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Accounting, Organizations and Society 39 (2014) 559–566

Contents lists available at ScienceDirect

Accounting, Organizations and Society


journal homepage: www.elsevier.com/locate/aos

Exploring the possibilities for causal explanation in interpretive


research
Kari Lukka ⇑
Turku School of Economics, University of Turku, Finland

a b s t r a c t

This paper suggests how the contemporary theory of causality, based on the notions of
counterfactuality and contrastive thinking, offers helpful direction on how to generate
plausible causal arguments in interpretive research. For an interpretive researcher, this
opens a route from rich emic accounts to thick explanations; however, only if he/she so
wishes and the research question so requires. Perhaps with some surprise, causality can
be included in interpretive research framings without compromising the unique features
of such research – actually by even building on some of its strongholds. Examples from
interpretive management accounting research will illustrate the message of the paper.
Ó 2014 Elsevier Ltd. All rights reserved.

Introduction phenomena (Denzin, 1983; Headland, 1990; Pike, 1954).


The key features of interpretive research have often been
The main thesis of this paper is that causality has the perceived as implying a stark contrast to causal explana-
potential to be a useful part of interpretive research. It is tion, hence even eliminating the latter from such research
suggested that it is possible to find a meaningful role for (e.g. von Wright, 1970; Winch, 1958; Burrell, 1979; cf.
causality in interpretive studies and that this can also be Kakkuri-Knuuttila, 2006). The paper investigates this
achieved while conducting interpretive research on its alleged tension between interpretive research and causal
own terms, without compromising its unique characteris- explanation in its attempt to explore the possibilities of
tics. In fact, it will be argued that linking causal explana- causality in interpretive research. Without denying the
tions to interpretive research places some of its central importance of such interpretive research that seeks out-
strengths at the forefront. The paper elaborates the value comes other than discovering causality, the purpose of this
of this thesis, its support and specific implications. The paper is to offer insight on potential avenues that open for
analysis is illustrated by examples from interpretive man- an interpretive researcher regarding causal explanation,
agement accounting research. based on a notable amount of the recent literature on cau-
Understanding meanings of often unique phenomena, sality and explanation in the wider social sciences; it is also
considering people as taking ‘something as something’ informed by recent advances in the philosophy of science.
(e.g. Meretoja, 2012), is the starting point and characteristic Indeed, the analysis of this paper is motivated, in partic-
feature of interpretive research (e.g. Chua, 1986). It tends to ular, by recent increasing interest in the wider social sci-
focus on the emic perspective, an examination on how the ences to understand better how researchers conduct, or
research subject his/herself develops his/her meanings, might conduct, their work regarding causal inferences
rather than the etic one, whereby the issue is the research- (e.g. Tetlock & Belkin, 1996; Morgan, 2007; Hoerl,
er’s interpretation and theorization on the studied McCormack, & Beck, 2011). While it certainly is not the
sole task of scholarly work to produce explanations, they
⇑ Tel.: +358 2 3339315; fax: +358 2 3338900. tend to play a central role in much that is sought to be
E-mail address: kari.lukka@utu.fi achieved (cf. Sobel, 1995, 1996; Morgan & Winship,

http://dx.doi.org/10.1016/j.aos.2014.06.002
0361-3682/Ó 2014 Elsevier Ltd. All rights reserved.
560 K. Lukka / Accounting, Organizations and Society 39 (2014) 559–566

