2008). Considering water as a specific concern, Unerman and Chapman (2014) argue that impacts will differ depending on the environment from
which water is drawn, and so efforts to commensurate
and compare water usage across locations may, therefore, be meaningless. Alternatively, Bebbington (2014)
argues that all issues of sustainability are complex and,
if top management support is clear, the value of seeking
to reveal the formerly hidden will outweigh any concerns about technical inaccuracies. Others add that accounting challenges might be overcome by engaging with
a broad range of stakeholders (Milne 1996). Accounting may demonstrate ‘considerable ceremonial change’
with little impact on ‘productive effectiveness’ (Burns
and Scapens 2000: 22). Lohmann (2009: 501) suggests
that accounting is ‘simplifying and boundary drawing’,
and yet ‘ultimately becomes an entity as “real” in policy
deliberations as any other’.
Several key arguments can be condensed from these
debates. On the one hand, it would seem that accounting technologies can assist with a range of core organisational concerns, including improving resource efficiency.
Top management support would seem critical; ‘without
top management interest and involvement, goalsetting
at lower levels will very likely be attempted only a few
times and eventually abandoned’ (Rodgers et al. 1993:
152). This literature also confirms that related research
continues to be ‘scarce and is focused more on describing
the current state of implementation than on analyzing or
critically evaluating the effectiveness of new [accounting]
tools’ (Bouma and van der Veen 2002: 279). We respond
here by exploring how accounting tools were drawn on in
support of a developing focus on water efficiency within
five case study organisations located in Sydney, Australia
in the late 2000s.
How Can Accountants Contribute to Water
Efficiency Goals?
Here we also seek to understand the impact that
accountants2 might have when drawn on to support water accounting initiatives. As with accounting, the impact
of accountants is also the subject of debate. For its part,
the accounting profession has been calling on members
to become more involved in novel organisational strategies and practices for some time (ASSC 1975; Schaltegger
and Burritt 2000; KPMG 2008). Tingey-Holyoak and
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Burritt (2012: 93) argue that accountants are critical for
their ‘transdisciplinary perspective on problem-solving’.
Accountants might enhance the understandability and
decision-making utility of novel accounting initiatives
(Wilmshurst and Frost 2001). Accountants commonly
have direct access to the board (Bennett and James 1998)
and, where excluded, the organisation may fail to realise the full information potential of related initiatives
(Parker 2000: 53).
Alternatively, accountants may be unwilling or unable to participate in novel organisational initiatives.
While accountants may be deeply involved in managing performance management systems, they may play
little part in environmental accounting systems, even
where the two are closely integrated (Länsiluoto and
Järvenpää 2010). In a case study, Monteiro and AibarGuzman (2010: 425) found that ‘the accounting department assumed an inactive behaviour . . . refusing to
include environmental issues in accounting practices’.
Schaltegger and Zvezdov (2015: 348) suggest that the
‘knowledge expert activity of deciding what sustainability issue should be captured is dominated by
sustainability managers’.
Accountants may be intellectually and emotionally
ill-equipped to contribute to initiatives that do not
clearly align with cost efficiency or profit maximisation
(Langfield-Smith 2007), or may fear that involvement
will threaten their credibility (Cooper 1992; Gray et al.
1996; Wycherley 1997; Adams 2002). While some might
be enthusiastic about environmental initiatives, ‘situational or internal constraints [may] prevent accountants translating attitudes into behaviour’ (Bebbington
et al. 1994: 118). Accountants may also be unable to engage due to ‘cost constraints, lack of political will from
governments, lack of conviction about business’s role
in the environment’ (Gray and Bebbington 2001: 40).
Hopper (1980: 410) observes a ‘common assertion
that accountants resist a service role [providing decision useful reporting to production managers] due to
their conservative and bureaucratic orientations’. Byrne
and Pierce (2007) counter, however, that such resistance may more correctly reflect time constraints due
to heavy reporting responsibilities to top management.
Support from top management is therefore critical. In
other cases, accountants may seek engagement, however
their objective may be to disrupt or dismantle related
practices (Armstrong 1985; Larrinaga-Gonzalez and
Bebbington 2001). Accountants might seek to reorient
the focus of accounting to quantitative, monetary measurement, to the detriment of initiatives focused on physical process flows (Burritt et al. 2002; Schaltegger et al.
In summary, the arguments presented here suggest
that while the accounting profession has promoted
the importance of participation in novel organisational
initiatives (such as water efficiency) for some time,
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M. Egan
Utilising Accounting and Accountants in the Management of Water Efficiency
members may continue to remain unwilling or unable to respond. We contribute by exploring the roles,
drivers and impacts of accountants, in a developing focus on water accounting change within five case study
An Institutional Logics Framework
A range of studies draw on a ‘neo-institutional’ framework to aid exploration of the social and political antecedents of environmental or sustainability management change (Greenwood and Hinings 1996; Bouma
and van der Veen 2002; Chang and Deegan 2008;
Qian and Burritt 2008). A central expectation of neoinstitutional theory is that ‘professions, sciences, legitimate interests . . . construct and constrain’ behaviour
(Jepperson and Meyer 1991: 206). DiMaggio and
Powell (1991: 15) add that the ‘taken-for-granted scripts,
rules and classifications’ of institutions describe the way
in which things are expected to be done (Scott 1992;
Tolbert and Zucker 1996).
A shortcoming of these neo-institutional arguments is
that they tend to emphasise homogeneity and ‘mindless
cognition, [while] ignoring mindful action and agency’
(Thornton et al. 2012: 31). Suddaby (2010: 16) adds
that related empirical studies often overlook the impact of culture including ‘meanings, systems, symbols,
myths and the processes by which organisations interpret their institutional environments’. Thornton et al.
(2012) therefore develop a distinct ‘institutional logics’ framework that seeks to explicitly factor in arguments about how culture and values not only constrain,
but also guide choice (Covaleski and Dirsmith 1988;
Thornton and Ocasio 1999, 2008). We will draw on these
concepts to enable articulation of how accounting and
accountants were uniquely drawn on in the management of water efficiency change across our five case study
Institutional logics serve as ‘underlying [organisational] lynchpins’ (Glynn and Raffaelli 2013: 178), which
condition actors’ choices, motivations and sense of identity, and so are able to explain diverse responses across
organisations (Thornton et al. 2012). Institutional logics ‘consist of linked material (practices) and symbolic
(meanings) elements that work together to constitute
a particular type of institutional order’ (Ezzamel et al.
