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The case study that we are supposed to analyze is devoted to the activity of or Euro Rail which is currently known as Eurail (“About us,” n.d.). The organization studied by the authors of the case study is one of the famous railway companies in Europe; the number of specialists working in the discussed company exceeds one hundred and fifty thousand. The case study focuses on the corporate culture and performance of the organization in connection with accounting.
As is clear from the case, accounting had a significant impact on the organization and the culture of this organization. Euro Rail has managed to become one of the wealthiest companies in the sector, which enabled them to invite the best engineers to develop projects. There is no doubt that accounting which is a range of measures aimed at tracking the funds of an organization can have an important influence on the performance of a company or its culture. Speaking about the ER, it is necessary to say that this company has always had good relationships with the government.
The attitude of the management towards the most appropriate approach to accounting impacted the organization because managers at ER have always preferred conservative practices, and that enabled the company to retain its competitive advantage over other businesses in the field. Under the conditions of financial deficit, when numerous companies needed to review their accounting practices to provide stricter expenditure monitoring, managers at ER decided to continue to implement their vision, and the organization remained bureaucratic.
At the end of the 1970s, the higher management of the organization decided to change the approach to financial planning. Changing needs related to accounting encouraged business owners to invite new specialists and establish the position of business manager. This innovation was expected to facilitate accounting, but one of the actual effects that it produced was related to the corporate culture of the organization. Due to that, a kind of counter-culture started shaping in ER: new managers were paying increased attention to making profits whereas numerous operations were seen not as the methods to fulfill customers’ needs but as the means encouraging clients to pay more. Therefore, specialists from the company gradually began to act by the requirements of the new business culture. About forty years ago, the management of the organization decided to implement a system of contribution accounting helping to match costs to revenues.
Apart from that, there was an obvious link between accounting and culture. For instance, the necessity to develop profit or loss measures based on a separate sector strengthened the links between managers on different levels as there was a need for intensive discussions. At the same time, culture impacted accounting; inflated expectations were a part of the ER culture and, criticizing business managers, the higher management could deteriorate financial results. In general, the information provided by accounting helped to implement the following changes to the work of ER: the introduction of new train schedules for the convenience of clients and relocation of certain train sets to different areas to optimize resource consumption.
There is no doubt that important changes were needed in this organization because its higher management used to implement working practices that can be called outdated. Despite that, it needs to be mentioned that the development of the business environment never stops, and the culture of ER could be seen as one that was too formal and conservative. At the same time, the organization needed to implement a new vision, enabling it to keep up with the times and remain the formidable opponent for other large companies in the field.
Reference
About us. (n.d.). Web.
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