2007). Further, although not the only option, the purpose tially argues that explanatory factors are things that made
of producing explanations based on causality appears to a difference to the thing being explained and that causality
be important across many areas of research, including refers to such dependency relations (Ruben, 1990;
business studies (e.g. DiMaggio, 1995; Sutton & Staw, Woodward, 2003).
1995; Weick, 1995). The counterfactual approach to causality builds on a
The paper starts with an outline of the significant, systematic analysis of ‘what-if’ questions that compare fac-
although not yet widely noticed, variation in how causality tual observation with a counterfactual conditional, typi-
is understood in the philosophy of science. In particular, cally negating the actual observation, to test whether or
this analysis introduces the recent emphasis on the coun- not the putative causal relationship holds.2 In this notion
terfactual account of causality, suggested to be of great of causality, while not intending to argue against the corre-
importance with regard to generating causal explanations lation of events being a cornerstone of causality, a constant
in interpretive research. Causality and causal explanations conjunction of events is perceived neither as a sufficient
are then examined in the context of interpretive research, nor a necessary condition for its manifestations (e.g.
focusing on knowledgeable agents and how their meanings Kakkuri-Knuuttila, 2006). Hence, in contrast to Hume and
develop and operate in the surroundings where they act. his followers, this notion of causality does not require regu-
After outlining the ways in which interpretive framings larity and is, in principle, applicable wherever – also when
can be employed in management accounting research, con- exploring unique situations in the field, for instance such
trastive thinking is introduced as a helpful method to focus that are typical of interpretive research in management
causal exploration, thereby making the counterfactual accounting. The conceptual move from the regularity per-
analysis more effective. Subsequently, abductive reasoning spective to the counterfactual account of causality is there-
is depicted as an approach through which interpretive fore a most significant step with regard to how we
researchers can apply the central resources of causal analy- consider causality and its potential in the context of inter-
sis and also integrate the emic with the etic, thereby linking pretive research.
an individual piece of interpretive research with the extant However, it is crucial to bear in mind that while the
body of knowledge on the focal field. Thereafter the mes- counterfactual definition of causality is analytically strong,
sage of the paper is illustrated by carefully opening up the it also implies that as the counterfactual in the putative
embedded causal storyline of one influential representative causal dependence naturally never simultaneously occurs
of interpretive management accounting research, high- with the observable factual – strictly speaking, not even
lighting how the conceptual weapons of causal exploration, in the case of controlled experiments – no causal argument
outlined in this paper, can be employed. is ever definitive. This is illustrated in Fig. 1 in the case of a
Finally, conclusions are drawn. controlled experiment.
Accordingly, with regard to the test group, we can only
observe the outcome in the case of treatment X, while the
The regularity perspective versus the counterfactual counterfactual (i.e. the outcome of the test group in the
account of causality case of non-X) remains inevitably unobservable. On the
other hand, with regard to the control group, we can only
Much of the ambiguity between causality and interpre- observe the outcome in the case of non-X, the counterfac-
tive research is probably driven by a limited and outdated tual (i.e. the outcome in the control group in the case of X)
perception of causality based only on regularity. This roots remaining unobservable through necessity. As illustrated
back to the Humean notion of causality as nothing but reg- in Fig. 1, even in the case of the strongest possible empiri-
ular coincidence of phenomena, the rest being, Hume cal research designs, causal arguments are, at least partly,
argued, useless metaphysics, and the idea of a covering based on theorization and thought experiments (Holland,
law, according to which ‘explaining’ means the ability to 1986; cf. Morgan & Winship, 2007).3
fit a phenomenon under a general law, such as falling An illustrative stylized example of counterfactuality
objects and the law of gravity (e.g. Raatikainen, 2011; cf. and thought experiments would be an attempt to explain
von Wright, 1970). why a house had been razed by fire. Sufficient parallel
Over recent decades, the positivistically tuned regular- explanatory factors might include the house being struck
ity perspective on causality has been challenged by and by lightning, a short circuit having occurred or the result
complemented with the counterfactual account of causality of pyromania. In a given situation, a lightning strike or
(e.g. Morgan & Winship, 2007) that states: ‘‘An event Y short circuit might possibly be eliminated and the thought
depends causally on a distinct event X if and only if both experiment, which mobilizes counterfactuals, focuses on
X and Y occur, and if X had not occurred, then Y would the potential action of a pyromaniac and takes into consid-
not have occurred either’’ (Lewis, 1973, p. 9).1 This essen- eration the evidence found. However, a necessary causal

1 2
Please note that the condition ‘other things equal’ is embedded in this The counterfactual account of causality is consistent with the so-called
definition and hence, for instance, a now controlled Z can also be a relevant manipulation theory of causality, according to which X is an explanatory
explanatory factor. Therefore, X ? Y and Z ? Y can, at least in principle, factor of Y if by producing X, other things equal, we can make Y happen.
exist in parallel, indicating that while counterfactual analysis can identify This is a most natural method for distinguishing causality from mere
necessary or sufficient causal factors (i.e. conditions) there can also be other correlation (Woodward, 2003; cf. von Wright, 1970).
3
such factors. An outstanding account of the complex relations between Mandel (2011) provides a profound analytical mapping on the land-
necessary and sufficient conditions in causality, formulated as the so-called scape of necessary thought experiments, which he terms ‘‘mental simula-
INUS-conditions, is put forward by Mackie (1974). tions’’, relating to causal explanations.
K. Lukka / Accounting, Organizations and Society 39 (2014) 559–566 561

