ACCOUNTING, RELIGION, AND POLITICS: PERFORMANCE MEASUREMENT PRACTICES IN IRANIAN PUBLIC MANAGEMENT Siamak Nejadhosseini Soudani 01517739 DISSERTATION eingereicht im Rahmen des PhD Programm Management (Doktoratsstudium) an der Leopold-Franzens-Universität Innsbruck Hauptbetreuer: Univ.-Prof. Dr. Silvia Jordan Weiterer Betreuer: Univ.-Associate Prof. Dr. Afshin Mehrpouya Erstbeurteilerin: Univ.-Associate Prof. Dr. Afshin Mehrpouya Zweitbeurteiler: Univ.-Prof. Dr. Martin Messner Innsbruck, im Mai 2021
298
Embed
ACCOUNTING, RELIGION, AND POLITICS: PERFORMANCE ...
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
ACCOUNTING, RELIGION, AND POLITICS:
PERFORMANCE MEASUREMENT PRACTICES IN IRANIAN
PUBLIC MANAGEMENT
Siamak Nejadhosseini Soudani
01517739
DISSERTATION
eingereicht im Rahmen des
PhD Programm Management (Doktoratsstudium)
an der Leopold-Franzens-Universität Innsbruck
Hauptbetreuer: Univ.-Prof. Dr. Silvia Jordan
Weiterer Betreuer: Univ.-Associate Prof. Dr. Afshin Mehrpouya
Erstbeurteilerin: Univ.-Associate Prof. Dr. Afshin Mehrpouya
Zweitbeurteiler: Univ.-Prof. Dr. Martin Messner
Innsbruck, im Mai 2021
i
Abstract
This study analyzes the interrelationship between accounting, religion, and politics, specifically
the role of Islam, political discourses, and anti-imperialist beliefs in the adoption of performance
measurement systems in the context of Iranian public management. I conducted a qualitative case
study in the Iranian petroleum industry drawing on interviews, observations, and document
analysis. The data analysis process followed an abductive approach, which facilitated systematic
data analysis, interpretation and enabled the development of theoretical concepts by moving back
and forth between data and theory. I discussed my findings by drawing on two theoretical
frameworks. First, I used post-colonialism (mainly Bhabha, 1994) to explain the role of Islam and
anti-imperialist beliefs, movements, and discourses on shaping the local identity construction and
the performance measurement practices in the context of the Iranian petroleum industry. Second,
I applied the literature on “orders of worth” (Boltanski & Thévenot 1999, 2006) to explore how
people cope with multiple value regimes co-existing within the society and the organization and
how they justify their actions legitimately. My findings reveal that the hybridization of Western
management approaches with Islamic ideology has produced an ambivalent variant of performance
evaluation systems in the Iranian petroleum companies; one is characterized by mimicry of
Western management thoughts and techniques, and the other is characterized by resistance to it by
emphasizing Islamic values. The Islamic ideology has shifted public management identity
construction by emphasizing the entanglement of religion and government as a dominant value in
managing the country and has shaped the practices of management control systems by measuring
and managing staff’s performance based on Islamic values in public organizations. This study
shows that Islamic management is not a unified concept. It may take different meanings even
within the same organizational context, and it may be mobilized for political purposes in a
totalitarian regime in ways that depart significantly from Islamic management principles derived
from Islamic faith, tradition, and practices. The study extends sociological approaches to
management accounting and management control research by revealing that the management
control systems can act as mediating tools between multiple value regimes that coexist within
society and organizations. More broadly, this study also contributes to the interdisciplinary
perspectives on accounting and the literature on the roles of accounting in society and
organizations.
ii
ACKNOWLEDGEMENT
This dissertation could not have been completed without the support of many people, within and
outside academia, who contributed to its production. First and foremost, my parents and my sisters.
Without their support and encouragement, this adventurous journey would have been far more
challenging.
I want to take this opportunity to extend my gratitude to several people who have made valuable
contributions to the completion of this PhD thesis. First of all, I want to appreciate my principal
supervisor Prof. Dr. Silvia Jordan who made this dissertation project possible in the first place. I
am grateful for your guidance, constructive feedback, and trust, as well as your encouragement to
pursue my interests. I am delighted to say that I have not only found a supervisor, and a co-author
in you, but also a good friend.
Secondly, I would also like to express my appreciation to my co-supervisor and examiner Prof.
Dr. Afshin Mehrpouya. Thank you for taking the time to supervise and evaluate me. You are an
extraordinary academic, and I have learned from you in so many ways through the valuable
feedback, advice, and comments you gave me on my PhD research project. Thank you also to my
second examiner Prof. Dr. Martin Messner for taking the time to examine and provide feedback to
this dissertation.
I am also very grateful for the valuable and constructive feedback and advice that I received from
other scholars, such as Prof. Dr. Albrecht Becker, Prof. Dr. Claire Dambrin, Prof. Dr. Keith
Robson, and Prof. Dr. Rania Kamla.
Furthermore, I am also indebted to the managers of the NIOC, the case study organization in
Tehran (Iran), for their hospitality, openness, and willingness to participate in my study. I am
extremely grateful to those people who provided me with access to the data, especially the Deputy
Minister of Science, Research, and Technology, the head of the Student Affairs Organization, as
well as the head of the Research and Technology Centre of the NIOC.
A part of this PhD thesis was financed by the scholarship, which I was kindly granted by the
University of Innsbruck, the Vice-Rectorate for Research (Vizerektorat für Forschung). I would
like to extend my sincere thanks to the University for this scholarship, without which, this
dissertation would have taken much longer.
iii
LIST OF ABBREVIATIONS
ALOP
APOC
BP
BSC
CIA
CVA
EPC
EPCF
EPCM
EVA
EW
GDP
ICOFC
ILP
IMF
INSTEX
IOC
IOOC
IRGC
IRI
JCPA
KEPCO
KPI
LNG
MCS
NICO
NIDC
NIGC
Anglo-Iranian Oil Company
Anglo-Persian Oil Company
British Petroleum
Balanced Scorecard
United States Central Intelligence Agency
Cash Value Added
Engineering, Procurement, and Construction
Engineering, Procurement, Construction and Financing
Engineering, Procurement, Construction and Management
Economic Value Added
Economics of Worth (also it refers to Orders of Worth)
Gross Domestic Product
Iranian Central Oil Fields Company
Institutional Logics Perspective
International Monetary Fund
Instrument in Support of Trade Exchanges
International Oil Companies
Iranian Offshore Oil Company
Islamic Revolutionary Guard Corps
Islamic Republic of Iran
Joint Comprehensive Plan of Action
Khazar Exploration and Production Company
Key Performance Indicators
Liquefied Natural Gas
Management Control System
Naft Iran Company
National Iranian Drilling Company
National Iranian Gas Company
iv
NIOC
NIORDC
NIPC
NISOC
NITC
NPM
OESC
OIEC
OILSO
OPEC
OPG
PEDEC
PMM
PMS
POGC
PPS
ROA
SPMS
STIPEC
National Iranian Oil Company
National Iranian Oil Refining and Distribution Company
National Iranian Petrochemical Company
National Iranian South Oil Company
National Iranian Tanker Company
New Public Management
Oil Exploration Services Company
Oil Industry Engineering and Construction Company
Oil Industry Logistics and Services Organization
Organization of the Petroleum Exporting Countries
Operating Profit Growth
Petroleum Engineering and Development Company
Performance Measurement Matrix
Performance Management System
Pars Oil and Gas Company
Performance Pyramid System
Return On Asset
Staff Performance Management System
Strategic Transformation in the Iranian Petroleum Companies
v
LIST OF TABLES AND FIGURES
Table 4.1: Participants’ qualification by gender
Table 4.2: Some revisions on original and emergent themes during the data collection process
Table 4.3: Extract of the open coding spreadsheet from the first round interview transcript
Table 4.4: an exemplary integration of stems and codes
Table 5.1: Main Iran’s state-owned petroleum companies
2011), and the professions of financial accounting and auditing (e.g., Gallhofer, Haslam & Kamla,
2011). These studies find that companies in Islamic societies only use Western management
accounting tools and techniques to a limited extent due to high levels of power distance and
collectivism in these societies. Some of these studies also argue that Islamic values affect all
aspects of life in Muslim societies, including organizational life. These studies highlight the
relevance of “Islamic management” for performance assessment and evaluation practices. Often,
“Islamic management” is referred to in a prescriptive way in terms of ideals derived from the
Quran and the Sunnah (e.g., Kamla et al., 2006). However, these studies are often based on
questionnaires and tend to draw on Hofstede’s (1980, 1984) findings which other scholars
criticized for its relatively static and simplistic cultural dimensions (see Baskerville, 2003; Ahrens
& Chapman, 2006).
Other studies on the impact of socio-cultural factors on performance management practices draw
on the concept of ideology. Historically, the sociology of knowledge has focused on ideology as
the examination of how ideas are rooted in the social structure and how they are used to serve
group interests. According to Marx, ideology concerns the creation of illusions (Gordon, 1978).
An ideology is seen as a false consciousness created by the ruling class to legitimize and reproduce
the social system (Alvarez 1998, p. 28-29), which consists only of “reflexes” and “echoes” of the
35
real processes of life, serving the interests of the dominant class (Ricoeur, 1986). In contrast,
Mannheim (2013) views an ideology as knowledge intended to integrate and preserve social order;
nonetheless, no social group can evade egotistical interest, with the possible elimination of
intellectuals, who may at least avoid it in their arguments. From such a more neutral aspect,
ideology is usually viewed as a significant expression of society and not as something imposed or
inadequate, which should not be taken to mean that it refuses criticism of the social structure
bearing the ideology of a given society (Arbib & Hesse, 1986). In other words, a neutral conception
of ideology does not exclude its being linked with power and domination (Neimark, 1992).
According to Bourguignon et al. (2004), each society has its distinctive ideological approach to
social issues, i.e., ideology variety among capitalist and socialist societies, and that the
distinguishing ideology of a society is embedded in the methods and techniques used for that
society’s collective action. They argue that management approaches are mechanisms that can
contribute to constructing hierarchies, making people obey and cope with ambiguity, and that they
rely on certain ideas about how to formulate social order, which refers to the ideological
assumptions of management methods (Bourguignon et al., 2004). Similarly, Mihret et al., (2020)
study of Iran indicates that how this country has promoted an ideological aspect of professional
autonomy as independence from Western influence by resisting external pressures for adaptation
of professional accounting to transnational neoliberal norms. Indeed, they highlights the role of a
country’s ideology in shaping adaptation of regulatory institutions for alignment to transnational
norms as well as the ideological foundation of the state dynamic (Mihret et al., 2020).
Consequently, resistance and adoption to the international norms in the era of globalization may
shape by the countries’ ideological perspectives (Halliday & Carruthers, 2009). This means that
the transferred methods and techniques may undermine the existing social order, which may
explain local resistance to them (Alvarez, 1998). In this regard, Bourguignon et al. (2004) show
that the BSC has not received a particularly warm welcome in France, where the tableau de bord
(dashboard) has been practiced for at least 50 years. This is due to the degree of consistency
between the tableau de bord and the BSC with the distinct general beliefs bearing the ways of
forming and maintaining social order in French and American society. Their findings indicate the
significance of local ideology, especially in the practices of control systems and development in
ideologically distinct settings. An ideology is manifested within the structure of interactions among
people of a society, their institutions, and their artifacts. Implicitly, it relies on individual, more or
36
less conscious, cognitive paradigms that are socially assimilated (Arbib & Hesse, 1986). However,
similar to language, the ideology of a society can be constructed imperfectly within the mind of
people and represent in various ways in heterogeneous people (Bourguignon et al., 2004). In
organizations, ideologies are embedded not only in the employees’ and the employers’ approaches
but also in management tools and techniques. Thus, management methods tacitly rely on
ideological assumptions, (such as specific beliefs, norms, knowledge and ideas) concerning the
construction or maintenance of social order (Mannheim, 2013). In general, any device associated
with hierarchy, planning, control and performance measurements may be expected to “resonate”
differently (Bourguignon et al. 2004, p. 129) in any society, especially between West and East
(Javidan & Carl, 2004). Accordingly, the absence of consistency between the ideology of society
and the ideological assumptions of globalized management approaches developed in Western
countries may not be compatible in non-Western countries. However, management methods that
do not fit with the dominant ideology of a society are not necessarily rejected, but they may also
shape (Nørreklit, 2003) or in turn be shaped by the local ideology.
Consequently, the impact of culture can be vital for transforming and translating management
accounting technologies in different nations. Although management accounting technologies and
techniques can help to improve managerial performance in one organization, they may have a
dysfunctional impact in another organization with a different socio-cultural background.
2.7 Summary
In this chapter, I reviewed the literature on the concepts of performance, performance measurement
and management, and I focused especially on studies which investigate PMS as organizational and
social practices. I reviewed the management accounting literature with regard to the different roles
that PMS can play in organizations and society, and the ways in which PMS practices are shaped
by the specific socio-cultural context. The literature has acknowledged the importance of these
phenomena. The literature review also uncovered that these concepts are subject to various
interpretations and meanings. They are also subject to change in specific historical and socio-
cultural settings. According to Hopwood (1976), “unfortunately, however, although recognized as
important, all too often accounting has been seen as a rather static and purely technical
phenomenon. Nothing could be further from the truth. The purposes, processes, and techniques of
accounting, its human, organizational and social roles, and the way in which the resulting
information is used has never been static. The economic distinctions drawn by accountants and
37
the methods which they use are themselves creations of the human intellect and reflect social as
well as economic evaluations. They have evolved, and continue to evolve, in relation to changes
in the economic, social, technological and political environments of organizations” (p. 1).
This literature review also reveals certain empirical gaps in practices of performance measurement
and management, specifically with regard to how these practices are shaped by different historical,
political, and cultural contexts. Studies on PMS practices have mostly focused on organizations
situated in Western cultural contexts, such as the US, Canada, Europe, and Australia. A few studies
have focused on the specific context of China, but very rarely PMS are studied in the context of
Islamic societies, especially the ways in which socio-cultural aspects such as Islamic values,
political tensions and transnational capitalism shape practices of performance measurement and
management in these societies. Moreover, extant studies on management accounting practices in
Islamic societies are often based on questionnaires and tend to draw on Hofstede’s (1980, 1984)
relatively static and simplistic cultural dimensions (see Baskerville, 2003; Ahrens & Chapman,
2006). However, these studies do not explain these gaps in much detail, and perhaps even more
importantly, they do not investigate how organizational actors themselves use and promote the
concept of “Islamic management”.
Consequently, we lack an understanding of how Islamic management practices shape the use of
PMS and how the specific geopolitical role of the so-called “Middle East” impacts PMS practices.
Although there are over two decades of literature and theories about the various roles of
performance measurement and management systems in practice, this literature is still not
exhausted. The phenomenon is hugely complex and multidisciplinary, and there is still a need for
a deeper understanding of how performance management technologies (such as PMS) are
understood and practiced in different socio-cultural contexts, such as the context of Islamic
societies. Furthermore, there are also conceptual and theoretical shortcomings of the extant
literature. Suggestions for how to study the impact of socio-cultural factors on the use of PMS
seem to be relatively vague, and most existing frameworks do not account for the impact of
different value systems or ideologies in diverse socio-cultural contexts.
I will address these conceptual shortcomings in the following chapter in which I develop the
theoretical foundations for the study of PMS practices in the context of the Iranian petroleum
industry.
38
CHAPTER THREE: THEORETICAL FRAMEWORK
3.1 Introduction
This chapter is devoted to the theoretical perspectives framing my research, which gives particular
consideration to Boltanski and Thévenot’s (2006) orders of worth and Stark’s (2009) concept of
organizing dissonance. These theories along with postcolonial theory play an essential role in
guiding the examination of my empirical data. I draw on the ‘order of worth’ framework (Boltanski
& Thévenot, 1999, 2006; Stark, 1990, 2009) and postcolonial theory to investigate how particular
historical, cultural, and political contexts impact performance management practices in complex
social networks and in uncertain situations, especially when multiple orders of worth co-exist
within an organization. I use these theoretical frameworks to analyze the impact of socio-cultural
aspects and systems of values that shape the use of PMS. Cultural sociology, in general, has
undergone a tremendous expansion that leads to a rich, as well as fluid and quite a polemical scene
(Silber, 2016). Culture affects practically all aspects of organizational interactions as well as
activities in upper-level management (Chatterjee et al., 1992). As part of control practices and
organizational activities, the use of PMS and the diversity of performance measurement and
management criteria are also influenced by culture (Bhimani, 2003). Thus, the attributes of PMS
reflect aspects of organizational values (Henri, 2006). According to Schein (1985), culture and
values are connected to the elements of an organization that are most stable and least malleable.
They act as a starting point for the design and use of management control systems (Flamholtz,
1983). According to Rousseau (1990), control systems are behavioral patterns, which are
influenced by the underlying value structure and create meaning in the organization. Although the
most employed model in organizational research is proposed by Hofstede (1980, 1984), who
described the structural elements of culture in five dimensions (power distance, individualism,
masculinity, uncertainty avoidance, and long-term vs short-term orientation), his work was
criticized in accounting research by Baskerville (2003), who argued that utilizing Hofstede’s
cultural method illustrates a lack of adequate consideration for the reasons behind the refusal of
such a universalist approach in anthropology and sociology (i.e., the assumption of equating a
nation with a culture and the challenge, and limitations on an understanding of culture through
numeric indices and matrices) and also led to a misleading sequence on cultural criteria as an
39
illustrative variable of diversity in accounting practices and behavior (see chapter 2). Therefore,
there are still conceptual and theoretical shortcomings in the extant literature, as most existing
frameworks do not account for the impact of different value systems of ideologies in diverse socio-
cultural contexts.
Boltanski and Thévenot (2006) conceptualize individuals as living in various ‘orders of worth’,
where each order of worth privileges distinct forms of evaluation that require discrete metrics,
measuring tools, and proof of worth in diverse social contexts. Instead of implementing a particular
principle of evaluation as the only adequate framework, it is recognized that it is legitimate for
actors to articulate alternative concepts of what is worthy, where multiple value regimes can
potentially synchronize and compete in any given field (Moor & Lury, 2011; Stark, 1996, 2009).
In this chapter I also consider the institutional logics perspective and its relation to the orders of
worth approach, both in terms of its contribution as a theoretical starting point and its limitations
for investigating my research questions. In the following sub-chapters, I will first present the
concept of institutional logics in organization studies, and I will then specifically focus on
Boltanski and Thévenot’s (2006) orders of worth theoretical framework as well as postcolonial
studies. I draw upon postcolonial studies in order to supplement the orders of worth framework by
a framework that is able to theorize the specific historical and cultural context and hence the orders
of worth in the Iranian public management.
3.2 Institutional Logics in Organizational Studies
The “institutional logics” approach was first introduced by Alford and Friedland in 1985, to
describe “the contradictory practices and beliefs inherent in the institutions of modern Western
societies” (Thornton & Ocasio 2008, p. 99). It is a hub concept in organizational studies and
sociological theory, which focuses on how broader belief systems shape the cognition and behavior
of actors (Thornton, 2004; Lounsbury, 2007). According to Powell and DiMaggio (2012),
institutions are “both supra-organizational patterns of activity by which individuals and
organizations produce and reproduce their material subsistence and organize time and space.
They are also symbolic systems, ways of ordering reality, thereby rendering the experience of time
and space meaningful” (p. 243). In organizational studies, it has long been authenticated that
businesses may require to take into account and comply with the diversified expectations that their
different stakeholders set upon them (Mitchell et al., 1997).
40
The institutional logics approach, while building from the neo-institutional framework, takes a sort
of middle ground in theorizing the link between agency and structure in organizational studies.
Proponents deliberately avoid rational actor models by characterizing individual interests,
identities, and understandings as embedded within logics, while at the same time describing actors
as competent of overcoming institutional constraints to innovate (Greenwood et al., 2008).
Greenwood et al. (2011, p. 320) highlighted that such a contradictory and complex practice in
organizations has been implicit in institutional scholarship since “Meyer and Rowan’s (1977)
observation that organizations confront socio-cultural as well as commercial expectations - and
that these may be incompatible”. However, a tendency to separate socio-cultural elements from
practices in organizational activities persisted dominantly until the turn of the century, when
several scholars (e.g., Scott et al., 2000; Lounsbury, 2002; Thornton, 2002) stressed the social
embeddedness of technical factors and developed the use of the institutional logics perspective as
a means to challenge the idea of institutional and technical forces as ‘separate’. While DiMaggio
and Powell’s (1983) theorized alternative forms of isomorphism (e.g., normative, coercive and
mimetic) are respectively located in the professions, state and market, Thornton et al. (2012) point
out that the “meaning of rationality” remained invariant across sectors such that isomorphism is
obtained through “relatively mindless behavior in response to structural rationalization” (p. 27).
Neo-institutionalism lacked a theory of actor interest and hence had neither a basis for individual
agency nor consequently for theorization of institutional change, which posed an “astonishing
deficit” (p. 29). Critical of the institutional focus on isomorphism and the inherent stability of
institutions, the institutional logics camp developed a meta-theory and analytical framework that
allows an analysis of the interrelations between institutions, organizations, and individual actors
(Thornton et al., 2012). Since then, the institutional logics perspective has been frequently used in
organizational studies, both as a meta-theory and a method of analysis (Thornton et al., 2012) with
a greater emphasis on the normative and structural aspects of institutions, mainly focused on their
cognitive and symbolic elements (Friedland & Alford, 1991).
Thornton and Ocasio (1999) used elements from Friedland and Alford’s (1991) perspective to
define institutional logics as “the socially constructed, historical patterns of material practices,
assumptions, values, beliefs, and rules by which individuals produce and reproduce their material
subsistence, organize time and space, and provide meaning to their social reality” (p. 804). The
logics approach views cultural content, the symbols and practices of each logic, as potentially
41
complementary or contradictory. It is through transposing symbols and practices across
institutional orders within an institutional field that change occurs (Thornton, 2004; Padgett &
Powell, 2012). Similarly, DiMaggio’s (1997) concept of institutional logics as a theory and method
of analysis for understanding the influences of societal-level culture on the cognition and behavior
of individual and organizational actors brings attention to the link between intra-institutional and
inter-institutional domains.
3.2.1 Institutional Logics in Action
While logics can be perceived as constraining, in as much as an actor’s social status makes
particular logics more accessible, the fact that actors are exposed to multiple logics allows for their
agency. Individuals and organizations are part of multiple institutional logics, which provide both
symbolic and material resources (Dobbin & Vican. 2015). Thus, actors can merge logics, highlight
contradictions, and otherwise reinterpret and mobilize meanings and practices to drive institutional
change (Thornton & Ocasio, 2008). Recent empirical work has supported these theoretical claims
by examining how such situations affect the organization’s activities and decisions. For example,
Carlsson-Wall et al. (2016) provide an illustrating discussion of a football club to show how
different logics are placing conflicting demands on organizational actors. They distinguish the
operation of the football club under two principal institutional logics: the sports logic and the
business logic. They highlight how the roles and positions of these logics do not remain constant
in their organization, but their significance depends on a variety of factors, including how the
organization is performing in terms of sports and financials, as they claim “on the organizational
level, logics are not compatible or incompatible per se, but are accorded different priorities in
different situations” (p. 48). Furthermore, they indicate how the tensions deriving from various
institutional logics can be managed in an organization by three strategies. First is decoupling,
which implies that the objectives, expectations, and practices stemmed from one logic are only
symbolically followed, whereas the actual operations are organized according to the other logic.
In practice, this often results in gaps between an organization’s talk, decisions, and actions, which
is broadly identified and discussed by scholars in various fields of literature (e.g., Brunsson, 1989;
DiMaggio & Powell, 1983; Lounsbury, 2007; Reay & Hinings, 2009; Boiral, 2013). The second
strategy identified as structural differentiation (Carlsson-Wall et al., 2016), implies dividing the
organization into various subunits that can operate fairly independently by allowing distinct parts
of an organization to accept various institutional logics. It can result, for instance, in organized
42
hypocrisy (Brunsson, 1989; Cho et al., 2015) or compromise, which is also identified as the third
strategy by Carlsson-Wall et al. (2016).
Recent management accounting literature has subsequently begun to address how accounting in
general and multiple performance measurement and management systems, in particular, can play
an important role when an organization attempts to manage conflicting institutional logics (e.g.,
Burchell et al., 1980; Miller & Power, 2013; Chenhall et al., 2013). Scholars have shown that the
role played by performance measurement systems in organizations facing multiple institutional
logics and inconsistent demands depends on how managers use PMS in evaluating performance
and in their decision-making. For example, Carlsson-Wall et al. (2016) indicate that the design and
use of performance measurement systems can relate to each of the three strategies (decoupling,
structural differentiation, and compromise) used to deal with conflicting institutional logics. From
a decoupling strategy, it can be concluded that performance measures in organizations do not
necessarily relate to actual decisions and actions, but are rather used solely to reassure internal and
external stakeholders, or to gain legitimacy for the organizational actions. Such decoupling may
also be inadvertent, especially when the formal measurement systems have not kept up with the
development of organizational practices, and the organizational decision-making draws on some
informal metrics. As for structural differentiation, the organization can use an assemblage of
separate performance measurement systems based on different goals sought in various
organizational subunits without having the targets combined to a sufficient extent (see Carlsson-
Wall et al., 2016). Therefore, each subunit can achieve its particular objectives and meet the
demands of a particular institutional logic, while other subunits would be drawing to a distinct
direction with a different set of goals. In respect to remedy such an action, multiple performance
measurement criteria may be used to integrate various metrics in attempts to ensure that the
organization as a whole progresses toward the desired objectives. This activity is referred to as
compromising, which is defined by Carlsson-Wall et al. (2016) as a third strategy. A prominent
example of a compromising tool is a balanced scorecard, which can be used in attempts to combine
and integrate a variety of performance metrics (see Kaplan & Norton, 1992).
3.2.2 Institutional Logics as Culture
Like culture, institutional logics can be referred to as infinite unexplored topics, such as how
objects, spaces, and technologies shape and frame social relations (Thornton, 2015). Thornton et
al. (2015) view institutional logics not only as a way to pluralize institutional rationalities beyond
43
state, market and professions, but a way to place an exterior culture manifest in material practices
and cultural “vocabularies of practice”. Their coherence across time does not depend on
internalized values and thus, on the one hand, provides a basis for “mindful” and “strategic” agency
and transformation through the multiplicity of logics, and their “nearly decomposable capacity”
on the other (p. 59-60). Thornton et al. (2015) argue that “...culture is not internalized as in the
Parsonian (1951) view; instead it is externalized in institutional practices and vocabularies that
shape not only habitual action, but also strategic decisions” (p. 106). In this respect, people’s
actions are motivated by cultural norms, habits, and routines (Bandelj & Morgan, 2015).
Sociologists perceive actors embedded in broad-scale contexts of meaning, which shape what is
considered to be rational (see Meyer & Rowan; 1977; Meyer et al., 2009; Bandelj & Morgan,
2015). Thornton (2004) treats culture as an independent variable, to interpret organizational
decision-making changes based on how different institutional logics focus actors’ attention.
However, Thornton (2015) argues further that culture can also be viewed as a dependent variable
by illustrating how alternative meanings of cultural symbols and material practices, as influenced
by different institutional logics, wane and wax over time and context. It is in transposing symbols
and practices across institutional orders within an institutional field that change occurs (Thornton,
2004; see also Padgett & Powell, 2012).
Thornton (2004) suggests that the institutional logics act as “axial principles of organization and
action based on cultural discourses and material practices prevalent in different institutional or
societal sectors” (p. 2). This perspective stresses how higher-level societal logics partly shape and
often conflict with the actions undertaken in the major institutional sectors of society such as “the
market, the state, the corporation, the professions, religion, and the family” (Thornton 2004, p.
42). Although the ways in which multiple institutional logics “focus attention” in different kinds
of situations and their contingent effects in reproducing or transforming them (Thornton et al.,
2012) have been studied, there is still a gap in exploiting the affinities between institutional logics
and cultural theory. In this respect, institutional change requires and evokes intense passions, while
Institutional Logics Perspective (ILP) remains predominantly in the cognitive or instrumental
domain, employing concepts such as focus, schema, and goals. Religion, which carries an
emotional charge, is neither developed nor linked to an institutional logic per se. Institutional
logics not only depend on distinctive modes of actions with their diction, expression, and the
schemata formed through them, they likely are contingent on specific emotional registers, on
44
structures of experience in which emotions are inseparable. Furthermore, coexisting or alternating
dominant logics, with the constraints they might entail (Friedland & Alford, 1991), are the
backdrop against which ILP analyzes how actors draw upon different worlds of worth within day-
to-day action. The institutional logics are limited to the contention of logics, specifically, an
analysis of compatibility, dynamics of material, and conflict within the organization (such as “How
do people reach agreement in organizations?”, “How do organizational actors cope with pluralistic
demands in institutional complexity?”, “On what basis do people reconcile disparate views?). In
this PhD research, I examine how the organizational actors cope with the multiple value regimes
that coexist within the society and the organization and justify their positions. Thus, in the
following section, I build on insights from the Orders of Worth approach, a developed version of
ILP, which extends it by current conceptualizations of legitimacy maintenance and justification.
