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Management Accounting: Science or Art?
William B. Joyce
Eastern Illinois University
Over the past few decades, academics and practitioners alike have voiced grave reservations about management accounting education. Precipitated by economic and demographic trends unfavorable to higher education and reflected in critical national reports, calls for thorough reexamination of the mission and methods of accounting education are now widespread [Accounting Education Change Commission, 1996; Cottell and Millis, 1993; Peek et al., 1995; Sullivan, 1996; and Ravenscroft, 1995].
The basic premise is that management accounting education has enthusiastically seized on and applied a scientific paradigm that applies criteria of precision, control, and testable models to both research and education. However, management accounting studies differ from some other academic disciplines in that the domain of scholarship and the domain of education require different approaches. First, the problems resulting from these different approaches are diagnosed by examining the transformation in management accounting education that initiated and perpetuated the current state of affairs. Then, recommendations for altering the current paradigm practice will be discussed.
EMBRACING SCIENCE
Beginning in earnest in the late 1950s, American accounting education underwent an extraordinary transformation. The trade and industry orientation shifted in favor of science. Other social/behavioral disciplines had long before grasped the science perspective and gained its considerable benefits. Accounting, in general, was late to adopt the science perspective (Eastman and Bailey 1994).
Behind this transformation were reports by the Caregie Council (Pierson 1959) and the Ford Foundation (Gordon and Howell 1959). On one hand, these reports argue that accounting programs were prevented from participating in the elite intellectual community of the university by a serious lack of faculty research. On the other hand, the educational recommendations ran counter to a scientific bent. Both reports advocated a firm, broad grounding: education requires being well-versed in liberal arts.
However, modern management accounting education draws little distinction between scholarship and education. First: the knowledge that it generates has become increasingly technical and secluded. Second: accounting programs appeal to one another, as scholarly communities, through an overabundance of academic journals that are often removed from the challenges of everyday management accounting practice. Third: and more to the point of this paper, accounting programs seem to see no compelling rationale for a separate educational model. Thus, management accounting is taught as if it were a science, and not a practice or an art.
MANAGEMENT ACCOUNTING AS SCIENCE VERSUS PRACTICE
The scientific paradigm assumes that information is objective and that its meaning is clear and definite. This assumption implies that where differences of opinion exist, analysis must proceed until a "correct" answer emerges. This "correct" answer orientation is reflected in instructional methods that require students to solve problem sets using techniques like time value of money models. However, the value system underlying the analysis is seldom questioned; information, assumptions, and analysis necessarily reduce anxiety.
A sensibility toward the realities of practice, on the other hand, would require an emphasis on the social processes which lead to the development of shared meaning that allow concerted action in inherently ambiguous business environments. This emphasis on social processes involves drawing a distinction between uncertainty as an absence of information, the existence of multiple conflicting interpretations, and politics as the presence of alternative agendas.
Traditional quantitative methods are often based on the results of similar actions taken in the past. Accounting as science is historical. However, accountants have little control over results that are subject to evolutionary and revolutionary forces. The practitioner must view the world in more fluid, changeable terms, and be wary of extrapolating results. Accounting educators should aspire to instill the imagination required to visualize alternatives, contingencies, and paths.
The task of reducing uncertainty emphasized by the scientific paradigm naturally leads to reliance on data collections and analysis. While scientific inquiry applies methodically sequential processes, accounting practice often requires experimentation with actions as a route to understanding. Creative actions are especially useful experiments because they provide variations necessary for developing new interpretations, new products and services, and flexible work environments according to Ford (1996). Accountants taught to experiment in creative actions would be expected to be judged on their ability to imagine and articulate multiple interpretations of events, act creatively under ambiguous circumstances, and quickly redirect their efforts in the event that creative actions fail.
In the absence of complete certainty, feedback provides a control function that allows corrective action to be taken should results deviate from the previously set standards. The value of feedback primarily lies in its ability to correct aberrations from plans. However, an accountant who uses feedback not only as a means of detecting problems, but as an avenue toward discovering preferences, improving strategies and developing expectations, would be a rare sort indeed. Managerial accounting curricula could foster this mindset, "double-loop learning" in Argyns' terms (1982), by encouraging students to reflect more on the implications of their personal successes and failures as a way of improving their professional development.
