Kelly & Pratt (1992) – Purposes and paradigms of management accounting: beyond monetary reductionism
The paper suggests that administration accounting can be considered fulfilling a multiplicity of purposes which will only be understood by examining the actions of the managing accounting celebrities involved.
Management accounting grew away of price accounting around 1950s. It had been grounded inside the neo-classical inexpensive theory from the firm: in the event that each organization acts to optimize its earnings, then the success of the total economy will be maximized.
Classic management accounting theory provides accepted that there is a concrete floor world full of resources. The role from the management accounting is to aid rational economic decision making. Technical progress provides perfection to rational decision making.
Kaplan ou al. argue that management accounting has not progressed. Need to come back to pure applications of basic principles to ensure management accounting practitioners to regain the high earth.
Simon: continues the attachek of neo-classical economics; individuals are rational profit-mazimizing decision manufacturers. The developing seperation between ownership and management offers directed focus on the motivation of managers and the adequacy of the profit maximization presumptions. Bounded rationality: business environment is too complicated to understand fully so bounderies around decision models happen to be drawn. Individuals are unable to understand the world totally, identify most possible choices and method all info.
Approaches to analyze management accounting:
1 . Making decisions approach:
Folks are not realistic, nor usually clearly defined desired goals or full knowledge. Drive & Olsen: ‘garbage can' model. Decisions are made when the 4 channels of trash come together inside the organization in the right mix. The 4 factors: problems, solutions, participants and choice possibilities. As problems and solutions are often independetn, this brings about...