3.3 Theory of Justification
The theory of justification is a part of an epistemology that attempts to understand the justification
of propositions and beliefs. Boltanski and Thévenot (2006) developed a system of evaluation in
On Justification: Economies of Worth, which highlights the importance of making explicit the
positions from which critiques are issued: to understand how organizational arrangements persist,
researchers must analyze social settings through the representations given by the agents involved.
They examined sources of agreement and disagreement not confined to any particular sphere or
logic in the theory of justification. They suggest that justifications which can be invoked by anyone
to criticize or reach agreement stay on six worlds of reference, corresponding to six polities or
higher common principles which co-exist in contemporary social settings. These forms of
generality are “not attached to collectivities but to situations” and actors involved in a situation
can, and often do, shift from one form of measure of worth to another (Boltanski & Thévenot,
2006, p. 16) in the course of critiques and justifications.
The subject of how agreements are reached is one of the primary issues that the social sciences
have taken over from political philosophy, allocating it in the languages of order, equality, norms,
culture, and so forth (Habermas, 2018). Boltanksi and Thévenot (2006) identify and describe a
framework used by social actors to critique or justify their behavior in the face of critique: when
trying to make their point of view predominate, actors invoke principles of equivalence that allow
them to assess the relative value of the beings engaged in the dispute or to use the authors’
vocabulary, their worth. Their field of research led to the identification of six principles of worth
45
operating in different kinds of everyday life social interactions. By undertaking theoretical work
in synergy with empirical research, the authors formalized these principles regarding classical
constructions of political philosophy (Boltanski 2011, p. 27), and each of them is based on a form
of common good referred to as a polity (Boltanski & Thévenot 2006, p. 15). A polity is a legitimate
order, that is, the ‘higher common principle’ that will sustain justification (p. 66).
These diverse principles of worth stay on a common structure, which allows the reduction of
tensions between two recurrent constraints in everyday situations, such as the constraint of equality
(all men are equal in principle by virtue of belonging to a common humanity) and the constraint
of order (which surfaces in situations where humans find themselves in hierarchical or
asymmetrical positions). Thus, Boltanski and Thévenot (2006) formulated four assumptions about
the principle of common humanity and the principle of differentiation including common dignity,
the ordering of worth, the investment formula, and the common good (pp. 74-79). There are six
constraints on the constitutive elements of the polity but also on the problems it confronts, the
main one being that it attempts to combine two antagonistic imperatives such as the imperative of
common humanity positing an identity shared by all people and the imperative of an order that
governs this humanity.
The first axiom is the principle of common humanity, which entails a form of basic equality among
all persons (all of whom belong to humanity on the same basis) and rejects (on the basis of their
inability to legitimately justify themselves) political constructs that include subhumans or slaves
(Boltanski & Thévenot, p. 74). The second axiom is the principle of differentiation, which assumes
at least two possible states of worth for the members of a polity and the necessity to establish under
what conditions the members of the polity can access those various states. The principle of
differentiation allows for forms of justification of actions as well as tests designed to attribute the
states (Boltanski & Thévenot, p. 75). The third axiom is common dignity, which states that all
members of the community have the same power to access different states in it. The fourth axiom
is the order of worth, which claims that the different possible states are ordered (in terms of value
or worth). However, in order to explain why all members of the different polities are not in the
highest state of worth despite having access to it by their common humanity, the fifth axiom as an
investment formula comes in to play (p. 76). This fifth principle links the benefits of higher state
to a cost or a sacrifice that is required for access to that state. This sacrifice might diminish or
eliminate the tension between common humanity and a ranking of states, but it does not ensure a
46
solid and generally accepted agreement, as people in the lower state tend to challenge the cost that
the access to the higher states necessitates. Thus, the investment formula might lack solidity unless
it is reinforced by the sixth axiom as the principle of the common good (p. 76).
This supplementary and overarching axiom plays a principle role in the polity model in that it
brings the various states together by positing that happiness, which increases as people advance
towards the higher states, benefits the polity as a whole. The common good is thus opposed to the
individual good, which has to be sacrificed to some extent in order to reach a higher state of worth.
Only by adding this supporting axiom to the rank ordering of states can one speak of a true order
of worth (Herzog, 2018).
Since political philosophies remain at the level of principles, they cast no light on the conditions
under which an actual agreement is reached. They do not explain how states of worth are evaluated
or attributed to particular persons. Once they established the constraints under which the principles
of justice are built, Boltanski and Thévenot (2006) examine the conditions under which those
principles are applied, by focusing on the shift from legitimate argumentation to actions
coordinated in practice. They argue that the requirement of a common dignity (p. 75) makes it
difficult to definitively attribute a state of worth to persons based on personal characteristics. The
basic property of the polity model declares that all members can accede to all states, which
introduces a degree of uncertainty in the assessment of worth and makes this assessment the focus
of contention whenever a dispute occurs. In order to examine how judgments and justifications are
tested and to present a theory that accounts for specific conditions, Boltanski and Thévenot (2006)
turn their attention to cases that involve the combination of humans and objects in a given action.
They argue that the involvement of objects requires human beings to rise to the occasion, to
objectify themselves by bringing objects into play and valorizing them, that is, endowing them
with value (p. 131). The use of objects enables people to distinguish a single situation in which
they find themselves with other circumstances; recourse to the higher common principle can be
achieved by means of tools. Objects prove worth, but at the same time, they impose restrictions on
tests that required valuation. A test does not depend on the viewpoint of an individual, nor is it a
ritual or a ceremony that could be properly called symbolic on the grounds that it depends on
objects or relationships that are deviant (Boltanski & Thévenot, 2006). Therefore, a test of worth
must not be confused with a theoretical debate. Worth is “the way in which one expresses,
embodies, understands, or represents other people” (Boltanski & Thévenot 2006, p.132), and a
47
test of worth engages people in a world of objects without which the dispute lacks the material
means to be resolved by testing. It is the presence of things that allow people to move from the
particular to the general by comparing the singular situation in which they are engaged with other
situations. A challenge to a situation that calls for a test appears when a disagreement between the
worth of the persons and objects involved becomes apparent in the form of deficiency (Boltanski
& Thévenot 2006, p. 134). For example, in the industrial world, guided by the higher principle of
efficiency, a machine breaking down or an employee being late are examples of deficiency. In the
domestic world, where primary attention is given to manners and habits anchored in tradition and
personal relations, a deficiency can emerge for example in the form of somebody attending a
traditional wedding wearing blue jeans. A contentious process then develops around the exposure
of a lack of worth, around some lack of justness in an arrangement. Both people and objects can
collapse: people fail when they do not rise to the occasion when they fall short of carrying out the
sacrifice required by their presupposed state of worthiness. Objects may also fail when they do not
accomplish the role required of them in a given situation (i.e., when the machine is breaking down,
it fails to fulfill its purpose).
A contention provoked by the failure of persons or objects leads to a decision. The contention is a
disagreement over the worth of persons, and thus over the equitability of the way worth has been
distributed in the situation. A contention will thus originate in a challenge to the view according
to which the prevailing situation is well ordered and in demand for readjustment of worth. For
example, a situation is not harmonious if in that situation the way a qualified operator works in is
not adjusted to the capacities of his machine (Boltanski & Thévenot 2006, p. 133). Such a situation
calls for readjustment of the arrangement. Sometimes the worth of the beings found deficient is
diminished and has to be excluded from the situation. However, if the observation of their
deficiency is not considered conclusive, beings may be given another opportunity to prove
themselves. A very common line of argument that often leads to an observation of deficiency being
considered unresolved is the claim that the contingencies involved in the situation are purely
accidental (e.g., illness for a person or malfunction for an object). This argument leads to a new
test that, since it accounts for the accidental contingencies, is considered purer than the previous
one. The function of every test, then, is to purge uncertainties, resolve disagreements, and purify
the situation by establishing a new distribution of the persons and objects to which worth has been
ascribed. However, the purity of any situation is maintained only as long as participants in the test
48
are able to remain in a single world and keep recourse to alternative worlds of worth at bay, and it
is important to note that no situation, no matter how pure, can permanently eliminate the existence
of potential contingencies gravitating around an established order. Thus, “the noise of the world”
or contingencies, although they can be temporarily silenced and absorbed by a test, are what keep
the world in motion (Boltanski & Thévenot 2006, p. 135). This endless chain of disruption means
that each particular world (in which the polity model is realized), when taken in itself, is
characterized by completeness and self-sufficiency, and allows for the possibilities of other worlds.
Such an Eden-like universe in which “nothing ever happens by chance” (p. 135) is reduced to a
common world that is free of contingencies and would be a universe of definite worth in which
tests would be unnecessary.
3.3.1 A Framework for Analyzing and Reporting within Common Worlds
According to Boltanski and Thévenot (2006), a comparison between a test of worth and a court
trial is offered to help clarify the way in which a higher common principle must involve both
persons and objects in their state of worthiness, in order to be implemented (p. 139). This
comparison stresses the significance of the relation between the establishing facts concerning
humans and recording those facts in a coherent report in which beings are qualified and their
relationships with one another are established. In a report similar to a court trial, things and facts
can be manipulated during a test and their engagement in the situation may be questioned in a
reconstitution of the facts. Tests are thus subjected to constraints that introduce the objective order
to the sort of rules that govern the construction of a well-founded argument and requirements. As
stated earlier, the consequence of a test cannot just be established by recourse to rhetoric and
language, reporting activities attached to tests means that the latter is subjected to the similar
grammar-like rules that allow and constrain the elaboration of a coherent argument. The order of
a given world can be described in reports (with the limitations that reporting implies) via categories
defining subjects (the list of subjects), objects (the list of objects and arrangements), qualifiers
(state of worthiness), and relations (natural relations among beings). Boltanski and Thévenot
(2006) use these categories to construct the following analytical framework, which distinguishes
between circumstantial actions that bring beings into mutual engagement based on a higher
common principle (pp. 140-144). In the following paragraphs, I will describe the most relevant
concepts of Boltanski and Thévenot’s framework.
49
Higher common principle – is a principle of coordination that characterizes a polity as a convention
that stabilizes and generalizes a form of association and thus makes it possible to establish
equivalence among beings. It ensures that beings are qualified (the condition for assessing objects
as well as subjects), and their value can be determined beyond contingencies. Based on this
principle, justification claims are compared and tested, to evaluate which claim or critique has a
higher worth. For instance, in the market polity, competition plays the role of a higher common
principle, and the status of worth is estimated according to the worth and desirability of a good:
the price is the means by which people express their judgment (Naccache & Leca, 2008).
State of worthiness – describes the various states of worth that are defined as highly dependent on
how the state or worthiness is characterized. The state of deficiency can be defined either
negatively, as lacking the quality of worthiness, or by the observation that the unworthy are
reduced to enjoying only self-satisfaction. Worthy beings, on the contrary, by virtue of their high
level of generality, serve as gatekeepers of the higher common principle and as reference points,
contributing to the coordination of the action by which value is evaluated. The deficient might feel
tempted to cast doubt upon the superiority of worth from which they can benefit, however, this
temptation is tempered by the unavoidable anxiety the unworthy experience in regards to
contributing to the collapse of the principle from which they derive their share of worth.
Human dignity – is the system of legitimate orders of worth in which people share a common
humanity that is expressed in common capacity to rise to the occasion for the sake of the common
good. The specific characteristics of human dignity in each polity must be inscribed in human
nature and anchor the order of worth in a particular aptitude; thus, each polity focuses on some
particular faculty (e.g., memory, habit, emotion, and so on) that persons can transform into a
capability which allows them to reach agreements with others.
List of subjects – is the list of subjects that can be established for each world in terms of their state
of worth: unworthy beings or worthy beings.
List of objects and arrangements – these are unevenly developed in each world, particularly when
objects or their combination in more complicated arrangements, are arrayed with subjects, in
situations that hold together. They help to assess the worth of the persons involved and the more
prominent the possibility of implementing mechanisms of worth in one particular world, the easier
it is to establish people’s worth.
50
Investment formula – is a key condition of a polity’s equilibrium. This formula constitutes an
economy of worth by linking access to the state of worthiness to sacrifice, so that the benefits
possessed by the worthy are balanced by a degree of renunciation of self-satisfaction.
Relation of worth – specifies how the state of worthiness contributes to the common good by
absorbing the state of deficiency. It spells out the relation of order among states of worth. For
example, delegation, membership, or representation constitute relations of worth in the civic
world, anchored in the higher common principle of inclusion. People granted the power of
representation are worthy because they encompass others who, in turn, acquire worth by breaking
out of their isolation and becoming part of a group (Bastid, 1970).
Natural relations among beings – are expressed by the use of verbs in reports, must be in harmony
with the worth of the beings they link, and are based on the relations of equivalence established by
the polity. Some natural relations entail worth of equal importance, while others indicate a
hierarchical distribution. For instance, the market world is anchored in reality by the place it
allocates to goods. Similarly, in the industrial world, which is highly objective, objects are arrayed
without the help of persons.
Harmonious figures of the natural order – describe the relation of equivalence, which can only be
revealed by a distribution of states of worth that is in harmony and conformity with the investment
formula. Harmonious figures of the natural order are able to identify as a reality that conforms to
the principle of equity. For example, in the world of fame, which is dominated by the opinions of
others, one can argue that an opinion is also a reality.
Model tests – are a peak moment in a situation that holds together and is prepared for a test whose
outcome is uncertain, entailing a consistent arrangement of beings belonging to the same world.
For instance, a traditional wedding is a test of domestic worth (grounded in the principle of
tradition).
Mode of expression of judgement – is examined by ratifying a test which is expressed in different
ways in the different worlds. The form in which the higher principle is manifested in each world
dictates the model of expression in which the judgement is expressed.
Form of evidence – indicates that evidence must be presented in a form appropriate to the world
under consideration.
State of deficiency and decline of the polity - are characterized by self-satisfaction and are often
more difficult to qualify than states of worthiness, either because qualification is no longer
51
possible on the brink of chaos, or because a designation of deficiency reveals a different type of
worth that, having been denounced, has also been diminished.
The achievement of a justifiable agreement not only presupposes the possibility of devising a
framework such as the one depicted above which will guide, constrain and govern the agreement-
reaching process, but also presupposes that people have the necessary capacities to function within
those constraints. Boltanski and Thévenot’s (2006) project takes into account what people do know
about their behavior, and the possible ways to justify it. Thus, they take to respecting a
distinguishing feature of human beings: moral sense – implies the integration of the two basic
constraints that underline the polity: the requirement of a common humanity (one must recognize
the human beings with whom agreement is to be reached as sharing a common human identity),
and the requirement of a general principle of order governing possible associations (pp. 144-145).
However, when the polity is extended into one of the worlds described in the next section, people
must, in order to judge justly, be able to adjust to each situation they engage in by bringing into
play the corresponding principle of justice.
3.3.2 Orders of Worth
Boltanski and Thévenot (2006) investigated the implementation of the higher common principles
in everyday situations by using the analytical framework demonstrated above. They used
contemporary manuals dedicated to instructional guidelines and illustrated common scenarios in
order to prevent the idea that each order of worth has its own separate space. One of the conditions
imposed in the source texts was that all six manuals must apply to a common space: the
professional organization. The other condition is that each text has to describe the relevant polity
“in the purest way possible” (p. 151). Using only terms and formulations that appear in each of the
selected manuals, Boltanski and Thévenot constructed six representative samples in which each of
the polities are realized under their respective principles of worth. The samples are constructed
following a single model based on the categories illustrated earlier (higher common principle,
subjects, objects, etc.), which allows a systematic comparison of and shifts between the various
worlds. In the following section, I will present an overview of each world and its higher common
principle in everyday situations. Then I will review the empirical studies, which have used
Boltanski and Thévenot’s (2006) order of worth framework to analyze organizational settings,
specifically accounting practices.
52
In the inspired world, worth is defined in terms of creativity and inspiration. However, the
creativity manual must also exit from the polity and even denounce its canonical expressions in
order to open up the possibility that creativity can be learned, through methodical exercises of an
industrial nature that justify the manual’s existence, and more generally, the profession of the
person who wrote it (p. 154). Visionaries and artists are some of the beings that inhabit this world,
which relishes the imaginary and the unexpected. People in this world are moved by the desire to
create and the necessary sacrifice to acquire worth is escaping from habits and accepting risks.
In the domestic world, worth is defined in terms of respecting tradition, responsibility, and personal
relationships, but not only those unfolding within families. Worth in the domestic world is “a
function of the position one occupies in chains of personal dependence” (p. 165). Respect of
tradition and hierarchy are the central values of this world in which beings achieve superiority
through the judgement of a superior.
In the world of fame, worth is defined in terms of recognition and popularity, which comes
exclusively from the opinion of others, and public relations hold sway. People in a state of
worthiness in the world of fame are driven by self-love and a desire to be recognized and respected.
Boltanski and Thévenot (2006) state that “persons are relevant inasmuch as they form a public
whose opinion prevails” (p. 179). When thinking in terms of organizations, it is this craving for
the respect which means that “the staff... likes to be made aware of the role it plays. In the same
way, questioned by someone from outside his own company..., the participant wants to be able to
explain what his own role is, and to be respected everywhere, since part of the reputation of the
company for which he works reflects back on him” (p. 179).
In the civic world, worth is defined in terms of solidarity, representation, and freedom. The
significant feature of the civic world is that “it attaches primordial importance to beings that are
not persons” (p. 185), and its higher common principle is the pre-eminence of the collective.
Accordingly, factors like human rights, participation, legislation, the state, and democratic
institutions are celebrated because of their role in nurturing social cohesion. The object of all
arrangements in the civic world is to stabilize the collective and protect it against individual
interests.
In the market world, worth is defined in terms of money, gain, and self-interest. It is underlined by
the higher common principle of competition, which is not a mere sphere of economic relations.
Boltanski and Thévenot (2006) argue that “economic actions are based on at least two main forms
53
of coordination, one by the marketplace, the other by an industrial order, and that each has its
own way of setting up a reality test” (p. 194). In the market world, where the desire of individuals
to possess objects motivates actions and affects prices, the search for wealth, interest, ambition,
and freedoms are considered positive values in that they stimulate innovation (Cloutier et al.,
2017).
In the industrial world, worth is defined in terms of efficiency, productivity, and mastery.
According to Boltanski and Thévenot (2006), the ordering of beings is based on their efficiency,
“their performance, their productivity, and their capacity to ensure normal operations and to
respond usefully to needs” (p. 204). However, they precaution upon the assumption that the
industrial world is solely delimited by the boundaries of industry. It is the world of all beings
giving priority to notions of efficiency, organization, and progress. It is the world of engineers and
specialists, whose objective is to optimize performance and for whom notions of expertise,
usefulness, and evaluation are central. In the industrial world, beings manifest their worthiness
through “their capacity to integrate themselves into the machinery, the cogwheels of an
organization, along with their predictability, their reliability, and it guarantees realistic projects
in the future” (p. 205).
Disagreements may be more readily solved within the same common world, where people share
the same worth. However, agreements are more difficult to reach when people invoke different
orders of worth to justify themselves. The common worlds address typical criticisms to one
another. For example, the domestic world criticizes the poor quality of standardized products in
the industrial world, and the latter denounces local privileges in the former. Situations in which a
form of injustice is voiced calls for a test that can lead to a clash or a compromise.
By following the deployment of objects in a coherent world, Boltanski and Thévenot (2006)
explicate how relations among the six worlds of worth unfold and what happens when people and
things belonging to different worlds converge in a test, especially situations of discord and a
possible return to agreement, which they call “compromise” (p. 277). Disagreement is more readily
resolved when it arises within the limits of one single order of worth resided by social beings who
share a common logic. However, permanently attaching the different worlds and their identical
worth to various persons would go against the principles on which the polity is based. Furthermore,
Boltanski and Thévenot (2006) argue that one of the essential observations in their undertaking is
that humans can inhabit different worlds and, in order to function in society, they must be able to
54
adjust to situations stemming from different forms of generality on a regular basis (p. 234). They
refer to the existence of a varying degree of uncertainty about people’s actions that accounts for
the fact that tests arising in situations that include people and things belonging to different worlds
are not fatally undone by disputes.
While the coexistence of elements of a different nature is possible in a test – and it is this possibility
of taking recourse to other worlds that critique often relies upon – incongruous setups can create a
great deal of anxiety or discomfort among participants (Cloutier et al., 2017). Actors need to set
up situations that hold together in order to avoid incongruity and clashes, scenes that when
confronted with a test are coherent in one world. However, in some cases, participants might decide
to suspend a clash without recourse to a test. They might opt for a compromise reaching for a
common good that transcends varied forms of worth (Boltanski & Thévenot 2006, p. 278).
According to Cloutier et al. (2017), “object” and “subject” correlated with different worlds are
thus of particular interest for the sociology of valuation because they continue the material “proofs”
of worth distinctive to each specific world, which allows evaluation, calibration, and interpretation
of value within each world’s value system (p. 246).
The orders of worth framework has been applied mostly in Western empirical studies in diverse
organizational settings. Those settings include public goods (Lafaye, 1990), health care (Dodier,
1993), banks (De Blic, 2000), the media (Lemieux & Leclerc, 2001), the energy industry (Patriotta
et al., 2011), and auditing firms (Ramirez, 2013) and the studies focused on issues of valuation in
situations where multiple orders of worth co-exist and may need to be justified (see Stark, 2006).
For example, Huault and Rainelli-Weiss (2011) demonstrated efforts to form the market for
weather risk as a meeting space for different metrics for evaluation. The creation of the new market
implied interaction between the various worlds of worth associated with different standards of
evidence for proving value (p. 1396). They drew on the order of worth framework to describe the
fragility of the new market, given the challenge of reaching a sustainable compromise between the
different measurement systems. Patriotta et al. (2011) constructed a framework that links the
notions of justification, institutional work, and sense-making, and used it to analyze controversy
about safety following a nuclear accident. They assume that different stakeholders mobilize
various orders of worth in their communication activities. These orders of worth are present in
rationalized myths through which agents describe events and justify their positions concerning the
debate surrounding the accident. Ramirez (2013) examined the operations of a monitoring unit set
55
by the Institute of Chartered Accountants in England and Wales in order to comply with European
company legislation. He draws on the framework developed by Boltanski and Thévenot (2006),
and particularly on their concept of the test, to analyze reforms that were perceived as challenging
new situations by chartered accountants. Reinecke (2010) used the orders of worth framework to
reveal political and moral construction underpinning price setting practices by the Fairtrade
Labelling Organization. She explained how this organization constructed practices which support
a theory of value that links industrial and civic orders of worth in battle to notions of value lying
behind economic liberalism (based on market order of worth). She particularly refers to cases when
the organization coupled the calculations of real costs for producers (an industrial notion of worth)
with a democratic forum for incorporating the views of all stockholders (a civic notion of worth),
substituting direct market interactions between producers and distributors (Reinecke 2010, p. 565).
Although the above examples show how scholars focus on different aspects of Boltanski and
Thévenot’s theory in the ongoing process of valuation, few studies describe how actors actually
proceed in their justification work. A study of non-profit technology by Mclnerney (2008) presents
an interesting analysis of ‘justification work’ based on ethnographic fieldwork. He focuses on
accounts as a mechanism by which institutional entrepreneurs seek to shape fields. A theory of
accounts is contracted based on the order of worth framework and states that “accounts become
conventions as actors seek to normalize their narratives by anchoring them to situationally-
appropriate orders of worth and convincing powerful actors within their field to adopt them. When
successfully underpinned by orders of worth, conventionalized accounts can enable institutional
entrepreneurs to construct organizational fields” (Mclnerney 2008, p. 1093). He documents how
two institutional entrepreneurs (Stuart and Fanning) drew on two opposing accounts (i.e., orders
of worth) to organize the field. Stuart maintained a community logic of promoting social justice
by distributing free information technologies to non-profit and grassroots organizations that share
their vision of social justice, by drawing on a civic order of worth. Meanwhile, Fanning realized a
political opportunity to advance an alternative account by drawing on an industrial and a market
order of worth as explained by Mechnerney (2008, p. 1107): “Stuart’s account of technology in
the non-profit sector as promoting social justice failed because it was anchored to civic order of
worth that did not align well with industrial and market orders of worth the foundation world had
recently began to employ to justify the new direction they were heading. Taking advantage of these
ascendant orders of worth, Fanning recognized a political opportunity to advance an alternative
56
account of technology as efficiency, an account anchored to orders of worth that aligned well with
the foundation officers’ understanding of how their own work ought to be done”. This study
indicates that the competencies actors have for differentiating between various orders of worth and
utilizing them in distinct ways are essential for their possibilities of gaining organizational
legitimacy. According to Jagd (2011, p. 351), employing the orders of worth framework allows
Mclnerney (2008) to capture co-existing evaluative frameworks revealing how actors mobilize
them at different points in time in an attempt to assert their interest.
In another study, Reinecke et al. (2017) examined how dialogue helps establish moral legitimacy
in contexts where multiple moral frameworks co-exist and compete with each other. They draw
on Boltanski and Thévenot’s framework to highlight the structure of clash in moral frameworks
by arguing that moral legitimacy ‘truces’ can be established as an outcome of dialogical processes
where relations between the moral frameworks that social actors refer to are frequently negotiated
and renegotiated through effective exchange with diverse audiences. They developed a model that
suggests three dialogic paths to achieve such truces in a situation of moral multiplexity, which
includes transcendence, compromise, and antagonism. Moreover, they also explicate how
individuals manage organizational pluralism in different contexts by providing theoretical
arguments supporting the idea that legitimacy is not a binary variable, but one that can diversify
both in terms of scope and certainty. Similarly, Jaumier et al. (2017) investigated how individual
actors respond to organizational pluralism in day-to-day activities, by examining how French
cooperators publicly justify the cooperative principles. They explain how actors in complex
organizations instantiate conflicting logics in practice, relying on positive affirmations as well as
critical mobilization of various logics. They show that individuals often represent the same logic
in different ways, and the ambiguity associated with these different instantiations allows
compromises between logics to be settled.
Although these articles addressed some of the shortcomings of managing organizational pluralism
and also investigated the ongoing articulation between multiple orders of worth within
organizations, notably by using Boltanski and Thévenot’s orders of worth framework in order to
better understand the specific mechanisms, whereby settlements in disputes are reached or
alternately explore what prevents such settlements or compromises from being formed, many
aspects of different value systems or ideologies in diverse socio-cultural contexts remain
unexplored. In the next section, I will explain how organizations are conceptualized as settings in
57
which multiple orders of worth co-exist in complex networks (i.e., organizing dissonance,
compromising accounts, and productive friction) by drawing on Stark’s (2009) order of worth
framework.
3.3.3 Organizing Dissonance, Compromising Accounts, and Productive Friction
Organizational scholars have recently engaged with the growing stream of research on the social
practice of valuation (Lamont, 2012), by relying on the Economies of Worth (EW) or the order of
worth framework, in order to understand how people assess and determine ‘worth’ (of objects,
actions, and persons) and how heterogeneous actors engage routinely with multiple orders of worth
in organizations (see Stark, 2009). The book of The Sense of Dissonance: Accounts of Worth in
Economic Life (Stark, 2009), is rightly regarded as a contribution to the theoretical path outlined
by Boltanski and Thévenot, which explicitly acknowledges the influence of their book’s On
Justification. However, according to Stark (2009), “in everyday life, we are all bookkeepers and
storytellers. We keep accounts, and most importantly, we can be called to account for our actions.
It is always within accounts that we ‘size up the situation’, for not every form of worth can be made
to apply and not every asset is in a form mobilizable for a given situation” (p. 5). Stark (2009)
concentrates not on isomorphism as an outcome of rationalization (from a neo-institutionalists’
perspective) but dissonance in organizational life that results from the meeting of rationalizing
forces with concrete situated practices. In this view, practice is complex and often embedded in
situations that call for attention to multiple (if not conflicting) evaluative principles (Dahler-
Larsen, 2019). Stark (2009, p. 27) mobilized the concept of “organizing dissonance”, which posits
that the coming together of multiple evaluative principles has the potential to produce a ‘productive
friction’ that can help organization to recombine thoughts and attitudes in productive and
constructive ways.
For instance, Annisette et al. (2017) used the EW framework as a conceptual toolbox for studying
accounting as a situated practice by drawing on two cases: a not-for-profit welfare agency and a
government-owned water utility. They followed the unfolding of disputes in which accounting
processes and measures were implicated by mobilizing the EW framework to explain how
accounting is used to justify decisions and actions in various organizational situations and how it
helps with “holding things together” in compromise arrangements, by serving as a stabilizing
device and thus facilitating coordination (p. 209). From this perspective, the role of accounting as
an ‘ambiguous object’ (something relevant in multiple worlds) or ‘controversial device’ (a tool
58
that is subject to debate) is what gives it an agency for making about institutional change (Cloutier
et al., 2017). Furthermore, Annisette et al. (2017) highlighted clashes between orders of worth as
potentially generative for a new institutional arrangement for the governing of collective action.
