MANAGEMENT OF IMAGE AND MANAGEMENT ACCOUNTING

<P>MANAGEMENT, IMAGE AND MANAGEMENT ACCOUNTING<BR>PETER ARMSTRONG†<BR>Department of Management, Keele University, Newcastle-under-Lyme,ST5 5BG<BR>This paper considers management accounting technique, specifically activity-based cost management, as a modelling process. Particularly in Anglo-Saxon capitalism,various institutional pressures have worked to dissociate management from expertise in the managed process. Management of this character can only engage with concrete processes by modelling them in terms which it can comprehend and with which it can engage. The result is a market in management and accounting techniques for producing these simplified representations. Those discussed in this paper consist essentially of a reporting framework which is imposed on the expert practitioner, so that the process is redescribed in modelled form. Precisely because the resulting models are simplified, however, the consequences ofmanaging through them are dysfunctional in various ways.<BR>In order to show the underlying similarities between apparently unconnected instances of this process, the paper discusses some attempts to open up aesthetic design to management control before proceeding to the analysis of activity-based cost management.<BR>Introduction<BR>Over the past decade, papers such as Gareth Morgan’s “Accounting as Reality Construction” (1988) and Ruth Hines’ “In Communicating Reality, We Construct Reality” (1988) seem to have lost much of their critical force. Once it is established that accounting does not mirror some objective reality, little more follows from the mere fact that it is socially constructed. Since all knowledges are socially constructed in the sense that they are products of human understanding and social acceptance, it becomes uninteresting to say the same of accounting. The interest lies in the questions of how, why and with what consequences it is socially constructed.<BR>In this paper, I suggest that activity-based cost management (ABCM) is one of a class of techniques which has been constructed so as to appeal to a particular market for ideas. Particularly within Anglo-Saxon capitalism, that market has bee conditioned by institutional pressures within management education, consultancy and labour markets which have worked to create a sharp distinction between“management” and what French and Raven (1959) once called “expert power”.<BR>The result at the level of ideas is an abstract and generalized conception of management which is detached from expertise in any particular process and can, in consequence, be applied to any and all processes1. At the human level, the result is the creation of a managerial cadre whose stock-in-trade is management-in-general rather than expertise in the processes to be managed (see Armstrong, 1986, 1996).<BR>For the one to control the other, for managers of this kind to control a particular process, it is necessary for that process to be constructed in a form which they find comprehensible and amenable to purposive intervention. Many of the procedures which are grounded in management knowledge aim to do exactly this. They are responses to a market for social constructions of reality, and ABCM is a response to this market.<BR>In order to flesh out these ideas, and to concretize the market for managerial ideas, I begin not with an analysis of ABCM, but with an account of some recent attempts to construct the design of products (in the aesthetic sense) as a process amenable to managerial control. These cases indicate that design can only be constructed as a process transparent to managerial control by editing out the very characteristics which might yield competitive advantage (see Armstrong &Tomes, 1996; Armstrong, 2000). The paper then considers the image of staff activity which underlies the project of controlling indirect costs through ABCM(see Armstrong, forthcoming). This portrayal too is shown to in