British Management Accounting Research: Whence and Whither: Opinions and Recollections

British Accounting Review (2001) 33, 263–291 doi:10.1006/bare.2001.0169, available online at http://www.idealibrary.com on

BRITISH MANAGEMENT ACCOUNTING RESEARCH: WHENCE AND WHITHER: OPINIONS AND RECOLLECTIONS TREVOR HOPPER University of Manchester

DAVID OTLEY University of Lancaster

BOB SCAPENS University of Manchester This paper is about the development of cost and/or management accounting research in Britain. The authors are three researchers active in this area from the 1970s until the present. The history has not been constructed from careful archival reconstruction of events, or publications, or surveys of colleagues. Rather, it is a personal joint recollection of how the area grew by three scholars involved in this process and perhaps having spent too long in bars discussing it. As history this paper must be carefully covered by caveats—it may be more revealing of the attitudes, perceptions and preoccupations of a set of scholars, than an exact chronology of events. Nevertheless, we hope that even this may be of curiosity. Having traced the chronology of British management accounting research, the paper concludes with the authors’ assessment of British research contributions up to the turn of the twentieth century. This includes a review of the current situation, insofar as it can be discerned and, even more tentatively and with trepidation, possible future prospects for British management accounting research.  2001 Academic Press

INTRODUCTION Non-British scholars sometimes assume that because Britain is steeped in history and has many old universities, then British academic management accounting research has a long lineage. Such views are wrong. British managers, consultants and engineers, often working with their North This paper was presented at the AAA/BAA Globalisation Conference, Cambridge, 2000 The authors wish to thank Sujuko Efferin for his contribution as a research assistant on this paper. Received March 2000; revised May 2000; accepted May 2001 0890–8389/01/030263+29 $35.00/0

 2001 Academic Press

264

T. HOPPER ET AL.

American counterparts, were pioneers of cost accounting techniques in the late 19th and early 20th centuries (Solomons, 1968). However, British academic research in this area developed much later. For example, Tony Lowe, who became professor of accounting at Sheffield University in 1972, claims that his lectureship in management and cost accounting at the London School of Economics (LSE) in the late 1950s was the first university appointment in that subject in Britain. John Perrin, subsequently a professor at Warwick and then a colleague of Tony Lowe, claims that his Ph.D. from LSE in the late 1950s was the first in accounting from an English university.1 Cost accounting was taught in Britain from the end of the 19th century, but initially (like other branches of accounting) this was mainly in Mechanics Institutes, technical and commercial colleges and, later, by correspondence courses.2 A major impetus came from the formation of the Institute of Cost and Works Accountants (now called the Chartered Institute of Management Accountants—CIMA) in l919. This newly created professional association, drawing from cost clerks and managers in industry involved in financial matters, delineated a new occupation of cost accountant and tried to control entrance by examinations and experience. To a degree they were copying the professional qualifying structures of financial accountants and auditors in the various chartered accounting bodies (especially what is the now Institute of Chartered Accountants in England and Wales, ICAEW—see Loft, 1986). The ICAEW viewed with horror and distaste any prospect of recruiting members tinged with ‘trade’ and who wished to be paid during apprenticeship, rather than paying accountants for the privilege. The addition of cost accounting to the syllabuses of other English professional accounting associations came much later. Despite a large proportion of its members entering financial management positions in industry, the ICAEW were the last British accounting body to add costing to their syllabuses. In order that their students ‘should keep pace with the growing demand for what is sometimes called dynamic costing and management accounting, the final examination syllabus of the Institute was extended in 1957 to cover these subjects’ (ICAEW, 1966, p. 124). Especially in England, preparation for professional accounting examinations was conducted outside the universities, through correspondence courses, and evening or day release classes at technical institutes and, more recently, private ‘cram’ colleges. However, the involvement of universities in professional syllabuses, teaching and examinations was minor. Professional examinations remained highly technical, procedural, and informed little by academic research. Even today it is still not unusual to come across professionally qualified accountants who do not know the existence, never mind the content of, academic accounting research. Given their practical bent and academic isolation, it is not surprising that the professions conducted

BRITISH MANAGEMENT ACCOUNTING RESEARCH

265

little fundamental research, although their newsletters and magazines, written mainly by practitioners, provided a forum for practical dialogues and contributions to cost accounting knowledge. Professional qualification as an accountant in England has never been closely integrated with university education. Attempts to create an ICAEW graduate entry route in the 1950s was unsuccessful and, until as late as the 1970s, graduate entry to the professional bodies was the exception rather than the norm. Despite graduate entry now being required for the ICAEW (but still not for CIMA), it is not restricted to graduates with accounting degrees; although accounting graduates can gain exemption from some professional examinations. However, Scotland has tended to be different with a much closer integration of professional qualifications and relevant university degrees—see below. Since the 1970s relationships between the accounting profession in England and accounting academics have become closer, but each still vigorously maintains and defends its independence. The relationship is potentially fraught, but does not appear to give rise to major problems. For example, the accounting bodies monitor the syllabuses of university accounting degrees to check that they cover the basic material specified by the profession, and if so, graduating students receive some exemption from professional examinations. Both parties are jealous of their right to determine their own syllabuses. However, meeting the stipulations of professional bodies has not normally been a major problem for university departments, partly because they are represented on relevant committees, and partly because the scale of professional exemptions is quite modest, being confined largely to introductory material. Indeed, some argue that this allows each sector to concentrate their teaching to their relative expertise. University degrees in accounting can concentrate on broader and core theoretical material in the confidence that it will not be repeated in the procedural, didactic and technical material that forms the basis of subsequent professional examinations. However, this division of accounting education is relatively expensive and may be questioned in the future by firms seeking to reduce training costs. The relative autonomy of leading university departments and their ability to concentrate on academic, rather than professional training has undoubtedly been a factor shaping their research interests and agendas. Geddes (1995) argues that this arrangement is mutually convenient. The presence of accounting research in leading universities legitimates the accounting profession, whilst leaving academic departments free to pursue their own intellectual agendas underpinned by income from undergraduates aspiring to a lucrative career as professional accountants (unlike academic accountants who are paid on national university scales that are substantially below salaries of accountants in the private sector). Each can pursue their respective agendas relatively untroubled by the needs or concerns of the other. Nevertheless, relationships between the research committees

266

T. HOPPER ET AL.

of professional associations and university researchers in accounting have grown closer in the last two decades, as the professional associations have become increasingly involved in funding accounting research, especially the non-salary costs, but also some extent the costs of employing contract researchers. CIMA, for instance, currently spends around £250,000 each year funding management accounting research, and has published numerous research reports and sponsored various initiatives, including and conferences and workshops. However, much of the funding for the salaries of academic researchers still comes from government sources, and since the late 1980s this has been subject to peer review in successive research assessment exercises, which has had the effect of concentrating research funding in the major research departments, and usually in the older more established British universities. Despite the separation of professional and academic training in English accounting and the general neglect of management and business studies in British universities until the 1970s, accounting has been taught in many of the older civic universities since the turn of the century. This was certainly the case at UMIST and the University of Manchester. Civic universities, such as Manchester, LSE, and Birmingham, introduced commerce degrees with an accounting element early in the twentieth century. However, student enrollments were often quite small and, in the case of Manchester, such degrees disappeared sometime in the early 1950s, although accounting courses remained within the newly created, broad-based economics degrees. These commerce degrees, however, were usually located in social science faculties and primarily in economics departments. This issue is not trivial, as it greatly influenced subsequent developments. When accounting later expanded, it was initially in social science faculties, rather than in business schools. Thus, appointments and promotions took place within a social science, rather than a business school culture. The teaching of accounting was more established in Scotland, however, mainly because Scottish universities and the Scottish professional accounting bodies have had closer links than their English counterparts. This continues today. For example, University of Edinburgh (with a sharp eye on its rival in Glasgow) has had chairs in accounting and taught costing since 1919. Scottish degrees were largely designed to prepare students for professional practice (Walker, 1994). The unusual title of the University of Edinburgh, Department of Accounting and Business Method is testament to this. The Business Methods element dates back to its accounting teachers development of a laboratory to simulate mechanical accounting in 1935. However, insofar as Scottish management accounting research existed at that time, it was primarily devoted to pedagogy and the practical concerns of professional accountants. As in England, up to the 1950s, most university appointments in accounting tended to be professionally qualified accountants whose major remit was teaching, rather than academic research as we know it today.3 Insofar as publications were produced, they were in the

BRITISH MANAGEMENT ACCOUNTING RESEARCH

267

form of textbooks and articles in professional magazines and journals such as the Accountant. This is not entirely surprising as any aspiring accounting researcher, unless pursuing work with a strong economics bent, would have had difficulties in locating suitable academic journals in management and accounting in which to publish. At the time the only research oriented accounting journals were in the USA. The one attempt to create a British accounting research journal during the 1950s, Accounting Research, ended in 1957 when its sponsor, the Society of Incorporated Accountants, merged with the Institute of Chartered Accountants, resulting in the cessation of professional sponsorship. Following government reports and concerns that the failing competitiveness of UK business lay partly in untrained managers, two major graduate business schools were established within the Universities of London and Manchester in the late 1960s. This marked the beginning of a massive expansion of undergraduate and postgraduate degrees in business and management studies throughout British universities that continues today. (Oxford and Cambridge Universities were major exceptions until quite recently.) This expansion was primarily driven by student demand. Relatedly, there was a similar growth in accounting and finance degrees, but initially this was concentrated in the older civic universities which had had commerce degrees, and in the polytechnics (later to become universities). In many of the newer universities of the 1960s and 1970s, accounting degrees were located in business schools and management faculties, and it was only later that some of the older universities began adopting similar structures. Nevertheless, major centers of accounting research were, and to some extent still are, located within social science faculties.