2012: 284). We can conceive of seven distinct institutional orders forming the ‘key cornerstone institutions of
society’: family, community, religion, state, market, profession and corporation (Thornton et al. 2012: 53). Each
institutional order is composed of distinctive norms,
symbols and practices. While market norms include
self-interest and reward through profit and efficiency,
‘community’ norms suggest the importance of group
concerns, trust, common values and loyalties. ‘State’
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norms in the Australian context suggest bureaucratic
democracy (Thornton et al. 2012).
While actors do not have ‘an unbridled ability to freely
manipulate institutions’ (Thornton et al. 2012: 9), a
sense of ‘contradictory’ logics (which are likely to be
evident in fields that bridge others) (Greenwood and
Suddaby 2006) can be exploited by individuals as they
seek to solve organisational challenges (Thornton et al.
2012). A sense of contradictory logics lowers an actor’s
sense of embeddedness in any one field and so provides the conditions necessary to become ‘institutional
entrepreneurs’ (or drivers of institutional change). Institutional entrepreneurs might choose from ‘a menu of
institutional models and components’ and are expected
to continuously integrate elements of new logics without
fully discarding old ones (Borum and Westenholtz 1995:
A range of organisational strategies and practices may
emerge where actors are subject to a diversity of conflicting logics. Thornton et al. (2012: 58) suggest that
‘one way individuals and organisations deal with the
pressures of conflicting logics of different institutional
orders is to loosely couple or decouple who they are,
from how they act’. Oliver (1991) suggests that organisational responses in the face of ‘multiple competing
logics’ are likely to range from acquiescence (a high level
of responsiveness), to compromise, avoidance, defiance
or manipulation. Pache and Santos (2010) suggest that
organisations are more likely to compromise and adapt,
where agents within the organisation who are aligned to
those logics have power, and where conflicting demands
are not expected to require significant organisational
adaption. Reay and Hinings (2009) add that competing logics can coexist where a culture of collaboration is
Waldorff et al. (2013) develop a framework for understanding how new logics can start to have some impact
in the face of dominant organisational logics. Agents
passionate about, or aligned to emerging logics emphasising the importance of water efficiency, may also
hold positions of some power. This may enable them
to resolve any organisational sense that new logics conflict with existing core logics. Another possibility is that
organisations might ‘segment’ any agents assigned to
address water efficiency, away from centres dominated
by logics that are seen to compete. In this case, action
might be possible without the need for resolution of
conflict. A further alternative is that agents responding
to novel logics might develop ‘facilitative relationships’
to core logics. For example, agents championing water
efficiency change might be able to convince others that
a pervasive water efficiency change might improve competitive advantage. Pache and Santos (2013: 28) argue
that ‘multicultural’ individuals (individuals able to identify with multiple logics) are best able to contribute to
institutional adaptation.
Australian Accounting Review
Utilising Accounting and Accountants in the Management of Water Efficiency
The opportunities identified in the literature reviews
undertaken across sections 2, 3 and 4, suggest value in
the following four research questions for this study.
1. What water accounting techniques were being developed across five large water consuming organisations
operating in Sydney, Australia, in the late 2000s?
2. What roles were assumed by accountants?
3. What logics explain each organisation’s unique approach to utilising accounting and accountants?
4. What impact did accounting and accountants have
on the embedding of water efficiency change in each
A qualitative case study approach is appropriate where
seeking rich insight into organisational complexity
(Creswell 1998). The Sydney basin (hereafter called the
‘basin’) was selected as an ideal location within which
to target a number of organisations. The basin has a
small water catchment (approximately 16 000 square
kilometres) and yet includes one of Australia’s largest
industrial and urban concentrations. The basin is hydrologically isolated and was impacted by a protracted
period of drought at the time of this study. Within the
basin, we targeted organisations that were both large
water consumers and financially large. Our goal here
was to access organisations that were both vulnerable to
community water pressures and able to invest in efficiency solutions. In 2005 the NSW Water Savings Order
2005 (‘the Order’) was implemented, which required all
Sydney-based organisations that consumed more than
50 megalitres of water in the preceding year to develop
water savings plans. An appendix to that Order named
each of those organisations, as ‘large water consumers’.
We matched that list against the 2006 Business Review
Weekly listing of organisations with total annual revenue exceeding AUD1billion (BRW 2006). We identified
38 organisations that met both of these criteria.
The environment/sustainability managers in five food
and beverage producing organisations from that list of
38 were contacted, and all agreed to provide access. The
inclusion of more than one case study organisation was
considered desirable, in order to enable some contrasting
of alternative approaches. The food and beverage sector
was considered an ideal target as it uses water for a variety
of purposes. Industry groups reflect ‘recognised areas of
institutional life’ (DiMaggio and Powell 1983: 148) and
by focusing within one, the researcher can ‘eliminate
the confounding influences of different regulators and
publics’ (Deephouse 1996: 1026). We explained our objectives in an initial meeting and each suggested a range
of staff for detailed interviewing. It is acknowledged
that in working through the environment/sustainability
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manager, some staff having an interest in water efficiency
may have been overlooked. Interviewing became the primary source of data.
To ensure anonymity, interviewee and company
names are not revealed. Instead, generic position descriptions are utilised and the five case organisations
are given the pseudonyms Alpha, Beta, Gamma, Delta
and Epsilon. A semi-structured interview approach was
adopted so as ‘to present a detailed view of the topic’
(Creswell 1998: 17). All staff suggested by our environment/sustainability manager contacts agreed to be interviewed. Interviewees included a number of ‘accountants’, along with others involved in the management
of water-related activities. Ultimately, we interviewed 21
during 2008, with nine follow up interviews conducted
through 2009 and 2010 (Table 1). Interviews were transcribed and coded to key themes using NVivo 9. Of
the comments coded to those themes, many were ultimately edited out because similar views were better expressed by others. Subjectivity of coding and analysis are
challenges for qualitative research and so are acknowledged as limitations of this study. Nonetheless, a ‘plausible’ and ‘trustworthy’ account (Ahrens and Chapman
2006: 834) was sought by contrasting and comparing key
Background – The Nature and Drivers
of Water Efficiency Change
While not the core focus of this paper, here we provide
some background on the water efficiency practices and
drivers of those practices, within the five case organisations. Despite drought conditions in the Sydney basin
through the early 2000s, water authorities implemented
limited price increases (Egan 2009). Furthermore, the
requirements of the Order were limited, and focused
largely on mandating the development of a ‘savings plan’.
