Cole's Supermarket: Culture's Influence on Accounting Procedures

This literature review examines the impact of organizational culture on accounting procedures and techniques, using Cole's Supermarket Australia as a case study. It explores the theoretical background, including the Anglo-American model and Hofstede's cultural theory, highlighting the influence of individualism/collectivism and uncertainty avoidance. Common themes across four articles are identified, such as the importance of organizational culture, accounting techniques (cash vs. accrual), Cole's supermarket's specific culture, and the role of administrative innovation and continuous improvement. The review also discusses different themes, including lean practices, market orientation, lean management accounting, and public sector performance. Managerial implications emphasize the pervasive influence of organizational culture on ethical behavior and accounting practices. Limitations of the reviewed articles include a lack of historical framework and the absence of a 'professional accounting sub-culture' concept, suggesting future research directions to address these gaps. This literature review provides a basis for further research into the relationship between organizational culture and accounting practices. Desklib offers access to similar assignments and study tools for students.

Running head: IMPACT OF ORGANIZATIONAL CULTURE ON ACCOUNTING
Impact of Organizational Culture on Procedure and Technique of Accounting: Case Study of
Cole's Supermarket, Australia
Name of the Student:
Name of the University:
Authors Note:

1IMPACT OF ORGANIZATIONAL CULTURE ON ACCOUNTING
Table of Contents
Brief Summary of Theory and Progression in the Field......................................................2
Common Themes/Findings across the Four Articles...........................................................3
Different Themes/Findings across the Four Articles...........................................................4
Managerial Implication of the Four Articles.......................................................................6
Study Limitations and Future Research Direction Proposed in the Four Articles..............7
References............................................................................................................................9
Bibliography......................................................................................................................10

2IMPACT OF ORGANIZATIONAL CULTURE ON ACCOUNTING
Brief Summary of Theory and Progression in the Field
Several researches such as Fullerton, Kennedy and Widener (2014) has indicated that
organizational culture has increased inferences on the accounting processes and techniques
employed within the company. This is for the reason that accounting is deemed to a broader
concept than just being methodologies, financial statements and numbers. It is relied on the basic
standards and rules in order to preserve a company’s business purpose and is also shaped by a
number of internal and external aspects. Research conducted by O’Neill, Sohal and Teng (2016)
also added that the accounting practice generally signifies and indicates the organizational
culture within which it is carried out.
There are two models that explain the impact of organizational culture on the techniques
and processes of accounting used within the companies. Anglo-American model is a model that
drastically impacts the professional standard setting bodies, focuses on the capital markets and is
dependent on equity offered by public and debt financing. This model also highly regards the
presentation of true and fair financial statements and is also deemed to be the foundation of
accounting standards within Australia. Another theory is Hofstede’s cultural theory that includes
certain manifestations regarding the organizational culture. Fullerton, Kennedy and Widener
(2014) stated that in consideration to the accounting practices, two major aspects associated with
impacting the organizational culture includes individualism verses collectivism along with
“strong uncertainty avoidances verses weak uncertainty avoidances”. This theory considers that
culture is not only found within an organization’s accounting practices but also within everyday
operations of the company.
Common Themes/Findings across the Four Articles
Theme 1: Organizational culture
Bortolotti, Boscari and Danese (2015) defined organizational culture as vital estimations
and understandings shared by a group or reviews like in a nation or ethnic group. It can also be
indicated as shared values, principles, traditions along with manner of conducting things that
impacts the way in which organizational members takes decisions. Organizational culture is also
deemed to have a positive impact on successful implementation of accounting standards and
policies. Chen et al. (2015) elaborated that culture serves as a set of important understandings
that are shared by the community members within an organization’s common culture in contrast
to personality within an individual.
Theme 2: Accounting techniques and procedures
Fullerton, Kennedy and Widener (2014) indicated that the accounting techniques and
procedures are included within the wide area of accounting management practices used within
organizations. Accounting standards and methods are basically explained within the counting
management process followed within the companies. This also includes the procedures, policies
as well as internal control techniques that include two major methods such as cost and accruals.
O’Neill, Sohal and Teng (2016) also elaborated that cash accounting processes and techniques
are focused on reporting expenses and revenue as they are paid and received. Accrual accounting
follows reporting techniques in companies as they are incurred and earned.