1930–1970: THE DOMINANCE OF ECONOMIC RESEARCH Given the dominance of economics in social science faculties until recently, it is not surprising that the most important initial British academic research in cost accounting was grounded in economics, and came largely from the LSE after the formation of its Department of Business Administration in 1935. Here a group of young scholars, including Coase, Edwards and Baxter embarked on a critique of accounting theory aimed at encouraging the use of accounting numbers in economics research and to improve the theory and practice of accounting (Coase, 1990). They undertook pioneering work on the nature of costs, especially the importance of opportunity costs, the use of accounts for business and economic analysis, and the importance of costs to the theory of the firm, including the foundations of agency theory. As Coase recounts, this did not always meet with favour from either academic accountants or economists, ‘accounting as taught at LSE at that time had the aspect of a religion. It is not, therefore surprising that these articles

268

T. HOPPER ET AL.

resulted in my being given a public rebuke by S.W. Rowland, the head of the accounting department at LSE. . . in 1939’ (ibid. p. 8). Baxter wrote papers questioning the accountant’s treatment of overheads (1938 and 1947) and his work contrasting economists’ and accountants’ approaches to pricing has proved to be seminal (Baxter & Oxenfeldt, 1961). Solomons, who was later to vacate his readership in LSE for a chair in accounting at Bristol, also joined the group. He worked on cost measurement and was to write seminal works on divisional performance measurement and cost accounting history, amongst his other achievements. His subsequent interest in history was not surprising, given the tradition in the area established by colleagues such as Yamey, Edwards, and Baxter. All produced work on accounting measurement and theory that saw little distinction between financial and cost accounting. Important features distinguishing the work of this LSE group include a close involvement with economic theory, accounting theory, and business policy and practice; little specialisation either methodologically or in the different branches of accounting; the importance of accounting history; and an engagement with the accounting profession. An important statement of the state of the art in management accounting from a the LSE perspective in the mid-twentieth century can be found in Solomon’s Studies in Costing (1952). In reading this, one is struck by the close collaboration which the LSE researchers had with colleagues in the USA, to the point where several subsequently decided to take the dollar rather than the pound. Finally, the group was to spawn notable scholars who were to influence events elsewhere, such as Carsberg who filled the first chair of accounting at Manchester, Lowe at Sheffield, and Perrin at Warwick. Perhaps the other most notable accounting event at the beginning of the second half of the twentieth century was the creation of an ICAEW sponsored chair in accounting at the University of Cambridge, which was initially filled by Professor Stone, who later won a Nobel prize in economics for his work on national income accounting. This work applied techniques of financial accounting (strongly influenced by his research colleague, an accountant named Bray) to a system of national income accounting, which became the standard method in most non-communist countries. Economists rather than accountants have subsequently filled this chair. Nevertheless, this was illustrative of later developments in English accounting research more generally—a strong commitment to interdisciplinary research in accounting, especially economics, and the recognition of accounting as a social science, rather than a distinct subject in its own right. It is interesting to compare Solomon’s second (1968) edition of Studies in Costing with the first, notwithstanding that he was then ensconced in the Wharton School, Pennsylvania. This second edition, which like the first was a collection of contributions by various authors, describes developments in accounting research from 1950 to 1968, and takes the story to approximately the time the authors of this paper entered academia. Some of the contents

BRITISH MANAGEMENT ACCOUNTING RESEARCH

269

remained similar to the first edition, notably historical studies and the nature of costs. But the changes noted by Solomons were several: ‘new’ cost tools embracing economic cost concepts and non-manufacturing costs, statistical and mathematical methods applied to cost analysis, behavioural factors, and operations research approaches. Contributions drew mainly from the USA and Britain, and covered the areas of notable British contributions, circa this era; for example, Parker on management accounting history, Samuels on linear programming, and Bromwich on standard costing. These broadly paralleled developments in the USA. An exception, perhaps, was the work on public sector accounting by Perrin and later Tomkins. Public sector accountants have their own professional body,4 and at that time it was focussed primarily on financial accounting and the ‘treasury’ function. Though totally not absent, public sector interest in management accounting was then relatively minor. But this was to change. 1970–1980: CONSOLIDATION AND GROWTH Tony Lowe taught one of the authors at Bradford University, on perhaps the first intake to an undergraduate business administration degree in the UK during the late sixties. The content of the final year accounting courses included linear programming, matrix accounting, marginal costing, information economics, systems theory, capital budgeting, and behavioral aspects. There was little discussion of full costing, on the grounds that marginal economics had rendered it obsolete, but a heavy commitment to quantitative analysis, an extensive discussion of the impending effects of computers, a thorough review of cybernetics, and a holistic analysis of the behavioural and environmental factors affecting accounting. Of course, this was not a typical accounting degree, but rather a subject leader, representing cutting edge thinking at the time. The course drew from the general excitement in the 1950s and 1960s surrounding the possibilities of management science or managerial economics, typified by the work of Joel Dean (1951), Beer (1966), and Churchman (1968). In doing so, it consciously drew from previous British traditions and achievements in economics and accounting, especially at the LSE. The belief at the time was that as new generations of students were taught the new techniques, sub-optimal methods such as full absorption costing would whither, and the new economic techniques, extended to incorporate managerial factors within the cybernetic models, would come to represent the future. In retrospect, it was a highly idealistic, scientific, and modernistic conception of progress, but was in line with its age. How much influence this work had on professional accounting training and practice is difficult to assess, though over time aspects entered professional syllabuses. Tony Lowe was regarded as an academic maverick, although widely respected academically. His criticisms were directed at those who preferred

270

T. HOPPER ET AL.

to confine management accounting to a more conventional professional, or exclusively economic approach. Perhaps the best statements of this economic approach from Britain were contained in the management accounting textbook produced by Amey & Eggington (1973) (which was highly regarded in academic circles, but not widely used on courses!), and the review of management accounting research by Scapens (1984). Both draw little distinction between North American and UK research, drawing on material such as marginal economics, mathematical programming, and information economics. British research in the 1970s made advances in a number of areas. But its major contribution was possibly in the work on divisional performance measurement and transfer pricing. A typical example is in the protracted exchange which took place in the Journal of Business Finance and Accounting, between Lloyd Amey and Cyril Tomkins (Amey, 1975; Tomkins, 1975), on whether return on investment or residual income provide the optimal means of performance measurement according to neo-classical economic analysis. Many leading British management accounting professors of today, including Cyril Tomkins (Bath), Bob Scapens (Manchester), Clive Emmanuel (Glasgow), Mahmoud Ezzamel (Cardiff) and Otley (Lancaster) established their reputations in this field during the 1970s and early 1980s. This British research on divisional performance measurement may have been inspired by Solomon’s classic book (1965) on the topic. Also the topic appeared intractable and lent itself to a variety of different approaches ranging from economics and linear programming, to behavioural science—all prevalent themes of the day. The 1970s marked the beginning of considerable growth in British accounting research. This was fuelled primarily by a major expansion of accounting and business undergraduate degrees. Much of the expansion occurred in the then newly created Polytechnics, although the traditional centers of accounting in the older civic universities also participated. The structural relationship of academic accounting, either in separate departments or in departments of economics within social science faculties, and the emergence of business schools in many British universities was, and remains, complex and varied. However, with respect to centres of accounting research, it may be fair to generalize that departments of accounting and finance maintained a distinctive academic structure and a community somewhat separate from the business schools, which have nevertheless undoubtedly influenced its academic development. This period also saw the emergence of British accounting research journals, especially the Journal of Business Finance and Accounting (launched in 1970 as the Journal of Business Finance and renamed in 1974); Accounting and Business Research (1969); Accounting, Organizations and Society (1976); and the AUTA Review (1968), subsequently renamed the British Accounting Review. There we also a number of books written by

