Accounting disclosure and industrial relations: A review article

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British Accounting Review (1988) 20, 141-157 ACCOUNTING DISCLOSURE AND INDUSTRIAL RELATIONS: A REVIEW ARTICLE* J. H. AMERNIC University of Toronto 1. INTRODUCTION An area which has only recently begun to receive the sustained attention of accounting researchers is the impact (actual and potential) of accounting information on industrial relations and collective bargaining. Indeed, Craft (1984, p. 107) has referred to the undernourished intersection between accounting and industrial relations. The potential uses of accounting information in industrial relations and collective bargaining are many (including assisting in the estimation of ability to pay, developing dis- closure policies, contract costing, use of accounting data in productivity sharing programs, among others), as are the potential research questions which may be of interest to accounting scholars. Walton and McKersies description of collective bargaining suggests the richness of this phase of the industrial relations process as a focus for the study of accounting, and its potential strategic and tactical roles, when they write (1965, p. 3): First, the agenda in labor negotiations usually contains a mixture of conflictful and collaborative items. The need to defend ones self-interest and at the same time engage in joint problem solving vastly complicates the selection of bargaining strategies and tactics. Second, labor negotiations involve more than a transaction of substantive items. Attitudes, feelings, and indeed the tone of the relationship represent an extremely important dimension of labor negotiations. Several characteristics of labor nego- tiations heighten the attitudinal dimension: the issues themselves often involve human values, and how they are handled affects the overall relationship; the weapons chosen involve sanctions which can exert a strong influence on the tone of the relationship; negotiation of the agreement represents only the beginning of the transaction; and whether the terms of the agreement are fulfilled depends on the character of the relationship. Moreover, the relationship between the parties to labor negotiations is usually unique, continuing, and long term-the attitudinal dimension providing one mechanism by which the successive negotiations are linked together. Third, the negotiations of interest to us involve complex social units in which constituent members are very interested in what goes on at the bargaining table and *The Social Sciences and Humanities Research Council of Canada has provided support for this project through a leave fellowship. 0890-8939/88/020141+ 17 $03.00/O $3 1988 Academic Press Lnnited 142 J. H. AMEHNIC have wmc influence over the negotutors. This dimension to nrgotlation\, hke the others, makes its own demands upon the negotiator and complicates his bargammg job. The objective of this paper is to provide an overview of the accounting and industrial relations disclosure literature, and to point out research areas which may be fruitfully addressed by accounting researchers. The paper is set out as follows: the next section (Section 2) outlines the importance of accounting information in collective bargaining and industrial relations by describing three diverse situations in which accounting information played a prominent role. The third section deals with the various ideo- logical frameworks which underlie alternative approaches to industrial relations-it will be shown that different ideological frameworks suggest different roles for accounting information, and indeed different research questions (normative versus descriptive). The fourth section of the paper reviews the literature on disclosure from union, management, and public policy perspectives. 2. THE IMPORTANCE OF ACCOUNTING INFORMATION IN LABOUR RELATIONS In this section, three illustrations of the often pervasive importance of accounting information in industrial relations are offered. Although the illustrations are restricted to the profit-seeking sector, not-for-profit examples could be readily provided (for an example from the university sector, see Amernic, 1985). (a) Ford (UK) and the introduction of injlation accounting in collective bargaining To support its 1977 bargaining position, Ford Motor Company Limited in the United Kingdom (Ford UK) introduced a form of current cost accounting based upon the Morpeth committee recommendations (ED 18), about which the companys directors asserted more accurately reflect the trading results of the group in todays inflationary environment. The current cost accounting profits were 25.1 million pounds before taxes and 5.6 million after taxes, compared to 121.6 million and 59-1 million, respectively, in the historic cost accounts. The union organizations involved-the Ford NJNC and the Transport and General Workers Union (TGWU)-hired stockbrokers Phillips and Drew Ltd to provide an independent and expert opinion (Transport and