Management in the early days of the Irish Free State - Bennetts of Ballinacurra

Studies of the internal workings of Irish businesses - including management, management structures and management information systems - around the time of the formation of the Irish Free State are scarce. Today, 100 years from... [ view full abstract ]

Studies of the internal workings of Irish businesses - including management, management structures and management information systems - around the time of the formation of the Irish Free State are scarce. Today, 100 years from the initiation of a rebellion, this paper explores one such company, namely Bennetts of Ballinacurra (hereafter Bennetts). This malting business was founded around 1792 and continued as an independent business until being acquired by Arthur Guinness & Son Ltd in 1951. In the early 20th century, Bennetts were at the forefront of efforts to improve the quality of barley breeding in Ireland. Being at the forefront suggests a strong management team and supporting infrastructure, which makes the case an interesting one to obtain a view the state of management in this vital area of economic activity for Ireland. Bennetts was until 1951, a family business where managerial succession was based in family ties.

There would appear to be little extant research on Irish businesses during the time period noted above. There is some accounting literature which explores the general nature of the accounting profession in Ireland. Works by O’Regan and Clarke provide useful insights into the history of the Irish accounting profession. Clarke (1996) noted the lack of literature on Irish accounting history at that time. He noted “the authorship of the first Irish accounting text may never be determined” (1996,37). Clarke (2001) details the difficulties faced by the profession in the early years of independence - the analysis period of this study. A key issue was the lack of legislation in newly independent state. He also notes the growth in the numbers of accountants in the 1940’s and ultimately the end of “independent isolation” as Ireland enacted the Companies Act of 1963, the first major piece of company law in 40 years of independence. This act included many provisions on audit and accounting. Clarke (2004) provides some insights on the development of management accounting, noting it came to fruition after the 1950’s as Ireland’s economy started to grow. O’Regan (2008) provides a useful account of the early days of the Institute of Chartered Accountants in Ireland (ICAI) and its efforts in the “professional project in Ireland” (2008,55). It recounts the efforts of ICAI to control membership by admission only through strict examinations and articles to ensure the “perpetuation of the socio-political ethos of the founders” (2008,55). O’Regan (2013) extends this analysis of professional dynamics by examining the formation of an Irish branch of the Society of Incorporated Accountants and Auditors in 1901. This branch was a response to the exclusionary strategy of ICAI (O’Regan 2013,256).

There are some studies which provide a more detailed account of accounting practices (or management accounting) within Irish firms. Unfortunately, these are less plentiful than more macro-level studies such as those mentioned. There are many sets of archival records held on the island of Ireland (see hÓgartaigh and hÓgartaigh 2004), many of which are unexplored. Having said that, the literature that does exist is quite insightful. For example Jeacle and Walsh (2008), building on Walsh and Jeacle (2003), provides extensive detail on how a Retail Price Inventory method was applied by a Dublin-based department store - Arnotts - during the 1930s. This was, according to Jeacle and Walsh (2008) a valuable management control tool as well as a inventory valuation method. There are also a small number of studies which detail internal accounting practices at the Guinness company. For example, Quinn (2014) explores accounting change in the cooperage at Guinness over a 100 year period from the 1880s. In a similar vein, Quinn and Jackson (2014) explore change to accounting practices at Guinness as influenced by the First World War. Finally, Hiebl, Quinn and Martinez (2015) explore the role of the Chief Accountant at Guinness from 1920 to 1940, offering a view that this role was very similar to the modern-day CFO. While these studies of Guinness are insightful, it should be noted that this company was one of a small number of large companies of the time as the economy was mainly agricultural with the government not pursuing any policy of industrialisation until the early 1930s - see from example O'Gráda (1997)

As suggested by Quinn (2014), studies of a topic (accounting in his work) over a long period time can offer interesting insights into the present state of organisational practices. This study explores the records of Bennetts during the 1920s and 1930s, drawing on records available at the Cork City & County Archives. This period was one where the fledgling Irish State endeavoured to set up new institutions of government, pass laws and develop economic policy. At the time, what we might today call professional management was likely to be less common in Irish business in general. The records reveal a relatively sophisticated management information system leading to good financial administration, signs of functional separation, detailed production controls and engagement in industrial relations practices.

References cited:
Clarke, P. 1996. “A glimpse at Irish accounting history.” Irish Accounting Review 3(2): 23-38.
Clarke, P. 2001. “Financial reporting in Ireland - the period of independent isolation.” Irish Accounting Review 8(2): 23-43.
Clarke, P. 2004. “Footprints in the sand - exploring the evolution of management accounting practices in Ireland.” Irish Accounting Review 11(1): 1-18.
Hiebl M.R., M. Quinn, and C. Martínez Franco. 2015. “An analysis of the role of a Chief Accountant at Guinness c. 1920–1940.” Accounting History Review 25(2): 145-165.
Jeacle, I., and E. Walsh. 2008. “A tale of tar and feathering: the retail price inventory method and the Englishman.” Accounting, Business & Financial History 18(2): 121-140.
O'Gráda, C. 1997. Rocky road: Irish economy since independence. Manchester: Manchester University Press.
O'Regan, P. 2008. “Elevating the profession: the Institute of Chartered Accountants in Ireland and the implementation of social closure strategies 1888–1909.” Accounting, Business & Financial History 18(1): 35-59.
O'Regan, P. 2013. “Usurpationary closure and the professional project: the case of the Society of Incorporated Accountants and Auditors in Ireland. Accounting History Review 23(3): 253-271
Quinn, M. 2014. “Stability and change in management accounting over time—A century or so of evidence from Guinness.” Management Accounting Research 25 (1): 76-92.
Quinn, M., and W. Jackson. 2014. “Accounting for war risk costs: management accounting change at Guinness during World War 1.” Accounting History Review 24 (2-3): 191-209.
Walsh, E., and I. Jeacle. 2008. “The taming of the buyer: the retail inventory method and the early twentieth century department store.” Accounting, Organizations and Society 28(7): 773-791.

management history, Irish Free State, malting [ view full abstract ]

management history, Irish Free State, malting