Accounting systems in organisational contexts: A case for critical theory

Accountin~ Organizations andSocieCy,Vol. 12, No. 5, pp. 479-502, 1987. Printed in Great Britain

0361-3682/87 $3.00+.00 Pergamon Journals Ltd.

ACCOUNTING SYSTEMS IN ORGANISATIONAL CONTEXTS: A CASE FOR CRITICAL THEORY*

R I C H A R D C. L A U G H L I N

School o f Management and Economic Studies, University o f Sheffield, Sheffield S10 2TN

Abstract

This paper starts from the view that accounting systems in organisational contexts are more than technical phenomena and that to understand and change these technical elements the social roots must also be both understood and changed. To develop these insights, it is argued, requires major changes in the methodologies we adopt. This paper is addressed to arguing a case for a methodological approach to further these purposes which is derived from a German philosophical school of thought called "critical theory" more specifically from Jfirgen Habermas' interpretation of this thinking which gives particular emphasis to the social and technical aspects of societal phenomena which includes accounting systems.

T h e r e is i n c r e a s i n g a w a r e n e s s a b o u t " h o w l i t t l e w e k n o w a b o u t t h e a c t u a l f u n c t i o n i n g o f acc o u n t i n g s y s t e m s i n o r g a n i s a u o• n s. " ( H o p w o o d , 1 9 7 9 , p. 1 4 5 , cf. H o p w o o d , 1 9 7 8 , 1 9 7 9 , 1 9 8 3 ; B u r c h e l l et al., 1 9 8 0 ; C o o p e r , 1 9 8 1 ; S c a p e n s , 1984; Otley, 1984). This view could be surprising to many due to the volume of research and publications addressed to accounting practices which dominates our academic libraries. Yet to t h o s e w h o s e e t h e n a t u r e o f a c c o u n t i n g as b e i n g n o t o n l y a t e c h n i c a l a c t i v i t y b u t a s o c i a l o n e as w e l l (cf. H o p w o o d , 1 9 8 5 ; B u r c h e l l etal., 1 9 8 5 ) t h e o v e r a r c h i n g v i e w is t h a t w e r e a l l y d o n o t know enough about accounting systems in practice. A c c o r d i n g t o t h i s t h i n k i n g , w h i l e it is a c k n o w l e d g e d t h a t a g r e a t d e a l is k n o w n a b o u t t h e t e c h n i c a l a s p e c t s o f a c c o u n t i n g , it is a r g u e d

t h a t l i t t l e is u n d e r s t o o d a b o u t e i t h e r a c c o u n t i n g ' s s o c i a l r o o t s o r t h e i n t e r c o n n e c t i o n a n d interrelationship between the social and the technical. T h i s i g n o r a n c e is a g g r a v a t e d b y o u r c u r r e n t dominant views within accounting concerning the nature of accounting knowledge. These views can be seen to reside within the perspective that Burrell & Morgan (1979) call "funct i o n a l i s m " , as a n u m b e r o f c r i t i c a l s u r v e y p a p e r s i n a c c o u n t i n g h a v e i n d i c a t e d (cf. C h u a et al., 1981; Cooper, 1983; Hopper & Powell, 1985; Laughlin & Lowe, 1985)• These predominant f r a m e w o r k s o f a n a l y s i s r e s t r i c t t h e n a t u r e o f disc o v e r y t o t h e t e c h n i c a l a n d m o r e t a n g i b l e aspects of accounting systems~ across a wide range of organisations in their search for general pat-

*The author would like to thank David Cooper, Trevor Gambling, David Held, Anthony Hopwood, Tony Lowe, Mike Power, Tony Tinker, a number of anonymous referees, along with the participants at the Interdisciplinary Perspectives on Accounting Conference, held in Manchester in July 1985, for their critical insightful comments on the contents of previous drafts of this paper. Particular thanks are due to Peter Miller who painstakingly assisted the author in the formulation of this final draft. However, despite this assistance the errors and omissions in the following remain the responsibility of the author. 1 For the purposes of this paper an accounting system can be defined as: An enterprise based formal system which expresses in fundamentally numerical terms past, present and future financial actions of such enterprises (Laughlin, 1984, p. 8). It is appreciated that this definition actually only refers to the more tangible aspects of accounting systems. This is intentional since although these tangible aspects find their meaning in the more intangible cultural elements it is difficult to justify calling these factors accounting phenomena. 479

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terns and general theories. Alternatively, where this thinking ventures into the social space, researchers create unnecessary restrictions as to what constitutes "acceptable" theories. 2 It has been argued that a resolution of our ignorance of the nature and context of accounting systems in practice can only occur if there are fundamental changes in our methodological approach (cf. Hopwood, 1983; Tomkins & Groves, 1983; Roberts & Scapens, 1985; Laughlin & Lowe, 1985). These proponents invariably agree that we must abandon the more "scientific" thinking so prevalent in the accounting literature which advances the discovery of, so called, objective generalisations from a particular structured methodological approach. The alternatives they offer differ considerably yet all advance a case for a more subjective understanding about truth and knowledge. Recently a range of approaches have emerged as possible analytical tools in the endeavour to expose the social roots behind accounting systems design. These have come from symbolic interactionism (ColviUe, 1981, 1982; Tomldns, 1982; Tomkins & Colville, 1984), from Gidden's structuration theory (Roberts and Scapens, 1985), from more traditional Marxian analysis (Tinker, 1980; Tinker et al., 1982) and a model informed by the thinking of Foucault (Burchell, etal., 1985; Miller & O'Leary, 1987). This paper presents a further methodological approach, in this more subjective tradition, using some of the insights from a group of German philosophers usually referred to as "critical theorists" [see Bernstein (1976), Held ( 1 9 8 0 ) and Guess ( 1 9 8 1 ) for some able summaries of their work]. The paper is divided into four major sections. The first section looks at the general characteristics of accounting systems in practice, and the ways in which their social roots can be understood. The issue of theoretical frameworks is addressed here and the potential merits and dif-

ficulties of using concepts and insights from critical theory to advance our understanding of these issues are discussed. The second section looks at some of the principal ideas of critical theory, and presents arguments for using the thinking ofJiirgen Habermas as the basis for developing a methodological approach for our concern with practical accounting issues. Some of the basic ingredients of this approach are also outlined in this section. The third section explores the nature of a methodological approach derived from Habermas' thinking set in the context of trying to understand and change accounting systems design. The fourth section presents a reflective critical evaluation of the suggested methodological approach. A final, fifth, section provides some concluding remarks.

ACCOUNTING THEORY AND PRACTICE AND THE SIGNIFICANCE OF CRITICAL THEORY IN SUCH A CONTEXT To view an accounting system as a technical, organisationally independent, p h e n o m e n o n is increasingly being questioned. The conventional view maintains that accounting is nothing more than a technical activity (cf. Burchell et al. 1980) but there is both growing research and support for seeing this thinking as a gross oversimplification (cf. Hopwood, 1978, 1983, 1985; Colville, 1981, 1982; Tomkins, 1982; Laughlin, 1984; Roberts & Scapens, 1985; Burchell et al., 1985; Miller & O'Leary, 1987). Although accounting systems, according to these proponents, undoubtedly have technical aspects, these need to be understood by reference to the context in which they are placed which supplies the important meanings for these more tangible elements. One particular way in which accounting systems can be understood by reference to their social context is to view them as types of organisa-

z Typicalexamples of accountingresearch, which fall in this category,are studies which mould accountingrelationships according to agencytheory (cf. Watts & Zimmerman, 1978, 1979;Zimmerman, 1979). To their merit they do posit social factors in the generationofaccountingtype behaviourbut put unnecessaryand, to a large extent, unreal constraints aroundwhat is this social space.

ACCOUNTINGSYSTEMSIN ORGANISATIONALCONTEXTS tional l a n g u a g e s y s t e m s (cf. Jain, 1973; Belkaoui, 1978; Laughlin, 1981; C o o p e r , 1983; R o b e r t s & Scapens, 1985). T h e y are, as l a n g u a g e systems, h u m a n artefacts w h i c h m o d e l c e r t a i n a s p e c t s o f o r g a n i s a t i o n a l life w h o s e "terms" a n d "sent e n c e s " ( t h e m o r e t e c h n i c a l a s p e c t s o f t h e i r des i g n ) find m e a n i n g s in t h e historical, organisational a n d s o c i e t a l c o n t e x t in w h i c h t h e y a r e "uttered". T h e s e m e a n i n g s m a y b e r e g a r d e d as variable, if o n e f o l l o w s t h e a p p r o a c h o f t h e l a t e r W i t t g e n s t e i n ( 1 9 5 3 ) to l a n g u a g e as s u g g e s t e d b y l e a d i n g figures in t h e m o d e r n t h e o r y o f l a n g u a g e (cf. Austin, 1961; Searle, 1969). As a r e s u l t universal g e n e r a l m e a n i n g s c a n n o t b e a s s u r e d ) Despite these doubts about the existence of general meanings two points are clear about t h e i r nature. Firstly, m e a n i n g s n e e d to b e discov e r e d a n d d e f i n e d b y h u m a n actors, a n d this is to b e a c h i e v e d t h r o u g h that d i s t i n c t l y h u m a n attrib u t e , n a m e l y language. 4 Secondly, t h e r e is e v e r y p o s s i b i l i t y t h a t t h e s e m e a n i n g s go b e y o n d t h e p r e s e n t o r g a n i s a t i o n a l c o n t e x t . In this s e n s e t h e m e a n i n g s m a y t r a n s c e n d t h e o r g a n i s a t i o n as H o p w o o d ( 1 9 8 3 ) suggests. T w o m o s t o b v i o u s areas o f t r a n c e n d e n c e a r e a p p a r e n t : firstly in t e r m s o f history, a n d s e c o n d l y in r e l a t i o n to t h e social o r s o c i e t a l c o n t e x t . T h e real m e a n i n g s behind the more technical aspects of accounting s y s t e m s d e s i g n m a y b e f o u n d in c o n t e x t u a l variables in p r e v i o u s g e n e r a t i o n s , o r e q u a l l y in social o r s o c i e t a l variables d u e to t h e c l o s e interc o n n e c t i o n s b e t w e e n o r g a n i s a t i o n s and s o c i e t y (cf. Laughlin & Lowe, 1985). To u n d e r s t a n d t h e t e c h n i c a l a s p e c t s o f acc o u n t i n g s y s t e m s design, let a l o n e t h e c o m p l e x historical, o r g a n i s a t i o n a l a n d s o c i e t a l m e a n i n g s w h i c h e x p l a i n t h e s e configurations, a d e e p in-

