What does it mean to talk of ‘New’
Directions in Management Accounting
Research?
David J Cooper,
School of Business,
University of Alberta.
Email: david.cooper@ualberta.ca
Thanks to CGA, CIMA and SSHRC for financial support for my
research
Structure of presentation
A.
B.
C.
D.
E.
The fetish of the new.
New observations
Enduring concerns
Some MA implications
Conclusions
A: The fetish of the ‘New’.
1. Are we too concerned about fads and the new?
Both in MA practices and in research. “New’ will
depend on perspective (including time and
place).
2. Importance of continuities in researchaccumulating evidence. Normal science.
3. Identifying enduring concerns, theoretically and
in practice. Building a complex understanding
of practice, as well as elaborating theory.
4. Is ‘new’ better (than old, taken for granted,
etc)?
A1. Fads and Fashions.
• Fads and fashion are treated pejoratively,
and part of discourse of academics and
practitioners;
• But let’s take fads and fashion seriouslynew names is rarely simply ‘new wine in
old bottles’!
• MA fashion is produced, used and has
effects. But in what ways?
Examining MA Fashions:
Conventional approaches
• Typically, MA fashion is (negatively) moralized,
both by academics and managers. E.g., “to
succeed as a fashion [business approaches]
must have qualities that advertise either
conspicuous leisure or conspicuous
consumption for the user “ (Nystrom, 1928: 204).
Moralizing discourages serious analysis.
• MA fashion too often dismissed as ‘irrational’.
• In research, management consulting and ‘gurus’
are assumed to dupe organizations by selling
unnecessary solutions. Keiser (2002) thus views
consultants as creating their own demand.
Examining MA Fashions (2)
• MA fashions as a production process, recognizing that
they are co-produced (Armstrong, 2002 and Jones and
Dugdale, 2002).
• MA fashions seem to be cyclical, not necessarily
progressive, but adopt the rhetoric of the times (eg RI
and EVA).
• Fashions provide problems as well as solutions.
• Our study interested in how users make use of MA
fashions- as Ax and Bjørnenak (2005) show, BSC used
differently- constant translation.
• Recognize also that managers might adopt for the
‘pleasure of change’ (Tarde, 1890: 293)
Examining MA Fashions (3)
• “Fashion means that many people [and
organizations] do the same thing at the same
time across space, but fashions mean that they
will be doing something else soon.”
(Czarniawska, 2005: 144).
• Involves conformity (mimetic behaviour) as well
as nonconformity (leaders). MA fashions appeal
to both.
• Studies of management fashion focus on
development. Also important to ask: why this?
why now? and, why here?
A2 and A3: An example of enduring
concerns.
Do we do enough to identify continuities and develop
theory?
Consider the work on MCS in the NCB in 1980s (Berry et
al, 1985), Mueller and Carter (AOS forthcoming) and
current study of SPMS in a MNE (Cooper and Ezzamel).
• Inter-professional conflict (accountants and engineers);
• Physical measures for operations and sales; financial
measures for strategy and negotiation with environment;
• Loose coupling between management systems;
• Importance of history and ‘culture’;
• Managerial concern with ‘control’ and perogatives, even if this
contradicts technical efficiency.
A4: Is ‘new’ better?
• I am not simply a romantic looking to a past
‘golden age’!
• But new MA often associated with greater
bureaucratization (BSC), loss of managerial
expertise through carving out of middle
management (ABC), pressures to be unethical
and to focus on short term (budgeting) and the
monetarization of public space (cost-benefit,
performance measurement).
• Elevation of efficiency and shareholder concerns
over stakeholder, equity and environmental
concerns.
B1: That being said……Some ‘new’
observations.
• MA and its link to governance (conceived as ‘whom
should be the beneficiaries of corporation?’); How
Boards operate: (Roberts et al, 2005, 2006).
• Financialization (Froud et al, 2001); How capital markets
permeate through the firm (Ezzamel and Burns, 2005).
• MA and globalization. Managing across space (Barrett et
al, 2005; Gallhofer and Haslam, forthcoming) .
• Spread of MA ideas (fads, fashions and translations)Malmi (1999), Ax & Bjørnenak. (2005); Qu (2006).
