Power base attribution and the perceived legitimacy of managerial accounting

The related concepts of power and legitimacy are well developed in social science literatures. However, accounting researchers in particular have devoted little effort toward understanding the role that these concepts play in the utilization of accounting information for control and decision making. Work by Cyert and March (1964), Pettigrew (1967), and others, suggests that information and information control can be key elements in decision making and sources of influence extending beyond mere transmission of data. Nevertheless, accounting researchers continue to focus attention on information characteristics such as relevance and accuracy and decision maker characteristics such as cognitive style and familiarity with accounting as the principal factors in decisions to utilize accounting information. There are two basic theses advanced in this dissertation. The first suggests that information and information providers can be perceived by decision makers to possess characteristics which serve to increase/decrease their ability to influence decisions. These characteristics have been well developed in the social sciences as "power resources." The present work develops a series of scales designed to measure the attribution of these resources by organizational participants to three aspects of the accounting function. The second basic thesis advanced is that the accounting function, as a key element in organizational control processes, can be evaluated in terms of the level of legitimacy attributed to it by organizational members. A review of social science literature regarding legitimacy produced four possible bases for this legitimization process. A scale measuring the level of perceived legitimacy is developed. As a test of these two theses, a mail survey was conducted of a sample of middle managers selected from the employees of four manufacturing companies. Responses from 116 people were analyzed using correlational and multiple regression techniques. The analysis of data provided support to reject 27 of 33 null hypotheses developed about the relationships between power resources, perceived legitimacy, exposure to accounting, and satisfaction with accounting services. The results of the study are seen to provide substantial support for the theorized relationships. Strong positive correlations were found to exist between expertise, charisma, perceived legitimacy, and satisfaction. This suggests that a person's satisfaction with accounting data, and hence, their propensity to utilize it in decision making and control, is strongly related to their perceptions that the information possesses the characteristics of power and legitimacy.