Cost and regulation, therefore, did little to ‘construct and
constrain’ (Jepperson and Meyer 1991: 206) inefficient
water usage. However, as drought conditions intensified,
an awareness developed across the field that significant
water usage was being closely scrutinised by both authorities and community groups. While water cost and
regulation did little to drive water efficiency change, this
somewhat intangible sense of scrutiny and criticism became a more powerful driver for change within at least
Alpha and Beta (Egan 2014). Responses across the five
case organisations can therefore be understood to have
been influenced by a combination of market, state and
community logics (Thornton et al. 2012).
The five case organisations developed a diversity of
water efficiency practices in response to these drivers.
Prior to the drought, the taken-for-granted or ‘institutionalised’ (DiMaggio and Powell 1991) approach to water efficiency had largely been ‘just pouring it down the
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Utilising Accounting and Accountants in the Management of Water Efficiency
Table 1 Semi-structured interviews
Generic position description
Head office environment manager
Plant manager and effluent manager
Operations manager
Head office environment manager
Head office environment manager
Corporate affairs manager
Head office environment manager
Environment assistant
Plant environment manager
Plant manager
Accountants (x 2)
Environment & corporate affairs manager
Environment & corporate affairs manager
Management accountant
Plant environment manager/engineer
Environment manager
Plant manager and effluent manager
Sustainability and environment manager
Environment manager
Environment manager
drain’ (as argued by Epsilon’s environment manager).
However, by 2010, market and state logics had driven all
five organisations to make some effort to identify and
monitor sources of usage, and remedy at least, any significant inefficiencies or leaks. Most initiatives were low
cost and included new reporting processes, staff awareness campaigns, some re-engineering of production processes, and minor hardware investments such as efficient
hose nozzles. The sense of community scrutiny and criticism felt within Alpha, Beta and Gamma, also motivated
those organisations to invest in some larger water treatment and recycling infrastructure (Egan 2015). Consistent with Ezzamel et al. (2007), these three identified
logics (market, state and community) impacted differentially across the five cases, and so variable strategies
were evident.
Responding to the Four Research
Four subsections are presented here, addressing each of
the study’s four research questions. The theoretical arguments developed in sections 2 to 4 are drawn on as
appropriate, to enable both a describing and an evaluation of the effectiveness of accounting and accountants
to water efficiency change (Bouma and van der Veen
RQ1. What water accounting techniques were being
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Length (mins)
Agents cognisant of, and enthusiastic to respond to,
developing community logics about the importance of
water efficiency were evident within each of the five organisations. Those agents differentially mobilised a range
of accounting techniques, including water costing, water
reporting, true cost and reputation cost, in their efforts
to champion some water efficiency change.
Water costing
Industrial water prices were not significantly increased
in Sydney through the 1990s and 2000s (Egan 2009).
Nonetheless, the market logics implicit in water cost had
some limited ability to drive water efficiency change in
Alpha. The accountant in Alpha explained that while
water was ‘still too cheap to be a driver on its own . . .
highlighting that it is a cost and that it is increasing
does get some traction’. By referencing ‘multiple logics
[this accountant was able to] open up space giving more
discretion to social actors’ (Waldorff et al. 2013: 104).
In general however, the insignificant cost of water, as
presented through financial accounting records, did little
to compel a focus on water efficiency. Typical of many
comments, Gamma’s environment manager argued, ‘I
don’t think there is a lot of cost savings’ through being
more efficient. He added; a business ‘has got to make
money to survive’.
Despite the limited impact of these market focused
logics (Thornton et al. 2012), developing community
logics, focused on the importance of preserving shared
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Utilising Accounting and Accountants in the Management of Water Efficiency
water resources, were also having an increasing impact
in Sydney at this time. Those norms encouraged both
householders and organisational agents to seek opportunities wherever they could, to maximise water efficiencies. Agents within the five case organisations, who were
keen to respond to those other developing logics, had
greater success in driving water efficiency change, where
they also referenced other more creative accounting solutions. Those other accounting solutions are explained
in the following subsections.
Water reporting
The Order mandated all five organisations to map water
usage patterns, develop a list of savings measures, and develop a plan for implementing those measures. This state
logic (Thornton et al. 2012) was generally interpreted to
require the development of at least some basic reporting
of water consumption (to be measured in litres), on at
least an annualised basis, dissected by key production
sites. Annualised data was of no utility, however, for investigating inefficiencies and leaks. Nonetheless, agents
in all five cases had championed at least some further
development of water reporting, beyond those limited
needs of the Order. In each case, usage data, measured in
both litres and as a cost (litres consumed multiplied by
unit cost), was now collected frequently (in some cases
on a monthly, weekly and even daily basis), dissected
in meaningful ways (by function, location or production cycle), and contrasted against production levels to
determine and compare efficiencies.
Alpha managed over 100 production sites across
Australia and New Zealand and had recently installed a
number of water sub-meters to allow deep analysis of water usage by site and process. By mid-2008 all production
sites were manually collecting water usage and discharge
data measured in litres, on a weekly basis. This data was
then discussed in monthly teleconferences, which were
attended by all plant managers and the CEO. The environment manager explained, ‘we actually show each site
whether they have gains or whether they have reduced
the amount of water they use. If it has increased the big
question is asked: what happened? If it is reduced: how
did you do it?’ Management’s goal for water reporting
in Alpha therefore went beyond compliance, and was
focused on maximising water efficiencies (Chang and
Deegan 2008) through benchmarking and a sharing of
ideas between production sites.
Interviewees in Alpha explained that a key factor driving this beyond compliance approach was a sense that
water consumption was being closely scrutinised by water authorities. The operations manager explained, ‘in
the past, it was just a cost of business and they [authorities] provided water for you. Now, they may say
“no, it’s just not available”. We would have to plan
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accordingly. So it becomes part of our strategic decision making’. Perceptions of new community norms
(Thornton et al. 2012), suggesting that wasteful organisations might somehow have their supplies cut or restricted, were increasingly able to compete with and
modify dominant market logics focused on cost efficiency. Here, informed agents were aware of this ‘constellation’ of community, market, and state logics (Waldorff
et al. 2013), and so promoted sophisticated reporting
practices, capable of providing insight into where inefficient usage might be contributing to unwanted scrutiny.