Test group Control group

Treatment X Outcome of variable Y = Y (X) Counterfactual (unobservable)


(observed)
No treatment X Counterfactual (unobservable) Outcome of variable Y = Y (non-X)
(observed)

Fig. 1. Counterfactuality in a controlled experiment.

factor for a fire is always oxygen, although as that so self- explaining it (e.g. Henderson, 1993). From this perspective,
evidently exists and therefore makes no difference, it when interpretive studies emphasize the role of subjective
would not normally even be mentioned. In this example, experiences in the construction of social reality, they can-
the burnt-down house requires a combination of at least not eventually omit the explanatory aspect of the endeav-
one of the sufficient factors and the necessary factor to our (Kakkuri-Knuuttila & Lukka, 2008).
form a plausible explanation. Nevertheless, the explicated But how does the idea of tracking down causality and
explanation would probably only mention the alleged suf- generating causal explanations relate to the tendency of
ficient factor (e.g. pyromania) as the suggested explanation interpretive research to address the meanings of knowl-
(cf. Mackie, 1974). edgeable agents in their life-worlds? This will be explored
in the next section.

The counterfactual account of causality and interpretive


research Knowledgeable agents, subjective meanings and
causality
The contemporary perspectives on causality, outlined
above, open an avenue for arguing, in contrast to estab- As interpretive research is interested in meanings
lished perceptions, that causal explanations are possible developed by subjects, it is closely related to the idea that
also in the context of interpretive research; for instance, reality is, at least partially, socially constructed (e.g. Berger
in the area of management accounting. The main argument & Luckmann, 1966; Hacking, 1999). Berger and
of this paper is that in addition to finding a meaningful role Luckmann’s (1966) core claim is that any adequate theo-
for causal thinking in interpretive research, it can also sup- retical understanding on society necessarily requires an
port interpretive research on its own terms without com- integration of subjectivist and objectivist accounts. Hence,
promising its unique characteristics. In fact, as will be society is both an objective fact and constituted by activi-
explained below in this paper, linking causal explanations ties, which express subjective meanings. Through pro-
to interpretive research places some of its central strengths cesses of externalization, the latter have the potential to
at the forefront. become objectified as facts that then re-affect the individ-
While the term ‘explanation’ at times surfaces in the uals and their formation of new meanings. In the account-
context of the regularity notion of causality, often termed ing context, Hines (1988) emphasizes that the social
the ‘Hempel-Oppenheim model’ or ‘the subsumption construction of reality does not start from nothing; indi-
model’, such explanations are ‘thin’ as causality is, in the vidual action and interaction are embedded in social struc-
Humean spirit, eventually perceived as nothing but a con- tures that pre-date the individual. New inter-subjective
stant conjunction of events (cf. Hempel & Oppenheim, constructions emerging in communication arise in the con-
1948). Hence, the processes and mechanisms through text of particular social structures, which become continu-
which causality works need not be focal interests in this ously sustained or reshaped through that communication.
vein of causal thought. Knowledgeable agents are often able to conceptualize
In contrast, the more recently established counterfac- and reflect upon the practices they entertain, leading to
tual account of causality has a natural and serious linkage the issue of double hermeneutics (Giddens, 1984). Hence,
to explanation. In addition, and importantly from the per- while agents can trigger or hinder the actualization of par-
spective of interpretive research, based on Wittgenstein’s ticular causal mechanisms to implement their agenda, they
later philosophy in particular, the contemporary philoso- probably cannot, at least in the short term, change the cau-
phy of causality tends to closely link explanation with sal mechanisms per se (Durand & Vaara, 2009). However, as
interpretation and understanding. For Wittgenstein, in his the entire notion of social constructionism is based on the
later ‘ordinary language philosophy’, understanding was idea that agents often have the possibility of acting other-
the correlate of explanation; to explain is to create under- wise (Hacking, 1999), the fact that knowledgeable agents’
standing. Moreover, the attribution of understanding intentions and actions are changeable and, over time,
means the ability to employ acquired information in action new social structures and mechanisms can emerge, imply
and reasoning in ways sanctioned by the relevant commu- that the stability of causal relationships in social sciences
nity (cf. Wittgenstein, 1953, §§ 148–159), thereby linking it is always at risk of being fragile (Alt, 2009; Mitchell, 2009).
with a social aspect (cf. Chua, 1986). Accordingly, explana- Knowledge on peoples’ meanings (i.e. their understand-
tion does not notably differ from understanding because ing of ‘something as something’) plays a central role when
interpreting action correctly, that is, identifying the factors we aim to explain human action and interaction. Seem-
(i.e. reasons) on which the action depended, simply means ingly similar behavior can have widely different meanings
562 K. Lukka / Accounting, Organizations and Society 39 (2014) 559–566

