BEA3017 Advanced Management Accounting

Student ID: 630022894

Emergence of Alternative Management

Accounting Research
Abstract
This paper is primarily based on the principles outlined in Baxter and Chuas Alternative
Management Accounting Research Whence and Whither (2003)1 . The first focus is to
determine the reasons for the emergence of alternative management accounting
research by critically evaluating the traditional and positivist view of management
accounting (MA). More importantly, it also argues whether such innovative research has
made a collective contribution to the field of knowledge since 2003. This paper
summarises the findings of B&Cs critiques as the reasons to why AMAR emerged, and
then builds onto this understanding by critically analysing AMARs impact in the more
contemporary context. It concludes by stating that alternative management accounting
research will strengthen as long as new contemporary issues continue to appear.

Introduction The Emergence

Alternative Management Accounting Research (AMAR) can be split into two
categories, the interpretive research and the critical research (de Araujo Wanderley,
2013). It sets out to create a pluralistic discursive space to change how MA is taught
and utilised within society (B&C, 2003). The reasons for the emergence of AMAR can
be justified through two lenses (Burns, 2015). The first being that AMAR emerged due
to a strong believe that there are faults in the mainstream MA ideology. Many argue that
it lacks the social aspects that needs to be considered (Burchell et al., 1985). There are
also a few debatable critiques that AMAR has collectively distinguished about current
MA practices. The second reason for the emergence could be because researchers had
an interest to go beyond what has already been established. Nevertheless, these two
reasons are not mutually exclusive. It could be the combination of both that raised the
need for further Management Accounting Research.

1. Emergence aligned with critiques

Through a series of questions, the following section will explain the 5 critiques set out by
B&C. It explores the origin of these critiques and how these weaknesses of the positivist
perspectives has undermined what AMAR wants to achieve. Nonetheless, this is a very
broad topic so the list is not exhaustive.

i. Is there more than a single rational behaviour?

During the 1970s, academics believed that the MA literature was fully developed, and
that the economic approach for optimising organisational goals was the only rationality
behind MA technologies (Scapens, 2006). Moving forward from the early 1980s,
researchers began to strongly believe that society has a variety of distinctive MA
rationalities apart from the mere pursuit of organisational goals (Baxter & Chua, 2003).
Many saw the gap between the traditional economic theory and the implementation of
internal information accounting. The critique of means-end reasoning problematises
the assumption that MA tools and techniques will always provide factual information to
make decisions that would optimise the organisations success. Accountants,

B&C - Baxter and Chua (2003)

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nowadays, are seen to recourse to many other reasonings for MA, which goes beyond
this very specific and very presumed objective of traditional practices.
Cooper et al. (1981) illustrated the idea of playfulness," which is similar to that from
Hedbery and Jansson (1978). These researchers emphasised how even though there
are limited rationalities within the role, design and nature of information systems, this is
still far from the suggestion that economic rationality is the basis of behaviour. The focus
is specifically on the unpredictability of reality and the disengagement that the
traditional-economic approach has on organisational effectiveness. B&C (2003) has
included in their paper the numerous studies which conveyed different themes and
behaviours that MA users need to keep in mind.

ii. What about the pluralism of meaning and interpretations?

B&C (2003) suggests that the traditional MA approach seeks unitary construction of the
accounting tools in accordance to what they constitutes as reality. In other words, the
mainstream approach is factual, unquestionable and does not accept different
interpretations. AMAR, however, contradicts this by arguing that the information derived
is in actual fact influenced by judgement. it is subjective and the meanings are
understood differently in reality. Alhtaybat and Alberti-Alhtaybat (2013) also emphasised
this idea of subjectivity in the context of research. Nevertheless, the alternative research
welcomes this theoretical pluralism, which accommodates the various phenomenons
that exist. It recognises the complexity of the different ways in which MA practices are
actually enacted and given meaning.

iii. Are rational practices potent?