General Workers Union, 1977, p. 6) on Ford UKs current cost accounts. The results were included in a TGWU publication entitled Ford Wage Claim, 1977 (TGWU, 1977), and made the following points: -the method of current cost accounting used by Ford UK seriously ACCOUNTING AND INDUSTRIAL RELATIONS 143 understates the real profits of the year, since it ignores the effects of inflation on the companys net liabilities. Phillips and Drew suggested that 67 million was a more meaningful indication of the results of the years operations . . . (TGWU, 1977, p. 6). -Fords method of inflation accounting was only one of many, none of which was generally accepted. -deferred taxes were virtually eliminated from the current cost accounts. -the level of capital investment was substantially less than the amount set aside for depreciation under the current cost system of inflation accounting . . . the implication would be that the company was failing to maintain its volume of fixed assets and other equipment. (TGWU, 1977, p. 7). The union then concluded (p. 7): If we take Fords exercise in inflation accounting seriously what those accounts seem to show is that Fords is failing its labour force and the UK community by not maintaining and expanding its productive capital, despite the great increase in profits that the restraint in pay increases have enabled Ford to make. This case is interesting and important not only because of the size of Ford UK and their use of current cost accounting in negotiations, but also because the union hired an outside expert to critique the current cost accounts, and made the entire result public. It shows that when accounting information becomes the focus of attention, What is accounted for can shape organizational participants views of what is important and that once implemented, the same accounting system can be used to serve even a different variety of ends as it is used by different actors in different ways (Burchell et al., 1980, pp. 5, 18). (b) Major league baseball Full-fledged labour relations has emerged over the past decade in various professional sports industries in North America. Major league baseball has been the most prominently in the public eye (players strikes in 1972, 1981 and 1985; an owners lock-out in 1976; etc.), but collective action has also been significant in football, basketball and hockey, as well (Tischler, 1986). In the summer of 1985, the Player Relations Committee representing the baseball club owners in their collective bargaining with the players representative (the Major League Baseball Players Association, MLBPA), hired Accounting Professor George Sorter to analyze the financial state- ments of the major league clubs and express an opinion . . . on whether these clubs, in the aggregate, were making or losing money on baseball operations. This issue was one of the bones of contention between the owners and the players in negotiations (Sorter, 1986, p. 126). In turn, the 144 J. H. AMEHNIC MLBPA hired Stanford University Professor of Economics, Roger Nell, to perform much the same function for them (Noll, 1985). After describing various controversial issues in baseball and sports accounting, such as initial-roster depreciation, deferred compensation, and related-party transactions, Sorter concluded (p. 133) everyone was unhappy with my findings. The owners couldnt understand why proper GAAP accounting doesnt serve every purpose and had to be adjusted to their circumstances. The players couldnt understand why and how there could be a loss when there was a $9 million excess of cash receipts over disbursements for the clubs as a whole. It is that excess which the players union insisted on calling income. . The fact that the nature-the substance--of accounting is so little understood, even by intelligent, interested parties (suggests) we have to do a better job explaining what we do and why we do it. In his report for the MLBPA, Professor No11 concluded that (pp. 5-6) @uncial statements regarding the operations of a team are essentially useless for determining its viability as an enterprise, unless substantial work is done to incorporate the consequences of tax treatments and ownership rela- tionships. (Emphasis in original.) Nolls report deals not only with general problems of measuring viability as an enterprise in sports, but also analyses individual club situations. An example follows (pp. 20-21): Atlanta . the Atlanta Braves are part of Ted Turners holdings that include the Turner Broadcasting System, and WTBS holds the television broadcasting rights to Braves games. For television alone, the Braves receive $1 Million, whereas the league-wide average is $2.686 Million. Obviously it is difficult to calculate the fair market value for Atlantas broadcasting rights. On the one hand, Atlanta is a relatively small city; however, the Braves are the only major league team in the Southeast, so their territory is bounded by such distant teams as Houston, St. Louis, Cincinnati, Pittsburgh and Baltimore. By contrast, Milwaukee, a city