MANAGEMENT CONTROL, MANAGEMENT ACCOUNTING 51
Conclusion...........................................
In his review of management accounting in the UK, Otley (2001) argued that
we need to ‘put the management back into management accounting’ (p. 259).
Otley reinforced theRelevance Lostargument (Johnson and Kaplan, 1987) that
management accounting had become ‘irrelevant to contemporary organizations,
but worse that it was often actually counter-productive to good management
decision-making’ (p. 243). Otley remarked that Johnson gave up on accounting
while Kaplan (with Cooper) ‘has become a leader in the re-invention of man-
agement accounting practices’ (p. 244), having developed activity-based costing
(described later in this book).
Simultaneously, Kaplan and Norton developed the Balanced Scorecard, which
in turn came into conflict with Stern Stewart’s Economic Value Added, a share-
holder value approach (see Chapter 2), although the two have to a large extent
been reconciled as mutually reinforcing (Kaplan and Norton, 2001). Both activity-
based costing and the Balanced Scorecard emphasize the transformation from
the nineteenth-century Industrial Revolution to the twentieth-century Information
Revolution and a shift in many western countries to a knowledge-based economy.
These techniques are, however, still rooted in the rational, economics-based
paradigm, which emphasizes the goal orientation and control system based
on feedback and feedforward described in this chapter. The next chapter pro-
vides alternative perspectives on the inter-relationship between accounting and
organizations.
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