An exploration of the potential of supply chain accounting to promote both economic and social upgrading: a case study in Brazil

The main purpose of this study is to explore the potential of supply chain accounting (SCA) for promoting both economic and social upgrading. In pursuit of this aim, this study examined the SCA practices used by a case study focal organisation in the textiles industry in Brazil and across its supply chain. SCA refers to the domain of management accounting and controls in inter-organisational settings. Drawing on institutional theory, this study investigated the impact of the SCA practices used across the case study supply chain on the wider economic and social context in which the organisations operated. The analysis is based on an in-depth case study. Sources of data included in-depth interviews with senior and middle managers within the focal organisation and five of their main suppliers, and within other organisations that represented the wider Brazilian institutional context (national and regional industry federations, trade unions, and a development bank), totalling 32 interviews across 11 organisations. The evidence shows that the SCA practices used across the case study supply chain impacted upon their external social and economic environment. Thus, this study argues that SCA has the potential to promote both economic and social upgrading. Although the intention of this study was to find best practices, the findings revealed instances in which the SCA practices impacted upon the external environment both in positive and in negative ways. Nonetheless, the evidence of the impact of SCA on the economic and social environment imply that SCA has the potential to promote both economic and social upgrading. This study contributes to the literature of management accounting in developing countries, and to research of accounting as a mechanism for development. This research has implications for policy and practice. Firstly, by examining the impact of SCA on the wider economic environment in which the organisations operated, this study has elucidated some of the factors that impacted upon the low competitiveness of the textiles industry in Brazil. Therefore, these findings may help inform policy and organisational practices aimed at increasing the competitiveness of the industry. Secondly, the findings in this study suggest that SCA had the potential to promote better social practices across supply chains. Considering both the moral and the business cases for managing social issues, these findings may also influence companies’ practices, policies and codes of conduct.