3IMPACT OF ORGANIZATIONAL CULTURE ON ACCOUNTING
Theme 3: Organizational Culture in Cole’s supermarket
Coles Supermarkets Australia Pty Ltd trading as Coles is positioned as an Australian
supermarket, consumer services and retail chain. The company is owned by its parent company
West farmers and offers baby, bakery, dairy, deli, fresh fruit and vegetables, special diet foods;
mobile phones and tablets; and gift cards (O’Neill, Sohal and Teng, 2016). The organization
culture of Cole’s is ensuring that the employees operate ethically in an open and transparent
manner. The company also has a culture of focusing on its investors and consumers and
considers offering good returns to all its shareholders. The accounting procedures of Coles
follow the structure of the necessary corporate governance arrangements.
Theme 4: Administrative innovation and continuous improvement program
Fullerton, Kennedy and Widener (2014) revealed that certain effective administrative
innovation and continuous improvement is necessary to be followed within organizations in
order to ensure suitable implementation of accounting techniques within the existing
organizational culture setting. A diversity of perspectives along with strong cultural backgrounds
strengthens innovation and certainty among employees. O’Neill, Sohal and Teng (2016) added
that organizational culture also shapes continuous improvement of the accounting techniques
used in the companies. These researchers also indicated that continuous improvement programs
implemented within organizations is relied on the belief of certain incremental changes that
contributes to major improvements in accounting practices over time.
Different Themes/Findings across the Four Articles
Theme 1: Organizational culture and lean practices
The article “Successful lean implementation: Organizational culture and soft lean
practices” is focused on elaborating organizational culture and its impact on accounting policy
changes. This article explained that the cultural values have a considerable predictive power in
determining the technique selection along with accountant’s behavior in accomplishment of their
duties. Bortolotti, Boscari and Danese (2015) also revealed that the cultural values of any
organization impact the implementation and enforcement of necessary accounting standards in
an organizational setting. The article also explains distinct sub-groups within the process of
accounting and such sub-cultures also indicate distinct account behaviors relied on certain
cognitive functioning culture perspective.
Theme 2: Linking market orientation and environmental performance
The article “Linking market orientation and environmental performance: The influence of
environmental strategy, employee’s environmental involvement, and environmental product
quality” indicated that for ensuring smooth operations of the company, strong cultural values is
necessary. The culture characteristics those are employed within the business surrounding are
observed to have a direct impact on the financial reporting of the organization. Chen et al. (2015)
elaborated that it is necessary that organizational values along with the factors those are
acceptable within the workplace indicates the requirements of accounting standards as well as
procedures. In addition, the article also revealed that existence in cultural harmony within the

