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Cushing, B. E., editor. 1987. Accounting and Culture: Plenary Session Papers and Discussants' Comments from the 1986 Annual Meeting of the American Accounting Association. American Accounting Association

Summaries by Mohamed Gomaa, Antoinette Lynch, James Martin, Michele Martinez and Anita Reed
Gomaa, Lynch, Martinez and Reed were Ph.D. Students in Accounting in the Spring of 2002

Provided by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida

Behavioral Issues Main Page | Research Methods Main Page

Cushing, B. E. Preface

The papers in this publication are from the three plenary sessions (one each morning) provided at the 71st annual meeting of the AAA held in New York city in August 1986. The theme "Accounting and Culture" was chosen by Steve Zeff who was the AAA president during 1985-86. Cushing refers to the subject as fascinating, complex and intellectually stimulating. We agree. This material is also timeless. The relationships between accounting and culture are just as relevant today as they were when these papers were published and may become even more important as the global economy continues to develop.

Zeff, S. A. Forward

Zeff indicates that the purpose of these sessions is to help us "to peer out from our intellectual habitats and survey the broader landscape. He explains that the plenary sessions deal with three gradations of cultural concerns: 1. national cultures and accounting (Hofstede and Schreuder), 2. organizational cultures and accounting (March and Hopwood), and 3. research subcultures in accounting (Demski and Kaplan). He makes a few comments about each paper and indicates that they are all "thoughtful, provocative examinations of the cultural dimensions of accounting."

Session One: Intercultural Perspectives on Accounting Research and Practice

Hofstede, G. The Cultural Context of Accounting

Hofstede's purpose is not stated explicitly, but it clearly has to do with how he defines culture and what culture has to do with accounting.

Accounting and Culture

Culture defined
- The collective programming of the mind which distinguishes one category of people from another. It is software, largely invisible and unconscious. A culture is the particular set of shared answers to certain basic questions in the minds of a particular category of people.

Layers of culture -
These include National, Corporate, Occupational, Generational, Class, and Family for some examples.

Four levels of culture
- These form a hierarchy from superficial to deeply rooted. Symbols - Words, gestures and objects that have meaning in a particular culture. Examples include language, professional jargon, dress, and money. Symbols are superficial manifestations of culture. Accounting is the manipulation of symbols.

- People that a culture takes as models of behavior. Accountants are unlikely to be heroes, but help anoint heroes.

- Activities that are done because they are done. Rituals provide a maintenance of culture. Accounting systems are uncertainty reducing rituals. Similar to religion, they fulfill a cultural need for certainty and simplicity. Budget control is a game or ritual. The idea that accountants are the priests of business is supported by GAAP - the accountants' holy book.

-Broad tendencies to prefer certain states of affairs over others. Usually acquired early in life, not susceptible to argument. Values have four underlying dimensions: Power distance index - Society's endorsement of inequality. High value means hierarchical structure.

Uncertainty avoidance index
- Tolerance for uncertainty or discomfort in unstructured situations. High value means rules are needed or some other form of control.

- Attitude of being responsible for one's self (and family) alone as opposed to collectivism - group orientation, loyalty etc.

- Assertive, competitive or oriented toward material achievement. The opposite of Femininity - Warm relationships, modesty, quality of life, caring for the weak etc. National Patterns of Organizational Functioning

Power distance and uncertainty avoidance are the most relevant for the functioning of organizations within a country. Hofstede's Table 1 compares IBM employees' responses to questions related to these two value dimensions in 50 countries . I sketched the idea below, but did not try to reproduce the table.

Hofstede's Uncertainty Avoidance Index and Power Distance Index

Hofstede indicates that the U.S. position in the table shows that market forces are the ultimate and optimal way of controlling an organization.

Individualism and masculinity are more relevant to the functioning of individuals within organizations. The next paper focuses on these dimensions.