A significant network of water sub-meters had also
been installed at key water consumption points in Beta’s
Sydney production sites in recent years. Plant management were required to read those meters on a daily basis.
The plant engineer explained, ‘sub-metering is where it
all starts because if you don’t get the correct data collection, you can’t do anything with the information’. Daily
water usage data measured in litres was then linked to
production data so as to present water usage per volume of output, by site. The plant environment manager
explained, ‘we have recently installed counters on every
line for our production figures . . . because previously,
the amount of water used in a day, well, what did it
mean? . . . relating it to the production data in real time
is a key objective’. Monitoring water usage as a percentage
of production enabled comparison to targets and benchmarking across locations. In this manner, water reporting had evolved in Beta to meaningfully inform plant
level efficiency investigations. Beta went one step further
than Alpha in also incentivising the achievement of key
water usage targets through bonus arrangements. Bonus
mechanisms provided an additional ‘material practice’
for Beta, linking community and market focused logics
(Waldorff et al. 2013). Organisational culture was important here and focused on encouraging collaboration
(Reay and Hinings 2009). That culture enabled change
to core production processes, which in turn facilitated
these measurement initiatives.
In Gamma, production level staff recorded water usage
in litres from water meters on a weekly basis. That data
was added to management reports that also documented
production data, along with energy and gas usage. The
plant manager explained that these reports had thereby
become useful for informing plant level efficiency investigations. Like Beta, an important factor motivating
staff to undertake those investigations was that water usage KPIs were incentivised through bonuses. The plant
manager explained, ‘at a certain [management] level we
all have a 20 per cent bonus based on, broken down into
different sections, but all of it will have a cents per litre
By 2008, water usage data (measured in litres) was also
being generated on a daily basis in Delta. However, top
management’s interest was limited to compliance with
the Order, and so they encouraged staff to do no more
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Utilising Accounting and Accountants in the Management of Water Efficiency
than monitor usage to ensure it stayed within reasonable
parameters. The plant manager explained water was ‘the
cheapest of our ingredients [and so] that would be the
least of their [top management’s] worries . . . if it [water
usage] is at a good level then I guess they [top management] don’t really need to go out there and make
waves’. Nonetheless, despite this limited emphasis on investigating inefficiencies, the plant manager and his team
utilised that data where they could to try to improve efficiencies. ‘Every day . . . we can look at discrepancies.
If too much water is being used, and it has happened a
few times, we’ve got to go and investigate why’. The production manager explained, ‘it is more of a competitive
thing against the other [production] sites which is the
driver for it’. This example shows that while top management were fixated on market logics, plant level staff
were able to drive some change, particularly where they
had some power (Pache and Santos 2010) to respond
to community focused norms about water conservation
(Thornton et al. 2012). This sense of a multitude of logics
motivated staff to draw on the organisation’s limited water reporting, as best they could, to explore for potential
Water reporting was the least impressive in Epsilon.
Management in Epsilon began collecting annualised water usage data, measured in both litres and dollars, from
2006 to address the limited compliance requirements of
the Order. This annualised water usage data was ‘simplifying and boundary drawing’ (Lohmann 2009: 501), as
it was of no use to any plant level staff seeking to investigate inefficiencies. Because water costs were low, top
management did little to encourage efficiency. Nonetheless, some plant level staff were motivated by community
concerns about the drought to do what they could, and
so drew on discretionary funding to install some submeters. Data from those meters needed to be recorded
in distinct localised reporting processes (Thomson and
Bebbington 2005). The head office environment manager summarised that it was a ‘case of excellence in some
[plants], and complete ignorance in others’.
‘True cost’ of water
Along with a well-developed focus on water reporting,
non-accountants in both Alpha and Beta were beginning
to creatively manipulate financial accounting information to bring greater attention to what they called the
‘true cost of water’. For both Alpha and Beta, the true
cost of water factored in not only the price to purchase
water from the supplier (which in this study was Sydney
Water Corporation), but the additional costs required
to heat, treat and dispose. The environment manager
in Alpha explained that the true cost of water comprised ‘the costs to come in per kilolitre, the costs to
heat it . . . the costs to chill it . . . then we pay to treat it
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when it’s wastewater and then we also pay to discharge
that. So if you add up all of those costs, it’s about 5 or
6 dollars a kilolitre, whereas if you just buy one kilolitre
from Sydney Water Corporation it’s about $1.14’. Similarly, in Beta, the plant environment manager explained
that the additional elements of ‘the real costs’ included
‘the costs within our process for treating that water before we can use it, all of the energy requirements, the
water treatment plants, filtration, the annual testing’.
These novel accounting developments required some
effort to assemble and integrate into management reporting processes. In both cases, they were championed
by non-accountants (in these cases, environment managers), and were designed to help better argue a case for
improving efficiencies and investing in water-specific infrastructure. In drawing on cost accounting data, true
cost reflected a growing leverage and influence by nonaccountants over data managed by accountants. True
cost overcame the limitations of water cost, by better revealing how water usage affected the economic health of
the organisation (Schaltegger and Burritt 2000). In these
examples, the true cost of water became a new material symbol (Ezzamel et al. 2012), which added strength
to the arguments for greater efficiency, as presented
through water reporting. That strength was apparent
through the ability that true cost had to contribute to reconciling new community concerns about water scarcity
(Waldorff et al. 2013), with dominant market focused
Reputation cost
Non-accountants were also empowered in some cases,
to rework capital investment proposal frameworks to
better describe how water usage and water efficiency impacted on broader organisational risks including reputation. In cases where a sense of pressure from community
groups and water authorities was acute, ‘reputation cost’
was developed to provide a qualitative understanding of
how proposed infrastructure investments could mitigate
broader organisational risks.