of similar size but with a highly limited broadcasting market (it is limited essentially to Wisconsin, being bounded by Minneapolis, Chicago and Detroit) receives $2.332 Million for local broadcasting including nothing for cable San Diego (a) constricted market owing to competition from the Dodgers and Angels, receives broadcasting revenues from local sources worth $2.171 Million. These examples suggest that the Braves are substantially underpaid by TBS for television rights . No11 comes to the following conclusion (pp. 43-44): The picture that emerges is certainly not of a sport in trouble . . . it takes either extravagant management or a poor team in a weak market to lose money. This case is important because it illustrates that collective bargaining may, at times, be strongly impacted by financial accounting; thus, the controversies in financial accounting become controversies in industrial relations. This is not to deny, of course, the pre-eminence of management accounting information in most collective bargaining situations-indeed, Cuthbert & Whitaker (1977, p. 377) assert that for both the shop steward ACCOUNTING AND INDUSTRIAL RELATIONS 145 and the line manager, the operating accounts have more significance than the historical accounts. As this and the Ford case suggest, however, both financial and management accounting are worthy of consideration in this area. (c) Massey-Ferguson Limited, and the shutdown of its Kilmarnock factory, Scotland Massey-Ferguson Limited (Massey, since renamed Varity Corporation) is a Canadian-owned multinational which dominated the world farm machinery market for decades. Although reported sales declined from $3.132 billion in 1980 to $1.288 billion in 1985, and the number of employees went from 41,690 to 18,405 over the same period (there were about 67,000 employees in 1978), Massey is still an important player on the international scene, and is still the worlds largest producer of agricultural tractors, and a world leader in diesel engines (1985 Annual Report, p. 2). The company has undergone major changes in the past several years in response to a number of significant shocks induced both by the collapse of various farm markets and crisis management (Cook, 1981; Henderson et al., 1984: various Annual Reports). As part of its world-wide retrenchment in the late 1970s, (a process which was still underway in the mid 198Os), Massey shut down its combine harvester plant at Kilmarnock, Scotland, in 1979. Our interest centers on the union reaction to a company-prepared feasibility study, upon which Massey ostensibly made its decision to close the Kilmarnock plant. The Scottish Trades Union Congress (TUC) Trade Union Research Unit (Scotland)-the TURU(S)-p p d re are a critique of the feasibility study. The TURU(S) critique focused on apparent significant technical short- comings in the company study, and came to the conclusion that: The feasibility study, the research team argued, was a post-hoc justification of a decision taken for financial (and chiefly cosmetic) reasons. It was primarily a propa- ganda exercise to undermine labour and government rcsistence. When the research team examined it closely, we found it to be a remarkably inept document qua evaluation of the options. Its method of comparing the plants was consistently and heavily weighted against Kilmarnock; it failed to provide the kind of projections and time-discounted calculations that would be considered necessary for such a study by any accountant or economist; and the restriction ofthe options it considered also seems invalid and inequitable for Kilmarnocks case. These, and numerous other criticisms, were put in detail to the company, but the companys replies never made any serious attempt to confront them, and at the end, in announcing closure (top management) merely asserted that management remained convinced by the original study. The union critique (TURU(S), 1979) was obtained and reviewed by the present author, and appears to be a not unreasonable document (the companys feasibility study itself was unavailable from the company). 146 J. H. AMERNIC Why, then, was Massey driven to prepare what appeared to be a remark- ably inept document for union and government consumption at Kil- marnock? The answer perhaps lies in the fact that Massey was still going to do business in the UK (11.4% of their worldwide 1979 sales were in the UK, and they still had plants at Coventry and other locations), and thus a shutdown rationalized on the basis of either (a) a cosmetic need (i.e., to fulfill public assertions that costs would be controlled and the company downsized), or (b) the rational needs of Massey based upon the incremental impact of the shutdown on Massey corporate, would not have been easy to sell. A quantitative analysis based upon Masseys multinational corporate objectives might have aroused both the UK and Scottish poli- ticians against multinational capital; some sort of quantitative analysis was apparently believed to be needed, however. The inept document that