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Shields M. D. 1997. Research in Management Accounting by North Americans in the 1990s. Journal of Management Accounting Research (9): 3-61.

Summary by Antoinette Lynch
Ph.D. Program in Accounting
University of South Florida, Spring 2002

Research Methods Main Page | Theories Main Page

Purpose: This article has two purposes: 1) To review the state of research in management accounting, as evidenced in publications by North Americans in the 1990s; and 2) To identify opportunities for research in management accounting.

The results of each study are classified under 8 headings:

1. Incentives (e.g., bonus pools, cost reports, monitoring, performance evaluation)
2. Budgets (e.g. designs of budget systems, budget-based performance evaluation, and heuristic budget-based contracts).
3. Performance measurement (e.g., variety of performance measurement topics and consequences of performance measures)
4. Transfer Pricing (e.g., optimal transfer pricing mechanisms)
5. Responsibility accounting
6. Cost accounting
7. Cost management
8. Cost Drivers

A high degree of consensus exists for most results in the 152 studies discussed in this literature review; however, there is some inter-study variation. There is a very high degree of consistency across analytic studies because they rely on similar assumptions, theories and mathematical techniques, and they are conducted by a relatively small, homogenous group of researchers.


Management accounting research published by North Americans (at least one author being from North American)

Six leading journals:

1. Accounting, Organizations and Society
2. The Accounting Review
3. Contemporary Accounting Research
4. Journal of Accounting and Economics
5. Journal of Accounting Research
6. Journal of Management Accounting Research

1990-96 seven-year time period

Table 1 provides the frequency distribution of topics for the articles listed in this review. For example, the most frequent topic is management control systems (85). Table 2 provides the frequency distribution of the research settings of the articles listed in this literature review. For example, 70 studies are in single industry or activity settings, mostly manufacturing.

Table 1 - Distribution of Topics
Topics Frequency
Management Control Systems 85
  Incentives 26
  Budgets or budgeting 21  
  Performance measurement 21  
  Transfer pricing 8  
  Responsibility accounting 6  
  International control 3  
Cost Accounting   24
  Cost accounting overall 7  
  Cost allocation 8  
  Activity-based costing 4  
  Product costing 3  
  Cost variances 2  
  Cost Management   14
  Quality 4  
  JIT 4  
  Use of costs for decision making 3  
  Benchmarking 2  
  History 1  
Cost Drivers   11
   Management Accounting, Information, and Systems   7
Research Methods and Theories   6
Capital Budgeting and Investment Decisions   5
Total   152

Table 2 - Distribution of Settings
Settings Frequency
Single industry or activity 70
Manufacturing 57  
Marketing and retailing 5  
R&D 1  
Transportation 3  
Other 4  
Multiple industries or activities (e.g., S&P 500   8
Government, not-for-profit, hospitals   10
Generic (abstract/stylized/simplified)   45
International   5
Inter-organizational   3
No or another settings   11
Total   152

Table 3 provides the distribution of theories in the 152 articles. Eighteen articles do not appear to rely on theory. Table 4 lists a variety of research methods used by the 152 articles. The most frequently used method is analytic (49).

Table 3 - Distribution of Theories
Theories Frequency
Economics 75
Organizational Behavior 15
Psychology 12
Production and Operations Management 10
Sociology 7
Strategic Management 1
Economics and Organizational behavior 2
Economics and POM 2
Economics and psychology 3
History and sociology 1
Organizational behavior and POM 1
Organizational behavior and strategic management 1
POM and sociology 1
POM and strategic management 3
None 18
Total 152

Table 4 -Distribution of Research Methods
Research Method Frequency
Analytic 49
Survey 28
Archival 22
Laboratory Experimentation 21
Literature Review 13
Case/Field Study 10
Behavioral Simulation 2
Multiple Research Methods 7
Total 152



The choice of research projects will continue to be driven by researchers’ incentives (e.g. annual performance evaluations, tenure and promotion, funding opportunities, intrinsic motivation) and constraints (e.g., knowledge, financial resources, data accessibility, tenure and promotion hurdles).

Most literature published in the six journals surveyed probably will continue to be basic research, which are extensions of what is recently published in them due to their editorial styles and preferences.

Doctoral students exposure to qualitative research methods is limited.

Changes in Management Accounting:

Potential relevant changes in the environmental and organizational context of management accounting include changes in competition (deregulation, globalization, customer demands), operations technologies (e.g., JIT, TQM, flexible manufacturing systems, computer integrated manufacturing), information processing technologies (e.g., measurement, communication, processing, reporting, analysis) and organization designs (e.g. competitive strategies, horizontal, flat, self-directed multi-functional teams, joint overtures, networks, supplier-customer partnerships).

