Table Of ContentISSUES IN MI
Third Edition S
MANAGEMENT ACCOUNTING AS
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ISSUES IN
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Edited by Trevor Hopper Deryl Northcott Robert Scapens A Third Edition
S
G I MANAGEMENT
Pooling the expertise of leading researchers, Issues in Management Accounting critically
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explores a broad range of issues in a concise, digestible style. Both students and E
practitioners specialising in this area will fi nd this book an essential guide to the many M
developments affecting management accounting theory and practice.
ACCOUNTING
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This third edition presents completely new and original chapters, written by
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leading experts in management accounting.
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Each chapter focuses on a specifi c emerging topic of contemporary
interest, explores research and practical developments in the area, and
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concisely summarises the current issues of contention and debate.
Edited by
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C Trevor Hopper
Issues in Management Accounting
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Topics discussed in this new edition of the text include: is designed to complement upper Deryl Northcott
• Management Accounting for consumerism level undergraduate, postgraduate U
and professional studies, and will Robert Scapens
• The balanced scorecard
also be of value to practitioners N
• National culture and management control
and academics investigating
• The changing role of management accountants contemporary aspects of T
• Management Accounting and accountants in the management accounting. I
public sector N
• Knowledge resources and Management Accounting
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• Management Accounting innovations
Third Edition
About the Editors NE
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Trevor Hopper holds professorships in Management Accounting at the University of Manchester, rite
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Stockholm School of Economics and the Victoria University, Wellington. hd
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Deryl Northcott is a Professor of Management Accounting at the Auckland University of Technology. oy
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Robert Scapens is a Professor of Management Accounting at the University of Groningen and an
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Emeritus Professor of Accounting in the Manchester Business School. cp
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www.pearson-books.com
an imprint of
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Issues in
Management Accounting
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We work with leading authors to develop the strongest
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Issues in
Management Accounting
Third Edition
Edited by
Trevor Hopper, Deryl Northcott
and Robert Scapens
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Pearson Education Limited
Edinburgh Gate
Harlow
Essex CM20 2JE
England
and Associated Companies throughout the world
Visit us on the World Wide Web at:
www.pearsoned.co.uk
First published 1991
Second edition published 1995
Third edition published 2007
© Pearson Education Limited 1991, 1995, 2007
All rights reserved. No part of this publication may be reproduced, stored in
a retrieval system, or transmitted in any form or by any means, electronic,
mechanical, photocopying, recording or otherwise, without either the prior
written permission of the publisher or a licence permitting restricted copying
in the United Kingdom issued by the Copyright Licensing Agency Ltd,
Saffron House, 6–10 Kirby Street, London ECIN 8TS.
All trademarks used herein are the property of their respective owners. The use of any
trademark in this text does not vest in the author or publisher any trademark ownership
rights in such trademarks, nor does the use of such trademarks imply any affiliation with
or endorsement of this book by such owners.
ISBN 978-0-273-70257-3
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
10 9 8 7 6 5 4 3 2 1
11 10 09 08 07
Typeset in 9.5/12.5pt Palatinoby 35
Printed and bound by Henry Ling Ltd., at the Dorset Press, Dorchester, Dorset
The publisher’s policy is to use paper manufactured from sustainable forests.