resulted was perhaps the result of either the impossibility of proving Kilmarnock to be unprofitable on its own account, or an attempt at inten- tional vagueness. These three examples-coming from a variety of circumstances-serve to illustrate the diverse roles that accounting information may play in industrial relations/collective bargaining, and thus the importance of applying systematic research to this undernourished intersection, in order to enhance our understanding. Each of these examples indicated the central role of accounting information disclosure, and its potential and actual impact on collective bargaining. An important preliminary to the research enterprise in this area-indeed in any area-is that the researcher must have a weltanschauung (or worldview) of the phenomenon in question. This is especially important in accounting disclosure research in collective bargaining, since different worldviews can severely delimit what is con- sidered to be problematic. Thus, we now briefly review three alternative ways of perceiving industrial relations, each having significantly different implications for accounting information disclosure research. 3. IDEOLOGICAL FRAMEWORKS AND INDUSTRIAL RELATIONS It is not unreasonable to accept the notion that the worldview or frame of reference by means of which we engage a phenomenon largely deter- mines how we deal with that phenomenon. Thus, we each have our own filters through which we interpret and react to the world. Although scholars in industrial relations are by no means unified in how they have categorized various frameworks, many of them have identified three separate political and ideological approaches to industrial relations (Kirk- bride, 1985, p. 267), each leading to somewhat different views of problems, goals and functions for actors in industrial relations, and thus of roles of ACCOUNTING AND INDUSTRIAL RELATIONS 147 accounting information. These three families of approaches are: the unitary perspective; the pluralist perspective; and the radical perspective. (a) The unitary perspective Fox (1966) describes a unitary system as one which has one source of authority and one focus of loyalty, which is why it suggests the team analogy. He goes on in a later work to define the unitary view as one in which (Fox, 1973, p. 186) (the organizational logic of the enterprise is seen as pointing towards a unified authority and loyalty structure with managerial prerogative being legitimised by all members of the organization. This accords with the emphasis that is placed on asserting common objectives and the common values which unite and bind together all participants. (b) The pluralist perspective Fox (1966) pointed out that the unitary perspective denied reality since it viewed conflict in industrial relations as an aberration. He then went on to suggest that a pluralist approach-in which both conflict and rival power groups co-exist within a framework of fundamental shared values-as a more realistic view. As Kirkbride (1985, p. 274) characterizes it, pluralism refers to a system where decision making is a result of conflict and compromise between a plurality of different interest groups whereas the unitary frame of reference views conflict as illegitimate or a temporary remedial phenomenon, the pluralist approach places conflict at the very heart of industrial relations. Conflict is, therefore, an inevitable and essential feature of industrial organization. However, while conflict is assumed to be a natural part of industrial relations, the competing groups are also assumed to subscribe to common beliefs about the desirability of maintaining the industrial relations system: The conflict between the interest groups only takes place, however, within certain limits. It should not be allowed to threaten the very existence of the system, so that, despite their conflicting objectives, the parties must have certain common goals while actors in the industrial relations system are seen as having different ideologies, they must possess a certain consensual ideology in relation to the contmuous exis- tence of the present industrial relations system (Kirkbride, 1985, pp. 274-275). In such a pluralistic system, negotiations may be occasionally protracted and very difficult, since even though the groups are mutually dependent (and) may be said to have a common interest in the survival of the whole of which they are parts . this is essentially a remote long-term consideration which enters little into day-to-day conduct of the organisation and cannot provide the harmony ofoperational objectives and methods for which managers naturally yearn (Fox, 1966, p. 4). 