and also causal effects in different contexts, both as tive position suggested by Winch (1958) or Burrell and
intended and as interpreted, and these do not necessarily Morgan (1979). While interpretive studies indeed offer
coincide; a classic example being the wink of an eye in thick descriptions (Geertz, 1973) or rich insights (Ahrens
social interaction. Agents’ beliefs regarding existing causal & Dent, 1998; Dyer & Wilkins, 1991) and explore peoples’
relations in the contexts where they operate have notable subjective meanings in line with the interpretive para-
bearing when they act; hence, both the beliefs and their digm, they also tend to include objectified ‘facts’ and
referents are relevant to understanding peoples’ meanings develop causal explanations, although most often only
and explaining their actions. As noted by Wittgenstein implicitly (Ahrens & Chapman, 2006; Kakkuri-Knuuttila
(1953), peoples’ meanings are often not merely their pri- et al., 2008; Lukka & Modell, 2010). It is therefore relieving
vate, inner ostensions, but also include their abilities to that the contemporary theory of causal explanation, based
communicate and interact with other subjects (cf. Chua, on the notion of counterfactuality, supports conducting
1986; Geertz, 1973). This perspective not only emphasizes case research and generating local explanations. Accord-
the social aspect of meanings but also suggests that ingly, to discuss causal explanations, we do not need to
interpretive research does not need to be limited only to seek law-like generalizations and apply the covering law
exploring the emic understandings of single individuals model. Instead, we are encouraged to seek causal explana-
(Kakkuri-Knuuttila et al., 2008). tions that capture (difference making) dependency rela-
While, in line with the core agenda of the interpretive tions between things in the world in any locality
paradigm, interpretive researchers certainly try to under- (Kakkuri-Knuuttila et al., 2008; cf. Durand & Vaara,
stand how people receive, develop and send meanings in 2009). Clearly, the need always remains for causal claims
social instances, they can and do tend to employ them to sustain analysis with counterfactual conditionals (cf.
when attempting to explain the phenomena to which Mandel, 2011).
these meanings relate. In fact, following Wittgenstein’s One of the strongholds of interpretive research, the ten-
(1953) line of thought, an argument can be developed that dency to focus on responding to ‘how’ type of questions,
not even the most subjectivist position of interpretive specifically addresses the question concerning how the
research can entirely distance itself from explanation.4 alleged explanatory factors work in producing outcomes
Accordingly, to be able to cope with living among other peo- (Weick, 1989; Morgan & Winship, 2007; Tsang &
ple, we need the ability to understand what kind of causal Ellsaesser, 2011). This is a notable difference from many
beliefs, meanings and intentions drive the actions of others other kinds of study; for instance, surveys and archival
while simultaneously considering how our actions, funda- research in which analysis of processes is typically difficult,
mentally driven by similar factors, are read by others. Peo- if not impossible. Interpretive studies can progress over