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Contents
List of contributors xi
Introduction xvii
Acknowledgements xxiii
Part 1
The changing nature of management accounting
1 Management accounting and changing operations management 3
Allan Hansen and Jan Mouritsen
Introduction 3
Operations management: central issues 4
Management accounting – a problem for operations management 10
Conclusion 21
References 23
Further reading 24
2 Management accounting for consumerism 27
Ingrid Jeacle
Introduction 27
Consumerism as a research agenda 28
Management accounting in an icon of consumer culture:
the department store 30
Management accounting and ‘fast fashion’:
the twenty-first century fashion chain 35
Conclusion 41
References 43
Further reading 44
3 Interactions between modern information technology
and management control 45
Niels Dechow, Markus Granlund and Jan Mouritsen
Introduction 45
The development of IT for management accounting purposes 45
Ledger systems and ERP systems 46
The content of this chapter 47
Integration and elimination 49
Calculation and configuration 52
Organising and realising management control systems 58
Management of technology 59
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Contents
Conclusion 60
References 60
Further reading 62
Appendix: Glossary 63
4 Globalisation and the international convergence
of management accounting 65
Cristiano Busco, Elena Giovannoni and Angelo Riccaboni
Introduction 65
Governing global organisations: changing strategies and emerging needs 67
Growing global by acquisition: when the GE Way met a local culture 72
Vertical and lateral relations within NestléWaters 76
IT and ‘a-centred’ corporations: evidence from two
globally operating organisations 81
Beyond compliance: the role of the finance organisation
within integrated governance 83
Conclusion 88
References 90
Further reading 92
5 National culture and management control 93
Graeme Harrison and Jill McKinnon
Introduction 93
National culture 94
Cautions and criticisms of Hofstede’s culture 98
Management control systems 100
National culture and management control systems 102
Comparing the five national culture dimensions 112
Placing culture and cultural research in perspective 113
Conclusion 114
References 115
Further reading 116
6 The changing role of management accountants 117
John Burns and Gudrun Baldvinsdottir
Introduction 117
The traditional management accountant’s role 117
Background to the changing roles of management accountants 119
New and emerging roles 121
New skills requirements 126
Discussion 127
Conclusion 131
References 131
Further reading 132
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Contents
Part 2
‘New’ management accounting techniques
7 Strategic management accounting 135
Beverley R. Lord
Introduction 135
Strategy and information needs 135
Traditional management accounting and strategy 137
Components of strategic management accounting 138
Criticisms of strategic management accounting 147
Conclusion 151
References 151
Further reading 153
8 Activity-based costing and management: a critical review 155
Maria Major
Introduction 155
The emergence of ABC/M 156
Origins of ABC/M systems 158
Features of ABC/M 160
From ABC to ABC/M 165
ABC/M implementation 166
An evaluation of ABC/M 170
Conclusion 172
References 172
Further reading 173
9 The balanced scorecard 175
Hanne Nørreklit and Falconer Mitchell
Introduction 175
The nature of the BSC 176
Research on the BSC 178
The nature of linkages 179
Promoting the BSC 188
Conclusion 193
References 193
Further reading 195
Appendix: Examples of the balanced scorecard 196
10 Strategic investment appraisal 199
Deryl Northcott and Fadi Alkaraan
Introduction 199
What are strategic investment decisions? 199
Models of strategic decision-making 200
vii
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Contents
Developing strategic appraisal approaches 203
Evidence from practice 208
Strategic appraisal and the investment decision-making process 215
Conclusion 218
References 219
Further reading 220
11 Performance measurement 223
Lin Fitzgerald
Introduction 223
The measurement metrics 224
Performance measurement to management 228
Shareholder approaches to rewards 231
Empirical evidence 232
Case study: Lloyds TSB 237
Conclusion 239
References 240
Further reading 241
Part 3
‘New’ applications of management accounting
12 Does EVA add value? 245
Jan Bouwens and Roland F. Speklé
Introduction 245
Performance measurement and decentralisation 246
The properties of EVA 252
Performance consequences of EVA: empirical evidence 261
Conclusions 266
References 267
Further reading 268
13 Management control in inter-organisational relationships 269
Kalle Kraus and Johnny Lind
Introduction 269
Inter-organisational relationships – drivers and trends 270
Inter-organisational relationships – dyads and networks 273
Inter-organisational control in dyadic settings 276
Management control issues and theories in dyadic settings 282
Inter-organisational control in network settings 285
Management control issues and applied theories in network settings 289
Future prospects 291
Conclusion 293
References 295
Further reading 296
viii
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Contents
14 Management accounting and accountants in the public sector:
the challenges presented by public–private partnerships 297
Jodie Moll and Christopher Humphrey
Introduction 297
New public management and the development of PPPs 298
PPP investment appraisal 302
Key issues for public sector management accountants
in the procurement, management and evaluation of PPPs 304
Conclusion 312
References 313
Further reading 315
15 Knowledge resources and management accounting 317
Hanno Roberts
Introduction 317
What is knowledge? 317
Knowledge typologies 318
Knowledge as a practice 323
Accounting for knowledge as a practice 324
Additional considerations: the economic characteristics of knowledge 326
The major cost drivers of knowledge 328
Management accounting and knowledge clues 330
Conclusion 330
References 332
Further reading 332
Part 4
Understanding management accounting change
16 Managing accounting change 335
Sven Modell
Introduction 335
Studying management accounting change: a prelude 336
Factor studies 337
Process-orientated approaches 344
Towards a synthesis of perspectives 352
Conclusion 353
References 354
Further reading 355
17 Management accounting innovations: origins and diffusion 357
Christian Ax and Trond Bjørnenak
Introduction 357
Management accounting innovations and their origins 358
Why do innovations diffuse? A demand-side perspective 360
Why do innovations diffuse? A supply-side perspective 362
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