148 (c) The radical perspective J. H. AMERNIC As Hyman (1975, p. 6) notes, There is no and simple clear-cut Marxist theory of industrial relations ; rather, there are families of perspectives which may be termed Marxist, or radical, in the sense they are rooted in a perspective which asserts capitalist societies are class-divided. The bulk of the population own no substantial property, and in order to earn a living must sell their own capacity to work. The wage or salary they receive is far less than the value of the wealth they collectively produce. The surplus is taken by a small minority who own the means of production . Between these two classes there exists a radical conflict of interests, which underlies everything that occurs in industrial relations (Hyman, 1975, pp. 22, 23). Kirkbride (1985, p. 277) suggests that, from a radical perspective viewpoint, the pluralist ideology, which seeks to portray the dominant class as just another interest group, becomes an ideological tool of sub- ordination and legitimation used semi-purposively to condition the sub- ordinate class into accepting the status quo. These three different perspectives, or frames of reference of industrial relations, provide alternative fundamental means of dealing not only with industrial relations, but also with the roles of accounting information in industrial relations/collective bargaining, and research therein. For example, Ogden & Bougen (1985) criticize recent accounting liter- ature on corporate disclosure to unions as being embedded in either the unitary or pluralist perspectives, and not being sensitive to more radical views: Central to our argument is the recognition that different con- ceptualisations of the management-labour relationship can generate different conclusions with respect to the potentialities for the use of accounting information in industrial relations (p. 211). We now turn to a consideration of the disclosure issue--it will be seen that the potential and actual roles of accounting and accountants are much more a function of the labour relations context, and accordingly much more complex, than the following normative suggestion by Goggans would imply: The independent accountant can interpret and communicate the position of both management and labor. His ability to comprehend basic accounting principles; his ability to apply his basic knowledge and experience .; and his objectivity, suggest that the independent accountant is uniquely equipped to make a fruitful contribution to wage negotiations (Goggans, 1964, p. 630). 4. EMPLOYER DISCLOSURE OF ACCOUNTING INFORMATION The modern literature in accounting is disclosure oriented. The auth- oritative bodies in both the US and elsewhere have issued documents ACCOUNTING AND INDUSTRIAL RELATIONS 149 whose essential message is that financial accounting should be user- oriented, and the classes of legitimate users identified in these documents include employees and labour unions. The general theme of this literature is that information desired by legitimate user groups should be disclosed, as long as the benefits exceed the costs. The problem is identifying and measuring benefits and costs, and deciding just whose benefits and costs should be included. If a narrow, management/owner orientation is adopted, then in effect, we are adopting a unitary perspective; however, if labours costs and benefits are considered, then we would have moved to a more pluralistic perspective. The disclosure issue--insofar as it affects collective bargaining and indus- trial relations-has several dimensions: (a) a union perspective. What should the unions policy on disclosure demand be? (b) a managerial dimension. What is the optimum disclosure policy from managements point of view? Should a disclosure policy be adopted which attempts to maximize shareholder wealth (a unitary perspective, assuming congruence between management and share- holder interests), or which has broader goals? Should disclosure be restricted to the union mainly for collective bargaining purposes, or should the employer also communicate directly with his employees? (c) a p u ic o icy dimension (Kleiner, 1984). Are the current set of bl -p 1 laws, NLRB administrative procedures, etc., optimum? As an example of the type of issue that might be considered under this dimension, one might refer to the recent experience in Ontario, Canada, in which the Provincial government imposed wage con- trols on the hospital sector, which was also subject to no strike/ lockout legislation with compulsory arbitration. The law setting out wage controls required arbitrators to consider the cost of union demands in connection with the desired control ceilings-costing information as provided by both sides was to be considered, except that where one side did not provide castings, the arbitrator could focus substantially on the data that was provided. Unfortunately, the legislation made no provision for union access to employer information, so that the union was at a significant disadvantage in operating under the combined weight of the wage control and compulsory arbitration legislation. We now turn to a consideration of each of these dimensions. (a) The unionsposition Gospel (1978) has identified three broad approaches that a union can adopt, with respect to disclosure of information. 