BRITISH MANAGEMENT ACCOUNTING RESEARCH

271

the new generation of British accounting researchers, which attempted to make the research accessible to students. For example, Carsberg’s (1975) book, ‘Economics of Business Decisions’ was very influential, as were various books published in the Accountancy Age Series: Arnold on pricing and output decisions; Carsberg on capital budgeting; Tomkins on divisional performance measurement; and Hopwood on behavioural accounting. A useful statement of British accounting research in the decade 1970–1980 was the series of essays edited by Bromwich & Hopwood (1981) that stemmed from a Social Science Research Council (SSRC) initiative on accounting research. The ‘financial’ accounting contributions included a discussion of British contributions to income theory (Whittington); research contributions to the setting of accounting standards (Bromwich); cash flow accounting (Lee and Lawson); empirical accounting research (Peasnell); and a typically Scottish contribution on the relationship between research and practice (Flint and Shaw). Management accounting was well represented, however. Arnold and Scapens recounted the British contribution to opportunity cost theory. Cooper presented a social and organizational view of management accounting, largely critiquing contingency theory. Lowe argued for a reconstitution of management accounting based on the epistemology and practices of inquiring systems. Bhaskar outlined important mathematical approaches to management accounting, including CVP analysis, simulation models, linear programming, input-output analysis, game theory, and Bayesian statistics. In addition, Parker reviewed British contributions to accounting history. The book concluded with essays on accounting in non-business organizations, including two chapters on public sector accounting and control by Perrin and Tomkins. In summary, British research on cost and management accounting up until the 1980s tended to follow a number of interrelated strands. Firstly, there was a large group of conventional cost accounting teachers in universities who emphasized management accounting as defined and taught by the professional bodies. Their research, in terms of publications in major journals tended to be modest—the work was avowedly practical and often related to consulting. Secondly, the most significant group of scholars, in research terns, remained concerned with the application of management science and neo-classical economics to management and cost accounting issues. Thirdly, there were small but important groups in the areas of cost accounting history and public sector accounting. Fourthly, there was a fledgling group interested in behavioural and organizational approaches, closely related to the developments in the ‘softer’ end of operations research. Lastly, there was the emergence, through SSRC funded workshops and conferences, of a greater self-consciously ‘British’ group of management accounting researchers, who nevertheless still looked to North American research, but with growing misgivings.

272

T. HOPPER ET AL.

1975–1985 THE RISE OF BEHAVIOURAL AND ORGANIZATIONAL ACCOUNTING RESEARCH In retrospect, the 1970s marked a watershed in British management accounting research, witnessing the advent of behavioural and organizational approaches. However, speaking as then young researchers, it did not appear so at the time. Other accounting scholars disparaged such approaches as not accounting, too theoretical, irrelevant to practice, lacking methodological rigor, and inferior to economic-based research. Nevertheless, they precipitated a major methodological debate within British management accounting research that was to have distinctive effects. It is difficult, so close to the event, to disentangle why this new school emerged, but the following factors may have been significant. Some scholars became interested in the relevance of organization theory to accounting. The accounting interest stemmed from the pioneering studies of Simon et al. (1954) and Argyris (1952) (both USA non-accounting academics) in the 1950s. Both laid the foundations for mainly USA studies of how motivational factors, leadership styles, standard setting and group behaviour affect the effectiveness of accounting controls. British researchers, however, came to the area later, at a time when contingency theory was the vogue, and British social scientists such as Burns & Stalker (1961), Woodward (1965), and the Aston Group (e.g. Pugh & Hickson, 1976) had made major contributions to the area. Nevertheless, behavioural research in the USA and Britain initially had much in common. For example, Anthony Hopwood, took his PhD at the University of Chicago in the early 1970s. This involved a major behavioural study of the effectiveness of accounting measures of performance, and resulted in two major books (1973, 1974a) and a series of important articles (e.g. 1972, 1974b) following Hopwood’s return to Britain. In the mid-1970s, David Otley’s PhD at Manchester Business School attempted to replicate Hopwood’s study on the effectiveness of accounting for managerial performance evaluation. His results (1978) conflicted with those of Hopwood (1974b), and Otley argued that a contingency theory approach might explain the differences—as the research sites in the two studies had very different technologies and managerial interdependencies. These two studies provided the basis for a sustained programme of research on accounting and performance evaluation world-wide; especially in Australia and North America (Hirst, 1981; Brownell, 1982; Dunk, 1989; Merchant, 1981; Onsi, 1973; Govindarajan, 1984). After a brief period at the Manchester Business School, Hopwood moved to London Business School, where he was to fill the chair in accounting. Most importantly, he founded a new journal, Accounting, Organizations and Society, devoted to organizational and behavioural approaches to accounting. This provided a research outlet for many young British scholars starting in this area. This was crucial, as many of the established accounting research

BRITISH MANAGEMENT ACCOUNTING RESEARCH

273

journals were antagonistic to the more innovative of this research and were often unwilling to publish it. In addition, Hopwood proved to be an invaluable mentor to many young British researchers. Another group of young scholars in behavioural accounting emerged under Tony Lowe, and formed an informal workshop around the subject of management control. Initially, this group was based at Manchester Business School, where accountants such as Tony Lowe, and PhD students such as Tony Berry and David Otley, shared interdisciplinary aspirations with colleagues, especially in operations research. The works of Stafford Beer (1954, 1973), Churchman (1968) and Ashby (1964) calling for more holistic approaches based on general systems theory and cybernetics were particularly influential. Much of this work was a philosophical attack on conventional operations research; arguing that it had become too narrow, obsessively mathematical, and hence of little relevance to managerial problems that involve uncertainty and complex multiple factors. It was a short jump to draw similar conclusions about much of the management accounting research, which was becoming increasingly mathematical and stylised. Members of the group argued that conventional accounting methods and research were of little use, except for simple problems under conditions of certainty. They argued that more complex uncertain decisions needed new techniques based on interdisciplinary, processual forms of analysis. Initially, much of the work of this group was often abstract and philosophical in tone, though it did much to encourage research on management accounting which explored strategy formulation, marketing and behavioural issues. In the mid-1970s Tony Lowe moved to a chair at Sheffield University, where his section (i.e. department) and the, by then, Management Control Association became a haven for young scholars pursuing organizational and social research on accounting. Whilst at the time some were regarded as eccentric, heretical, and hence unemployable by other more traditional accounting departments, they came fill many senior academic positions. They include, Hopper (Manchester), Puxty (Strathclyde, now sadly deceased), Cooper (Alberta), Tinker (City, New York), Berry (Manchester Business School), Chua (New South Wales), Otley (Lancaster), Wilson (Keele), Laughlin (Kings, London), and Miller (LSE). Their work was, and remains, strongly influenced by philosophy, social theory, sociology, political economy, and organization theory. Their major contributions have been primarily, but not exclusively, in management accounting. Initially, many members of this group focussed on contingency theory approaches to management accounting, seeing it as an extension of general systems theory and cybernetics. This soon changed, as they recognised methodological problems, such as difficulties in conceptualising and measuring key variables, inconsistent or modest correlations, an absence of an inherent theory, and a failure to recognise the importance of managerial choice in control system design (Otley, 1980). Dissatisfied with the static

274

T. HOPPER ET AL.

and highly statistical survey methods prevailing in contingency theory and other forms of management accounting research, this group developed a strong commitment to intensive case study research culminating in the National Coal Board studies (e.g. Berry et al., 1985). Members became particularly interested in organizational effectiveness, how managers use accounting information in practice, how accounting controls relate to other types of controls in organizations, the micro-politics of accounting within management, processual aspects of management, and the social and political consequences of accounting controls in a historical and social context. Representative collections of this work were published by the Management Control Workshop in two books, entitled New Perspectives on Management Control, edited by Lowe & Machin (1983) and Critical Perspectives in Management Control, edited by Chua et al. (1989). The Management Control Association continues to meet regularly and organises a triennial conference on management control, which is held in Europe, jointly with the Behavioural Section of the American Accounting Association. In addition, its more radical members were responsible for the triennial Interdisciplinary Perspectives on Accounting Conferences which have been held at Manchester since 1986. However, the methodological drift was not unique to these scholars, and they were not isolated from other management accounting scholars. The SSRC (now ESRC) and CIMA/ICAEW has funded twice yearly informal workshops at Aston and LSE since the late 1970s, which have provided for a relatively cordial cross-fertilization of ideas and data. Mike Bromwich (LSE) has, with others, been particularly instrumental in maintaining this forum. In addition, the drift to qualitative research was prompted in others by more pragmatic concerns, especially the growing belief, based partly on empirical studies, such as Gee (1986), that many of the new economic approaches to management accounting were either not being applied or, when used did not yield the benefits expected by managers. Concerns over the limitations of economic analysis, coupled with calls to abandon normative research in favour of close observations of practice became commonplace. Several leading professors, who had made their reputation in more conventional economic and quantitative management accounting research, such as Scapens, Tomkins, Ezzamel, and Gambling (see for example, Tomkins & Groves, 1983; Gambling, 1987), became increasingly frustrated with the limitations of formal economic analysis, and were in the vanguard of British accounting researchers calling for sociological approaches and qualitative research, and each made substantial contributions to this growing literature during the 1980s. To summarize, up to the early 1980s, behavioural management accounting research in British universities tended to follow neo-human relations and contingency theory approaches, similar to those pursued by North American scholars such as Bruns (1968), Merchant (1981) and