ples’ meanings, which are realized in their actions, become and above merely describing associations between vari-
part of the world’s causal linkages and can (and tend to) ables to exploring the processes and mechanisms by which
have a lot of causal power (cf. Kakkuri-Knuuttila et al., they are generated; that is, towards looking profoundly at
2008; Lukka & Modell, 2010). the linkages (i.e. the ‘arrows’) between the elements of the
It is crucial to note that including causality in the anal- explanatory scheme (cf. Ahrens & Chapman, 2006; Durand
ysis by no means implies that the world would be & Vaara, 2009). This means, based on careful and profound
assumed as deterministic. For interpretive research, it field work, opening up how processes of interest, including
rather means the incorporation of the idea that inten- causal linkages, work out from conditions to outcomes
tional actors with a certain amount of agency can and regarding the explored research question, thereby possibly
tend to take relevant causal relations within the context revealing particular mechanisms that are at work in the
where they operate into consideration and that their subject area (cf. Dent, 1991). This is precisely what inter-
actions can and tend to have causal consequences. These pretive researchers in management accounting often seek
features hold even though the web of causalities is always to achieve in their typical endeavours to ‘make sense’ of
inherently fragile in the social world (cf. Melan, 2013, pp. what they have observed in their field work. Due to this,
117–119). it can be argued that the explanations produced by inter-
pretive studies are particularly informative and strong.
Hence, interpretive studies can provide thick explana-
Causality in interpretive management accounting tions that are deeply rooted in the life-worlds of the people
research being studied and, hence, incorporate peoples’ meanings,
which is the main focus of interest in interpretive research,
Reviewing the literature of interpretive management and also the processes and mechanisms that tie together
accounting research suggests that while causality is typi- the elements of the developed explanation (cf. Lukka &
cally played down in what is explicitly stated, deconstruct- Modell, 2010). Consequently, when causal explanations
ing the studies’ contents often discovers storylines that form part of the argumentation structure of an interpretive
include causal explanations. Indeed, the bulk of interpre- study, there is no need for them to be hidden. On the con-
tive studies in management accounting do not quite fit into trary, they can be made even more explicit, which would
the narrow window of the extreme subjectivist interpre- tend to sharpen and strengthen the arguments developed
while maintaining the interpretive framing of the study
4
In addition to this epistemological grounding, the audiences of
and remaining faithful to the core agenda of interpretive
interpretive research are likely to expect some theoretical (i.e. etic) research (Kakkuri-Knuuttila et al., 2008; cf. Hammersley
structure that overarches mere accounts of emic understandings. & Atkinson, 2009, p. 185).
K. Lukka / Accounting, Organizations and Society 39 (2014) 559–566 563

