Guest editorial

Citation

Covaleski, M. and Hoque, Z. (2020), "Guest editorial", Journal of Accounting & Organizational Change, Vol. 16 No. 4, pp. 517-526. https://doi.org/10.1108/JAOC-11-2020-161

1. Introduction

Coronavirus disease (COVID-19) is a human tragedy and is unfolding daily with significant impact on the economy and business. World Health Organization (WHO) COVID-19 Dashboard shows that globally, as of 2:15 p.m. CEST, 26 September 2020, there have been 32,429,965 confirmed cases of COVID-19, including 985,823 deaths. In a joint statement by WHO, UN, UNICEF, UNDP, UNESCO, UNAIDS, ITU, UN Global Pulse and IFRC on 23 September 2020 remarks that COVID-19 is the first pandemic in history in which technology and social media are being used on a massive scale to keep people safe, informed, productive and connected [1]. Countries across the globe engage in developing national action plans to develop solutions to prevent the spread of this pandemic among the community. The pandemic continues to create uncertainty and anxiety in every aspect of human life including businesses. A World Bank feature story published on 8 June 2020 [2] remarks that “the COVID-19 pandemic has spread with alarming speed, infecting millions and bringing economic activity to a near standstill as countries imposed tight restrictions on movement to halt the spread of the virus”. According to this feature story, the pandemic is expected to plunge most countries into recession in 2020, with per capita income contracting n the largest fraction of countries globally since 1870. According to the World Bank prediction: “Every region is subject to substantial growth downgrades. East Asia and the Pacific will grow by a scant 0.5%. South Asia will contract by 2.7%, Sub-Saharan Africa by 2.8%, Middle East and North Africa by 4.2%, Europe and Central Asia by 4.7% and Latin America by 7.2%. These downturns are expected to reverse years of progress toward development goals and tip tens of millions of people back into extreme poverty” [3].

Academics, experts and professional bodies from all fields now focus on addressing needed changes in the coming months that support a return to normal operations. Throughout the world, sudden lockdowns in March 2020 aimed at combating the pandemic forced universities to switch to online learning almost overnight. COVID-19 represents a massive economic hit to those universities worldwide who rely heavily on foreign students. Even top universities across the globe face challenges because of the drop in revenue from foreign students, especially Chinese and Indians. Experts believe that while travel restrictions to and from China and other countries have been helpful in slowing down the spread of the coronavirus disease, they have also left international students stranded – students are unable to return to universities to continue their studies [4]. This crisis leads to almost no enrolments in the new semester commencing in 2021.

This special issue of the Journal of Accounting and Organizational Change draws on academic experts' reflections on how businesses can respond, manage and mitigate the risks and uncertainties in the local and global economies. The aim was to publish several short reflective essays from leading scholars by invitation with the exception of one emerging scholar who reflects on her experience from an alternative perspective. Table 1 presents a profile of contributors with topics covered by their essays.

All manuscripts submitted have been subject to an editorial review and peer-reviewed by editorial board members on an expeditious basis to facilitate prompt publication. Scholars were selected for contributions based on the guest editors' well aware of their longstanding focus in the accounting field, and welcomed their developing a short essay focusing on their reflection on any of the following issues or one that they would think to be interesting and timely:

• How organisations can address needed changes in the months ahead to stabilising in the evolving environment due to the COVID-19 pandemic and strategising for what’s next.

• How the COVID-19 crisis creates an opportunity to explore how accounting numbers and calculative practices such as budgets may mediate the association between organisational strategic rethinking and sustainable performance.

• How universities should prepare current and future accounting graduates to be a key player in advising businesses in an extremely uncertain environment through calculative practices and multidisciplinary knowledge and skills.

2. Coverage and contributions of this special issue

“This (special issue idea) is a bold move. How will you determine that all your contributors are not overlapping?” This was a reaction from one of the contributors of this special issue which paused me (as editor of the journal) to think twice about this special issue idea. Interestingly, as can be seen from contributions of this special issue, there are hardly any overlapping in issues covered by the contributors.