BRITISH MANAGEMENT ACCOUNTING RESEARCH

275

Macintosh (1981), and Australians such as Hirst (1981) and Brownell (1982). However, in the early 1980s, British research began to branch out in very different directions to encompass new research methodologies and research questions. The reasons for this were several. Whilst many management accounting researchers moved into organizational areas, several important non-accounting scholars, often from sociology, which was discouraged under Thatcherism, started to conduct accounting-related research. These included Willmott, Knights, Hoskin, K.Williams, Armstrong, Rosenberg (now deceased), Miller, Ogden, Colwyn Jones, Roslender and Morgan—several of whom were later to enter the ranks of accounting faculty. Given the limited number of trained faculty in the areas of business, including accounting, and the rapid expansion of degrees in these areas, recruitment of suitable faculty was often difficult. This was compounded in the 1980s by a deterioration in academic salaries relative to the private sector.5 Consequently, some accounting departments recruited staff from allied social science disciplines, such as economics and sociology, especially in the leading research universities who were determined to maintain traditional academic norms of scholarship. Given the location of many such departments in social science faculties, this was perhaps easier in the UK, than in business schools of the USA. Whatever, it contributed to making British cost and management accounting becoming interdisciplinary. Relatedly, organization theory in Britain and Europe underwent a major paradigm shift that largely failed to occur in North America. Contingency theory and neo-human relations tended to be abandoned for more sociological and political approaches which drew, in the main, from European social theory. This may have been due in part to British organization theory becoming more interconnected with European scholars through workshops organised by the European Institute for Advanced Studies in Management (EIASM), and more direct links with the large and influential European group of organizational sociologists. Many of the nonaccounting scholars entering accounting research brought new ideas into the accounting arena. These included such approaches as critical theory, labour process theory (Hopper et al., 1987), interpretive sociology (Tomkins & Groves, 1983), and especially the work of the French Philosopher, Michel Foucault (Burchell et al., 1980; Miller & O’Leary, 1987). Also, many other leading management accounting researchers, organizational and economic alike, called for major changes in research methodologies (e.g. Burchell et al., 1980; Tomkins & Groves, 1983). They argued that contingency theory and economic modelling were too distant from the activities of managers. Given that managers generally appeared not to adopt such academic prescriptions, as marginal costing, DCF evaluations and linear programming, they argued that researchers should use intensive case studies of management in action to discover why managers use the particular forms accounting which they do. That is, management

276

T. HOPPER ET AL.

accounting theory should be reconstructed on the basis of an understanding of how and why managers behave in the way in which they are observed to behave, rather than, as previously, from academic prescriptions of how they should behave, based on normative economic theory. Like their counterparts in organization theory, British accounting academics attending European workshops were impressed by Scandinavian ¨ research (e.g. Hedberg & Jonsson, 1978; J¨onsson, 1982), which had a long tradition of case-based research and a degree of scepticism towards the ‘scientific’ social science research methodologies that dominate North American management research to this day. Lastly, one cannot divorce changes in research topics and methodologies from the politics of the period. Under Thatcherism, accounting data and the consulting arms of accounting firms had been central to economic and political debates, involving privatisation, industrial restructuring, reform of the public sector, and worries about de-industrialisation. Consequently, whatever the researchers’ political views, it appeared apparent that accounting had to be studied in its broader social, political and institutional context. For the more radical, who argued that the notion of a disinterested neutral researcher was in fact a normative statement favouring the status quo, it meant more direct engagement with policy and a search for alternatives more consistent with the European social democratic tradition. The result of the above was a small flood of innovative sets of research projects, which can be roughly grouped into three inter-related areas. Firstly, there was managerial work emphasising the socially constructed nature of cost accounting data and controls; the importance of processual aspects, including culture, rituals and the interpretation and usage of accounting; and its role within change processes and accountability (Berry et al., 1985; Dent, 1987; Preston, 1986; Roberts & Scapens, 1985). This work was not confined to the private sector, but extended to what is now often termed ‘new public sector management’. Secondly, drawing from earlier British traditions in cost accounting history, but reinterpreting it and extending it through the lenses of contemporary European social theory, new historical insights emerged about the origins of cost accounting in the USA and Britain. This work challenged the notion that accounting is merely a consequence of the economic imperatives of efficiency and competition, and argued that it is influenced by dominant ideologies, socially constructed powerknowledge systems, and the changing structure of capitalism (Hopwood, 1987; Armstrong, 1985; Loft, 1986; Hoskin & Macve, 1986; Miller & O’Leary, 1987). Thirdly, there were theoretical and methodological critiques of prevailing neo-classical economic and contingency approaches to management accounting, puncturing their claims to be neutral, objective and descriptive, rather than prescriptive (Hopper & Powell, 1985; Chua, 1986). Of course, more conventional cost accounting research based on neoclassical economics, human relations, contingency theory, and surveys of practice did not cease in Britain during the 1980s. Sometimes it was even

BRITISH MANAGEMENT ACCOUNTING RESEARCH

277

performed by the researchers who were working in the alternative modes described above. Nevertheless, in the 1980s much of British management accounting research took a radically different turn from the research across the Atlantic. For example, there was relatively little interest in agency theory, which has perhaps become the dominant research approach in leading American business schools. Even many British researchers within the neoclassical economic paradigm believe it is inadequate for modelling real-life control problems in organizations and it contains intractable mathematical problems (Ashton, 1991). There was also little interest in behavioural psychology, and especially laboratory studies. However, surveys were, and continue to be, a feature of British accounting research, with for example, regular surveys on capital budgeting (Pike), standard costing (Puxty), ABC and ABM (Innes and Mitchell) and on management accounting, more generally (Drury) Finally, the period was to lead to a burgeoning of new journals (some appearing a little later at the beginning of the 1990s) with strong British and European links, especially Management Accounting Research; Critical Perspectives on Accounting; Accounting, Auditing and Accountability Journal; and the European Accounting Review. Such journals, along with the earlier journals mentioned previously, whilst international and often eclectic, have provided the means to publication for many British management accounting researchers. This blossoming of accounting journals has been matched by a similar growth of British and European journals in the areas of management and organization studies that are often used as outlets by British accounting scholars. CONTEMPORARY MANAGEMENT ACCOUNTING RESEARCH IN BRITAIN: 1985–2000 It is always difficult to comment on contemporary research trends. With hindsight, what appeared significant at the time, can turn out to be quite trivial, or vice-versa. One is constantly surprised by the twists and turns that research takes. Nevertheless, perhaps unwisely, this article will close by examining recent trends in British management accounting research; concluding with an assessment of its contributions and failures, and providing possible pointers to likely future directions. The work of Kaplan and his colleagues in the USA (Johnson & Kaplan, 1987) was met with a combination of shock and fascination by British accounting academics. The claim that conventional management accounting lacks of relevance resonated with the theoretical and empirical work done in Britain, but the more recent surveys suggest that it may be premature to pronounce management accounting’s last rites (Scapens, 1999; Burns et al., 1999).

278

T. HOPPER ET AL.

The historical basis of Relevance Lost was welcomed as British accounting research, whether new or old, conventional or radical, has long emphasised the importance of history. However, the theoretical basis of Johnson and Kaplan’s history, namely the search for efficiency based on Chandler’s work and transaction cost economics, has provoked a series of papers which have provided alternative historical explanation grounded in the work of European social theorists; for example, Foucault (Ezzamel et al., 1990; Loft, 1986; Miller & O’Leary, 1993; Bhimani, 1993) and labour process/regulation theory (Hopper & Armstrong, 1991). However, Johnson and Kaplan’s contribution to history provided a stimulus and focus for accounting history in the UK, and has helped to promote a dialogue between, on the one hand, those who have pursued alternative social theory and, on the other, the accounting scholars who have maintained the archival tradition of British historical research, typified by the work of Solomons (1952, 1968) and subsequently Parker (1969, 1981). This research continues in Britain today, with substantial contributions from the team at Cardiff led by Dick Edwards, who co-founded Accounting, Business and Financial History in 1990 and is its current editor. The calls of Kaplan and his colleagues for more case study research, and less emphasis on highly quantitative economic analysis, have been widely welcomed by British researchers. This is not surprising given that they had already shown a commitment to this style of research, but they are frequently sceptical of the validity of Harvard-type case studies as effective research tools. They argue that Kaplan and his followers need to pay more attention to methodological issues and to practical experiences gained from case study research in Europe and elsewhere. In short, Harvard case studies are alleged to be too brief, too managerial, too closed to behavioral and external factors, unduly atheoretical, and hence inadequate for unraveling managerial processes and problems. Nevertheless, the initial concerns of Johnson and Kaplan about relevance, and the need to study major changes in cost and management accounting in enterprises, struck a chord with British researchers who had long held such concerns but, perhaps like their North American colleagues, had not fully appreciated their nature and scale. Thus, issues such as ABC, the effects upon accounting of changing operations management, the incorporation of Japanese cost management methods, customer-focused organization as in World Class Manufacturing (WCM), and strategic management accounting, which were raised by Kaplan and his colleagues, have helped to alert British researchers to these areas. Although the British response was generally sceptical, the program provided a focus and themes around which a disparate group of scholars could cohere—for an excellent review see Bromwich & Bhimani (1994). The attitude of many British academics to ABC and ABM tended to be cool. It is argued that it is not new, merely a more refined method of cost allocation, and it ignores implementation problems, overstates the