National Value Patterns and Accounting

Less technical activities are ruled more by values and cultural differences. The technical imperatives are weak in accounting, i.e., laws of nature, so accounting systems vary along cultural lines. The higher uncertainty avoidance, the more detailed the accounting system.

Organizational Culture Differences

Hofstede's work in the Netherlands indicates that organization cultures vary along three dimensions:
Single purpose vs. multiple purpose - Single purpose institutions focus on the bottom line.

Structured vs. unstructured
- Structure relates to how formal it is, but formality does not prevent flexibility.

How the parts consider themselves
- Whether they are more or less parts of the whole.
Occupational Culture

U.S. accounting students stress the form of information and uncertainty avoiding values. Accountants in a Dutch sample stressed the form of information while operating people stressed the content of information.


Culture is the ultimate form of control since what is programmed in our minds does not need to be formalized in systems. Culture opens a whole area of viable research topics.

Schreuder, H. Accounting Research, Practice and Culture: A European Perspective

The main purpose of this article, as stated by Schreuder, is to give some reflection on the theme “Accounting and Culture” from a European perspective. In his article he addresses two topics. First, he builds on Geert Hofstede’s presentation of “Accounting and Culture” by describing some of his own research work in which he made use of Hofstede’s four culture dimensions. In the second part of the paper Schreuder gives some impression on the research cultures in Europe by focusing on some of the features that may differ from the prevalent U.S. research cultures.

The Interaction of National and Organizational Cultures in Accounting Firms

Schreuder describes an international study he participated in aimed at making a cross-cultural comparison of work-related values, performance evaluation systems, and work motivation for accountants in various countries. In the study they used Geert Hofstede’s Value Survey Module to measure accountants’ work related values. The questionnaire was administered to two types of accounting firms:

Three local Dutch firms, and

Three local offices of international Big Eight firms.

The researchers addressed the following two research questions:

“Can we detect an influence of the U.S. culture on the work-related values of Big Eight employees in the Netherlands? and”

“If so, which cultural effect is dominant: the national culture or the particular organizational cultures of these firms?”

All these forms worked entirely with Dutch employees. The researchers were exploring whether the “collective programming of the mind” (Hofstede, 1980) of Dutchmen working for Big Eight firms was different from those working for local Dutch firms. If a difference was found, the researchers examined whether the difference could be explained by any systematic impacts of U.S. culture upon the Big Eight firms.

Schreuder’s table 3 summarizes the data collected in the study compared to Hofstede’s (1980) study.

Schreuder’s Table 3
Scores in Hofstede (1980) and Soeters & Schreuder (1986)
  Hofstede Soeters & Schreuder
Values The Netherlands USA Local Big 8
Power Distance 38 40 45 (43 to 45) 38 (25 to 50)
Uncertainty Avoidance 53 46 9 (-13 to 20) -38 (-43 to –33)
Individualism 80 91 53 (44 to 64) 63 (53 to 71)
Masculinity 14 62 17 (10 to 38) 63 (45 to 81)

The Power Distance, Individualism, and Masculinity scores are consistent with Hofsteade’s earlier findings. The Uncertainty Avoidance scores were much lower than Hofstede’s data. The researchers’ data suggest an industry-specific cultural effect since accounting firms as a group appear to differ from IBM, which was used by Hofstede.

The Accounting Research Culture in Europe

In Europe there are several different national research cultures as well as subcultures within the various countries. Within these cultures, the substantive research concerns and strategies were often very different and research and professional journals were primarily nationally oriented. In these cultures, few accounting researchers even knew their peers in other countries. One exception is the influence that German accounting thought has had in several European countries. However, the rule was that European accounting research developed in segmentation. Schreuder believes that a key factor to this is the national orientation of accounting itself. Even thought there are similarities in the technical language and practice of accounting among European countries, there are significant differences in both the technical and contextual terms.