TEACHING MANAGEMENT ACCOUNTING AS A PRACTICE
Creativity can improve accountants' ability to explore and develop their own talents, and contribute to the development of firms as well as the profession. Curricula could address this topic in at least two ways.
First, course work that seeks to develop individuals' creativity-related motivations and skills should be presented early in the curriculum (Ford 1996). A second way of improving creativity would be to present students with alternative analytical procedures that are less penalizing to highly uncertain, creative options. Traditional approaches to evaluating alternative projects are notorious for penalizing creative alternatives (Bowman and Huny, 1993). Students could also be acquainted with the distinctive challenges associated with implementing new courses of action in large organizations (Dougherty and Heller 1994). Clearly, there is great potential for developing rich, interdisciplinary contributions to the practice of adopting more creativity.
Accounting curricula have been widely criticized for their inattention to leadership and communication skills. Practitioners recognize that ambiguous organizational events and diverse interests typically evoke multiple, and perhaps conflicting interpretations. Leadership and communication skills are critical for shaping and directing interpretations.
Accounting curricula could possibly benefit from a more explicit recognition of the interpretive dynamics associated with leadership and influence in organizations. Students need to develop the ability to use language. Students also need a better understanding of how to work effectively within political contexts by utilizing legitimate sources of influence such as expertise, reason, and charisma. Communication skills are crucial foundations for effectively utilizing these sources of influence, and students should develop an appreciation of the ways in which their appearance and mannerisms affect their ability to influence others.
Leadership should be described primarily as a symbolic activity (Pfeffer 1981) directed toward forging shared interpretations as a basis for collective action.
CONCLUSIONS
These recommendations represent a shift in emphasis on management accounting education. Accounting, as science, has long been lamented as too weak to solve the ambiguous, contextually-bound problems faced by practitioners. One reason for this disenchantment is that the scientific methods adopted by accounting scholars have been imposed, perhaps inappropriately, on management accounting practice and education. The diffusion of the scientific paradigm throughout accounting curricula denies fundamental differences between scholarship and education. Management accounting educators need to recognize the difference between the scientific approach and practice. This realization suggests that teaching management accounting as an art rooted in action is a viable alternative to traditional curricula. Designing management accounting curricula to reflect the central role of action, rather than scientific analysis, may provide a rationale for revising management accounting curricula within and across management accounting disciplines.
REFERENCES
Argyris, C., Reasoning, Learning, and Action, (Jossey-Bass: San Francisco), 1982
Bowman, E., and D. Hurry," Strategy through the options lens: An Integrated view of Resource Investments and the Incremental-Choice Process," Academy of Management Review, (1993).
Cottell, P., and B. Millis, "Cooperative Learning Structures in the Instruction of Accounting," Issues in Accounting Education, (1993), pp. 40-59.
Dougherty, D. and T. Heller, "The Illegitimacy of Successful Product Innovations in Established Firms," Organization Science, (1994).
Eastman, W., and J. Bailey, "Examining the Origins of Management Theory: Value Divisions in the Positivist Program," Journal of Applied Behavioral Science, (1994), p. 30.
Ford, C., "A Theory of Individual Creative Action in Multiple Social Domains," Academy of Management Review, (1996), p. 21.
Gordon, R., and J. Howell, Higher Education for Business, (Columbia University Press: New York), 1959.
Peek, L., et al., "Cooperative Learning Activities: Managerial Accounting," Issues in Accounting Education, (1995), pp. 112-125.
Pfeffer, J., "Management as Symbolic Action: The Creation and maintenance of Organizational Paradigms," Research in Organizational Behavior (Vol. 3), L. Cummings and B. Staw (Eds.), (JAI: Greenwich, CT), 1981.
Pierson, R., The Education of American Businessmen, (McGraw-Hill: New York), 1959.
Ravenscroft, S., et al., "Incentives in Student learning: An Experiment in Cooperative Group Learning," Issues in Accounting Education, (1995), pp. 97-109.
Sullivan, E., "Teaching Financial Statement Analysis: A Cooperative Learning Approach," Journal of Accounting Education, (1996), pp. 107-111.
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