MANAGEMENT ACCOUNTING, ORGANIZATIONAL THEORY AND CAPITAL BUDGETING Over the past decade the research effort devoted to accounting problems has expanded considerably and the volume of publications has increased proportionately. The time is therefore ripe for a review of some of the most significant of these developments. The reviews collected in this book focus on management accounting research. Commissioned by the Economic and Social Research Council, they synthesize important developments in understanding the processes and consequences of management accounting, the application of modern organization theory to the area and the application of more rigorous financial theory to investment planning and appraisal. All of the chapters are by acknowledged experts in their respective areas. Each of the reviews attempts to summarize the current state of the art, relate the research findings to important practical problems and point to emerging directions of inquiry. The book will be of particular interest to concerned practitioners, academics and postgraduate students. Robert W. Scapens is Professor of Accounting at the University of Manchester. He has held visiting positions at Ohio State University and the University of Cincinnati. His publications include books in the areas of management accounting, financial control of divisionalized companies, and inflation accounting. David T. Otley is Senior Lecturer in Accounting and Finance at the University of Lancaster. Author of numerous articles, he is an editorial board member of Ac counting, Organizations and So ciety and of the Journal of Business Finance and A ccounting. Roger J. Lister is a Senior Lecturer in Economics and Business Studies at the University of Liverpool. He is the author of An Annotated Bibliography of Corporate Finance. Anthony G. Hopwood is ICA Professor of Accounting and Financial Reporting at the London Business School. Michael Bromwich is Professor of Accounting at the University of Reading.
MANAGEMENT ACCOUNTING, ORGANIZATIONAL THEORY AND CAPITAL BUDGETING Three Surveys Robert W. Scapens, David T. Otley, Roger J. Lister Introduction by Anthony G. Hopwood and Michael Bromwich M IE.IS/R/CI MACMILLAN EC()N()',1/C AND SOCIAL RESEARCH COf..1'.XJL
~) Economic and Social Research Council 1984 Softcover reprint of the hardcover 1st edition 1984 All rights reserved. No part of this publication may be reproduced or transmitted, in any form or by any means, without permission First published 1984 by THE MACMILLAN PRESS LTD London and Basingstoke Companies and representatives throughout the world British Library Cataloguing in Publication Data Scapens, Robert W. Management accounting, organizational theory and capital budgeting : three surveys. I. Managerial account ing 1. Title II. Otley, David T. III. Lister, Roger J. 658.1'511 HF5635 ISBN 978-1-349-07098-5 ISBN 978-1-349-07096-1 (ebook) DOI 10.1007/978-1-349-07096-1 The Social Science Research Council (SSRC) changed its name on I January 1984and is now the Economic and Social Research Council (ESRC). The functions of the Council are unchanged.
Contents 1 Emerging Patterns of Management Accounting Research Anthony G. Hopwood and Michael Bromwich The SSRC research initiative A variety of research traditions The juxtaposition of the technical and the organizational Some issues for the future Conclusion Notes References 1 4 5 6 8 11 11 12 2 Management Accounting - A Survey Paper 15 Robert W. Scapens Abstract 15 The conventional wisdom 18 Management accounting practice 35 Recent research 39 Agency theory research in management accounting 63 Concluding summary 74 Notes 75 References 78 3 Management Accounting and Organization Theory: A Review of their Interrelationship 96 David T. Otley Preface 96 Introduction 97 Organization theory 102 Review ofpublished work The use of organization theory in management accounting research 124 Conclusions 138 Notes 150 References 151
vi Contents 4 Capital Budgeting: A Survey Roger J. Lister Introduction Evolution Seminal theories Risk and uncertainty Agency theory Subproblems Constrained capital budgeting Mergers International capital budgeting Inflation ; taxation Conventional accounting numbers Capital budgeting and corporate modelling Empirical surveys Conclusions and future directions References 165 165 166 167 180 189 194 199 207 209 211 213 213 218 220 225 Index ofauthors Index ofsubjects 257 271