A BLUEPRINT ON RESEARCH STRATEGIES FOR THE
DOUBLE-HYBRID MANAGEMENT ACCOUNTING RESEARCH
Joseph Kim-keung Ho
Independent Trainer, Hong Kong, China
Abstract:
Since the
mid-80s, the management accounting field has been responding to a crisis that
is captured in the phrase “relevance lost”. Since then, new intellectual
thinking and approaches in management accounting have been proposed, very often
labeled as strategic management accounting. Based on the Multi-perspective,
Systems-based (MPSB) Research of this writer, a few papers on a visionary
research theme called double-hybrid management accounting research has been put
forward of late by this writer. In this paper, a research strategies blueprint,
involving literature review, induction and deduction within the MPSB knowledge
supply chain framework, is presented. The blueprint portrays a challenging, yet
feasible way to involve academicians and professionals to develop double-hybrid
management accounting. A brief exercise to review an article on activity-based
management by Armstrong (2002) is provided to illustrate how MPSB management
accounting literature can be developed to inform the double-hybrid management accounting
research venture. The paper justifies this intellectual project in terms of
practical and academic values that it is capable of delivering to the
professional and academic communities in systems thinking and management
accounting.
Key
Words: activity-based
management, double-hybrid management accounting research, a research strategies
blueprint, the Multi-perspective, Systems-based (MPSB) Research, management
accounting, systems thinking
INTRODUCTION
The management
accounting field has been experiencing a turbulent time since the mid-80s.
There was the crisis about the relevance of management accounting to the
business world as described by the work of Johnson and Kaplan which appeared in
1987 (Johnson and Kaplan, 1991). In response, the management accounting
professional bodies and academicians proposed a number of innovative management
accounting approaches, which can be considered as strategic management
accounting approaches (Guilding et al., 2000). In 2014, this writer has
launched another original research project on management accounting (see Ho
(2014a; 2014b; 2014c).), drawing on the Multi-perspective, Systems-based (MPSB)
Research[1] (see Ho, 2014d; 2015) also
conducted by this writer. In essence, these works by this writer propose, based
on literature review, the intellectual vision of developing Multi-perspective,
Systems-based management accounting called double-hybrid management accounting
as well as the professional profile of double-hybrid management accountant, see
Figure 1.
Referring to Figure
1, which is an updated version of the diagram from Ho (2014c), the aim of
double-hybrid[2] management accounting
research is to develop critical systems-based management accounting theories.
In this regard, theories include models, methodologies and theoretical
perspectives. These theories inform management accounting system analysis and
design, management accounting system implementation, and management accounting
practices, etc... To do so requires development of hard systems-based,
soft-systems-based, emancipatory systems-based and postmodern systems-based
management accounting as well as their usage with pluralism guidelines.
Double-hybrid management accounting constitutes the vital body of knowledge for
a double-hybrid management accountant, i.e., a Multi-perspective, Systems-based
scholar-practitioner in management accounting, to pursue (Ho, 2014a; 2014b).
Nevertheless, the contemporary systems thinking has not made any significant
influence in the management accounting community. In particular, in the
existing management accounting and systems thinking literature, there is as yet
no such thing as hard systems-based management accounting, soft-systems-based
based management accounting, emancipatory systems-based management accounting,
postmodern systems-based nor critical systems-based management accounting.
Instead, the mainstream management accounting literature is mainly grounded in
neoclassical economics and the research philosophy of positivism (Scapens and
Yan, 1993; Baxter and Chua, 2003) and it is also not enthusiastic in adopting
the systems thinking lens[3] in its practices and
theoretical development. Specifically, the academic management accounting
literature exhibits willingness to consider different theoretical perspectives
in research studies. However, the employment of systems language and systems
methodologies in these academic works is rare. In short, the research project
on double-hybrid management accounting is right at the visionary stage. How to
proceed with the double-hybrid management accounting research is less than
clear. To address this concern on research strategies, the paper proposes a
research strategies blueprint for the double-hybrid management accounting
research, which offers some clarification on this concern.
THE EXISTING RELEVANT
LITERATURE FOR THE DOUBLE-HYBRID MANAGEMENT ACCOUNTING RESEARCH
The vision of the
intellectual venture to develop double-hybrid management accounting theories
and perspective, as depicted in Figure 1, is ambitious and highly
unconventional. This is because the existing systems thinking literature and
management accounting literature have no works specifically on hard
systems-based, soft systems-based, emancipatory systems-based, postmodern
systems-based and critical systems-based management accounting theories.