The positivist approach says that MA is a neutral and apolitical collection of techniques
that exist because they are the most efficient and the most optimising tools to use. But
B&C critiques this supposedly impotent characteristic and comprehends how MA
technologies are exercised as a tool of power in society. It is quite often to find that
existing MA practices in real organisations are inefficient and unnecessary. Some
participants, often those in power, are benefited whilst others are at a disadvantage. In
other words, the mainstream approach cannot be rationalised on the basis of being the
most idealistic way of doing accounting. For example, study cases show that hospitals
utilised budgeting, not because it was the most efficient way of planning and controlling,
but because it was part of the orders from the Government at that time. This idea was
particularly highlighted in Preston et al. (1992) and Chua (1995) studies. The same can
apply for high-school institutions, as illustrated in Boland and Pondys 1986 paper (B&C,
2003). This shows how empowerment and political-influence overrides rationality and
efficiency within MA. The connection between power and MA is not always obvious to
those who are influenced by it. B&C described this as being surreptitious. They believe
that the Latourian research, which is a category of AMAR, emerged in order to expose
this secretive network between politically constructed values and MA practices. Further
studies by Roberts and Scapens (1985) and Covaleski and Dirsmith (1983) also
supported this idea but in other streams of AMAR. The latter pair of authors illustrated
how unidentifiable government polices became the extra-organisational expectations
of the nursing services. It showed how those in power can remain influential regardless
of whether their presence existed in organisations or not. B&C concluded that studies
show MA is potent and in some cases almost hegemonic.

iv. What is the nature of accounting change?

The rational-designed and positivist approach perceives the changes in the context of
MA as the movement from one efficiency state to another. It assumes that there is
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BEA3017 Advanced Management Accounting

Student ID: 630022894

always a reason behind the need for change, and that it is always recognised by the
rational participant. AMAR argues that this assumption is too simplistic and unrealistic
(Burns, 2015). Organisational changes in general, and particularly MA changes, are
much more complex. It is never just a static movement from one to another. Changes
are also not always for technical reasons only. Researchers often found that the MA
changes made in hospitals were not based on the technical inefficiency, but instead,
changes were based on government placing power into the systems (Preston et al.,
1992). As a result, AMAR proves that the growing advances in technologies does not
necessarily propel MA changes. There is a sense of accounting changes not being
linear nor controllable. It is very unpredictable and not always exclusively in line with
advances in technology (B&C, 2003).

v. Are humans not part of MA practices?

B&Cs critique of bodiless forms of management accounting practice denotes the idea
that practitioners bodily habitudes both constrain and enable the existence and success
of MA. The mainstreams notion, however, follows a technically oriented phenomenon
that focuses on the tools and techniques rather than the people. In practice, people are
completely intertwined with these tools and sometime plays an even more important
role. AMAR takes into account these roles of participants as well as their interaction with
the MA technologies. The interaction between humans and non-humans is, therefore,
an important factor to consider when determining the root of the problem. These bodies
may be either passive (Miller & OLeary, 1987, 1993) or pro-active (Rosenberg et al.,
1982). The prior are subjected to the disciplinary impact of MA techniques, whilst the
latter helps regenerate MA practices (B&C, 2003).
Overall, it is quite clear that this legacy of AMAR enables the appreciation of how limited
the traditional MA theories, and the technologies that generate them, really are.

2. Emergence through the interest of researchers

Robert Scapens (2006), for example, began his research within the field of financial
accounting. He then became increasingly interested in MA literature when he began
researching on the relevance of economic profits within accounting. Soon after, he saw
the gap between the MA theories and its application in practice. He also recognised the
limitedness of researchers knowledge on MA practice as well as the anecdotal
verification of the reliability of these theories. Thus, it could be said that the emergence
of AMAR came about as a result of what researchers felt they needed to expand on.