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v o l v e m e n t o f t h e o r y a n d t h e o r e t i c i a n s in p r a c t i c e is r e q u i r e d . At p r e s e n t this is sadly lacking: The simple fact is that accounting research has tended to isolate itself from accounting in practice, if not accounthag practice (Hopwood, 1983, p. 302). If w e are to g r a p p l e w i t h t h e s e c o m p l e x m a t t e r s w e n e e d a r e o r i e n t a t i o n o f o u r r e s e a r c h end e a v o u r s w h i c h will have far r e a c h i n g effects o n the nature of academic research. O n e p a r t i c u l a r issue o f significance w h i c h w o u l d arise f r o m this r e o r i e n t a t i o n c o n c e r n s t h e p o s s i b i l i t y o f a m o r e p r o a c t i v e i n t e n t i o n for t h e research endeavour. Rather than being involved o n l y in e x p o s i n g t h e u n d e r l y i n g c o n t e x t u a l m e a n i n g s a n d t h e i r t e c h n i c a l o u t w o r k i n g s it has b e e n a r g u e d that t h e r e s e a r c h e n d e a v o u r c a n a n d s h o u l d b e i n v o l v e d in p r o c e s s e s o f c r i t i q u e a n d o f c h a n g e in b o t h t h e t e c h n i c a l a n d u n d e r l y i n g c u l t u r a l factors in a c c o u n t i n g s y s t e m s d e s i g n (cf. Tinker, e t al., 1982; C o o p e r , 1983; C o o p e r & Sherer, 1984; Laughlin & Lowe, 1985). T h e b e n c h m a r k s for t h e d i r e c t i o n for t h e s e c h a n g e s a r e i n d e e d c o m p l e x a n d c a n n o t b e easily resolved. Yet d e s p i t e t h e s e u n c e r t a i n t i e s a case c a n b e m a d e for s e e i n g t h e raison d'dtre o f r e s e a r c h as n o t o n l y u n d e r s t a n d i n g b u t also t h e transformat i o n o f t h e p r a c t i c a l p h e n o m e n a b e i n g investigated. T h e a r g u m e n t o f this p a p e r is that critical t h e o r y has m u c h to c o n t r i b u t e in this r e s p e c t .

Critical theory as research methodology and practical intervention for accounting systems design Critical t h e o r y refers p r i n c i p a l l y to t h e w o r k o f m e m b e r s o f t h e I n s t i t u t e o f Social R e s e a r c h f o u n d e d in Frankfurt in 1923. T h e m o s t p r o m i -

3 Clearly this view about the nature of accounting systems design and the social contexts which give the tangible aspects "meaning" is problematic. It also seriously challenges the methodological assumptions upon which much current research is based. In effect current research in accounting maintains that it is possible, desirable and necessary to generalise about all accounting systems whereas what is being suggested here is that this desire may be both impossible and counterproductive in terms of generating knowledge about these systems. 4Aswe will argue in the following section accounting systems in organisational contexts are not only forms of language in and of themselves, they can only be accessed and changed through language processes which need to be carefully specified. It is this belief above all others whch guides this author to arguing the case for adopting Habermas' thinking for the design of a suitable methodological approach which majors on the nature of these language processes. s However, as we indicated above, the ability of the critical theorists to actually generate the changes they anticipate from their approaches remains embryonic at best,

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n e n t figures in this tradition are Max Horkheimer, T h e o d o r Adorno, H e r b e r t Marcuse a n d Jiirgen Habermas. It is primarily these four w h o have m o u l d e d the n a t u r e of the t h e o r y as it is k n o w n to-day. Yet each of these individuals did n o t simply b u i l d u p o n the insights of the others. Critical t h e o r y is a diverse and, to a c e r t a i n extent, disparate set of ideas. Despite this diversity, h o w e v e r , it is possible to highlight s o m e i m p o r t a n t general characteristics of critical t h e o r y itself. Some of the key elem e n t s are s u m m a r i s e d b y Held ( 1 9 8 0 ) as follows: At a general level it may be said that the founders of critical theory preserved many of the concerns of German idealist thought - - concerns, for example, with the nature of reason, truth and beauty - - but reformulated the way in which these had been previously understood. They placed history at the centre of their approach to philosophy and society. Yet the issues they addressed went beyond a focus on the past and embraced future possibilities. Following Marx, they were preoccupied, especially in their early work, with the forces which moved (and might be guided to move) society towards rational institutions - - institutions which would ensure a true, free and just life. But they were aware of the many obstacles to radical change and sought to analyse and expose these. They were thus concerned both with interpretation and transformation (p. 15). The p r i m a r y c o n c e r n of all critical theorists was, a n d still is, with an historically g r o u n d e d social t h e o r y of the w a y societies and the i n s t i t u t i o n s w h i c h make t h e m up, have e m e r g e d a n d can b e u n d e r s t o o d . I n t e r p r e t a t i o n is n e v e r for its o w n sake b u t forms part of the i m p o r t a n t u n d e r s t a n d ing w h i c h c a n allow s o m e desired "transformation" of societies and their i n s t i t u t i o n s so that a "true, free a n d just life" can b e assured. This practical and critical c o n c e r n w i t h the c h a n g e a n d d e v e l o p m e n t of societies a n d i n s t i t u t i o n s indicates the role a n d significance of t h e o r y for these writers: t h e o r y b e c o m e s the vehicle for an historically g r o u n d e d i n t e r p r e t a t i o n and transform a t i o n to occur. Critical t h e o r y is a vehicle t h r o u g h w h i c h u n d e r s t a n d i n g a b o u t reality can b e achieved and t r a n s f o r m a t i o n of c o n c r e t e institutions occur. U n d e r s t a n d i n g is always to b e related to the c o n c e r n s w i t h desired transformation. It is the view that the p r e s e n t is n o t satisfac-

tory, that reality c o u l d b e b e t t e r than it is, a n d that the m e t h o d o l o g i c a l aspects of critical t h e o r y c a n create this i m p r o v e m e n t w h i c h marks o u t this t h i n k i n g as essentially "critical". Historical analysis, to a critical theorist, supplies n o t o n l y the insights into the past b u t also the m e t h o d o l o g i c a l tools for c h a n g e in the future. Points of progress in the past a n d the m e c h a n i s m s w h i c h have p e r m i t t e d their e m e r g e n c e form the m e t h o d o l o g i c a l apparatus for c h a n g e in the future. This view rests u p o n a p r i o r belief as to w h a t c o n s t i t u t e s progress or regression for society. Historical analysis is n o t s o m e value free activity, b u t is u n d e r t a k e n w i t h a particular p u r p o s e in m i n d : to analyse p o i n t s of progress, to d i s c e r n the m e c h a n i s m s leading to their e m e r g e n c e , a n d to allow these to be used again to e n c o u r a g e societal d e v e l o p m e n t to a truer, freer a n d m o r e just life for all. In a d d i t i o n to this c o n c e r n with historically g r o u n d e d change, critical t h e o r y has a n u m b e r of o t h e r i m p o r t a n t characteristics. F o r e m o s t a m o n g s t these is the p o s i t i o n a n d significance of h u m a n agency in b o t h historical c h a n g e and the p r o c e s s of k n o w l e d g e acquisition. Critical theory, w i t h its roots in Kant, Hegel and Marx, stresses the significance of h u m a n agency as an active force in history. It also assumes, apriori, that h u m a n subjects, of necessity, m e d i a t e and m o u l d historical u n d e r s t a n d i n g . I n this sense it is critical of the m o r e positivistic approaches to k n o w l e d g e w h i c h assume a c e r t a i n i n d e p e n d e n c e b e t w e e n an e x t e r n a l reality and the observer. This v i e w of history as m o u l d e d and, to an extent, m a d e b y m a n k i n d does n o t ignore structural c o n d i t i o n s , b u t seeks an e x p l a n a t i o n w h i c h c o m b i n e s s u b j e c t i v e a n d o b j e c t i v e factors. Critical t h e o r y has always m a i n t a i n e d a c e r t a i n dist a n c e from the classical historical materialist int e r p r e t a t i o n of history w h i c h identifies econo m i c factors as the driving force b e h i n d historical change. For critical t h e o r y the d e v e l o p m e n t of societies is n e i t h e r an inevitable p r o g r e s s i o n (as it was for Hegel) n o r d e t e r m i n e d solely b y structural matters. This r e j e c t i o n of traditional historical materialism was b e c a u s e it was v i e w e d as an u n b a l a n c e d i n t e r p r e t a t i o n of Marxian

ACCOUNTINGSYSTEMSIN ORGANISATIONALCONTEXTS thOUght. This has g e n e r a t e d m u c h c r i t i c i s m f r o m t h o s e a d o p t i n g this m o r e t r a d i t i o n a l s t r u c t u r a l Marxist p e r s p e c t i v e (cf. A n d e r s o n , 1976; Therb o r n , 1977). Yet t h e s e c r i t i c i s m s fail to grasp t h e a t t e m p t o f critical t h e o r y to e x p l a i n c h a n g e b y h i g h l i g h t i n g t h e significance o f s u b j e c t i v e h u m a n agents as k e y factors w h i l s t r e t a i n i n g t h e significance o f s t r u c t u r e : their work sought to expose the complex relations and mediations which prevent the forces and relations of production from being characterised simply as objective - - as things developing "over the heads" of human agents. An analysis of the components of culture, of identity formulation etc. is necessary because "history is made" - - by the "situated conduct of partiallyknowing subjects". The contradiction between the forces and relations of production does not give rise to a fixed crisis path. The course of the crisis, the nature of its resolution, depends on the practices of social agents, and on how they understand the situation they are part of. Critical theory does not downplay structure, but seeks to examine the interplay between structure and social practices, the mediation of the objective and subjective in and through particular social phenomena (Held, 1980, pp. 361,362). .