2.1 Governance, accountability, leadership, work practices and control systems

Paul Mather of La Trobe University Business School in his reflexive essay titled “Leadership and governance in a crisis: Some reflections on COVID-19” reflects on how the COVID-19 crisis presents significant leadership and governance challenges and opportunities for organisations. Drawing on personal experiences as an employee, non-executive director and observing leaders, Mather argues that leaders emphasising values and purpose and communicating with clarity, meaning and empathy is paramount. He further went on to say that “it is organisations which continue to be agile, adapt and change proactively with “out of the box” thinking who will thrive in the next normal”.

Adjunct Professor Stuart Kells of La Trobe University Business School shares his personal reflections on impacts of the COVID-19 pandemic on corporate governance and assurance, international finance and economics and non-fiction book publishing. Kells, based in Melbourne, Australia, had an unusually diverse and multi-faceted experience of the pandemic. A key insight from his reflexive essay is that “the pandemic has had diverse and wide-ranging impacts, many of which are likely to persist beyond the immediate response and recovery periods”.

In his paper titled “Accounting for the unaccountable – Coping with COVID” Steven E. Salterio Queen's University Business School, Canada, demonstrates how the onset of the COVID 19 pandemic leads to a combination of economic and public health circumstances that challenge the accounting for and accountability of organizations that are mostly outside of their experience and that of academics for the last 50 years. He sought to understand what the effects of these events would be on organizations and economies through using evidence-based tools that he had recently gained competency in other areas of his research. Building on his short research synthesis paper (Salterio 2020a, references in his paper) on the historical economic evidence about the Spanish Flu of 1918–1920 as well as various simulations of potential pandemic macroeconomic effects he reflects on how the evidence about the Spanish Flue allowed him to quantify the potential effects of the crisis less than a month into the North American economic shutdown. Using that research synthesis, Salterio reflects on the lessons that the COVID-19 crisis has for managers and organizations from both an accountability and accounting perspective.

Trevor Hopper of Sussex University, UK examines accounting related issues that have emerged during the Coronavirus (COVID-19) pandemic. His reflexive account based on personal experience and observation of events and media reports in the UK, the USA and New Zealand highlights how emerged problems worldwide owing to COVID-19 vary “due to differences in the national governance of each country regarding the emphasis their governments and businesses have placed on short-run financialisation policies; the comprehensiveness of their information and control systems; their leadership and whether their discourse accords with events and expert advice; their degree of accountability and concern for public wellness; and the need to consider new taxation policies to meet the costs of the pandemic”. Hopper's paper, according to him, reflects his “political opinions and beliefs”. He outlines areas where accounting could and has addressed the issues examined and recommends greater adoption globally of policies and systems designed to meet the United Nation’s Sustainable Development Goals. Hopper suggests that the social implications of the COVID-19 pandemic “are vast for they extend to major issues concerning preserving the planet, its species, humankind, and enhanced democratic processes for civil society and developing countries”.

In the context of business processes and work practices, Manzurul Alam of Murdoch University in Australia reflects on how mandatory lockdowns during Covid-19 pandemic have exposed internal organisational processes and work practices. He highlights how the Covid-19 crisis challenges the existing organisational practices and implications for future job design and control systems. His paper produces thoughtful considerations of diffident options for managing organisational activities in the post-COVID-19 period.

2.2 University business model, accounting teaching and research

Australian universities in a pandemic world: Transforming a broken business model? – with this title Lee Parker of RMIT University in Australia and the University of Glasgow critiques the accounting and financial orientation of Australian universities’ business model in order to identify the future university financial management and accounting role in universities’ strategic trajectory responding to COVID-19. According to Parker, Australian universities have aggressively pursued an accounting-based private sector business model within which they rely heavily on international student revenues which has been undermined by the COVID-19 crisis. Parker further remarks that university management clings to their commercialised university identity and role colonised by the accounting structures. “Fundamental change requires a reversal of this relationship”, says Parker. His paper raises the issue of whether universities should continue being seen as an export industry supporting the national economy or as knowledge, educational and social resource for their national and regional communities.