BRITISH MANAGEMENT ACCOUNTING RESEARCH

279

case that all costs are variable and, if treated as such, can give misleading economic information for decision making. ABC/M may be attractive to Western managers, especially accountants—who have dominated the senior managerial positions in many companies, because it offers an apparent solution to changing conditions without threatening managerial power structures and practices based on financial engineering. Nevertheless, the excitement of practitioners and consultants about ABC/M is seen as an interesting and significant phenomenon, worthy of study in its own right. Debates have centered on implementation problems and whether firms use such techniques to make visible (and legitimate) the opportunities to reduce labour costs and to subcontract tasks, rather than as a superior method of routine product costing. Typical British contributions to the area have lain in economic critique (Bromwich & Bhimani, 1989; 1994), survey and case study work (especially the contributions of Scottish teams led by Innes & Mitchell, 1990; 1995; and Innes et al., 1999) and radical sociological critique (e.g. Armstrong, forthcoming AOS). The more strident claims of Kaplan and his colleagues concerning the ineffectiveness of conventional cost accounting for Western manufacturers competing internationally, and the wholesale emergence of new forms of work organization, have often been regarded by British researchers as overstated (Bromwich & Bhimani, 1989). Nevertheless, the general thesis that markets and work practices are gradually, but significantly changing has generally been accepted. This has been revealed in a series of intensive case studies; such as those by Dugdale & Jones (1996) on throughput accounting, Ezzamel (1992) on new accounting controls, Burns & Scapens (2000) on management accounting change, and Hopper & Jazayeri (1999) on WCM. In addition, Innes and Mitchell have done considerable work, often with Japanese colleagues, on Japanese cost management techniques. Collectively the studies reveal how significant changes in markets (becoming more global and highly differentiated) are changing corporate strategies (with more emphasis on high value-added production and with simultaneous pressures for cost reduction), and producing new forms of work organization (flexible manufacturing, automation and flatter, more processual forms of management). Such changes are having major effects on costing systems and the role of accountants. However, the changes are often uneven, ephemeral, and variable in effectiveness. The processes of change and industrial relations have often been found to be important. As a result a number of researchers are broadening their analysis to relate these changes to changing forms of governance and accountability, and to economic restructuring. Consistent with previous traditions, the British reaction has been to attempt to theorise the nature of changes using a variety of social science perspectives; such as regulation theory (Hopper, 1993), labour process theory and the flexibility debate within sociology (Jones, 1995), political economy (Williams et al., 1994; Williams, 2000), institutional theory (Burns & Scapens, 2000), and

280

T. HOPPER ET AL.

Foucauldian theory (Miller & O’Leary, 1987, 1993). It is apparent that the major research issues and problems are being redefined to explore how the emergence of new manufacturing technologies, flexible manufacturing, and global markets are challenging conventional cost accounting methods. Thus, the focus is tending to move from operational matters to issues of strategy, organization, governance, and performance evaluation. This is not seen as problematical for many British management accounting researchers, who tend to be versed in interdisciplinary methods and to view management accounting within a broader perspective of control. For example, a number of British academic accountants have long criticised conventional management accounting for its unduly internal focus and consequent neglect of environmental and strategic factors, and this has given rise to an interest in what might be termed strategic management accounting (Bromwich, 1990; Tomkins, 1991; Simmonds, 1981). Recently, there has been a return to more traditional research with a re-evaluation of issues of performance evaluation. Although the work of Hopwood (1972, 1974) and Otley (1978) on the use of accounting data in performance evaluation set off a stream of (generally contingency-based) work, which has been described as ‘the only organised critical mass of empirical work in management accounting at present’ (Brownell & Dunk, 1991), this has mostly been carried out by Australian and US researchers. It has also tended to follow a positivistic approach using survey data. Somewhat surprisingly, given the positivistic approach adopted, very few of these empirical studies have ever been replicated, a defect recently partially rectified by Otley & Pollanen (2000), with potentially worrying results for the assumed generality of prior findings. However, it has also been noted that many of the issues raised by Hopwood and Otley concerning the use made of budgetary control systems by managers (short-term vs. long-term emphasis; rigid vs. flexible use; input vs. results focus etc.) are also relevant to the application of a much wider array of control devices. Otley (1994) describes some of the changes that have occurred over the past twenty years which have affected control systems design and use in the contemporary organization. Bunce et al. (1995), under the auspices of a CAM-I (Europe) project, point out the increasing problems felt by practitioners using budgetary control systems, and describe some of the attempts to replace or upgrade them, drawing especially on innovations in Scandinavia. More recently, Otley (1999) has attempted to develop a framework within which a much wider range of extant control practices (including EVA and the Balanced Scorecard) can be analysed. This integrates with other work (such as Simons, 1995) that specifically examines the different ways in which senior mangers actually use control information (which Otley labels interactive and diagnostic use), although some care needs to be taken in defining the level of management at which these different uses are observed. Clearly, much of importance remains to be studied in terms of the wide variety of control information, both financial

BRITISH MANAGEMENT ACCOUNTING RESEARCH

281

and non-financial, that is used and the effects of such use on organizational performance. Indeed, the issue originally raised by Otley (1980), that performance may itself be a contingent variable that affects control systems use, is again highly relevant in studying whether the adoption of new control techniques causes, or is a result of, good or poor performance. More generally, work outside of management accounting strictly defined, especially that on governance and payment systems is also being connected with work on performance measurement and the management process. These connections have recently been cogently made in a book by two US authors (Epstein & Birchard, 2000), but much of the foundational work is being conducted in the UK by researchers such as Peasnell, Pope, O’Hanlon and Walker. Performance measurement has been extensively studied by a group led by Andrew Neely, although as much from a production management as an accounting point of view, and has led to two international conferences held in Cambridge. It appears that the stakeholder framework that underlies much of this work has found more fertile ground in Europe and Britain, than in the USA where even the proponents of the Balanced Scorecard feel obliged to argue that it ‘is not a stakeholder technique; it is designed to deliver shareholder value’. The wider perspectives that this UK tradition is bringing to bear on issues of performance management and governance now appear to be poised to deliver some important outcomes. It is important to note that debates in Britain over changes to control systems have not been confined to the private sector. The last two decades have seen major changes in the public sector, with the growth of privatisation, agencies, subcontracting, market testing, league tables, internal markets and many other methods associated with the ‘new public sector management’. Given the predilection of successive governments to create quasi-markets and to import private sector methods into the public sector, the boundaries between the public and private have become obscured. In addition, Britain like its European partners, has had a relatively large public sector. Thus, many British management accounting researchers have gained experience of public sector issues, if only because access to research sites is often easier. The coal industry is a case in point. Also, traditionally, there has been a significant group of researchers concentrating mainly on public sector (management) accounting; for example, Perrin, Tomkins and Jones. Perrin, for instance, who was a founder and long serving editor of the Journal of Business Finance and Accounting, spun-off a new journal in 1985, Financial Accountability and Management, specialising in public sector accounting. Currently, this journal is edited by Lapsley, who heads a research institute on public sector accounting in Edinburgh. However, the scale of public sector changes have elicited widespread interest amongst British management accounting researchers, not least because accounting has been central to the implementation of many of the change programmes. So, for example, there has been interest in education,

282

T. HOPPER ET AL.

especially the local management of schools through delegated budgets (Edwards et al., 1995; Broadbent et al., 1999), health costing (Llewellyn, 1993; Lapsley, 1992), managerial auditing (Power, 1991; McSweeney & Sherer, 1990), universities (Scapens et al., 1994; Angluin & Scapens, 2000; and Bourn, 1994), and privatization (Ogden, 1995). Whilst some of the work has been technical there has been a strong emphasis on case study research, informed by various social theories. There has been a strong interest in the politics of accounting change, and its relationship to the changing role of the state. In this sense, much public sector research runs parallel to the research in the private sector, which is focused on accounting change in the context of industrial restructuring, nationally and globally, and the associated changes in accountability. In summary, insofar as it is possible to discern trends in current work, British management accounting research in the private sector tends to be concentrated on accounting change and the reconstitution of accounting roles. This tends to embrace a plethora of acronyms, which have dominated practice in the past ten/twenty years; such as JIT, MRP, ERPS, TQM, TQC, WCM, ABC/M, EVA. We see no signs of abatement in this area, as case studies are continuing to identify new accounting innovations as focal points for research. There are also programmes of management accounting research in the public sector with similar themes and concerns. Both share a strong commitment to case study research and the use of social theories ranging from institutional theory in economics and sociology to political economy and various branches of organizational studies. There is a strong focus on performance measurement, but not in terms of agency relationships, but rather as modes of accountability. In addition, the commitment to historical research remains strong. TAKING STOCK The above is not without its problems, however. Researchers are increasingly becoming aware of the difficulties and limitations of case study research. It is difficult to ascertain general trends from a series of single-site studies that often follow very different ways of defining key factors and employ different theoretical approaches. There has perhaps been a lack of theoretical and empirical consolidation that compares and contrasts results in an attempt to derive a more integrated programme of research. Novelty tends to prevail and replication studies are neglected and are difficult to conduct within prevailing case study approaches, which emphasise how theory and issues emerge from the site. Nevertheless, this style of research has many strengths: theory and empirics are closer to practical concerns and promote interdisciplinarity. Thus, British research has been creative in adding to theory, and in identifying the importance of implementation processes, inter-professional