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It m u s t b e n o t e d , h o w e v e r , that critical t h e o r y has e n c o u n t e r e d difficulties in e x p l a i n i n g t h e d e t a i l e d a s p e c t s o f this t h e o r y o f change. A r a n g e o f social t h e o r i e s c o n c e r n i n g t h e w a y s o c i e t i e s and institutions have emerged and changed have b e e n d e v e l o p e d . T h e s e in t u r n h a v e p r o v i d e d t h e basis, in different guises, for a m e t h o d o l o g y w h i c h e x p l a i n s p r o c e s s e s for s o c i e t a l a n d ins t i t u t i o n a l change. H o w e v e r , largely w i t h o u t exc e p t i o n , all h a v e failed to s e e a p p l i e d t h e m e t h o d o l o g i e s t h e y p r o p o s e d a n d t h e conseq u e n t s o c i e t a l changes. T h e " i n t e r c o n n e c t i o n s ( m e d i a t i o n s ) that m a k e p o s s i b l e t h e r e p r o d u c t i o n a n d t r a n s f o r m a t i o n o f society, e c o n o m y , c u l t u r e a n d c o n s c i o u s n e s s " ( H e l d , 1980, p. 3 3 ) have been advanced, but they remain embryonic ideas r a t h e r t h a n p r o c e s s e s w h i c h are guarant e e d to g e n e r a t e t h e d e s i r e d e n d result. This c l e a r l y relativises t h e s t a n d i n g o f t h e insights forthcoming. Critical t h e o r y , therefore, c a n n o t claim t h e status o f a w e l l e s t a b l i s h e d and v a l i d a t e d app r o a c h to t h e u n d e r s t a n d i n g o f s o c i e t y a n d t h e t r a n s f o r m a t i o n o f its institutions; it is, o n t h e c o n t r a r y , b a s e d o n a s s u m p t i o n s w h i c h are sub-

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j e c t to d e b a t e a n d question. T h e p r i m a r y ass u m p t i o n s are: firstly, that s o c i e t y has t h e p o t e n tial w i t h i n itself to b e w h a t it is not; s e c o n d l y , that c o n s c i o u s h u m a n a c t i o n is c a p a b l e o f m o u l d i n g t h e social w o r l d to b e s o m e t h i n g differ e n t a n d "better"; a n d thirdly, that this c a n b e p r o m o t e d b y utilising t h e aids and p r o p s w h i c h critical t h e o r y c a n supply. T h e ( s e c o n d ) h u m a n i s t i c a s s u m p t i o n rests o n a p a r t i c u l a r position c o n c e r n i n g t h e ability o f c o n s c i o u s h u m a n a c t i o n to c h a n g e t h e social w o r l d . It thus takes a p a r t i c u l a r p o s i t i o n o n an issue w h i c h has d o m i n a t e d a n d d i v i d e d p h i l o s o p h i c a l d i s c u s s i o n for centuries. In this r e s p e c t critical t h e o r y is o p e n to a t t a c k b y t h o s e w h o o p t for a v i e w e i t h e r o f d e t e r m i n i s m o r t h o s e w h o r e m a i n justifiably agn o s t i c at this stage in o u r u n d e r s t a n d i n g .

The relevance o f critical theory for accounting research From the preceding discussion three key c h a r a c t e r i s t i c s o f critical t h e o r y can b e identiffed w i t h a v i e w to i l l u m i n a t i n g t h e t e c h n i c a l a n d social a s p e c t s o f a c c o u n t i n g systems. Firstly, critical t h e o r y p r o p o s e s d y n a m i c a l l y linking t h e o r y to p r a c t i c e . T h e o r y , to a critical theorist, m u s t always h a v e s o m e s o r t o f effect o n p r a c t i c a l "real w o r l d " p h e n o m e n a . W e n o t e d a b o v e that critical t h e o r y has b e e n c r i t i c i s e d for a c h i e v e m e n t s in this r e s p e c t . W e h a v e argued, h o w e v e r , that a c c o u n t i n g t h e o r y s h o u l d a c c o r d a c e n t r a l r o l e to this l i n k e d t h e o r e t i c a l and practical m o d e l if w e are to c o m e to t e r m s w i t h acc o u n t i n g s y s t e m s design. To use critical t h e o r y for o u r p r a c t i c a l c o n c e r n , w h i c h takes t h e s e linkages as vitally i m p o r t a n t , c a n o n l y aid this endeavour. Secondly, critical t h e o r y sees critique, c h a n g e a n d d e v e l o p m e n t as vitally n e c e s s a r y c o m p o n e n t s o f t h e p r a c t i c a l l y b a s e d r e s e a r c h endeavour. This u n a b a s h e d c o n c e r n for c r i t i q u e o f t h e status quo a n d t h e n e e d for t r a n s f o r m a t i o n to a c h i e v e a "better" life c o u l d i n j e c t a fundam e n t a l ethical d i m e n s i o n into a c c o u n t i n g research. H i t h e r t o this has b e e n a b s e n t a n d in this r e s p e c t critical t h e o r y is p o t e n t i a l l y r e l e v a n t to t h o s e w h o c o n s i d e r t h e s e issues as vitally important.

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Thirdly, critical theory views social organisations in an historical and societal context. The concern is to identify the often hidden meanings which reside in these contexts. Critical theory has always been addressed to going beyond the tangible to the unseen and unclear contextual elements to discover the "real" meanings and factors which produce change. To the extent that accounting systems find their meaning in underlying social factors, with change in the former being dependent on changes in the latter, then critical theory may well supply a methodological framework for addressing these issues. For these reasons it is argued that critical theory may well supply a useful vehicle for understanding and changing accounting systems in organisational contexts. ALTERNATIVE METHODOLOGICAL APPROACHES IN CRITICAL THEORY AND THEIR RELEVANCE IN ACCOUNTING Each of the four key individuals representative of critical theory (Horkheimer, Adorno, Marcuse and Habermas) have taken different perspectives on the nature of historical development. It may be useful to indicate just some of these differences before presenting an argument for building an approach based on some of Habermas' insights. Different perspectives on critical theory: an evaluation Max Horkheimer held different interpretations during his life about historical development. His overarching view about the human race and society was that things were not as they should be but the desire and ability to change to achieve emancipation was "immanent" to humanity. In his younger days he maintained that these developments, admittedly through struggle and crisis, were occurring. However, in his later life, seeing the anticipated changes not occurring, he shifted ground to argue the case for the historical necessity for major alterations in societal configurations for the sake of the survival of the species (cf. Adorno & Horkheimer, 1947/1972).

Horkheimer's view about the nature of critical theory and hence a methodological approach to achieve development also varied during his life. In his initial position he saw theory as a way of exposing the processes of change and development which were already assumed to be occurring and consequently to allow these developments to continue. In his later life, however, theory became a vehicle for demonstrating the destructive processes of societal developments and the consequent necessity for alternative scenarios if the survival of the species was to be assured. Theoretically this brought Horkheimer much closer to Adorno such that in the 194Os, at possibly the height of the latter's career, there was little to distinguish the two of them. The most complex and difficult of the critical theorists to summarise is Theodor Adorno. His principal concern was with issues of philosopy and the nature of truth. However, like all critical theorists his views about truth, theory and methodology came from an analysis of history. Historical reality was far from optimal according to Adorno. He maintained that reality constantly did not match up to some pre-defined (although unspecified) set of concepts which Adorno applied to it. However, developments occurred in social reality when the process of "immanent criticism" of its current nature was allowed to be exercised with change to a new and developed state the natural outcome. From this interpretation of history Adorno, and Horkheimer in his later life, advanced a methodology of "negative dialectics" (cf. Adorno, 1966/1973) whereby the negative elements of reality are exposed to the ideal concept and through this process change towards a greater alignment was assumed to occur. Arguing from a different stance, Herbert Marcuse viewed history as a constant repression of human individuals whose immanent potential to achieve a better world for themselves and their society was almost extinguished (cf. Marcuse, 1955, 1960, 1964). Repression for Marcuse was not a matter of physical violence but was a domination of creative human potential by the logic of western industrial life and its consumerist logic. Marcuse propounded a critical methodol-

ACCOUNTINGSYSTEMSIN ORGANISATIONALCONTEXTS o g y w h i c h w a s i n t e n d e d to e x p o s e this repression and, in t h e p r o c e s s , g e n e r a t e t h e m o m e n t u m for t h e n e c e s s a r y c h a n g e w h i c h w o u l d ensue. Critical t h e o r y was to c o n t r i b u t e to t h e enlightenment required before the repression of life in t h e affluent w e s t c o u l d b e e n d e d . F r o m a s e e m i n g l y less radical p e r s p e c t i v e H a b e r m a s f o c u s s e d o n t h e r o l e o f l a n g u a g e in s o c i e t a l d e v e l o p m e n t a l p r o c e s s e s . H e maint a i n e d that d e s p i t e t h e m a n y r e p r e s s i v e p o i n t s in t h e h i s t o r y o f w e s t e r n s o c i e t y t h e r e is m u c h that r e g i s t e r s real p r o g r e s s . H a b e r m a s ' t h e o r y o f social e v o l u t i o n (cf. 1976, 1979, 1981a, 1 9 8 1 b / 1 9 8 4 ) m a i n t a i n s that s o c i e t y has p r o g r e s s e d d u e to t h e e x p a n d i n g a n d d e v e l o p i n g l a n g u a g e skills o f s o c i e t a l m e m b e r s . This r e a l i s a t i o n gives rise to w h a t H a b e r m a s calls his "logic o f d e v e l o p m e n t " , o r m e t h o d o l o g i c a l a p p r o a c h in o u r t e r m i n o l o g y , w h i c h c e n t r e s o n different l a n g u a g e p r o c e s s e s w h i c h w h e n o p e r a t i v e w o u l d , a c c o r d i n g to Habermas, generate even greater progression. T h e f o u r critical t h e o r i s t s e a c h p r o v i d e a differ e n t m e t h o d o l o g i c a l a p p r o a c h , w h e t h e r this b e a p p l i e d to a society, an o r g a n i s a t i o n o r an acc o u n t i n g system. It is argued, h o w e v e r , that H a b e r m a s ' m o d e l has t h e g r e a t e s t p o t e n t i a l b o t h as a m e t h o d o l o g i c a l a p p r o a c h for u n d e r s t a n d i n g a n d c h a n g i n g a c c o u n t i n g s y s t e m s d e s i g n a n d for investigating social p h e n o m e n a m o r e widely. T h e r e are t h r e e r e a s o n s for m a k i n g this claim. Firstly H a b e r m a s ' m e t h o d o l o g i c a l a p p r o a c h c e n t r e s o n l a n g u a g e a n d c o m m u n i c a t i o n as t h e e l e m e n t w h i c h is vital in a l l o w i n g u n d e r s t a n d i n g to o c c u r a n d n o n - v i o l e n t c h a n g e to h a p p e n . As s u c h t h e a p p r o a c h is b u i l t u p o n a v e r y basic rational skill w h i c h m a r k s o u t o u r u n i q u e n e s s as h u m a n beings. It c a n b e a r g u e d that a c c o u n t i n g systems, w h i c h c a n b e s e e n as t h e t e c h n i c a l elem e n t s o f a t y p e o f o r g a n i s a t i o n a l l a n g u a g e system, n e e d to b e u n d e r s t o o d a n d c h a n g e d t h r o u g h l a n g u a g e if w e are to d i s c o v e r a n d alter t h e social m e a n i n g s w h i c h a d h e r e in them. Secondly, H a b e r m a s ' m e t h o d o l o g y , u n l i k e t h e o t h e r