In another study, she shows the power of the internal logic of imperialism by illustrating how the
interests of a UK-based accountancy institution intermeshed with those of the local accounting
elite to subvert the nationalistic goal of indigenizing accountancy training in Trinidad and Tobago
(Annisette, 2000). This process also shaped them in ways that have excluded segments of the local
populations based on ethnic and cultural criteria and in line with Anglo-American interests
(Annisette, 2003). From another perspective, Joannidès de Lautour et al. (2020) by drawing on the
EW framework, indicate how critique contributes to disputes in accounting research. Their
analysis reveals two responses to critique: (1) reality critiques, uncovering how a research program
is diffused and accepted; and (2) truth critiques, questioning object justness and legitimacy. They
argue that reality critiques occur before truth critiques but after isolated attempts at emancipation
from the dominant perspective. Thus, the best way to justify a critique is to emancipate oneself
from it and behave as a neglecter (p. 150). Mailhot and Langley (2017) also draw on the EW
framework to examine the process of knowledge commercialization in academia as a valuation
exercise, in which new forms of value are assigned to knowledge as it passes into practice. They
illustrate how the EW framework may help in understanding the assignment of worth to
knowledge-based objects in the context of multiple and potentially competing systems of value
evaluation. They also show how ‘composite objects’ that achieve compromises between different
value systems may be constructed and sustained. They suggested that durable compromises
between competing systems of valuation might be achievable if oriented around the composite
object that draws together objects and subjects from different worlds of worth in mutually
reinforcing assemblages by addressing the valuation challenges that transfer knowledge from
academia to practice (Mailhot & Langley, 2017).
In another study, Chenhall et al. (2013) draw on the EW framework of organizing dissonance and
develop arguments concerning how compromising accounts can be productive for an organization
under conditions of competing institutional logics and various forms of evaluation. They examine
a case study setting of a private organization, in which some internal stakeholder groups held
diverse opinions concerning the development of the organization and to the ordering of certain
actions. They describe that in order for the compromising accounts to create productive friction,
59
the organization’s performance measurement system should include measures and metrics that
fulfill some of the expectations of each conflicting logic. From this perspective, such accounts can
generate simultaneous visibility for competing demands and logics, and thereby create space for
positive debate and dialogue, leading into productive friction that helps in reconciling the demands
set upon the organization by conflicting institutional logics (Chenhall et al., 2013). Chenhall et al.
(2013) also explicate three significant processes that are crucial for compromising accounts to be
productive for an organization. First, the accounts should be deficient when performed in practice.
Such a defect facilitates the creation of productive friction because the organizational actors with
divergent opinions, values, and expectations need to involve in dialogue and dispute about the
accounts. Second, the performance measurement system must give space and perceptibility to the
aspects that are significant to diverse groups. This entails that both in designing and using the
accounts, the diverse evaluative principles are visible, creating unified perceptibility that enhances
the productive use of compromising accounts. However, in this perspective, there is the danger
that any opportunities for dialogue and productive friction could become stuck underneath the
mere number of indicators. Third, the productiveness of compromising accounts also couples on
the extent to which the discussion and debate concentrate on the evaluative principles sustaining
the accounts as exposed to the technical features of the accounting measures (Chenhall et al.,
2013). Similarly, Kraus et al. (2017) recommend that by concentrating more on the principles of
evaluative, the actors can easily engage with covert conflicts and in so doing proceed with
productive friction aiding discussions about how could be integrated the diverse evaluative
principles underling different institutional logics. Thus, the concept of organizing dissonance
provides an analytical approach that views the co-existence of multiple evaluative principles as an
opportunity for productive or unproductive debate, rather than a site of domination or intractable
conflict (see Chenhall et al., 2013).
These studies investigate the role of accounting and profession within practices in different
Western nations by drawing on the EW framework to demonstrate the variety of competing orders
of worth co-existing within societies or organizations as well as for the analysis of conflicts and
tensions between the different values. However, they do not acknowledge the ongoing significance
of historical, cultural and political relations in accounting practices, specifically, the effect of
postcolonial discourses and anti-imperialism in shaping the performance measurement and
management practices, and shifting identities construction and taken-for-granted Western subjects
60
and subjectivities in non-Western countries. In order to address this shortcoming, I will draw on
postcolonial theory in the next section to fill this gap and highlight the significant role of Islam
and anti-imperialist beliefs on the practice of PMS as historical, cultural, and political contexts in
shaping ideology and the enactment of new public management in the Iranian petroleum industry.
3.4 Postcolonial Theory
Postcolonial theory deals with the effects of colonization on cultures and societies and those
societies’ responses. This theory emerged in the late 1970s to describe a range of literature and has
since been used by cultural critics to discuss the various social, political, and cultural engagements
of colonized people with imperial power, as well as the more widespread effects of colonization
(Ashcroft, 2017). The first systematic account of the theoretical issues of postcolonial studies was
provided by Ashcroft, Griffiths and Tiffin (1989) in The Empire Writes Back. This book initiated
the field that became known as “postcolonial theory” and has been extensively used in postcolonial
literature. This theory has subsequently been widened to include an extensive range of analyses of
the political, linguistic, and cultural experience of societies that were former Western colonies,
particularly analyses of resistance, and a general rethinking of dominant Western historiography
that places the ‘West’ at the center of the world (Ashcroft, 2013).
Postcolonial theory is currently becoming extensively applied in historical, sociological, political,
and economic studies, as these disciplines continue to engage with the influence of Western
imperialism upon world societies and also the distinctions of subject construction in colonial
discourse and the resistance of those subjects, and most notably perhaps, the differing responses
to such invasions (Gandhi, 2019). Thus, “postcolonial” is best understood as a reading practice,
which analyzes the continuing resistances, appropriations, and transformations of dominant, (i.e.,
“imperial”) discourses, institutions, and methodologies by colonized and formerly colonized
societies (Ashcroft 2017, p. 3). As critics like Young (1995) have indicated, the crucial task has
been to avoid the assumption that “the reality of the historical conditions of colonialism can be
safely discarded” in favor of “the fantasmatics of colonial discourse” (p. 160). On the other hand,
he claimed that although the totalizing aspects of the postcolonial discourse are of real concern, it
is essential to avoid a return to a simplified form of indigenous materialism that rejects solely to
identify the existence and impact of general discourses of colonialism on individual instances of
colonial practice (Young, 1995). According to Ashcroft (2017, p. 4), the need to strike a proper
balance between the specific cultural and social conditions of colonized and formerly colonized
61
peoples and the larger theoretical frameworks in which the cultural practices of those societies are
analyzed became a challenge for many postcolonial critics and theorists. For instance, the ways in
which postcolonial peoples have appropriated and transformed metropolitan languages may differ
in particular instances but the general political processes by which this appropriation occurs show
the continuing value of broader postcolonial frameworks (Ashcroft et al., 2013).
According to Boyne and Rattansi (2017), critical postcolonial studies try to reveal that “the
economic and political domination that formed the key elements of imperialism and colonialism
in the eighteenth and nineteenth centuries was always accompanied by the formation of discourses
in which the ‘otherness’ of the peoples of Asia and Africa was apprehended and culturally
colonized, and in which the cultural and moral superiority of the Western imperial powers was
always affirmed without reservation” (pp. 34-35). This discursively produced cultural superiority
established the ‘right’ of commercially expansive Britain or France or Spain to exercise political
and cultural domination over the ‘Orients’, Africa and elsewhere. Notably, only a minority of
Western scholars have ever seriously attempted to explore the significance of imperialism and
colonialism in the rise of the West and the formation of its self-understanding and its attitudes
toward the rest of the world (Rattansi, 1997). However, amongst the limited number today, is a
growing proportion of studies of ‘hybrid’ origin. Many individual scholars (such as Edward W.
Said, Gayatri Chakravorty Spivak, Homi Bhabha, and Abdul R. Jan Mohamed), who were inspired
by post-structuralism and begun to challenge the varieties of colonial and imperialist discourse,
which have been so crucial in the intellectual formation of modernity, combined Third World3
origins with Western perspectives and ideologies in Western cultural establishments (Boyne &
Rattansi 2017, p. 35). Thus, postcolonial criticism seeks to challenge the Western ideologies such
as racialism, fanaticism, and Westernization of the Orient, which have an impact through Western
cultural production, literature and thought.
One of the significant academic approaches to Western scientific discourse is the study of
“Orientalism”4 and the criticism of Orientalist discourse. Orientalism is a set of beliefs about the
Eastern World published by Edward W. Said in 1979, who defined Orientalism as the West’s
3 During the Cold War, the term Third World referred to the developing countries of Asia, Africa, and Latin America,
the nations not aligned with either the First World or the Second World. This usage has become popular mostly in
Western countries to describe a class of economically inferior nations. 4 Orientalism is a manner of regularized (or Orientalized) writing, vision, and study, dominated by imperatives,
perspectives, and ideological biases ostensibly suited to the Orient. It is the image of the ‘Orient’ expressed as an
entire system of thought and scholarship (see Said, 1979).
62
patronizing representations of “The East”, the societies and peoples who inhabit the places of Asia,
North Africa, and the Middle East (Said, 2003). The scope of Said’s Orientalism became a
foundational text in the field of postcolonial studies, which examines the denotations and
connotations of Orientalism, and the history of a country’s postcolonial period (Groden et al.,
2005). According to Said (2003), in the Middle East, the social, economic, and cultural practices
of the ruling Arab elites indicate that they are imperial satraps who have internalized the
romanticized “Arab Culture” created by French, British and, later, American Orientalists.
However, the critical expansion of Orientalism (the Western scholarship about the Eastern World) and
its influence in academic studies have extended into a distinctive amalgam of cultural critique by
post-structuralism and post-modernism, including Foucauldian approaches to power, engaged
“politics of difference,” and postmodernist emphases on the decentered and the heterogeneous,
and began to be appropriated in a major way for the study of non-European histories and cultures
(O’Hanlon & Washbrook 1992, p. 141). Indeed, the critical application of post-structuralism and
post-modernism in the scholarship of Orientalism influenced the development of literary theory,
cultural criticism, and the field of Middle Eastern studies, especially concerning how academics
practice their intellectual inquiry when examining, describing, and explaining the Middle East
(Howe, 2008). According to Said (1993, p. 8), “Neither imperialism nor colonialism is a simple
act of accumulation and acquisition. Both are supported and perhaps even impelled by impressive
ideological formations which include notions that certain territories and people require and
beseech domination, as well as forms of knowledge affiliated with that domination”. He claims
that the peculiarly ‘Western style for dominating, restructuring, and having authority over the
Orient’ (Said 1979, p. 3) is inextricable from the peculiarly Western style of studying and thinking
about the Orient. Furthermore, Said’s irate critique of overheated nativism5 is predicated upon his
own overarching cosmopolitanism. He holds the view that “...the racial, religious, and political
divisions [are] imposed by imperialism itself. To leave the historical world for the metaphysics of
essences like négritude, Irishness, Islam or Catholicism is to abandon history for essentializations
that have the power to turn human beings against each other” (Said 1993, p. 276).
Despite Michel Foucault’s silence on questions of imperial domination (Spivak 1988, pp. 289-
291), his work has been crucial because of the value of his concepts for the appliances and
5 Nativism is the political policy of promoting the interests of native inhabitants against those of immigrants, including
the support of immigration-restriction measures.
63
processes involved in the formation of discourses implicated in the exercise of imperial power
(Boyne & Rattansi 2017). Said’s egotistic Orientalism (1979) is a profound exposition of the
discourses through which the West has constructed and governed the ‘Arabs’ and ‘Islam’, and it
has been a key Foucauldian contribution to challenge the freezing of the ‘Oriental’ into a timeless
‘other’. All of those supposedly uniform characteristics serve only to highlight the Occident’s
difference and superiority in cultural, moral, and technological matters (Boyne & Rattansi 2017,
p. 35). Consequently, it essentializes the Orient in a position of inferiority, which justifies its
supervision and assistance.
Foucault is not the only important influence in postcolonial studies. Derrida’s work on post-
structuralism and postmodernism as well as Spivak’s reflections on female and subaltern ‘others’
in the Indian context, have been significant too. For example, Spivak’s deconstruction for
postcolonial critique is not simply rejecting Marxist thought but modifies and develops the
categories of Marxist thought beyond the narrow terms of class politics by other forms of liberation
struggles, such as the women’s movement, the rights of indigenous minorities, and the peasant
struggles (Young, 2016). Furthermore, Bhabha’s work (1983, 1984) combines post-structuralism
and postmodern, especially Foucauldian, concepts with psychoanalytic themes from Freud, Lacan,
and Fanon to produce effective deconstructions of colonial discourse, which move beyond the
unified image of the ‘other’, as implied in Said’s Orientalism. Bhabha (1994) acknowledged the
importance of postcolonial discourses to the abilities of imperial authorities to govern, arguing that
postcolonial discourse aims to “construe the colonized as the population of degenerate types on
the basis of racial origin, in order to justify conquest and to establish the systems of administration
and instruction” (p. 70).
According to Prakash (1994), postcolonial studies have two aspects: criticism of orientalism and
subaltern studies6. He argues that criticism of subaltern studies has compelled a radical rethinking
of knowledge and social identities authored and authorized by colonialism and Western
domination, especially the inconsistency of Western ideas applied to non-Western societies.
Jackson (2013) asserted that one of the significant characteristics of postcolonial studies is the
emphasis on indigenous science vs. colonial science (the Western ideas, practices, and techniques).
According to Snively and Corsiglia (2016), indigenous science refers to the scientific knowledge
6 Subaltern studies refer to the group of South Asian scholars interested in the postcolonial and post-imperial societies
(see Chibber, 2014).
64
of all peoples who, as participants in culture, are affected by the worldview and interests of their
home communities and homelands (p. 89). It has been referred to as one of the most important
methodological tools of postcolonial studies to deconstruct Western colonial science through
indigenous science (Baber, 1996). For example, Creer and Neu (2009) highlighted the positioning
of accounting within the process of colonialism and imperialism by arguing that accounting
discourses and technologies have been used to influence and control indigenous people. Their
study shows how accounting techniques allowed colonial rulers to put specific programs that
attempt to control and govern the activities of indigenous people into practice (p. 470). Qasemi
(2009) argues that “when thought patterns and methods of research and education are
westernized, it becomes impossible to come up with pure indigenous thought” (p. 241) because
every indigenous thought will eventually be interpreted with Western analytical tools, which are
influenced by the modern Western concepts. Therefore, the colonized societies are attempting to
apply different ideologies or indigenous humanities and social sciences to counter Western
influence (Qasemi, 2009). Said (1993) suggests that, despite the formal end of the “age of empire”
after the Second World War (1939 - 45), colonial imperialism left a cultural legacy to the
(previously) colonized peoples, which remains in their contemporary civilizations and that is
cultural imperialism which is very influential in the international systems of power.
Postcolonial theory has the potential to explain how scientific endeavors become sites for
generating and linking local identities (Anderson, 2002; Anderson & Adams, 2008), as well as
sites for disrupting and challenging the distinction between the West and the East (Said 1979,
1993). According to Said and Barsamian (2003), decolonized people develop a postcolonial
identity based on cultural interactions between different identities (such as cultural, national, and
ethnic as well as gender and class-based), which are assigned varying degrees of social power by
the colonial society. The historical experience of imperial and colonial relations appears to provide
valuable insights into the agency of local communities and the cultural production of colonized
countries in a global era (Kennedy, 1996).
Elhariry (2017) states that “the struggle for national liberty [in the Arab World] has been
accompanied by a cultural phenomenon known by the name of awakening Islam” (pp. 95-96).
Fanon’s psychologically and Said’s culturally oriented writings aim at freeing the colonized people
from the inside, so as to enable them to feel and think independently. This “inside independence”
is fully supported by Islam: the religion that refused to be colonized by Western Christianity in the
65
past and by western secularism today (Majed, 2013). However, Islamic thought has not received
much attention from postcolonial critics, even though they see “important commonalities between
strands of Islamic political theory and other critiques of imperialism and colonialism” (Kohn &
McBride 2011, p. 37). Therefore, postcolonial studies are limited in the way they deals with issues
related to Islam and need to theorize their own limits and horizons.
According to the aforementioned postcolonial studies, I draw on Homi Bhabha’s work of “hybrid”
to investigate the role of Islam and anti-imperialist beliefs concerning the practice of Western
management technology (i.e., PMS) in the context of Iran. Homi Bhabha’s work (1994) has been
particularly valuable in describing the construction of culture and identity within conditions of
colonial encounters. In contrast to Said (1979), who makes an explicit distinction between the
colonizer and the colonized, Bhabha takes the mutual effects of the colonizer and the colonized
within the colonial encounter into consideration (Bhabha, 1994). His concept of hybrid opens a
‘third space position’7 as a transformative place in which the colonizer and colonized are offered
new possibilities of representing the identity of the Self and the Other in addition to new forms of
political hegemony and subversion (Parry, 1994). He argues that otherness is an ambivalent
narrative construction, which implies an ongoing process of interpretation and reinterpretation
(Bhabha, 1994).
3.4.1 Mimicry
Otherness is not a static, but a dynamic structure. Bhabha (1994) highlights this point by
introducing the concept of colonial mimicry as “the miming and imitation of the colonizer by the
colonized” (Prasad 2003a, p. 21), intended “not only at changing the colonized’s conduct but also
at reconstituting its very identity” (Frenkel 2008, p. 926). For Bhabha (1994), the strategy of
mimicry is ambivalent, which shows both masks and exhibits diversity. Mimicry attempts to
reform the other based on the ethnocentric and narcissistic Western thought by making “the
unfamiliar familiar, thereby controlling it” (Frenkel 2008, p. 926). Thus, mimicry attempts to the
homogenization between two, even if their positions differ. However, the demand for mimicry
indicates the sign of the inappropriate (Bhabha, 1994) between the colonizer and the colonized,
which is represented as “the natural repository of preferred knowledge, and the colonized, who
7 A position that challenges the validity and authenticity of any essentialist view (the idea that people and things have
‘natural’ characteristics that are inherent and unchanging) of cultural identity.
66
lacks such knowledge is therefore forced to import it” (Frenkel 2008, p. 926). For example, the
imposed Western management technologies in non-Western countries.
3.4.2 Hybridization
The ambivalence of mimicry signifies power relations between the colonizer and the colonized.
On the one hand, mimicry reinforces the hegemony of the colonizer, such as norms, values, and
beliefs to the colonized. On the other hand, “mimicry repeats rather than represents” (Bhabha 1994,
p. 88). Although the colonized reproduces some aspects of the colonizer, it does not give up its
own identity (Beaudoin, 2013). In this sense, mimicry implies hybrid, which produces new forms
of knowledge within new forms of power (Blanchet, 2013). Postcolonial studies of management
have considered the practice of Western management technologies in developing countries under
the banner of ‘modernization’ to be a process of postcolonialism and imperialism (Alcadipani et
al., 2012; Caldas & Wood, 1997; Frenkel & Shenhav, 2003). These studies have employed the
concept of hybrid by either focusing on the hybridization process of management knowledge or
on the hybridization process of identities (Yousfi, 2014). While acknowledging that the imposition
of Western management technologies and techniques are new forms of postcolonialism, studies
examining processes of local hybridization have revealed that this hegemonic discourse should not
be considered absolute (Alcadipani & Caldas, 2012; Frenkel, 2008, 2006; Kamoche, 2002;
McKenna, 2011; Mignolo, 2000). According to Murphy (2008), the modernity in contributing to
the diffusion of Western management practices has led to a conflict between local values and
modern management thinking in developing countries. Bhabha’s (1994) notion of ambivalence
indicates the contradictory nature of mimicry and the development of the hybridized ‘in-between’
spaces as discursive constructions of identities and cultures. For instance, Murphy (2008)
explained the hybrid of the emerging economies’ managerial class in the context of globalization
in India. He argued that globalization does not cause local values to be replaced with modern ones,
but rather that it creates hybrid relationships of domination in which an emergent global
managerial class is constructed and intertwined with pre-existing class and caste hierarchies.
By considering culture as a largely narrative construction of reality, which influences all aspect of
social life, the emergent framework of hybrid provides a new conceptualization of culture that
could help us to take into account how national culture may shape the way that local managers
resist, adapt or adjust to the practice of transferred Western management technologies (e.g., PMS)
into non-Western countries. I will highlight the ambivalence of the accounts produced by public
67
managers in order to explain how they modernized their company through the implementation of
Western management tools (i.e., PMS). Furthermore, I demonstrate the ambivalent nature of
managers’ identity construction through the contextualization of the historical Western powers
domination, the role of Islam and anti-imperialist beliefs coexisting within society and the practice
of performance measurement and management in the context of the Iranian petroleum industry.
Instead of critiquing postcolonialism or the secular postcolonial scholars for neglecting Islam or
marginalizing it, I intend to develop it by highlighting the centrality of Islam as a dominant value
(religious value) in postcolonial practices, specifically the enactment of new public management
within hybridization process in the context of Iran. Moreover, the use of postcolonialism as a
supplement to the orders of worth (EW) theory will help me to explain how the organizational
actors cope with pluralistic values that coexist within organizational complexity in the context of
the Iranian petroleum industry.
3.5 Summary
While studies of institutional logics have mainly tended to focus on identifying the trajectories of
dominant logics, the orders of worth framework focused on a broader set of issues such as the co-
existence of competing orders of worth and the intertwining of multiple orders of worth within
diverse organizational settings. These empirical studies show that the orders of worth framework
is useful to reveal the different competing or conflicting rationalities in organizations. Moving
away from perspectives that ascribe orders of worth to particular social spheres (Walzer, 1983),
Boltanski and Thévenot suggest that actors can, in any situation, invoke different worlds of worth
in order to criticize, justify or reach an agreement. The orders of worth framework and French
pragmatist sociology provide a valuable approach for addressing numerous issues faced by
increasing streams of research in organizational and management theory, and can help
organizational theory move beyond traditional organizational settings (Ahrne et al., 2016). Where
the embedded dynamics of the orders of worth framework is concerned, it is flexible and thus open
to being combined with other theoretical approaches, as it does not claim to be a complete
sociological theory that explains all aspects of social life (Cloutier et al., 2017). Cloutier and
Langley (2007) argue that “the orders of worth framework provides a very rich, descriptive
language for delimiting each world, which has a distinctive advantage, from a heuristic
standpoint, of giving readers a good ‘feel’ for each world, which could facilitate coding and
categorizing of empirical data” (p. 16). Stark (2009) has also extended the framework of Boltanski
68
and Thévenot (2006) by focusing on the concept of ‘organizing dissonance’, which provides an
analytical approach recognizing that the co-existence of multiple values is not necessarily a source
of conflict, but it can be an opportunity for productive debate through recombination and
redeployment.
Although the orders of worth framework seems to be a very effective framework for analyzing
how multiple orders of worth co-exist within organizations, it has limitations regarding its
relevance beyond the Western social context in which it is tacitly embedded. According to Cloutier
et al. (2017), such recognition involves an effort to investigate whether the framework applies in
different contexts across time and space. Since then, scholars have tried to expand the notion of
“orders of worth” to investigate whether these ideas apply to different historical and geographical
contexts (see Lamont & Thévenot, 2000). However, such an expansion implies the existence of
other polities not initially identified by Boltanski and Thévenot’s orders of worth framework (see
e.g., Boltanski & Chiapello, 2005; Lafaye & Thévenot, 2017). I will draw on postcolonial theory
(specifically the hybridization processes) as a supplement to the orders of worth theory in order to
highlight the significance of historical, cultural, and political relations in shaping PMS practices
in the context of the Iranian petroleum industry. I will apply these theoretical frameworks in
chapter 8, when discussing my essential empirical findings.
69
CHAPTER FOUR: METHODOLOGY
4.1 Introduction
In designing and undertaking a PhD thesis, the research problem, questions, and cultural issues are
important factors that must be considered at the outset, when deciding on an appropriate research
design to employ (Saunders et al., 2009). As this study focuses on the Iranian petroleum industry
as one of the strategic governmental organizations in a unique and complex context, I had to
undertake a thorough and critical review of the literature on research methodologies in order to
determine a fitting methodology for the research questions and the instruments used to collect data.
Saunders et al. (2009) defined research methodology as the theory of how research should be
undertaken, including the theoretical and philosophical assumptions upon which research is based
and the implications of these for the method(s) adopted.
I conducted a qualitative research methodology as its constitution is epistemologically
interpretivism and ontologically constructivism. Patton (2002) argues that a qualitative research
methodology can help researchers approach fieldwork without being constrained by any
predetermined categories of analysis, which “contributes to the depth, openness, and detail of
qualitative inquiry” (p. 14). As relatively little research has explored how PMS is understood,
implemented, and practiced in the context of Islamic societies more broadly and Iran more
specifically, a qualitative approach suited this study because it would provide an in-depth
exploration of how people perceive and enact their social realities in the complex social network.
This point followed Gay et al. (2009), who explain that the qualitative research approach provides
an opportunity for researchers to interact with and gather data directly from their research
participants and to understand a phenomenon from their perspectives. Qualitative field researchers
agree that “social reality is emergent, subjectively created, and objectified through human
interaction” (Chua 1986, p. 615).
The study of the social world, including patterns of social relationships, social interaction, and
culture, requires a selection between varieties of research approaches. Social reality has meaning
for human beings, and accordingly, human action is meaningful. It means human beings make
sense of their subjective reality and attached meaning to it (e.g., Bryman, 2008; Holloway &
Wheeler, 2002; Patton, 2002; Mansourian, 2006). Accordingly, society is both an objective fact
and constituted by activities, which signify subjective meanings (Lukka, 2014). That’s why the
70
researcher chooses an interpretive viewpoint to interpret the realities of the people by
understanding, analyzing, and altering their actions and behaviors, especially when the relevant
field of science lacks existing knowledge. According to Andrews (2012, p. 40), “Interpretivism
differentiates between the social and natural sciences and has as its goal the understanding of the
meaning of social phenomena. While interpretivists value the human subjective experience, they
seek to develop an objective science to study and describe it. There is then a tension evident
between objective interpretation of subjective experiences. In other words, they attempt to apply a
logical empiricist methodology to human inquiry.”
This study undertakes a case study to understand complex social phenomena and in-depth
exploration of the context by focusing on the abductive strategy to facilitate systematic data
analysis and theory development. Unlike inductive and deductive reasoning, abductive reasoning
can explain, develop, or change the theoretical framework before, during, or after the research
process by moving back and forth between theory and empirical data (Dubois & Gadde, 2002;
Lukka & Modell, 2010). Another reason for choosing abductive reasoning, was that it has the
potential of contextualizing the research findings, including causal components, to form a
theoretically more encompassing and consistent set of arguments (Lukka, 2014). I found that a
case study approach would be more suited for my research as it would help me answers ‘how’ and
‘why’ questions regarding the nature of the phenomenon based on the participants’ experience and
viewpoints in the context of the Iranian petroleum industry, a topic that has not previously been
studied in-depth.
This chapter begins with a discussion of the qualitative research method. The second part of the
chapter explains the procedures I undertook for data collection, data analysis, and coding process.
The ethical consideration is taken into account in the study, as is the role of the researcher in this
study.
4.2 Characteristics of the Quality Criteria in Qualitative Research
In contrast to quantitative studies, qualitative studies generally do not involve the use of statistical
procedures to describe the social reality under investigation. Qualitative research is the scientific
method used to gain an in-depth understanding of underlying reasons, opinions, and behaviors
from non-numerical data such as interviews, observation and focus groups. As described by Gill
and Johnson (2010), qualitative research provides a different way of explaining why people do the
things they do in various social contexts. The objective of explaining and interpreting behavior is
71
usually derived from a methodological commitment which Gill and Johnson (2010) refer to as
understanding. This terminology has been defined as “the assumption that all human action, or
behavior, has an internal logic of its own which must be understood and described in order for
researchers to be able to explain that behavior” (Gill & Johnson 2010, p. 149). Thus, a qualitative
study in management accounting research has the purpose of generating understanding through
making sense of employees’ work behavior (Anderson, 2004). Qualitative studies are therefore
not only expected to explain what people do but also the human subjectivity behind why they do
those things in various socio-cultural contexts (Gill & Johnson, 2010).
Nevertheless, there are generally agreed characteristics of qualitative research including the fact
that most qualitative studies are grounded in a broadly interpretivist philosophical position, they
adopt flexible qualitative data collection methods, and aim to analyze phenomena in such a way
that detailed explanations are provided for the complexity of the social reality being studied
Iranian officials have ratified a comprehensive strategy surrounding market-based reforms as
indicated in the government’s 20-year vision document and the sixth five-year development plan
for the 2016-2021 period.9 The sixth five-year development plan is constituted of three pillars,
namely, the extension of a resilient economy program, improvement in science and technology,
and cultural superiority.10 On the economic aspect, the development plan envisages an economic
growth rate of 8 percent annually and structural reforms of public companies, the financial and
banking sector, and the allocation and control of oil and gas resources among the main priorities
of the state during the five years. The Iranian officials argue that much of the equipment required
for the oil and gas industry is being produced by local manufacturers in Iran (D16-2018), which is
keep them among the few countries that have such technology and “know-how” for drilling in the
deep waters (D7-2012).
Since oil was discovered more than a century ago, Iran has turned into one of the major players in
the petroleum industry. During this time, the industry has become more complicated and more
mature. On the supply side, governments in countries where oil reserves have been found have
acquired sufficient confidence in their sovereignty to demand higher shares of the gains from the
production and sale of their oil. On the demand side, the post-war Western market for oil increased
at a dramatic pace, reflecting its substitution for indigenous coal and a greatly expanding
transportation sector (Painter, 2012). Enlarged markets encouraged independent companies to
enter the business, giving the long-term control of the international industry to a handful of major
oil companies. Iran has since been an influential state in the oil market. However, the oil income
and the resultant re-positioning of the economy as an oil economy influenced other sectors and
now play a vital role, seeing as many other sectors are dependent on the oil economy (Luciani,
2005).