Anatoli Bourmistrov of Nord University Business School reflects on his personal use of scenario planning methodology in accounting classes and how it can be useful for creating accounting graduates who are better prepared to face greater uncertainty such as the COVID-19 pandemic. Accounting education is criticized by the Author for its inability to educate graduates capable of advising current and future business in an extremely uncertain environment. Bourmistrov argues that scenario planning as a compulsory component in accounting courses can be a potential remedy for addressing the current gap in accounting education in the higher education sector. The author encourages accounting educators to find an appropriate balance in the university training programs between professional skills and the skills required of accounting graduates in order to be change agents.

In a related paper, Gary Spraakman of York University in Canada explores the ramifications of COVID-19 on management accounting teaching and research. In his paper he reflects on how COVID-19 has affected his management accounting teaching and research. He realized that textbooks, because of the lack of integration among management accounting techniques, do not prepare our students with the ability to make the quick changes required by COVID-19. Spraakman expects that we will have to introduce integration to our management accounting textbooks and courses. He further expects the beneficial practices we learned from online and remote teaching during the pandemic will be with us into the future.

Timothy J. Fogarty of Case Western Reserve University, USA, who has been around “long enough to see a good bit considers how COVID-19 might change the general contours of the world”. Using the COVID-19 pandemic as pedagogy, his paper concludes that “whatever rigor might have been gained by a life spent thinking about research design and the limits of methodology […] the opposite of what many others believe will happen […] Things will change more than we wish […] Most will change for the worse […] More about change than about accounting”. Fogarty argues that while accounting research has a role to play, “to have impact this work will require that researchers adopt a much more critical perspective about capitalism and its consequences than before”.

2.3 Government financial management, political accountability and loss of trust

Irvine Lapsley of the University of Edinburgh, Scotland uses a storytelling perspective to understand the impact of the COVID-19 pandemic from the perspective of the UK health-care system and risk management. To Lapsley, “the impact of the Pandemic has been so massive it has challenged the capacity of the UK's National Health Services. He reflects on how the political influences at work in the UK have not always promoted best practice in risk management and indicate blame avoidance strategies by politicians. His paper identifies several major issues around asset management, decision making and supply chain problems and argues the need to reform processes of handling of crisis management.

Jane Broadbent of the Royal Holloway University of London seeks to reflect upon the nature of some elements of the UK Government’s response to COVID-19 in England. Her reflective commentary based on a conceptual framing reflects in turn on the use of performance measures in the building of trust and her experience as a citizen. Broadbent highlights how the English Government approach to controlling the progress of COVID-19 has been characterised by long-standing tenets of New Public Management have undermined rather than created trust in their actions.

In his essay, Ian Ball of the Victoria University of Wellington reflects on competence in the management of government, with a focus on the management of the public finances. He also reflects on the role of public financial management (PFM) in addressing the impact of coronavirus (COVID-19) pandemic. Having devoted his entire academic and professional career in public sector administration and financial management fields, his personal, reflective essay led him “to believe that the better the information we have about a government’s financial performance and position, the better are we able to ensure that its finances are sound”. He concludes that “competent bureaucrats and sound finances are the key drivers of an effective PFM system which enable and encourage decisions leading to high standards of financial performance and position”. This thought-provoking reflection will encourage further research on the impact of the COVID-19 pandemic on the financial management of government around the world.

2.4 Charity sector, accountability and structural inequalities

“UK charities and the pandemic: Navigating the perfect storm” – in this paper Noel Hyndman of Queens University Belfast reflects on the impact of COVID-19 on the UK charity sector, outlines some opportunities for researchers in accounting/management as a consequence and discusses strategies to respond to the pandemic. To Hyndman, COVID-19 has created a perfect storm for charities as major swathes of income have been lost, demands on services have increased and some are unable to operate at all because of imposed constraints.

