Management Accounting Change: Approaches and Perspectives

David Carter (Victoria University of Wellington, Wellington, New Zealand)

Journal of Accounting & Organizational Change

ISSN: 1832-5912

Article publication date: 6 June 2008



Carter, D. (2008), "Management Accounting Change: Approaches and Perspectives", Journal of Accounting & Organizational Change, Vol. 4 No. 2, pp. 206-209.



Emerald Group Publishing Limited

Copyright © 2008, Emerald Group Publishing Limited

Management accounting is about context: institutional, organisational, behavioural, environmental, and problem‐focused. Management Accounting Change endeavours to shift the reader's focus from “management accounting” as technical to “management accounting” in its full context. That is, management accounting can no longer be considered merely a technical subject, as this book illustrates management accounting's practical and theoretical contexts in relation to the evolving nature of techniques, the implementation of techniques, and the effects of implementation. This book, then, concentrates on two aspects of the issue of change: change as represented by shifts in management accounting practices and approaches; and change as represented by theoretical perspectives that provide “conceptual frameworks” for management accounting research. For me, the true success of this endeavour is the authors' ability to illustrate the change process from multi‐perspectives.

The stated aim of the book is the challenging task of providing advanced management accounting students with a bridge between technical management accounting textbooks and academic articles. For the authors, the “excitement” of the academic world is not “effectively conveyed to these undergraduates”. For the authors, “excitement” lies within the story behind change from the “mechanistic” to the “post‐mechanistic”, but equally, in the multiple perspectives on the changes. No single answer is posited for the changes, but the authors raise multiple issues about change, as well as engaging in interpretation and reflection.

The authors have carefully considered the methodology by which they introduce levels of context to bridge the “technical” and the “academic”. Chapter 1 provides a succinct overview of two challenges to management accounting. First, the authors question what is management accounting, particularly in relation to the practical “relevance lost” issue (Johnson and Kaplan, 1987, pp. xi‐xii). Second, the authors illustrate the broad effects of paradigmatic approaches to management accounting change, by considering the rational perspectives (including transaction cost theory, agency theory, and contingency theory), the interpretive perspective, and the critical perspective (including political economy, and post‐structuralism/postmodernism).

The book is problem‐focused, in the sense that it seeks to illustrate present tensions in management accounting surrounding a broad conception of “change”. In particular, the authors acknowledge that management accounting has changed from “mechanistic” to “post‐mechanistic”, while holding that, contextually, change in management accounting is pervasive. I fully appreciate the approach engendered by arguing: “The future of management accounting seems to be uncertain and unpredictable, but the present is a contestable terrain. ‘Change’ can be considered under these circumstances” (p. 9). The authors carefully argue how and why they focus on change, and this summary is an important aspect of the book. In my opinion, as a learning aid, this will be invaluable. In particular, the authors make the essential link between the role of “alternate” theories in explaining the practices of management accounting to the insights of “alternate” theories in designing and implementing management accounting systems.

Consequently, there are four parts to the book. Part I considers “mechanistic” approaches to management accounting, consisting of five chapters. This part considers cost, allocation methods, product costing, budgeting, profit planning, standard costing, variances, and decision making. While the focus is on traditional “technical‐orientated” management accounting, the book focuses on understanding the historical and contextual evolution of techniques, alongside practical illustrations of those techniques. For example, Chapter 2, entitled “Towards mass production and bureaucracy” highlights the evolution of production systems from craft to mass production and the evolution of organisational forms from aristocracy to bureaucracy. The chapter presents a contextual story of the emergence of management accounting. But unlike most technical management accounting textbooks that present an accepted story of the emergence of management accounting, this book canvasses alternative theoretical explanations for the emergence of management accounting. Equally, in the discussion of particular techniques, there is a mixture of practical, case‐based illustrations, worked examples, as well as a detailed depictions of the problems associated with these techniques from practical, social, cultural, and theoretical perspectives. In this sense, Part I provides an historical overview of the development of technical management accounting.

