competing ideologies in the accounting and industrial relations environment

British Accounting Review (2000) 32, 43–75

doi:10.1006/bare.1999.0118, available online at http://www.idealibrary.com on

COMPETING IDEOLOGIES IN THE ACCOUNTINGAND INDUSTRIAL RELATIONS ENVIRONMENT

JUDY A. BROWNVictoria University of Wellington

Despite differences in approaches towards ‘accounting and industrial relations’, therehave been few attempts to record those differences systematically or to locate themwithin a conceptual framework. This paper documents the diversity among actorsin the accounting and industrial relations environment, situates it theoretically andconsiders its implications for policy and practice. ‘Differences’ are shown to havepersisted across time and to transcend national boundaries. Building on previousstudies, a framework is presented to explain observed differences in terms ofdifferences in underlying ideologies, based on varying sets of assumptions aboutsociety and organizations. Unitarist, pluralist and radical assumptions are seen to leadto different conceptualizations of the management–labour relationship and differentsets of ‘problems’ and conclusions concerning the ends served by the disclosure ofaccounting information to employees and labour representatives. It is also arguedthat the ideologies identified incorporate competing knowledge interests and involvedistinct modes of rationality.

2000 Academic Press

INTRODUCTION

Over the years there has been a diversity of attitudes and approaches tothe subject of financial disclosure to employees and labour representatives.There has been support for and resistance to the idea of ‘accounting tothe workforce’ from managers, employees, unions, accounting researchersand practitioners, Government legislators and political parties. However,the basis of their respective concerns is quite different. The parties oftentalk past each other; worse, they do not seem to realize that they do notunderstand each other and rarely appreciate the full extent of the debate.

I would like to thank two anonymous reviewers for their helpful comments. An earlier version of thispaper was presented at the 1999 Annual Congress of the European Accounting Association.

Please address all correspondence to: Judy A. Brown, Senior Lecturer, School of Accounting andCommercial Law, Faculty of Commerce and Administration, Victoria University of Wellington, POBox 600, Wellington, New Zealand.

Received 22 September 1998; revised 6 September 1999; accepted 29 September 1999.

0890–8389/00/010043+33 $35.00/0 2000 Academic Press

44 J.A. BROWN

To date, this diversity has largely gone unnoticed or at least unresearched.Academics have assumed a perspective (typically that of manage-ment—Ogden & Bougen, 1985) and ignored other perspectives. Craft(1981), for example, admits ‘differences’ in terms of positing an adversarialrelationship between labour and capital but focuses almost exclusively onhow this affects the managerial interest in disclosure. Differences havealso been glossed over or concealed through very general talk about ‘moreeffective communication’ and ‘better industrial relations’. Some researchersimply that attitudes are characterized by a high degree of consensus, withemphasis on a ‘shared values ideology’ (Amernic & Craig, 1992). Others,such as Marsh & Rosewell (1976) and Dickens (1980), have made passingreferences to ‘differences’ but have not attempted to document that diversitysystematically, to situate it theoretically or to consider its implications forpolicy and practice.

This paper proposes a framework to describe, compare and promotethe understanding of different approaches to accounting and industrialrelations. It builds on Ogden & Bougen’s (1985, p. 211) suggestion that‘different conceptualizations of the management–labour relationship cangenerate different conclusions with respect to the potentialities for theuse of accounting information in industrial relations’ and on the work ofAmernic (1988). Using Fox’s (1973, 1985a) typology of industrial relationsapproaches, a framework is presented to explain observed disparity in termsof differences in underlying ideologies, based on varying sets of assump-tions (unitarist, pluralist and radical) about society and organizations withinit. These assumptions lead to different conceptualizations of the manage-ment–labour relationship and different sets of ‘problems’ and conclusionsconcerning the ends served by the disclosure of accounting informationto employees and labour representatives. The ideologies identified are alsoargued to incorporate competing knowledge interests (Habermas, 1972;Apel, 1979, 1980) and to involve distinct modes of rationality.

IDEOLOGY, PERCEPTION AND BEHAVIOUR

Accounting is a social institution created, shaped and operated by people.Hallowell (1955, pp. 83, 84) reminds us that in seeking to understandactors’ responses and attitudes in any area of social activity, we must bemindful that they arise from their perception of the situation, not our own.Individuals and groups (not just academics) are interpreters of the socialworld; they operate in the context of their own experiences, concepts, needsand purposes and these may diverge significantly.