Similarly, in her paper, Kathryn Haynes of Northumbria University in England provide a reflective account of inequalities exposed by the COVID-19 pandemic in the UK. Her Autoethnographical reflections on caring in lockdown interspersed with commentary on wider societal inequalities and care. Entrenched societal inequalities relating to age, health, poverty, disability, race and gender in the UK are highlighted in her paper through the experience of COVID-19. She concludes that accounting research has a further role to play in exposing inequalities, promoting enhanced measures for inequalities, promoting care and transforming society.

2.5 Sustainability and ecosystems accounting

“Unsustainability as a key source of epi- and pandemics: Conclusions for sustainability and ecosystems accounting” – in this article, Stefan Schaltegger of Leuphana University of Lueneburg, Germany sought to identify sources of epidemics and to deduct conclusions for management, accounting and reporting. Based on a review of scientific literature on epidemics, Schaltegger outlines three key sources and paths of zoonotic diseases and concludes organizational change and accounting. The author remarks that to reduce the likelihood of future pandemics the paths of epidemics development need to be broken.

2.6 COVID-19 pandemic and small- and medium-sized enterprises

All of the above papers highlight the authors' reflections on the impact of the COVID-19 pandemic for businesses, government agencies, charities and education sectors across western developed economies. Quite differently from these, Mohammad Nurunnabi of Prince Sultan University in Saudi Arabia tells a story about how the COVID-19 pandemic affects small- and medium-sized enterprises (SMEs), using Saudi Arabia as an example. In particular, he explores how SMEs in Saudi Arabia address needed changes in their survival strategy in the market during the COVID-19 pandemic. He reported on how the Saudi government has provided stimulus package to keep stable employment and small and medium businesses in the Saudi economy. He believes that organisations need to monitor and evaluate all the developments associated with the spread of the emerging virus and to develop and implement contingency plans to meet any undesirable circumstances arising from COVID-19 pandemic. I believe that the role of SMEs in economic transformation and Vision 2030 is imperative. His research shows that Saudi Arabia is working to increase the contribution of SMEs to GDP from 20% to 35%. Nurunnabi reflects on how other countries across the globe should continuously evaluate the SME impact owing to the COVID-19 and continue the support based on the evaluation report like Saudi Arabia.

2.7 COVID-19, mind, body and performance

Kate Mai of La Trobe University Business School in her paper titled “Performance in COVID-19: Beyond a social construction” reflects on her personal experience on her teaching performance during the COVID-19 pandemic, and to share her investigation into the nature of performance phenomenon. As an emerging scholar who sees life from a social-natural phenomenon suggests that performance on an individual's teaching can only be enabled and directed but cannot be controlled. According to her, “the enabling process includes removing (energy, mental and physical) obstacles for normal functioning of an individual brain, providing constructive direction, building knowledge and creating a working environment in which individuals can maintain a state of healthy body-mind-energy, that is essential for their brain to perform”. She shared some implications for understanding the nature of performance and performance management from an integrated worldview of physics, biology, psychology and neuroscience. Mai suggests that by monitoring both layers of performance, one can maintain a healthy mind-body-energy system, which can enhance their ability to work to better and live better.

3. Conclusion and implications

Several interesting issues have emerged from contributions to this special issue. Exhibit 1 presents a summary of words that together visualize several key emerged themes such as COVID pandemic, accounting, university, management, organizational change, governance, performance, sustainability, challenges, risk and opportunities. It appears from this special issue that the evolving economic crisis amid COVID-19 pandemic has forced everyone in society across the globe to reassess the kinds and levels of our thinking in managing crises – financial, physical, emotional and mental. The pandemic has forced businesses, governments, educational institutions, health care and other organizations across the globe to make budget cuts and reassess the kinds and level of services they provide. As a way forward, and to try and restore their financial positions, many organisations including universities have placed increasing emphasis on strategic rethinking, organisational restricting, job losses and innovation in times of crisis (Figure 1).

Contributors to this special issue focus on reflexive accounts of their thoughts, feelings and reactions about how the COVID-19 pandemic has been a challenge for recovering such an unprecedented crisis. Contributors attempted to bring their pieces together by providing a summary of both the points made throughout, and what they have learned as a result, and any implications for future research and practice.

