360 ACCOUNTING FOR MANAGERS
looks to government for support (although a government conceptualized as a
customer). Nevertheless, the underlying knowledge systems are quite different,
and constitute different realities.
This shift in knowledge which accounting helps to construct, the shift from
looking to the state for subsistence to looking to markets, is fundamental, and
it interpenetrates the operation and management of ER’s core technology with
pervasive effects. For a start, it changes the appropriate form of organization. In
the old knowledge, the prime task was the operation of trains. The meaningful
management structure was one which facilitated operations. The physical facilities
of the railway are geographically laid out along the radial routes of the old pre-
nationalization companies. Thus the appropriate management organization was
around these routes, i.e. the regional management structures. The regional General
Managers and engineers, because of their acknowledged expertise in operating
trains, were afforded substantial status and influence.
Now, in the new knowledge, this is ‘‘mere’’ production, subservient to markets.
The prime task is serving markets. The meaningful form of management organiza-
tion is one which reflects and confronts markets. Since the long distance intercity
travel market is not confined to one main line, for example, or the freight market
confined to one region, the regional and business forms of organization do not map
perfectly onto one another. Hence the reorientation of management structures and
systems around the Business Managers, and their subsequent elaboration through
the Business Manager’s subordinates located in the regions. Of course, there is
still an operational task to be performed: trains, tracks, maintenance and so forth.
But in this new knowledge it is Business Managers, with supposed expertise in
markets and extracting resources from them, who attract status and influence.
The changing knowledge also redefines the appropriate form of action. In the old
knowledge, that of the celebration of the train, there were norms that made things
intrinsically necessary. ‘‘Of course’’ professional railwaymen renewed signalling
equipment when they electrified the track, for example; it was inconceivable not
to do so. The train needs to be taken care of and nurtured. The interest in thrift, the
avoidance of waste, also meant the elimination of activities not strictly necessary
for the operation of trains: training staff to smile at customers, for example. In
the new knowledge, activities are neither intrinsically necessary, nor intrinsically
wasteful. Rather they are judged for their consequences in the market. Through
the ‘‘bottom line’’, activities become desirable to the extent that they add more
‘‘value’’ than they cost. This is not simply cost minimization: the avoidance of
unnecessary gold-plating. The ‘‘bottom line engineering specification’’, mentioned
earlier, means designing for the market, as it were: adding comfort, reliability,
speed, customer service where its returns outweigh its cost. Attractive concourse
design is not wasteful extravagance, it is reinterpreted as a ‘‘good’’ thing which
brings in custom.
Action is also judged against a different concept of time. In the old knowledge,
time was practically infinite. The railways were built to last for decades, for
centuries. The nation would always need a transport infrastructure. Professional