Iran’s strong focus on the oil economy proved to be problematic when it declined from a GDP
contribution of 16.9% in 1976 to 5.8% in 1979, 2.6% in 1983, and 1.9% in 1987 due to local and
international political crises.11 Iran’s oil production has largely followed OPEC’s overall
9 Petro Energy Information Network. The oil and gas industries outlook on the horizon of 2025. (Online) available
at: https://www.shana.ir/news/49556 [Accessed: November, 2018] 10 An organization-wide way of thinking and working that engages people in more creative and innovative ways.
The institutionalization of the learning culture is one of the essential purposes of achieving cultural excellence in the
organization. 11 The World Bank. Iran’s Economic Outlook. (Online) Available at:
The country has the resource base to raise production capacity significantly. Historically, oil
attracted external interference by Western powers under the economic and political domination,
and the sector has suffered over the course of the last several decades.
This chapter begins with the historical development of the Iranian petroleum industry before the
Islamic revolution of 1979, illustrating the influence of foreign powers and the nationalization of
the industry. The second part of the chapter explains the development of the Iranian petroleum
industry during and after the Islamic revolution in 1979.
5.2 The Development of the Iranian Petroleum Industry Before 1979
The development of the Iranian petroleum industry began in 1908, after the discovery of a large
oil field in Iran led to the formation of the Anglo-Persian Oil Company (APOC) which was a
British company. It was the first company using the oil reserves of the Middle East. The APOC
took control of exploration and development in Iran. Shortly before World War I in 1913, APOC
managers negotiated with a new customer, First Lord of Admiralty Winston Churchill, who saw
the world war on the horizon and knew he would need oil to power ships. Accordingly, as part of
99
a three-year expansion program, he endeavored to refurbish Britain’s Royal Navy by discontinuing
the usage of coal-fired steamships and fostering oil as fuel for its ships instead. Furthermore, he
wanted to free Britain from its dependency on the Standard Oil and Royal Dutch-Shell oil
companies (Bamberg, 1994). Hence, the British government invested in the APOC by buying 51%
of the company. From that moment on, the interests of the British government and the APOC
became one and inseparable. By purchasing a majority of the company’s shares in 1914, the British
government increased literal control over the Iranian petroleum industry. In 1935, the APOC was
renamed to the Anglo-Iranian Oil Company (AIOC). In the wake of World War II, the AIOC
rapidly expanded production and investment to meet the increased global demand for oil. Between
1930 and 1950, the company’s pretax profits grew from approximately £6.5 million to nearly £85
million, bringing in large amounts of income, but disproportionately shared, to the British
Treasury, company shareholders, and the Iranian government (Henniker-Major 2013, p. 17). In
1950, the company’s giant Iranian oil fields and the vast Abadan refinery, which is located in the
south of Iran and was the largest refinery in the world, accounted for about three quarters of the
company’s crude production and refining throughputs (Bamberg, 2000).
5.2.1 Foreign Influence
Not only was Iran’s oil controlled by the British government13 but almost all services (such as
banks, post offices, telegraph, customs, etc.) were run by various Western powers. Moreover, The
AIOC was extremely reneged on agreements to train Iranian technicians and engineers. Iranians
were not able to access senior positions and positions of skilled workers. While the company
provided luxurious conditions for its Western employees, specifically British employees, it paid
Iranians considerably less than foreigners and accommodated Iranian workers in sub-standard
housing, often in slums (Bamberg, 1994). The director of Iran’s petroleum institute wrote that
“wages were 50 cents a day. There was no vacation pay, no sick leave, no disability compensation.
The workers lived in a shanty town called Kaghazabad, (Paper city), without running water or
electricity … In winter the earth flooded and became a flat, perspiring lake. The unpaved alleyways
were emporiums for rats” (Kinzer 2003, p. 67). This situation created a great deal of resentment
13 The British influence in Persia (Iran) since the 19th century. The British imperial interests in Persia in the Qajar
period were primarily determined by the concern for the security of colonial India and, secondarily, by trade,
telegraphic communication, and financial or other concessionary agreements. At the beginning of 20th century many
economic resources in Iran were run by Great Britain (e.g. Persian railways) which was competing with Russia over
influence in the Middle East …) (see Clawson & Rubin, 2005).
100
among Iranians (D16-2018). Since industrial development and planning, as well as other
significant structural reforms, were predicated on oil incomes, the government’s loss of control
over the oil industry served to strengthen the Iranian government’s apprehensions regarding how
the AIOC managed its operations in Iran. Such a pervasive atmosphere of dissatisfaction appeared
to propose that a significant revision of the concession terms would be plausible (Bamberg, 2000).
Iran attempted to revise the terms of the oil concession on a more favorable basis (50-50), while
Iran received only 16% net profit of crude oil sold in international markets. Iran also attempted to
become independent from foreign influence regarding the control of Iran’s assets and services,
which led to protracted negotiations between Iran and the board members of the AIOC in different
locations (such as Tehran, Lausanne, London, and Paris) from 1925 to 1932. In these meetings,
Iran requested that the AIOC must register in Tehran as well as London, and the exclusive rights
of transportation of the oil should be returned to the Iranian government. Instead, the AIOC
promised to give workers better pay and more chances for advancement, to build schools,
hospitals, roads, and a telecommunication system, but the AIOC did not fulfill these promises. In
December 1950, the message reached Tehran that the American-owned Arabian American Oil
Company (Aramco) had agreed to share profits with Saudis on a 50-50 basis. Following World
War II, nationalism was on the rise among Iranians, mainly enclosing the natural resources being
exploited by Western companies without adequately compensating Iranian taxpayers. Hence, the
“Iranian nationalism group”14 exerted pressure on the Iranian government to revise the terms and
conditions of concession. However, the idea of any similar agreement with the AIOC was rejected
by the UK Foreign Office (Kinzer, 2003).
5.2.2 Nationalization
In 1951, the Shah (King of Iran) appointed Mossadeq as prime minister after the Parliament of
Iran nominated him by vote. The Shah was aware of Mossadeq’s rising popularity and political
power due to his nationalist ideology especially focused on the Anglo-Iranian Oil Company
(AIOC) and the widespread engagement of foreign actors and influences in Iranian businesses.
The major issue for nationalists was the foreign control of the oil industry, and within this, the
Iranians had concerns about the role and connection of the AIOC to the British government
(Henniker-Major 2013, p. 19). Despite the fact that Iran was never a colony or a protectorate, it
14 The “Iranian nationalism group” refers to political and social movements among people whose sentiments are
prompted by a love for Iranian culture, Iranian languages and history, and a sense of pride in Iran and Iranian people.
101
was still heavily controlled by Western powers beginning with concessions provided by the Qajar
Shahs15, and leading up to the oil agreement signed by Reza Shah in 1933 (Bamberg, 2000).
Mossadeq saw the AIOC as an arm of the British government controlling all of Iran’s oil.
Therefore, he broke off negotiations with the AIOC after it had threatened to “pull out its
employees”, and had told the owners of oil tanker ships that “receipts from the Iranian government
would not be accepted on the world market” (Abrahamian 1982, p. 268). Anglo-Iranian’s
managers in Tehran, advised the home office not to “attach much importance” to the nationalist
movement (Kinzer 2003, p. 77). However, in the next few months, the AIOC withdrew its
management team and technicians from Iran, and organized an effective worldwide embargo of
Iranian oil. This confrontation between Iran and Britain escalated as Mossadeq’s government
refused to allow the British any involvement in Iran’s oil industry, and it caused the formation of
the National Iranian Oil Company (NIOC). In 1951, the Iranian Parliament (Majlis) nationalized
the Iranian oil industry by unanimous vote, and the National Iranian Oil Company (NIOC) was
formed, displacing the AIOC (Bamberg, 2000). The AIOC withdrew its management from Iran,
organized an effective worldwide restriction of Iranian oil in 1954 and renamed the AIOC to
British Petroleum Company (BP). This decision strongly impacted the production of the NIOC
(see figure 5.3). The British government warned legal suit against buyers of oil produced in the
formerly British-controlled refineries and obtained an agreement with its sister international oil
companies16 not to fill in where the AIOC was embargoing Iran (Bamberg, 1994). The United
States also disagreed with the nationalization of the AIOC, because of the fear that the idea of
nationalization would spread to other places (such as Arab states of Persian Gulf). However, the
US believed it would be possible to achieve a face-saving agreement with Mossadeq, under which
actual control and management of the organization would remain under the AIOC. Hence, the US
government claimed that they accepted nationalization and insisted on having “a foreign-owned
company to act as an agent of NIOC in conducting operations in Iran” (Abrahamian 2013, p. 116).
However, this agreement was rejected by the British government. The AIOC production crisis
15 The Qajar dynasty was an Iranian royal dynasty of Turkic origin, specifically from the Qajar tribe, which ruled the
state of Persia from 1794 to 1925 (see Katouzian, 1981). 16 The seven multinational oil companies of the “Consortium for Iran” cartel, which dominated the global petroleum
industry from the 1940s to the 1970s, were known as “seven sisters”: Anglo-Iranian Oil Company (now BP), Gulf Oil
(later part of Chevron), Royal Dutch Shell, Standard Oil Company of California (SoCal, later Chevron), Standard Oil
Company of New Jersey (later ExxonMobil), and Texaco (later merged into Chevron) which controlled around 85%
of the world’s petroleum reserves (see Sampson, 1975).
102
reduced Iran’s oil revenue to nearly nothing, placing a severe strain on the implementation of
Mossadeq’s promised domestic structural reforms.
In 1953, the US and the UK agreed to cooperate on Mossadeq’s removal and began to publicly
criticize Mossadeq’s policies for Iranian society as harmful to the country. Accordingly, the US
Central Intelligence Agency (CIA) with the help of bribes to politicians, soldiers, mobs,
newspapers, and information from the British Embassy and Secret Service, organized a riot which
gave the Shah an excuse to dethrone Mossadeq. The Shah used the opportunity to issue an order,
forcibly evicting the immensely popular and democratically elected Mossadeq from power when
General Fazlollah Zahedi led armored vehicles to Mosaddeq’s residence and arrested him. The
shah and his new pro-Western prime minister, Fazlollah Zahedi tried to restore the AIOC (then
already called British Petroleum) to its previous position so that Iranian oil would flow again.
However, public opinion was so opposed that the new government could not permit it (Kinzer,
2003). The US did not want the crisis to affect the production and performance of other oil
producers in the Middle East. Hence, the US put pressure on BP to accept membership in a
consortium of companies which would help to bring Iranian oil back on the international market.
Iran had been the AIOC’s (BP) main training ground, where staff had gained experience before
being repatriated to London to take up senior positions. At the same time, the expatriate community
in Iran had provided a reserve of British managers and technical staff on which the company had
been able to draw to meet requirements elsewhere. Nationalization had forced the loss of this
system of training and promotion on the company, for which there was no immediate substitute
(Bamberg, 2000). The nationalization of the Iranian petroleum industry shows the Iranian anti-
colonial discourse, particularly independence from foreign economic and political domination, as
well as nationalist values among the Iranian people.
The NIOC was given wider power than its predecessor, including overall control over the national
oil production level, in order to reduce the rate of depletion of oil reservoirs. Also, the requests to
access books of accounts worried the British government, as it would have authorized the Iranians
to scrutinize the profit-sharing arrangement and therefore reinforce their claims of underpayment.
The company thus be afraid that an examination of the book of accounts might challenge the
British concessionary control of oil and decrease their profit share. One of the first steps taken by
the NIOC in 1958, was to raise official export prices and increase the tax rate payable by foreign
companies. New participation agreements were concluded, which gave the NIOC a holding of at
103
least 50 percent profit share in all concessions, but did not force it “to open its bookkeeping to
Iranian auditors and to allow Iranians onto its board of directors” (Kinzer 2003, p. 195). Some
viewed this agreement as the move to quell the rising tensions of Iranians, since it allowed the
consortium to divert and hide profits easily and effectively control Iran’s share of the profits
(Bamberg, 2000; Kinzer, 2003).
Figure 5.3 demonstrates that Iranian crude oil production decreased rapidly from 349.6 thousand
b/d to approximately 26 thousand b/d during the years 1952 and 1953, due to Britain boycotting
Iranian crude oil. However, after the 1973 oil crisis and the quadrupling of the oil price, Iran began
to earn enormous revenues from its oil production, much of which it funneled into modernization,
industrialization and militarization programs. The NIOC continued to operate and Iranian
production reached an average of just over 5.5 million barrels a day between years 1974 to 1978.
The peak was reached in September 1978, when production rose to 6.1 million b/d. It must be
recalled that Iran’s optimum capacity was estimated to be as high as 6.5 million b/d during that
period. During this same period, the US imported around 800 thousand b/d of Iranian crude oil
and invested almost 457 million dollars in Iran’s oil industry. However, this situation did not last
review/bp-stats-review-2018-full-report.pdf [Accessed: December, 2018] 21 The US energy information administration. Annual Energy Outlook 2015. (Online) Available at:
Figure 5.5 Iranian crude oil daily average exports (1980-2018)
Source: BP statistical review of world energy, 2018
112
operations related to refining and the distribution of oil products (D13-2015). Pursuing a strategy
of diversification and vertical integration of production, refining and distribution activities, Iran
long ago built up a substantial domestic refining capacity and has since gone on to develop
downstream activities. The government’s medium-term strategy remains to secure outlets for
Iranian oil through the entire downstream chain, with emphasis on the country’s export market in
developing countries.
Since 1995, Iran has adopted a risk-service buyback contract model, to encourage foreign
investment in its upstream petroleum sector. The use of a risk-service model effectively
circumvents the prohibition in the Iranian constitution on granting mineral concessions to foreign
entities (Palmer, 2017). Therefore, officials from Iran’s oil refining company were holding talks
with international services firms to clinch projects to repair Iran’s derelict refining and
petrochemical sector.22 According to the officials, there were projects worth around 100 billion
dollars for repair and modernization plans (D11-2014). But they cannot be conducted due to the
sanctions.
Nonetheless, years of limited access to advanced technology have left Iran’s refineries limping
and lagging into the 21st century, driving them to produce low quality and polluting fuels and
creating safety hazards. In an observed meeting in October 2017, the business development
manager of the NIOC claimed that “the whole industry is in a mess”. He added, “Iran only has 2
million barrels per day of refining capacity, and is heavily dependent on Western technology to
expand this sector capacity” (M3-2017). However, the Iranian petroleum officials argue that
between 2007 and 2012, oil refining capacity for crude oil and gas condensate was increased from
1.6 million barrels per day to 3.1 million barrels per day.23 Oil refining produces a wide range of
oil products, such as liquefied petroleum gas, gasoline, kerosene, fuel oil, gas oil and lubricants.
But, it cannot meet the domestic demand for lighter distillates such as gasoline (D7-2012). The
NIOC’s head of controls on petroleum exports argues that “Iran has become an exporter of oil
byproducts after years of import” (M1-2017). The below table shows that refinery throughput has
risen steadily every year since 1998, having averaged at 1,999,000 barrels a day in 2013. This
22 George and Bousso (2015). Foreign firms scramble to fix Iran’s refineries once sanctions end. (Online) available
at: https://www.reuters.com/article/us-iran-refineries-idUSKCN0QM1BT20150817 [Accessed: February, 2020] 23 The Ministry of Petroleum. The achievements of the petroleum industry four decades after the Islamic revolution.
(Online) Available at: http://mop.ir/portal/home/?news/32165/36405/302184 [Accessed: January, 2019]
exploration, extraction, exportation to development of oil and gas fields. The head of public
relations argued that “these influences need to be channeled through the political apparatuses of
Iran’s power structure, which identify, decide, and implement the policy” (P20-VR-Aug18).
Among those external institutions and councils that have direct and indirect impact on the
organizational routines and decision-making processes of the Iranian petroleum industry, there are
other internal parties that have direct impacts on decisions of the petroleum companies. For
example, the head of international relations said, the NIOC has a general assembly (consisting of
the President, Vice President, Minister of Petroleum, Director General of the Management and
Planning Organization, Ministers of Energy, Industries and Mines, Labor and Social Affairs,
Economy and Finance) as its highest decision-making body. He added that the board of directors
has the authority and main responsibilities to approve operational schemes within the general
framework ratified by the general assembly. The board of directors approve transactions and
contracts and prepare budgets and reports for presentation to the general assembly (P4-VR-
Aug17). Similarly, the NIOC’s business planning manager said, “The NIOC’s general assembly is
the highest decision-making body which determines the company’s general policy guidelines, and
approves annual budgets, operations, financial statements, and balance sheets. However, the other
political players at Iran’s power structure also affect the decision-making process” (P2-VR-
Aug17).
Additionally, the Supreme Economic Coordination Council must approve most of the development
contracts in oil and gas fields, especially foreign direct investments. Its agreement is essential for
large-scale state investment projects (D7-2012). The involvement of many parastatal entities in the
structure of the Iranian petroleum industry makes this sector extremely political and complicated.
6.3.1 The Role of the Islamic Revolutionary Guard in the Petroleum Industry
Since 1990, the IRGC has been transformed from its modest post-war reconstruction activities into
a business conglomerate independent of state regulation as a dominant player in large
infrastructure projects. The IRGC operates in part through Iran’s bonyads29, ostensibly charitable
foundations that operate as huge holding companies. As important as its political influence is, the
IRGC also has become an economic influence in Iran’s society. The IRGC also extended its
influence into the lucrative oil and gas sector by establishing several companies such as Khatam
29 Bonyads are charitable trusts in Iran that play a major role in Iran’s socio-economic sector, controlling an estimated
20% of Iran’s GDP, and channeling revenues to groups supporting the Islamic Republic (see Thaler at al., 2010).
134
al-Anbia. Khatam al-Anbia has become one of Iran’s largest contractors in industrial and
development projects, and is considered the IRGC’s major engineering arm today (Wehrey et al.,
2009).
In 2006, the NIOC gave Khatam al-Anbia a no-bid contract to develop the fifteenth and sixteenth
phases of South Pars gas field, one of Iran’s most valuable gas development projects. According
to the Islamic Consultative Assembly News Agency, several members of parliament demanded an
inquiry into how the grant was awarded but the government defended the project, and no inquiry
occurred.30 Moreover, a few months later, the National Iranian Gas Company awarded Khatam al-
Anbia a contract to build a 600-mile “peace pipeline” from Iran to Pakistan and India. The supreme
audit court criticized extensive irregularities in oil and gas contracts of the country, but the head
of IRGC defended the Khatam al-Anbia activity. The head of the IRGC said the IRGC had a corps
of young specialists with the required technical knowledge and full engineering support who could
be involved in every project, wherever other contractors were not ready to work (D10-2013). The
IRGC repeatedly declared that the involvement of foreigners posed a security risk because of an
alleged link to Israel, but it was clear that the foreign consortium’s biggest mistake was to try to
cut the IRGC out of its business model. This resulted in the IRGC winning lucrative energy
development contracts as a direct result of diminished foreign investment (Alfoneh, 2012).
In July 2011, Iranian President Mahmoud Ahmadinejad appointed a member of the IRGC as
petroleum minister, raising the number of former IRGC officers in his cabinet to twelve out of
eighteen. He also urged the new Petroleum Minister Mr. Rostam Qassemi to work for “the
creatures of God” and the “material and spiritual progress” of Iran.31 Iran’s petroleum ministry has
signed a number of no-bid contracts with the IRGC worth billions of US dollars. The officials
argue that these contracts were granted because of the lower cost offered by the IRGC, its skilled
and experienced corps of engineers, its expertise with large projects, and its access to heavy
machinery and sizable assets (D10-2013). However, the Petroleum Minister faced criticism from
those who fear the IRGC’s growing involvement in Iran’s economy. For example, at the
parliamentary session debating his appointment, Ali Motahari politely objected:
30 Islamic Consultative Assembly News Agency. The 2 billion US dollar contract for the South Pars phases 15 and
16 was signed. (Online) Available at: http://www.icana.ir/Fa/News/75464 [Accessed: July, 2017] 31 Petro Energy News. President’s letter for Rostam Ghasemi as the new Petroleum Minister. (Online) Available at:
“Opposition to the appointment of Mr. Rostam Qassemi as Petroleum Minister is not opposition
to his person … I distinguish between his person and his legal position since his person is
commendable… The main issue … is that the IRGC as a military force should not be connected
with the political and economic power. In other words, the IRGC should not be [a part of the]
cabinet … The IRGC is the symbol of the unity of society, just like the clergy. The Guards belong
to all classes of society … Now, the IRGC is - rightly or wrongly - accused of seizing development
projects in unequal competition with the private sector … the great oil infrastructure being added
to it will not do away with such accusations”.32
However, in his defense, the Petroleum Minister said that Khatam al-Anbia had “filled the
vacuum” left by the withdrawal of Western companies from Iran’s oil and gas sectors as a result
of the international sanctions.33 According to the Khatam al-Anbia website, since 2018, the
company has been awarded more than 750 contracts in different construction fields including
transportation, telecommunication, offshore construction, gas pipelines, and oil and gas
infrastructure development.34
The oil and gas industry plays a vital role in the political power structure of the Iranian regime.
The Iranian petroleum industry continues to serve as a source for the state-oriented and
redistributive political economy (Brumberg & Ahram, 2007). First of all, it directly present a
significant program subsidizing domestic consumption of fuel for the entire country. Secondly, it
provides generous wages and benefits to its thousands of employees and their families. Nearly all
government spending, from the military to education to food subsidies, is ultimately derived from
money that the Iranian petroleum industry remits to the national treasury. The Petroleum Minister
and his deputies submit recommendations to various decision-making bodies on things such as
optimal production levels (D13-2015). However, Iranian petroleum authorities have been more of
a consistent servant and agent of the state that remains institutionally embedded and attached
because of the need to stabilize the entire system of the Islamic regime. These ‘revolutionary’
bodies straddle the boundary between state and non-state in the pursuit of both political and
32 Alfoneh, A. (2012). Iran’s Revolutionary Guards Strike Oil. (Online) available at:
https://www.meforum.org/3153/iran-revolutionary-guards-strike-oil [Accessed: August, 2018] 33 Donya-e Eqtesad. All the Iranian officials acknowledge the role of Khatam’s headquarters in the country.
Newspaper no. 2427. (Published: 8 August, 2011) 34 Retrieved in August, 2018 from the Khatam al-Anbia website at: https://khatam.com/
economic advantage, sometimes taking on state-like powers while simultaneously expanding their
economic interests into the private sector (Yong 2013, pp. 24-25).
6.3.2 Structural Reforms of the Iranian Petroleum Industry
In 1979, the post-revolutionary government did not dismantle and replace all of the organizations
that had existed in the pre-revolutionary period, instead established new entities to sit beside the
pre-existing bodies of government. An example of this political transformation was the
establishment of the Ministry of Petroleum by the post-revolutionary government to increase its
controls over oil and gas companies’ activities. The NIOC itself remained largely intact, despite
the loss of numerous experienced staff through purges and resignations. However, this political
transformation of government in the petroleum industry did not routinely ensure its actual authority
over the NIOC as an oversight body. In practice therefore, the NIOC retained many of the powers
and responsibilities that had been within its remit under the Shah (Yong, 2013). According to one
of the Parliament members who was vocal during the decision about structural reforms of the
NIOC, “even though the Ministry of Petroleum was established in 1979, it has never really taken
shape”.35 Moreover, a business development manager of the NIOC argued that “since 1973, the
NIOC structure has not been changed although it is required to be reformed with the new changes
in this sector after 1979” (P2-VR-Aug17).
Despite constitutional reforms in 2006, which dictated that policy-making duties and governance
functions be reassigned from public industries to ministries and government agencies, the Ministry
of Petroleum reported that “this process has not yet occurred with respect to the NIOC which still
governs itself”.36 Hence, the NIOC retains the responsibilities of ownership, sovereignty, and
management in the upstream oil sector, which is to say that the company exercises oversight with
regard to its own activities. One member of the Parliament who has been mobilized to back a new
oil law in 2012, complained that “under current conditions, true power is held by the NIOC and
there is no possibility of effective oversight”.37 The continuation of this institutional form may be
intelligible, reflecting the inadequate motives for disrupting the status quo. In 1979, legislators
35 Fars News Agency. The end of 30 years dominance of NIOC. (Online) Available at:
https://www.farsnews.com/news/13901019001415 [Accessed: August, 2018] 36 Petro Energy News. NIOC contracting rights will increase. (Online) Available at:
https://www.shana.ir/news/184324 [Accessed: August, 2018] 37 Farda News. The end of 33 years dominance of NIOC and presidential oil rights. (Online) Available at:
February, 2019] 44 Iranian students’ news agency. Vice president: We do not want to worry people about the sanctions/ we should
minimize the impact of the sanctions. (Online) available at: https://www.isna.ir/news/97081507275 [Accessed:
February, 2019] 45 Cummins, C. and Hafidh, H. (2009). Iranian Troops Occupy Oil Field in Iraq, Stoking Tension. The Wall Street
Journal. (Online) Available at: https://www.wsj.com/articles/SB126114921937697207 [Accessed: October, 2018] 46 France’s Total Company. US withdrawal from the JCPOA: Total’s position related to the South Pars 11 project in
Iran. (Online) available at: https://www.total.com/en/media/news/press-releases/us-withdrawal-jcpoa-totals-position-
related-south-pars-11-project-iran [Accessed: April, 2019]
Since the United States imposed sanctions on Iran, Iranian oil exports have fallen from a peak of
3.2 million b/d in June 2006 to 1.7 - 1.9 million b/d in September 2018, and this number is already
declined further in 2019 and 2020. Over the years, sanctions have taken a serious toll on Iran’s
economy and society. In April 2013, the United States national security adviser claimed that the
United States government had imposed the most severe economic sanctions against Iran, which
had never been imposed on any other country before.47 My personal observation of Iranian society
shows that these sanctions have crippled the lives of the Iranian people, as exports and investment
inflows reduced, national currency value dropped sharply, and rising inflation and high
unemployment decreased consumption. By barring banks doing business with Iran from operating
in the US or from even using dollars, the restrictions effectively severely limit imports of food and
medicine. However, the Iranian officials argue that Iran has reached self-sufficiency in all areas,
stressing that the nation will overcome the sanctions imposed by the United States.48 This rhetoric
is also adopted within the NIOC. For instance, the NIOC’s operation manager argued that “the
United States’ sanctions have had no impact on exploration operations which continue as usual”.
He also added that “the sanctions have made Iran self-sufficient in producing equipment for oil
and gas exploration” (P12-NT-Feb18).
6.4.1 International Sanctions Since 1979
Throughout anarchy in Iran in 1978, the US kept supporting the Shah with military assistant and
equipment to maintain him in power. The US opposed Khomeini for many different reasons. First
of all, if Khomeini came to power, he would restrict or abolish Western domination in Iran's
economy (mainly in oil and natural gas) and policies because this promise was one of his primary
objects. The US has also feared an ideological shift in Iran and an expansion of revolutionism
among Arab counties.49 However, their support did not prevent the revolutionaries’ approach. In
fact, when Khomeini announced his return to Iran, a senior diplomat from America was beaten by
47 Ganji, A. (2013). Crippling economic sanctions; systematic violations of the fundamental rights of the people of
Iran. Radio Zamaneh. (Online) Available at: https://www.radiozamaneh.com/91099 [Accessed: October, 2018] 48 PressTV News, ‘Self-sufficient Iran will overcome US sanctions: President Rouhani’, published: February, 2019.
(Online) Available at: https://www.presstv.com/Detail/2019/02/18/588864/Iran-President-Rouhani-US-sanctions-
selfsufficient [Accessed: March, 2019] 49 Markham, J. (1979). Khomeini’s forces rule Iran; He urges an end to violence; US consulting with regime. The
New York Times. (Online) Available at: https://www.nytimes.com/1979/02/13/archives/khomeinis-forces-rule-iran-
a mob of revolutionaries. As a result, the United States leaders urged their citizens in Iran to leave
the country or remain in safety zones.50
Khomeini and revolutionary leaders identified the United States as a nation with selfish motives.
Thus, after the conclusion of the 1979 Islamic revolution, American-Iranian relations went
downhill. He claimed that because of the United States’ exploitation, Iranians were forced to
engage in a revolution where Iranian blood was shed. He was willing to take economic risks in
order to destroy Western influence in Iran. According to Khomeini, “All the problems of the
Eastern countries stem from the influence of Western powers, mainly the [US]. Indeed, all our
problems come from America”.51 As a result of the Islamic revolution, the US not only worried
about the spread of communist supporters but also its impact on the Iranian petroleum industry.
However, the Iranian oil cutoff strained the oil market quickly. The Western media started
speculating on how oil prices would increase because of Iran’s policies. In 1978, the US was one
of the most significant oil importers from Iran, having bought approximately 200 million barrels
of Iranian oil during this period (Murray, 2009). The oil policy of the revolutionary regime has
made oil price double on the international market, approximately ten times the price that was paid
in 1970. These new oil policies noticeable an economic change for both Iran and the US. Iran
began earning more profits from its oil industry; the US was required to pay more for foreign oil.