In Epsilon, the head office environment and sustainability managers explained that ‘sticking a number on it
[any social or environmental benefits expected as a result of water efficiency initiatives] is always going to have
assumptions . . . but ultimately you’re saying, okay, by
implementing this program five people on the site who
otherwise would have left the business decided to stick
around for another 18 months which saved X dollars in
recruiting costs and training’ (presumably these ‘people’ would be individuals with some passion for community focused logics about water scarcity). In Beta,
the plant level engineer explained, ‘there has been some
leniency . . . and it really is based on what is the longterm benefit. Is it the right thing from an environmental
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Utilising Accounting and Accountants in the Management of Water Efficiency
perspective, does it fit with our values and missions?’
Such ‘values’ included the importance of contributing
to common environmental challenges including water scarcity. Referring to an example of a recently approved rainwater harvesting system he added, ‘it hits
the ticks in all those other boxes’. The plant environment manager also commented on this investment: ‘one
thing that’s very hard for us to quantify is the feel-good
factor . . . we have kicked a few ideas around the table; it [the ultimate solution] might even be ratings
on a chart and assessing values according to various
Efforts to document these non-quantifiable risks
demonstrate a progressive acquiescing to new community norms about water scarcity (Oliver 1991). Reputation cost was developed as a clever way to exploit nonquantifiability. Reputation cost increased the sense of risk
associated with poor water efficiency practices and so increasingly facilitated (Waldorff et al. 2013) a linkage between those new norms and core market logics. Whereas
Spence and Rinaldi (2010) suggest that a well-developed
focus on ‘sustainability’ accounting might allow some
space for non-documentation and ‘gut instinct’, management in Beta were determined to try to ‘kick a few
ideas around the table’ in an effort to document relevant
risks in a qualitative manner. Documentation was seen as
a more powerful way to drive change than ‘gut instinct’.
Further to Adams and Frost (2008) and Burritt et al.
(2002), these reputation cost examples sought to complement water costing information, water reporting and
true cost, with broader insights into how poor responses
to community logics impacted on the organisation’s
financial health.
RQ2. What was the role of accountants?
From 2008, accountants in Alpha began to play a more
central role in water efficiency. Specifically, they were
mandated from that time to help improve the accuracy
and meaningfulness of water reporting, and assist with
the development of ‘true cost’ calculations. The environment manager explained, ‘the challenge that’s been
set for [the chief financial officer] and I is that we need
to have a [water] report that a CEO can read that isn’t
vastly different from anything else that he reads, yet it’s
telling him exactly where we sit environmentally and
from a sustainability point of view’. Parker (2000) suggested that accountants should participate in environmental accounting initiatives because they can improve
decision utility. Here the operations manager explained,
‘we need accountants involved to make sure it reconciles against our dollar figures and the whole system is
repeatable and can stand the scrutiny of audit’. The state
accountant also commented positively: ‘as the legislative
requirements change . . . almost certainly we’ll have to
collect more detail’.
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M. Egan
Explaining how market focused logics dominated in
Alpha, the operations manager argued: ‘finance people
have been considered to be the controllers of the business’. Nonetheless, other non-accountants influenced by
developing community focused water logics (for example, the environment manager), were also now gaining
influence (Pache and Santos 2013). So much so, that
those others became instrumental in enlisting accountants to help develop new water accounting initiatives. In
so doing, accountants in Alpha contributed to a reconciliation (Waldorff et al. 2013) of conflicting community
and market logics. Tensions were evident in comments
from the accountants as they sought to adapt to these
changes. Alpha’s state accountant expressed frustration
regarding the CEO’s vision for water reporting: ‘there
is nothing special about water, it’s a cost, it’s got statistical requirements, it has got legislative requirements.
Let’s not recreate the wheel all the time’. This accountant’s sense of self (Thornton et al. 2012) appeared to be
focused fundamentally on market logics. Nevertheless
in a second interview in 2010, the environment manager explained ‘the finance people are [evolving and]
now talking about kilolitres or kilowatts rather than
dollars and cents; so it’s been good both ways’. Apparently
with time, and as management carefully made the case
for a collaborative response (Reay and Hinings 2009),
accountants came to embrace a broadening vocabulary
(Thornton et al. 2012), and started to learn ‘new tricks’
(Langfield-Smith 2007).
Unlike Alpha, champions for water efficiency in Beta
appeared less enthusiastic about drawing on accountants
to assist with water accounting initiatives. Despite Beta’s
impressive water efficiency responses, the environment
manager summarised in 2010, ‘to be honest water’s not
a material cost to the business so they [accountants]
are probably not interested’. Supporting the arguments
of Schaltegger and Zvezdov (2015), he suggested some
hostility to accountants: ‘this company is not ruled by
just accountants. There’s a managing director who is embracing sustainability’. The plant environment manager
also seemed wary of the plant level accounting team: ‘I
kind of need to understand what their drivers are’.
Providing some contrast, two plant level accountants
in Beta were also interviewed. One argued that water ‘is
one of the key ingredients . . . it’s our bread and butter
so to speak . . . so we do monitor our wastage levels . . .
to try and control it’. She remained keen however, to ‘segment’ (Waldorff et al. 2013) water efficiency from core
production and profit maximisation concerns: ‘I think
environment and accounting is probably in the infancy
stage where we are at the moment, and is probably best
left separate anyway’. The other reflected somewhat facetiously, ‘I think sometimes environmental decisions are
made without considering cost implications . . . if there
is a problem you present to an engineer there’s always
a solution, of course there is, it might be a jumbo jet
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Utilising Accounting and Accountants in the Management of Water Efficiency
solution for a bicycle, but there will always be a solution. Whereas the accountant will add that bit of sanity;
you don’t need a jumbo jet, you just need a bicycle’.
Clearly there were some differences in the norms of water efficiency within Beta, from its accountants to its
Beta provides an example of water efficiency progress,
despite a segmenting of agents championing community logics (non-accountants), from agents championing
market logics (accountants) (Waldorff et al. 2013). However, this bypassing of accountants was probably not
going to persist. The environment manager explained in
2010 that management were trying to develop a single integrated ‘database that reports all of those metrics’ (that
is, water cost, water consumed in litres, effluent disposed
in litres etc). She added, ‘I think there’s a massive role
for accounting in our business to do that’. As Alpha had
done years earlier, Beta was beginning to appreciate by
2010 that accountants were well placed to contribute to
a more facilitative relationship between community and
market logics (Waldorff et al. 2013). To do that, just as
Alpha had done, Beta would probably also have to work
on re-engineering the ‘vocabulary they [accountants]
use to motivate action’ (Thornton et al. 2012: 2).
