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Management Accounting Assignment: Ontological & Epistemological Approaches



Management Accounting Assignment Topic: Critique of strategic management accounting practices

Generally speaking, accounting researchers approach their task from one of two ontological foundations. These two approaches are mutually exclusive – meaning that a researcher cannot engage both approaches to reach sound conclusions. The accounting researcher’s approach depends entirely on how he/she views the world and which ontological assumption is adopted. Dillard (1991) presents an excellent description of these two foundations. Students are required to familiarise themselves with the first 4 pages of this article (Dillard, 1991, pp 8 – 12) to gain an understanding of the two approaches.

In this century, the role of the management accountant and management accounting practice (MAP) has witnessed a transition. Today the focus is on what Porter (1991) describes as ‘competitive advantage’ in order to meet their long-term objectives. It is imperative for businesses to understand, gain, maintain and leverage their competitive advantages in order to succeed. There are many tools available to the management accountant who seeks to achieve this. Tools like Balanced Scorecard, SWOT analysis, PEST analysis and Porter’s 5 Force Model are examples.

It is in the context of this competitive environment that Arnold (1999) composed a critique of management accounting in an article titled, “FROM THE UNION HALL: A LABOR CRITIQUE OF THE NEW MANUFACTURING AND ACCOUNTING REGIMES”. One of the crucial findings is that modern corporations (with tacit approval from mainstream accounting academics) are engaged in a purposeful process which aims to appropriate employee knowledge and undermine the power of labor unions. It is through this process that Arnold (1999) implies that modern corporations are reductionist. I.e., they seek to reduce people to numbers in order to maximise profits.

Arnold’s (1999) research location is in a US city – Decatur, Illinois. She is examining 3 companies, Caterpillar, A.E. Staley and Bridgestone/Firestone. She conducts interviews with employees and union officials and makes some interesting conclusions.

Required: Read the 2 articles referenced above then answer the following questions in essay format. You may structure the essay in any way you see fit but do not use bullet points. Approximate word limits for each section are provided.

1. Based on your reading of the first 4 pages of Dillard’s (1991, pp 8 – 12) article, describe the ontological and epistemological approach adopted by Arnold (1999). Provide justification for your answer. (500 words)

2. Consider the meaning of the word ‘reductionist’ above and discuss the following quote (1000 words):

“A segment of the labor movement…. demonstrate that the conventional wisdom is neither neutral nor universally accepted, but rather constitutes a partisan rhetoric that is embroiled in a power struggle over meaning and signification” (Arnold, 1999, p413).


Management accounting involves that branch of accounting that supports management in decision-making and planning (Azudin and Mansor, 2018). Herein management accounting assignment, two articles will be analysed, and the finding of one article will be used to understand the approach of another article. Then the meaning of reductionist and given quote will be discussed to get a better understanding.

Description of the ontological and epistemological approach adopted by Arnold (1999)
In the article named ‘Accounting as a critical social science’, it has been stated that Ontology refers to the nature of being or reality. On the other hand, in this article, Epistemology is stated to be the method in which knowledge is gathered or process of knowing. It is also stated ontology, the underlying radical humanism is Nominalism, and functionalism is Realism. On the other hand, the underlying radical humanism is anti-positivism, and functionalism is positivism (Dillard, 1991).

It has been concluded that the article named “From The Union Hall: A Labor Critique Of The New Manufacturing And Accounting Regimes” by Arnold (1999) adopted the Ontology approach of realism. The justification of such conclusion is that Arnold (1999) has stated that management accounting literature has failed to properly characterise how new manufacturing regimes will operate in the three organisations in Decatur and failed to take in the role of Unions in creating sustaining governance of the business. It has been argued that Union is needed to control corporate opportunism and create a good working environment which three organisations in Decatur failed to create, leading to disruption in its operation.