The Europeans have become increasingly aware of the similarities in European accounting research and practices. This led to the creation of the European Institute for Advanced Studies in Management in 1971, and the European Accounting Association in 1978. Schreuder believes that from a cultural perspective, the European institute has played a significant role by providing workshops that had a much less hierarchical environment for discussion of research. The ambiguity that was created by mixing different academic systems was used positively to emphasize the originality of ideas and the commitment to research.

Even though European accounting is relatively long in experience, it is relatively short in empirical training. The United States, on the other hand, had an “empirical revolution” in the late sixties that was viewed by their European colleagues with tremendous respect. Schreuder believes that this is a result of the sense of “tradition” which is more prevalent in Europe. The Europeans have a concern to know how new approaches relate to the research traditions and to preserve the coherence of the discipline of accounting and the overall discipline of business studies.

In summing up, Schreuder identified two aspects of European research cultures which he believes are rather general:

1. The sense of tradition, and

2. The sense of diversity.

Montagna, P. D. Disscussion Comments

Montagna looks at the cultural layers of the occupational community and raised certain questions at the occupational community level and among subcommunities in the profession. At the occupational community level, he believes that accountants tend to avoid uncertainty situations much more frequently than lawyers, bankers, corporate executives, and management consultants. This raised the question of validity:

“How good a measure of work-related values are the questionnaire items used by the authors?” At the level of subcommunities, Montagna believes that the occupational culture of accounting practitioners will tolerate much less ambiguity than the occupational; culture of accounting researchers. This leads to the following questions:

“How is this conflict between positivist practitioners and pragmatist academics at the occupational level of accounting culture manifested at the national level and at the organizational level?”

“To what degree does the language of accounting – its concepts, rules, conventions – affect the national culture and international culture?”

“To what extent does it affect organizational culture, e.g. through an accounting mentality of chief executive officers, some of whom are accountants?"

In summing up, Montagna found that the papers by Schreuder and Hofstede lack an emphasis on social dynamics of culture that limits the utility of their analysis of the relationship between culture and accounting.

Hofstede and Schreuder. Reply to Montagna

Their reply is focused on two main points.

1. Levels of culture. They make a distinction between the levels of culture, i.e., national, organizational and occupational to avoid confusion. For example, Hofstede's main study relates to national culture, not the organizational or occupational levels, because all of the subjects worked for IBM. Schreuder's study also relates to the national level because it compared accountants in the U.S. "Big 8" with accountants in Dutch firms.

2. Validity. Although people do not always mark what they think on a questionnaire, or even know what they really think, or do what the say, inferences about behavior from questionnaire results are validated by measures of collective behavior that are highly correlated across countries. Differences in behavior at the national level represent the validation of a questionnaire about values and ideas.

Differences in values and ideas often produce hard consequences.

Session Two: Organizational Cultures and Accounting
March, J. G. Ambiguity and Accounting: The Elusive Link between Information and Decision Making

March demonstrates through contemporary information doctrine that the link between information and decision-making is hard to define. Although March recognizes that information engineering (i.e. decision aids, accounting software, etc.) is useful in the decision making process, he argues that information engineering underestimates the ambiguities of choice and the many facets of organizational decision-making.

Information and Decision Making

Classical sampling theory assumes that a sample represents the population from which it was drawn, that the events are observed accurately and consistently. The classical sampling theory places emphasis on increasing accuracy by increasing sample size. However, in organizational settings, observations are not assumed to be independent, and thus increasing sample size does not always lead to an increase in accuracy.

Contemporary theories of decision-making, limited rationality and conflict of interest, place less emphasis on estimation issues (i.e. accuracy) and more emphasis on other complications associated with using information. For example, limited rationality takes into account that decision-making is made with incomplete information about alternatives and consequences, not everything is known. The notion of conflict of interest is that organizations, individuals, and groups have competing, different, or conflicting goals; therefore, all information received cannot be taken at its face value. Contemporary theories are interested in designing cost-effective incentives that induce rational, self-interested agents to provide complete, honest information.