150 J. H. AMERNIC (i) The ostrich approach, which is characterized by a lack of interest in company information, or cynicism about its value, or even strong hostility towards securing and discussing company infor- mation (Gospel, 1978, p. 20). This approach may be the result of the unions being conditioned to not receiving information they have requested in the past, an intentional avoidance of becoming trapped in ability to pay arguments, or because of ideological grounds (that is, according to Gospel (1978, p. 21), . . the pursuit of company information would . . . be accepting managerial rationality and endorsing the capitalist system). (ii) The shopp mg list approach, in which the union demands that the company open the books, or at the very least supply the union with data it feels it needs, and (iii) The decision-orientated approach (Cooper & Essex, 1977), which is rooted in the decision-relevance literature in accounting (Sterling, 1972). Gospel (1978, p. 22), writing from an industrial relations perspective, concludes that The decision-orientated approach is the most useful because it seeks to locate information in a particular union and industrial relations context and stresses that information must be sought which is relevant to the decisions unions need to take to meet their objectives. There are, however, considerable problems with adopting such a decision-oriented approach, among them the lack of a single global set of objectives for any given union, from which one might deduce the unions information demand, problems associated with making operational a decision-oriented approach based upon the maximization of subjective expected utility (Cooper & Essex, 1977), and the risk for the union that any increased disclosure might lead to the possibility that the acquisition and use of company information may lead to union incorporation in the managerial control system (Gospel, 1978, p. 25). Ogden & Bougen (1985) make this point even more forcefully when they argue the following (p. 222) : The extent to which accounting information entails an ideological bias in favour of management raises questions for unions as to its potential utility. Indeed, it poses a dilemma for unions. On the one hand securing systematic disclosure of accounting information has advantages for unions. It would reduce the comparative advantage management enjoys in negotiation by being the sole possessor of information. The non-availability to unions of information possessed by management has a significance for unions irrespective of its content, since unions will feel that man- agements possession of information constitutes a potential bargaining advantage insofar as it enables them to resort to unverifiable justifications for their bargaining position. Possession of accounting information would not only enable unions to verify managements arguments, but also through their own independent audit to question managements interpretation of the organizations performance, and ACCOUNTING AND INDUSTRIAL RELATIONS 151 identify, where possible, a biased structuring of information towards decision out- comes favoured by management. On the other hand, however, by using accounting information disclosed by management, unions would become exposed to the latent ideological conditioning such information entails. In conducting negotiations on the basis of accounting information, unions, whatever tactical advantage they obtained from it, would enter into a discourse that was exclusively managerial in its rationale. To counter this and to maintain the integrity and distinctiveness of their own demands and objectives, unions would need to generate and develop alternative criteria to those used by management for assessing organizational performance. Although much work needs to be done in the area of theorizing about the unions demand for information, there is a corresponding scarcity of empirical work on the apparent information needs of union decision makers, the usefulness of available disclosures, etc. Adopting a case-study perspective, Jackson-Cox, Thirkell & McQueeney (1984) suggested that although management information appeared to be of limited use in annual wage bargaining, (f)ar more important was the process of disclosure as a mechanism for the communication and development of intelligence; for management to explain the business situation; and for trade union representatives to identify the source of management decisions and the constraints upon them (p. 271). Jackson-Cox et al. (1984) went on to offer some suggestions as to how legislation governing disclosure might be changed in order to enhance its use as a catalyst for . . . disclosure (p. 272). In another study, Sherer, Southworth & Turley (1981) adopted a less grounded approach. Their results seem to indicate that key decision makers in the Amalgamated Textile Workers Union in the UKs Lancashire cotton industry (an industry in severe decline) found accounting reports to be too aggregated and, in general, considered less important than other types of information (p. 10). (b) Managementsposition The literature focusing on