Consequently, American leaders endeavored to reduce reliance on foreign oil and to conserve
energy more efficiently.52
Over the last 40 years, during several periods of conflict between Iran and Western powers, several
sanctions were imposed on Iran, causing serious losses for Iran’s economy. The United States first
imposed sanctions against the Iranian regime in November 1979, after a group of radical students
seized the American Embassy in Tehran and took the people inside hostage. The United States
broke diplomatic relations with the revolutionary government of Iran and blocked the Iranian
government’s assets of around 12 billion US dollars including bank deposits, gold and other
properties in the United States. Moreover, the United States government banned the import of
50 Branigin, W. (2019). We were covering the Iranian revolution. A single gunshot still haunts me. The Washington
Post. (Online) Available at: https://www.washingtonpost.com/history/2019/02/10/we-were-covering-iranian-
revolution-then-single-gunshot-changed-everything/?utm_term=.f0da4d891f17 [Accessed: March, 2019] 51 Mosleh Zade, M. (2018). Imam Khomeini’s strategies in the contemporary international system. Imam
Khomeini’s portal. (Online) Available at: http://www.imam-khomeini.ir/fa/n131934 [Accessed: February, 2019] 52 The United States Congress, 1980 Economic Report, published: February, 1980. (Online) Available at: https://fraser.stlouisfed.org/title/1250/item/536798 [Accessed: October, 2018]
Iranian oil to the United States and all trades within Iran’s energy industry such as investment,
technology transfer, financial transaction, and virtually all interaction between Iran and the United
States. Against the American leaders’ decisions, the Iranian government ordered any foreign
experts, especially those within the Iranian petroleum industry, to leave the country. Hence, all the
exploration data about the oil reserves and infrastructure development details of Iranian oil and
natural gas fields were withdrawn by the Western petroleum companies that used to operate in
Iran. During the period from 1994 to 2001, the United States government officially prohibited
American companies from investing in Iranian petroleum projects and those who violated the law
could face a fine of up to 1 million US dollars and 20 years of imprisonment. The American
officials argue that they imposed a new embargo on Iranian goods and services because of Iran’s
support of international terrorism and its aggressive actions against non-belligerent shipping in the
Persian Gulf.53
In 2001, the United States government increased the economic sanctions against Iran under the
pretext of Iran’s engagement in the development of nuclear weapons. Therefore, Iran’s access to
the peaceful nuclear technology program was violated. However, Iranian officials emphasized that
the nuclear program was for civilian purposes such as generating electricity and medical
purposes.54 In 2006, the UN Security Council passed Resolution 1696, which demanded that Iran
halted its uranium enrichment program, and after a few months it passed Resolution 1737 to
impose sanctions after Iran refused to comply. The United States has led international efforts to
use sanctions to influence Iran’s policies, including Iran’s uranium enrichment program, which
Western powers worry is intended for developing the ability to produce nuclear weapons. The
United States government used this opportunity to tighten economic sanctions against Iran and
especially targeted investments in oil, gas and petrochemicals, exports of refined petroleum
products to reduced Iranian government revenues, and prevent business dealings with the IRGC.
The US blocked the properties of Iranian banks, financial institutes, individuals, and companies
including shipping, telecommunication, technology, education, web hosting services and software
for supposedly having ties with Iran’s nuclear technology program.55
53 Levs, J. (2012). A summary of sanctions against Iran. Cable News Network (CNN). (Online) Available at:
https://edition.cnn.com/2012/01/23/world/meast/iran-sanctions-facts/index.html [Accessed: February, 2019] 54 Cabinet office of Iran. Iran's nuclear activities are peaceful. (Online) Available at:
http://cabinetoffice.ir/fa/news/3541 [Accessed: October, 2018] 55 Legal information institute. The US Federal Regulations on Iran. (Online) Available at:
idUSKCN0UV0GB [Accessed: January, 2019] 59 Weston Phippen, J. (2017). Iran Signs a $5 Billion Energy Deal with France’s Total. The Atlantic News. (Online)
Available at: https://www.theatlantic.com/news/archive/2017/07/iran-total/532560/ [Accessed: January, 2019] 60 Nakhle, C. (2018). The return of US sanctions on Iran: consequences for the oil market. Geopolitical Intelligence
Service. (Online) Available at: https://www.gisreportsonline.com/the-return-of-us-sanctions-on-iran-consequences-
kind of psychological warfare to frighten our people and to sabotage our economy. But gradually
we were able to, in fact,…find ways and means to guarantee that we can continue to export oil”
(P1-NT-Aug17). Iran previously could not provide enough fuel for domestic needs because of a
lack of infrastructure and international sanctions which limited the supply of modern equipment
and technology for plant maintenance. However, at the beginning of 2018, the Deputy Minister of
Petroleum said on local media, that the country would be self-sufficient in the production of
gasoline by the end of the year. Additionally, at the inauguration of the second phase of the Persian
Gulf Star Refinery the Iranian President said: “Fortunately, we do not need to import gasoline
anymore. We have reached self-sufficiency…We can export our produced gasoline but have no
export plans”. In contrast, the Petroleum Minister argued on local media that “due to the high
consumption of gasoline in the country and the necessity of refineries to the foreign equipment and
technology, self-sufficiency in gasoline production is not possible”. “If the refinery becomes fully
operational, we will have no concerns over sanctions”, he added.63 After a few days, the Iranian
President said the following in a televised speech: “When under threat of sanctions by our enemy,
if we control and reduce our domestic consumption of gasoline ... we can say that we are self-
sufficient in fuel production”.64 However, the business development manager of the NIOC asserted
that “Iran has struggled to meet its domestic fuel needs for years. This was due to a lack of refining
capacity and economic sanctions that limited the supply of spare parts for plant maintenance”
(P8-VR-Sep17). In spite of the severity of the sanctions regime, the Iranian officials asserted that
they have taken positive steps to develop the required technologies for their energy sector by
relying on domestic private companies to improve technological capabilities. The operation
manager of the NIOC argued that “a few years ago, we were begging foreign countries such as
Chinese companies to be able to purchase some drilling equipment, but we have now become self-
sufficient for them” (P12-NT-Feb18). In 2019, at the inauguration of the third phase of the Persian
Gulf Star Refinery the Iranian President said: “at the moment, we are facing the challenges of an
economic war and sanctions, since the US and its mercenaries in the region are attempting to
increase daily pressure on the Iranian nation, but we are neutralizing their goals by relying on
63 Mashreq News. Rouhani: We became self-sufficient in gasoline production / Zanganeh: They lied that we were
self-sufficient. (Online) Available at: https://www.mashreghnews.ir/news/835273 [Accessed: February, 2019] 64 The Ministry of Petroleum. The inaugurating the second phase of the Persian Gulf Star Refinery. (Online)
Available at: http://www.mop.ir/Portal/Home/ShowPage.aspx?Object=NEWS&ID=d5e5c47d-6bb5-4a67-9cca-
domestic capabilities”. He also added, “The era in which they could rule over the people through
pressure and sanctions has ended, it is time to hold a dialogue and constructive interaction
between governments based on respect and mutual interest”.65 These narratives show that the
Iranian authorities have a rhetorically controversial view about the influence of sanctions on the
Iranian economy, specifically on the energy sector as the principal source of government revenues.
Furthermore, France, Germany and Great Britain launched the Instrument in Support of Trade
Exchanges (INSTEX) in January 2019, a financial mechanism to protect Tehran-Europe trade ties
against the United States bans.66 However, details about how the mechanism will function are not
yet clear. Nevertheless, it appears that due to the political pressure of the United States in an
intensification of sanctions against Iran, this tool is not practiced and has only a propaganda aspect.
Hence, it is almost impossible to quantify the geopolitical risk in the Middle East especially the
effects of the United States sanctions on the crude oil price in the international market.
In an unintended consequence, the US sanctions have actually strengthened the IRGC’s economic
power, as few foreign firms risk investing in the country. The IRGC marginalized the domestic
private sectors especially in the oil and gas sector. Currently, Khatam al Anbia, the engineering
arm of the IRGC, is one of the main contractors of the Iranian oil and gas projects which helped
its access to Iran’s foreign exchange reserve. The IRGC has also established its several banks,
including Ansar Bank, and Mehr Finance and Credit Institution (D16-2018).
6.4.2 The Impact of Sanctions on Technology Development for the Iranian Petroleum
Industry
Iran’s petroleum industry is currently (2020) facing challenges including the maturity of
hydrocarbon fields, the growing population of the nation that strains additional revenues from
petroleum exports, and economic sanctions that have limited access to ‘key’ technologies.
Importantly, these restrictions have led to obstacles in the acquisition of the technology and
technical knowledge needed for development. For example, the development of the South Pars gas
condensate field faced severe problems. While Iran has been able to provide the costs of the gas
field which is shared with Qatar, lack of advanced technology, technical knowledge, and the
65 Mehr News. The opening of the third phase of the Gulf refinery means a failure of sanctions. (Online) Available
at: https://www.mehrnews.com/news/4545429 [Accessed: February, 2019] 66 Germany’s international broadcaster (Deutsche Welle). INSTEX: Europe sets up transactions channel with Iran.
(Online) Available at: https://www.dw.com/en/instex-europe-sets-up-transactions-channel-with-iran/a-47303580
Islamic regime by linking its Islamic ideology with some elements of the nationalist movement,
such as anti-imperialism discourse, which was headed by Mossadeq, has tried to justify its political
debate over strategic industries.
The current political environment makes it hard to imagine immediate change in Iran’s oil and gas
management. But dependency on oil and gas revenues makes Iranian economic development
vulnerable to oil price volatility. Although the majority of Iranian officials rhetorically disproved
the effects of sanctions on Iran’s economy, Iranian citizens perceived the impact of the economic
sanctions in their daily life through high inflation, high unemployment rates, and a sharp decline
in the value of the national currency. Iranian petroleum authorities have frequently talked on the
national media about the localization of a variety of equipment and commodities used in principal
projects of the oil and gas industry. However, the evidence shows that the development of Iran’s
oil and gas projects have slowed down, and Iran cannot reap profits from shared oil and gas fields
in the same way as its Arab neighbors. Disputes over resources and territorial boundaries have
escalated tensions between Iran and its Arab neighbors, especially concerning Iran’s shared oil
and gas fields.
All these points caused the future of Iran’s oil and gas development unpredictable and volatile.
The sanctions led to a suspension of the country’s ambitious plans concerning gradual capacity-
building and more dynamic energy stability in the medium to long term. Although this trend has
deprived the vital role of the Iranian petroleum industry in Iran's economy, it most likely will not
lead to a downfall of the sector or a collapse of the economy as a whole. In the next chapter, I will
explain the practices of PMS in the Iranian petroleum industry, especially the factors that have
shaped the uses of PMS, such as the Iranian variant of Islamic management, as well as
discrepancies between the aspirations of the change program and the actual PMS practices.
155
CHAPTER SEVEN: THE PERFORMANCE MEASUREMENT AND
MANAGEMENT SYSTEMS IN PRACTICE
7.1 Introduction
As explained in previous chapters, Iran has enormous oil and natural gas reserves and plays a
crucial role in the required energy in the world. In consequence, the oil and gas industry also plays
a significant role in the Iranian economy. It presents the main source for foreign currency earnings
as well as the government’s annual budget and the main financial source for government projects.
Given the key and critical role of the petroleum industry for Iran’s economy, it is not surprising
that Iranian authorities have an interest in measuring and managing the performance of petroleum
producing companies.
Iranian authorities have adopted a comprehensive strategy encompassing reforms as reflected in
the government’s 20-year vision document (2005-2025) as well as the fifth and sixth development
plans in the petroleum industry. According to the country’s fifth and sixth development plans
(2010-2020), the Ministry of Petroleum became responsible for measuring and evaluating the
performance of petroleum producing companies in all areas such as exploration, production,
transportation, export, and development of oil and gas fields (D7-2012). The Ministry of
Petroleum’s performance-oriented strategy invites managers and employees to change their
existing mindset (see section 7.2.2) by providing training for managers and employees to acquire
new knowledge and skills and replace the old culture with one that encourages creativity,
innovation, dedication and productivity (D5-2012). According to the Deputy Director of Human
Resources Development in the Ministry of Petroleum, the main spurs to developing this strategy
are the dimension and speed of transformational technologies that have dominated the international
arena during the past years, coupled with the slow pace at which many international oil companies
have responded to this change. Subsequently, the strategic alignment of the petroleum producing
companies with the government strategy and the development of human resources in the oil and
gas companies were combined in the Ministry of Petroleum’s agenda (D2-2011).
The Ministry of Petroleum’s strategy stresses the need to synergize organizational planning and
set clear and transparent assessment indicators to help monitor the performance of petroleum
producing companies. According to the CEO of the NIOC, one of the main principles of the fifth
and sixth strategic development plans is “to increase the efficiency of the Iranian petroleum
156
companies and improve the level of services. It was expected that using PMS plays an essential
role in the achievement of these goals” (P1-NT-Aug17). Similarly, one of the NIOC’s board
members stated that they are intensively seeking to improve their services and transform the
approach of the organization’s managers and employees through the implementation of
performance measurement and management technologies. He added that executives in various
disciplines should focus their efforts on “institutionalization” in order to change the existing
mindset (e.g., beliefs, norms, assumptions, values, etc.) within their organization (D12-2015). This
principle is underpinned by developing, building and implementing PMS in the Iranian petroleum
companies. Therefore, Iranian authorities assumed that there is a need to take real, solid and
sustainable steps towards implementing a PMS that supports the strategic initiatives and measures
the effectiveness and efficiency of the organization’s processes (D4-2012). The performance
management technologies should be aligned with the petroleum companies’ objectives (such as
the fifth and sixth development plan) as well as the government’s strategy (20 years’ vision plan
in the oil and gas sector). The pressure was on the managers to encourage employees to enhance
their activities with the aim of achieving organizational objectives (D2-2011).
As in the chapters five and six, the findings in chapter seven are a result of the axial coding process,
which is described in the methodology section of this thesis (see chapter 4). In this chapter, I
address three main research questions:
1. How are performance measurement and management systems understood and practiced in
a non-Western context?
2. How has Islamic ideology shaped the practices of performance measurement and
management?
3. How do managers cope with conflicting values (such as religious value and industrial
value) in the practices of performance measurement and management?
I will address these questions through document analysis, observations, and interviewees’
reflections on their past and current experience with and perception of the practices of PMS.
First, I will describe the aspirations and the background of the recent PMS change program,
illustrating how documents and interviewee statements expressed ideals of how performance
measurement and management systems should be used in the Iranian petroleum industry. I will
then illustrate the study’s findings on how performance measurement and management systems
157
were actually put to use and how these practices are partly in conflict with the ideals described
before. In order to explain these discrepancies, I will then move on to discuss important cultural
and political context factors which shape performance measurement and management practices in
the Iranian petroleum industry.
7.2 Aspirations of Performance Measurement and Management
The lack of transparency, accountability, and mismanagement of Iranian petroleum companies
such as the NIOC has been criticized by the society, social media and local experts during the past
years.70 Critics argue that Iranian petroleum authorities have failed to invest in economic
development and have veiled their management in secrecy. Moreover, they assert that the
government has violated its own rules for oversight of the oil and gas revenues (Semnani, 2018).
Similarly, the Petroleum Minister claimed that “the problem we are facing now in the petroleum
industry is not finance, but management problems”.71 Thus, the government prioritized reforming
poor management in the oil and gas sector in 2010 (D2-2011). According to the Deputy Director
of Human Resources Development in the Ministry of Petroleum, the main spurs to implement and
develop the change program are keeping pace with globalization as well as the speed of
transformational technologies that have dominated the international arena. Moreover, this
organizational change is also essential, as the majority of the organization’s goals and objectives
are not being met by the previous strategic development plans (D11-2014).
In 2012, the change program called Strategic Transformation in the Iranian Petroleum Companies
(STIPEC) was introduced by the Ministry of Petroleum, allowing negotiation with the research
and technology development of the four major Iranian petroleum-producing companies. The
Ministry of Petroleum has set targets for all petroleum-producing companies to align their strategic
efforts with the government’s vision for 2025 and the fifth and sixth development plans (D12-
2015).
7.2.1 Iran’s 20-year National Vision and the Fifth and Sixth Development Plans
One of the most significant subjects in the Iranian petroleum industry is the formulation of the
country’s fifth and sixth development plans for oil, gas, and petrochemicals in line with Iran’s 20-
70 Tabnak agency news. Review of six decades of oil revenues in the Iran. Translated from Persian by the author.
(Online) Available at: https://www.tabnak.ir/fa/news/864209 [Accessed: January, 2019] 71 Mohamedi, F. (2010). The oil and gas industry. The United State Institute of Peace. (Online) Available at:
year national vision goals, the Ministry of Petroleum’s mission and the general policies of the oil
and gas sector (D7-2012). In 2004, the Expediency Council72 convened a special commission to
draft a 20-year vision document (2005 - 2025) with the cooperation of the management and
planning organization. This document was approved after some amendments were made by the
Supreme Leader, and the legislative, executive and judicial branches of the Islamic Republic of
Iran were notified of its implementation in March 2005 (D10-2013). This vision document was
called Iran’s 20-year national perspective in the horizon of 2025 (serving as the basis for
formulating four five-year development plans (fourth - seventh)), outlining a road map for the
country’s economic, political, social and cultural developments during the next two decades (D16-
2018). One of the main objectives of this 20-year perspective is achieving the first rank in the areas
economy, science, and technology in the region of southwest Asia (including central Asia,
Caucasus, Middle East, and other neighboring countries). This ranking emphasizes technological
development, knowledge production, continuous economic growth, relative promotion of the per
capita income level, and the achievement of full employment.73 In another part of this national
vision, it also compels public organizations to use selection criteria for recruiting people who
should be active, responsible, self-sacrificing, devout, conscientious, committed to the goals of the
Islamic revolution, and proud to be Iranian (D11-2014).
The national vision 2025 in the petroleum industry emphasizes the oil and gas sector’s strategy for
long-term development, which includes supporting the establishment and development of the
private sectors, producing, transferring and upgrading new technologies, development of oil and
gas fields, increasing production capacity of crude oil to 5.2 million barrels per day and natural
gas to 900 million cubic meters per day, attracting foreign investment, etc. (D7-2012). According
to this perspective, Iran must first maintain the position of second-largest crude oil producer in the
OPEC by covering 7% of the share of world petroleum supply. Secondly, the country must also
achieve first place in the region in terms of refining capacity and value in producing petrochemicals
72 The Expediency Council is an administrative assembly appointed by the Supreme Leader and was created upon the
revision to the Constitution of the Islamic Republic of Iran on 6 February 1988. It was originally set up to resolve
differences or conflicts between the Parliament and the Guardian Council, but “its true power lies more in its advisory
role to the Supreme Leader”. The Expediency Council has supervisory powers over all branches of the government.
Members of the council are generally ayatollahs (powerful clerics), who are chosen by the Supreme Leader every five
years. (see http://english.khamenei.ir/news/5072/What-are-statuses-and-duties-of-the-Expediency-Council-in-the) 73 The Ministry of Economic Affairs and Finance. The 20-year national vision of the Islamic Republic of Iran in
2025 Horizon. Translated from Persian by author. (Online) available at:
and materials in order to create the highest added value from its hydrocarbon resources.
Furthermore, Iran needs to achieve first place in the region’s oil and gas technology (D4-2017),
which requires the improvement of services, technologies, customers satisfaction, internal
processes, and so on. All of these conditions must be fulfilled to keep proper distance from other
competitors for this position in terms of creating production capacity. According to the NIOC’s
administrative circular about the national vision in Iran’s 2025 Horizon, general policies
announced by the supreme leadership in the energy sector include:
Adopting appropriate measures and strategies for expanding oil and gas exploration
and awareness of the country’s resources.
Increasing oil production capacity in proportion to existing reserves and using the
country’s economic, political, and security power.
Increasing natural gas production capacity appropriate to the country’s reserves to meet
domestic consumption and maximize replacement of oil products.
Expanding fundamental research, developing and training of human resources, and
technology development in various fields of oil, gas, and petrochemical.
Striving to create the right structure to attract the required funds through internal and
external investors.
Exploiting the country’s geopolitical position in the region to buy, sell, process, refine,
trade and transfer oil and gas to domestic, regional, and global markets (D10-2013).
The fifth and sixth development plans emphasize utilizing the maximum capacity of the petroleum-
producing companies for increasing production, developing oil and gas fields and those objectives
which were not achieved in the previous plan (i.e., the fourth development plan) such as
exploration and development of new oil and gas fields, localization of technologies, expanding
refineries’ capacity, etc. (D17-2018).
Each of these development plans (e.g., fourth, fifth, and sixth) have almost 20 main objectives
each, which have an average of 10 articles, and each of these articles have around 5 clauses. For
example, according to the sixth five-year development plan (2015 - 2020), article 48 states “...to
increase and enhance the potential of science, technology, and innovation in the petroleum
industry, an amount equal to 1% of the fund allocation of the annual development plans of the
subsidiary companies is required during the implementation of the planning act. The planning act
was allocated these funds to increase capacity, develop technologies in oil, gas, petrochemical,
160
and renewable energies and apply them in related industries. Furthermore, existing technologies
are to be upgraded and localized, and domestic energy consumption shall be reduced, while
agreements with the organizations shall be exchanged and annual performance reports shall be
submitted to the research center of the Islamic Consultative Assembly”.74 According to clause (C)
of article 48, the Ministry of Petroleum is obliged to make arrangements to use the capacities and
abilities of private and cooperative companies as well as semi-governmental entities to invest in
the exploration, production, and exploitation (not ownership) of oil and gas fields, particularly in
the shared fields with neighboring countries. This obligation was enacted within the framework of
the general policies of article 44 of the constitution.
Furthermore, article 51 states that the petroleum-producing companies should be developing
human capital with regard to health, skill, competence, and motivation (modified according to the
notion of the Deputy of Human Resources of the Ministry of Petroleum). According to clause (D)
of article 51, the Ministry of Petroleum is required to create a competitive environment among
petroleum companies by transforming the management structure (e.g., improving skills,
competences, and abilities of managers) in compliance with international management standards.
Furthermore, he is also required to establish gender equality and create equal opportunities by
enabling and enhancing the skills and competencies of all employees, and integrating performance
measurement and management systems in petroleum-producing companies (D17-2018).
Moreover, to implement the overall policies of the sixth development plan and the resilience
economy program, the government is obligated to enhance the “jihadist culture”75 of creating
value-added, wealth, productivity, entrepreneurship, and investment. Granting “Resilience
Economics badges” to individuals for their valuable service in the field and promoting the
dimensions of resilience economics and its discourse, especially in the scientific, educational and
media contexts and their transformation into a widespread national discourse, is also part of the
program.
74 The National Iranian Oil Co. Oil in the Sixth Development Plan Act. Translated from Persian by author. (Online)
available at: http://www.nioc.ir/portal/home/?generaltext/97296/96775/21742/ [Accessed: July, 2019] 75 Jihadi culture is also known as struggle culture, a combination of thought and value capitals (such as overcoming
obstacles, striving with Divine Will, self-esteem and confidence, etc.) which affect human behavior. The jihadist
culture and values are based on the religious thoughts and beliefs of the revolutionary people, inspired by the founding
of the Islamic Republic of Iran in 1979. Jihadist culture is an institution that is governed by dedicated management
with a definite identity and mission to serve the individual effort of its participants. There are two basic orientations
for jihadist culture, one based on cultural and religious beliefs of Islam, and the other on true independence (i.e.,
independence from the Western and Eastern countries). By contrast, this terminology refers to “jihadism” as a 21st
century neologism found in a Western language to describe Islamist militant movements (see Hegghammer, 2017).
IRI constitution for nominating “good citizens” in the workplace as part of performance appraisals.
This is somehow similar to Gordon’s (1964) civic assimilation policies, according to which the
requirements for citizenship of external people in the host culture (i.e., organization) are based on
accepting the dominant culture.
As already stated earlier in this section, two evaluation systems are used in parallel for nominating
the “good citizens” and improving citizens’ performance in the NIOC. The first type of
performance evaluation system is the general biannual evaluation process of staff performance by
managers or supervisors with the involvement of the HR department. An individual’s work
performance is assessed based on skills and competences (including a self-assessment) by
employees and managers or supervisors every six months and feedback is provided once a year
using a standard appraisal form which is accessible through the NIOC’s system online (see figure
7.9). This performance evaluation is linked to the learning and growth dimension of the BSC.
Second, staff performance is evaluated by the security department,81 which applies different
evaluation criteria compared to those of the HR system. This second type of evaluation is often
performed during staff recruitment, mobility, contract renewal, and job promotion, especially in
the key positions. With this method, staff performance is mainly evaluated based on Islamic
principles (the most fundamental expression of Islamic beliefs) as well as past performance. Past
performance includes factors such as local affirmation82 of social life, ethical corruption (e.g.,
harassment, discrimination, etc.), record of organizational affiliation, support for parties,
organizations and groups that are illegal, record of a criminal conviction, drug addiction,
participation in political and religious activities, compliance with religious values, etc.
I also found that there were some people which had been accepted by the HR department but later
were rejected by the security department. The security department plays an essential role in
nominating people in public organizations and also monitoring individual performance at work,
especially with regard to staff in high-level positions. Indeed, the security’s evaluation outcome
always overrules other performance assessments in the Iranian petroleum companies. The security
manager said that “we have a close relationship with the HR department in nominating the good
81 Portal of the security department of the National Iranian Oil Company. (Online) available at: http://www.nioc.ir/portal/home/?generaltext/97296/96775/21804/ 82 Local affirmation is performed by means of an official sheet in which witnesses (e.g., neighbors of the person to be
evaluated) write testimonies on the subject or person being evaluated. The testimony of a witness (i.e., neighbor) is
also necessary to complete the verification process by the security department, who check the social life of a person
being considered for a position in a public organizations.
VR-Sep18). The security manager said that “the various indicators used in selection criteria
[Gozinesh] of people includes belief in Islam, Islamic principles and norms [such as Islamic
clothing (dress codes for men and women), daily praying, fasting, faith, and pilgrimage to
religious places (e.g., Mecca and Karbala)], believing in the principle of Velayat-e faqih and the
Islamic Republic of Iran, criminal records, morality, records of any connections with illegal
parties or anti-Islamic organizations, drug addiction, independence from foreign organizations
and displaying regular religious activities”. He further continued that “the process of evaluating
an individual’s performance usually takes between one and two months” (P21-NT-Sep18).
According to the NIOC’s general policy guideline about the organization’s staff terms and
conditions of service, the recruiting policies based on the selection criteria ‘Gozinesh’ was
introduced after the victory of the Islamic Republic of Iran in order to nominate committed and
specialized staff in the ministries and governmental organizations (D1-2011). According to my
personal observation, although the policy of Gozinesh is used for all people who intend to work in
public organizations, those people who have a kinship relationship with focal political actors or
the clerical circles of the country are sometimes faced with less scrutiny in the Gozinesh process.
Furthermore, the Gozinesh is not just used for the people in the process of recruitment, but it is
also used for staff mobility or relocating, contract renewal and job promotion processes.
This evidence shows that religion, political perspective and kinship relationship with focal power
players are essential parameters in nominating “good citizens” for public organizations. The
process of evaluation allows the security department to physically eliminate not only political
adversaries, but entire categories of people who for some reason cannot be integrated into the
organizational network. Moreover, various formal mechanisms were also put in place to inform
managers or supervisors about what employees actually did (or did not do) on a day-to-day basis.
For example, I observed a time-recording system in most departments for employees to indicate,
on a daily basis, the time that they arrived and left work. In some departments I also observed that
the employees had personal activity notebooks where they were expected to note down the
activities they carry out on a daily basis.
7.3.2.2 The Budgeting Process
The second organizational practice that was affected by the new PMS was the budgeting process.
According to the NIOC reports, upstream and downstream processes are the two main business
segments of the NIOC (see chapter 5). A wide range of KPIs is used to meet the NIOC’s strategic
192
priorities by an explicit “causal” business model (strategy map) describing how value drives are
linked to strategy (see figure 7.1). The CFO argued that “the NIOC activities are a set of value
chains. I mean every non-financial performance has a direct effect on financial performance, for
example, getting better employees (e.g., employees’ turnover) can add more value (e.g., retention
bonus) and improve productivity which leads to profitability. The change program links all these
measures” (P3-VR-Aug17). However, my observation indicates that the NIOC’s main aims of
using performance measurement systems are to analyze financial information to allocate its
resources, and also to gain legitimacy in front of its stakeholders, and external investors and
organizations. Although some of these indicators (i.e., financial and non-financial metrics) appear
in the NIOC’s strategic performance dashboard for monitoring the overall performance of the
organization, the BSC is not used as a performance assessment tool for the Ministry of Petroleum
and the government.
With regard to the resource allocation, the NIOC’s budgeting process begins with the accounting
departments and its subsidiary companies upon the request from the headquarters’ financial
department at the Ministry of Petroleum. The headquarters is responsible for issuing guidelines on
the preparation of budgets based on the organization’s policies and priorities. The accounting
department of each petroleum company asks all departments and deputies to submit their
requirements for the following year. When all the required information is received, the accounting
departments of each petroleum company consolidate reports, prepare a budget, and submit it to the
headquarters.
At the headquarters, the annual plan and budget for the Iranian petroleum companies are prepared,
taking into consideration the priorities as well as guidelines from the Ministry of Petroleum.