On the other hand, it has also been stated the value which new management theories or practices is stated to be giving high value to the corporation is damaging the labour interest. Therefore, it has been stated new theoretical approach is needed to seek out that is more social and institutionally embedded than the stated management accounting practices. Therefore, the author, in one way, is adopting realism. This is stated as realism tells that reality is out there, and it is not an artificial thing (Llewellyn, 2017). Realism also promotes evidence-based policy and practices (Hoddy, 2019). So, as the author is telling to adopt a new theoretical approach more aligned with the social and institutional interest, it is encouraging to adopt evidence-based practices that realism promotes. This is the justification for stating that the ontology approach chosen by the author is realism.

On the other hand, the epistemological approach adopted by Arnold (1999) is identified to be Anti-positivism. The justification of such a conclusion is that anti-positivism holds that social realm studies cannot be done with the scientific methods used to investigate natural science (Steinmetz, 2019). Under this approach, it is stated that the researcher's concept and language influence its interpretation of the social world they are investigating (Woodbury-Smith, 2021). Here, Arnold (1999) implied that an alternative theoretical approach is needed, which is more embedded with the social and institutional needs and will not only focus on what value is shown by the cost accountant. Therefore, in one way, the author is telling that a quantified approach to creating change in workplace ideology may not be ideal, and some subjective study which will also take into account the social and institutional interest is needed for bettering implementing changes in the workplace ideology. Therefore, it supports the anti-positivism view that other methods than the scientific method are needed to get a better understanding. This is justification for stating that the author has adopted anti-positivism.

Analysing the meaning of the word ‘reductionist’ using the stated quote
In the given quote, the modern corporation and its management who control these corporations are referred to as ‘reductionist’. The article named “From The Union Hall: A Labor Critique Of The New Manufacturing And Accounting Regimes” implies that modern corporation and its management looks into different ways to reduce the number of workers working in its corporation or reduce the level of compensation which they gave to these workers so that the corporate profit can be maximised. Therefore, the modern corporation and its management are referred to as ‘reductionist’ for the stated phenomenon. So, this reference has been made in the negative sense in which modern corporations and their management found to be sacrificing their workers' livelihoods or standard of living for higher profit.

In other words, it has been implied that modern corporations have a ‘reductionist’ mindset where they use technology to reduce the role of the workers in their operation and their different type of job security, which reduces the labour cost. This led to a higher profit of the businesses but at the expense of labourers losing their jobs or significantly lowering workers' standard of living.

Different organisations' stakeholders have implied this reductionist mindset of modern corporations and their management in the research done in the stated article. In this article, three companies’ employees and Union officials have been interviewed to get the implication of modern corporations having a ‘reductionist’ mindset. Here, in reference to the reductionist mindset of the modern corporation, not only firing of the workers after the introduction of new technology has been referred but the reduction of different benefits which these workers used to get or supposedly get to have a certain standard of living.

In interviewing the employees and Union officials of Caterpillar, which is one of the three organisations researched upon in this stated article, it has been found that the organisation has not only weakened seniority provision, which sped up the layoff of the workers in the organisation, but the management has also reduced different benefits which the labourers used to get like heath benefit. Caterpillar also replaced the UAW negotiated job security clause with the new provision that gives job security to certain individuals specifically. However, when that individual with job security retires, the company might eliminate the job security for that job role under this new provision. Therefore, these findings from Caterpillar have implied the reductionist mindset of Caterpillar in which the organisation systematically reduced the number of workers and the benefits or compensation the workers used to get.

Also, the second organisation researched is A.E. Staley, and it has been found that this corporation and its management have also been shown a reductionist mindset. Under the findings of this organisation, it has been found A.E. Stanley has demanded unlimited subcontracting rights for itself, abolishing the health and safety provisions, ending seniority provision, eliminating the Union role in the grievance process and replacing of eight hours per day shift with 12 hours per day rotational shift. Therefore, this again implies the ‘reductionist’ mindset of A.E. Stanley, where it has reduced the job security of its workers and the quality of the environment in which its workers work.