Adherents of Weltanschauung have long recognized that people withdifferent frames of reference see the same things in quite different terms. Theintuition behind the concept of worldview, or ‘ideology’ in the descriptivesense of the term1, is that individuals and groups;

IDEOLOGIES IN ACCOUNTING AND INDUSTRIAL RELATIONS 45

‘don’t just ‘have’ randomly collected bundles of beliefs, attitudes, life-goals,forms of artistic activity, etc. The bundles generally have some coherency . . . theelements in the bundle are complexly related to each other, they all somehow‘fit’, and the whole bundle has a characteristic structure. . .’ (Geuss, 1981,p. 10).

Worldviews provide ‘a more or less coherent. . . way of thinking about theworld’ (Kearney, 1984, p. 41). Underlying beliefs and values are ‘widelyshared among the agents in the group’, ‘systematically interconnected’ and‘central to the agents’ conceptual scheme’ in the sense that they will noteasily give them up (Geuss, 1981, p. 10). They are highly significant notonly to an individual’s or group’s self-concept and decision-making but alsoto the basis of social relations, reactions to social change and the processesof knowledge creation (Kinloch, 1981). They may be viewed as a distillationof people’s social backgrounds, education, history, interests and other lifeexperiences. Their origins can often be traced to the ‘outlook of a group orclass, defined as such in opposition to others’ (Kearney, 1984, p. 2).

Worldviews need not be held in the form of consciously articulatedstructures; ideologies may be explicit or implicit (Plamenatz, 1971; Geuss,1981). They may simply express themselves tacitly in behaviour andattitude. Alternatively, people may not only recognize the beliefs and valuesunderpinning their behaviour but may actively cultivate them. And, justas holding beliefs and values in common allows members of a communityto understand one another, the holding of disparate worldviews createsproblems in communication. Stated positions, coherent when judged ontheir own terms, often appear irrational to outsiders.

The relationship between worldviews and social reality has been thesubject of a great deal of philosophical debate.2 Mechanistic versions ofmaterialism hold that social reality determines ideas; idealists hold thatideas are the determinants of social structure. The position taken here isthat ideologies and social reality are inextricably intertwined; that realityand thought shape each other. The beliefs and values individuals holdinfluence the way they lead their lives. Individual action then collectivelyhelps to create the environment people perceive and respond to. Changes inthe dominant ideas in society help promote changes in the social structurewhich, in turn, help to foster new ideas that sustain those structures.

Recognition of the dialectic nature of the relationship between worldviewand reality alerts us to its political potential. Critical theorists warn thatideologies are often grounded in interests ‘of which they may not speak withease and freedom’ (Gouldner, 1976, p. 214). Worldviews may advance thesocial position of certain groups. People may foster ideas they do not believefor the purposes of convincing others. The assumption in critical theory isthat ability to promote a particular ideology increases in accordance withthe distribution of wealth and power in society. The ‘interested’ nature ofworldviews may manifest itself in ‘performative contradictions’ (Eagleton,1991) between what actors say and do.

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UNITARIST, PLURALIST AND RADICAL PERSPECTIVES OFACCOUNTING AND INDUSTRIAL RELATIONS

This section explores the ways in which people in the UK, USA, Australiaand New Zealand have interpreted ‘accounting and industrial relations’.It draws on ideology to make sense of observed differences in reportingpractices and attitudes towards the disclosure of financial informationto labour. However, contrary to more traditional comparative work (butconsistent with the view of ideology as class-based), it emphasizes intra-national divergences and international convergences in the thought andpractice of players. It also highlights the longstanding nature of thesedifferences. Building on Fox (1973, 1985a) and Ogden & Bougen (1985),three categories—unitarist, pluralist and radical—are used to describe,analyse and compare approaches to accounting and industrial relations.The three frames of reference are best viewed dialectically as part of a‘self-defining whole’ (Morgan, 1983, p. 402); each offering a competingperspective on the same subject area. Pluralism involves a rejection ofunitarist perspectives while radical perspectives, in turn, provide a critiqueof pluralist ideologies.