Overall, the annual plan and the budget of the NIOC and its subsidiary companies are discussed
by the board members and the general assembly. In this meeting, the budget proposals for the
various activities of the organization (such as human resources, training, research, equipment,
development, etc.) are discussed in detail. The main issue with respect to the budget of the NIOC
is ensuring that it complies with the national and government priorities and policies which are
represented in the BSC (e.g., 20 percent of oil and gas export revenue must be deposited into the
National Development Fund (NDF), 3 percent must be allocated to the development of
underprivileged areas, and 14.5 percent shall be returned to oil and gas production facilities for
development and maintenance). Moreover, the figures need to be realistic and the budget proposal
193
is compared with actual results to analyze variances. The CEO argues that “…approximately 62
percent of the Iranian petroleum industry revenues are allocated for the government budget every
year and the remaining percentage is allocated for industry budget” (P1-NT-Aug17). This
evidence shows that a combination of top-down and bottom-up planning and budgeting approaches
are used in practice. Moreover, revenues from the sale of oil, gas, and petrochemicals provide a
large part of the state budget. As a result, the financial performance of the NIOC and how the
organization prepares its own budget are particularly important.
According to the CFO, the headquarters usually cuts the requested budget down mainly through
the operating costs (P3-VR-Aug17). Some of the participants also highlighted that the headquarters
usually did not pay attention to the submitted budget details and amended it without giving notice
to the Iranian petroleum companies. The R&D manager mentioned: “…In budget allocation, the
importance of market research has not yet been institutionalized among the petroleum
authorities…the final budget is therefore not seen by the NIOC’s managers as reflecting reality
and soon will be overtaken by the economic crisis such as inflation, devaluation of the national
currency, and the oil market volatility…” (P22-NT-Oct18). Similarly, the CFO explained the
budgeting process as follows: “…the Ministry of Petroleum views budgeting as a mechanism for
monitoring the financial discipline of the Iranian petroleum companies. The Ministry also uses
budget information to evaluate the [financial] overall performance of the Iranian petroleum
companies…the audited annual financial reports that are submitted by the NIOC to the board
members comprise budget and actual performance information for the preceding two years”. He
further continues, “…previously, the NIOC set targets using budgeting practices to improve its
performance, particularly in financial areas and with regards to cost reduction practices. Now,
they are based on the BSC” (P3-VR-Aug17). According to administrative circulars of the Ministry
of Petroleum, the NIOC’s accounting department is also accountable to external organizations
such as the Audit Organization, the Supreme Audit Court, and the General Inspection Organization
(D10-2013). The external auditors use budgeting information to examine the financial discipline
of the NIOC and its subsidiary companies. According to the business planning manager, the
change program helped them to integrate the accounting systems with the PMS in order to properly
plan and control the departments’ resources and costs. It was especially helpful in the management
of funds allocated to subsidiary companies, as it made it possible to precisely determine the budgets
received and spending based on the departments’ overall performance results and goals. He further
194
continues, “…In the budgeting process, the current year’s sales figures and revenues are
compared to previous years’, along with monitoring the changes in the current year such as
performance results, policies, objectives and also the influence of external factors such as market
volatility in sales and pricing. Therefore, according to the results based on a prediction that the
conditions remain constant, the budget for the following year is prepared and assigned to each
department. It is a way to allocate resources and to achieve specific objectives based on program
goals and measured results” (P2-VR-Aug17).
Overall, although interviewees viewed budgeting as a very important accounting practice in the
change program by linking resources with results, it is also a very complicated procedure because
the NIOC needs to go through many processes before moving into the budget execution phase and
post-execution analyses. According to the marketing manager, “The reasons for this complexity
are the bureaucracy, uncertainty, and volatility of the oil market”. He further added, “One of the
most complex processes in budgeting is predicting sales, which depend on extensive marketing
research techniques, reviewing the company’s past sales trends, competitors’ sales status, the
government’s conservative plans and policies, and political interaction” (P17-VR-Aug18).
Moreover, the entire process involves the collaboration of different bodies throughout the
government. This collaboration is not only necessary for budget preparation, negotiation, and
approval processes but also for the spending approval after the whole budget allocation is finalized.
Furthermore, the external auditors and other audit organizations, who are not involved in the
budgeting process, utilize BSC-related budget information extensively.
Some participants described how using PMS in budgeting had an impact on their accountability in
performing their respective functions efficiently. The CFO argued that “the budgeting process is
the most important accounting practice for accountability…to allocate resources to achieve
strategic objectives based on measured results and to explain why the money is being spent”. He
further continues, “At the annual general meetings of the NIOC’s board of directors with the
general assembly, the audited financial statements along with the related measured results are
examined to allocate resources based on program goals” (P3-VR-Aug17). The BSC measures are
actually considered as a means to discharge accountability to the stakeholders and legitimate the
NIOC’s performance. Similarly, the HR manager mentioned: “The budgeting is an accountability
tool to provide transparent information about spending and the results achieved” (P5-NT-Sep18).
The marketing manager asserted that “the adoption of the change program has shifted our focus
195
of budgeting, away from the management of inputs towards a focus on the result of spending and
the achievement of policy objectives” (P17-VR-Aug18). Furthermore, according to the CEO, “The
new budgeting process helped them to improve their internal decision-making [the allocation of
funds], and to make a stronger case to stakeholders and the government in support of their budget
proposals. It also helped program managers to track performance as well as spending” (P1-NT-
Aug17).
The NIOC’s administrative circulars indicate that the parliament has recently played a significant
role in holding the NIOC accountable for the results of spending, reviewing, and discussing
performance-based budget and financial reports. For example, clause (b) of article 121 of the sixth
five-year development plan indicates that each public organization is obliged to define a
comprehensive system of operational oversight, and submit a quarterly, a six-month and an annual
report based on the budget law approved in February 2015 to the Islamic Consultative Assembly
(parliament). These reports must include the organizational performance and performance-based
budgeting reports.
The above statements express the interviewees’ view that the adoption of the change program has
changed the management approach to the allocation of resources, thereby achieving strategic
objectives based on program goals and measured results, and improving decision-making.
However, the interviewee statements and my observation show that due to the “complicated
procedure” other criteria and principles of resource allocation (other than the ideally performance-
based ones) actually become prominent during this procedure. For example, the marketing
manager argued that the bureaucracy, uncertainty, and volatility of the market are the relevant
criteria that complicated the budgeting process. Furthermore, the NIOC’s budgeted performance
measures are used in order to explain to its stakeholders, investors and the government “why” and
“how” the money is being spent, i.e. to render the NIOC accountable vis-à-vis those groups of
actors.
7.4 Factors Which Shape the Use of PMS
This chapter will now present the views held by interviewees on how political, cultural and
economic factors impacted/shaped the PMS practices in the Iranian petroleum companies,
especially regarding target setting, policy-making, and decision-making processes. The
interviewees’ statements and my observations indicate that Islamic culture as the pre-dominant
approach of Islamic management plays an essential role in nominating people as “good citizens”
196
at the workplace and has shaped the way in which the PMS is used in the NIOC. The majority of
interviewees agreed that, in principle, Islamic management would be compatible with the new
PMS. However, they also argued that there is a contradiction between the main definition of
Islamic management in the literature and the actual practice of Islamic management in the NIOC,
which mainly emphasizes Islamic principles and values rather than skills, justice, equality, and
satisfaction. Furthermore, all the interviewees associated governance with the issue of involvement
of different political bodies such as the government, the general assembly, and other focal power
players in the Iranian petroleum companies’ activities and the way in which the PMS is used by
interfering in target setting, policy-making, and decision-making. The majority of interviewees
also highlighted the uncertainty among managers stemming from both domestic and international
factors such as management mobility, political conflicts, economic exclusion, and market volatility
on performance management practices and decision-making processes.
7.4.1 Islamic Management
The victory of the Islamic revolution in 1979 initiated a fundamental transformation in the Iranian
management context. Managerial issues were seen to be best dealt with using the principles of
Islamic management (Javidan & Carl, 2004). This approach led to massive purges within
managerial ranks and the presence of clerics as the bearers of spiritual values for public and semi-
public organizations. Indeed, the previous approach to Western management concepts (e.g., the
dominance of Western powers in Iranian administrative systems) was replaced with the new
managerial approach based on Islamic principles and values (D11-2014).
Many interviewees explained that Islamic management is the governance of moral and spiritual
values in an organization based on Islamic thought, which also has a symbolic aspect. For example,
the marketing manager mentioned: “…Islamic management has a different meaning in Iranian
public organizations. I mean different in practice…The managers must be involved in religious
activities such as regular praying, attending the Islamic cultural services, meetings and
conferences, fasting, attending masses, etc. Indeed, the Islamic management perspective
emphasizes the way an organization is managing its staff based on Islamic values”. He further
continues, “…Attending religious activities has a positive effect on individual performance
evaluation” (P17-VR-Aug18). Another interesting response was received from the security
manager, who said “the Islamic management approach emphasizes the cultivation of managers’
relationships with Islamic principles and values in public organizations…A kind of pact with the
197
orders of Velayat-e-Faqih…Islamic principles are valuable sources for teaching morality, ethics,
and social behavior. In this approach, the managers are nominated based on Islamic indicators
such as being faithful, revolutionary, trustworthy, loyal, productive, etc.” He further continues,
“…being revolutionary means to obey orders of the supreme leader [Ayatollah Khamenei] and
his concepts such as jihadi management84 and resilience economy85” (P21-NT-Sep18). The
resilience economy is defined as “an inspiring pattern of the Islamic economic system and a good
chance to make an economy epic” by the Supreme Leader of Iran.86 He further interpreted the
policy of resilience economy as a domestic and research-based paradigm, which originates in
revolutionary and Islamic culture (D14-2017). The resilience economy is primarily a way to
circumvent sanctions. This policy is illustrated as an economic roadmap to the country’s long-term
measures, which set the standards for achieving economic goals and solving current issues in this
area. Furthermore, the government’s 20-year vision plan mentions that managers should be
revolutionary, preserve Islamic values and indigenous identity for achieving the country’s
objectives in various areas such as economy, science, and technological knowledge (D11-2014).
Thus, this notion shows an interaction between international politics, domestic politics, and Islamic
management in the context of Iran.
Similarly, the deputy of the center for energy studies underlined that Islamic management is
compatible with PMS. He explained: “The BSC is a strategic planning and management system
that we use to align the day-to-day work that everyone is doing with a strategy based on core
values (what we believe in). Islamic management similarly puts the person at the center of
84 Jihadi management is understood in the Iranian context as a branch of Islamic management. It describes a strategy
inspired by Islamic faith and the belief in the principle of “we can do it”, self-belief and self-confidence for achieving
dignity and progress in various areas. While many Muslims understand jihad to focus on the internal struggle to make
themselves better individuals, jihadi management in the Iranian context also comprises the ideal conduct of citizens
that follow the revolutionary regime, suggesting that the ideal revolutionary fully embraces the idea of clerical rule
put forward by Ayatollah Ruhollah Khomeini and seeks to export it to other countries beyond Iran’s borders. This
concept is thus more complicated and multifaceted than the Western term “jihadism” as a 21st century neologism
found in Western languages to describe Islamist militant movements. [Written from the book Jihadi Management in
Persian see https://bookroom.ir/book/52584] 85 “Resilience economy” denotes ways to circumvent sanctions over a country or region experiencing sanctions. This
can involve increasing resilience by substituting local inputs for imported inputs, the smuggling of goods and an
increase in barter trade. The term was coined in Iran by supreme leader Khamenei, and in the context of the Iranian
petroleum industry it refers e.g., to practices of selling oil in the “gray market” (see e.g.,
attention, with forces for change battling against individual resistances to change such as habits
and practices, and improve the behavior of individuals through a set of values and beliefs in the
organization”. He further added, “…Islamic management means being a revolutionary and
jihadi...A set of values and beliefs intertwined with the scientific managerial structure and
revolutionary as well as Velayati values [having a practical commitment to the principle of
guardianship of the jurist] in dealing with the crisis. In this perspective, the managers’ behavior
is scrutinized based on jihadi traits such as meritocracy, trustworthy, morality, patriotism, loyalty,
piety, commitment, etc., and through people’s attitude [the local affirmation of individuals]. These
are the factors used in evaluating managers’ performance, which have a positive impact on their
performance at the workplace” (P19-NT-Aug18). The local affirmation is an essential part of
selection criteria (Gozinesh) used by security departments of public organizations for evaluating
individuals’ social behavior where they live and at work by conducting surveys. In this evaluation
process, people’s responses, opinions, and attitudes are rated from 0-4 (very weak - very good) to
measure their behavior. For example, to evaluate individuals’ Islamic revolutionary behavior,
factors such as participating in religious rituals and ceremonies (e.g., Friday prayers, visiting the
mosque, etc.), member of the Basij87 or being Basiji, dress code, having voting stamps on the birth
certificate (known as shenasnameh in the context of Iran)88, participating in the Islamic regime’s
political ceremonies (e.g., Al-Quds Day march89, the anniversary of the Islamic revolution, the
demise anniversary of the late founder of the Islamic revolution, and so on) are measured (see
figure 7.10). However, individuals do not receive conventional feedback through the security
performance evaluation system, and the outcome informs the HR department as accepted or
rejected.
87 The Basij or “Mobilisation Resistance Force” (also known as the Niru-ye Moghavemat-e Basij in the context of
Iran) refers to one of the five forces of the Islamic Revolutionary Guard Corps. It is a volunteer military established
in Iran in 1979 by order of Ayatollah Khomeini, originally consisted of civilian volunteers who were urged to fight in
the Iran–Iraq War. Today, Basij serve as an auxiliary force engaged in activities such as internal security, enforcing
state control over society, law enforcement auxiliary, providing social services, organizing public religious
ceremonies, policing morals, and suppression of dissident gatherings. Basij. (2020, November 26). In Wikipedia.
https://en.wikipedia.org/wiki/Basij 88 The birth certificate is one of the identity documents in Iran. Its last page is dedicated to the elections. In Europe,
birth certificates are also important identity documents but have nothing to do with elections. (Online) available at:
https://www.refworld.org/docid/550fd108adb.html [Accessed: November, 2020] 89 Each year on the last Friday of the holy month of Ramadan, Muslims worldwide unite in solidarity against Israel’s
domination and in support of the Palestinians. Quds Day. (2020, February 25). In Wikipedia.
I received another important response from the head of public relations, who highlighted the
symbolic approach of Islamic management. He explained, “...Measuring the people’s involvement
in religious activities does not help to increase productivity and efficiency or even the performance
of the organization. But this is a belief system based on Islamic values and principles which we all
are bound to implement…”, he further continues, “…In my opinion, there is no conflict between
Islamic management and PMS, but there is a contradiction between the interpretation of Islamic
management and the actual practice of Islamic management in our organization. I understand the
main definition of Islamic management to be the management’s ability to utilize both material and
human resources optimally based on Islamic rules (Sharia law)90, in order to achieve
organizational objectives in the short-term or the long-term” (P20-VR-Aug18).
Figure 7.10 A sample of the security department’s evaluation form
In the same way, the HR development officer explained that “Islamic management principles are
compatible with PMS because they emphasize justice in evaluating people... By this I mean equal
opportunities and no discrimination in the workplace”. He further continued, “However, only
90 Sharia law is a religious law forming part of the Islamic tradition. It is derived from the religious precepts of Islam,
particularly the Quran and the Hadith Nabavi (Esposito, 1998).
Source: Redesigned and translated from Persian by the author, 2019
200
some of these Islamic laws are applied, not just in our organization, in all public organizations,
since the basis of the country’s policy is focused only on some of these Islamic laws…There is
more emphasis on religious aspects than on establishing equality and working against
discrimination at the workplace” (P7-VR-Sep18).
In the Quran (the holy book of the Muslims), a lot of verses emphasize testing people in order to
assess their performance (verse 155 of the Surah of Al-Baqarah and the beginning of the Surah of
Al-Ankabut). For example, verses 52 and 53 of Surah of Al-Omran mention that “all the major
and minor deeds of human beings are written line by line in special notebooks and the preciseness
of the letter of performance causes the people to be surprised on the Day of Judgment” (Moghimi
2019, p. 213). Therefore, according to the Quran, people should be evaluated precisely, accurately,
and equitably based on evidence without any personal orientation. Furthermore, verses seven and
eight of the Surah of Al-Zalzal also mention that in order to assess the peoples’ performance and
give feedback about the assessment results, we should first emphasize the individuals’ strong
points and then the negative ones. The verses also say that people are worthy of taking the material
and spiritual reward because of their performance. According to Moghimi’s (2019) description of
Islamic management, Islamic verses and narration emphasize the importance of skill, trust, and
satisfaction in performing work and in the process of customer orientation (Moghimi, 2019).
Therefore, Islamic management is about the relationship between science and religion,
implementing the aspects of religious science (also known as theistic science91) based on the main
elements of scientific management (Moghimi, 2019). In Moghimi’s opinion, Islamic management
is not limited to one or more organizations but emphasizes the management of Islamic society by
intervention in politics, economics, and culture, so as to govern the social life of the people.
According to this description, Islamic management based on Islamic Sharia law is compatible with
PMS. However, the NIOC has implemented only part of these divine rules (i.e., relying on the
symbolic aspects of Islam such as prayer, fasting, worship, etc., without paying attention to its
principles, beliefs, and practices in order to bring justice to the organization) in their framework
of Islamic management.
91 Religious science or theistic science is a science that deals with the topics of empirical science and uses religion in
its core studies. It is also referred to as theistic realism, which is the pseudoscientific proposal that the central scientific
method of requiring testability, known as methodological naturalism, should be replaced by a philosophy of science
that allows occasional supernatural explanations, which are inherently untestable (Moghimi, 2019)
201
Furthermore, during my participation in the company’s organizational routines in August 2018, I
realized that there is an Islamic cultural center92 in the Ministry of Petroleum with many offices
aiming to promote Islamic beliefs and values in the Iranian petroleum companies. These offices
encourage staff to participate in the religious activities of the organizations. Additionally, the
performance of the Islamic cultural center and its offices are evaluated by external clerical
institutions, which are controlled by the Supreme Leader of Iran.93 According to their annual
performance reports, the performance of the Islamic cultural center and its offices is assessed based
on the number of meetings, the number of religious ceremonies, the number of religious
workshops, seminars, and conferences, the amount of integration into the Quranic activities, the
number and names of participants, and the length of participation in these activities. The measured
results are linked to the Islamic principle indicators, which are used as one of the fundamental
metrics in nominating a good citizen in the NIOC. Moreover, the results of these reports are used
when the security department assesses individuals, especially for job mobility, relocation,
promotion, and even when individuals want to move to another public organization. Furthermore,
my observation indicates that the majority of people are constrained to behaving hypocritically
(the conscious use of a mask) in order to gain legitimacy at the workplace (e.g., good performance
in the public organizations) and to obtain the social benefit, even if their behavior leads to states
of dissonance in their social life. According to the head of public relations, “As we are living in
Islamic country, respecting the Islamic principles and belief system is a value. Therefore, many
people may show themselves religious in order to gain legitimacy in society, by which I mean
enjoying citizenship rights and economic benefits that may result from their religious appearance.
It so happens, that even those people who have no faith in religious matters stand in
congregational prayer (e.g., Friday-prayer) to appear religious and thus gain legitimacy at the
workplace” (P20-VR-Aug18). This interviewee’s statement and my observation indicate that
although people are participating in religious activities or show allegiance to the organizational
culture, as is required from good citizens, this does not mean that everyone is genuinely interested
92 Cultural council and prayer headquarters of the Ministry of Petroleum. (Online) available at:
http://namaz.mop.ir/portal/home/?148820 [Accessed: March, 2020] 93 Islamic cultural center of the Ministry of Petroleum. The annual performance report. Translated from Persian by
the author. (Online) available at: http://www.mop.ir/portal/home/?generaltext/148820/148873/149035 [Accessed:
situation before the sanctions, our challenges in production, development, and export will
continue” (P14-NT-Feb18). Similarly, the CFO said: “…The international sanctions have affected
our financial performance as the average profitability decreased. We cannot make directs
transactions with international banks. Our revenues have reduced which caused a delay in paying
salaries. This situation has a direct impact on staff performance as well”. He further continues,
“… Normally, whenever you sell your products in the market you receive money in payment for
sold products into your bank account, however, this is not possible during financial sanctions…
these conditions have affected our productivity, efficiency, and competitiveness…these are the
challenging issues which have impacted our organizational performance” (P3-VR-Aug17).
Oil as a strategic commodity plays a crucial role in Iran’s economy. It also has the highest degree
of cohesion (i.e., balancing the global market price) and solidarity with the outside world of Iran’s
economy. Therefore, any business interruption in production, development, and export of this
industry will directly affect Iran’s economy. The main issue in this regard is the increasing inflation
and instability of the economy, which created serious challenges for the Iranian petroleum
companies. The CFO said: “…We prepared the annual budget a year ago and the prices have
increased by at least 50% in the current year”. He further continued, “This situation has disrupted
all our calculations in budgeting” (P3-VR-Aug17). Similarly, the R&D manager argued that the
budget had reduced in comparison with the previous year due to the shortage of the organization’s
income. He further continued: “…The economic sanctions have influenced business, investment,
development of oil and gas fields, and employment of Iranian petroleum industry” (P22-NT-
Oct18). The head of controls on petroleum export explained: “...Although the international
sanctions affected oil export revenues, we have tried to adapt to the sanctions through various
means, including using alternative payment mechanisms such as barter agreements98 and
changing our trading partners”. He further continued: “…The petroleum authorities have tried to
keep a certain level of performance at any costs, even selling the crude oil at as much as a 10%
discount from its official market price or selling in the black market” (P16-NT-Aug18). Revenue
from oil exports is an essential component of government revenue in Iran. The project manager
argued that “the enactment of recent US sanctions have downgraded the forecast for developing
oil and gas fields and initiated a deterioration in the Iranian petroleum industry’s expected
performance” (P14-NT-Feb18). This statement shows that although the Iranian petroleum industry
98 A barter agreement is a contract in which goods or services are exchanged in lieu of cash (see Răvaş, 2011).
208
had previously had to cope with sanctions for a long time and this situation was not completely
new to them, the interviewees talked about it as if it were a novel and “abnormal” situation.
According to the International Monetary Fund (IMF) in 2018, economists predicted poorer
performance on key macroeconomic indicators, such as GDP, inflation, and unemployment,
between 2019 and 2020 than previously expected. Additionally, Iran was predicted to continue to
face declining oil output, plunging exports, surging prices, and a sharply weaker national currency
after 2018.99 Furthermore, according to IHS Global Insight, the imposed international sanctions
that targeted the Iranian petroleum industry were likely to push Iran’s economy into recession.100
These reports from the IMF and the IHS show how Iran’s economy is tied to the revenues of the
petroleum industry, and how any poor performance of this industry has a direct impact on the
economy.
The marketing manager highlighted that the economic sanctions increased concerns about the
future of the economy: “…Although the majority of the petroleum authorities rhetorically refused
the effect of economic sanctions on the Iranian petroleum industry [he is referring to the Ministry
of Petroleum’s deputy of international affairs’ interview with Mashreq newspaper in July 2013]101,
the sanctions created an uncertain situation making it difficult to set strategic goals and make
strategic decisions…We are using various metrics to measure sales rate, customer satisfaction,
competitiveness, credibility, effectiveness, etc. So, we feel the impact of sanctions much better than
them”. He further continued: “The exchange rate crisis stems from financial constraints and rising
transaction costs, and investment risk as well as lack of technology, shortage of oil export
revenues, and limitation of foreign trade...all in all, [these factors] are primarily driven by the
sanctions on Iran’s economy” (P17-VR-Aug18). Similarly, the head of strategic planning and
energy management explained: “There is a certain complexity and uncertainty due to the current
situation [2018]…at the moment, if you ask people almost nobody knows what will happen in the
near future, even tomorrow…how we can plan or manage the performance of the organization as
a whole? Let alone the performance of individuals in the organization?” (P18-NT-Aug18). The
99 International Monetary Fund. Islamic Republic of Iran: Selected Issues; IMF Country Report No. 18/94. (Online)
available at: https://www.imf.org/en/Publications/CR/Issues/2018/03/29/Islamic-Republic-of-Iran-Selected-Issues-
45768 [Accessed: March, 2019] 100 IHS Global Insight. Low oil prices, Iran and Middle East stability. (Online) available at:
https://ihsmarkit.com/research-analysis/low-oil-prices-iran-and-middle-east-stability.html [Accessed: May, 2019] 101 Mashreq news agency. How does Iran bypass the “crippling” Western sanctions?. Translated from Persian by
author. (online) available at: https://www.mashreghnews.ir/news/216642 [Accessed: June, 2019]
2019; Kamla & Haque, 2019; Mihret et al., 2020; Napier, 2009; Napier & Haniffa, 2011), there is
a lack of in-depth studies on the role of Islam and anti-imperialist beliefs, movements, and
discourses on the adoption of Western management technology in the context of Islamic societies.
Postcolonial studies and theory, in this regard, by taking a meaningful position against imperialism
and Eurocentrism (Bahri, 2001), contribute a useful basis for the extension of the critical
accounting school’s debates (see Kamla, 2007; Omar, 2012), to accommodate insights from a non-
Western perspective.
The long history of contact between Islam and the West has given Muslims their own perception
of the colonial experience, which needs to be explored explicitly within the post-colonial
discourse. Islam is not just a religion, it is a set of norms and values that govern various aspects of
behavior, a cultural system, a way of life, and a civilization rather than just a faith (Kamla, 2007;
Maznil, 1997). It has a vital effect on economic and political organizations as well as human
relationships in Muslim societies (Metcalfe, 2007). However, there is tension between Islam and
Western philosophies in all aspects of social life. According to Ahmed (2004), the clash between
Islam and the West “is more than a clash of cultures, more than a confrontation of races: it is a
straight fight between two approaches to the world, two opposed philosophies. […] One is based
in secular materialism, the other in faith; one has rejected belief altogether, the other has placed
it at the center of its world-view. It is, therefore, not simply between Islam and the West” (p. 264).
The Western colonial powers followed a similar “one and only truth” way of thinking, which
contributed to the justification of their colonialism’s superiority over the others (Majed 2012, p.
57). The colonial powers are still influencing and controlling the non-Western societies indirectly
in various ways, especially by the practice of management tools and techniques. Researchers have
documented the centrality of accounting language and technologies in the discourses and practices
218
of imperialism and colonialism by showing accounting as a technology that helped enable and
legitimize colonial conquest (see Annisette & Neu 2004; Davie 2000, 2005a, 2005b; Gibson 2000;
Kamla, 2007; Neu 1999, 2000a, 2000b; Neu & Graham, 2006). Similarly, Alatas (2003, p. 602)
illustrates how “the contemporary social science powers” (including the United States, Great
Britain, and France) have the ability to influence and control the Third World. Muslim intellectuals
suggest that Islamic societies should utilize the Islamic perspective on management as an
alternative to Western management theories in managing organizations (Moghimi, 2019; Sulaiman
et al., 2014), while still benefiting from the transfer of relevant Western management technologies
and techniques (Branine & Pollard, 2014). In the context of Islam, management as a function is a
process of coordinating activities according to a set of Islamic principles derived from the Holy
Quran (which contains the words of God) and the Hadith (which contains words of the Prophet
Mohammed). Islamic management is, therefore, described by some authors as a moral, spiritual,
and physical function that is not only driven by material objectives in contrast to Western
management thinking, in which individualistic, technical and material objectives are often the most
important (Ali, 2005; 2010; Moghimi, 2019).
My findings reveal that the formation of ideology and practice of Islamic management principles
in the Iranian public management context is proposed as an alternative discourse102 to Western
management approaches and imperialism in dealing with managerial issues. Nevertheless, the way
Islamic management is practiced in the Iranian public management context is far from what they
understand as “proper” Islamic management ideals. More precisely, the Islamic management
practices in Iranian public organizations such as the NIOC do not merely apply Islamic principles
derived from the Quran and the Hadith (e.g., presented by Moghimi, 2019) to the use of PMS, but
rather they are shaped by the specific historical, political, and economic development of Iran’s
society. This finding is in line with Prakash’s (1994) research, who discusses the inconsistency of
Western management thought with non-Western societies and is also in line with Branine and
Pollard (2010), who argue that heritage of colonization (as part of historical and cultural influence),
ideological differences, and political conflict with the West are factors that might lead to the
formation and practice of Islamic management in Islamic countries.
102 It refers to Islamic management principles as a valuable alternative to neoliberal, capitalist management
approaches. In this perspective, dimensions of Islam religion such as ethics, the spirituality, and the sacred displace
with the relentless pursuit of efficiency and profit maximization (see Kamla, 2015).
219
As I explained previously, the value of being religious is rooted in the historical and cultural
context of Iran, and has remained the basis of political authority and legitimacy in Iran’s society.
The rise and popularity of the Islamic perspective in managing Iran’s society became a reality by
articulating an alternative discourse to Western-centric projects (imperialism and Eurocentrism)
of modernization and domination. This happened in a way that enabled Iran to accommodate
modernity to its own historical and cultural experiences and gain control over resources (see
chapter 6). In other words, the Islamic perspective became unfolded as a dominant value and has
represented an Islamic nationalist ideological response to colonialist thought in managing society
due to the historical influence and control of the Western powers and also the anti-imperialism
perspective of the Islamic regime. This ideology was also enshrined in the state constitutions after
the victory of the Islamic revolution of 1979. Mirsepassi (2000) refers to this ideology as “local”
politics based on local “identities” in the “Third World” - the invention of resistance against
Western power domination (p. 11). The political perspective of religion (Islam) has shifted,
emphasizing the entanglement of religion and government as a dominant value in managing the
country, and it has been transported into the organizational rules and regulations by measuring and
managing staff’s performance based on Islamic principles and values in the public organizations
(see chapter 7). Therefore, while the central political and business influence in the so-called
“Middle East” came from the US and the UK, the principal social and cultural influence remained
to be Islam (Samuels & Oliga, 1982). However, this cultural confrontation has led to a conflict
between local values and to some extent also locally promoted “modern” management practices.