The third organisation which has been researched upon is Bridgestone/Firestone. Under this organisation research, it has been found that Bridgestone/Firestone has also made similar demands as two other organisations. Some of these demands are lower restrictions for outside contracting, weakened seniority rights, minimum 3 miles per hour work pace standards, reduced health benefits and absentee policy (Arnold, 1999). All these demand shows Bridgestone/Firestone has the similar mindset of ‘reductionist’ in which it was systematically reducing the job security and standard of the environment in which workers will be working. Therefore, all these demands of these three organisations show the reductionist mindset of modern corporations.

The new manufacturing regimes are stated to be promoting quality improvement, cooperation, teamwork, participation, and employee empowerment. Berber et al., (2020) stated that teamwork and cooperation can lead to better efficiency from the operation of the company as resources could be less used by corporation and teamwork. Ptitsyna et al., (2019) stated that by introducing the new technology, the quality of output improves, leading to lesser wastage costs and making the business more competitive.

However, the quoted line has stated that all these are rhetoric which is further proved by the situation in the three discussed organisations. Also, it stated that a portion of the labour movement is actively challenging the rhetoric created by the new manufacturing regimes. They are not giving the same results as they are stated to be. This quote has also stated that conventional wisdom under new manufacturing regimes is neither neutral nor universally accepted. This is being stated as this quote has implied that the new manufacturing regime is stated to be empowering workers, but in reality, different management accounting under this new manufacturing regime legitimises the different steps taken to weaken the position of the workers in the organisation.

However, this quote has pointed out that different new management theories rather than empowering the management of the different corporations to implement stricter demands from its workers at lower compensation. For example, the article has stated ‘strategies of symbolic construction’’ theory legitimise management's demand for the worker to work harder and give more leading to management demanding workers worked for higher hours or work for lesser health benefit or wages. Another example is job reduction is stated as flexibility which justifies the corporation firing the increasing number of workers and further empowers managements and corporations rather than workers. Therefore, this quote has stated what is shown as new reforms under different management accounting practices to change workplace ideology may be damaging the value of the labours and giving more power in the hand of management and corporation.

Therefore, from this discussion, it can be seen that the management accounting theories may show some value in their literature, but the implementation of these reforms under these theories may not be given the same result as stated in the literature, which is what happened with different management accounting practices.

Arnold, P.J., 1999. From the union hall: a labor critique of the new manufacturing and accounting regimes. Critical Perspectives on Accounting, 10(4), pp.399-423.

Azudin, A. and Mansor, N., 2018. Management accounting practices of SMEs: The impact of organizational DNA, business potential and operational technology. Asia Pacific Management Review, 23(3), pp.222-226.

Berber, N., Slavi?, A. and Aleksi?, M., 2020. Relationship between perceived teamwork effectiveness and team performance in banking sector of Serbia. Sustainability, 12(20), p.8753.

Dillard, J.F., 1991. Accounting as a critical social science. Accounting, Auditing & Accountability Journal, 4(1), pp.0-0.

Hoddy, E.T., 2019. Critical realism in empirical research: employing techniques from grounded theory methodology. International Journal of Social Research Methodology, 22(1), pp.111-124.

Llewellyn, K., 2017. Jurisprudence: realism in theory and practice. Routledge.

Ptitsyna, V.S., Kulikova, M.S., Vasiliev, V.A. and Chernogorskiy, S.A., 2019, October. The introduction of information technology in business processes as a method of quality improvement. In IOP Conference Series: Materials Science and Engineering (Vol. 666, No. 1, p. 012059). IOP Publishing.

Steinmetz, G., 2019. Sociology and Sisyphus: postcolonialism, anti-positivism, and modernist narrative in Patterson’s oeuvre. Theory and Society, 48(6), pp.799-822.

Woodbury-Smith, K., 2021. On Emad Atiq’s Inclusive Anti-positivism. Journal of Ethics and Social Philosophy, 20(2).


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