An Investigation into the Application of Open-Book Accounting (OBA): A Case Study of Saudi Arabian Supply Chain Companies

Abstract

This study investigates the adoption of open-book accounting (OBA) in Saudi Arabian companies and identifies the challenges that must be addressed before this can occur. Strong structuration theory (SST) was used as the theoretical framework to explain the underlying restrictive factors and explore the internal and external factors influencing OBA’s operation and performance. Additionally, this study aims to evaluate the significance of the maturity of supply-chain networks with regard to OBA application in the Saudi Arabian context. This study used a dialectical ontology and interpretive epistemology. These two concepts acknowledge the limitations of objective knowledge and place emphasis on the context and interpretation of subjective experiences for understanding social phenomena. A qualitative research method guided by an interpretive philosophy was utilised, recognising the significance of individuals' subjective experiences and the meanings they ascribe to their own actions. The case-study approach was employed, and inductive reasoning was used to explore the perspectives of the key stakeholders. The research was built around two supply chain case studies, each representing different stages of maturity in their relationships. These case studies provided an opportunity to conduct a comparative analysis, allowing for valuable insights into the impact of structural factors on the development of OBA in supply chains. Primary data were collected through semi-structured interviews and observations, and secondary data were collected through the Saudi Vision 2030 document, as well as government reports and company reports and documents collected from different organisations’ websites. The thematic analysis approach was used to analyse the obtained data and to identify the key themes and patterns in the findings. The evidence suggests that OBA is in an early stage of implementation in Saudi Arabia. However, various factors driving its successes and challenges were evident. One noteworthy aspect is the influence of cultural norms and the legal environment amongst other elements on individual behaviour. These cultural norms are leading many Saudi companies to hesitate and resist OBA adoption. Moreover, what sets Saudi Arabia apart is the active advocacy among practitioners for standardized regulations governing OBA practices. Finally, this research finds that a high level of supply chain maturity alone may be insufficient to ensure successful OBA adoption because of the cultural norms of confidentiality and privacy as well as the legal environment existing in Saudi Arabia.