Summary by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida
This is a presentation Anthony Hopwood made when he received the 2008 Lifetime Achievement Award of the Management Accounting Section of the American Accounting Association. The purpose of his presentation is to reflect on a number of issues including:
1. Mainstream tendencies in management accounting research,
2. The need for an integration of both design and social science perspectives,
3. The increasing autonomy of the research sphere, and
4. The challenges of responding to the changes occurring in management accounting practice.
Mainstream Tendencies in Management Accounting Research
Hopwood is troubled by the increasing narrowness of outlook and unwillingness of researchers to address the multitude of issues and problems that characterize accounting ideas and practice. There appears to be more of what he refers to as careerist-oriented research rather than curiosity-oriented research in accounting. More emphasis seems to be on mainstream conceptual and methodological approaches from analytics and economic perspectives with little integration of organizational theory and sociology. Faculty look for simplicity and certainty in their research rather than complexity and challenge. More and more accounting research emphasis is placed on abstract theories that are detached from how accounting actually operates. The management accounting research community needs to recognize the pressures for conformity and instead invest in the preservation of an intellectual and methodological diversity that characterizes the accounting craft in practice.
The Need for an Integration of Design and Social Science Perspectives
There is an increasing need for more integration of theoretical and methodological approaches. Hopwood mentions his debates with Kaplan who is well known for his design work related to activity-based costing and the balanced scorecard. While Kaplan's approach is from a design perspective, Hopwood has looked at management systems from a social science perspective. Hopwood says he now believes that both design and social science approaches are needed for investigating and implementing effective organizational change and improvement. Systems design needs to include issues of organizational and cultural fit. Currently, relating information and control systems to organizational structures and cultures is more of an aspiration than a reality.
The Increasing Autonomy of the Research Sphere
Research in business schools is becoming increasingly distanced from the reality of business.1 The worlds of practice and research have become ever more separated. More and more accounting and finance researchers know less and less about accounting and finance practice. Other professions such as medicine have avoided this problem so it is not an inevitable development. Hopwood mentions the applied research centers that were developed at Oxford when he was Dean to facilitate communication and a flow of ideas between the worlds of practice and research.2 Other means of connecting business schools with practice need to be found since business schools do not have the equivalent of the medical school interest in curing patients and improving their quality of life.
The Challenges of Responding to the Changes Occurring in Management Accounting Practice
The term management accountant is no longer popular and virtually no one in the U.S. refers to themselves as a management accountant.3 The body of knowledge formally associated with the term is now linked to a variety of other concepts and job titles. In addition, management accounting is no longer an attractive subject to students in business schools.4 This is in spite of the fact that many students will be working in positions where a knowledge of management control and systems design issues will be needed. Unfortunately, the present positioning and image of management accounting does not make this known.5
1 For a related article see Bennis, W. G. and J. O'Toole. 2005. How business schools lost their way: Too focused on "scientific" research, business schools are hiring professors with limited real-world experience and graduating students who are ill equipped to wrangle with complex, unquantifiable issues - in other words, the stuff of management. Harvard Business Review (May): 96-104. (Summary).
2 Saïd Business School Research Centres, University of Oxford.
3 Note that Hopwood is mainly talking about job titles. Many in the U.S. do call themselves Certified Management Accountants. In addition, the AICPA has a new Charted Global Management Accountant designation, but in the U.S. you have to be a CPA before you can be a CGMA.
4 Perhaps the unattractiveness of management accounting to students and others is related to the current confusing alphabet soup associated with the subject. Students are exposed to most, if not all of the following terms: Activity accounting, activity-based management, activity-based cost management, cost management, cost management systems, strategic cost management, throughput accounting, resource consumption accounting, and lean accounting, as well as the older terms including cost accounting, managerial accounting, and management accounting. In addition, we have direct cost, indirect cost, capacity related cost, variable cost, fixed cost, expired cost, unexpired cost, product cost, inventory cost, non-manufacturing cost, period cost, full cost, normal cost, historical cost, standard cost, job order cost, process cost, joint cost, by-product cost, future cost, opportunity cost, discretionary cost, activity cost, unit level cost, batch level cost, relevant cost, activity-based cost, time driven activity-based cost, throughput cost, target cost, backflush cost, life cycle cost, and so on. Many cost accounting, managerial accounting, and management accounting textbooks now use one of the newer terms such as cost management. Corporate accountants say they work in Finance rather than in accounting. In 1999 the IMA changed the title of its monthly periodical Management Accounting to Strategic Finance. All this is confusing to students and everyone else.
5 Reckers asked the following question. Are students and society best served by an accounting curricula focused on public accounting when only 15% of the people who identified themselves as accountants in the last U.S. census are involved in audit or financial reporting? See Reckers, P. M. J. 2006. Perspectives on the proposal for a generally accepted accounting curriculum: A wake-up call for academics. Issues In Accounting Education (February): 31-43. (Note).
Other related summaries:
Castellano, J. F. and R. Burrows. 2011. Relevance lost: The practice/classroom gap. Management Accounting Quarterly (Winter): 41-48. (Summary).
Eastman, D. R. 2002. What higher education is for. St. Petersburg Times (September 14): 19A. (Note).
Elliott, R. K. 1992. The third wave breaks on the shores of accounting. Accounting Horizons (June): 61-85. (Summary).
Johnson, H. T. 1989. Professors, customers, and value: bringing a global perspective to management accounting education. Proceedings of the Third Annual Management Accounting Symposium. Sarasota: American Accounting Association: 7-20. (Summary).
Martin, J. R. Not dated. Management accounting terminology. Management And Accounting Web. http://maaw.info/ManagementAccountingTerminology.htm
Martin, J. R. Not dated. The accounting doctoral shortage and opportunities to teach accounting. Management And Accounting Web. http://maaw.info/ArticleSummaries/ArtSumAccountingDoctoralShortage.htm
The Pathways Commission. 2012. The Pathways Commission on Higher Education: Charting a National Strategy for the Next Generation of Accountants. American Accounting Association and American Institute of CPAs. (Note).