Moreover, the underlying theoretical foundation of double-hybrid management
accounting research, i.e., the Multi-perspective, Systems-based Research (with
its theoretically anchored critical systems thinking), is essentially a
personal sub-Systems Movement (Ho, 2014e) with few followers. Taking all these
factors into consideration, the challenge of realizing the double-hybrid
management accounting project vision appears tremendous. Nevertheless, this
writer maintains that such an intellectual venture is feasible and worth doing.
The reasons are as follows:
Reason 1 – the multiplicity of perspective in
the management accounting literature:
The existing management accounting literature has examined management
accounting from a diversity of perspectives, notably the rational accounting
theory studies (RATS), ethnographic or interpretive accounting research studies
(EARS) and critical accounting theory studies (CATS), that are similar to the
theoretical perspectives of various strands of systems thinking (Ho, 2014a;
2014b; Jönsoson and Macintosh, 1997).
Reason 2 – the
ease of adopting various management concepts with generic constitutive
rules based on different systems thinking perspectives: Contemporary critical systems thinking works,
notably Jackson (2003: Chapter 15), have already formulated highly condensed
generic constitutive rules on systems thinking methodologies that can be
readily adopted for informing various perspective-aware and systems-based
organizational intervention efforts as well as employing various conceptual and
analytical techniques from diverse academic sources, e.g., literature on systems
methodologies and management accounting, see also the appendix.
Furthermore, the literature of critical systems thinking, e.g., Jackson (2003),
Flood and Romm (1996) and Mingers and Gill (1997), has evaluated the strengths
and weaknesses of various systems methodologies, thus facilitating their
application with critical awareness.
Reason 3 – the availability of the MPSB
techniques to develop the MPSB management accounting literature via literature
review: Via literature
review of existing management accounting works with the Multi-perspective,
Systems-based (MPSB) key concepts, e.g. Ho (2015), it is feasible to produce
management accounting ideas that can more easily be adopted to formulate and
enhance the double-hybrid management accounting theories and perspective.
These three reasons point to the relevance of the
existing systems thinking and management accounting literature for developing
double-hybrid management theories. Via the MPSB literature
review-induction-deduction research process working on management
accounting-related research projects and topics, double-hybrid management
accounting theories can be developed. More specifically, this research process
is subsumed under the larger MPSB knowledge supply chain framework of Ho
(2014f), so further research guidelines can be sought from that framework. In
due course then, a repository of double-hybrid management accounting literature
will be established. These reasons and ideas reveal a research strategies
blueprint for conducting double-hybrid management accounting research. This
research blueprint is further portrayed in Figure 2 as follows:
Regarding Figure 2,
there is already a set of identified academic resources to draw on to launch
the double-hybrid management accounting research. The argument from the writer
is not to downplay the intellectual challenges ahead for conducting the
double-hybrid management accounting research. Undeniably, it is a daunting
task. Nonetheless, it is quite feasible for academicians interested in this
intellectual project to start working on it using the proposed research
strategies blueprint as presented in Figure 2. Researchers can now locate their
research endeavours in this blueprint to see how their research works fit into
the overall research strategies blueprint. For example, some researchers may
focus on the literature review realm to generate MPSB management accounting
literature (Research Domain 1 of Figure 2). Another group of researchers may
concentrate on formulating double-hybrid management accounting theories
(Research Domain 2). Yet a different group of researchers may conduct action
research with some double-hybrid management accounting theories (Research
Domain 3). The blueprint encourages distributed and associated research efforts
to conduct double-hybrid management accounting research by researchers who are
interested in this topic. Finally, on the practical and academic values of
pursuing the double-hybrid management accounting research, it offers a body of actionable management
accounting knowledge to professional management accountants who aspire to be
internal consultants and team leaders in their organizations (Xydias-Lobo et
al., 2004), capable of coping with complex business challenges in a
holistic and creative way. Thus, it is able to generate practical value. [The
research theme on actionable management knowledge production via the MPSB
Research is explained by Ho (2014d).] Besides, the double-hybrid management
accounting research provides an encompassing and vigorous theoretical foundation
that synthesizes the existing management accounting literature and draws on
insights from the systems thinking literature for developing management
accounting theories. As such, it creates academic value via an innovative
research strategy. The next section provides an illustration on how to make use
of a key MPSB concept, i.e., the notion of perspective, to comprehend a
piece of management accounting article so as to contribute to the double-hybrid
management accounting literature.
REVIEWING AN ARTICLE ON ACTIVITY-BASED
MANAGEMENT WITH THE MPSB RESEARCH LENS
To indicate how
some MPSB management accounting literature can be derived via the MPSB
Research, the writer reviews a management accounting article on activity-based
management, i.e., Armstrong (2002). Briefly, activity-based management is “the
entire set of actions that can be taken on a better informed basis using ABC
(activity-based costing) information” (Ryan, 2015). The review takes the form
of associating some evaluative comments made by Armstrong (2002) with the
perspectives of the main strands of systems thinking as identified by Jackson
(2003). A somewhat similar review exercise, which makes use of the key MPSB
concepts, has been previously conducted by Ho (2015) on performance measurement
models, another management accounting topic. Armstrong’s (2002) article, to be
reviewed here, is a critical evaluation of activity-based management. The
review findings on his article are presented in Table 1.
