17 Introduction to the Readings..............................
A rationale for this book was to provide a theoretical underpinning to accounting,
drawn from accounting research, to assist in interpretation and critical questioning.
This underpinning provides a critical perspective on the most common accounting
techniques and describes the social and organizational context in which accounting
exists. This context influences accounting but is also influenced by accounting,
as the way we see the world – even if only our small organizational part of the
world – is significantly influenced by the ways in which accounting portrays and
represents that world.
In this part of the book, we reproduce four readings from the academic
literature to present four different yet complementary perspectives on accounting
in organizations. Each reading has several questions that the reader should think
about and try to answer in order to help understand the concepts.
The article by Cooper and Kaplan is a classic, explaining clearly how traditional
management accounting techniques have distorted management information and
the decisions made by managers. The authors criticize the distinction between
variable and fixed costs, the limitations of marginal costing and the arbitrary
methods by which overhead costs are allocated to products. The activity-based
approach recommended by Cooper and Kaplan treats all costs as variable, although
only some vary with volume.
Covaleski, Dirsmith and Samuel’s paper describes the contribution of contin-
gency theory, and interpretive perspectives using organizational and sociological
theories (including institutional theory) and critical perspectives. The authors call
for ‘paradigmatic pluralism’, not as competing perspectives but as ‘alternative
ways of understanding the multiple roles played by management accounting in
organizations and society’ (p. 24).
Otley, Berry and Broadbent’s paper reviews the development of the manage-
ment control literature in the context of organization theories and argues for the
expansion of management control beyond accounting. The authors use a frame-
work of open/closed systems and rational/natural systems to contrast each of
these four perspectives and give examples of research in each. They conclude
that management control research needs to recognize the environment in which
organizations exist. While the definition of management control is ‘managerialist
in focus...this should not preclude a critical stance and thus a broader choice of
theoretical approaches’ (p. S42).