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critical t h e o r i s t s ' a p p r o a c h e s , d o e s n o t p r e s u m e s o m e p r i o r ideal state for t h e p h e n o m e n a b e f o r e an investigation c a n e n s u e - - t h e ideal is discovered through the process rather than being part o f t h e d e f i n e d a t t r i b u t e s o f t h e a p p r o a c h formul a t e d at t h e outset. Thus using H a b e r m a s ' s thinking in an a c c o u n t i n g c o n t e x t w e n e e d n o t start w i t h an ideal d e s i g n w i t h w h i c h w e c o m p a r e t h e actual as w e w o u l d have to using, say, n e g a t i v e dialectics. 6 Rather w e discuss t h e n a t u r e o f t h e a c c o u n t i n g s y s t e m and t h r o u g h this s t r u c t u r e d and defined discourse discover the improvem e n t s w h i c h are necessary. Thirdly, a n d finally, H a b e r m a s specifies c l e a r l y t h e n a t u r e and t y p e o f t h e p r o c e s s e s w h i c h are n e c e s s a r y to g e n e r a t e u n d e r s t a n d i n g and c h a n g e in t h e p h e n o m e n a u n d e r investigation. Unlike t h e o t h e r critical theorists, H a b e r m a s e x t e n s i v e l y d i s c u s s e s t h e r e q u i s i t e details s u r r o u n d i n g t h e r e q u i r e d lang u a g e p r o c e s s e s 7 w h e r e a s m o s t o f t h e o t h e r app r o a c h e s r e m a i n in e m b r y o n i c generalities. F o r all t h e s e r e a s o n s H a b e r m a s ' m e t h o d o l o g i c a l app r o a c h s e e m s to offer m o r e p r o m i s e than t h e o t h e r t h r e e as an a p p r o a c h for u n d e r s t a n d i n g a n d c h a n g i n g a c c o u n t i n g s y s t e m s design. H o w e v e r , b e f o r e p r o c e e d i n g to l o o k at t h e imp l i c a t i o n s o f H a b e r m a s ' m o d e l in m o r e d e p t h , it is i m p o r t a n t to m a k e t w o n e g a t i v e p o i n t s conc e r n i n g his f r a m e w o r k . Firstly t h e r e is t h e p o t e n tial p r o b l e m that t h e a p p r o a c h r e d u c e s t h e level o f c r i t i q u e so a p p a r e n t in t h e o t h e r critical t h e o r i s t s ' work. Each o f t h e o t h e r critical t h e o r i s t s h e l d p a r t i c u l a r and c l e a r p o s i t i o n s o n m a n y issues, p a r t i c u l a r l y o n r e p r e s s i o n in Weste r n society, w h e r e a s H a b e r m a s is p r i m a r i l y conc e r n e d w i t h t h e p r e c o n d i t i o n s for a d i s c u s s i o n w h i c h leads to t h e f o r m u l a t i o n o f t h e s e viewp o i n t s as w e l l as s u p p l y i n g c r i t e r i a for j u d g i n g t h e i r legitimacy. H a b e r m a s d o e s n o t define a p o s i t i o n o n any p a r t i c u l a r issue o r p h e n o m e mon, although he does express general views about current societal developments (see b e l o w ) , b u t this d o e s n o t n e c e s s a r i l y m a k e his

6 Although this is clearly the position of Horkheimer, Adorno and Marcuse it is remarkable how little insight they actually supplied into the nature of this important ideal (cf. Held 1980, pp. 381-389 ). 7The details of which will be looked at in the context of our accounting focus in the next section along with some of the potential application problems in the final substantive section.

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approach any the less critical providing the preconditions he specifies and the ultimate discourse will actually generate critical insights and change. Those who criticise his thinking for losing the level of critique on say society or the repression of the working class which dominated the thoughts of his fellow critical theorists, fail to realise that his thinking may actually achieve greater rather than less critique of these issues. This leads into a second c o m m e n t which centres on a question as to whether understanding and change is actually a function of a defined structured form of discourse. Put another way, if we follow Habermas' discursive processes can we be assured that critical understanding about a p h e n o m e n o n will occur and, ultimately, change in the p h e n o m e n o n will ensue? To date it is uncertain as to whether this is the case but only experiments with the thinking in particular empirical situations will supply an answer to this question.

S o m e preparatory insights into Habermas' approach a n d its relevance to accounting in organisational contexts Habermas' methodological approach is derived from his "theory of social evolution". This is abstract and complex, but can be understood by reference to three key interrelated variables. These are what he calls a "life-world", "systems" and "language decentration" (cf. Habermas, 1981a, 1981b/1984; Giddens, 1982; Thompson, 1983). The life-world is, to Habermas, a type of cultural space which gives meaning and nature to societal life. Whilst separate and distinct from the more tangible (technical) visible "systems" it is the social reality which gives these systems meaning and attempts to guide their behaviour through "steering mechanisms". Systems are the "self-regulating action contexts which co-ordinate actions around specific mechanisms or media, such as money or power" (Thompson, 1983, p. 285). They are, in this sense, distinct elements whilst at the same time intended to be the tangible expression of the cultural life-

world. Language decentration traces the way individuals develop their language skills which, to Habermas, enables the differentiation of the lifeworld and systems and the development of both. His theory is intended to cover the way western societies have developed over the centuries. The three main stages of social evolution ("mythical", "religious-metaphysical", "modern"), according to Habermas, can be traced to increasing levels of differentiation of and in the life-world and systems in societies. These changes, in turn, are traceable to the expansion of language capacities, according to Habermas, where individuals progressively move from a position of "primitive egocentrism" towards a language capacity "for coping with the external world, the social world and the world of inner subjectivity" (Giddens, 1982, p. 323) in a differentiated but integrated manner. It is this ability to articulate the differences and interrelationships of the technical (the external world), the cultural (the social world) and individuality (the world of inner subjectivity) which have allowed, according to Habermas, our differentiated cultural systems and tangible institutions to arise. Yet our inability to differentiate and retain as separate the social and technical spheres has led, according to Habermas, to a process of "inner colonization" of the social life-world by the technical system. The technical sphere overpowers the social, far exceeding its boundaries. To avoid this situation either the life-world can defend itself against further inner colonisation or it can re-establish its superiority while still maintaining its differentiated nature from the systems. Habermas sees the concern for defence being the current situation. 8 Yet he would maintain that long term development can only occur with the re-emergence of the significance of the cultural life-world and movements in this which are seen to happen through the adoption and use of a particular methodological approach which, not suprisingly, is language based. This methodology attempts to expose the distinct nature of the technical and social spheres

Habermas sees the current protest movementsthroughout the western world (e.g. CND in the U.K.and the Greens in Germany) as typical examples of such defensive mechanisms.

ACCOUNTING SYSTEMS IN ORGANISATIONAL CONTEXTS

(systems and life-world). This is to be achieved through the language processes which, according to Habermas, created their differentiated but integrated nature in the first place. The approach relies on the use of language processes which can heighten the ability of human beings to articulate the nature of and interconnections between the three "worlds" of reality (the "external", the "social" and "inner subjectivity")which will be vital if we are to understand and change any phenomena we need to investigate. The actual details of these language processes are extremely complex and somewhat scattered through Haber.mas' writing although the clearest and overall picture of them is contained in the new introduction to Theory and Practice ( 1974, pp. 1-40). In this work Habermas articulates three key stages in this language process ("formulation of critical theorems", "processes of enlightenment" and "selection of strategies" stages) each of which have different natures, purposes and intentions. However, all have an overriding concern with exposing the integrated social and technical aspects of any phenomena and changing the balance and nature of the two. This is primarily to be led through changes in the social, as we will see in the following section w h e n we apply this logic in an accounting context. Before proceeding to this there are two further points to highlight which register the merits of using Habermas' thinking in the context of understanding and changing accounting systems design. Firstly, his model addresses an issue central to the debate between those w h o see accounting systems as nothing more than technical phenomena and those w h o view them as having important social roots. Whilst Habermas does not focus specifically on accounting phenomena his more general concerns with the domination of the technical over the social and the need for an exposure of both and of their interrelationships has considerable relevance to accounting. Hahermas would quite understand w h y it is that some accounting theorists only see accounting as a set of techniques for constructing profit and

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loss accounts, balance sheet, budgets, etc. and their desire to encourage the use of these technical developments in all organisations to improve efficiency. This, to Habermas, is an expected and understandable outcome where the technical is overriding and divorced from the social. But he would be equally adamant of the need for change in this unbalanced situation. Secondly, Habermas presents a detailed process which is intended to allow not only an understanding about the nature and interconnections of the social and technical but also the possibility to engender change and development in both. We will discuss the process, which concentrates on the use of particular linguistic skills to the p h e n o m e n o n under investigation, in depth in the following section. If Habermas' model is correct it is language itself which has created the division between the social and the technical. Thus, following this logic, it is language processes which will give access to these differentiated phenomena, trace their interconnections and generate change in both. In an accounting context this implies that accounting discourses have been limited to talking about alternative measurement approaches, to concepts such as cost, profit, etc. and more or less efficient systems of evaluation (as in capital budgeting), thereby restricting our understanding about accounting systems design. This also restricts the possibilities for practical change and may well explain why so many of our textbook models of efficient systems remain unused in practice. Our surprise at this lack of usage is because we have not yet realised the significance of culture in determining the acceptability of any technical system. To change this situation we need to change the linguistic processes and the vocabulary we use for our descriptive understanding about the nature of accounting systems and for the processes necessary to achieve real changes in these systems in practice. With these thoughts in mind we turn to an adaptation of Habermas' methodological process set in the context of trying to understand and change accounting systems design.