BRITISH MANAGEMENT ACCOUNTING RESEARCH

283

rivalries, and industrial relations. The strength of such studies is that they reveal rich detail on internal organizational processes, and focus on important environmental and institutional pressures, such as competition, state influences, supply chain relations. However, although case studies may reveal the importance of external factors, further investigation of such factors can be difficult with case study modes of analysis. Often external factors, especially economic factors, require analysis at an aggregate level, drawing on existing and/or newly created data sets. Whether or not there will be a revival of large-scale survey studies, contingent analyses, and market-based studies of accounting change, alongside the currently more popular case study research, remains to be seen. But if they do emerge, there needs to be a greater degree of methodological eclecticism and plurality, than existed during many of the methodological debates of the 1980s. There are grounds to believe that this may be occurring. For example, there seems to be a growing belief amongst many leading British researchers that advances in social theorising about accounting has outstripped its testing through careful empirical study. In addition, the methodological boundary lines have become more clearly demarcated and the strengths and limitations of alternative approaches better understood. Certainly journals are becoming more impatient with theoretical papers which lack empirics. Furthermore, younger British scholars have been trained in a wide variety of methodological approaches. They were not involved in the major methodological debates and crusades of the 1970s and 1980s, and there are indications that a greater theoretical eclecticism may be emerging amongst them. They may be more willing to triangulate different theories and research methods; for example, using agency theory with political economy approaches which emphasise trust relations. If it works then use it, may become a more common cry amongst such researchers, rather than an insistence upon theoretical and methodological consistency and purity. In short, the research thrust may lie in attempting to integrate and consolidate the variety of theories and methodologies which have emerged in recent years, rather than seeking to add yet more. The commitment to organizationally-based case study research, nevertheless, remains strong. Greater methodological plurality and eclecticism in British research, would require a considerable re-integration of economics. The issues may be more methodological, rather than practical. As mentioned previously, British management accounting researchers often came from economic and quantitative backgrounds and students continue to be trained in these areas. It is not unusual for researchers committed to case study research also to publish more quantitative economic-based research. In addition, there are some British researchers, most notably Bromwich, who have retained a commitment to economic-based management accounting research. Nevertheless, it is difficult to deny that many of the potential conventional economic-based management accounting researchers have

284

T. HOPPER ET AL.

tended to focus on what could be labelled financial management research. Thus, British contributors to economics-based research such as Walker (e.g. Walker, 1997; Strong & Walker, 1993), Stark (e.g. Stark, 1997; Stark et al., 1992), Pope (e.g. Pope & Inyangete, 1992), O’Hanlon (e.g. O’Hanlon, 1991; O’Hanlon et al., 1992), who from time to time make substantive contributions to management accounting research, tend to be associated with networks of researchers concerned with market studies and financial accounting. Thus economic work, potential or actual, in areas such as agency theory, EVA, and executive compensation systems, has tended to lie outside the groups normally regarded as management accounting researchers, although there are close personal contacts between the respective groups. To summarize, the outcome of the methodological debates of the 1980s has not been the dominance of a single research methodology in British accounting research. Rather, there are a number of different methodological camps which exist in mutual tolerance, fostered perhaps by relative nonengagement with each other. This has its strengths and attractions, but it is increasingly difficult to defend at a time when each is recognizing similar problems, and addressing similar concerns. For example, case study researchers are becoming aware of the need to study accounting change from the perspective of global competition The effects of executive remuneration systems remain relatively neglected, along with economic analyses of new management accounting methods, such as EVA. In short, there is a need to re-incorporate economics into social theory, and case study based research. Paradoxically, this comes at a time when economics research in accounting is recognising the need to employ more case study research and to incorporate non-economic factors. Also, issues relating to the changing role of accountants is not confined to management accountants, but extends to other branches of accounting as well. Furthermore, issues of accountability, corporate governance (especially stakeholder analysis), sustainability, and ecology cut across the artificial divisions between financial management, management accounting, and financial accounting. Consequently, the traditional distinction between financial and management accounting research may be less easy to sustain in the future. It might be argued that British management accounting research has contributed much to an understanding of accounting practice, and to theoretical and methodological innovations which have been carried beyond its shores. We would also argue that, given its commitment to interdisciplinary work and an openness to non-accounting scholars and ideas, British management accounting research is well placed to both recognise and cope with the demands of changing research and pedagogy. As an academic venture, management accounting research in Britain has been relatively successful, but not without problems. However, in the field of practical innovation, British research has been weak. There have been few, if any British scholars that have proselytized particular issues and trends, or converted them into applications that have received significant application in

BRITISH MANAGEMENT ACCOUNTING RESEARCH

285

practice. The reason for this is unclear. It may lie in the anti-intellectualism of British managers and accountants (despite the close and harmonious relations between academics and the accountancy profession in more recent years) or the marginal role of academics in British policy making. It may also be a consequence of the nature and rewards of British academic life, compounded by the demands of research assessment exercises, which emphasise academic output. It might even be due to the location of many leading accounting researchers outside business schools, and/or the career choices of academic accountants—as the choice of penury, as opposed to the financial rewards of industry and commerce, may dissuade more entrepreneurial inclined individuals. Or it may merely be a continuation of the traditional strength of the British scientific community in fundamental research, and its relative weakness in commercial application. But we leave this to others to discern. Lastly, we wish to question the extent to which it will be meaningful to talk about British management accounting research in the future. Whilst there is a distinctive British tradition and community of scholars in management accounting research, the area is becoming increasingly international. Of course, there has long been a tradition of British exchanges between Australasian and North American colleagues. These remain, but not perhaps of the same intensity as previously. However, European links have become much stronger. In part, this is due to deliberate European initiatives, such as the creation of the European Institute for Advanced Studies in Management, which has fostered the growth of the European Accounting Association, and a series of specialist workshops which now provide a focus for many leading accounting scholars across Europe. Also, the European Union is increasingly funding various forms of research and training which usually favour collaborations across countries. Thus, British research may increasingly be subsumed under a European banner. In part this is a practical consequence of European political union coupled to greater globalisation of markets and production. Currently, British management accounting researchers have considerable advantages in this collaboration, as most leading European research forums are conducted in English. However, this advantage is likely to be short-lived, as there are a growing number of European management accounting researchers publishing in English in the leading international research journals. In addition, the growing number of continental European scholars on British PhD programmes, allied to a dearth of British candidates, is leading to a significant number of non-British appointments in leading British research departments. This trend is not confined to Europeans, but the free mobility of labour within the EU is beginning to create a European market for accounting researchers, albeit slowly. Furthermore, unlike in the period in the 1970s when academic accounting was expanding in the Britain, and new researchers were recruited from professionally qualified accountants, today because of salary differentials it is impossible to attract significant

286

T. HOPPER ET AL.

numbers of qualified accountants into universities, and it is almost as difficult to encourage British graduates into research careers. As a result, the accounting researchers in British universities in the future are likely to recruited from overseas, possibly from the ranks of the many overseas PhD students who are currently studying in British universities. This may be intellectually stimulating and reflective of growing internationalisation more generally, but it is likely to have major effects on the nature of British research output in the future. To conclude, it is apparent that British management accounting researchers continue to pursue different research methodologies to many of their North American colleagues. However, both sets of researchers are tending to share a common perception of the major research problems. Both recognise the significance of new manufacturing methods, and global markets for accounting controls within work organizations. However, rather than investigating these phenomena through formal economic analysis or managerial case studies, like their North American counterparts, British researchers have tended to concentrate on intensive case studies and historical analyses, often based on European social theory, rather than neo-classical economics. The British reaction to the calls for dramatic changes to Western cost accounting systems has not been unsympathetic to the general tenor of the argument, but it has tended to be guarded and pragmatic, preferring to defer any conclusion until more sustained intensive studies of the implementation of new techniques have been produced. However, in Britain and Europe there is evidence of some convergence with respect to topics and methods, which cuts across the conventional academic specialisations, and if so, this is likely to be reflected in a greater European focus with respect to individuals, ideas, and problems. Finally, an excellent source of current information about British (and Irish) accounting academia is The British Accounting Research Directory (published by Chapman and Hall). It gives details of every university and higher education department which teaches accounting, including the names of staff, their positions, their qualifications and their research interests and publications in the previous two year period. This is revised and published every two years. It is distributed free to all members of the British Accounting Association, but can be purchased by non-members. NOTES 1. Both are from personal conversations. 2. Trade Associations also played a part in cost accounting education at that time. In the early decades of the 20th century, a large number of trade associations developed their own uniform costing systems which they promoted to their memberships (see Mitchell & Walker, 1997; and Ahmed & Scapens, 2000). 3. However, in England the notable exception was the LSE. 4. Now known as the Chartered Institute of Public Finance and Accountancy (CIPFA).