Contrastive thinking as a resource for causal analysis causality, contrastive thinking and the power of thought
experiments suggests focusing on relatively narrow slices
An important aspect of contemporary thinking on cau- of the world to enable contribution to the clarity and
sality is the acknowledgement that, in developing causal strength of the generated explanation. However, the chal-
claims, selection is an inherent part of scholarly work. It lenge of keeping the holistic nature of interpretive research
is worth bearing in mind that causes typically have several on the agenda remains and, as such, the abductive mode of
different kinds of effect while, in turn, effects tend to have reasoning partially comes to the rescue as it, among other
numerous possible and different kinds of cause.5 Typically, things, tends to contextualize theoretically the core empir-
there is considerable room for choice regarding the screen- ical findings and thereby helps to link the study with the
ing of relevant explanatory factors and as such screening is extant body of knowledge on the focal field.
never a neutral, contextual or interest-free activity (van
Fraassen, 1977), the process of generating explanations
practically always needs to be carefully focused by the Abductive mode of reasoning and causal analysis
researcher him/herself. It is also crucial to realize that, typ-
ically, we do not explain events or phenomena per se, but Interpretive research often functions through an abduc-
only particular aspects of them (Hempel, 1965; cf. Tsang & tive process (Dubois & Gadde, 2002; Peirce, 1903) instead
Ellsaesser, 2011). of the better known inductive and deductive modes of
An epistemologically sound approach is to let our reasoning.6 Abductive reasoning typically starts from a
selected theoretical focus drive the choice of which possi- striking empirical observation that begs an explanation, trig-
ble explanatory factors are of true interest to us (e.g. gering the process of ‘making sense’ to begin. However, as
DiMaggio, 1995). The sharpening of explanations in terms the observation is not perceived to exist in a theoretical vac-
of contrastive thinking is of notable help in this regard uum, an abductive researcher then commences careful
(Lipton, 1990; Tsang & Ellsaesser, 2011; Ylikoski, 2007). development of theoretical explanations with the help of
Consider an innocent looking example observation, which everything he/she knows, both empirically and theoretically,
could certainly be part of an interpretive management on the examined issue (Hanson, 1958, 1961). The process of
accounting study on budgetary biasing (cf. e.g. Lukka, abductive reasoning can be paralleled to detective work as it
1988): collects clues, focuses on those that are most promising and
attempts to put them into perspective with the conditions
Divisional managers underestimate their sales forecasts and other evidence at hand. In brief, the abductive explana-
when submitting their budgets to the headquarters. tory scheme can be formulated as follows (Peirce, 1960, p.
117):
How can this example of budgetary biasing be
explained? Contrastive thinking advises us to first sharpen Surprising phenomenon Y is observed.
the target of the explanation (i.e. the explanandum). In so But if proposition X would be true, then Y would be a
doing, we get, for instance, the following four more specific matter of course.
sub-questions, or so-called allomorphs (see Tsang & There is reason to assume X is true.
Ellsaesser, 2011): Why divisional managers, not some other
party? Why underestimate rather than, say, overestimate? The outcome of an abductive research process is typi-
Why sales forecasts, not some other item? Why when deal- cally a causal explanation where X is concluded to plausi-
ing with the headquarters, not with some other party? All bly explain Y, representing so-called inference to the best
of these questions lead to somewhat different explanation explanation. Rather than being a linear process of reason-
focuses and processes of counterfactual analysis (cf. Lukka ing, an abductive process includes going back and forth
& Modell, 2010). between empirical findings and theoretical elements per-
The central lesson here is that we can easily endeavour ceived to be of relevance and interest (Lukka & Modell,
to explain overly broad sets of aspects of phenomena, 2010). Thought experiments relating to the application of
which tend to lead to weak and ambiguous argumentation, contrastive thinking and counterfactual analysis form an
potentially limiting the possibility of truly increasing our integral part of the abductive reasoning process.
understanding. Thoughtful application of contrastive It is indeed worth emphasizing the important role of
thinking makes analysis with counterfactual conditionals contrastive thinking within the abductive reasoning pro-
more effective and also contributes to avoiding so-called cess; factors included in the various stages of the analysis
over-generation of causes (e.g. Hoerl et al., 2011). In fact, do not come ‘out of the blue’ but are selected, based on
there is reason to argue that careless disregard of the con- particular grounds. In the case of interpretive research,
trastive thinking aspect makes it very difficult to develop the endless spectrum of actors’ potential differing mean-
causal claims that can be rendered meaningful and plausi- ings that might play a role in the research setting renders
ble (cf. Lukka & Modell, 2010).
The approach to causal exploration introduced in this 6
Abduction, developed and coined by C.S. Peirce approximately a
paper, revolving around the counterfactual notion of century ago, has much similarity with grounded theorization that was
introduced to the agenda of social studies in the 1960s by Glaser & Strauss
(1967) (cf. Strauss & Corbin, 1998; Suddaby, 2006). Hanson (1958)
criticized the dominant hypothetico-deductive and inductive models for
5
Cf. Morgan and Winship (2007) and their discussion on the difference representing the logic of a completed research report rather than the actual
between primarily seeking the causes of effects versus the effects of causes. research process.
564 K. Lukka / Accounting, Organizations and Society 39 (2014) 559–566