The resource usage reports prepared each week by
plant level staff in Gamma were not shared with management at head office level. Instead, Gamma’s head office
management accountant had recently begun to generate
similar data from water bills and sales invoices. Those reports were then included within monthly reports to his
board. He explained that this duplication ‘was mainly because of the disjoint . . . operations have kind of been neglected within the company . . . there’s always been this
kind of silo mentality where accountants all sit at their
computers and twiddle with the numbers’. He added,
‘they [top management] can see there’s a heck of a lot
of money to be saved’. Despite its low cost, water was
consumed so inefficiently in Gamma that top management saw cost saving opportunities through improving
efficiencies. Water reporting developments in Gamma
were therefore motivated by norms that were familiar
territory for accountants. There was no suggestion in
Gamma that new water practices conflicted or contradicted core corporate focused logics (Greenwood and
Suddaby 2006). The fear evident in Alpha and Beta that
accountants might seek to undermine water efficiency
initiatives, was therefore not evident here. Accountants
in Gamma thereby assumed control over limited water
efficiency practices, focused on cost efficiency.
As noted, water reporting in Delta was focused on little more than monitoring usage. Delta’s plant manager
explained that these processes were of limited interest to
accountants as they were ‘not going to try and save $100
on water when within that same time they could have
saved a couple of hundred thousand dollars on other ingredients’. As a consequence (similar to Gamma), there
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was no sense of tension in Delta about the role accountants played, nor any suggestion that the organisation
was grappling to reconcile new community logics with
core cost/profit focused logics (Cooper 1992). Nonetheless, some acquiescence (Oliver 1991) to logics for the
importance of water efficiency was evident in the efforts of the sustainability manager and some plant level
staff (non-accountants) who were championing some localised efficiency initiatives. Water efficiency initiatives
in Epsilon were limited, and so the role for accountants
also remained limited.
To summarise, the tensions felt between nonaccountants and accountants across the five cases with
respect to water efficiency differed, and can be explained
by considering the institutional logics impacting on each.
Those non-accountants who sought to champion a focus on maximising water efficiency initiatives spoke of
the importance of new community logics (Thornton
and Ocasio 2008; Thornton et al. 2012), about water
scarcity and the importance of preserving long-term
supply. By way of contrast, all accountants interviewed
continued to understand their identity with central reference to market logics focused on cost efficiency and
RQ3. What factors motivated this use of accounting
and accountants?
The Order can be understood to have effected a state
imposed logic (Thornton et al. 2012), driving management to map and monitor water usage. That logic impacted on all five organisations and contributed to a
growing sense that all were now operating within an
identifiable organisational field (Jepperson and Meyer
1991). That logic necessitated some homogeneity of
practices across all five organisations (Jepperson and
Meyer 1991); all were now required to record and monitor total physical flows (Schaltegger and Burritt 2000),
develop savings plans, identify water as an issue of risk
and invest in some water sub-meters. All five organisations were also impacted by the market logics implicit within water cost. However, because those costs remained low, they did little to drive significant efficiency
In addition to these state and market logics, community logics focused on reputation and the importance
of water efficiency were apparently having an impact on
some individuals in at least some cases. Where this complexity of logics had some impact, well dissected and regularly compiled water reports had developed to complement existing financial accounting systems (Hopwood
et al. 2010). Financial accounting information was an
obstacle to any beyond compliance initiatives, as it presented water as unimportant. Further to Schaltegger and
Burritt (2000), true cost and reputation cost accountings were therefore developing in some cases, to more
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M. Egan
Table 2 Key corporate features of each case organisation, and overview of the accounting and role for accountants, evident
in each
Corporate form
water reporting?
True cost?
Reputation cost?
Private Australianbased
Not apparent
Multinational public
with foreign parent
Multinational public
with foreign parent
Multinational public
with foreign parent
Multinational public
with Australian
Seeking to effect
some ranking of
social and
Not apparent
Not apparent
Some isolated
convincingly reveal how water usage impacted on the
economic health of the organisation.
Further to Adams (2002), Cooper (1992), and Gray
et al. (1996), accountants were seen as a threat by
those seeking to champion progressive water efficiency
responses. Non-accountants were generally wary that
accountants might undermine practices perceived to be
inconsistent with prevailing market logics (Thornton
et al. 2012). This paper therefore adds to Burritt and
Tingey-Holyoak (2011) and IFAC (2012) by suggesting that despite decades of effort encouraging members
to engage more effectively with such novel organisational developments, the accounting profession’s success
continues to be limited. Further research could explore
whether the accounting profession might have more
traction with other strategies.
With a ‘multicultural’ appreciation of all three of these
competing logics (Pache and Santos 2013), the environment manager in Alpha was keen to encourage accountants to engage with the organisation’s water initiatives.
She argued, ‘we have to be always very vigilant in what
we do in terms of actually reducing water use to make
sure it doesn’t compromise what we’re actually doing,
which is producing safe food for the consumer’. Alpha
represents the first of these five organisations to encourage accountants to participate in initiatives that went
beyond simply monitoring water usage. Her motivation was a sense that accountants could become important ‘lynchpins’ between competing logics (Glynn and
Raffaelli 2013), and so assist with integrating disparate
reporting processes (Parker 2000).
By way of contrast, market logics prevailed in Gamma,
Delta and Epsilon. As a result, accountants were given
responsibility for managing limited water reporting initiatives which focused on monitoring and on regulatory
compliance. However contrary to the conclusions from
Australian Accounting Review
Accountant’s role
Improving accuracy,
consistency, and
enabling true
cost calculations
Enabling true cost
Monitoring water
Monitoring water
Albelda (2011) and Milne (1996), the outcome in each
of these cases cannot simply be dismissed as ‘business as
usual’. In each case, tenacious plant level staff were also
able to champion some efficiency initiatives. However,
those initiatives remained largely segmented from core
profit focused activities (Waldorff et al. 2013).