management disclosure to unions and employees in general has a rather long history, and is written from a mainly unitary perspective, although there are exceptions (for example, Foley & Maunders, 1977). In this paper we are concerned with the literature only insofar as it deals with disclosure to unions; the literature dealing with managerial decision-making with respect togeneral employee disclosures outside of the collective bargaining relationship-although germane to the broad scope of industrial relations-is ignored. Managements position with respect to disclosure to unions may be conceptualized as one of the components of an industrial relations strategic choice model (Kochan, McKersie and Cappelli, 1984). In an important 152 J. H. AMERNIC paper, Craft (1981, p. 99) points out that managements strategy with respect to information disclosure may be viewed in terms of discretion, need and choice. The discretion management enjoys regarding information disclosure is related to its bargaining power (i.e., its ability to reach an agreement with the union on managements own terms). Managements need to disclose information depends upon its independence in collective bargaining from other firms in its industry (i.e., pattern follower versus leader, etc.). Craft then goes on to suggest that, while discretion and need may outline the boundaries of the disclosure decision, managements final disclosure choice depends upon factors such as the nature of the collective bargaining relationship (adversarial; co-operative; etc.); the political situation of the union; and the sophistication of the union leaders and membership regard- ing financial and accounting information. Although written from a pri- marily unitary point of view (Ogden & Bougen, 1985), and criticized for being incomplete, for being biased against increased disclosure, and ignoring disclosures long-term effects, Crafts (1981) paper represents an important, if partial, analytical contribution to the literature, and extends the more idealistic work of other writers, such as Palmer (1977). Foley & Maunders (1977) and Maunders & Foley (1984) point out that information disclosure by management to the union may impact on the various subprocesses of collective bargaining; for example, any evaluation of information has to take into account predictions of both the immediate and longer term effects. In the context of a typical collective bargaining situation, it is possible to envisage these effects in terms of the immediate distribu- tive bargaining process and longer term potential influences on integrative bar- gaining and the whole stream of future negotiations through attitudinal structuring. (Maunders & Foley, 1984, p. 101). They further point out that it is not only the fact of disclosure which is important, but also the credibility of the disclosed information; accordingly, they suggest (Maunders & Foley, 1984, p. 105) that one way of increasing credibility is for management to ensure that potentially relevant infor- mation is disclosed on a systematic basis. The disclosure, however, must not be directly to the employees over the heads of the union, since even though such a tactic might give better distributive bargaining results on occasion from a managerial point of view it may also have longer lasting adverse attitudinal structuring effects as far as negotiations are concerned (Maunders & Foley, 1984, p. 105). Such end run bargaining, as Keller & Phelan (1985, p. 317) point out, may be used by an employer to secure an agreement where it might not have been able to do so at the bargaining table. As a result, many jurisdictions have curtailed the employers right to make such com- ACCOUNTING AND INDUSTRIAL RELATIONS 153 munications directly to its employees, on the grounds that it could impair the institution of collective bargaining. For example, in Pennsylvania the Public Employee Relations Act is designed in part to insulate employees from direct communications from their employer (Keller & Phelan, 1985, p. 318). (c) Public-policy dimension Kleiner (1984) b o serves that there is a lack of research on both the role of the accountant and accounting information on the outcomes of bargaining or with impact of relevant legislation on the disclosure of financial infor- mation and its consequences (p. 253). Effectiveness of legislation in the UK (Dickens, 1980), and Canada and the US and elsewhere (Jain, 1981; Bellace & Gospel, 1983) . IS mixed, leading commentators such as Kleiner to conclude that (p. 254): little effort has been made to estimate the benefits or costs to firms or unions of obtaining these data or their usefulness. As a result this has left a large number of unanswered questions for accounting and industrial relations researchers to address. Others have a similar view about the necessity for sustained research in this area of accounting and public policy, since-as Bellace & Gospel (1983, pp. 72, 73) write: In the United States and the United Kingdom the main problem from the union viewpoint is the