their identification an even more challenging matter. Con- of the knowledge set on the focal field. This is a way by
trastive thinking is crucial at the outset of the process as it which theoretical diversity and development in interpretive
helps the researcher identify the interesting observation research across studies might be understood as an exercise
perceived as requiring explanation – in other words, why in complementarity rather than fragmentation.
was precisely this observation picked up in contrast to Examples selected from published interpretive manage-
another one? Contrastive thinking is employed over the ment accounting research such as Covaleski and Dirsmith
entire abductive process as the researcher focuses his/her (1986), Dent (1991), Ahrens (1996) and Vaivio (2006) give
attention on particular potential emerging explanatory fac- other illustrations regarding how interpretive scholars
tors instead of some others, collects further evidence based effectively apply abduction as their mode of reasoning. In
on his/her theoretical contemplation as well as clues from all of these studies, the authors offer implicit clues to hav-
the field and also runs thought experiments on expected ing employed counterfactual analysis and contrastive
relationships between things (i.e. mobilizing counterfac- thinking in making theoretical sense of their findings and
tual conditionals). Contrastive thinking offers a focused delineating plausible explanations to accounting-related
method with which to consider one’s own ideas and etic phenomena (cf. Lukka & Modell, 2010). In all of these stud-
preferences in relation to those of others. ies, the emic and the etic interact fruitfully, resulting in
To exemplify abduction in the context of interpretive interpretive studies producing more than merely rich emic
research, let us consider further the case of budgetary bias- accounts. They offer theoretical arguments including
ing introduced in the previous section. Actors’ subjective explanations and, as these are deeply rooted in the life-
meanings relate particularly to their intentions concerning worlds of the people being studied, we can term these
their biasing attempts and different intentions can have explanations thick. In the following section, one of the
different likely consequences. In this regard, Lukka (1988) above-mentioned studies will be analyzed in more detail
identified two main types of intention for a manager to to more specifically illustrate how causal arguments and
manipulate his/her budget: resource intention (i.e. aiming a storyline can be generated by interpretive research,
to get additional resources) and performance evaluation although in an embedded manner.
intention (i.e. aiming to receive more positive evaluations).
While a functionalist researcher would focus on trying to
measure bias and its quantifiable determinants, an inter- Developing a causal explanatory storyline in
pretive researcher pays attention to the process of biasing, interpretive research: An example
including its subjective elements. The contrasts are
brought in partly from extant theory; however, the Dent’s (1991) widely cited article ‘‘Accounting and
researcher still has to decide what he/she wishes to con- organizational cultures: A field study of the emergence of
trast and against what. In line with abduction, an interpre- a new organizational reality’’ is a longitudinal interpretive
tive researcher can attempt to explain a particular case study on a profound cultural change in an organiza-
observed instance of budgetary biasing (e.g. contrasting tion, Euro Rail (ER), focusing on the roles played by new
biasing efforts towards pessimistic and optimistic direc- accounting practices along the dynamic process of the cul-
tions) and develop an explanation for it based on the anal- tural transformation in the firm.
ysis of the subjective biasing intentions of the focal actor Dent’s study traces the process of major change in a
(cf. Lukka, 1988).7 state owned railway company (i.e. ER), starting with the
As abductive reasoning inherently combines empirical introduction of new kinds of manager (i.e. ‘‘business man-
and theoretical elements to develop a plausible argument agers’’) under governmental pressure, culminating in a
or set of arguments, it helps an interpretive researcher to profound cultural change whereby the old ‘‘railway
maintain the holistic feature of interpretive research, culture’’ became gradually replaced by a new ‘‘business
despite conducting parts of his/her primarily empirically culture’’. The central interpretive content of Dent’s analy-
grounded analysis in a focused and selective manner, based sis, in which he mobilized Geertz (1973) in particular,
on contrastive thinking. Abductive reasoning is inclined to encompasses that he carefully examined the process and
tie together the components of the study and has the poten- the ways by which the business managers gradually and
tial of contextualizing the empirical findings, possibly systematically acquired influence by transforming the
including causal elements, to form a theoretically more structures of meaning in the organization through, among
encompassing and consistent set of arguments. Through other things, various actions with considerable symbolic
abduction, emic-level empirical analysis at the core of inter- significance. Dent argued that the transformation of a
pretive research is connected to etic-level analysis and few accounting practices played a major role in this pro-
knowledge. This move makes the individual piece of inter- cess by changing the way people conceptualized key parts
pretive research notably more theoretical as it becomes part of the organization and also the very role of the organiza-
tion in relation to the larger community. He identified
and described a particular process and pattern in the busi-
7
The researcher can also start the analysis from observed subjective ness managers’ actions whereby they gradually broadened
intentions and attempt to predict the likely biasing possibilities. It is worth their influence at ER to implement their change agenda.
noting that the precise subjective biasing intention of the actor can make a When causality is understood in the sense of referring to
notable concrete difference. Resource intention, in contrast to performance
evaluation intention, tends to systematically relate to an attempt to
dependencies, which do not need to be regularities and can
negotiate for more resources, leading to overestimations in the cost side of be contextual, Dent’s piece includes numerous explana-
the budget (cf. Lukka, 1988). tions (cf. Kakkuri-Knuuttila et al., 2008). The delineated
K. Lukka / Accounting, Organizations and Society 39 (2014) 559–566 565