Collective Contribution of AMAR

The rest of this paper will critically analyse the impact made by the collective
contributions of AMAR on contemporary issues as well as the field of knowledge as a
whole. It questions whether or not it has been acknowledged by the MA profession and
whether it is necessary too press on the need to engage in more research.
There are two aspects to this analysis. The first explores AMARs contributions in the
contemporary context, as well as its potentials for future implications. It will question
whether or not it has replaced the traditional MA approach, or whether AMAR actually
aims to replace the current MA technologies. The second part focuses on debating
whether AMAR is warranted, and if so how large is the scope, and whether it will be an
ongoing phenomenon.
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There were three contemporary themes that B&C, at the time, thought were the ultimate
platforms to generate new streams of AMAR namely globalisation; hybridity and
network society. They addressed how the important implications of these issues were
not so obvious to those with the perspective of the positivist and traditional approach.
Even until 2006, researchers (Miller et al., 2006) continued to believe that the
accounting practice remain unaware of the dual and innovative hybridisation process
that the MA literature has neglected. Moving forward, professional bodies, such as
CIMA, has added to this list of issues as society becomes more and more developed.
More recent issues include technological changes and customers needs (Jokhi, 2011).
A more recent contemporary issue demanding an increasingly significant role for MA is
the financialisation in higher education (Burns, 2014). It is argued that higher education
is progressively being judged purely on its financial performance, and how more
critically grounded MA studies in the future might be needed. Steps have already been
taken to help prepare students to be able to question and interrogate the deeper
ideological roots of the these changes. For example, research-oriented academics are
now becoming the main medium of education in Universities across England. This
perhaps will allow the combat of the rapidly changing environment in which the
accounting professions exists.
It must not be forgotten that the management accounting profession is extremely broad
and diverse. Thus, there will always be a continuous debate on whether a certain
stream of research is right or wrong. De Araujo Wanderley (2013) has categorised the
many streams of research into three groups. These being the functionalism or rational
research (mainstream approach); the interpretive research and the critical research,
whereby the latter two are AMAR. All these areas of research rely on judgements. This,
therefore, builds onto Vaivios (2008) emphasis on the need for qualitative research.
Alternative MA research, itself, has been under a lot of criticisms as well as
reinforcement. Zimmerman (2001) advocated the idea that empirical MA research will
suffocate all other accounting researches due to its lack of substantive cumulative body
of knowledge. Since 2001, however, there has been an increase in support for AMAR
from scholars, such as Luft (2002) and Ittner (2002). They argue that with the
combination of economic-based and behavioural approaches, AMAR can broaden the
field of knowledge of MA into many ideologies. To an extent, AMAR can be considered
as playing a supportive role for the traditional MA approach rather than replacing it.
As previously mentioned, researchers such as Scapens (2006) and de Araujo
Wanderley (2013) began their alternative MA research based on their recognition of the
gap between the theories and practice. This, however, may also apply to AMAR in terms
of the emergence of other research streams. Alhtarybat and Alberti-Alhtaybat (2013)
concluded that there are, in fact, much appreciation for the work that scholars, such as
Baxter and Chua, John Burns, Scapens, Baldvinsdottir (2010) and even themselves
have made regarding to the relevance of AMAR. But they also added that it is
important to be aware of how any research will only be relevant to practitioners who are
at the foremost concerned with the issues addressed. They highlighted how accounting
issues require practical solutions that allows practitioners to relate to, rather than to
simply counteract with the mainstream function. This brings back the idea of the
importance of quality in future researches. In order to re-connect MA with practitioners,
these studies will have to pass the so-called test of neutrality and reliability (Alhtaybat
and Alberti-Alhtaybat, 2013).

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B&C (2006) argued that this theoretical revitalisation of MA is warranted. They also
suggested that there is a pressing need to draw attention to current social-science
debates, in order to enable the substantive contributions of AMAR to continue in a more
updated contemporary context. The ideologies from Burns et al.s (2014) paper on the
debate of diversity in MA research also highlighted this idea. But concluded that it is not
likely to change due to the lack of incentives from those who are identified as part of the
mainstream group. Thus, until AMAR strategies are proven to be authorised and
implemented, actual changes in the MA profession seems unlikely.
AMAR is also far from being short-lived. Nowadays, almost anything and everything
involves MA (Burns, 2015). There are examples where MA can be seen to be implicated
as a result of the findings and recommendations of AMAR (Burns, 2015). The financial
crisis and the recent Volkswagen scandal are two extreme examples in which AMAR
plays a key role in questioning the traditional technologies, particularly the budgeting
systems that were used. Bartolomeo et al. (2010) also discussed how environmental
management accounting has not been as significantly implemented as companies had
claimed, but has potential to grow. There are also far too many areas that lacks the
existence of MA, which includes issues that have not yet occurred.

Conclusion
After considering the various reasons to why AMAR emerged, and its collective
contributions thus far, it could be concluded that AMAR plays a key role in the
accounting profession within the contemporary context. The reason is because this
approach allows practitioners to become more flexible and innovative whilst utilising the
traditional MA tools and techniques. It is beyond the scope of this paper to go into
depth, but contemporary issue has continued and will continue to surface in respond to
internal and external fluctuations. Thus, this paper believes that there will be continuous
demand for further AMAR.

Word Count2: 2,533

Word count excludes: title, footer, header and bibliography

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