Table 2 reveals the corporate form and product base3
of each organisation. Table 2 demonstrates that these factors cannot explain variations in the use of accounting
and accountants across the five cases. To summarise our
response to research question 3, basic water reporting
was driven by the monitoring requirements of legislation. In some organisations, top management felt compelled by a sense of pressure and scrutiny from community stakeholders to go further and seek opportunities
to maximise efficiencies. In these cases, water reporting was further developed to provide greater dissection
across process and location. The more responsive organisations in this study were also beginning to draw
on accountants to help reconcile developing community
logics to prevailing market focused logics. True cost and
reputation cost were developed in some cases with the
help of accountants, and provided deeper insight into
how inefficiencies impacted on the organisation’s financial health. In other cases where top management lent
little support to developing community logics, localised
water accounting initiatives did little more than monitor
usage, and were largely managed by accountants.
RQ4. What was the impact of accounting and accountants?
Existing literature suggests that effective environmental accounting initiatives should measure both
physical and monetary flows (Schaltegger and Burritt
2000; Adams and Frost 2008; Fries et al. 2010). The
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Utilising Accounting and Accountants in the Management of Water Efficiency
comprehensive examples of water accounting evident
in Alpha and Beta can be seen to have done both. Well
dissected water reporting in these cases began to render
‘transparent formerly invisible’ (Parker 2000: 48) physical flows, and contributed to plant level efficiency investigations. True cost provided deeper insight into monetary
flows, and so contributed to efforts to reconcile (Reay and
Hinings 2009) multiple competing logics (Oliver 1991).
True cost and reputation cost also broadened discourse
across these organisations by obliging engagement with
accountants. Through these interactions, norms about
the importance of water efficiency began to enter the ‘day
to day activities of [an expanding range of individuals
and their] organisational life’ (Johnson et al. 2003: 3).
Contrary to Gray et al. (1995), this study demonstrates
that accounting is capable of contributing to goals that
do not clearly align with cost efficiency and profitability.
Further to Adams and Frost (2008), ‘old-fashioned
gut instinct and vision’ (Spence and Rinaldi 2010: 58)
were not enough for those keen to pursue a progressive
approach to water efficiency. Non-accountants, including environment managers, plant managers and production managers, were central to the progressive examples
of water efficiency change evident in this study. Environmental managers were employed within all five organisations, and assigned a number of responsibilities
including managing compliance with the Order. However, regardless of what their ‘statement of duties’ may
or may not have required, all environment managers
interviewed were attuned to the drought and keen to
champion as best they could, a particular set of community logics focused on resource efficiency. Creative
accounting initiatives became critical to the efficiency
changes they sought to drive. Water accounting began
in each case with water reporting. However, a challenge
for individuals keen to champion efficiency change, was
to link the importance of evolving practices to dominating norms focused on cost efficiency. As water remained
cheap, cost was an inadequate ‘lynchpin’ (Glynn and
Raffaelli 2013) between community logics and dominant market focused logics. Non-accountant champions
therefore appreciated that to get traction, other creative
accounting initiatives were needed that better connected
with dominant market focused logics.
The environment manager in Alpha summarised:
‘what we’re talking about is trying to marry the two together, so put environment into our standard reporting
processes so that we can get robust data for our sustainability reporting as well as our mandatory reporting. But
I also like to bring more cost information into things as
well so that we can say well look, we use so much electricity and this is what it costs, this is what it’s likely to
cost in four years’ time’. An adaptation of core corporate logics (Thornton et al. 2012) was also evident where
these comprehensive accounting examples directed attention to more difficult to measure factors including
2017 CPA Australia
reputation, brand value and longer-term resource security. We add to Waldorff et al. (2013) by observing that
logics that might initially be seen as competitive, can
become facilitative where top management lend support
(Rodgers et al. 1993) through strong reconciling arguments. The facilitative arguments developed in Alpha
and Beta suggested that by maximising water efficiencies,
the organisation could respond to negative attention, and
so better secure longer-term water supply needs.
Some water efficiency change was also achieved in
Gamma through a ‘segmenting’ (Waldorff et al. 2013)
of well dissected plant level water reporting processes,
from distinct summary level water reporting prepared at
head office. This ‘hands off’ approach allowed plant level
non-accountants some success in improving efficiencies.
The plant manager explained that giving him space to
develop his own reporting processes was ‘an awful lot
better for me in terms of saving water’. By way of contrast, Gamma’s head office accountant explained that the
distinct water reports prepared at head office were designed ‘primarily just to do the financial modelling. We
use it not only to look historically but also to look forward’. Market focused norms unambiguously dominated
in Delta and Epsilon, which enabled management to constrain water ‘to a safe and controllable issue’ (Gray et al.
1995: 233). Further to Larrinaga-Gonzelez et al. (2001),
this constraining was achieved through accounting that
limited the focus of related discourse to monitoring and
compliance. The plant manager in Delta explained, ‘of
course they [management] are going to worry about the
water; but they are going to focus where the dollars are’.
Accountants in all five cases initially sought to simplify related discourse to a monocultural focus on market
logics. Accountants argued that efforts to improve efficiencies should not exceed what was cost effective. For
example, the accountant in Alpha argued, ‘there’s nothing special about water, it’s a cost’. Ezzamel et al. (2007)
argued that organisational participants may have difficulty untangling the importance of new logics from prevailing logics. The tension evident here provides insight
into how the multiple logics impacting in these organisations competed and differed. Further to Armstrong
(1985), the organisational hierarchies in Alpha and Beta
were not simply dominated by accountants. A culture
of collaboration (Reay and Hinings 2009) in these cases
allowed other voices to respond to community concerns
and champion a focus on maximising water efficiencies.
Nonetheless, as those other voices progressed with embedding water efficiency change, they ultimately also saw
opportunity to draw on accountants for their ability to
provide ‘transdisciplinary’ (Tingey-Holyoak and Burritt
2012) linkages between market and community logics.
This study provides an example of one of the classic
problems for the environment; organisations will remain
oblivious to significant logics impacting broadly on society (such as drought), unless agents are able to reconcile
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M. Egan
Table 3 Summarised representation of the impact of accounting and accountants
Combination of logics impacting on top management
Water efficiency dominated by
The objective of related accounting initiatives
Market and state
Market, state and community
Decision utility
those logics to issues of commercial importance. In some
cases, a surprisingly small number of non-accountants
in this study were able to mobilise a very real set of
logics impacting outside their organisations. They did
this by presenting those logics as an existential threat
to the business. Those threats were visualised through
creative accounting solutions that focused attention on
how drought threatened water supply, and therefore organisational survival. This study shows that social issues
can come to impact on organisational practice, where
accounting initiatives are allowed to give them traction
as issues of organisational survival.