Ambiguities in the Link between Information and Decision Making

More recent literature on decision-making indicates that contemporary theories do not explain all there is to know about problems associated with decision-making. For example, March discusses four observations about the ambiguities of organizational decision-making:

Observation 1: The ambiguities of preferences. The preferences of organizations, their owners, and their managers are frequently less clear than is assumed in theories of rational choice. Preferences are often vague or contradictory. They develop over time, changing as a result of experience and the decision process. (March, page 33)

For example, all choices have consequences. Once consequences are realized, preference and choice may or may not change. However, contemporary theories treat preferences as a controlling choice. In reality, most decision-making is made by skillful decision makers with the use of a decision aid to help consider alternatives and classify choices. However, contemporary theory treats preferences as a controlling choice while excluding the decision process from consideration. Observation 1 takes into account that preferences and choices are not clear-cut. Actions are not always guided by one’s preference, sometimes preferences are contradictory, and preferences could be modified with new information or new experiences.

Observation 2: The ambiguities of relevance. Organizational decision-making often has less coherence than decision theory attributes to it. Problems, solutions, and actions are frequently only loosely coupled, or connected by their simultaneity rather than their consequentiality. Information strategies are relatively independent of specific anticipated decisions. (March, page 35)

Relevant information needed to make decisions is not always gathered. Individuals may rely on irrelevant information to make decisions or receive information without a clear understanding of how it relates to the decision outcome. “People, problems, solutions, and choice opportunities seem to be combined in confusing ways that make predicting agenda and outcomes difficult.” (March, page 35)

Observation 3: The ambiguities of intelligence in complex ecologies. Although individual actors within organizations often try to act intelligently by calculating the expected consequences of possible actions, such a basis for action is typically supplemented by, or subordinated to, the following of rules that encode historical lessons learned within a complex ecology of nested organizations. (March, page 36)

Cleverness alone will not make you a winner. Decision-making is affected by the individuals who are nested within organizations that are, in turn, nested within markets, communities, and political instructions.

Observation 4: The ambiguities of meaning. Most information in organizations is collected and recorded not primarily to aid decision-making directly but as a basis for interpretations that allow coherent histories to be told. As a structure of meaning evolves from information and from the process of decision-making, specific decisions are fitted into it. (March, page 38)

Information is not always immediately collected to support decision-making. Information may not appear to be useful at the particular moment. But as we gather more and more information and make the connections, it becomes knowledge that is useful for making decisions.

Implications For Information Engineering

There are three classical engineering approaches to dealing with apparent deficiencies in human beings (March, page 40):

1. Adapt the system to observe characteristics of human beings. However, under this approach, it would be difficult to customize the system to the decision-makers wishes.

2. Change the way in which decision-makers make decisions and think about information.

3. Replace human beings with machines, in this case primarily with computers and the software associated with them.

Attending to Problems in the Theory of Decision Making

Within the framework of contemporary decision theory, decision makers must know what they want before they act. However, decision makers don’t always know what they want before they act.

Within the framework of contemporary decision theory, decision makers act based on their understanding of and anticipated consequences. However, intelligent decisions can be made without a clear understanding of consequences.

Questions asked and information gathered does not always lead to decisions.

Human beings speak ambiguously, where interpretation can take on several meanings.

Information systems can be designed to fit in the framework of contemporary decision theory. However, recent literature has shown that a decision-maker’s behavior does not always subscribe to decision theory. Therefore, the challenge is to design a system for unpredictable, unstructured situations, where the decision structure is changing, and that takes into account how the information is going to be used, by whom, and in what context.

Hopwood. Accounting and Organisational Action

The depth of this paper deals with the authors attempts to realize, investigate and mainly “account for accounting.” The arguments presented by the author are developed based on the necessity to explore the idea of accounting for accounting. Thus, throughout the paper the author will draw upon his recent inquiries into the factors that he feels make accounting what it is not, and to question accounting in an attempt to appreciate its organizational functioning as a whole.

