Reviewed by Anne Loft Copenhagen Business School

This book is a fascinating collection of papers designed to give a historical perspective on corporate reporting to employ-ees. It will be of value not only to those interested in the specific relationship between accounting and industrial relations, but also to those interested more generally in the relationship between accounting and its social and organizational context.

The inspiration to publish this clearly came as result of the literature search Lee Parker carried out for an article which he co-authored on the pattern of development of financial report-ing to employees from 1919 to 1979 [Lewis et al, 1984]. In this paper, which is reproduced at the beginning of the book, it is demonstrated that financial reporting to employees was not a “discovery” of the 1970s, or even the 1960s, but had been dis-cussed and practiced earlier in the century. Even more interest-ing, the production of these reports seemed to follow a wave pattern: there was interest just after the First World War, again around 1940, it reached new heights in 1949, revived again in the late 1950s/early 1960s, and again in the latter part of the 1970s. These peaks are tentatively claimed to be linked with the application of new technology to the workplace, increased merger activity in the corporate sector, groundswells of anti-union sentiment, and economic recession and/or fears of recession. In the Introduction to this book Parker writes that these peaks:

. . . reflected corporate management’s interest in telling its own story or version of events that had overtaken, or were about to overtake their employees. This may suggest a legitimizing or propagandist role for such re-ports, at least in the perception of some report produc-ers [p. xviii].

The papers are divided into six groups: “Early Stirrings;” “Reporting Rationales;” “Reporting Methods,” “Reporting Prac-tices: Case Studies and Surveys;” “Assessing Employee Interest;” and “Reporting in an Industrial Relations Context.” While I found the papers interesting, I also found it hard to see the logic in their arrangement. Personally I would have preferred them to have simply been arranged in chronological order because there is much overlap in the issues with which they deal. For instance, most of the papers contain something which could be called “Reporting Rationales”, yet oddly under this heading it-self there appears two papers from 1960/61 and one from 1973, nothing from an earlier period. Arranging the papers in chronological order would also have helped the reader who wants to see the papers in the context of the explanations of the peaks in interest put forward in Lewis et al [1984].

One of the valuable things about this collection is that the thirty-one papers come from a wide variety of sources, from the local Illinois Manufacturers’ Costs Association, Monthly Bulletin, to the more well known Journal of Accountancy. Thus the reader can get an impression of different groups’ ideas on reporting to employees, not only the view from accountancy. Sometimes the past can surprise us. R. Keith Yorston, an official of the Australian Society of Accountants [1959], writes about the “moral obligation” [p. 44] which an employing company has to supply financial information to employees, suggesting that:
in the same way that the accounting profession has be-come greatly interested in taxation, so in the future it must, I suggest, become similarly interested in supplying information to employees and the representatives of employees (p. 50).

Would a professional accounting journal print such an article today? Historical material can have an important role in revealing that the past is not so simple as many management propagandists would have us believe; when reporting to employees is next rediscovered as the ‘Columbus egg’ in progress towards a more democratic workplace, this book will help us remember.

One of the central issues which all those writing about the topic of financial reporting to employees had to, and still have to, address is that of the role of workers in the enterprise. They have to address the paradox that workers are on the one hand defined as mere factors of production: ‘hands’ or ‘labor’, the cause of that item ‘wages’ on the financial statements; on the other they are human beings, and to be treated as capable of understanding business, albeit in simplified form. Andersen [1961], writing in The Accountant, treats “Labour as an Investment”:

The supplier of labour is in fact rather like the provider of capital, in that he also invests something in the busi-ness, namely his labour and personal skill.

Like the supplier of capital, the supplier of labor should be:

advised periodically of the financial progress of his employer, so that he too may have the opportunity of assessing the worth and prospect of his investment.

This comparison is carried further:

capital has an indefinite life and can appreciate, whilst labour ceases to exist on the death, incapacity or retire-ment of the supplier; it also deteriorates with age [p. 52].

This last paragraph illustrates that when labor is reduced to a mere factor of production, as Sievers writes, workers are de-frauded of their mortality as they are converted into production means, tools, cogs, dead-wood, or scrap, and to the extent that workers are perceived and treated like things they are also re-garded as non mortals [Sievers, 1990, p. 133]. Here death is recognized, but only as a cessation in a supply of a factor of production. Yet the notion of advising the supplier of labor of the financial progress of “his investment”, and the optimistic message at the end of the article, that: “the working population is better educated and more widely read than ever before. Some employers have recognized this fact, and in conjunction with the trade unions concerned are attempting to create a real partnership in industry and commerce” [p. 55], show the paradox, for here the worker is a human being, not a mere cog.

Whether these financial reports directed at employees are a representation of a genuine attempt by management to cooper-ate with employees, or mere propaganda (or a mixture of both) is in this book left open for the reader to decide. Parker only hints at their possible “legitimizing or propagandist role” [p.xviii]. In my view, financial reporting to employees brings together two systems of managerial control over work which have been developed and elaborated during the twentieth century, namely industrial relations and accountancy; financial reporting to employees represents the use of accountancy in in-dustrial relations. As Knights and Collinson [1987] describe, accountancy is peculiarly powerful as a disciplinary force in management-worker relations, it can be used to create an “agenda and script” for management-labor discussions [Bougen, 1989], its appearance of being the “facts” makes it hard to challenge, as was amply demonstrated in the recent Coal Strike in England [Cooper and Hopper, 1988]. Whatever the readers’ standpoint on these issues, this is a very useful work to consult.

REFERENCES

Bougen, P.D., “The Emergence, Roles and Consequences of an Accounting -Industrial Relations Interaction,” Accounting, Organisations and Society (1989): 203-234.
Cooper, D. and T. Hopper, Debating Coal Closures, Cambridge: Cambridge Uni-versity Press (1988).
Knights, D. and D. Collinson, “Disciplining the Shopfloor: A Comparison of the Disciplinary Effects of Managerial Psychology and Financial Accounting,” Accounting, Organisations and Society (1987): 457-477.
Sievers, B., “The Diabolization of Death: Some Thoughts on the Obsolescence of Mortality in Organisation Theory and Practice,” in Hassard, J. & Pym, D. (eds.), The Theory and Philosophy of Organisations, London: Routledge, (1990).