• Reinvigorating research methods- using case studies.
B2:The value of field (case) studies
THESE OBSERVATIONS ARE BASED ON FIELD (OR CASE)
STUDIES FROM AN ORGANIZATIONAL AND
SOCIOLOGICAL PERSPECTIVE.
Cooper and Morgan (2006) argue for field studies to make
accounting research more ‘practical’, to develop theory and to
understand extremes in an uncertain and complex world.
Aim is to facilitate ‘phronesis’- judgment based expertise that is
situationally sensitive (Flyvbyerg, 2000). Similar to Schon’s
(1982) concern with knowledge for ‘reflective professional
practice’.
Case studies as more than description or ‘finding things out’!
B3: And some ‘new’ ideas?
• Practice based view.
• Business systems (and comparative MA).
• Bourdieu and reflexive sociology (capitals,
fields and habitus).
B4: Practice based views
• A mix of ideas, but linked to idea that Study of MA is a
set of calculative activities.
• Some influenced by Schatzki and Wittgenstein (Ahrens
and Chapman, forthcoming).
• Others (eg Chua, forthcoming) more concerned with
process view of organizing and managing (influenced by
Weick).
• Most linked to a revised conception of the link between
MA and strategizing. Often linked to Giddens’ ideas
about structuration.
• Welcome focus on what management accountants (and
other actors) do, with less attention on ‘systems’.
• Danger of functionalism and managerialism- valorizing
management explanations and practices
B5: Varieties of Capitalism (or
Business Systems)
• Institutional context matters!
• Forms of control depend on social and economic
arrangements- degree of trust, authority relations,
labour market arrangements, financial system, state
involvement, etc.
“The study of management control therefore needs to take
account of variations in forms of economic organization and
interest groups, as well as in the societal institutions and
agencies that help to structure them, in order to understand
how and why different coordination and control systems
become established and widely diffused in different
institutional contexts.” (Whitley, 1999: 209)
B6: Business Systems and MA
• Different forms of coordination and control suggest
different forms and uses of MA across sectors and
societies.
• A contingency approach based on macro political
economy- although Whitley warns that:
“the comparative analysis of management control and
accounting should, then, be based more upon ethnographic
and fieldwork research, as well as detailed knowledge of
particular societies and organizations than on postal surveys
and descriptive statistical analysis” (522).
• But how to conceive ‘different systems’ and what is
the relation between systems and practices?
B7: Conceiving of international MA in
terms of convergence or divergence is
insufficient!
• My work with Ezzamel suggests that while there
is some convergence within HQs of MNEs, there
remains considerable divergence in local units.
• Convergence in language and shareholder value
orientation.
• Divergence in strategies to achieve control over
labour (direct controls or responsible autonomy),
and interaction with local context and rules.
B8: Bourdieu’s Reflexive sociology
• Emphasizes ‘fields’ as sites of struggle and ‘capital’ as
what’s valued in the field. Economic, cultural, social
capitals. Struggle often about language and what can be
said and thought.
• Reflexivity applies to everyone- eg us knowing our position
in the academic field. Important for those action
researchers, as well as academics wishing to ‘get on’.
• Accounting and language- symbolic violence; what is
ignored, recognized and mis-recognized.
• MA as a technology of power- its use as mechanism of
power in a field.
• Role of MA in movement from fields of restricted production
to fields of wide scale production (Kurunmaki, 1999 in
health, Oakes et al, 1998 in museums). Mechanism of
‘marketization’.
C1. Of course, there are some enduring
ideas (that may seem ‘new’ to some!)
• Sociology of translation (ANT)- hybrids, networks, translations
and inscriptions in MA. Ezzamel et al, 2005; Jones and
Dugdale, 2002; Mouritsen and Thrane, 2006.
• Labour process and worker resistance (Armstrong, 2002; CPA
Special issue, 2006, Saravanamuthu & Tinker, AOS
2003,Bryer, CPA, 2006);
• Institutional theory (IT- how things become taken for granted).
Berry et al, 1985; Covaleski and Dirsmith,1988; Malmi, 1999.
This is not the same as economics (old) IT of Burns and
Scapens, 2000.