The Iranian regime, by emphasizing that the Western rulers are unreliable and seek to invade the
country’s culture, economy, and politics, has created the security state and extended these
exceptional conditions103 in the country by continuing its tensions with the West in order to justify
its Islamic nationalist ideology and legitimize its political actions. Agamben (2005, p. 14) indicates
that “the declaration of the state of exception has gradually been replaced by an unprecedented
generalization of the paradigm of security as the normal technique of government”. Indeed,
concepts such as jihadi management and resilience economy, which are interpreted by the Iranian
supreme leader as an integral part of Islamic management principles, are examples of possessing
103 This refers to the work of Agamben (2005), who stressed the concept of a “state of exception” as a specific situation
in which juridical order is suspended due to an emergency or a crisis threatening the state [or organization]. Under
such conditions, the sovereign, i.e., the executive power, prevails over the others, and the primary laws and norms can
be violated by the state in the name of the public good while facing the crisis (see also Aradau & Van Munster, 2009).
220
the authority to suspend the modern management and declare a state of exception by the dominance
of a specific value system over other values in society, due to the crisis caused by political tensions
with the West (e.g., ideological differences, economic sanctions, etc.). Moreover, the Islamic
regime, by emphasizing the concept of “Esteghlal” and indigenization processes (such as
localization of Western technologies) on one hand, and Iran’s slight ideological shift to
accommodate transnational capitalism post-1989 on the other hand, has engendered a paradoxical
neoliberal and anti-Western ideology (see Mihret et al., 2020). However, this kind of neoliberal
strategy is not unique to the Islamic regime of Iran, rather other regimes such as authoritarian,
democratic, or communist also have alternative views on how to align with neoliberalism. For
example, Ong (2006) indicates how the East and the Southeast Asian states have selectively made
neoliberal discourse to their typical practices of governing to position themselves in alignment
with the global economy. Accordingly, such value systems require a kind of management control
system that is compatible with the state’s ideology. For instance, in the context of Iran, this is a
management control system with the Iranian-Islamic interface in order to support Iran’s Islamic
nationalist ideology, namely Velayat-e Faqih, and strengthen the security over public
organizations. This social transformation has formed Iranian identity and the Iranian culture to
become the Iranian-Islamic identity and culture (Moshe-hay et al., 2015), which was produced by
the clerical leader (i.e., Ayatollah Khomeini) and aimed to save Iranian Muslim society from the
West’s influence and ‘imperialist domination’ (Rakel, 2009). According to Mohammadpur,
Karimi and Mahmoodi (2014), Iranian identity construction revolves around a relationship
between Islamism, Persianism (pre-Islamic culture), and historical relations with the West
(Western hegemony). As a result, ensuring Iran’s esteghlal was one of the essential policy
priorities throughout the post-revolution hegemony under Velayat-e faqih (Vakil, 2011). The
paradigm shift thus became a precondition for implementing Islamic management in public
organizations.
While Iranian authorities openly emphasize Islamic management principles which are in
opposition to Western influences and colonialist thought, Western management technologies and
approaches are not completely disregarded in the face of the need for international cooperation,
investment, and globalization. For example, the cooperation of the US based management
consulting company (i.e., Bain & Company) in the structural reform of the Iranian petroleum
industry, as well as the implementation of Western management tools (i.e., PMS), were aimed at
221
linking organization strategies to day-to-day actions including the evaluation of the overall
performance and connecting performance results with rewards in order to improve productivity
and increase profitability. These decisions confirm Iran’s slight ideological shift to accommodate
institutional norms of transnational capitalism along with Islamic nationalist ideology in the
globalization era, whereby ideology-based consent (e.g., consent between neoliberal policy and
the nation state ideology) is used as a primary means of power without completely disregarding
coercive mechanisms (Mihret et al., 2020). Accordingly, although the colonized people celebrated
their independence through the process of nationalization, the neo-colonialism in the guise of
modernization and development in the age of globalization has continued to linger in a new style
of Western imperialism (Bahri, 2001).
This evidence indicates the ambivalent Iranian elites’ approach to the West after the revolution of
1979. One approach emphasizes anti-Western imperialism by claiming that the West intended to
invade the country’s culture, economy, and politics. Consequently, all facts of social life need to
be Islamized, which means continuing to resist Western notions of international order, politics,
and culture. Another approach emphasizes Western modernization, development, and
technological superiority, which should comply with the local culture, precisely the Islamic
principles, and values. The Roman god Janus can be used as a metaphor to explain this ambivalent
approach in Iranian petroleum companies: Janus is the god of gates and bridges and he is depicted
as having two faces: one is turned to look at the past and the east, the other is turned to look at the
future and the west. Thus, Janus symbolizes the interface between two contradictory worlds
(Blanchet, 2011). This metaphor enables me to focus on the encounter between Western and local
culture in the practice of PMS by mimicry of and resistance to it, by emphasizing local culture and
social values in Iranian petroleum companies. The encounter of local culture and Western
management approaches in these paradoxical situations generates a hybrid variant. I use these
paradoxes to produce a more comprehensive theory of post-colonialism between the East (esp.
Islamic societies) and the West in the practices of PMS.
My findings reveal that the implementation of PMS is characterized by mimicry of Western
management approaches, which is justified by the ideology of modernization and development.
On the one hand, this mimicry contributes to masking the difference between Islamic nationalist
ideology and Western management approaches. On the other hand, it manifests differences
between these approaches in the practice of PMS in the Iranian petroleum industry. Documents
222
such as the fifth and sixth development plans (2010-2020) of the country, which call for the use of
comprehensive performance measurement and management systems, as well as the NIOC’s recent
strategic change initiative that comprises the introduction of PMS such as the BSC, are illustrative
of attempts to integrate Islamic nationalist ideology with Western management approaches (see
chapter 7). Such integration in the postcolonial discourse is defined as “hybridity” by Homi
Bhabha (1994). Hybridity is a condition that most substantively challenges the ideological validity
of colonialism (Bhabha, 1994, p. 113). By drawing on the straddling of both cultures
(transcultural), the postcolonial discourse provides “the consequent ability to negotiate the
difference” (Hoogvelt 1997, p. 158) and mediate affinity and difference within a dynamic of
exchange and inclusion (Wolf, 2000). For example, my findings reveal that the practice of PMS is
illustrative of attempts to integrate Islamic nationalist ideology with Western management
approaches based on the negotiation between the HR department and the security (herasat)
department concerning how to evaluate individuals’ performance in the Iranian petroleum
industry.
In the postcolonial study of management, hybridity is a common occurrence when Western
management technology is confronted with local realities (Alcadipani & Rosa, 2011; Frenkel,
2005). In particular, Bhabha’s notion of ambivalence highlights the contradictory nature of
mimicry and the development of the hybridized ‘in-between’ spaces as discursive constructions of
identities and cultures. In this respect, the Iranian public managers’ attitude in nominating people
as “good citizens” is defined as a “Third Space” which is formed by the cultural encounters
between the Islamic nationalist ideology and Western management approaches. For instance, the
case of the NIOC reveals both the seeming domination of Western management approaches and
the resistance of Iranian public managers to Western management approaches in the practice of
PMS. The domination of Western performance management practices is visible in official
documents and statements that indicate that people’s performance is evaluated based on skills,
experiences, and competencies. Resistance to Western approaches is visible when people’s
performance is evaluated based on Islamic principles and values to control and secure the Iranian
petroleum companies from foreign influence. Indeed, the confrontation of two cultures with
different ideologies that are in competing with each other has created a third space in which the
individuals’ performance is evaluated based on two evaluation systems, which are influential in
nominating good citizens (see table 8.1).
223
My findings extend a claim that has been formulated in post-colonial literature, which holds that
when the imposition of Western management practices in developing countries is combined with
an indigenous ‘local ideology’, a hybrid version may be produced (Frenkel, 2008; Nkomo, 2011).
Table 8.1 The ambivalence of the colonial process in the practice of PMS
Colonial Process Evaluators Mimicry Hybridity Colonial relation
PMS
ambivalence - Performance
Evaluation Systems
HR
Department
Western
modernity and
development
Western
management
approaches
Domination
Security
Department
(herasat)
Islamic nationalist
ideology
Islamic
management
approach as an
alternative to the
Western
neocolonialism
Resistance
Source: Developed by the author, 2020
Table 8.1 shows an ambivalent version of hybridity in the practices of PMS as a compromise
between the dominating force and resistance to it. For example, the case of the NIOC shows that
although the implementation of the PMS in the Iranian petroleum industry displays the integration
of the Western management approaches with Islamic management, the way in which they apply
Islamic management principles has led to the practice of two parallel performance evaluation
systems that are in conflict (see chapter 7, section 7.3.2.1). The way the security department is
using a performance management system to evaluate people’s performance is similar to the
boundary control systems proposed by Simons (1995), who indicates how managers set limits on
people’s behaviors by delineating the acceptable domain of activity at the workplace. In this
system, individuals’ performance is evaluated based on the set of values and norms as a
prerequisite of organizational culture that indicates what people in public organizations should or
should not do without providing conventional feedback. Meanwhile, the way the HR department
is using a performance management system is similar to the interactive control systems proposed
by Simons (1995), who explains how managers stimulate organizational learning by providing
conventional feedback and linking people’s performance with organization strategies. Indeed,
although the HR and security systems are constantly exchanging information with each other,
neither of them accepts each other’s evaluation system alone. This refers to the interplay between
justifications and compromises in an organizational setting (Boltanski & Thévenot 2006, 1991).
224
For example, while the HR department justifies the evaluation of individuals’ performance based
on their skills, experiences, and meritocracy, the security department justifies the evaluation of
individuals’ performance based on Islamic nationalist values. This dispute includes distinct
culturally-rooted grammars of legitimate behavior; one insists on the Islamic nationalist ideology
and the other on mimicry of Western management thought. However, such imitation produces a
new cultural identity, the postcolonial hybrid as a compromise between two cultures that poses as
the same (though not quite) (see Bhabha, 1994). This is a space intrinsically critical of essentialist
positions of identity and conceptualization of original culture as Bhabha (1990, p. 112) argues that
“for me, the importance of hybridity is not to be able to trace two original moments from which
the third emerges, rather hybridity to me is the ‘Third Space’, which enables other positions to
emerge [such as] new structures of authority, new political initiatives…”. It refers to the interstices
between colliding cultures, a liminal space “which gives rise to something different, something
new and unrecognizable, a new area of negotiation of meaning and representation” (Rutherford
1990, p. 211). The hybrid identity is placed within this Third Space, as ‘lubricant’ (Papastergiadis,
1997) in the combination of cultures. Indeed, this identity construction takes place in an alternative
ambivalent site, a Third Space, where there is ongoing [re]vision, negotiation, and if necessary,
renewal of those cultural practices, norms, values and identities inscribed and enunciated through
the production of bicultural ‘meaning and representation’ (Bhabha, 1994). Cultural identity is
constructed with varied and often contradictory systems of meaning, which “blurs categorical
distinctions and creates continuity and a permanent ambivalence” (Frenkel & Shenhav 2006, p.
858). Accordingly, the integration of Western management approaches with Islamic nationalist
ideology has generated a Third Space in PMS practices in which people are nominated as “good
citizens” in public organizations. In the Third Space, people’s performance is evaluated based on
the hybridization of their religious values, the industrial values (skills, experiences, meritocracy,
and efficiency), and the aspects of nationalist values (such as being Iranian, patriotism, and
independence from Western and Eastern powers) in Iranian petroleum companies. Shared by the
members of a community, social norms are enforced through “social control” and not simply
institutional control (Thévenot, 2019, p. 2). Soroush (2000) argues for individual construction of
cultural identity by adopting valuable aspects of each culture (i.e., nationalist traditions, Islamic
proliferation, and Western hegemony) in the context of Iran while rejecting their drawbacks (p.
169).
225
The evidence shows the set of these values used in evaluating people’s performance for
recruitment, mobility, job promotion, compensation, and rewards in Iranian public organizations.
It also represents the inevitable contradictions and overlaps between cultural and social values that
are negotiated through rules and regulations by actors in a network of relations (Callon, 1999), and
attempts to legitimately justify their positions. Therefore, the Third Space as a new identity
construction is identified by ambiguity and contradictions, and the ambivalence of the colonial
encounter.
8.3 Orders of Worth and the Role of Performance Management System
In the book On Justification: Economies of Worth, Boltanski and Thévenot (2006) also highlight
an ambivalent or contradictory situation by developing the system of evaluation in analyzing the
complex processes involved in justification, critique, and attempts for a better understanding of
the co-existence of multiple orders competing or conflicting within society. This perspective
includes the significant competencies that human beings bring to such a setting and the role that
objects and a diversity of evaluative principles play in organizing stable agreements in a social
world with unlimited potential for conflict (Annisette, Vesty, & Amslem, 2017).
My findings reveal the ambivalent practice of PMS in Iranian petroleum companies. Instead of
implementing a single principle of individuals’ performance evaluation as the only adequate
framework in the Iranian petroleum companies, it is legitimate for actors to articulate alternative
conceptions of what is valuable. This means that multiple value regimes co-exist within an
organization. For example, the Iranian petroleum companies practice two performance evaluation
systems in parallel due to the hybridization of Islamic nationalist ideology with Western
management approaches for assessing staff’s performance at the workplace. As depicted in chapter
7, the HR department uses a performance evaluation system based on an industrial world of worth,
within which the single standard by which worth is assigned is efficiency. An industrial world of
worth constructed on this basis is populated by experts and professionals (Boltanski & Thévenot,
1999), who have the necessary skills, experiences, and competencies (see chapter 7, table 7.1) to
deploy methods, tools, and graphs in pursuit of the common good. The relative worthiness of being
in this world is determined by conducting a ‘test’ (Boltanski & Thévenot 2006, 1999) that measures
job performance based on meritocracy, efficiency, and productivity of both the employee and the
employer at the workplace in relation to certain pre-established criteria and organizational
objectives. By contrast, the security department uses a performance evaluation system based on a
226
religious world of worth, in which worthiness is linked to being religious. Consequently, the
worthiness of being in this world is determined by conducting a ‘test’ that measures staff’s
performance based on Islamic principles and values (such as being a member of the Basij,
sincerity, dedication, cooperation, good conduct, gratitude, responsibility, trustworthiness, loyalty,
active participation in religious events (e.g., praying, fasting, etc.), belief in the principles of
Velayat-e Faqih and Islam, obedience to the leader’s [supreme] orders and an allegiance to the
Islamic regime (i.e., attendance of state marches, support of the state’s ideology and political
attitude)). As is confirmed by Simons’ (1994) study that various levers of control drive
organization strategies based on conducting different tests. Accordingly, each test is suitable for
particular orders of worth. For instance, the HR department uses an interactive control test to alter
the patterns by ranking people based on their skills and competencies in the industrial order of
worth. Meanwhile, the security department uses a boundary control test to frame prerequisite
behavior in public organizations by rating people based on Islamic principles and values
(comparing people to an absolute) and comparing people with each other or to relative dimensions
in the religious order of worth (absolute order of worth).
However, my evidence shows that the religious value is used in terms of symbolic Islamic acts,
disregarding other aspects of Islamic principles such as equality, fairness, and consultation. This
is illustrative of using PMS as controlling tools to pursue political goals and socio-cultural
approaches within public organizations. According to Ali (2005), Islamic principles to the world
of work are not standardized, and the country of origin has a significant effect on their
implementation and interpretation. Hanafi (1981) also highlights that in Islamic societies, the
religious structures have reflected the political structures and helped the elites in expanding control
over people. Nevertheless, such practices are not necessarily specific to Islamic societies. For
instance, Williams and Demerath (1991) by investigating the historical roles of religion in the US,
argue that American political rhetoric is laced with a religious-based moralism that interprets
citizens’ roles in social institutions and the nation’s place in the world in terms of a sacred or at
least a moral order. They also explain that there is an ethos in American political culture in which
being a good citizen includes being religious, although the particular religion is less important
(William & Demerath, 1991).
Furthermore, religious values and some elements of Iranian nationalist worth (e.g., anti-
imperialism discourse) are bound together in the context of Iran by the perceived universalism of
227
the 1979 revolution, as these values intersect and are never entirely separated from one another.
However, each also has its idealized ‘pure’ form (Akbarzadeh & Barry, 2016), and they are in
constant competition, tension and overlapping with each other (Hunter, 2014). For example, the
slogan for resilience economy and jihadi management refers to the integration of religious values
and nationalist values, which contains an anti-imperialist perspective that is also evoked when
nominating people as good citizens in the course of using performance appraisals in Iranian
petroleum companies. Such a perspective is similar to civic assimilation policies (Gordon, 1964),
in which the requirement for citizenship of external people in a host culture is based on accepting
the dominant culture. It can also be framed in terms of civic worth (Boltanski & Thévenot, 2006),
which evaluates its object according to its conduciveness to the good citizenry, to universalism,
and the common good (Dromi & Illouz, 2010). What stands out in the context of my study,
however, is the open and explicit way in which citizenship is assessed by an organizational
department which uses quantifiable data to assess an individual’s performance in terms of “good
citizenship”.
Subsequently, the term good citizen is referred to as a civic value, which is viewed in the
organization as a combination of controversial values such as the religious values, nationalist
values, and industrial values. It can be argued that in order to be a good citizen, the people need to
be religious and nationalist (accepted by herasat), worthy according to all the religious and
nationalist orders of worth, which are intertwined with the industrial world of worth through the
hybridization process. The ideology of Islamic nationalists has provided a political ability for the
government as head of public organizations to negotiate between these values and, where
necessary, emphasize one over the others (Akbarzadeh & Barry, 2016).
According to Boltanski and Thévenot (1999, 2006), such interaction reflects conflict and
distinction between different notions of what is right, which they describe as a kind of dispute in
which the protagonists each mobilize their sense of justice. The conflict arises in the situation
involving incompatible principles deriving from different orders of worth (such as the value of
being religious, the value of being nationalist, and the value of being experts or professionals),
where organizations are responding to hybridization of two cultures. In this regard, a disagreement
over organizing principles is discernible, and may develop into disputatious moves in regards to
which organizing principle ought to apply. Moments of controversy or dispute such as these are
defined by Boltanski and Thévenot (2006) as “situations”, key moments for understanding the
228
micro-processes, rationales, and practices that come into play when human actors seek to reach an
agreement to settle contradictions by means of justification (see also Jagd, 2007). Accordingly,
Boltanski and Thévenot (2006) introduce the concept of the reality of test or ‘test of worth’ based
on the agreed principle of worth, by enabling the judgment process to reach a justifiable agreement
(convention). In this case, competing or conflicting value regimes are “put to the test” in the
organization, as each constitutes a systematic construction that rests on a commonly valued higher
principle (Thévenot, 2019). It allows the evaluation of people’s actions based on multiple value
regimes in the organizational setting. By qualifying individuals concerning their principles of
worth, a reality test serves to order or rank different people and objects according to their worth
and to minimize inaccuracy, ambiguity, and improve security in cooperation (Dequech, 2008). I
argue that the PMS is enacted as the test of worth by evaluating people’s performance based on
multiple value regimes that co-exist within the organizations and ranking different people
according to their worth. Furthermore, by converting the qualitative values (e.g., Islamic principles
and values) into quantifiable measures, the PMS has created the power of qualification, in which
a new order of worth (including factors such as religious values) becomes visible. Thus, the staff
is empowered to act and be evaluated in different worlds of worth within day-to-day action
(Cloutier et al., 2017). This finding is in line with Cloutier et al. (2017) as well as Mailhot and
Langley (2017), who show how individuals can navigate through pluralist environments, directing
attention to interpretation, justification, decisions, and potential compromise by the practice of
accounting systems. Accordingly, organizational actors need to justify their positions by
emphasizing higher-order principles that enabled them to convince others of what they think is the
appropriate belief or action to maintain the legitimacy in the organization in a given situation
(Mailhot & Langley, 2017; Stark, 2009). For example, my findings reveal that, in order to be
nominated as good citizens, the individuals should justify their positions with religious value along
with the coexistence of other value regimes such as nationalist values, domestic values, industrial
values, and market values in the Iranian petroleum companies. However, people can justify their
positions through hypocritical behavior in managing conflicts and maintaining legitimacy (see
Brunsson, 1989). Thévenot (2006a) explains:“[The actor] is confronted by a plurality of models,
not ones defined by social theorists, but by those that laypersons use to apprehend events in the
course of every day action, in order to understand what others do, and adapt their own behavior.
For [the actor], plurality is not a classification issue, but is something that is important in her
229
relation to the world. Her personal integrity as well as her integration into a community will
depend on her capacity to cope with this diversity” (p. 6). In the case of the NIOC, the evidence
shows that organizational actors needed to adjust their positions between the multiple orders of
worth in day-to-day actions to maintain their legitimacy in the organization. As argued by
Boltanski and Thévenot (2006, p. 219), “individuals are in no way attached to orders of worth,
they can be acquainted with more than one world,” and have the ability to adjust their behavior to
the situation they face. However, they highlight that a situation can be fragile when privileging
any of the orders of worth that are in conflict. They suggest that one way of solidifying a
compromise in such an instance is “to place objects composed of elements stemming from different
worlds at the service of the common good and endow them with their own identity in such a way
that their form will no longer be recognizable if one of the disparate elements of which they are
formed is removed” (Boltanski & Thévenot, 2006, p. 283). In this regard, the compromise is
materialized in devices, objects, or tools that turn the conflict or tension into a solidified
compromise (Smith et al., 2017). Accordingly, I argue that the PMS can act as a composite object
to solidify a compromise by hybridizing multiple value regimes which co-exist within the Iranian
petroleum companies, helping actors to measure values (such as religious values, nationalist
values, and industrial values), and mobilizing the plurality of rationalities in the organization.
However, my findings reveal that the way in which the Iranian petroleum companies apply Islamic
management principles has led to the use of two parallel performance evaluation systems that are
promoting various values. Nonetheless, the practice of PMS has helped “hold things together” in
compromise arrangements, serving as a stabilizing device and thus facilitating coordination (see
Annisette et al., 2017). For example, this influences how competing values such as religious values
and industrial values are afforded in individual performance evaluation, and by so doing, become
influential in decision making in the Iranian petroleum companies. This argument is in line with
Smith and Lewis (2011), who argue that management control systems (MCS) as composite objects
can help unpack multiple tests of worth that are inscribed within formal processes in the
organization. Such discursive development has provided a basis for changing the practice of
accounting tools through the roles that they can play in organizations and society (Burchell et al.,
1980).
Furthermore, my findings highlight an interconnection between religious values, nationalist values
and industrial values with other values such as market values and domestic values in the Iranian
230
petroleum companies. Market values are argued to be in need of religious values, nationalist
values, and industrial values because they would help in achieving a higher worth in the market
orders. In the market order, the higher common principle is competition and active market
relationships, human dignity is built on consumption and self-interest, and people invest based on
opportunism (Boltanski & Thévenot 2006, 1991). Worthy subjects are clients, sellers, and
competitors, while worthy objects are goods, services, and wealth (Thévenot, 2002). The relative
worthiness of being in this world is evaluated by conducting a ‘test’ that measures sales rate,
customer satisfaction, competitiveness, credibility, effectiveness, etc. by aligning people,
processes and systems towards common predetermined goals. However, the case of the NIOC
shows that the market value may also be influenced by internal policy (see chapter 7).
The connection with market values was made directly by being worthy of the religious values,
nationalist values, and industrial values in order to overcome the problems in the market (e.g.,
sanctions) and to achieve market goals such as maximizing revenues as well as competing with
other firms. As the market is unpredictable and volatile, it is challenging to achieve predetermined
goals as well as the highest worth of industrial order, i.e. increasing efficiency. Therefore, the need
for nationalist values along with religious values was constructed to overcome market volatility
and imposed sanctions by practicing jihadi management and resilience economy as an integral part
of Islamic management, which is manifested in religious and nationalist values. The official
authorities’ argument is that the petroleum companies will only survive in the market if the
managers are religious and nationalist enough, and have the ability to circumvent sanctions and
sell products (see chapter 7, section 7.4.1). This is an example of how the market order of worth
is mobilized in order to defend the religious and nationalist orders of worth as complementary
measures of performance: Individuals need to be worthy in other orders if they want to be worthy
in the market order. It indicates that there is a similar understanding among the petroleum
authorities that the nationalist values and religious values, together with the industrial values, are
needed in order to be able to overcome difficulties in selling products and dealing with clients in
the market. However, without market values, it becomes intricate to achieve the most crucial
factors of industrial worth, such as efficiency and productivity. Accordingly, Boltanski and
Thévenot (2006) argue that compromise between the industrial and market orders of worth “lies
at the very heart of a business enterprise” (p. 332). Such a construction of a cause-and-effect chain
can be understood as mobilization of the industrial, nationalist and religious orders of worth with
231
market values in the context of the Iranian petroleum industry. Believing that the relationship
between these values is what delivers market success and mobilizing this chain of causality to
defend the need for an increase in barter trade (e.g., the practices of selling oil in the gray market)
while under sanctions, is a manifestation of how the religious and nationalist orders of worth are
defended by drawing on factors of worth from the industrial and market orders.
Another connection between the industrial, religious, and market values was through the domestic
order of worth. The domestic order of worth is a function of the position one occupies (a hierarchy
of trust) in chains of personal dependences, where human dignity is built on comfort and ease, and
worth is based on kinship, face-to-face relationships, and respect for tradition (Boltanski &
Thévenot 1999, 2006). The NIOC’s managers argued that the compensation (rewards) system is
not just based on performance outcomes, but there are some other influential factors such as
kinship, nepotism, face-to-face relationships, and religious activities (see chapter 7). Furthermore,
the evidence shows that domestic values also play a role in recruitment, mobility and promotion
in public organizations. The domestic values are mobilized together with religious, nationalist,
industrial, and market values. Although the aim of linking performance with the compensation
system is to motivate employees at the workplace as a “cover for the intensification of
exploitation” (Walker 2011, p. 373), it is manifested by other values in the context of Iranian
petroleum companies. The arguments reveal that the multiple value regimes are mobilized by
achieving worth in the market order, specifically how key actors link such economic success to
religious, nationalist, and domestic values. The religious, nationalist, and industrial values were
mobilized in order to achieve market values, but also to achieve market values through the
domestic values. Each order of worth not only corresponds to, but also seems to be synonymous
with, a principle or mode of justification (Boltanski & Thévenot 1999, 2006; Thevenot 2001).
These findings highlight the organizational actors in the process of justification and how actors
engage with a plurality of orders of worth to maintain legitimacy, specifying their capacity to
strategically mobilize orders of worth within their political interest in order to strengthen their
discourse. This finding is in line with Burchell et al. (1980), who presented the role of management
tools as a “justification machine” to justify and legitimize actions to organizational order under
conditions of uncertainty (see also Courtney et al., 2009; Mouritsen & Kreiner, 2016), and also
support hegemonic political ideology (Wright & Nyberg, 2017). This has also been shown in a
study by Oldenhof et al. (2014), where managers had to deal with conflicting values
232
simultaneously and justify their work with a plurality of values in order to achieve many varieties
of goods by adapting behavior and material objects.
My findings indicate an aspect that has not yet been adequately addressed in the literature: the
significance of using a contextualized approach to hybridization processes in the Muslim societies
that take into account how former colonial experiences as well as local cultural context can
interfere with the practice of Western management technologies. I argue that, in terms of hybridity,
(e.g., Homi Bhabha 1994) the post-colonial studies fail to consider the fact that local cultures may
not fully be hybridized with imposed or transferred Western culture, but rather produce their own
forms of domination, transgression, and resistance that are underpinned by a more stable cultural
framework of meaning. Such a notion of hybridity, modernity and possibilities of exchange and
dialogue allowed Iranian managers to reconcile and develop Islamic national ideology with
modern Western management thought and techniques. It highlights how local managers interpret
and reconstruct corporate aspirations and techniques to fit local concerns and pressures, managing
globalization through localizing management and measurement technologies (Cooper & Ezzamel
2013; Ezzamel & Xiao, 2015; Efferin & Hopper, 2007). In the same vein, Ezzamel et al. (2007)
examine the impact of two different ideologies on the practices of accounting in the context of
China, focusing on the transition from Maoism to Dengism. In particular, they show how dominant
political and intellectual elites in China produced and disseminated performative ideological
discourses that influenced the practices of accounting (Ezzamel et al., 2007). The terms they
defined in their study are similar to the way the Iranian managers prevail and coexist with Western
management concepts in practices of PMS in the Iranian petroleum companies.
