Reviewed by Takashi Oguri Kagoshima Keizai University
The history of management accounting. The first edition of this book gained a reputation in Japan of having successfully established a social science methodology for researching the history of management accounting and of having analyzed the formative stages of U.S. management accounting from 1880 through 1920. The revised and enlarged edition, now available to readers eager for a reprint, has elaborated both the methodology and content through subsequent research.
The author’s methodology can be identified with one of the critical schools of accounting in Japan whose origins go back to the early 1950s (or, according to some researchers, to the 1930s). While traditional accounting theorists tended to confine their research to mere discussion of accounting techniques and interpretations of law, the development of accounting as a social science discipline was heavily influenced by the critical theories. The latter theories share common characteristics in that they are based on a political economy of capitalism or monopoly capitalism and view accounting in a social and historical context. Through applying these perspectives to his study, the author has proposed a productive methodology oriented both to the analysis of logical relationships between accounting theories or techniques and the development of capitalist economy and to the analysis of individual historical facts.
Through this effective methodology, this book arguably makes the following contributions to the research of manage-ment accounting history.
First, it identifies the managerial or control function of costing per se at the stage of the modern factory system as a basis of management accounting. Traditional research approaches were concerned with the history of linkage between costing and the accounting (bookkeeping) system. On the contrary, this book demonstrates that costing was developed, especially in the USA, regardless of articulation with the accounting system.
Second, this book successfully discerns two types of costing development, the UK-type and the US-type. While accountants took the lead in developing a system devoted to precise calculation of cost in the UK-model, it was the engineers with experi-ence in the scientific management movement who initiated efforts to design new methods of reducing cost in the US-model. As a result, the US-type invigorated the formation of management accounting.
Third, Tsuji’s book elucidates the history of two indispen-sable components of management accounting: standard costing and budgetary control, while other researchers tend to lean toward one or the other. This book emphasizes that the scientific management movement stimulated the formation of standard costing and budgetary control and that the first stage of management accounting was promoted by engineers who were not acquainted with the traditional accounting system. The book goes on to argue that management accounting, initially formulated as an accounting of engineers, was finally completed and institutionalized by combining the accounting of engineers and the accounting of accountants.
The uniqueness of the book lies in its theoretical categorization of the types and stages of development of management accounting and its emphasis on what the author terms “the logical inevitability imminent in historical facts.” These characteristics are deeply related to the author’s methodology.
This theory-oriented study contrasts with the empirical (facts-oriented) works of such authors as A. D. Chandler, Jr. and H. T. Johnson. One of Tsuji’s apparent objectives is to criticize these empirical case studies as lacking theoretical analysis. It is difficult to determine which criterion ought to be used to denote the development of management accounting. Can it be any practice in a particular company, a theory which popularizes a typical method or any set of practices and theories? This book is stimulating in that it raises these significant, controversial issues.
Unfortunately for our non-Japanese readers, this book is written in Japanese. It is to be hoped, however, that through international exchange and cooperation the book can come to be regarded as a contribution to be reckoned with in our future debates extending beyond the language barrier.
