Article S7.6 Research in Management Accounting: Some Observations Seminar Leader: D. V. Ramana (with Students of Strategic Management Accounting), XIMB, India ramana[at]ximb.ac.in Research in accounting focuses either on financial accounting or management accounting. Research in financial accounting addresses the concerns of specific stakeholder groups associated with financial accounting, such as investors and regulators. Research in management accounting focuses mainly on performance measurement, performance management, managerial remuneration, and prediction of bankruptcy. The work of Zimmerman (2001) was used to discuss the status of research in management accounting. In his 2001 article, Zimmerman argued that the state of research in management accounting was rather unsatisfactory, as the research literature did not go beyond “describing practice.” Six possible reasons were identified by Zimmerman to explain this state of affairs: (a) lack of publicly available data, (b) predominantly inductive approach, (c) structure of researchers’ incentives, (d) use of non-economics-based frameworks, (e) lack of empirically testable theories, and (f) emphasis on decision making, not control. Of these, the principal factor hampering empirical research on management accounting is the lack of consistent data on what firms do internally. Unfortunately, the lack of data is often used to justify weak (or no) theory and/or badly designed and implemented research in this field. Kaplan (1986), writing before Zimmerman, had argued that researchers should leave their offices and study the practices of innovating organisations. He had also emphasised that theory is useful in guiding empirical research. His prescription for management accounting research called for systematic observation and description of accounting practice. Apparently, the management accounting literature has failed to evolve from describing practice to developing and testing theories because researchers no longer have an incentive to work on theory development. Accounting scholars and teachers working within business-school environments seem to have a greater incentive for engaging in consulting work and adding to the ever growing body of descriptive material. One way to develop management accounting research would be to build theories on the basis of the descriptive material available and then derive testable predictions from those theories. This is the so-called hypothetico-deductive model for doing research, borrowed from the methodology of classical science. However, accounting being a practical discipline, research should also focus on the use of the results in organisations, whether in planning, decision making, or control, so as to make the user organisations more efficient, agile, innovative, resilient, adaptive, and so on, depending upon their respective strategic orientation. This type of demand on research is not part of classical scientific methodology. Therefore, some alternative research methodology may be necessary for a practical discipline such as management accounting. References Kaplan, R. S. (1986). The role of empirical research in management accounting. Accounting, Organizations and Society, 11, 429-452. Zimmerman, J. L. (2001). Conjectures regarding empirical managerial accounting research. Journal of Accounting and Economics, 32, 411-427. Retrieved August 31, 2010, from http://www.simon.rochester.edu/fac/zimmerma/Conjectures.pdf Reported by Upendra Kumar Maurya; with inputs from D. V. Ramana; edited by D. P. Dash. [August 31, 2010] Copyleft Xavier Institute of Management, Xavier Square, Bhubaneswar 751013, India Research World (ISSN 0974-2379) http://www1.ximb.ac.in/RW.nsf/pages/Home |