linkages (i.e. the ‘arrows’ between various things) that tie interpretive research to thick explanations. Perhaps with
the isolated descriptions of events into a coherent whole some surprise, causality can be included in interpretive
can be regarded as forming a set of causal explanations, research framings without compromising the unique fea-
rendering the causal reading of the piece quite natural. tures of such research, even by building on some of its
According to Dent, the accounting-related changes at ER strongholds. In particular, this is due to the tendency of
were important causal explanatory factors for the cultural interpretive studies to focus on responding to ‘how’ ques-
change, without which there would probably have been tions. Typically, interpretive research profoundly investi-
no such change, thereby offering examples of counterfac- gates how associations between phenomena occur and
tual conditionals that are frequently embedded throughout explores the processes and mechanisms that generate out-
his paper. comes from particular conditions, thereby shedding light
When Dent identifies phenomena begging for explana- on the ‘arrows’ between variables.
tion (i.e. explanandums) at various levels of his analysis, The paper emphasizes and illustrates the role of con-
examples of contrastive thinking turn up in plenty, imply- trastive thinking as a most useful tool with which to focus
ing that he had selected specific focus issues to drive his on the development of causal explanations, rendering
examination, forming the key elements of his storyline. analysis with counterfactual conditionals, including
In their application, counterfactual thought experimental thought experiments, more effective. The abductive mode
analysis is present, although typically only implicitly. To of reasoning, referring to the iterative movement between
illustrate this, the process of cultural change began with empirical materials and theory elements and contributing
the appointment of new kinds of manager at ER; however, to making the set of explanations more holistic and theo-
why were they needed rather than, say, new kinds of loco- retically contextualized, forms the principal way to gener-
motive engine? Because ER’s environment had changed in ate plausible explanations in interpretive research. While
such a way that its top management especially felt more abduction works through all of the key tools of causal
managerial resources would be required. The kind of man- exploration introduced in this paper, the role of contrastive
agers appointed were business managers; however, why thinking is particularly notable as it guides the researcher
precisely this kind of managers rather than, say, hiring in his/her choices of analytical focus from the beginning
more operational managers? Because ER’s top manage- of the abductive process.
ment especially lacked marketing and business expertise Explicating causal explanation in interpretive research,
and a bottom line mentality. Had the government not for instance in the field of management accounting, has
turned ‘hostile’, the need for new kinds of managerial the potential to add to the clarity and strength of the argu-
resources and practices would probably have not emerged. ments developed, while also leading to the need to bear in
Also, had the nature of the government’s hostility been dif- mind their inherent boundary conditions, such as the lim-
ferent (e.g. less focused on financial issues), the type of its of counterfactual analysis and those of abductive rea-
newly recruited managers could have been different, too soning and also the fact that the stability of social
(cf. Kakkuri-Knuuttila et al., 2008). structures and relationships is always an open question.
Overall, Dent’s (1991) analysis relies strongly on the Despite these caveats, it is suggested that the potential of
‘power of example’ (Flyvbjerg, 2001), whereby particular applying causal thinking more explicitly in interpretive
critical events from ER’s trajectory of change are identified research is notable.
for careful and profound scrutiny and are presented as key
drivers for further changes. The analysis is formed by Acknowledgements
numerous partial episodes and narratives, bound together
with the help of the theoretical resources introduced at the This paper is based on the plenary presentation at
beginning of the paper, hence providing a well-developed GMARS conference in Copenhagen in June 2012. I would
example of how abductive reasoning can be usefully mobi- like to thank Chris Chapman, Markus Granlund, Olli Koisti-
lized in interpretive research. Therefore the outcome of nen, Mikael Melan, Hanna Meretoja, Sven Modell, Susan
Dent’s (1991) analysis is inherently holistic. The paper also O’Leary, Jan Pfister and the anonymous reviewers for their
offers a solid example of thick explanations as it presents a helpful comments along the process of preparing this
careful emic account of the evolving change in the mean- paper. Mike Power is thanked for his highly significant
ing structures of the actors at ER and also provides an encouragement.
explanation on the change from an etic perspective (cf.
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