Rule Following as Skillful Practice : Understanding the Situated Functionality of Formal Rules

For many years, management accounting research has paid particular attention to the design of formal rules, taking the following of such rules largely for granted. In response to this recognition, various studies have emphasised the dysfunctional nature of rules and identified instances where rules were ignored or opposed. However, although formal rules are ambiguous and generic by nature, they continue to be fundamental to the domain of management accounting and control. Since there have been few studies which have attempted to provide an understanding of the processes by which formal rules are followed, this paper draws on practice theory in order to understand how ambiguous formal rules become functional in practice. Based on the findings of a case study in two branches of a Dutch bank, the paper argues that particular expressions of formal rules become embedded in the skillful practices in a specific context. These practices are frequently invoked by the habitus, which constitutes the dispositions to enact particular practices. These dispositions are activated when objective conditions, akin to those from which the practices arose, are met. Although the habitual nature of rule-following practices makes the replacement of rules problematic, new rules can be become functional through changes in the objective conditions in a context, leading to the repudiation of existing practices – and rules. The paper concludes by discussing the consequences for theory and practice of this concept of rule following as a skillful practice