The Interaction of western budgeting and Solomon Islands culture: A case of the budgeting process of the Church of Melanesia

Abstract

Accounting is said to be a product of its environment, with culture being one of the powerful factors shaping the accounting system within each context. An accounting system is therefore a reflection of the society in which it is being practised. In addition, given the differences in the social, political, economic, and cultural characteristics that exist amongst different countries of the world, an accounting system that is effective in one country may not necessarily be so in another. This study explores the application of a western style budgeting process in a non-western society. It uses the Anglican Church of Melanesia (CoM), a non-profit organisation in a developing country, Solomon Islands, as the case study. Its primary objective is to theorise on the process concepts explaining the influence of culture on the budgeting process, with specific reference to the impact of Solomon Islands culture on the western system adopted by the CoM. The research adopts the interpretivist approach and employs stakeholder theory and grounded theory frameworks as the theoretical insights for data collection, analysis and theory formation. The significant results of the study include confirmation of suggestions by some previous research that culture does shape the accounting and budgeting systems practised in different environments. The nature of such influence depends on the degree of compatibility between the interacting cultures. This study discovers that the CoM’s budgeting process reflects attributes of both the western and Solomon Islands cultures. The adopted western budgeting system interacts and is being filtered and moulded by the local social-cultural and organisational environment. The impact of the various cultural attributes is explained in terms of whether these are more or less shared by the western and local societies. The more shared or common features when applied harmoniously within the appropriate budgeting functions tend to reinforce one another to produce anticipated outcomes. For instance, both cultures stress the importance of achievements as a basis for assigning powers. Hence within the organisation, it is expected that power and responsibilities be delegated based on qualifications and expertise. Anything to the contrary is considered an unanticipated result. The less shared attributes are unique to the local society and hence generally dissimilar from the norms and values of western societies. When these less shared or even conflicting values and norms are integrated within the same budgeting roles, unexpected or even dysfunctional consequences may ensue. For instance, the emphasis on monetary and economic values in a predominantly semi-subsistence society results in many church followers being excluded from its budget process. It also creates a dependency and materialistic mentality in a society where sharing and modesty are important norms. The study recognises that significant potential exists for appropriate integration of both western and local cultural attributes within the local budgeting process. This requires thorough understanding of both the more shared and less shared features of the interacting cultures and their impact on the budget process. Organisations need to identify the appropriate context, time and situations for the application of these cultural attributes within the budget process.