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HABERMAS' METHODOLOGICAL APPROACH FOR UNDERSTANDING AND CHANGING ACCOUNTING IN ORGANISATIONALCONTEXTS Figure 1 depicts the central features of Habermas' methodological approach and seeks to show h o w this may be applied to understanding and changing accounting systems in their organisational contexts. This figure needs to be read at two distinct levels. The first (depicted as the smaller boxes) refers to the technical accountings and social reality which are deemed to become progressively clearer and altered when sequential methodological processes are applied to this reality. These methodological processes, which constitute the second level, are depicted as the larger overlaying boxes and are primarily the three stages from Habermas' model mentioned briefly above. Figure 1 is built upon the assumption that accounting systems are part of and give shape to organisational reality. It assumes that at a given point in time an organisation will have certain more tangible and obvious elements (e.g. observable actions, buildings, money, organisa-

tional charts, accounting systems) which constitute the "tangible systems" in Fig. 1. These are the more obvious "technical" aspects of organisational life which are often assumed to constitute the entirety of organisations. However the argument of this paper, as well as those others w h o propound the importance of organisational culture, is that this technical reality, although giving the illusion of independence, is actually related to other social contextual variables. Although these cultural variables are unseen and implicit they often come most dramatically to the surface w h e n change at a technical or social level is suggested. Thus, for instance, the imposition of a new management accounting system in particular organisations can often be used to discover some interesting cultural dimensions where the system may touch some delicate cultural nerve. Equally the times when organisations reject or react to the imposed financial reporting standards can also provide a vehicle for seeing more clearly these cultural factors which invariably determine these reactions. Figure 1 posits a developmental process in the acquisition of knowledge from quasi-ignorance to change in accounting systems design. Starting

Social evolutionary process increasing enlightenment and emancipation

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Fig. 1. The three stages of critical t h e o r y set in an accounting and organisational context.

ACCOUNTINGSYSTEMSIN ORGANISATIONALCONTEXTS from a "quasi-ignorance" position Habermas' three methodological stages (see below for details) can help understand and change the nature and interconnections of the (technical) accounting system and the various social factors which give it meaning. The "critical theorems" stage is where certain researchers attempt, through certain discursive processes, to expose the nature of these variables and their interrelationships. These insights are then taken to the primary organisational actors ( w h o can in some sense be called the "researched" due to their likely involvement in the critical theorems forthcoming) w h o together with the researchers continue to explore the accuracy or inaccuracy (to t h e m ) of the nature and interconnections of the various insights gleaned in the "critical theorems" stage. This constitutes the next, "processes of enlightenment", stage. Finally the researchers and researched together, through further discursive processes, derive, in the light of the insights from the previous stages, strategies which are intended to lead to change and development in the accounting system and the social context and the interrelationships between the two. This is the "selection of strategies" stage. The whole approach is a process which can be used for analysing and changing the nature of any accounting system, and its social context, of any particular organisation. It is a process which starts from a position where the researchers know nothing at all about even the technical nature of the particular system (the "quasi-ignorance" stage) and moves through a reflective process of discovery by the researchers as a group, about both the technical elements and social roots (the "critical theorems" stage). These are then reanalysed and redefined by a wider group which includes both the researchers and the researched (the "processes of enlightenment" stage). Finally, in combination, both researchers and researched explore the possibilities for change in both (and/or) the technical aspects of the accounting system as well as the social context which gives it meaning.

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The approach forms a process of discovery, from a critical perspective, into the fundamental nature of any accounting system leading to changes in both the technical nature of this system as well as the context which gives it meaning. From a point of ignorance about even the technical aspects of any particular organisation's accounting system the approach enables both the researchers and those actively involved in the organisation (the researched) to critically clarify these technical elements (e.g. the specific nature of the external reporting system and of the internal accounting control process) along with exposing the social roots (e.g. the cultural factors and the historical reasons behind these factors or the technological roots, such as compliance to the laws and standards of the accounting regulatory bodies for external report design and the cultural reasons for this compliance). It then takes both groups into actively seeking changes in either, or both, these technical elements and the social roots in the context of a model of "progress" (to be defined in the discourse) for both the organisation and the society of which it is part.

S o m e general c o m m e n t s a n d pm'or issues Before turning to the detail of these three key stages it is important to make two general comments about the nature of Fig. 1 as well as raise three prior matters which need to be resolved at this stage. The general c o m m e n t s centre firstly on Habermas' concept of "truth", and secondly on the validity of adapting this approach to an accounting and micro-organisation context. On the first point, Habermas relativises the nature of truth to what could be called a "justified or grounded consensus" about any p h e n o m e n o n coming from a particular group entering into the dialogue (cf. Hesse, 1982). If a group of people agree that a particular p h e n o m e n o n is of a certain form then, providing they have adopted a defined set of processes 9 in arriving at this consensus, to Habermas this is "truth" to that group. If the conditions remain unfulfilled or if the con-

9 Encapsulated in diagrammaticform in Figs 2 - 4 and described below.

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s t i t u t i o n o f t h e g r o u p c h a n g e s t h e n t h e v i e w s exp r e s s e d are e i t h e r n o t t r u e in t h e first situation o r in t h e l a t t e r case n e e d to b e r e n e g o t i a t e d . It is u p o n this r e l a t i v i s e d c o n c e p t o f t r u t h that t h e c o n t e n t s o f Fig. 1 are based. Secondly, it is i m p o r t a n t to c o m m e n t o n t h e validity o f using H a b e r m a s ' m o d e l in t h e c o n t e x t o f Fig. 1. As w e have a l r e a d y i n d i c a t e d H a b e r m a s has n o t h i n g to say a b o u t a c c o u n t i n g as such. This is n o t i m p o r t a n t in itself s i n c e h e d i d n o t define w h a t s h o u l d b e t h e p u r v i e w o f c o n c e r n for this m e t h o d o l o g i c a l thinking. 10 W h a t m a y c a u s e greater difficulty is t h e use o f m u c h o f his u n d e r s t a n d i n g in a m i c r o - o r g a n i s a t i o n a l c o n t e x t . Primarily H a b e r m a s w a s a n d is c o n c e r n e d w i t h s o c i e t y as a totality w h e r e , f r o m this p e r s p e c t i v e , financial m i c r o - o r g a n i s a t i o n s ( t h e d o m a i n o f int e r e s t in Fig. 1 ) a p p e a r to b e m o r e like t e c h n i c a l "systems". Yet, at t h e s a m e time, h e r e c o g n i s e s that t h e s e s y s t e m s c a n o v e r s h o o t life-world exp e c t a t i o n s l e a d i n g to t h e p o s s i b i l i t y o f i n n e r colo n i s a t i o n (i.e. t h e t e c h n i c a l l e a d i n g a n d influencing t h e social r a t h e r than t h e o t h e r w a y r o u n d ) . This s e e m i n g i n d e p e n d e n c e o f t h e d i f f e r e n t i a t e d s y s t e m s from t h e life-world, f r o m a societal perspective, suggests that t h e s e s y s t e m s m a y have t h e i r o w n g u i d i n g life-world a n d are w o r t h y o f investigation in t h e i r o w n right. It is this assumpt i o n w h i c h has l e d this a u t h o r to go b e y o n d H a b e r m a s ' c u r r e n t w o r k into an analysis o f t h e s e "systems" ( f r o m a societal p e r s p e c t i v e ) w h i c h b e c o m e t h e m i c r o - o r g a n i s a t i o n s o f Fig. 1 w i t h t h e i r o w n d i f f e r e n t i a t e d social a n d t e c h n i c a l elements. T h e t h r e e p r i o r issues w h i c h n e e d to b e raised are m a t t e r s o f s o m e s u b s t a n c e w h i c h are constant r e m i n d e r s o f t h e p o t e n t i a l difficulty o f app l y i n g this a p p r o a c h w i t h r e g a r d to p a r t i c u l a r acc o u n t i n g s y s t e m s in actual organisations. First a n d f o r e m o s t is t h e p r o b l e m o f o b t a i n i n g a c c e s s to any o r g a n i s a t i o n to u n d e r t a k e this critical p r o c e s s w h i c h is i n t e n d e d to l e a d to c h a n g e