Following Said’s (1975, 2012) and Cooper and Ezzamel’s (2013) arguments on the globalization
discourses, my study contributes to interdisciplinary perspectives on accounting by articulating
how accounting technologies (such as PMS) infuse the Western management approaches with the
local ideology to produce a hybrid version and the way in which local managers mobilized the
global discourses to formulate their own space of discursive expressions wherein they reimagine
their managerial circumstances and identities. Moreover, I argue that hybridity is understood as an
interweaving of two elements (the transformation of practices and cultural continuity) in which
identity construction, local power dynamics, and cultural framework of meaning have
simultaneously shaped the Western management practices in the Iranian petroleum industry. The
ambivalent nature of management identity construction shows that transformational technologies
233
in the international oil companies and the modernization framework were essential and that, to
some extent, they were taken for granted (only on the surface)104 by Iranian public managers. They
used them to evaluate organizational performance and align organizations’ strategists with day-to-
day actions, to achieve better decision-making by implementing PMS in Iranian petroleum
companies. While the NIOC’s managers emphasized the importance and primacy of Western
management technology (i.e., PMS) and stressed how they are using it to overcome the previous
dysfunctional organizational system, and how the local culture (the role of Islam and anti-
imperialist beliefs) influenced the public managers’ patterns of thinking and acting by measuring
and evaluating staff’s performance based on religious and nationalist values. They view Islamic
management practice as providing cultural independence from the domination of imperialist
practices. Therefore, the integration of Islamic nationalist ideology with Western management
practices presents a hybrid form of management identity construction (the Iranian variant of
“Islamic management”) and has also triggered a transformation of PMS in practice. Iranian public
managers have engaged with the PMS adoption process and its emancipative potential without
taking on a subaltern105 position. This analysis encourages us to move beyond binary
conceptualizations that consider elites’ identity construction in Muslim societies in terms of either
an acceptance or a rejection of modernity. It also questions the limits of casting the diffusion of
Western ideology as a unique and absolute hegemonic phenomenon by highlighting the
significance of the historical experience of Western powers’ domination as well as the role of Islam
and an anti-imperialist perspective on local knowledge management in the new public
management’s identity construction. This finding is in line with Nørreklit (2003), who asserts that
management methods that do not match the ruling ideology of a society are not necessarily
rejected, but they may also shape or in turn be shaped by dominant ideology. In this respect,
ideology plays a central role in achieving consent, because it is formed as a mental framework
consisting of a particular set of ideas, dominates social thinking in a society, and influences how
individuals construct their subjectivity in social networks (Hall, 1986; Li & Soobaroyen, 2020;
Yee, 2009).
104 Official documents state that they use these managerial frameworks, but they are not much important in day-to-
day practices (see chapter 7). 105 In postcolonial studies and critical theory, the term subaltern designates the colonial populations who are socially,
politically, and geographically outside the hierarchy of power of a colony, and the empire’s metropolitan homeland
(see David Ludden, 2003).
234
Moreover, the practice of PMS shows local power dynamics (adherence to the value regimes that
co-exist within society) between the HR department and the security department as a dominant
and resistant approach to evaluating individuals’ performance as “good citizens”. This study also
confirms that the practice of PMS differs across countries and industries because of cultural issues
(Salk & Brannen, 2000), governmental regulations or policies (Morishima, 1995; O’Connor et al.,
2006), competitive priorities (Boxall & Steeneveld, 1999), and diverse adoption of managerial
practices (Snell & Dean, 1992). Although some of the interviewed managers regarded Islamic
management principles as described in the literature (e.g., Ali, 2010; Moghami, 2019) as
compatible with the use of Western performance management tools, the way in which the NIOC
applies Islamic management principles has led to the use of two parallel performance evaluation
systems that are often in conflict. The emergent of the two appraisal performance systems in
parallel shows the outcome of a process driven by power dynamics through the hybridization
process (contradiction and overlapping) between two cultures and social values that are implicitly
negotiated and interpreted based on the local culture.
Furthermore, my findings reveal that the Iranian variant of Islamic management is intertwined with
the state’s political interest and the state has legitimized its actions. In other words, the ideological
dispute and political tension with the West provided an opportunity for the Iranian regime to use
Islamic management ideology as a tool to pursue its political goals. This conceptualization further
implies that Islamic management ideology is a purposefully tailored formation through which to
achieve political ends. Therefore, the practice of management tools can be shaped by the dominant
ideology of society, and can be purposefully organized as a malleable object in order to reflect and
enable different political interests (Cooper, 1995; Ezzamel et al., 2007). For example, in the NIOC,
Islamic management primarily means checking organizational actors’ symbolic obedience of
Islamic religious procedures in their everyday conduct, and their commitment to the orders given
by the supreme leader. This management approach mostly combines a symbolic form of Islam
with loyalty to the political regime, in order to pursue political interests in the Iranian petroleum
companies. This finding is in line with Beyers (2015), who argues that political actors use religion
as an effective instrument to attain political aims in a society receptive to religious allusions. This
finding is also in line with Williams and Demerath (1991, p. 421), who use the term “civic” religion
and view it as a set of cultural resources used differentially by political groups to interpret and
legitimate their places or agendas within the community. Islam has frequently been linked with
235
repression rather than emancipation (see Dawkins, 2006; Grayling, 2006; Hichens, 2007), but as
Kamla (2009) argues, this is not due primarily to the religion’s repressive nature, but more to
political forces mobilizing religion for their political intentions. Thus, the socio-cultural setting of
each country in which Islam is incorporated and interpreted makes for significant shifts, so that, in
some instances, modern management practices conflict with the teachings of Islam (Branine &
Pollard 2010, p. 723).
The evidence shows the practice of PMS is shaped not only by the interplay of Islamic nationalist
ideology and Western management approaches but also by domestic political dynamics. The way
in which the NIOC practices PMS to pursue political interests of the government refers to the role
of management tools as a “political machine” (Burchell et al., 1980; Cepiku et al., 2017).
The predominant management style within a country can be defined as the overall set or pattern of
behavioral characteristics (e.g., cultural values, expectations, norms, and beliefs) that distinguish
the country’s general approach to management (Pascale & Athos, 1981) and have implications
both for the design and practice of performance measurement and performance evaluation systems
(Fletcher, 2001). In other words, the value regimes operating within a society can influence the
principles that govern modern management within the organization and shape the way in which
PMS is practiced. Thus, the role of Islam and anti-imperialist beliefs have influenced the enactment
of the new public management in the context of the Iranian petroleum industry.
The hybridization process indicated the fact that the cultural framework of meaning within the
transformation took on significance by compromising between two various ideologies (e.g.,
Islamic nationalist ideology and Western management ideology), enabling the Third Space to
emerge without being replaced themselves. Accordingly, the hybridization process is an alternative
way of organizing that is coherent with the local socio-cultural context (Szkudlarek et al., 2020).
The relation between Islamic management and post-colonialism shows the significance of the
Islamic regime’s politics in shifting local identities’ construction (i.e., the domination of Islamic
nationalist value in public organizations) to resist mimicking Western management practices. This
study also extended Halliday and Carruthers’s (2009) and Mihret et al.’s (2020) work on the
interplay of national and transnational norms and added a new dimension to the hegemonic
correlation of the ideologies of the colonized societies with imperialist aspects in the globalization
era.
236
In sum, the combination of the orders of worth or EW theoretical framework with the post-
colonialism theory has helped me to theorize the specific historical, political, and cultural contexts
and hence the co-existence of multiple value regimes in the Iranian public management, especially
the impact of socio-cultural aspects and systems of values that shape the use of PMS in the Iranian
petroleum industry. Following Boltanski and Thévenot’s orders of worth framework (1999, 2006),
my study has contributed to the co-existence of other values or polities (such as religious value
and nationalist value) beyond the Western social context in which it is tacitly embedded.
Furthermore, my study has extended sociological approaches to accounting technologies
(Annisette et al., 2017; Baker et al., 2011) that can act as mediating tools between multiple value
regimes coexist within society and organization setting. This contribution sheds light on the
significance of accounting technologies (e.g., PMS) for supporting a compromise between
multiple value regimes within the organization setting, in ways that facilitated dialogue between
two ambivalent ideologies through the notion of test, such as in the case of Iranian petroleum
companies (as discussed in section 8.3). It also confirms the processes of justification that are
fundamental to the symbolically mediated construction of social life (Stark, 2000; Susen, 2017),
especially how individuals justified their position with the co-existence of multiple value regimes
to maintain legitimacy in the context of Iran. Indeed, Iranian managers have to perform constant
justification work that involves not only the use of rhetoric but also behavior hypocritically in
order to be able to deal with conflicting values and to minimize legitimacy threats in Iran’s
petroleum industry.
This study applied interdisciplinary perspectives on accounting and its role in society and
organizations (Burchell et al., 1980; Gallhofer & Haslam, 2004; Sikka, 2012), which required
accounting be studied in its organizational and social context. Thereby, this study confirmed the
previous arguments that PMS can play various roles in organizations and society: it can both reflect
and enable the construction of society with institutional forms as well as modes of social actions
being intertwined with its emergence and development (Burchell et al., 1980; Chenhall & Moers,
2015; Mouritsen & Kreiner, 2016). This will allow researchers and practitioners to interpret,
understand, and even develop the interrelationships between accounting and society and the
structural conflicts embedded in accounting interdisciplinary discourse (Morgan, 1983; Chua,
1986; Dillard, 1991, Hiebl, 2018). In the next chapter, I will highlight how the research findings
237
contribute to extant research and describe the study’s limitations and potential directions for future
research.
238
CHAPTER NINE: CONCLUSION
9.1 Introduction
This chapter briefly outlines the research background and gaps in the existing literature to make
justifications for this study. The research aims were emphasized when introducing relevant
findings, mainly to explain how the specific interaction between historical, cultural, religious, and
political context of Iran affects Iranian public management and has shaped the application of
‘Western’ performance management concepts in the Iranian petroleum companies. This study
shows how its findings develop our knowledge in the field of interdisciplinary accounting and
contribute to our understanding of the co-existence of other values beyond the Western social
context in which it is tacitly embedded. In addition, the study also illustrates the significance of
accounting technologies (e.g., PMS) in supporting a compromise between multiple value regimes
within the organizational setting in ways that facilitate dialogue between two ambivalent
ideologies through the notion of hybridity in the case of Iranian petroleum companies.
Furthermore, this study highlights the limits of casting the diffusion of Western management
approaches as a unique and absolute hegemonic phenomenon by indicating the significance of the
historical experience of Western powers’ domination as well as the role of Islam and an anti-
imperialist belief on local knowledge management as a new identity construction in the context of
Iranian public management. In doing so, this study draws on the blending of two theoretical
frameworks (post-colonialism and orders of worth) by explaining and interpreting empirical
findings.
The study adopted an interpretivist and constructivist approach to the investigation of the practices
of performance management in Iranian petroleum companies as a social phenomenon. Guided by
these philosophical considerations, this study undertook a qualitative research method, allowing
an in-depth exploration of how heterogeneous actors in the Iranian petroleum companies perceive
and enact their social realities in the practices of performance management. In doing so, I used the
triangulation technique to improve the validity and allow for generalization by consulting multiple
data sources such as interviews, observations, and analyzing documents.
This chapter initially presents a general synopsis of this study, followed by its most significant
findings. Then, I will explain how this study contributes to both the theories and extant accounting
239
literature. Moreover, the following sections disclose this study’s limitations and challenges as well
as potential directions for future research.
9.2 General Synopsis and Findings
Since oil was discovered more than a century ago, Iran has turned into one of the major players in
the petroleum industry. Since then, the oil and gas industry has played a significant role in Iran’s
economy as a central source of revenue for the country’s budget, directly affecting public
development projects and social services. However, during this period, the Iranian petroleum
industry has constantly been affected by political, social, and economic upheaval, which has
directly influenced the development, reformation, and performance of the industry. Although the
Iranian society was never colonized by Western powers directly, the historical domination of
Western powers (mainly the UK and the US) who had cultural and political influence, led to an
opposition to Western imperialism and modernization in Iran’s society. For example, Britain’s
direct influence on the Iranian petroleum industry from 1908 to 1951, or the US’s support f Reza
Pahlavi’s reign over Iran. However, the nationalization of the Anglo-Iranian Oil Company (AIOC)
in 1951 and later the victory of the Islamic revolution in 1979, have considerably diminished the
domination of Western powers. The Islamic revolution of 1979 was the culmination of a long
struggle between the modern secularist trends that had overwhelmed Iranian society for many
decades and Islamic revivalist movements striving to save Iranians from socio-cultural and
political degeneration and Western domination by emphasizing Islamic nationalist ideology. This
perspective significantly influenced the development of “Islamic management” concepts and
practices in dealing with managerial issues and the entanglement of religion and government as a
dominant value in managing the country.
While Iranian authorities rhetorically emphasize Islamic management principles in opposition to
Western influences and colonialist thought, Western management technologies and approaches are
not completely ignored in the face of the need for international cooperation, investment, and
globalization. For example, the implementation of a comprehensive PMS in the NIOC in 2014,
aimed at linking organization strategies to day-to-day actions included evaluating the overall
performance and connecting performance results with rewards in order to improve productivity,
proficiency, and increase profitability. According to Gruman and Saks (2011), globalization and
economic challenges have led many organizations to try to improve their outcomes by practicing
performance measurement and management. However, the successful application of a
240
comprehensive PMS in different countries became very challenging due to work-related
backgrounds and culture (Salk & Brannen, 2000), especially when it transferred from Western to
non-Western countries (Chen, 2017; Firth, 1996; Pucik, 1985; Vance et al., 1992). As part of
control practices and organizational activities, the use of PMS and the diversity of performance
measurement and management criteria are also influenced by culture (Bhimani, 2003). For
example, Miller and O’Leary (1990) argue that “the analysis of internal accounting change needs
to take seriously the complex network of political and cultural debates within which accounting is
enmeshed, rather than assuming it away” (p. 481). Thus, the attributes of PMS reflect aspects of
organizational values that are influenced by the cultural and political contexts (Henri, 2006).
This study aimed to investigate how the specific interaction between historical, cultural, religious,
and political contexts impact the practices of PMS in the Iranian petroleum companies. Although
accounting studies have analyzed the influence of culture on the practices of PMS, they have
mainly focused on Western countries and rarely taken non-Western countries such as China into
consideration. Moreover, the extant studies on management accounting practices in Islamic
societies are often based on questionnaires and tend to draw on Hofstede’s (1980, 1984) relatively
static and simplistic cultural dimensions (see Baskerville, 2003; Ahrens & Chapman, 2006)
without going into much detail. More importantly, these studies did not investigate how
organizational actors themselves use and promote the concept of “Islamic management” in day-
to-day actions. Therefore, there are empirical gaps regarding the practices of performance
measurement and management in Islamic societies, specifically concerning the interaction
between historical, cultural, and political parameters in the social and organizational contexts.
Furthermore, this study examines how the hybridity of Islamic management with Western
management approaches influences the practices of PMS in Iranian petroleum companies. In doing
so, I interpret my findings by combining two theoretical frameworks, those of Post-colonialism
and Orders of Worth, in order to theorize the co-existence of multiple value regimes in the context
of the Iranian public management.
My findings reveal that the historical domination of Western powers (mainly the UK and the US)
as part of cultural and political influence, led to the formation of Islamic ideology and practice of
“Islamic management” principles in dealing with managerial issues in the context of Iran after
1979. This ideology emphasizes the solidarity of religion and government as a dominant value,
which has officially been incorporated into the legislation of public organizations. For example,
241
the evaluation of individuals’ performance based on Islamic nationalist ideology in the Iranian
petroleum companies. However, the ambivalent Iranian elites’ approach to the West post-1989
caused the coexistence of conflicting multiple value regimes. One approach emphasizes anti-
Western imperialism by claiming that the West intended to invade the country’s culture, economy,
and politics. Consequently, all factors of social life need to be Islamized, which means continuing
to resist Western notions of international order, politics, and culture. Another approach emphasizes
Western modernization, development, and technological superiority in dealing with managerial
issues. This ambivalent approach to the West has also shaped the encounter between Western and
local culture in the practice of PMS by mimicry of and resistance to it, and by insisting on local
culture and social values in Iranian petroleum companies. In other words, the hybridization of
Islamic management with Western management approaches has produced an ambivalent version
of practices of PMS in the Iranian petroleum companies. One is characterized by mimicry of
Western management approaches, which is justified by the ideology of modernization and
development. Another is characterized by resisting Western management approaches, which is
justified by applying Islamic nationalist ideology to control the Iranian petroleum companies and
secure them from foreign influence. The case of the NIOC reveals both the seeming domination
of Western management approaches by evaluating individuals’ performance based on skills,
competencies, and experiences as well as the resistance of Iranian public managers to Western
management approaches by evaluating individuals’ performance based on Islamic nationalist
ideology in the practices of PMS. As is explained by Simons’ (1994) study on various levers of
control, the NIOC’s HR department is using a performance management system similar to the
interactive control systems, whereas its security department is using a performance management
system to evaluate people’s performance comparable to the boundary control systems.
Furthermore, the hybridization of Islamic nationalist ideology with Western management ideology
has created a Third Space, in which individuals are measured and nominated as “good citizens”
based on multiple competing value regimes such as religious values, nationalist values, and
industrial values. It represents the inevitable contradictions and overlaps between cultural and
social values that are negotiated through rules and regulations by actors in a network of relations
(Callon, 1999), and attempts to legitimately justify their positions (Boltanski & Thévenot, 2006).
Such a notion of hybridity, modernity and possibilities of exchange and dialogue has allowed
Iranian managers to reconcile and develop Islamic national ideology with modern Western
242
management thought and science as a new identity construction. Therefore, in the case of the
NIOC, hybridity is understood as an interweaving of the transformation of practices and cultural
continuity in which identity construction, local power dynamics, and the cultural framework of
meaning have shaped the Western management practices in the Iranian petroleum industry.
The evidence shows that the religious values are used in terms of symbolic Islamic acts,
disregarding other aspects of Islamic principles and values such as equality, fairness, dedication,
and consultation. Hanafi (1981) highlights that in Muslim societies, the religious structures have
reflected the political constructions and assisted the elites in expanding control over people.
However, such practices are not necessarily specific to Islamic societies. For example, after
reviewing the historical roles of religion in the US. Williams and Demerath (1991) argue that in
American political culture being a good citizen includes being religious, although the particular
religion is less important. According to Akbarzadeh and Barry (2016), the ideology of Islamic
nationalists has provided a political ability for the government as head of public organizations to
negotiate between these values and when necessary to emphasize one over the others. This study
highlights the practices of PMS as controlling tools in the pursuit of political goals and socio-
cultural approaches within public organizations. In other words, the practice of PMS is shaped not
only by the interplay of Islamic nationalist ideology and Western management approaches but also
by domestic political dynamics. This conceptualization further implies that Islamic nationalist
ideology is a purposefully tailored formation through which it is possible achieve a political end.
Therefore, the practice of management tools can be shaped by the dominant political ideology of
society and purposefully organized as a malleable object in order to reflect and enable different
political interests (Cooper, 1995; Ezzamel et al., 2007).
My findings also reveal that the PMS can act as a composite object through hybridization of
multiple competing value regimes coexisting within the organization and provides a compromise
between the various test of worth by evaluating people’s performance and ranking different people
according to their worth. In other words, it helps “hold things together” in a compromise
arrangement, serving as a stabilizing device by facilitating coordination (Annisette et al., 2017).
Accordingly, organizational actors need to justify their positions by emphasizing higher-order
principles in their discourse that enabled them to convince others of what they think is the
appropriate belief or action in a given situation to maintain the legitimacy in the organization
(Mailhot & Langley, 2017; Stark, 2009). For example, in order to be nominated as good citizens
243
the individuals should justify their positions with religious values as well as the coexistence of
other value regimes such as nationalist values, domestic values, industrial values, and market
values in the Iranian petroleum companies. These findings highlight the role of organizational
actors in the process of justification and how they engage with a plurality of orders of worth to
maintain legitimacy, specifying their capacity to strategically mobilize orders of worth within their
political interest in order to strengthen their discourse in the context of Iranian public
organizations. This finding is in line with Burchell et al. (1980), who indicated the role of
management tools as a “justification machine” to justify and legitimize actions based on
organization order under conditions of uncertainty.
Furthermore, this study shows that the value regimes operating within a society can influence the
principles that govern modern management within an organization and shape the way in which
PMS is practiced. Thus, the role of Islam and anti-imperialist beliefs have led to the enactment of
new public management in the context of the Iranian petroleum companies.
9.3 Contributions to Knowledge
This study contributes to our understanding of the development of the Western management
approach and its link with national state ideology in practices of performance management in the
non-Western contexts. It makes an empirical contribution that allows us to make sense of how the
dynamic interplay of local and Western management ideologies impacts the practices of
performance management systems in Iran. Furthermore, it shows how the state’s Islamic
nationalist ideology and political visibility among elite groups tied to the public organizations
drove practicing Western performance management tools based on the state’s ideological
viewpoints.
Moreover, this study indicates an aspect that has not yet been adequately addressed in accounting
literature: the significance of using a contextualized approach to hybridization processes in the
colonized societies that take into account how the experiences of historical domination of Western
powers as well as local cultural and religious contexts can shape the practice of Western
management technologies. For example, the role of Islam and an anti-imperialist perspective on
local knowledge management interfere with Western management approaches and have built a
new public management’s identity construction in the context of Iranian public management. This
analysis encourages us to move beyond binary conceptualizations that consider elites’ identity
244
construction in the context of Iran and other Islamic countries in terms of either accepting or
rejecting Western modernity (Yousfi 2014).
The empirical findings in this study give new insights into how specific historical, cultural, and
political contexts have shaped the practices of performance management by showing the
coexistence of multiple value regimes in the context of Iran. Following Said’s (1979, 2012) and
Cooper and Ezzamel’s (2013) arguments on the globalization discourses, my study contributes to
accounting in the globalization discourse by articulating how the integration of Western
management approaches into the local ideology has produced an ambivalent practice of
performance management, the way in which local managers mobilized the global discourses to
formulate their own space of discursive expressions wherein they reimagine their managerial
circumstances and identities. Moreover, the contribution of this study has confirmed Ezzamel et
al.’s (2007) studies in the context of China by explaining how a specific political and cultural
elite’s attitudes to Western management approaches have produced and disseminated performative
ideological discourses that influenced the practices of accounting technologies. This study also
extended Mihret et al.’s (2020) work on the interplay of national and transnational norms and
added a new dimension to the hegemonic correlation of the ideologies of colonized societies with
imperialist aspects in the globalization era.
Following Boltanski and Thévenot’s orders of worth framework (1999, 2006), my study has
contributed to the co-existence of other values or polities (such as religious values and nationalist
values) beyond the Western social context in which it is tacitly embedded. The empirical findings
of this study confirmed the significance of accounting technologies (such as PMS) for supporting
a compromise between multiple conflicting values within the organizational setting in ways that
facilitated dialogue between two ambivalent ideologies through the notion of hybridity. This
finding also extended Annisette et al.’s (2017) study on the role of accounting in justificatory
actions and compromising arrangements by adding that the PMS can also function as a mediating
tool between multiple value regimes to stabilize the tensions and inconsistencies between them.
This study applied interdisciplinary views on accounting and its role in society (Burchell et al.,
1980; Gallhofer & Haslam, 2004; Sikka, 2012), which is required to be historically and
contextually reviewed and interpreted to clarify socio-cultural consequences. Accordingly, this
study confirmed the previous arguments that PMS can play different roles in organizations and
society by both reflecting and enabling the construction of a community with both institutional
245
forms and modes of social actions (Burchell et al., 1980; Chenhall & Moers, 2015; Mouritsen &
Kreiner, 2016).
9.4 Limitations and Potential for Future Research
When conducting this study, I faced some challenges. Therefore this research has its limitations.
First, it was very difficult to gain official access to the Iranian petroleum companies as they are
strategic public organizations in Iran. A special letter was submitted by the Ministry of Science,
Research, and Technology to the Ministry of Petroleum and the National Iranian Oil Company in
order to receive permission to conduct this research.
Second, as there was arduous administrative bureaucracy involved in gaining access to
organizational actors, the number of participants was limited to 22 managers from all levels (e.g.,
upper-level managers, middle-level managers, and lower-level managers) and various disciplines.
Third, this study focused on certain aspects of performance management regarding time and the
number of respondents in Iranian petroleum companies. Therefore, further research is required to
concentrate on other aspects of performance measurement and management in practice.
Forth, this study provides valuable opportunities for further research by highlighting the following
gaps which need to be explored: What are the longitudinal dynamics of hybridization and how can
they change over time and space? What are alternative ways of dealing with multiple and
conflicting values other than the hybridization process? Under what conditions can we observe
different modes of stabilization between multiple values, such as the domination of one value over
others (e.g., Agamben, 2005), the strategy of hypocrisy (e.g., Brunsson, 1989), or the coexistence
within different times and situations (e.g., Carlsson-Wall et al., 2016)? How do organizations
minimize their legitimacy threats and increase the chance of survival in dealing with multiple value
regimes? These questions open a broad horizon for future investigation.
In terms of new contributions to the Orders of Worth framework, notably those of Boltanski and
Thévenot (1999, 2006) and Stark (2009), this study indicates the intertwining of competing orders
of worth with inter-organizational co-operation and organizational change as well as attempting to
produce compromises in a non-Western social context. Therefore, explicitly focusing on the other
pragmatic sociological aspects of the orders of worth, such as the processes of justification and
legitimation, could be a potential source for future empirical studies.
246
The findings of this study can also help scholars interested in international political economy and
policymakers to understand the structures, hierarchies, local values, and power dynamics in the
context of Iranian public organizations.
247
Appendix A
A sample of semi-structured interview guideline
Section A – General profile of the interviewee
1. Could you please describe your current job position?
a. For how many years have you been working in this position?
b. What are the main tasks that you are responsible for in your position?
c. How many people are you supervising at the moment?
2. Could you please describe your previous career path experiences?
a. What is your educational background?
b. Where and in what kind of positions did you work before you started your current job position?
c. Do you have any study or work experience abroad? If yes, what kind of experience / where?
Section B – Performance measurement and management
1. What kind of performance measurement technology are you using?
2. How do you measure organizational performance?
a. What kind of dimensions of performance are measured (e.g., financial performance, non-financial
performance such as market share, customer satisfaction, delivery performance, etc.)
b. How are these dimensions of performance operationalized / measured (e.g., ROL, EVA, satisfaction
surveys, etc.)?
3. How is the performance measurement technology used in your organization?
a. Do you use the performance measurement technology for the purpose of evaluating individuals or
groups?
i. If for one or the other or for both, in what way is it used? (e.g., performance-related rewards,
punishments; evaluation of particular aspects of performance: which ones are used, which ones are
measured, but not used for performance evaluation … why are some measures used, and not others?)
b. Do you use the performance measurement technology for the purpose of target setting and budgeting?
If yes, in what way?
i. How are targets set (e.g., based on past performance, based on strategic goals, bottom-up in a
participative way, set top-down, set for particular period such as a year or half a year, etc.)?
ii. What happens if targets are not met?
c. How are the performance measures communicated and discussed?
i. Who is involved in these discussions?
ii. What is discussed in these meetings / how are the measures discussed?
d. Are there any differences amongst departments in how they measure performance and in how they
use performance measures (e.g., employees and managers)?
4. How does the current measurement system help you to improve dimensions of organizational
performance which you consider to be relevant?
248
a. In your view, why is this the case (e.g., related to measurement, or to the use of the performance
measures)?
5. How does the current measurement system (or elements of the system) fail to help you improve
dimensions of organizational performance?
a. In your view, why is this the case (e.g., related to measurement, or to the use of the performance
measures)?
6. What challenges do (or did) you face when developing and implementing performance measurement
systems?
7. What challenges do (or did) you face when applying performance measurement systems?
8. Are you operating a formal performance management system? If yes, to whom do these processes
apply (e.g., upper level, middle level, low level or professionals)? And how?
9. What strategies of your organization have been linked (e.g., cultural strategy, reward strategy or team
work strategy) to the performance management system?
10. Are there any internal or external parameters (e.g., politics, economics and organizational culture)
which affect the use of performance measurement systems?
a. If so, how do these parameters affect the use of performance measures in your organization?
11. In the past, did you experience any changes in the way in which performance was measured / used in
your organization?
a. If yes, please describe these changes.
b. How did these changes come about, in your view (what were the reasons for these changes)?
Section C – Decision making processes
1. What kind of information is collected and used for decision making?
2. How is the information collected, interpreted and used for decision making? Is there a different
kind of decision making for each sector (e.g., human resource management, investment,
international agreements and etc.)?
3. What kind of decisions are the most crucial ones?
4. Does the performance measurement technology affect your decision making?
a. How?
5. Who is responsible for the decision making? And how is this process applied?
6. Are there any internal or external parameters (e.g., politics, economics and organizational culture)
which affect the decision making process?
b. How do these parameters affect the decision making process?
Section E – Final question
1. Do you have any other comments about performance measurement practices in your organization
which we have not discussed so far?
249
Appendix B
The list of interview participants
SN. Participant position Type of
interview
Date of
INTVW Duration
No.
INTVW Code
1 CEO Note-taken 06.08.2017 1:20 hrs 1 P1-NT-Aug17
2 Business planning manager Voice recorded 09.08.2017 1:30 hrs 1 P2-VR-Aug17
3 CFO Voice recorded 21.08.2017 1:00 hrs 1 P3-VR-Aug17
4 Head of international relations Voice recorded 26.08.2017 1:25 hrs