Accounting, and the many sub-disciplines within accounting have developed into a particularly diverse craft. Specifically, the area of management accounting has apparently taken on many different forms in different sectors and different enterprises within a sector. However, this diversity and the factors that lie behind it have to this day largely remained hidden and unknown to the contemporary view. Textbooks and reference manuals describe and refer to accounting as a largely homogeneous technical domain. The ways in which management accounting has become intertwined, related, and functioned within the organizational context has all but been ignored and disregarded as uninteresting Consequently, it’s the need to explain the pervasiveness of management accounting through organizational functioning that drives the author and this paper.

It is known that management accounting has a plethora of influence with many of these influences having an external origin. For example, external influences such as the Great Depression and social and political transformations associated with the efficiency movement have contributed to the resultant changes in the underlying practices of management accounting. Moreover, management accounting practices were further altered and developed by the necessity to help regulate the social and labor forces of an organization. Management accounting practices were called upon and utilized to confront the social and labor forces of the organization. However, these rationales are not spoken of in conventional accounting texts and dialogue and thus, little if any appreciation for the ways in which external influences have transformed internal accounts is taught. While it is not the author’s intention to be comprehensive of all the external influences of the craft of management accounting it is his intention to emphasize some of the diverse but influential arenas which make accounting what it is.

The author feels that a problem with today’s pedagogy is that our texts talk accounting rather and better than they explain and do accounting. It should be noted that accounting talk could have autonomy from accounting practice. Viewing accounting through this same lens one can come to realize that accounting is no longer just accounting and accounting knowledge was a major player in making accounting what it is not. Therefore, the author is describing a diverse accounting that serves many roles, many of which are not accounted for in accounting’s account of itself. Accounting viewed in this manner is much more influential than it’s presumed to be. Through this lens accounting is a technique, which bases its rationale on a formal and abstract economic rationality.

While the author’s remarks are extremely thought provoking they also have large implications for both research and practice. He feels that not only our researchers and practitioner’s observations inadequate but also the theories. In addition, he feels that the rise of interest in positivism is also a contributing factor to the current problems of accounting views. Positivism he believes plagues today’s accounting research and researchers. What is needed is a much more open approach to theorizing and research in general. Moreover, from an educational standpoint, an organizationally grounded accounting could provide a basis on which management accounting textbooks could become more than just accounting talk.

Ashton. Discussion Comments

The main focus of this article is to provide follow up discussion on two papers presented by Anthony Hopwood and James March. The authors on the two papers are based on his own research interest, which is descriptive aspects of judgment and decision making in accounting and auditing contexts. The thrust of his research consists of evaluating human judgment via the prescriptions of rational models of judgment and choice. Thus, the author begins his discussion of the papers by describing the development of this type of research in accounting in the United States.

Research on the descriptive aspects of decision making in accounting first saw an interest during the mid-sixties. A change in the research approach from the use of questionnaires to the use of laboratory experiments came during the seventies. Furthermore, the seventies literature was concerned with correcting the discrepancies between what the participants did and what the normative models predicted they should do. The research of the eighties consisted of a broader conception of information processing and decision making with an additional focus on cognitive activities. Currently, research has shown more interest in the impact of incentive schemes on individual behavior and the impact of aggregating decisions via a laboratory experiment.

Accordingly, the author feels that behavioral research in accounting has almost totally adopted what March describes as a link between information and decision making. However, March argues that by embedding information engineering in theories of choice that rely on microeconomics and statistical decision theory is incomplete. March feels it necessary to uncouple information from decision making.

Consistent with March’s paper, Hopwood also addresses the traditional view of accounting information. Hopwood feels it necessary to explore beyond the traditional view of accounting to other models. He argues that accounting, as we know it has become more rationalized and less of a social phenomenon.