in b o t h t h e a c c o u n t i n g s y s t e m and t h e c o n t e x t o f w h i c h it is part. A c c e s s o f this n a t u r e is difficult to s e c u r e b u t m a y b e g r a n t e d if t h e o r g a n i s a t i o n is in a t i m e of"crisis" (cf. Habermas, 1 9 7 6 ) and/ o r if t h e r e s e a r c h e r ( s ) have w o n t h e trust a n d res p e c t o f t h o s e in a p o s i t i o n to g r a n t this access. H o w e v e r , if access is d e n i e d t h e n t h e r e is little real p o s s i b i l i t y o f o p e r a t i o n a l i s i n g any o f t h e stages in Fig. 1. Secondly, t h e r e is t h e p r o b l e m o f defining prec i s e l y t h e r e s e a r c h e r s a n d t h e r e s e a r c h e d for t h e p u r p o s e o f t h e investigation. Each s h o u l d b e a small g r o u p o f p e o p l e o f a p p r o x i m a t e l y equal numbers who separately and together can u n d e r t a k e a real d i s c o u r s e w h e r e e a c h c a n m a k e a d e q u a t e c o n t r i b u t i o n s . Clearly t h e t w o g r o u p s n e e d to b e carefully f o r m u l a t e d w i t h b o t h b e i n g willing to a d o p t t h e d i s c u r s i v e p r o c e s s e s necessary ( s e e b e l o w ) . H o w e v e r , in a d d i t i o n t h e res e a r c h e d n e e d e v e n m o r e careful c h o i c e . This is b e c a u s e it is o n l y t h o s e w h o have t h e p o t e n t i a l p o w e r to effect c h a n g e in t h e p h e n o m e n a b e i n g i n v e s t i g a t e d w h o s h o u l d b e chosen. T h i r d l y a n d finally, e v e n if a c c e s s is s e c u r e d a n d if t h e right g r o u p i n g s have b e e n f o r m u l a t e d t h e r e are still all sorts o f c o n s t r a i n t s w h i c h c a n prevent the steady progression through the stages d e p i c t e d in Fig. 1. T h e r e are m a n y r e a s o n s for t h e s e c o n s t r a i n t s (e.g. c o g n i t i v e ability, psychological or sociological resistance etc.) w h i c h will e i t h e r m a k e a c o n s e n s u s s p u r i o u s o r i m p o s s i b l e o r p r e v e n t t h e m o v e m e n t to a f u r t h e r stage in t h e p r o c e s s . T h e p r o g r e s s i o n is, it m u s t b e stated, an ideal o n e a n d always runs t h e risk o f b e i n g s u b v e r t e d . T h e "ideal" n a t u r e o f t h e s e p r o cesses is f u n d a m e n t a l to t h e t h i n k i n g o f Habermas, b u t d o e s n o t d e t r a c t f r o m its value. T h e p o i n t is to p r o v i d e as m a n y g u a r a n t e e s as possib l e that t h e actual f u n c t i o n i n g o f t h e p r o c e s s in t h e analysis o f actual a c c o u n t i n g systems app r o x i m a t e s to t h e ideal.

to Where Habermas does apply his thoughts they are in the context of political processes. Yet he is, to a certain extent, ambivalent as to the actual domain of reality for the application of his ideas. Habermas and, in the main, the other critical theorists, are concerned with "... the complex factors which hinder people coming to consciousness of themselves as capable of different action" (Held, 1980, p. 363) without defining necessarily the specific nature of this action. Thus accounting being a social activity is just as legitimate as a domain of interest as any other.

ACCOUNTING SYSTEMS IN ORGANISATIONAL CONTEXTS

The quasi-ignorance and critical theorems stages The process of enquiry starts with the researchers at the "quasi-ignorance" stage. This is w h e r e the researchers, having initially secured access, are faced with virtual ignorance at the outset about m o s t of the variables of importance. There may be some awareness about the tangible aspects of the accounting system but even here initial insights can be deceptive. However, it is highly unlikely that the cultural roots or the steering mechanisms will be apparent: their essential strength is in their underlying and pervasive nature but also in their unseenness. To m o v e fr~)m the "quasi-ignorance" stage researchers, adopting and accepting the discursive processes contained in Fig. 2, attempt, through reflective and iterative processes, to p r o d u c e critical theorems about the accounting system. These critical theorems start with an exposure of the m o r e obvious tangible elements of the accounting system (e.g. this accounting system has

a budget system and financial statements with these characteristics are p r o d u c e d through this process, approved by these people etc.) and then, through iterative processes, critically explores the hidden roots which lie behind these technical elements. These roots could c o m e from two possible sources. Firstly, through technological or m o r e technical factors. This is because a particular accounting system, as with all systems elements, can potentially overshoot the desires of the organisational life-world and its steering mechanisms. A typical example of this, in an accounting context, could he the dictates from the accounting regulatory bodies reinforced through the auditing profession: these are technological reasons for the current design of part of the tangible asp e c t s of the accounting system which may well overshoot the desires of the organisations themselves leading, on occasions, to challenges to the regulatory bodies. These actions are entirely appropriate from an organisational viewpoint even

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though possibly, but not certainly, they are not appropriate from a societal perspective. 11 The second source of explanatory roots comes from life-world and steering mechanisms which, in turn, have their own historical and structural underlying reasons for their nature. An appropriate explanation of this type needs to initially expose the actual elements of the social context (the life-world) and the processes which guide the technical elements (the steering mechanisms) which give rise to the present tangible aspects of the accounting systems design. In addition the historical, structural and other reasons which give rise to this social/cultural explanation need to be exposed so that the background dynamics of these can be clearly seen. This exposure is vital not only because without it the necessarily relativised explanation is even more partial but also because without an appreciation of these factors the process and possible resistances to change will not be understood. Also, as noted above, for critical theory understanding is always coupled with transformation: it determines, in large measure, the nature of what constitutes acceptable interpretive explanations. Fund accounting which is particularly prevalent in non-commercial and charitable organisations is an interesting example to demonstrate some of the above processes. The division of an organisation's cash resources into distinct earmarked funds is a technical expression of some interesting social divisions in organisations. The argument of the above is that we need to analyse these funds in terms of: firstly, the fund accounting statements that are produced (the systems level); secondly, the rules as to uses of the funds which ensure their separation (the steering mechanism level); thirdly, the social divisions in the organisation which these separate funds express (the life-world level); and fourthly, the historical and structural roots which give rise to these social divisions.

These social, historical and structural roots will vary quite considerably with regard to the organisation being investigated as we are already beginning to see with the very limited studies which have been undertaken. For instance Berry et al. ( 1 9 8 5 ) traced the rudimentary nature of the management control system in an Area of the National Coal Board to important cultural factors concerning the dominant importance of production over finance at this level in this industry. Colville ( 1 9 8 2 ) and Tomkins (1982), on the other hand, exploring the different accounting systems design in a social service department and a police force traces these differences to political and structural factors. Laughlin ( 1984, 1986) traces the reasons for the rudimentary nature of accounting systems in the Church of England to central cultural factors concerned with the significance of the sacred and the downgrading of all that is deemed to be secular (e.g. money, accounting etc.). While Burchell et al. ( 1 9 8 5 ) trace the emergence of accounting for value added, and Miller & O'Leary ( 1 9 8 7 ) examine cost accounting, as more general accounting phenomena, highlighting the different social and cultural factors which have played a part in encouraging their appearance. Only the study by Laughlin cited above has used a methodological aproach based specifically on Habermas' approach to uncover these cultural factors. The nature of this approach is represented in Fig. 2. This constitutes the discursive processes which are intended to provide the methodological vehicle for this critical exposure. It also provides suitable benchmarks which will allow one to judge whether the insights forthcoming are internally legitimate in terms of the processes adopted. Figure 2 is based on the fundamental assumption that the key process in discovering the technical and social aspects of accounting systems centres on the ability of the researchers to use "constative" speech acts (see Habermas, 1976,

11This, of course, raises questions about the legitimacyof the actions of some societalsteering mechanismssuch as accounting regulatory bodies. Quite clearlythis scepticism is justified in an evolvingsociety and if one followsand agreeswith the critical analysisof the accountingand regulatoryagenciesby Laughlin& Puxty( 1983, 1984) and Puxty & Laughlin(1983), questioning the actions of these bodies is appropriate and meaningful.

ACCOUNTINGSYSTEMSIN ORGANISATIONALCONTEXTS pp. 1-68; Held, 1980 pp. 332-346). Constative speech acts are the mechanisms we use to represent social reality (e.g. the above analysis of fund accounting) which, in turn, create validity claims concerning the truth or falsity of these views. Where there are differences of opinion about the accuracy of the insights these can, according to Habermas, be resolved through adopting a process called "radicaiised theoretical discourse" which uses further constative speech act processes to challenge and question any insights forthcoming. It is the nature of the processes involved in using constative speech acts which provides the dynamics for the actual contents of Fig. 2. The contents of Box A in this figure contain some fundamental background factors which guide the actual discursive process (the contents of Box B) which generates the insights into any particular accounting system. The background factors are three: some underlying commitments about the attitudes of the researchers (e.g. an agreement that it is the "force of the better argument" which should determine the value of the alternative explanations advanced) (Box A1); an agreement that all researchers should have an equal opportunity for offering insights (speech acts) (Box A2); and some agreed discursive processes for resolving disagreements between the researchers where there is a seeming blockage in making progress towards a consensus about the nature of the technical elements and, more especially, the social roots (Box A3). Undoubtedly the first two of these conditions have important interrelationships with key structural matters such as p o w e r and influence, the abuse of which may make the operationalisation of these problematic. These are not actually mapped in Fig. 2 yet the adequate resolution of these factors is intended to be implicit in these variables. The actual discursive process with regard to a particular accounting system starts with some statements about the technical elements of the accounting system (Box B1 ) followed by an attempt, through discourse, to posit some sort of "theoretical explanations" as to the social roots which give rise to these technical elements (Box

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B2). These explanations clearly need some form of logical or documentary substantiation if they are to stand any chance at all of convincing fellow researchers. However, even if they seem to be gaining support they must always be critically appraised (Box B3) in terms of the quality and depth of their insight. Where it is impossible, after these procedures, to produce a "grounded consensus" about the likely social roots (Box B4), then it is important to step outside the situation, although as Box A3 indicates, this simply registers yet again that the only right of appeal is further critical, open discourse.