BRITISH MANAGEMENT ACCOUNTING RESEARCH

287

5. As mentioned earlier, academic salary scales in the UK are set nationally and are uniform for all subjects and universities.

REFERENCES Ahmed, N.M. & Scapens, R.W. (2000). ‘Cost allocation in Britain: towards an institutional analysis’, European Accounting Review, 9(2), pp. 159–204. Amey, L. (1975). ‘Tomkins on ‘Residual Income’’, Journal of Business Finance and Accounting, 2(1), pp. 55–68. Amey, L.R. & Egginton, D.A. (1973). Management Accounting: A Conceptual Approach. London: Longman. Angluin, D. & Scapens, R.W. (2000). ‘Transparency, accounting knowledge and perceived fairness in UK universities’ resource allocation: results from a survey of accounting and finance’, British Accounting Review, 32(1), pp. 1–42. Armstrong, P. (1985). ‘Changing management control strategies: the role of competition between accountancy and other organizational professions’, Accounting, Organizations and Society, 10(2), pp. 129–148. Argyris, C. (1952). The Impacts of Budgets on People. New York: Controllership Foundation. Ashby, W.R. (1964). An Introduction to Cybernetics. London: Methuen. Ashton, D. (1991). ‘Agency theory and contracts of employment’. In D. Ashton, T. Hopper & R.W. Scapens (eds), Issues in Management Accounting, pp. 106–125. Hemel Hempstead: Prentice-Hall. Baxter, W.T. (1938). ‘A note on the allocation of oncosts between departments’, Accountant, 5, November. Baxter, W.T. (1947). ‘Should accountants ignore overheads?’ Accountant. Baxter, W.T. & Oxenfeldt, A.R. (1961). ‘Costing and pricing: the cost accountants versus the economist’. Business Horizons Winter. Beer, S. (1954). ‘Operational research and accounting’, Operational Research Quarterly, 5(1), pp. 1–12. Beer, S. (1966). Decision and Control: The Meaning of Operational Research and Management Cybernetics. Chichester: John Wiley & Sons. Beer, S. (1973). Brain of the Firm. London: Penguin Press. Berry, A.J., Capps, T., Cooper, D., Ferguson, P., Hopper, T. & Lowe, E.A. (1985). ‘Management control in an area of the NCB: rationales of accounting practices in a public enterprise’, Accounting, Organizations and Society, 10(1), pp. 3–28. Bhimani, A. (1993). ‘Indeterminacy and the specificity of accounting change: renault 1898–1938’, Accounting, Organizations and Society, 18(1), pp. 1–40. Bourn, Michael. (1994). ‘A long and winding road: the evolution of devolution in universities’. In R.H. Berry (ed.), Management Accounting in Universities, pp. 5–24. London: The Chartered Institute of Management Accountants. Broadbent, J., Jacobs, K. & Laughlin, R. (1999). ‘Comparing schools in the UK and New Zealand: individualizing and socializing accountabilities and some implications for management control’, Management Accounting Research, 10(4), pp. 339–361. Bromwich, M. (1990). ‘The case for strategic management accounting: the role of accounting information for strategy in competitive markets’, Accounting, Organizations and Society, 15(1/2) pp. 27–46. Bromwich, M. & Bhimani, A. (1989). Management Accounting: Evolution not Revolution. London: Chartered Institute of Management Accountants. Bromwich, M. & Bhimani, A. (1994). Management Accounting: Pathways to Progress. London: Chartered Institute of Management Accountants. Bromwich, M. & Hopwood, A.G. (eds) (1981). Essays in British Accounting Research. London: Pitman.

288

T. HOPPER ET AL.

Brownell, P. (1982). ‘The role of accounting data in performance evaluation, budgetary participation and organizational effectiveness’, Journal of Accounting Research, 20(1), pp. 12–27. Brownell, P. & Dunk, A.S. (1991). ‘Task uncertainty and its interaction with budgetary participation and budget emphasis: some methodological issues and empirical investigations’, Accounting, Organizations and Society, 16(8), pp. 693–704. Bruns, W.J. (1968). ‘Accounting information and decision-making: some behavioural hypotheses’, Accounting Review, 43(3), pp. 469–480. Bunce, P. Fraser, R. & Woodcock, L. (1995). ‘Advanced budgeting: a journey to advanced management systems’, Management Accounting Research, 6(3), pp. 253–265. Burchell, S., Clubb, C., Hopwood, A.G. & Hughes, J. (1980). ‘The roles of accounting in organizations and society’, Accounting, Organizations and Society, 5(1), pp. 5–27. Burns, J., Ezzamel, M. & Scapens, R.W. (1999). ‘Management accounting change in the UK’, Management Accounting, March, pp. 28–30. Burns, J. & Scapens, R.W. (2000). ‘Conceptualizing management accounting change: an institutional framework’, Management Accounting Research, 11(1), pp. 3–25. Burns, T. & Stalker, G.M. (1961). The Management of Innovation. London: Tavistock. Carsberg, B.V. (1975). Economics and Business Decisions. Harmondsworth: Penguin. Chua, W.F. (1986). ‘Radical developments in accounting thought’, Accounting Review, 61(4), pp. 601–632. Chua, W.F., Lowe, T. & Puxty, T. (eds) (1989). Critical Perspectives in Management Control. London: Macmillan. Churchman, C.W. (1968). The Systems Approach. New York: Dell. Coase, R.H. (1990). ‘Accounting and the theory of the firm’, Journal of Accounting and Economics, 12(1–3), pp. 3–13. Dean, J. (1951). Managerial Economics, 2nd ed. Hemel Hempstead: Prentice Hall. Dent, J.F. (1987). ‘Tensions in the design of formal control systems: a field study in a computer company’. In W.J. Bruns & R.S. Kaplan (eds), Accounting and Management: Field Study Perspectives, pp. 119–145. Cambridge, MA: Harvard Business School Press. Dugdale, D. & Jones, T.C. (1996). Accounting for Throughput. London: Chartered Institute of Management Accountants. Dunk, A.S. (1989). ‘Budget emphasis, budgetary participation and managerial performance: a note’, Accounting, Organizations and Society, 14(4), pp. 321–324. Edwards, P., Ezzamel, M., Robson, K. & Taylor, M. (1995). ‘The development of local management of schools: budgets, accountability and educational impact’, Financial Accountability and Management, 11(4), pp. 297–315. Epstein, M.J. & Birchard, B. (2000). Counting What Counts: Turning Corporate Accountability to Competitive Advantage. Cambridge, MA: Perseus Books. Ezzamel, M. (1992). Business Unit & Divisional Performance Measurement. London: Academic Press in association with the Chartered Institute of Management Accountants. Ezzamel, M., Hoskin, K. & Macve, R. (1990). ‘Managing it all by numbers: a review of Johnson and Kaplan’s relevance lost’, Accounting and Business Research, 20(78), pp. 153–166. Gambling, T. (1987). ‘Accounting for rituals’, Accounting, Organizations and Society, 12(4), pp. 319–330. Geddes, S.B. (1995). The Development of Accountancy Education, Training and Research in England. PhD Thesis. University of Manchester, UK. Gee, K.P. (1986). Advanced Management Accounting Problems. London: Macmillan. Govindarajan, V. (1984). ‘Appropriateness of accounting data in performance evaluation: an empirical investigation of environmental uncertainty as an intervening variable’, Accounting, Organizations and Society, 9(2), pp. 125–135. ¨ Hedberg, B. & Jonsson, S. (1978). ‘Designing semi-confusing information systems for organizations in changing environments’, Accounting, Organizations and Society, 3(1), pp. 47–64.