Table 1: Perspectives of
systems thinking strands and related evaluative comments on activity-based
management by Armstrong (2002)
Perspectives of systems thinking strands and
associated organizational images (Jackson, 2003)
|
Related evaluative comments on activity-based
management by Armstrong (2002)
|
1.
The hard systems
perspective
Main aims: improving, goal
seeking and viability
Associated organizational
images:
machine, organism, brain, flux and transformation
|
1.1 “…the more of the
labour within a staff department which is indirect in terms of its output
activities, the greater will be the proportion of arbitrarily allocation
within activity costs…” (Armstrong, 2002: 106).
1.2 Where Scientific
Management involved a concrete simplification and standardisation of
production processes, ABM offers no positive guide to the revision of working
practices..” (Armstrong, 2002: 109).
1.3 “Providing staff
managers succeed in establishing activities ……., these activities, or rather
their cost-drivers, are likely to become fossilised within the activity
monitoring system, especially when this is written into software…….”
(Armstrong, 2002: 111).
1.4 “…it is common to find that initial list of
activities obtained from staff managers is too extensive to fit into a
feasible system… it could…be symptomatic of an attempt on the part of staff
managers to insist on the organic complexity of their tasks …” (Armstrong,
2002: 112).
|
2
The soft systems
perspective
Main aim: purpose exploration
Associated organizational
images:
culture and political system
|
2.1 “ABC found a receptive audience
amongst line or production managers because it proposed that staff
departments should be subjected to regimes of accountability similar to those
already experienced by manufacturing” (Armstrong, 2002: 102).
2.2 “Since there are
managerial occupations which profess techniques through which others can be
monitored and controlled, senior managers can choose to trust these as an
alternative to trusting the managers of the functions concerned..”
(Armstrong, 2002: 103).
2.3 “The validity of the
truth claims made for ABC is one thing; its social consequences are
another….people do not act according to the situation but according to their
definition of it. So has been with belief in the reality of activity-based
costings…” (Armstrong, 2002: 107).
2.4 “In some of the ABC
implementations…, attempts to rank activities according to their value added
were described as ‘controversial’ or ‘painful’ …” (Armstrong, 2002: 109).
|
3
The emancipatory systems
perspective
Main aims: pursuit of fairness
and empowerment
Associated organizational
images:
psychic prison and instrument of domination
|
3.1 “Where ABM is
‘successfully’ implemented, this image of the staff function may become a
self-fulfilling prophecy in that the department’s activities may actually be
reduced to routine technical or clerical services” (Armstrong, 2002: 103).
3.2 “In some of the ABC
implementations…, attempts o rank activities according to their value added
were described as ‘controversial’ or ‘painful’ because ‘Everyone had a
different definition of what’s valuable to them.’…” (Armstrong, 2002: 109).
|
4
The postmodern systems
perspective
Main aim: diversity promotion
Associated organizational
image:
carnival
|
4.1 “… one would expect
some show of resistance from staff subjected to the ABM frame of reference…
Generally, the voices of the subjects are suppressed…” (Armstrong, 2002:
112).
|
5
The critical systems
perspective
Main aim: creative holism
Associated organizational
images:
all organizational images
|
Relevant
evaluative comments are not found. Overall, the article is multi-perspective
but not systems thinking-based.
|
On the whole,
Armstrong’s (2002) makes a number of evaluative comments and observations on
activity-based management, some reflecting concerns associated with the hard
systems perspective, others more related to the interpretative systems,
emancipatory systems, and postmodern systems perspectives. Such an evaluation exercise
endorses a “multidimensional” way (Cinquini and Michell, 2005) to investigate
activity-based management. Still, no specific viewpoints from Armstrong (2002)
resonate with critical systems thinking though the article is
multi-perspective. Moreover, Armstrong’s (2002) article does not make use of
systems language and notions in his discussion. In other words, his work is not
systems thinking-based. The whole review exercise that produces Table 1 is
interpretive (or subjective) in nature. Thus, another person doing the same
exercise could come up with a slightly different grouping of comments from
Armstrong (2002). Also, some evaluative comments can be associated with more
than one perspective, e.g., points 2.4 and 3.2 in Table 1. Taken as a whole,
his study unravels the machine metaphor underlying the activity-based
management approach, and its application limitations as conceived from various
theoretical perspectives. Table 1 serves an important purpose of pointing to
how various strands of systems thinking could potentially be considered to
enrich the study of activity-based management. By explicitly reviewing
activity-based management with an MPSB perspective, the discussion would then
be not only multi-perspective, but also systems-based; this is what this paper
encourages academicians to do. All in
all, the review exercise by this writer falls within the Research Domain 1 of
Figure 2. Being multi-perspective and systems-based enables a more
comprehensive and creative managerial response to deal with complex business
issues that involve management accounting practices in this case, thus
maintaining the professional relevance of management accounting to the business
world (re: Research Domain 3 of Figure 2). Besides, as such, Table 1
contributes to the MPSB management accounting literature (re: Research Domain 1
of Figure 2), which in turn informs the double-hybrid management accounting
research.