Research almost always analyzes or models settings and tasks that have a static context (e.g. technology fixed), or the research investigates determinants of cross-sectional variation in management accounting. In contrast, more research that investigates the dynamics and unpredictability of change would make significant contributions to understanding contemporary management accounting.

Understanding when and how management accounting is a leader, a follower or an inhibitor of organizational change is valuable.

Research can identify how management accounting encourages employees to proactively identify changes in environments and organizations, take appropriate risks, and innovate.

Horizontal Accounting:

An important emerging role for management accounting is to facilitate learning and memory. There has been, however, very little research on the learning conceptualization and use of management accounting. Psychological theories of learning and expertise can provide insights into individual learning.

Distinguishing characteristics of horizontal accounting are its focus on accumulating resource costs and revenues throughout value changes (e.g. supply chain), horizontal responsibility accounting centers (e.g. activity and process centers), and horizontal planning and control mechanisms and information (e.g. budgets, performance measures, transfer prices and incentives for various aggregations of value chain activities).

As organizations increasingly use horizontal structures and processes, research which investigates the effects of using vertical vs. horizontal budgeting processes, budgets, performance measures and incentives would be valuable.

As organizations continue to shift to team-based structures, researchers also can make valuable contributions by investigating how teams form judgments, make decisions, bargain internally (e.g. goals, performance evaluation) and externally (e.g. coordinate budgets, transfer pricing negotiations), and how performance measures and incentives affect motivation and performance).

Strategic Accounting:

Most research in management accounting is related to tactical, operational, and short-term decisions and actions. Investigating the strategic context in which management accounting is embedded would provide interesting opportunities for research.

An important line of research would be to investigate consequences of strategic fit between management accounting mechanisms, strategy variables, and other organizational design characteristics.

Organizational Accounting:

The term management accounting will increasingly become too limited a concept and will be replaced by organizational accounting. This broader conception will enable it to incorporate more types of accounting and accountabilities in organizations, organizational subunits, and inter-organizational arrangements.

As more non-management employees are involved in accounting processes and use accounting information, research should investigate why, how, when and where they interface with organizational accounting.

Virtual Accounting:

The changes in organizations and environments that have been described, coupled with changes in the types and cost of information technology, make it likely that employees will have customized information systems on their desktops (or shirt pockets) which provide immediate access to real-time financial and non-financial information about almost anything related to the organization and its environment, anywhere the employee is at anytime.

Research is warranted which investigates the drivers (e.g., product volume, price, promotions, customization, quality, reputation) and management (e.g., revenue budgeting, revenue variances, revenue-based incentives) of revenues, profits, and assets.

Important for cost-driver research is the development of a framework to organize between- and within-study evidence. For example, the growing number of cost-driver studies has individually provided interesting insights into cost causality in particular settings but, overall, there is a lack of a meta-framework to understand what types of cost drivers would be expected to be operative in various settings.

Integrative Research:

Instead of investigating a single topic, researchers would make broader contributions if their projects were to include multiple topics (e.g., budgets, performance measures, and incentives).

More complete models would be developed by relying on multiple theories from a discipline as well as theories from multiple disciplines.

The application of multiple methods within and between studies on various topics will provide more complete and reliable evidence and models.


Related summaries:

Foster, G. and S. M. Young. 1997. Frontiers of management accounting research. Journal of Management Accounting Research (9): 63-77. (Summary).

Ittner, C. D. and D. F. Larcker. 2001. Assessing empirical research in managerial accounting: A value-based management perspective. Journal of Accounting and Economics (32): 349-410.

Jonsson, S. 1998. Relate management accounting research to managerial work! Accounting, Organizations and Society 23(4): 411-434. (Summary).

Jonsson, S. and N. B. Macintosh. 1997. CATS, RATS, and EARS: Making the case for ethnographic accounting research. Accounting, Organizations and Society 22(3-4): 367-386. (Summary).

Kaplan, R. S. 1993. Research opportunities in management accounting. Journal of Management Accounting Research (5): 1-14. (Summary).

Kaplan, R. S. 1998. Innovation action research: Creating new management theory and practice. Journal of Management Accounting Research (10): 89-118. (Summary).

Kasanen, E., K. Lukka and A. Siitonen. 1993. The constructive approach in management accounting. Journal of Management Accounting Research (5): 243-264. (Summary).

Luft, J. and M. D. Shields. 2003. Mapping management accounting: Graphics and guidelines for theory-consistent empirical research. Accounting, Organizations and Society 28(2-3): 169-249. (Summary).

Lukka, K. and J. Mouritsen. 2002. Homogeneity or heterogeneity of research in management accounting? The European Accounting Review 11(4): 805-811. (Summary).

Otley, D. and A. Fakiolas. 2000. Reliance on accounting performance measures: Dead end or new beginning. Accounting, Organizations and Society 25(4-5): 497-510. (Summary).