Organizational Founding, Strategic Renewal and the Role of Accounting: Management Accounting Concepts in the Formation of the 'Penny Post'

41 Pages Posted: 2 Apr 2008

See all articles by Alan J. Richardson

Alan J. Richardson

University of Windsor - Odette School of Business

Abstract

Organizational strategies, processes and procedures may become institutionalized during the early history of an organization leading to dysfunctional rigidities when the environment changes. The postal system worldwide is under significant pressure to change its business model, including rescinding the provision of universal service and uniform pricing, as the posts are privatized and opened to competition. Cost accounting has become a key mechanism to achieve reform in the postal system. But is the introduction of a cost-based logic new to the design of post office reforms? Were the core policies of the post office originally developed without reference to cost? This paper analyzes the key document in the creation of the current postal business model - Rowland Hill's (1837) "Post Office Reform: Its importance and practicability." The pamphlet shows a basic understanding of economic concepts including the elasticity of demand and opportunity costs as well as implementing practical accounting techniques that we now call value chain analysis, cost behaviour analysis, activity based costing and activity based management, and target costing. This paper provides an analysis of Hill's logic from the perspective of current management accounting techniques and terminology. It illustrates the use of management accounting in the reformation of social institutions and provides a rare example of the early decision-making use of management accounting concepts.

Keywords: strategic renewal, Penny Post, Rowland Hill, post office reform

JEL Classification: K23, L86, M41

Suggested Citation

Richardson, Alan J., Organizational Founding, Strategic Renewal and the Role of Accounting: Management Accounting Concepts in the Formation of the 'Penny Post'. Journal of Management Accounting Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1114853

Alan J. Richardson (Contact Author)

University of Windsor - Odette School of Business ( email )

401 Sunset
Windsor N9B 3P4, Ontario
Canada

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
503
Abstract Views
2,900
Rank
103,232
PlumX Metrics