CONCLUDING REMARKS
Given the existing
insignificant intellectual imprint of contemporary systems thinking to the
management accounting field, it is indeed an overwhelming task to develop
double-hybrid management accounting theories as well as mobilize academicians
to do so. Nevertheless, such a task is not impossible. It is argued in this
paper that, by means of the MPSB Research, it is quite feasible to produce MPSB
management accounting literature. Together with the works on critical systems
thinking, e.g., Jackson (2003), it is quite practicable to formulate
double-hybrid management accounting theories (re: Research Domain 2 of Figure
2). Those academicians who are creative and visionary probably will find this
kind of intellectual endeavours engaging and stimulating. Others will prefer to
conduct empirical research, e.g., case study research and action research, to
develop double-hybrid management accounting theories (re: Research Domain 3 of
Figure 2). All these theoretical and empirical research efforts play an
important part in the overall double-hybrid management accounting research
venture, as depicted in Figure 2. In this respect, this visionary paper, by
offering a research strategy blueprint, serves as an invitation to all those
who are possibly interested in double-hybrid management accounting to
participate in this highly innovative and stimulating intellectual adventure.
BIBLIOGRAPHY
1. Ackoff, R.L. 1981. Creating the corporate future.
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management accounting: lessons from the activity-based costing/ management
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international comparison of strategic management accounting practices” Management
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to develop double-hybrid management accountants (DHMAs)” European Academic
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Multi-perspective, Systems-based (MPSB) Research with an MPSB Knowledge Supply
Chain Framework” European Academic Research 2(1) April: 705-729.
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Multi-perspective, Systems-based Research sub-Systems Movement” European
Academic Research 2(9) December: 11880-11900.
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Chain Framework” European Academic Research 2(1) April: 705-729.
14. Ho, J.K.K. 2015. “An updated research note on the
key Multi-perspective, Systems-based (MPSB) concepts in the Multi-perspective,
Systems-based Research” American Research Thoughts 1(11) September:
2693-2704.
15. Jackson, M.C. 2003. Systems Thinking: Creative
Holism for Managers. Wiley. Chichester.
16. Johnson, H.T. and R.S. Kaplan. 1991. Relevance
Lost: The Rise and Fall of Management Accounting. Harvard Business School
Press. Boston. Massachusetts.
17. Jönsoson, S. and N.B. Macintosh. 1997. “CATS, RATS
and RATS: Making the case for ethnographic accounting research.” Accounting,
Organizations and Society 22(3-4): 367-386.
18. Mingers, J. and A. Gill. (editors) 1997.
Multimethodology: The Theory and Practice of Combining Management Science
Methodologies. Wiley.
19. Ryan, N. 2015. “Activity-based management”
ACCAglobal.com (url address: http://www.accaglobal.com/an/en/student/exam-support-resources/professional-exams-study-resources/p5/technical-articles/activity-based-management.html) [visited at October 14, 2015].
20. Scapens, R.W. and M. Yan. 1993. “Management
accounting research in China” Management Accounting Research 4: 321-341.
21. Xydias-Lobo, M., C. Tilt and D. Forsaith. 2004.
“The Future of Management Accounting: A South Australian Perspective” JAMAR 2(1).
Certified Management Accountants, Australia: 55-70. (url address: http://www.cmawebline.org/joomla4/images/stories/JAMAR%202004%20Winter/jamar-v2-1-xydias-lobo.pdf) [visited at October 5, 2014].
Internet resources
A Facebook page on
management accounting research: https://www.facebook.com/Literature-on-Management-Accounting-418682984981179/
A Facebook page on
the MPSB Research: https://www.facebook.com/The-Multi-perspective-Systems-based-Research-1630606813892045/
[1]
The MPSB Research, as conducted by
this writer, is grounded on critical
systems thinking (see Jackson (2003).).
[2] The term double-hybrid is solely used for MPSB study in the management
accounting field. Its meaning is the same as MPSB.
[3] The systems thinking lens is typified
by the notion of systems age thinking of Ackoff (1981).
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