4IMPACT OF ORGANIZATIONAL CULTURE ON ACCOUNTING
organization improved employee’s environmental involvement, and environmental product
quality in the organization.
Theme 3: Lean management accounting practices
The article “Lean manufacturing and firm performance: The incremental contribution of
lean management accounting practices” focused on elaborating the ways in which lean
manufacturing culture in an organization supports effective implementation of management
accounting practices. Fullerton, Kennedy and Widener (2014) explained in this article that lean
accounting is designed in a manner that it reflects the financial performance of the organization
that has successfully followed the process of lean manufacturing. In addition, it also indicates
that the accounting practices focused on lean manufacturing culture considers organizing costs
by value streams, altering inventory valuation processes and encompassing non-financial
information.
Theme 4: Management control, results-oriented culture and public sector performance
The article “Management control, results-oriented culture and public sector performance:
Empirical evidence on new public management” focused on explaining the ways in which
organizational culture impacts the disclosure transparency in accounting. O’Neill, Sohal and
Teng (2016) explained that culture serves as an important determinant of disclosure transparency
in organizations of Australia. In addition, the organizational culture must be shaped in a way that
can support the link among culture and disclosure transparency. This might also impact the
companies in modifying its recent culture practices in favor of which transparency in accounting
discourses can be supported. This can further benefit financial situation of the company in future.
Managerial Implication of the Four Articles
The four articles selected for this paper provides some useful managerial implications
that considers organizational culture influences every aspect of a company that is further
important for its operations. It is deemed to impact the general behaviour of the companies’ staff
like their performance and motivation along with influencing and forming company artefacts
(Bortolotti, Boscari and Danese, 2015). Organizational artefacts serves as the structures and
practices within a company like independence in accounting and auditors judgements.
The practices and techniques of accounting used within an organization are sanctioned by
ethical culture followed within organizations. It also pervades all the aspects of accounting that
includes the way it rules along with standards those are practiced to decisions conducted on
everyday basis. This is the reason for which the professional accounting boards and the literature
explained in the elected four articles have greatly focussed on suitable ethical behaviour from the
accountancy viewpoint. This article also indicated that the organizational culture of maintaining
ethics and religious inferences has an impact on the procedures and techniques of accounting
(Chen et al., 2015). Considering the same the future accounting standard setters can take into
account cultural influences for maintaining basics purpose of a profession along with attaining
growth in future.

5IMPACT OF ORGANIZATIONAL CULTURE ON ACCOUNTING
Study Limitations and Future Research Direction Proposed in the Four Articles
The four selected articles in this paper has provided certain useful managerial
implications by elaborating the ways in which organizational culture has impact on the
techniques and procedures of accounting used (Bortolotti, Boscari and Danese, 2015). However,
these articles are also observed to have certain limitations in explaining certain aspects related to
organizational culture based on which accounting techniques and procedures can be selected. It
has been gathered that the articles had a limitation in developing a historical framework for
studying the impacts of organizational culture on selection of the corporate reporting practices.
In addition, these articles also presented a gap in explaining that the companies might be
conceptualised focussed on the extent to which they have a “professional accounting sub-culture
(PASC)”. The limitation exists in reflecting the implementation of accounting as a language,
symbol, myth, ideology and ritual. Considering such limitations identified from these four
articles, the future research is proposed to include suggesting a concept of PASC that might be
helpful in developing a theoretical construct. The future research must also consider the ways in
which organizational culture can impact the selection of the disclosure and measurement
practices.

6IMPACT OF ORGANIZATIONAL CULTURE ON ACCOUNTING
References
Bortolotti, T., Boscari, S. and Danese, P., 2015. Successful lean implementation: Organizational
culture and soft lean practices. International Journal of Production Economics, 160, pp.182-201.
Chen, Y., Tang, G., Jin, J., Li, J., and Paillé, P., 2015. Linking market orientation and
environmental performance: The influence of environmental strategy, employee’s environmental
involvement, and environmental product quality. Journal of Business Ethics, 127(2), pp.479-500.
Fullerton, R. R., Kennedy, F. A., and Widener, S. K. 2014. Lean manufacturing and firm
performance: The incremental contribution of lean management accounting practices. Journal of
Operations Management, 32(7-8), pp. 414-428.
O’Neill, P., Sohal, A. and Teng, C.W., 2016. Quality management approaches and their impact
on firms׳ financial performance–An Australian study. International Journal of Production
Economics, 171, pp.381-393.

7IMPACT OF ORGANIZATIONAL CULTURE ON ACCOUNTING
Bibliography
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and ethical climate on ethical decision making of auditor with self efficacy as
moderating. Review of Integrative Business and Economics Research, 4(1), p.226.
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Verbeeten, F.H. and Speklé, R.F., 2015. Management control, results-oriented culture and public
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