Addressing Hopwood’s paper first some concerns and questions the author had are as follows: (1) If the traditional frameworks that are now guiding accounting research – whether the rational, cognitive, positive, or some other framework – are to be supplemented then what theories that are not currently being used appear to promising candidates for use? (2) On the education side, what topics should be covered in textbooks that are consistent with Hopwood’s view of accounting?

Questions the author had concerning March’s paper concern the link between information and decision making and the questions raised on the descriptive validity of normative decision theory. Also the author is concerned about the criterion March uses to judge human decision behavior and his notion of bounded rationality.

Aside from these comments and concerns the author feels that both papers were excellent with few valid objections.

Biddle. Discussion Comments

The main focus of this article is to provide follow up discussion on two papers presented by Anthony Hopwood and James March. The breadth of this discussion concentrates on two themes introduced in the Hopwood and March papers.

The first theme introduced is for individuals in teaching and textbooks to “account for accounting practice.” It is proposed that managerial accounting topics should not be presented in isolation with their value assumed but rather made clear that these applications form a part of a complex fabric of informational and organizational structures. Hopwood proposed that managerial accounting should be viewed through a lens that recognizes the roles played by culture, regulation and politics, which in turn recognize the role management accounting systems has had in shaping social values. Consequently Professors March and Hopwood have petitioned for the writing of textbooks that adopt a broader view of managerial accounting. One that addresses the complexities of the settings in which managerial accounting systems has evolved.

Currently, managerial accounting texts place great emphasis on normative perspectives, with limited insights into the actual techniques practiced. However, the author makes it a point to say that one should not be overly critical of today’s pedagogy. Technology has made accounting education they way it is. Based on this perspective the two papers presented by March and Hopwood provided a good starting point for the evolution of accounting education.

The second major theme discussed by the author is “accounting for accounting research.” Basically, this theme states there is a need to better understand the process by which one comes to understand accounting. He suggests that one must keep an open mind regarding the potential contribution of alternative methodologies. In addition, in understanding accounting for accounting research one must take note of the role of technology and its impact on research costs. Thus, the author believes that in following the advice of Professors March and Hopwood one will see important steps in the evolution of accounting education.

Swieringa. Discusison Comments

The main focus of this article is to provide follow up discussion on two papers presented by Anthony Hopwood and James March. This discussion begins by summarizing the major points of March and Hopwood’s papers.

First, March and Hopwood are concerned with individual’s views of accounting as we see it. Specifically, March is concerned with the extent to which ideas about accounting information are linked to a view of decision making that he believes underestimates the ambiguity of choice. Whereas, Hopwood is concerned about the extent to which accounting is seen as homogeneous, technical, and intent driven. Both March and Hopwood suggest that individuals need a new lens with which to view accounting as a whole.

Second, March and Hopwood both see cause for concern about how individuals see accounting – calling it as it is. March discusses whether the linkage between accounting and its uses is loose or tight. While Hopwood distinguishes between doing accounting and talking about accounting and the impact both have on each other.

Third, emphasis is placed on the use of accounting to define reality by both March and Hopwood.

The author states that accounting concepts and practices provide a way of framing actions and events that occur in a complex and uncertain environment.

Additionally, both March and Hopwood raise questions about the constructs being used by accounting researchers and also question the relative roles of theory and contexts in understanding accounting and its uses. Furthermore, they a concerned with the way researchers enact environments when conducting accounting studies. They acknowledge the importance of theory and context, but suggest the use of different lens with which to view and study the issues of accounting.

March. Reply

March responds to three discussants, Robert H. Ashton, Gary Biddle, and Robert Swieringa, by commenting on two questions that appear explicitly or implicitly in their remarks:

Question 1: Even granted that the theory of rational choice is flawed in fundamental ways, is there any other comparably complete theory that is better?

March answer to this question is “No.” However, he does not support keeping a theory around until we find a new one to replace it. The notion of keeping a theory until the creation of a new theoretical structure is not rational in a case where we know the old theory to have an incorrect mapping of human behavior.

