The hidden power of language: How “value creation accounting” influences decisions on expenditures, cost reductions and staff costs

Research output: Journal contributionsJournal articlesResearchpeer-review

Authors

Purpose

Stakeholder theory research identifies changes in language as one possible mechanism to overcome the deficiencies of current accounting practices with regard to social aspects. This study aims to examine the effects of the terms used for specific accounts on company internal decision-making, drawing on the example of “value creation accounting”.
Design/methodology/approach

The study uses a survey based-experiment to analyze the effects of terms used for specific accounts on decision-making, with a focus on social aspects (in particular expenditures for staff) in cost reduction and expenditure decisions.
Findings

The findings indicate that wordings, which more closely relate to value creation than to costs, decrease cost reductions and increase the priority ascribed to the social aspect of reducing staff costs in times of financial shortage. The effects of terms used on cost reductions are stronger among female decision makers.
Practical implications

The analysis suggests that conventional accounting language best suits organizations that aim at incentivizing decision makers to primarily cut costs. By contrast, if an organization follows an approach that puts importance on social aspects in times of financial shortage and on not doing too sharp cost reductions, value creation-oriented language is the more effective approach.
Social implications

The study suggests that the specific terminology used for accounts should be chosen more carefully and with awareness for the possible effects on cost reduction decisions as well as on social consequences.
Originality/value

This study contributes to a better understanding of the relevance of language in accounting. It suggests that the terms used for accounts should be chosen purposefully because of their far-reaching potential consequences for stakeholders as well as for the organization.
Original languageEnglish
JournalSustainability Accounting, Management and Policy Journal
Volume11
Issue number1
Pages (from-to)187-206
Number of pages20
ISSN2040-8021
DOIs
Publication statusPublished - 06.01.2020

Recently viewed

Researchers

  1. Paul Silas Peterson

Publications

  1. Variation revisited: A corpus analysis of offers in Irish English and British English
  2. Community-based Entrepreneurship and Rural Development
  3. On the microstructure of the German export boom: Evidence from establishment panel data, 1995-2002
  4. Mathematik 1
  5. Audit quality and materiality disclosure quality in integrated reporting
  6. Communication management of start-ups: an empirical analysis of entrepreneurs’ communication and networking success on Facebook
  7. Früherkennung als Problem der Unternehmensführung in virtuellen Organisationen
  8. Specific SBR population behaviour as revealed by comparative dynamic simulation analysis of three full-scale municipal SBR wastewater treatment plants
  9. Spatial variation in human disturbances and their effects on forest structure and biodiversity across an Afromontane forest
  10. Gathering Voices, Feeling Relations
  11. The attenuating effect of mortality salience on dishonest behavior
  12. Activity-based start-up simulations in entrepreneurship education at the German universities
  13. Tree Species Traits but Not Diversity Mitigate Stem Breakage in a Subtropical Forest following a Rare and Extreme Ice Storm
  14. Identity affirmation and social movement support
  15. Top-down social modulation of perception-action coupling
  16. Lernkarten Bibelkunde
  17. Is Export Diversification good for Productivity? First Evidence for Manufacturing Enterprises in Germany
  18. Spatial characterization of coastal marine social-ecological systems
  19. Constructing The European Space Policy
  20. Implications of financial transaction costs on the real economy
  21. Reducing aquatic micropollutants – Increasing the focus on input prevention and integrated emission management
  22. “Normality” Revisited: Fieldwork and Family
  23. Anchoring and Sleep Inertia
  24. Continental-scale ecology versus landscape-scale case studies
  25. What do we know about Antibiotics in the Environment?
  26. Größen bauen auf Längen
  27. Time sensitivity
  28. The impact of digitisation and big data analysis on the sustainable development of tourism and its environmental impact
  29. Consumer Preferences and Their Willingness to Pay for Local Products (by Means of Consumer Ethnocentrism)
  30. Metaphern und ihre Bedeutung für das mathematische Tätigsein
  31. Sustainability process assessment on transformative potentials
  32. Erfolgreich enttäuschend
  33. The global perspective of education for sustainable development
  34. Lebens-Formen
  35. Plasma arcing during contact separation of HVDC relays
  36. The Post-entry Performance of Cohorts of Export Starters in German Manufacturing Industries
  37. Special Section: Pragmatic Development and Stay Abroad
  38. The Maternal in Drag
  39. Worldwide distribution of Persistent Organic Pollutants in air, including results of air monitoring by passive air sampling in five continents
  40. Berufsorientierte Schreibkompetenz mithilfe von SRSD fördern
  41. Frömmigkeit der Theologie, zur Logik der offenen Theodizeefrage
  42. Deliberative Bürgerbeteiligung in der Priorisierungsdebatte