3.1 Implications for future accounting education and research

The vast impact and related implications of the COVID-19 pandemic certainly justifies an “all hands-on deck” call to accounting researchers, educators and practitioners with no particular favored nation status for any of the sub-disciplines of our profession. Formal administrative structures such as budgeting and the accumulation of a strong financial position from previous successful financial management efforts take on special particular meaning in the addressing this new reality during periods of acute uncertainty and disruptive ambiguity. Here the various tools to aid decision-making such as budgets play much more complex roles in an effort to channel and frame the vast array of social and organizational decisions with such indeterminable consequences as into some semblance of rationality. Such a perspective of budgeting during a crisis is grounded in a tradition of accounting research that has long recognized that budgets are both the substance and result of political processes that are used to identify the problems the organization chooses to address and the range of possible actions it considers appropriate (Burchell et al., 1980). This perspective of budgeting translates well to a teaching agenda where the focus for accounting students can be taught to better incorporate the potential consequences of a range of possible actions as compared to seeking a right answer for an agreed upon set of organizational goals and actions.

One potentially fruitful avenue to examine budgeting as being both the substance and result of political processes during this period of social and economic crisis related to COVID-19 is through the notion of sensemaking (Weick et al., 2005) which is about the social construction of reality during periods of acute uncertainty and disruptive ambiguity. Sensemaking is about the interplay of action and interpretation and is central when the current state of the world is perceived to be different from the expected state of the world, or when there is no obvious way to engage the world such as we are experiencing in this COVID-19 environment. Here sensemaking involves turning circumstances into a situation that is comprehended explicitly through such processes as budgeting which then serve as a basis to take action; albeit that the taking of this action as informed by budgets is part of the sensemaking to understand the current situation (Boland and Pondy, 1983; Swieringa and Weick, 1987). Here it is argued that when the need for action is the primary concern such as during the coronavirus, “interpretation, not choice, is the core phenomenon” (Weick et al., 2005, p. 409). Such a perspective of the role of budgeting research and the teaching of budgets which have tended to focus on choice process and outcomes without similar concern for budgets in its role in the interpretation during periods of acute uncertainty and disruptive ambiguity and the resultant the framing of organizational actions.

The focus on organizational sensemaking through the interplay of action and interpretation during periods when the world is perceived to be different from the expected state of the world, and where interpretation, not choice, is the critical issue draws attention back to Hopwood’s (1987) call for the study and teaching of the way that budgeting becomes intertwined with organizational and social action. As such, the role of budgeting is not considered so much as an operational resource to be managed, but as representing a set of constitutive beliefs and cultural perceptions reflecting how organizations should be understood and evaluated (Czarniawska, 1997). Here the teaching of organizational budgeting process should emphasize that budgets serve as an expression of values, thus affecting not only how people act toward organizations, but also how they understand them. Once budgeting is treated as sociologically problematic such as in our urgent efforts to understand it during the COVID-19 pandemic, it moves the research and teaching of organizational budgets away from the trap of treating “values and ideology as kind of natural things, as having an existence out there” (Zald and Lounsbury, 2010, p. 21) but, instead, allows the role of budgets to be considered in terms of the values associated with the major societal and policy issues where values matter in many different ways and, as such, should enter into our research efforts and teaching directed towards the role of budgets in organizations.

The role of accounting and budgeting during the COVID-19 pandemic is particularly relevant for professional bodies, public policy and public sector organizations. Public sector organizations have multiple belief systems, identities and purposes and, as such, particularly wrestle with the centrality of definitions in periods of crisis such as the COVID-19 pandemic. Externally legitimated, formal assessment criteria such as budgeting play a particularly heightened role in these poorly structured settings where political tensions are likely to be endemic with a great deal of governance takes place outside the boundaries of individual organizations (Stinchcombe, 2001). The ostensible certainty of budgeting serves public administration in developing meaning and trust around budgeting which incorporates the solutions to the complex social problems in public administration (Lindblom, 1959). As such budgeting serves as a mechanism to manage the tensions between diverse organizational stakeholders such as exists in the public sector where there is frequently conflict between values used by variant stakeholders who seek to influence organizational activity. Here budgets are considered as an important component of the portfolio of organizational practices and tools that allow disparate values to coexist; a portfolio that would be a meaningful way to embed the teaching of the diverse roles of organizational budgeting practices.