In four chapters, Part II details “post‐mechanistic” approaches to management accounting. This series of chapters begins with a careful presentation of the shift from the mechanistic to the “post‐mechanistic”. By way of defining the “post‐mechanistic”, the authors situate the reader in a four‐piece analysis. First, there is an overview of the post‐mechanistic change from its multi‐layered perspective (including the local and global nature of the change) and its multi‐faceted levels (encompassing the technological, organisational and managerial, political, social, and cultural). The post‐mechanistic, then, is presented as a mixture of contextual influences from the local to the global, “intents” influences from finance to strategic, and from content influences from mass to flexible manufacturing. Second, the authors introduce globalisation, considering the political‐economic and business implications in relation to markets, products, and brands. Third, this section considers the implication of these global changes in relation to the business through its affects on corporate goals and objectives. In this, the pluralistic nature of the corporation shifts the focus from a traditional financial emphasis to a strategic emphasis. Finally, in defining “post‐mechanistic”, the chapter considers the crisis of mass production and the subsequent transformation to flexible manufacturing approach. After detailing traditional conceptions of “flexible manufacturing”, the chapter outlines the sociological context of the term, by illustrating different aspects of the “post‐mechanistic” through the descriptions posed by “post‐Fordism”, “flexible specialisation”, “postmodernity”, and “post‐bureaucracy”. Chapters 8‐10 illustrate the post‐mechanistic management accounting shift by considering the growing influence of strategic management accounting, the balanced scorecard, cost management, activity‐based costing, and management control and governance. What I appreciate about these chapters is that the authors juxtapose the traditional conceptions of these management accounting techniques and approaches alongside their context, criticisms, and limitations.

Part III of the book shifts the focus towards perspectives in relation to management accounting change, by considering the influence of the rational. Chapters 11 and 12 consider neoclassical economic theories and the contingency theory of management accounting change. Thus, the focus of the book shifts from a focus on the interface of management accounting practice and different approaches to concentrate on the influence of theoretical economics on management accounting research. Thus, Chapter 11 depicts the shift from the normative “prescriptive” to the positivist “descriptive” approaches to management accounting. The chapter focuses on the “agency problem” and “transaction cost” theory by outlining the relevant theoretical issues and then considers the influence of each theory on management accounting research. Chapter 12 concentrates on contingency theory. It depicts the traditional contingent perspectives of the environment, technology, structure, strategy, before considering the influence of contingency theory on management accounting research. The chapter concludes with a thorough review of the conceptual and methodological limitations of contingency theory, as well as the iterative process of researchers developing the theory and positing answers to certain deficiencies. For me, these chapters succeed in developing a difficult message. They provide excellent summaries both of the theoretical perspective, but equally of the challenges of the theoretical perspective, presenting a realistic picture of the research world as an evolving, iterative process.

Part IV continues the focus on perspectives by considering interpretive and critical perspectives of management accounting change. These three chapters consider the movements toward interpretation, political economy, and post‐structuralism/postmodernism. Chapter 13 introduces interpretivism, by considering the influence of functionalism, interpretive sociology, institutional theory (both old and new), and actor‐network theory. The focus, naturally, is on how these theoretical influences shift our understandings of change. Chapter 14 begins with a succinct overview of what it is to be critical, before shifting to consider Marxist and neo‐Marxist perspectives on management accounting. The chapter introduces labour‐process, orthodox Marxism, and neo‐Marxism (including Friedman, Burawoy, and Gramsci). The final chapter introduces Foucauldian and Habermasian approaches to management accounting research. In particular, the chapter outlines critiques made against the structural and the “critical”, before considering the theoretical underpinnings of post‐structuralism and postmodernism. The authors canvas each of the main research projects within this paradigm, and provide succinct summaries of the aims of the theoretical interventions. In this, difficult theoretical material is made accessible to a broad range of readers.

In summary, the authors have succeeded in presenting an integrated practical and theoretical overview of management accounting change. They succeed on a number of levels, but there are three aspects that I particular appreciate about the book. First, the authors do not provide a “sanitised, accepted” view of management accounting, but consider social, political, and cultural influences in its development, as well as depicting limitations and challenges to a wide variety of management accounting practices and research projects. In this sense, by being problem‐focused, the book is realistic. Second, the authors focus on student learning by highlighting key terms and points in focus, as well as providing a variety of illustrations and well‐chosen examples. In particular, I appreciated the thought‐provoking “Beyond the Chapter” questions, which should provide a valuable resource for class discussion. Third, the multi‐perspectival approach was illustrated throughout the book. By focusing on context, this enabled the authors to examine the complexities and challenges of using management accounting, and this should enable readers to develop a more‐informed view of practice and research. In this context, Chapter 1 is a vital chapter, and readers should be encouraged to reread this chapter as they make their way through the book.

To conclude, this is a challenging book targeting an audience of advanced management accounting students. In this endeavour, the authors have succeeded. In fact, given the increasing focus on context both practically and theoretically, I personally believe that this book would be most helpful in any undergraduate level, as well as an excellent post‐graduate resource. The book is ambitious; but it works.


Johnson, H.T. and Kaplan, R.S. (1987), Relevance Lost: The Rise and Fall of Management Accounting, Harvard Business School Press, Boston, MA.

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