• Giddens’ structuration applied to local-global dialectic (Barrett
et al 2005).
• Constructivism and action approaches (building better MALaughlin, 1987; Kasenen et al, 1993; Labro & Tuomela,2003).
• The importance of external context in management controls
(Tinker and Merino, 1986; Hopper et al, 1986; Whitley, 1999).
C2: Building on the enduring
• Continue to explore these ideas.
• Develop and test these theories.
• Seek refutations, not confirmations! To test
theory and examine variation (extremes)
• Feed back to source disciplines.
D: MA implications
Some brief elaborations…..
D1: MA and governance
• Beyond rule and agency based views of governance. Bureaucracy
and ‘capture’ the popular metaphors that generate valuable work on
compensation and disclosure.
• Such metaphors tend to correspond to regulators and managerial
conceptions.
• But academics have a role to play in developing and exploring
alternative metaphors: eg theatre, spectacle, control, cooperation,
battle. Enrich understanding and maybe explain ‘failures’ of popular
models.
• How do Boards actually work?
• The ownership- control debate suggests we might overstress
conflicts of interests (and ignore systemic commonalities). The
commonalities of interests between owners and managers (Roberts
and colleagues).
• What does MA have to offer debates about internal controls- e.g on
contingency approaches to control? (Cooper and Gendron, 1999)?
D2: MA and financialization
• Financialization suggests that firms ‘make
money’ through financial activities (e.g Treasury,
M&A) as much as (more than?) through
productive and distribution.
• Role of MA in these processes- making the
capital market ‘everyone’s business’ through
accounting.
• What do we know about role of MA in making
M&A successful (or not)? Recall Jones (1984)
D3: MA and globalization
• MA as a coordinating mechanism across diverse spaces; but
also used to maintain local autonomy (Barrett et al, AOS,
2005);
• Despite popular literature on MNEs (Bartlett and Ghoshal,
1989), recent research offers a more complex understanding
of variations in global management control ‘recipes’. E.g,
Kristensen & Zeitlin (2005) show how HQ in UK multinational
doesn’t ‘know’ subsidiaries and instead focuses on financial
engineering. Subsidiaries focus on local strategies and use of
MA. Similarly, MA (and ERP) used differently in different
MNEs (Quattrone and Hopper, AOS, 2005)
• Role of TP and taxation- Picciotto, 1992; Cools (2002 PhD)
and Emmanuel and Cools (forthcoming). Interaction of
compliance, tax minimization, performance evaluation and
decision facilitating roles of TP systems.
D4: Spread of MA ideas
(Tentative) ideas based on joint project, funded by CIMA,
with Ezzamel and Qu, on BSC.
• History of the idea- KN’s (emergent) strategy of ‘open
source’. Global- local interconnection;
• Movement of the idea- from innovators to consultants to
clients. Each movement involves translation (not
diffusion);
• How an idea becomes objectified;
• A solution attached to multiple issues and problems
(‘garbage can’ model);
• Somewhat de-coupled from issues of efficiency.
Symbolic- normative, coercive and mimetic pressures.
E. Conclusions: theme 1
Let’s play more attention to MA as an international
phenomenon- different approaches are too often
regarded as deviations form Anglo- Saxon
‘norm’.
Business systems approach suggests a more
macro contingency theory to understanding MA
and an appreciation that there may exist
dysfunctional practices where one approach is
imposed on all others.
Conclusions: theme 2
Let’s pay more attention to MA designmaking MA ‘better’.
Design requires values to be incorporated
into our research (eg., supporting
innovation, healthy workplaces, ecological
sustainability etc).
Value of case studies to learn ‘reflective
practice’.
Conclusions: theme 3
Let’s learn more about how MA ideas and
practices are ‘spread’ and are used.
Interaction of global and local.
Role of consultants, textbooks, professional
syllabi, professional associations,
business press, etc.
Conclusions: theme 4
Let’s focus both on the ‘new’ (and in what
ways new ideas and practices are made
use of) and on ‘enduring’ features of MA.
But why should MA be any different than
clothing, food, travel, music and other
areas of culture? Fashion is part of the
game! Lets take MA fashion seriously!