Question 2: In what senses is it possible to think of non-rational procedures of choice as intelligent?

It is necessary to be able to describe procedures in terms different from their outcomes. When the observe actions do not fit the theory, initially one will justify the outcome by describing the behavior as a mistake or a bias. However, when observe actions do not fit the theory repeatedly than one must question the theory and not the behavior.

By distinguishing procedures (rationality) from outcomes (intelligence), we can treat the relation between the two as a question for research, rather than a matter of definition. (March 77).

Session Three: Research Cultures in Managerial Accounting

Kaplan. Research Cultures in Managerial Accounting: Empirical Research

The author had been requested to speak regarding empirical research in the field of management accounting. Instead, the author chose to address the phenomena being studied by researchers in the field, contending that neither theoretical nor empirical research is a preferable method and the research method utilized should follow from the nature of the research question.

The author defines the rather simplified view of the firm that has been the subject of analytic management accounting research as Academic Management Accounting (AMA). This view of the firm is adapted from economics and seeks to simplify the firm in order to study the behavior of markets. The author contends that this view of the firm is not rich enough for adequate examination of the management accounting phenomena, which seeks to study the behavior of individual firms. As a result, utilizing AMA as the research and teaching domain does not adequately capture vital characteristics of the environment in with management accounting procedures are used. The author proposes the existence of a different view, Organizational Management Accounting (OMA), which is a rich, complex view of the firm. This view of the firm recognizes the need to examine the cost systems that extend throughout the firm's value chain, as opposed to the AMA focus on factory-based costs. The author also extends the usefulness of management accounting information beyond control, incentives and contracting into a realm wherein shirking, moral hazard, adverse selection and risk aversion do not exist.

After defining the two views of the firm, the author compares the two. His comparison indicates that AMA is focused on analysis of well-specified systems while OMA is focused on issues of synthesis and design. The distinction between analysis and design is an important difference in the two systems. A second important difference in the two systems is the maturity of the fields. AMA is a mature field, based on well defined and specified concepts and paradigms. OMA is an emerging field, with issues and concepts that are undefined and yet to be explored. Another differences in the two fields include different audiences for the research results. AMA is of interest mainly to academics, OMA to practitioners. One other very important difference in the two fields is the synthesis of the research. AMA examines management accounting issues in isolation from the rest of the organization, while OMA examines management accounting issues within the context of interaction with the other processes and forces at work within the organization. A final difference identified by the author is the setting for research in the two fields. AMA can be utilized quite effectively in laboratory settings, OMA phenomena needs to be studied in its natural surroundings and is more effectively examined in field studies.

The author next compares the two fields in terms of appropriate research methodology. While AMA phenomena are appropriately studied using theoretical methodology, OMA phenomena require systematic observation and description to develop the necessary documentation and specification of the concepts and variables. Both theoretical and empirical methodologies are appropriate for the examination of OMA. In evaluating the existing research in the two fields, the author recommends methods having high internal validity and rigor are necessary for AMA research, and methods that high external validity and more relevance for OMA research, due to the need to adequately capture the actual phenomena. The author also recommends that researchers in the OMA field develop skills for the proper documentation of field studies and communication of their findings.

The author presents seven concepts based on evaluation of his extensive research that are relevant to the study of both AMA and OMA. He encourages a dialogue between researchers in the two fields to expand understanding of management accounting phenomena and to create synthesis between the two fields.

Demski. (Theoretical) Research in (Managerial) Accounting

Demski's first point is that the title of his session is too narrow. He rejects the compartmentalization of accounting and research methods. No method of research stands alone. Therefore, his comments are about Research in Accounting. His purpose is to identify five frictions in accounting research culture that he believes interfere with our research productivity. Demski labels these frictions as impatience, infatuation, brand loyalty, temptation and hedonism.

