Systems of income and financial position would superimpose standards of normalization upon everyone within the firm. Accounting, thereby, had achieved Foucault's definition of knowledge as power over people per excellence. By the 1950s, however, person as decision-maker replaced this vision of person as machine, and accounting still has power in our society, but a different sort of power. Likewise, accounting still possesses its constructivism (i.e. manner of perceiving a certain stranglehold on reality by emphasizing certain construct and demoting others), although its constructivist paradigm may have differed from that of, say, a century ago. Individuals are viewed, measured, and criticized within programmatic frameworks, and Miller and O'Leary (1987) suggest that accounting today can still be viewed as part of the heritage and structure (albeit slightly changed) of the traditional mode of power that it was in the early decades of this century. In other words, the slanted domination of accounting remains.
Accounting as Form of Lens
The fact that accounting can be perceived as a subjective discipline that has its particular perspective and language is a view that is emphasized by Ezzamel, Lilley, and Wilmett (2004) who argue that accounting inscriptions serve as a certain form of hieroglyphic and semantic control via organizations over people.
Using the company Britech as an example, Ezzamel et al. (2004) demonstrated how writing as representation emphasized certain structures and processes whilst de-emphasizing others, and how all semantics and forms of writing (or speech) serve to do the same. Ezzamel et al. (2004) explored the option of alternate accounting measure and practices, accentuating the role played by human agency in these processes, before elaborating their understanding of the power of accounting inscriptions in human life. Britech, Ezzamel et al.'s (2004) case-study, in question, introduced a newer set of accounting standards that would reflect their new paradigm of environmental change.
In 1989, the managers of Britech decided that accounting would be extended to firstly incorporate new measures that would emphasize concern for quality and value; and secondly would extend these more detailed measures and to target them all across the board so that their influence was felt even by the shopfloor operators. To that end, processes conceptualized as "market pull" became promoted as the new entities around which managers and employees would focus their attention. Accounting and business terminology were mobilized to spell out the financial benefits that would accrue from "build to- order": "reduced working capital employed; reduced risk of incorrect model mix; reduced total cost; improved responsiveness; superior quality; improved revenue" (Manufacturing Strategy Document; Ezzamel et al., 2004, 800).
A shift got into effect between obsession on man-hours and labor costs to inventory cost and stock ratio. Vocabulary was added and deleted, and swerves in perspective and corporation conduct occurred. New measures were implemented to inform decision making, and to incorporate a new holistic vision. This new alternative constructivist manner of perception was implemented right down from top level to shopfloor. This was supplemented by the adopting of a new model: the four dimensional approach to performance management based on the European Foundation of Quality Management (EFQM). What Britech served to do, according to Ezzamel et al. (2004), was to serve as case study signifying the importance of inscriptions on shaping people's activities and judgment, and that by shift in vocabulary or semantics an entirely different construct of perception, thought, and behavior could be created. What we see here, in other words, is that written measures are at the center of power / knowledge relations, and deployment of new methods creates an alternate representation.
Most interesting is the observation of Armstrong (2002) to this effect that management accounting technique is an endeavor to grapple with a reality that it has to concretize into its own specific language in order to understand it and to deal with it according to its perspectives. Having done so, however, this interpretation results in a lopsided, one-sided, and simplistic representation that is then imposed on others. It is precisely because this interpretation is so simplistic and because it is such an inadequate and clumsy caricature of experience (or reality) that the consequences of managing reality through this lens become dysfunctional in so many ways. Examples are the oxymoron of activity-based cost management, which can only indicate a short-run cost savings whilst resulting in long tem lost capabilities.
Whilst textbooks and business managers consider accounting to be the most important management control system, modern scholars consider its role and position to be subjective and, consequently, problematic. Most argue, that accounting, by placing a specific controlling lens on reality, serves as one among many control systems. Marx, in fact, argued that modern accounting lies at the core of capitalist control of modern business enterprises (Bryer, 2006), and Weber would have seen it as conducive to history's guilty rationalization of man. Marx was not far wrong for, as we have seen, the discipline of accounting served as instrument for scientific management to convert people into machines and to judge them (and eliminate them) according to their standards and outputs of efficiency. Western society, particularly that of the U.S., many would argue (and with tremendous merit) is not much different today.
For change to be achieved, Marx and his followers placed their attention on history and on social forces of capitalism. According to Bryer (2006), however, the issue lay not so much with control of labor forces, per se, but with understanding and control of accountability of the labor process. The aim should be the collective worker's control of the boardroom and the corporate structures, and central to that control, he concluded, should be an understanding of accounting for accounting is the "business of capitalism." Once an understanding of accounting, per discipline, is achieved, control can be wrested and usurped over the labor process.
Since we are ultimately human, perhaps we are always constrained to perceive our existence in this format, for taking Armstrong's (2002) stance, practitioners of accounting endeavor to constrict their environment into some form of understanding. True, doing so results in simplistic forms and in dysfunctional consequences, but an alternate grasp of reality might result in alternate forms of simplistic understanding, constructivist forms of interpretations, and errors. Most of us buy into this form of management, however erroneous and subjective it be, for we see reality in this way. Another perspective of reality may not be necessarily truer or better, or achieve greater accountability in the organization. As biased and subjective humans, we are prone to perpetrating errors and, are, ontologically, debarred from seeing reality as it is. The current accounting schema is simply one form of trying to grapple with human existence and to press it into a more manageable and order-producing environment.
Armstrong, P. 2002, "Management, Image and Management Accounting. Critical Perspectives on Accounting, 13, pp. 281-295
Bryer, R. 2006, "Accounting and control of the labour process" Critical Perspectives on Accounting, 17, pp 551-598.
Chwastiak, M. & Young, J.J. 2005, "Silences in Annual Reports, Critical Perspectives on Accounting, 14, 533- 552
Ezzamel, M., Lilley, S. & Willmott, H. 2004, "Accounting representation and the road to commercial salvation." Accounting, Organizations and Society, 29, pp. 783- 813.
Lehman, G. 2005, "A critical perspective on the harmonisation of accounting in a globalising world" Critical Perspectives on Accounting, 16, pp.975-992.
McSweeney, B. 1997. "The unbearable ambiguity of accounting" Accounting, Organizations and Society, 22, pp. 691-712.