Figures

Figure 1.

Wordcloud – emerged themes/words frequency

Table 1.

COVID-19 and accounting reflective essays: profile of contributors and topics covered

Contributor	Institution	Paper title	Key themes covered
Ian Ball	University of Wellington, New Zealand	Reflections on Public Financial Management in the COVID-19 Pandemic	Government financial performance; public financial management
Jane Broadbent	Royal Holloway University London	The response to Covid-19 in England: political accountability and loss of trust	Government's political accountability, public services and trust
Anatoli Norway	Nord University, Norway	From educating agents to change agents: Experience of using foresight in accounting education	Accounting education, teaching and learning delivery modes
Gary Spaarkman	York University, Canada	Ramifications of COVID-19 on management accounting teaching and research	Management accounting teaching and research
Irvine Lapsley	University of Edinburgh, UK	An uncertain, erratic story: the pandemic in the UK	Health care system and risk management.
Lee Parker	RMIT University, Australia	Australian universities in a pandemic world: Transforming a broken business model?	University business model and organisational core activities
Paul Mather	La Trobe University, Australia	Leadership and governance in a crisis: Some reflections on COVID-19	Accountability, governance and leadership
Noel Hyndman	Queens University Belfast	UK charities and the pandemic: Navigating the perfect storm
Stefan Schaltegger	Leuphana University of Lueneburg, Germany	Unsustainability as a key source of epi- and pandemics: Conclusions for sustainability and ecosystems accounting	Sustainability and ecosystems accounting
Steven Salterio	Queen's University Business School, Canada	Accounting for the unaccountable – Coping with COVID	Coping mechanisms for accounting education and research
Stuart Kells	La Trobe University	Impacts of COVID-19 on corporate governance and assurance, international finance and economics, and non-fiction book publishing: Some personal reflections	Corporate governance, finance, economics and finance
Tim Fogarty	Case Western Reserve University	Lessons we never wanted to learn: pandemic as pedagogy	Organizational change and critical research
Kathryn Haynes	Newcastle Business School, Northumbria University	Structural inequalities and lockdown experiences: reflections from the UK on COVID-19	Structural inequalities in charities
Manzurul Alam	Murdoch University, Australia	Organisational processes and Covid-19: Implications for job design and control systems	Job design and control practices at workplaces
Trevor Hopper	University of Sussex, UK	Swimming in a sea of uncertainty –business, governance, and the Coronavirus (Covid-19) pandemic	Business and governance in an uncertain environment
Mohammad Nurunnabi	Prince Sultan University, Saudi Arabia	Recovery planning and resilience of SMEs during the COVID-19: Experience from Saudi Arabia	SMEs recovery strategies and policy implications
Kate Mai	La Trobe University	Performance during COVID-19: Beyond a social construction	The nature of performance and performance management from an integrated worldview of physics, biology, psychology and neuroscience.

Notes

1. www.who.int/news-room/detail/23-09-2020-managing-the-covid-19-infodemic-promoting-healthy-behaviours-and-mitigating-the-harm-from-misinformation-and-disinformation (accessed 27 September 2020).

2. www.worldbank.org/en/news/feature/2020/06/08/the-global-economic-outlook-during-the-covid-19-pandemic-a-changed-world (accessed 27 September 2020).

3. www.worldbank.org/en/news/feature/2020/06/08/the-global-economic-outlook-during-the-covid-19-pandemic-a-changed-world (accessed 27 September 2020).

4. www.weforum.org/agenda/2020/07/will-universities-learn-from-lockdowns (accessed 27 September 2020).