Comparing The Accounting Review research titles in the 80's with research titles in the 60's Demski indicates that the research emphasis has shifted from how to do accounting, or how to analyze decisions, to research that was not motivated by issues of the day and had little if any pretension toward applicability. This change was motivated by new computing capacity, empirical techniques and theory that were unavailable in the 60's. He refers to this as "the creeping social science perspective". There were three stages: The age of advocacy - True income and true cost existed and would be reported when we improved our measurements. In this stage we told students how accounting ought to be done.

The age of reason
- We eventually learned that circumstance mattered and that J. M. Clark was right about this in 1923. We no longer believed that true income and true cost existed, but instead that the best system depends on what the end user was trying to accomplish.

The age of agnosticism
- The best system can (with error) be identified by the practitioner, but not by the researcher. These changes are welcome, healthy and productive, but five frictions have crept into our research culture as indicated below.


We want results, generality, applicability and usefulness from our research. This impatience creates a bias towards short run useful research. He advocates patience in directing and evaluating our research.


Compartmentalization using dichotomies or trichotomies, such as managerial vs. financial vs. auditing vs. tax etc. obscures the task at hand. Accounting does not exist in a vacuum.

Brand Loyalty

Different research strategies might be appropriate for different circumstances, but none is superior. Brand loyalty to a given research method (theoretical vs. empirical vs. field vs. lab-based research) obscures the interactive nature of research. Theory feeds off data and empirical research feeds off theory. Therefore, a preference for any particular type of research method is a needless friction.


The temptation to pontificate, to tell our professional counterparts what to do is crossing the line from scholarly behavior to professional behavior. The scholar should focus on understanding professional behavior, while the professional focuses on efficient behavior. A proclivity to cross the line is a needless friction in the research process.


We tend to take the easy way out and talk about research rather than doing research.

Demski recognizes distinctions between professional and scholarly behavior, and between scholarship and personal opinion. He also says we fail to recognize that we are a community of experimentalists. Finally, he hopes we succeed in creating a research environment in which our students rather than our predecessors are able to render us obsolete.

Christenson. Discussion Comments

Christenson says that both Kaplan and Demski lost sight of the fact that the theme of these sessions was research cultures, not research methods. He suggest using Hofstede's instrument on accounting faculty. He comments on "Ockhams razor" - make no unnecessary distinctions, but points out that Demski created his own dichotomy between practitioners (or professionals) and researchers (or scholars). He says Demski defends his dichotomy based on the idea that professionals are specialized in action and researchers are specialized in observation. However, in the more successful sciences, active experimentation rather than passive observation is the norm. He appears to agree with Kaplan's view and notes that if researchers have little to tell practitioners, we should listen to what they have to tell us.

Wolfson. Discussion comments

Wolfson disagrees with Demski's view of the researcher as only a social recorder and points to the economies of scale in moving from research to a policy position. He disagrees with Kaplan's view on academic management accounting (AMA) versus organizational management accounting (OMA) by saying that they are interested in learning about the same domain, but use different methods. He also mentions the difficulty of aggregating the results of field research and the high costs involved. Wolfson disagrees with Kaplan's claim that AMA does not require an understanding of the entire organization and says there are three perspectives on field research: 1) as an end in itself, 2) as input to hypothesis formulation and 3) as a reality check on models. Research includes an investment phase and a harvesting phase, and much published research represents research that is harvested too early.


Related Summaries:

Covaleski, M. and M. Aiken. 1986. Accounting theories of organizations: Some preliminary considerations. Accounting, Organizations and Society 11(4-5): 297-319. (Summary).

Covaleski, M. A., M. W. Dirsmith and S. Samuel. 1996. Managerial accounting research: The contributions of organizational and sociological theories. Journal of Management Accounting Research (8): 1-35. (Summary).

Neimark, M. and T. Tinker. 1986. The social construction of management control systems. Accounting, Organizations and Society 11(4-5): 369-395. (Summary).

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