The processes of enlightenment stage At the "enlightenment" stage the intention is that both researchers and researched come together, following the discursive processes illustrated in Fig. 3, to critically assess the accuracy or inaccuracy of the agreed conclusions from the "critical theorems" stage. The aim of this "enlightenment" stage is the same as that for the "critical theorems" stage (i.e. to arrive at an explanatory consensus with all their historical, structural, technological roots laid bare). At a basic level, therefore, the processes of these two stages are exactly the same, although there are two basic differences. The first difference concerns the introduction of other, uniquely important, discursive partners the inaptly named "researched" as we have called them m and the problems created through introducing these individuals into the discourse. Both the commitment of these individuals and their ability to operationalise, even understand, the various discursive processes shown in Fig. 3 may be limited. It is for this reason that a prior "therapeutic discourse" (Habermas, 1974, p. 34) between the researchers and the researched is necessary so as to enable the researched to adopt and use the discursive processes. These therapeutic discourses, which Habermas likens to a psychoanalytic process between a doctor (taken to be the researchers) and patient (the researched), are extremely complex and not easily achieved; they form, however, the vital entrance (Box C2 in Fig. 3) into

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Statementson systems and consensuson critical theorems C11

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o p e r a t i o n a l i s i n g t h e o t h e r e l e m e n t s i n v o l v e d in Fig. 3. T h e s e c o n d d i f f e r e n c e b e t w e e n t h e "critical t h e o r e m s " and " e n l i g h t e n m e n t " stages c o n c e r n s t h e fact that t h e r e s e a r c h e r s p u t b e f o r e t h e res e a r c h e d t h e i r v i e w as to t h e t e c h n i c a l e l e m e n t s a n d social r o o t s o f t h e p a r t i c u l a r a c c o u n t i n g syst e m u n d e r investigation. T h e r e is, therefore, a r e c o g n i s e d a n d a c k n o w l e d g e d a s y m m e t r y at t h e o u t s e t o f this " e n l i g h t e n m e n t " stage in t e r m s o f b o t h insights into t h e p h e n o m e n a o f i n t e r e s t as w e l l as a g r e a t e r ability to u s e and a d o p t the critical d i s c u r s i v e p r o c e s s e s . H a b e r m a s r e c o g n i s e d this initial a s y m m e t r y b u t m a i n t a i n e d that the p r i o r " t h e r a p e u t i c d i s c o u r s e s " f o l l o w e d b y the

d e m a n d s for an equal o p p o r t u n i t y for offering insights ( s p e e c h a c t s ) s h o u l d e n a b l e t h e res e a r c h e d n o t s i m p l y to r e a c t to t h e r e s e a r c h e r ' s t h o u g h t s b u t to actually c r e a t e n e w e x p l a n a t o r y theories. It is for this r e a s o n that in Fig. 3 s o m e o f t h e e l e m e n t s in B o x B are s h o w n as b e i n g p o t e n t i a l l y different f r o m t h o s e in Fig. 2. It is a s s u m e d that w i t h an e x p a n d e d g r o u p o f critical discussants t h e n a t u r e o f e l e m e n t s B 1 - B4 will n o t necessarily b e t h e s a m e as in t h e "critical t h e o r e m s " stage h e n c e t h e r e a s o n for m a r k i n g t h e s e as B 1' to B4' in Fig. 3. T h e r e c o u l d b e m a n y factors o f relev a n c e here, n o t least o f w h i c h is t h e effect o f an i n c r e a s e in t h e n u m b e r o f p e o p l e i n v o l v e d

ACCOUNTINGSYSTEMSIN ORGANISATIONALCONTEXTS which, through critical discourse, may well bring n e w perspectives to bear on the issues. Apart from some possible changes in the nature of the insights forthcoming the actual required discursive process illustrated in Fig. 3 is exactly similar to the "critical theorems" stage (Fig. 2): the advancement of different theoretical propositions about the technical nature and social roots which gives meaning to particular accounting systems which need to be constantly challenged and critically appraised. This second stage of the research process registers two important points concerning the position an.d significance of the researched. Firstly, that they are of equal value to the researchers in providing critical insights into their o w n organisation p for our purposes the accounting system and the social roots. Their equality, however, following this way of thinking, depends upon their willingness and ability to enter into and adopt certain defined discursive processes. As with the researchers, however, there are all sorts of constraints which could prevent the adoption of the discursive processes shown in Fig. 3 (e.g. lack of time, motivation or willingness to delve deep into the nature of the organisation of which they are part). While this is recognised it still does not detract from the view that they have a contribution to make and a position of importance in exposing the social and technical aspects of accounting systems design. Secondly, that their involvement in this process of discovery is vital if they are to enact change which is the specific intention of the "selection of strategies" stage. Researchers clearly have limited powers to bring about change in actual organisations even though it is the concern with change which guides the design of this critical methodological approach. On the other hand, the researched have significance in the actual organisations and can bring about change if they are motivated to do so. Their early involvement in the enlightening process of discovering why things are as they are is a vital prelude, although not the determining factor, in engendering the motivation to seek change.

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The selection of strategies stage This final stage is a process of suggesting, evaluating and acting u p o n alternative strategies for change given the outcomes from the "enlightenment" stage. As already indicated these conclusions purposefully do not provide a specification of alternative strategies. They do, h o w e v e r provide provocative background information and raise fundamental questions about the particular organisation being investigated. These questions form the starting point for the strategy formulation process following the discursive processes as shown in Fig. 4. There appear to be three mutually exclusive strategies for accounting change. Firstly, there is the need to change the cultural or social roots (the life-world and steering m e c h a n i s m ) with subsequent changes in the technical accounting systems elements. Implicit in this strategy is the view that the changes in the m o r e obvious and tangible elements of the accounting system need to follow rather than lead changes in the cultural life-world elements. A second general strategy for change is with regard to the actual technical systems where these elements have already overshot "acceptable practice" from the cultural life-world which is intended to guide their nature. This strategy would try to bring the technical elements into line with their cultural roots. In accounting terms this might, for instance, involve abandoning a computerisation plan or refusing to p r o d u c e accounts based on the procedures advanced by the standard setting bodies due to these technical advances being out of line with cultural expectations and desires. Thirdly, and finally, change could ensue with regard to the life-world to bring it.in line with the overshot systems elements. This would be the case if there is "positive" inner colonisation occurring, i.e. the systems are purposefully and rightly overshooting the present state of the organisational life-world. Obviously this situation means that the, primarily, technological roots (often societal steering mechanisms) are "right" from a societal or other perspective and thus the organisational life-world should change. A typical

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Theoretical conclusions from enlightenment stage \ \ \ \ \

Underlying commitments (a) cooperative search for right actions (b) force of better arguments

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accounting example of this behaviour would be a cultural adaptation rather than resistance, to governmental or standard setters' pronouncements. Each of these strategies for change have implications for the important organisation/society relationship. Although we have argued a case for looking at societal "systems" (i.e. administrative and economic micro-organisations) using the societal model of Habermas, it would be wrong to assume that the interconnections are unimportant or ignored in this process. In each of the three cases of change discussed above these interrelationships are automatically brought to the fore. In the case of the third strategy (cultural change to be in line with technical developments guided by technological factors) the issue is resolved in a way which involves no challenge to the societal culture and this becomes its "posi-

tive" contribution. From an accounting viewpoint this strategy could reinforce both the position and standing of, say, the accounting regulatory bodies as to the actions they are currently taking. In the case of the second strategy for change (technical change to be in line with the current organisational culture), the challenge could be addressed to the societal steering mechanism, if they are guiding the technical developments, questioning what these mechanisms are doing in the context of societal evolutionary progress. This, in turn, raises questions about the nature and content of the lifeworld which supplies the overall intentions for the steering mechanisms in the first place. Finally, the first strategy for change which moves the organisational life-world "forward" must, of necessity, raise implications for the societal culture (life-world) as well. From a societal per-

ACCOUNTING SYSTEMS IN ORGANISATIONAL CONTEXTS

spective, the organisation as a societal "system" will potentially overshoot the intentions of the societal life-world through this strategy for change which means that some sort of inner colonisation is b o u n d to occur. Both the first and second strategies for change, where the micro-organisation, in effect, creates its o w n development path, can raise questions for both the societal culture and its steering mechanisms. Either this can be encompassed at a societal level, leading ultimately to cultural change at this level, or seen as a threat requiring intensification of effort, possibly with force, to 5equire the micro-organisation to change its innovative ways. A typical accounting example of this intensification was the call for legal backing for inflation accounting to require company compliance even though these calls have rather subsided in more recent years. The decline in these demands, on the other hand, suggests that changes are occurring in the accounting related cultural expectations. The actual discursive processes involved in bringing about these various changes are contained in Fig. 4. This figure is built upon the fundamental assumption that the key process in the discovery of strategies centres on the ability of the researchers and researched to use primarily "regulative" speech acts (see Habermas, 1976, pp. 1--69; Held, 1980, pp. 332-346). Regulative speech acts are used to formulate alternative strategies for further action (e.g. we think it is right you ( w e ) do such and such)which, in turn, create validity claims concerning the correctness or otherwise of these suggestions. Put another way, change, to Habermas, is dependent upon formulating alternatives and convincing others about the validity of these suggestions which, in turn, leads to changes in both the social and technical reality. These changes invariably involve changing attitudes of those not seeing the value of these alternatives which, in Habermas' critical theory, is achieved through the medium of language, primarily regulative speech acts. The "action" element in Fig. 4 is, therefore, related to one of the above three strategies, but is dependent upon changes in the behaviour of key organisational individuals.

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Clearly the question as to which changes in either the social and technical d e m e n t s or of the attitudes of those involved in the decisions are "right" is open to challenge; it is, however, only through what Habermas calls a "radicaiised practical discourse" that the correct strategy (to the parties in the discourse) will be formulated. The way in which the action presented in Fig. 4 is forthcoming is similar to the "critical theorems" and "enlightenment" stages although the level of concern is different. Possible strategies are formulated by both the researchers and researched together who continue to subscribe to and practice the "underlying validity claims to discourse" (the underlying commitments, the rule about equal opportunities etc.). These strategies need to be not only theoretically justiffed as to their worth, but also need to be continually critically appraised; where consensus is not reached the disagreements need to be rigorously analysed through further discursive processes. A concluding c o m m e n t We have tried in this section to show h o w Habermas' methodological approach can be applied to understanding and changing accounting systems and the organisational contexts which give them meaning. Before reflecting more generally about the value of this approach for these concerns it is important to address and reiterate one further point concerning the contents of Fig. 1. This concerns the possible constraints upon knowing and acting which are highlighted in Fig. 1 but which have not been drawn out in the above discussion. This discussion gives the impression of a certain surety about the movement between the stages and the precision of the conclusions forthcoming. The reality is that a vast range of constraints may prevent the steady movement between stages and reduce the insights gained and actions forthcoming (particularly at the "selection of strategies" stage). As we shall indicate in the following section, these need to be more fully understood in order to reduce them through clearly defined strategies. Neither Habermas nor other critical theorists

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have specified to date the mechanisms by which this may be achieved.

