Management Accounting and Control Systems: An Organizational and Sociological Approach

Citation

Bui, B. (2011), "Management Accounting and Control Systems: An Organizational and Sociological Approach", Journal of Accounting & Organizational Change, Vol. 7 No. 3, pp. 309-311. https://doi.org/10.1108/18325911111164231

The second edition of Management Accounting and Control System book by Norman Macintosh and Paolo Quattrone (2010) examines management accounting and control systems (MACS) from an organizational and sociological perspective, rather than a technical‐rational one. Adopting a sociological perspective, the authors view MACS as a mechanism to make, manage and maintain relationships within organizations and societies. In doing so, it takes a rational view of actors and organizations, that is, MACS cannot be reduced to individual actors and actions, but is the result of cause and effect relationships and interaction between actors and between these actors and organizational structure.

The book advocates the use of theories and models to understand MACS problems and issues and through which it also seeks to illustrate the intertwining nature of theory and practice. Therefore, throughout the 11 chapters, theories and models are used to “sensitize” the understanding of practical situations, and cases are used to illustrate abstract theoretical concepts and arguments. Another distinguishing feature of this book is that it places MACS in its historical context, with interesting cases ranging from the use and practice of MACS from the fifteenth century to the twentieth century and the implications of and the role played by MACS in recent scandals such as Enrol and World.com. This not only provides a background to the technical evolution of MACS, but also covers the issues of accountability, labour control, religion, education, and social and cultural belief. In explaining the differences in MACS systems and practices in different cases and contrasting a positivist‐functionalist view with a relativist‐interactionist view of MACS, the book offers an overview of the different paradigms to understand MACS by. While a positivist‐functionalist view of MACS focuses on structure, technical and rational function and contingency‐based view of MACS, the alterative view posits the importance of interactions, actions and networks and MACS as practice (the method of doing things, rather than the content of doing) and thus the flexible, fluid and dynamic nature of MACS as the society and the actors within it change.

The book is divided into three parts. Part 1 including the first three chapters defines the dimensions and theoretical perspectives with which MACS can be viewed. Specifically, the two views of MACS are constrasted, with the first emphasising a strong belief in reality, features and functions of MACS, whereas the second view focuses the network of relations that shape MACS.

Part 2 examines the nature, structure and modes of MACS operation. Chapter 4 provides an overview of five predominant paradigms and theories that interpret the nature of MACS and considers the nature of MACS as information and power, whereby the use of information creates and distributes power within an organisation. Chapter 5 presents three frameworks to look at MACS as a system:

1. 1.

   natural selection model that presents a contingency view of organisations and its environments;

2. 2.

   classical economics notion of efficiency whereby the control mechanisms for markets and hierarchies are compared; and

3. 3.

   the cybernetic model, where MACS is considered as an information processing system with a focus on managing task uncertainty.

The relationship between strategy and control is reviewed in Chapter 6. The striking feature of this chapter is the idea of strategy as ideological control, whereby strategy works as a powerful control itself, becoming shared values and belief among organisational participants. Chapter 7 analyses five modes of control, elaborates the different uses of MACS under different conditions of goal and means uncertainty, and highlights the possibility of control being used as camouflage and the different coping strategies with disguised control.

Part 3 discusses the ways in which MACS work in daily organisational action with a focus on organisational change and the role of MACS in such a process and the impact of such process on the nature of MACS. The authors argue, by using case evidence, of how MACS change is intertwined with, and used as means of significance (meaning), legitimation (morality and norms) and domination (control over people or resource allocation), rather than merely just a tool to achieve technical efficiency (Chapter 8). An elaboration of how development of information technology has shaped and changed the nature and functioning of MACS is also presented (Chapter 9).

Part 4 considers MACS in and as practice. Specifically, Chapter 10 views MACS as mechanisms to achieve social order through the exercise of power and creation of specific kinds of citizens and people. It is argued that control practices are not necessarily driven by the economic and profit‐maximisation rationale, but rather intrinsically linked to the broader apparatuses of control, social contexts and training regimes. It is through the practice, or “performing” of MACS, that organisational and individual identities are formed and mirrored, performances generated and examined, and knowledge emerge and reproduced. Chapter 11 concludes the book by considering MACS at an ethical and societal level in which control and governance are considered specific forms of arranging and governing societies and challenges the validity of the contemporary calls for economic‐driven accountability and transparency. Through these they challenge the traditional‐training models of accounting and management control with prescribed solutions. Rather than, they advocate the need to abandoning the belief in “true and fair view” provided by accounting and instead leave people free to find their own solutions and seek for more reality than possibly provided by the strict economics‐driven premises of accounting.

The key merit of the book lies in the links between theoretical arguments and issues and varying, rich and insightful empirical case evidence from prior research studies and practice. The purpose, and the benefit of doing this, is the ability to illustrate the partial nature of each theoretical perspective in explaining MACS practice, and thus the need to view them as such, rather than advocating the best paradigm to look at MACS. Further, the placing of MACS in both its historical and contemporary contexts is a rare and praiseworthy achievement since it reminds us of how inter‐connected MACS practice of today is to its origins. The multiple theories and models presented throughout this book also help readers understand and appreciate the multi‐faceted and complex nature of MACS. Therefore, this book will benefit researchers and practitioners who seek to look beyond the simple and somewhat naive view of MACS as an economic‐driven efficiency seeking and profit maximisation tool and presenting a true and fair view of organisational reality. As they venture into the dangerous but more exciting waters of exploring the implications and connections of MACS to broader issues such as social controls, governance, knowledge, power, ethics and accountability, they will find this book of great companion, both theoretically and empirically. This book is also one that deserves several revisits as each time the reader may find their thinking challenged and enlightened in a new way. Furthermore, there is a summary and conclusion section to each chapter which is useful for “buddling” key concepts and ideas. The extensive list of references to the seminal work is certainly a necessary and valuable guide for more advanced learners and readers in their pursuit of knowledge in the field of management accounting and control.

Binh Bui

Victoria University of Wellington, Wellington, New Zealand