Institutions in transition: legitimisation and cognition in the educational field

The purpose of this paper is to examine the consequences of accounting intervention into institutionalized organizations in transition. The context for the study was the implementation of the 1988 Education Reform Act in England and Wales, known as the Local Management of Schools (LMS) Initiative, which devolved budgets from Local Education Authorities (LEAs) to individual schools. We develop the argument that the emergence of new accounting practices in institutions and the accompanying process of re-institutionalization is not inconsequential, but detail rather the accounting’s re-presentation of teachers as costs does accompany a re-distribution of the authority and resources in schools and LEAs, thus implying that administrative changes and organizational actions are not decoupled. Our case study of institutional change focuses as an illustration on the example of school ‘carry forwards’ (budget under-spends) as we analyze the ability of accounting practices to influence legitimacy and cognition by stimulating new debates, according them increased visibility and endowing them with significance. We assess the contribution of our study to the further development of neo-institutionalist theory; in particular, we consider the new problems of cognitive legitimacy that arose between LEAs and schools, and examine their implications for institutionalized organizations