weakness of the law itself. In both countries the glaring defect is the limited scope of the disclosure obligation. In the United Kingdom the law is unsupported by a legal obligation to bargain and yet the disclosure obligation arises only when there is bargaining. In the United States the scope of bargaining is itself confined by law. In both countries the law rests on an adversarial model of industrial relations. Within the legal framework this has promoted, employers are quick to defend managerial prerogatives and reluctant to disclose information freely. Unions therefore suspect that whatever information is disclosed beyond the traditional or legal minimum is disclosed only because it tends to support the employers position. Indeed it might be argued that, paradoxically, suspicion may increase rather than decrease as a result of the legislation . . The national systems surveyed in this article all demonstrate that the law on disclosure of information is restricted in what it can do to move the process beyond the limits of the traditional attitudes of both parties and the organisational capacities of the unions. Certainly broader legislation can have the merit of prodding reluctant employers to disclose information and may act as a catalyst on the union side. But legal rights alone are of little use in the absence of favourable attitudes and institutions. Referring specifically to the United States, Kleiner (1984) suggests that empirical research is needed in the following areas: -the impact of the unions right to information on good faith bar- gaining violations of the National Labor Relations Act (NLRA). 154 J. H. AMERNIC -cost-benefit of legislated information disclosures to the employer. and the union. -the impact of greater information on the efficiency and effectiveness of collective bargaining. -the possible impact of greater disclosure to unions on the union/ nonunion wage differential. -potential conflicts between disclosure requirements under the NLRA and other statutes and regulations (for example, the SEC). The area of disclosure of accounting information to unions appears to be wide-open as far as the need for systematic research is concerned, from not only demand (union) and supply (management) perspectives, but from the point of view of public policy as well. The ideological viewpoint adopted by researchers in this area would serve to delimit their perspective and the issues they consider to be legitimate research questions; thus, such research-whether mainly theoretical or empirical in orientation (and indeed, whether normative or positive in intent), would appear to need to be based exphcitly upon an ideology or framework, with biases laid open, to be of significant value. Such an approach is consistent with recent entreaties in the literature to be explicitly normative, descriptive, and critical (Cooper & Sherer, 1984). The issue of disclosure is the broadest, and potentially most important in the field of accounting/industrial relations which requires the attention of accounting scholars. Although disclosure was the only area reviewed in this paper, it is certainly not the only area in the undernourished intersection between accounting and industrial relations in need of sus- tained examination. Contract costing, in terms of both its technical nor- mative (Granof, 1973; Herman & Kuhn, 1981; Skinner & Herman, 1981; Holoviak, 1984) and behavioral (Amernic, 1985) aspects; ability to pay (Zulauf, 1965; Foley & Maunders, 1977); cost/benefit analyses of strikes and lockouts, from both a firm (Tang &Jensen, 1981; Gandz, DuMont & Lord, 1980; Lau & Nelson, 1981) and public policy (Hameed, 1976) perspective; the theoretical and experimental role of information in bar- gaining (Hessel, 1984; Gordon, Schmitt & Schneider, 1984); the impact of accounting information on the outcome of collective bargaining (Hor- witz & Shabahang, 1971); and of collective bargaining on accounting decisions (Liberty & Zimmerman, 1985); and others, are all relevant research areas. NOTES 1. Conventional literature refers to the union, as if all unions are identical; as Owen and Lloyd (1985, p. 338) note, however, _ . the objectives of a traditional craft union may well differ considerably from those of a managerial white collar union, the former ACCOUNTING AND INDUSTRIAL RELATIONS 155 being largely concerned with the protection of long standing status and differentials, whilst the latter may actively seek changes giving them greater participation in decision making. In addition, as a reviewer of this paper has observed, differences between types of union negotiators (i.e., full-time official versus shop steward) may also be important. 2. The employee disclosure literature is voluminous; Lewis, Parker and SutclXe provide a useful historical perspective (1984a) and also a theoretical framework (1984b); while Schreuder (1981) and Purdy (1981) provide some empirical evidence on such disclosure in Holland and the UK, respectively. 3. 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