Accounting for Managers: Interpreting accounting information for decision-making

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276 ACCOUNTING FOR MANAGERS


thing! Further, Machin argues that research in MCSs, led, as it was, by qualified
accountants, made the research questions


‘virtually immune from philosophical analysis’,

a critique also reflected in Hofstede’s (1978) criticism of the


‘poverty of management control philosophy’,


  • the narrow, accounting focus which had become so prevalent.
    Such diverse opinions leave a number of issues to be clarified. First, is the
    meaning of the term ‘control’. In this review we will include within the definition
    of control both the ideas of informational feedback and the implementation of
    corrective actions. Equally, we explicitly exclude the exercise of power for its own
    sake, restricting ourselves to those activities undertaken by managers which have
    the intention of furthering organizational objectives (at least, insofar as perceived
    by managers). We are, thus, primarily concerned with the exercise of legitimate
    authority rather than power. This is no doubt a controversial position, but gives
    the review a clear managerial focus.
    There is also a distinction to be drawn between management control and
    financial control, which is of some importance given the accounting domination
    of the subject in recent years. Financial control is clearly concerned with the
    management of the finance function within organizations. As such it is one
    business function amongst many, and comprises but one facet of the wider
    practice of management control. On the other hand, management control can be
    defined as a general management function concerned with the achievement of
    overall organizational aims and objectives. Financial information is thus used in
    practice to serve two interrelated functions. First, it is clearly used in a financial
    control role, where its function is to monitor financial flows; that is, it is concerned
    with looking after the money. Second, it is also often used as a surrogate measure
    for other aspects of organizational performance. That is, management control is
    concerned with looking after the overall business with money being used as a
    convenient measure of a variety of other more complex dimensions, not as an end
    in itself.
    Having set some boundaries, the next section of the paper will provide a
    brief account of the main themes that have formed the starting point for the
    development of the field. Whilst well known, these roots cannot be ignored as
    their influence is reflected in work which continues today. There follows a review
    of the literature that has evolved over the last 20 years both as a continuation of
    and as a reaction against those roots, using a heuristic map provided by Scott
    (1981). Finally, we will suggest possible themes for future development.


The starting points


The roots of management control issues lie in early managerial thought. The
significance of the work of Weber, Durkheim and Pareto upon the development

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