With an historic base in the material, particularly with roots in the industrial revolution and in drawing upon the influences of Fordist production and Yaylor’s scientific management, management accounting tends to focus on production, control and measurement (Frezatti et al., 2014). In this sense, traditional management accounting tools and technologies, including cost, budgets and variances, provide a foundation for controlling material production (Chapman, 1998). Management accounting, in this context, is highly effective, and equally, there has been evidence of a degree of flexibility within these foundational technologies, such as developing and applying the techniques to different environments including service and merchandising (Puxty, 1993). However, the base tools and technologies do structure and constrain organisations in a certain cultural way (Morgan, 1988).
As advanced capitalist economies have developed, there has been a ‘genuflection’ to immaterial forms of value creation (Spence & Carter, 2011). In this sense, ‘ideas’ are crucial to the new economy as access to immaterial production is the driver of ‘new wealth’ (Hardt & Negri, 2000, 2005). There is an essential role for management accounting, particularly with respect to information and decision-making, but a challenge with how management accounting approaches the immaterial is that the tools and techniques of management accounting focus on the tangible, measurable and controllable. Thus, oftentimes, knowledge workers are asked to meet arbitrary, numeric-based targets that reflect a translation of management accounting into the factory to account for ideas. This is fundamentally a trade-off between trust and control. As such, the question is whether extending the ambit of management accounting to the immaterial is by logical design.
This chapter identifies the key challenges that the immaterial provides for management accounting. This is done by examining two case studies in higher education research management and by examining billing practices at professional firms (such as accountants and lawyers). This allows an opportunity to critique current practice, as well as considering options for identifying new approaches to managing the immaterial.
|Title of host publication||The Routledge Companion to Performance Management and Control|
|Place of Publication||United Kingdom|
|Number of pages||22|
|ISBN (Print)||9781138913547 , 1138913545|
|Publication status||Published - 2017|