In summary, in Alpha and Beta, support for new community focused logics was clearly articulated from the
CEO level. Through that support, non-accountants in
both were given a mandate to develop a broad water accounting toolkit, which facilitated effective exploration
of water inefficiencies. Furthermore, non-accountants in
Alpha were also now increasingly drawing on the skills
of accountants, to enable integration of the ‘material’
aspects of water efficiency practice, with the ‘ideal aspects’ (Thornton et al. 2012: 42) of existing market and
emerging community focused logics. By contrast, nonaccountants in Beta continued to remain segmented
from accountants and their market focused logics. It
seemed likely, however, that this ‘by-passing’ of accountants would not persist.
In Gamma, Delta and Epsilon, state and market logics dominated. Segmentation enabled some response to
community logics at plant level in Gamma. Generally
however, contrary to Länsiluoto and Järvenpää (2010),
but consistent with Armstrong (1985), accountants in
these three cases presided over a limited range of accountings. Accounting here offered an appearance of a
response to new community logics, but in reality focused
on simplistic monitoring and accountability reporting
to top management (Byrne and Pierce 2007). The arguments developed here about the impact of accounting
and accountants are summarised in Table 3.
With clear top management support (Rodgers et al.
1993), it is apparent that engineers, environment managers and production managers are all capable of
imagining and implementing a range of creative,
decision-useful accounting solutions to community focused logics about environmental challenges. However,
in making space for practices that do not clearly link
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with core logics, we argue that an organisation should
approach its accountants with caution. Despite encouragement for some time from the accounting profession
to engage with issues of ‘sustainability’ (KPMG 2008),
our study suggests that accountants may struggle to appreciate how acquiescence (Oliver 1991) can benefit the
organisation. This mismatch between the ambitions of
the accounting profession, and the interest of members,
needs to be reflected upon. A myopic focus on the ledger
is unhelpful to either accountants or the organisations
for which they work. Organisational objectives and challenges are constantly evolving, and so those who view
them solely through a financial lens may have little to
offer beyond compliance.
Our study makes two key contributions to understanding how accounting and accountants can contribute to a developing focus on water efficiency. First, a
broad complement of physical, monetary and qualitative
water accounting initiatives were best able to reconcile
apparent contradictions in state, market and community logics about water. The state logics presented within
the Order demanded some reporting of physical water
flows. Water costs were low, however, and so that market
symbol had limited ability to motivate management to
dissect water reports in greater detail. Where state and
market logics dominated, water reporting was therefore
managed by accountants, and focused simply on monitoring usage (Larrinaga-Gonzalez et al. 2001). However,
as broader community focused logics came to have some
impact within each organisation, non-accountants (including engineers, environment managers and production managers) were given latitude to further develop
water reports, so as to better inform investigation into
inefficiencies and leaks.
To complement well-dissected water reporting, some
also developed a variety of other monetary and qualitative accountings. Non-accountant champions for water
efficiency change increasingly appreciated that true cost
and reputation cost could enhance arguments for a complementarity (Thornton et al. 2012) between competing
logics (Glynn and Raffaelli 2013). That complementarity became most apparent in arguments that long-term
water supply needs, and therefore survival, were threatened unless the organisation could demonstrate a focus on maximising efficiencies. In this manner, nonaccountants ‘garnered support for engaging with new
combinations’ of logics (Thornton et al. 2012: 62), as
visualised through a range of novel accountings. The development of reputation cost suggests that contrary to
Spence and Rinaldi (2010), some qualitative accounting
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Utilising Accounting and Accountants in the Management of Water Efficiency
is an important complement to physical and monetary
accounting initiatives.
Second, accountants questioned how any focus on
water efficiency was of organisational value. Contrary
to Länsiluoto and Järvenpää (2010) and Monteiro and
Aibar-Guzman (2010), who argued that accountants will
avoid any active participation in novel practices of this
nature, accountants in this study dominated water related practices in Gamma, Delta and Epsilon. In these
cases, water efficiency was a low priority for top management, and so accountants were directed to preside
over a limited range of responses, focused simply on
monitoring usage. Nonetheless, some segmented space
for isolated plant level water efficiency initiatives was
also able to develop in some of these cases. On the
other hand, where a strong focus on water efficiency
was mandated by top management (Alpha and Beta),
accountants were initially bypassed, but ultimately became important transdisciplinary (Tingey-Holyoak and
Burritt 2012) lynchpins (Glynn and Raffaelli 2013), to
help non-accountants strengthen links between community and market logics. Alpha demonstrates that where
carefully managed, accountants can make a positive contribution to practices that do not have an immediate and
compelling link to market focused logics.
This study ends with several suggestions for future research. The five organisations targeted here were only just
beginning to experiment with novel water accounting
techniques. As drought conditions subsequently abated
into the mid-2010s, the limited water accounting developments evident across these five cases may therefore
also have eroded. Further research could explore how
novel accountings of this nature continue to either evolve
or erode as community logics change. While this study
focused on questioning the logics driving the five case
organisations to utilise accountants as they did, future
research could explore motivations from the perspective
of accountants. Other studies could consider where novel
activities such as water efficiency might best be ‘placed’
within organisations (which departments, etc.), and explore organisational perspectives on the ‘right’ mix of
demand management strategies.
The author would like to acknowledge and thank staff
at the anonymised case study organisations for their access and assistance. The author would also like to thank
attendants at the 2012 British Accounting and Finance
Association BAFA Annual Conference, Brighton, United
Kingdom, the 2011 RMIT Accounting for Sustainability Conference, Melbourne, Australia, and the 2011
Australasian Conference on Social and Environmental
Accounting Research CSEAR, Launceston, Australia, for
comments on earlier drafts of this paper.
2017 CPA Australia
1 The terms ‘environmental’ and ‘sustainability’ management will
be drawn on in this paper as little as possible. Our interest here
lies with water efficiency as a specific example of such practice.
Nonetheless, we are obliged to make some use of these concepts,
where they are either referenced by relevant literature, or by our
2 We adopt Schaltegger and Zvezdov’s (2015: 347) definition of
accountant here, by limiting our focus to just those with ‘an
education degree, or professional focus, or an explicit accounting
3 That is, whether the organisation produced mostly food staples
or non-staples.
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