AN EVALUATION OF HABERMAS' MODEL AS A GENERAL METHODOLOGICAL APPROACH FOR UNDERSTANDING AND CHANGING ACCOUNTING SYSTEMS At the end of the first section of the paper three advantages were identified for utilising the concepts of critical theory for our practical and theoretical concern with accounting systems design. The interpretation of critical theory offered by Habermas develops this framework in a specific direction, one in which much emphasis is placed on the role of language. We are n o w in position to critically evaluate the specific model put forward by Habermas in terms of its qualities as a possible methodological approach for understanding and changing accounting systems in organisational contexts. It is to this evaluation that this section is addressed, starting with three advantages for using this approach which build upon and extend the points already made at the end of the first section. Firstly, its overarching concern is to go beyond the tangible and behind the more obvious possible explanatory linkages. Accounting systems are technical phenomena, yet their nature is moulded by social factors. The latter are particularly significant in so far as they contribute to both the understanding and change of the technical elements. The approach suggested by Habermas takes these relationships as a starting point and goes further than other methodological approaches in insisting on a constant iterative critique of all postulated insights into these interrelationships. This focus on the social roots often has to probe into highly sensitive matters which may well be rather uncomfortable to expose (e.g. issues about the foundation reasons for the existence of the organisation). This rigour, even though potentially disturbing, may well take us into real levels of understanding and lasting change in our accounting domain which are sadly lacking at the moment. Secondly, it sets the nature of understanding

exclusively in the context of lasting and meaningful change and development. As we have already indicated, theories are not valued for their own sake; their meaning, significance and very nature are moulded by their ability to facilitate change. As we argued in the first section it is the premise of this paper that this ethos and intention should also dominate any general approach for analysing accounting systems in practice. It seems appropriate that the academics of the accounting profession should be involved not only with accounting practice p e r s e but in a proactive, critical and developmental expression of this concern. However, it is only right and necessary that these proactive concerns should also not be imposed but should be formulated in conjunction with practitioners themselves in the pursuit of meaningful change. Habermas' approach sets understanding totally in the context of change and development. In addition it does give a proactive role to the researchers but also sees the so called researched (the actual practitioners) as vital in the process of understanding and enabling - - in fact it is the researched w h o play a much larger part in the "selection of strategies" than the researchers. This dominant concern with partnership in understanding and change, implicit in the essence of the approach, constitutes a potentially powerful argument for seeing this as a valuable methodology for our problem concern for those w h o subscribe to this proactive thinking. Thirdly, the approach is based on a developmental process of discovery rather than a reality assumed to be static needing to be accessed through structured techniques. The dominant intention behind all more traditional social science methodologies is primarily concerned with the design of various techniques which will allow one to both access the general patterns which are assumed to exist in reality as well as to determine when certain insights are spurious generalities. Of necessity, therefore, the structures around research behaviour are very tight indeed precisely so that other researchers can re-run the same experiment to allow a falsification process to be conducted. Against this model Habermas starts from the premise that reality

ACCOUNTINGSYSTEMSIN ORGANISATIONALCONTEXTS needs to be accessed through imaginative human actors using discursive processes which may not be reproducible in quite the way traditional scientists would demand. In this sense Habermas is quite close to Feyerabend (cf. 1975) allowing and encouraging free thinking human beings to discover a much looser concept of knowledge. Yet Habermas would mainrain the need for some structural conditions around the discursive processs to determine, both by those in the discourse as well as those outside, whether the resulting conclusions are "justified" and "grounded". Accounting systems in particular organisations cannot be assumed to be universal p h e n o m e n a like gravity or friction. Equally, it cannot be assumed that they will not possess these qualities. We need a methodology that keeps open the opportunity for both but also allows us to judge, in some sense, the "validity" of the insights forthcoming. It can be argued that the Habermasian approach satisfies these demands. These arguments in favour of an approach based on Habermas' critical theory as a general methodology for understanding and changing accounting systems need to be set against the difiqculties entailed. There are five issues which can be raised in this respect. Firstly, there is the question about the accuracy of Habermas' insights. As w e have already indicated the most vehement attacks at this level have c o m e from more traditional Marxist thinkers w h o see the elevation of free thinking human beings and the potential d o w n playing of structural matters a gross simplification of reality. Quite clearly there are problems in Habermas' model (see Held, 1980, pp. 3 7 4 - 3 7 8 for some interesting insight into these deficiencies) and in the end it is right to see it as nothing more than the conclusions from a "critical theorem" stage, with society as its focus, using Habermas' own logical terms to describe his theory. It is thus open to challenge and change by Marxist critics and others w h o wish to enter into a discourse about these insights. Secondly, there is the problem about the validity of using this thinking at the micro-organisational level at which accounting systems func-

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tion. Certainly the justification for this cannot be obtained from Habermas w h o does not make these linkages, remaining very much at the societal level and analysing it as a total system. Yet the implications of this thinking, as discussed at the outset of the previous section, imply that it is possible to apply his thoughts at a micro, even accounting, level without losing the thrust or intentions of the total societal model. But in the end this logic is, like Habermas' thinking more generally, open to question and challenge through suitable discursive processes. Thirdly, is the problem that basically the desire for a language decentration process along with the motivation for change in the phenomena remains unclarified. With regard to language development, Habermas does present the need for "therapeutic discourses", as we have already indicated, setting this in the context of a doctor--patient relationship in a psycho-analytical framework but still does not indicate the processes which lead to the "patient" desiring therapy in the first place! When it comes to the desire for change leading to practical action at the "selection of strategies" stage Habermas is equally obscure. It does not seem that enlightenment alone is the key driving force and Habermas, in fact, would not expect this natural causal movement. It still remains that the processes which lead to or prevent change remain unclear. To be fair Habermas discusses at length the matter of various kinds of "crises" (cf. Habermas, 1976) in the context of generating the desire for change, but it still has to be recognised that these matters remain undeveloped and unproven at a practical level. Fourthly, there is another problem of underdevelopment concerned with the discursive benchmarks depicted in diagrammatic form in Figs 2-4. The application of these discursive processes in the analysis of the accounting systems in the Church of England by Laughlin (1984, 1986) led to some considerable uncertainty as to when they were being adequately applied. The reason for this uncertainty is because the actual benchmarks are imprecise and in need of considerable refinement if they are to adequately form a basis for judging whether the

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r e s u l t i n g c o n s e n s u s is " g r o u n d e d " and "justified" using H a b e r m a s ' u n d e r s t a n d i n g o f t h e s e terms. Fifthly, and finally, is t h e p o t e n t i a l p r o b l e m c o n c e r n i n g t h e r e s o u r c e c o s t i n v o l v e d in, and feasibility of, a p p l y i n g this a p p r o a c h in u n d e r s t a n d i n g a n d c h a n g i n g a c c o u n t i n g s y s t e m s in p a r t i c u l a r organisations. T h e r e are m u l t i p l e p r o b l e m s in using this t h i n k i n g in specific studies. T h e r e are, for instance, m a n y difficulties in o b t a i n i n g a p p r o p r i a t e access as w e l l as having t h e available t i m e a n d ability to e x p l o r e t h e k e y cultural d i m e n s i o n s . N e i t h e r o f t h e s e p r o b l e m s are s o l v e d easily, b u t t h e d i s c o v e r y o f s o l u t i o n s is n o t impossible. H o w e v e r , w i t h g r o w i n g press u r e o f availability for b o t h r e s e a r c h e r s a n d res e a r c h e d this a p p r o a c h m a y p r o v e to b e unpalatable, d e s p i t e t h e p o t e n t i a l l o n g t e r m advantages, for all sorts o f d i v e r s e reasons. T h e s e five p r o b l e m s are u n d o u b t e d l y o f significance. T h e y d o not, h o w e v e r , u n d e r m i n e t h e f u n d a m e n t a l p o t e n t i a l o f this a p p r o a c h as a general m e t h o d o l o g y for u n d e r s t a n d i n g a n d changing a c c o u n t i n g s y s t e m s in o r g a n i s a t i o n a l contexts. T h e first t w o c r i t i c i s m s a p p l y just as easily to any o t h e r c l a i m e d a p p r o a c h : t h e H a b e r m a s i a n a p p r o a c h is b a s e d o n a s s u m p t i o n s as is everything else a n d should, o f necessity, b e o p e n to challenge. H o w e v e r , it p r o v i d e s a f o u n d a t i o n u p o n w h i c h to build. T h e s e c o n d t w o c r i t i c i s m s are significant b u t t h e y actually f o r m an i m p o r t -

ant a g e n d a for i m p r o v i n g t h e a p p r o a c h r a t h e r than d e n y i n g its significance. T h e final c r i t i c i s m is u n d o u b t e d l y a p r o b l e m for t h o s e w i s h i n g to use this t h i n k i n g in p a r t i c u l a r situations b u t these practicalities do not undermine the claim that t h e a p p r o a c h can b e used, fi'uitfuUy a n d generally for t h e p r o b l e m focus. CONCLUSION In this p a p e r w e have o u t l i n e d critical t h e o r y a n d p r e s e n t e d a r g u m e n t s for its use in s e e k i n g to u n d e r s t a n d a n d c h a n g e a c c o u n t i n g s y s t e m s in o r g a n i s a t i o n a l c o n t e x t s . T h e first t w o s e c t i o n s have p r e s e n t e d t h e o r e t i c a l a r g u m e n t s for t h e rel e v a n c e o f critical t h e o r y in u n d e r s t a n d i n g a n d c h a n g i n g a c c o u n t i n g s y s t e m s in p r a c t i c e . In part i c u l a r a case w a s a r g u e d for utilising H a b e r m a s ' i n t e r p r e t a t i o n o f critical theory. T h e f o l l o w i n g t w o s e c t i o n s l o o k e d in detail at H a b e r m a s ' m e t h o d o l o g i c a l a p p r o a c h for this i m p o r t a n t acc o u n t i n g c o n c e r n . D e s p i t e s o m e difficulties w i t h t h e a p p r o a c h it is h e l d to p o s s e s s s o m e ext r e m e l y a t t r a c t i v e p r o p e r t i e s w h i c h c o u l d take our current inadequate appreciation of accounting systems, as i n t e r r e l a t e d social a n d t e c h n i c a l p h e n o m e n a , to n e w i m p o r t a n t levels. W i t h this in m i n d t h e a p p r o a c h s h o u l d b e v i e w e d a l o n g s i d e t h e o t h e r n e w m e t h o d o l o g i e s for this c o n c e r n w h i c h are c u r r e n t l y e m e r g i n g .

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