318 ACCOUNTING FOR MANAGERS
that is both constitutive of and constituted by the standard costing and budgetary
practices of the early twentieth century.
To date, within accounting as well as organizational theory, a majority of
work applying what has been termed Foucault’s archeological and genealogical
perspectives have had an historical perspective. However, the application of
Foucault’s insights into the functioning of modern societies is not limited to forays
into the past. More pertinently, his work proves to be of continuing value as it is
being profitably used to illuminate certain aspects of the contemporary uses and
redefinitions of accounting. For example, Preston (1992, 64) studied the relative
emergence of Diagnostic Related Groups (DRGs) as an ‘‘accounting technology
based upon principles of cost control rather than cost reimbursement.’’ Using a
longitudinal study Preston (1992, 97) showed how this practice of reimbursement
cannot be exclusively related to a ‘‘a logic of economic incentives and rational
economic behavior.’’ Rather, a shifting complex of events, including Medicare and
Medicaid, the private structure of American health care, the power of professional
associations, changing public attitudes towards health care, is seen as being part
of this transformation of accounting practices. Accordingly, Preston, following
Foucault, revealed the emergence of DRGs as being implicated in a wider and
more general transformation in the ‘‘politics of health’’ which involves not only
economic factors but more decisively, social and cultural ones as well. On this
same issue of contemporary application of Foucault’s work, Rose (1991) argued
for an interrelation between the mode of liberal democratic governance and the
technology of quantification, numeracy and statistics. Rose (1991, 691) stated that
‘‘numbers have an unmistakable power in modern political culture’’ evident from
opinion pools to the federal budget and the national income statistics. The role of
accounting in this Foucaultian view, is that accounting, along with other various
calculations, form the basis for democratic politics whose singular characteristic is
‘‘arms-length’’ management from a distance.
Consistent with the underpinnings of critical perspectives, the Foucaultian
view situates management accounting in a wider political and social context.
Specifically, in the Foucaultian approach, management accounting is considered
as part of a larger historical trend through which people at large were subjected to
a variety of disciplinary techniques. Whereas in labor-process theory, management
accounting appears within the context of a class-divided society to aid economic
expropriation, the Foucaultian tradition reveals management accounting as an
element of a general historical process by which people are made calculable and
governable. The Foucaultian view also considers management accounting as a
social practice rather than a technique by examining the intricacies and richness
in such social relations that are embedded in social patterns of interaction as
language, discipline and intimacy, all cultural norms and forces which potentially
impinge on the roles and nature of management accounting.
Closing discussion
It is important to note our interpretation of the relationship among the alternative
managerial and sociological theories considered, as well as their relationship