BRITISH MANAGEMENT ACCOUNTING RESEARCH

289

Hirst, M.K. (1981). ‘Accounting information and the evaluation of subordinate performance: a situational approach’, Accounting Review, 56(4), pp. 771–784. Hopper, T. & Powell, A. (1985). ‘Making sense of research into the organizational and social aspects of management accounting: a review of its underlying assumptions’, Journal of Management Studies, 22(5), pp. 429–465. Hopper, T., Storey, J. & Willmott, H. (1987). ‘Accounting for accounting: towards the development of a dialectical view’, Accounting, Organizations and Society, 12(5), pp. 437–456. Hopper, T. & Armstrong, P. (1991). ‘Cost accounting, controlling labour and the rise of conglomerates’, Accounting, Organizations and Society, 16(5/6), pp. 405–438. Hopwood, A.G. (1972). ‘An empirical study of the role of accounting data in performance evaluation’, Journal of Accounting Research, 10, pp. 156–193. Hopwood, A.G. (1973). An Accounting System and Managerial Behaviour. Hants: Saxon House. Hopwood, A.G. (1974a). Accounting and Human Behaviour. London: Accountancy Age Books. Hopwood, A.G. (1974b). ‘Leadership climate and the use of accounting data in performance evaluation’, Accounting Review, July (3), pp. 485–495. Hopwood, A.G. (1987). ‘The archaeology of accounting systems’, Accounting, Organizations and Society, 12(3), pp. 207–234. Hoskin, K.W. & Macve, R.H. (1986). ‘Accounting and the examination: a genealogy of disciplinary power’, Accounting, Organizations and Society, 11(2), pp. 105–136. ICAEW (1966). The History of the Institute of Chartered Accountants in England and Wales 1880–1965 and of Its Founder Accountancy Bodies. London: Heinemann. Innes, J. & Mitchell, F. (1990). Activity Based Costing: A Review with Case Studies. London: Chartered Institute of Management Accountants. Innes, J. & Mitchell, F. (1995). ‘A survey of activity-based costing in the UK’s largest companies’, Management Accounting Research, 6(2), pp. 137–153. Innes, J., Mitchell, F. & Sinclair, D. (2000). ‘Activity-based costing in the UK’s largest companies: a comparison of 1994 and 1999 survey results’, Management Accounting Research, 11(3), pp. 349–362. Jazayeri, M. & Hopper, T. (1999). ‘Management accounting within world class manufacturing: a case study’, Management Accounting Research, 10(3), pp. 263–301. Johnson, H.T. & Kaplan, R.S. (1987). Relevance Lost: The Rise and Fall of Management Accounting. Boston, MA: Harvard Business School Press. Jones, T.C. (1995). Accounting and the Enterprise: A Social Analysis. London: Routledge. ¨ Jonsson, S. (1982). ‘Budgetary behaviour in local government: a case study over three years’, Accounting, Organizations and Society, 7(3), pp. 287–304. Lapsley, I. (1992). ‘User needs and financial reporting: a comparative study of local authorities and the national health service’, Financial Accountability and Management, 8(4), pp. 281–298. Llewellyn, S. (1993). ‘Linking cost with quality in health and social care: new challenges for management accounting’, Financial Accountability and Management, 9(3), pp. 177–194. Loft, A. (1986). ‘Towards a critical understanding of accounting: the case of cost accounting in the UK, 1914–1925’, Accounting, Organizations and Society, 11(2), pp. 137–169. Lowe, T. & Machin, J.L.J. (eds) (1983). New Perspectives in Management Control. London: Macmillan. Macintosh, N.B. (1981). ‘A contextual model of information systems’, Accounting, Organizations and Society, 6(1), pp. 39–53. McSweeney, B. & Sherer, M. (1990). ‘Value for money auditing: some observations on its origins and theory’. In D.J. Cooper & T.M. Hopper (eds), Critical Accounts: Reorienting Accounting Research, pp. 294–312. London: Macmillan. Merchant, K.A. (1981). ‘The design of the corporate budgeting system: influences on managerial behavior and performance’, Accounting Review, 56(4), pp. 813–829.

290

T. HOPPER ET AL.

Miller, P. & O’Leary, T. (1987). ‘Accounting and the construction of the governable person’, Accounting, Organizations and Society, 12(3), pp. 235–266. Miller, P. & O’Leary, T. (1993). ‘Accounting expertise and the politics of the product: economic citizenship and modes of corporate governance’, Accounting, Organizations and Society, 18(2/3), pp. 187–206. Mitchell, F. & Walker, S.P. (1997). ‘Market pressures and the development of costing practice: the emergence of uniform costing in the UK printing industry’, Management Accounting Research, 8(1), pp. 75–101. Ogden, S.G. (1995). ‘Transforming frameworks of accountability: the case of water privatization’, Accounting, Organizations and Society, 20(2/3), pp. 193–218. O’Hanlon, J. (1991). ‘The relationship in time between annual accounting returns and annual stock market returns in the UK’, Journal of Business Finance and Accounting, 18(3), pp. 305–314. O’Hanlon, J., Poon, S. & Yaansah, R.A. (1992). ‘Market recognition of differences in earnings persistence: UK evidence’, Journal of Business Finance and Accounting, 19(4), pp. 625–639. Onsi, M. (1973). ‘Factor analysis of behavioral variables affecting budgetary slack’, Accounting Review, pp. 535–548. Otley, D.T. (1978). ‘Budget use and managerial performance’, Journal of Accounting Research, 16(1), pp. 122–149. Otley, D.T. (1980). ‘The contingency theory of management accounting: achievement and prognosis’, Accounting, Organizations and Society, 5(4), pp. 413–428. Otley, D.T. (1994). ‘Management control in contemporary organizations: towards a wider framework’, Management Accounting Research, 5(3/4), pp. 289–299. Otley, D.T. (1999). ‘Performance management: a framework for management control systems research’, Management Accounting Research, 10(4), pp. 363–382. Otley, D.T. & Polanen, R.M. (2000). ‘Budgetary criteria in performance evaluation: a critical appraisal using new evidence’, Accounting, Organizations and Society, 25(4/5), pp. 483–496. Parker, R.H. (1969). Management Accounting: A Historical Perspective. London: Macmillan. Parker, R.H. (1981). ‘The study of accounting history’. In M. Bromwich & A.G. Hopwood (eds), Essays in British Accounting Research, pp. 279–293. London: Pitman. Pope, P.F. & Inyangete, C.G. (1992). ‘Differential information, the variability of UK stock returns, and earnings announcements’, Journal of Business Finance and Accounting, 19(4), pp. 603–623. Power, M. (1991). ‘Auditing and environmental expertise: between protest and professionalisation’, Accounting, Auditing and Accountability, 4(3), pp. 30–42. Preston, A. (1986). ‘Interactions and arrangements in the process of informing’, Accounting, Organizations and Society, 11(6), pp. 521–540. Pugh, D.S. & Hickson, D.J. (1976). Organizational Structure in Its Context: The Aston Programme 1. Farnborough, Hants: Saxon House. Roberts, J.R & Scapens, R.W. (1985). ‘Accounting systems and systems of accountability—understanding accounting practices in their organizational contexts’, Accounting Organizations and Society, 10(4), pp. 443–456. Scapens, R.W. (1984). ‘Management accounting: a survey paper’. In Robert W. Scapens, David T. Otley & Roger J. Lister (eds), Management Accounting, Organization Theory and Capital Budgeting—Three Surveys, pp. 15–95. Macmillan/ESRC. Scapens, R.W. (1999). ‘Broadening the scope of management accounting: from a micro-economic to a broader business perspective’. Maandblad voor Accountancy en Bedrijfseconomie. December, pp. 640–651. Scapens, R.W., Ormston, A.L. & Arnold, J. (1994) ‘The development of overhead recovery models at the university of manchester’. In R.H. Berry (ed.), Management Accounting in Universities, pp. 55–68. London: The Chartered Institute of Management Accountants. Simmonds, K. (1981). ‘Strategic management accounting’, Management Accounting, (ICMA) 59(4), pp. 26–29.

BRITISH MANAGEMENT ACCOUNTING RESEARCH

291

Simon, H.A., Guetzkow, H., Kozmetsky, G. & Tyndall, G. (1954). Centralization vs Decentralization in Organizing the Controller’s Department. New York: Controllership Foundation. Simons, R. (1995). ‘Control in an age of empowerment’. Harvard Business Review Mar/Apr, pp. 80–88. Solomons, D. (1965). Divisional Performance: Measurement and Control. Homewood Ill: Irwin. Solomons, D. (1968). ‘The historical development of costing’. In D. Solomons (ed.), Studies in Cost Analysis, 2nd ed. London: Sweet & Maxwell. Solomons, D. (ed.) (1952). Studies in Costing. London: Sweet & Maxwell. Stark, A.W. (1997). ‘The impact of irreversibility, uncertainty and timing options on deprival valuations and the detection of monopoly profit’, Accounting and Business Research, 28(1), pp. 40–52. Stark, A.W., Thomas, H.M. & Watson, I.D. (1992). ‘On the practical importance of systematic error in conditional IRRs’, Journal of Business Finance and Accounting, 19(3), pp. 407–424. Strong, N. & Walker, M. (1993). ‘The explanatory power of earnings for stock returns’, Accounting Review, 68(2), pp. 385–399. Tomkins, C. (1975). ‘Residual income: a rebuttal of professor amey’s arguments’, Journal of Business Finance and Accounting, 2(2), pp. 161–168. Tomkins, C. & Groves, R. (1983). ‘The everyday accountant and researching his reality’, Accounting, Organizations and Society, 8(4), pp. 361–374. Tomkins, C. (1991). Corporate Resource Allocation: Financial, Strategic and Organizational Perspectives. Oxford: Basil Blackwell. Walker, M. (1997). ‘Clean surplus accounting models and market based accounting research: a review’, Accounting and Business Research, 27(4), pp. 341–355. Walker, S.P. (1994). Accountancy at the University of Edinburgh 1919–1994: The Emergence of A Viable Academic Department. The Institute of Chartered Accountants of Scotland. Williams, K. (2000). ‘From shareholder value to present day capitalism’, Economy and Society, 29(1), pp. 1–12. Williams, K., Haslam, C., Williams, J. & Johal, S. (1994). ‘Deconstructing car assembler productivity’, International Journal of Production Economics, 34(3), pp. 253–265. Woodward, J. (1965). Industrial Organization: Theory and Practice. London: Oxford University Press.