Unitarist perspectives

Management-espoused rationales for the disclosure of accounting informa-tion to employees are dominated by a unitarist frame of reference. Unitaristideology is based upon a notion of fully shared interests. The enterpriseis viewed as a harmonious system in which participants work towards theachievement of common goals. Ideally, it should possess the unity and senseof direction found in a well-integrated team. Managers, as the team cap-tains, guide the firm towards the attainment of profitability and efficiencygoals which serve the rational purpose of all. Rival sources of authority andcontrol, such as unions, are viewed with suspicion. The belief in commonobjectives and positive-sum relationships leads to a denial of organizationalconflict, with adversarial attitudes being attributed to misunderstanding,outdated ‘us and them’ attitudes, or the work of ‘agitators’ (Fox, 1973,1985a).3

Within this perspective, communication is viewed as a means of improvingwork relations ‘by reducing conflict, overcoming suspicion and promotinggreater harmony in the workplace’ (Smith, 1985, p. 1). The expectation isthat the provision of financial information will promote understandingof, and identification with, the disclosing company and thereby havea favourable impact on enterprise productivity and efficiency. Industrialrelations may thus be conducted in a more rational and harmonious way.The approach is utilitarian, with no explicit recognition that employees have‘information rights’. The presumption is that management should controlthe flow of information to enhance the likelihood of understanding and


identification. Accordingly, the strong preference is for disclosure to bepurely voluntary—a matter of managerial prerogative.

Management initiatives in this area are not new.4 In the UK andUSA, the practice of employee reporting has been traced back to the latenineteenth century/early twentieth century (Hussey, 1981; Lewis, Parker &Sutcliffe, 1984; Bougen, 1988). Most of this early development related tothe operation of profit-sharing schemes and the emergence of unions.Organizations such as the Liberty and Property Defence League andAnti-Socialist Union encouraged profit-sharing as a means of ‘reducinglabour problems’ (Burritt, Dennison, Gay, Heilman & Kendall, 1918) andpromoting ‘a sense of common interests and active co-operation at theworkplace’ (Fox, 1985b, p. 194). These themes are evident in professionaljournals of that period.5 House journals were also promoted as a way ofoffsetting ‘the lost healthy intimacy of ‘‘shirt sleeve’’ days of workman andboss’ and as ‘a panacea to sweep away disloyalty, unrest, inefficiency andstrikes’ (Lewis et al., 1984, p. 230).

During the 1940s and 1950s there was renewed interest with theestablishment of consultative committees on productivity and the rise of thehuman relations school of social psychology (Hussey, 1981). The BritishInstitute of Management (BIM, 1957, p. vii) identified financial disclosureas one of the techniques available ‘to bring about the active co-operationof the employee’. Burchell, Clubb & Hopwood (1981, pp. 96, 97) reportthat readers of UK management journals were greeted by headlines suchas ‘Workers had all the facts—up went efficiency’. In the USA, employerswere advised that employee reports could reach ‘to the very heart of someof the most serious labor problems’ (Barloon, 1941, p. 124) and lead to‘fewer strikes and other evidences of dislocations in the relations betweenmanagement and employees’ (Powlison, 1947, p. 145). In the face of‘growing frictions’, reports were also viewed as part of a broader campaign‘to inculcate right ideas with respect to business’ (Walker, 1948, p. 269,emphasis in original) and ‘to counterpropagandize employees with respectto the propriety of private enterprise’ (ibid., p. 272).

During the 1970s and early 1980s employer organizations in the UK,Australia and New Zealand promoted disclosure as a central component of‘economic education’ and ‘employee involvement’ programmes (Confeder-ation of British Industry, 1975, 1976, 1977; UK Industrial Society, 1976;Enterprise Australia, 1978; NZ Chambers of Commerce, 1979, 1980; NZEmployers’ Federation, 1980). The UKIS (1976, p. 1) emphasized the linkbetween financial information and company identification, claiming that it‘helps people to get more involved in their work’ and ‘to understand betterthe problems facing the company’. The NZCOC (1980) described its workas part of a programme ‘designed to improve public understanding of busi-ness and to promote support for the competitive market concept’. Employeereports were also seen as a ‘useful response to growing union pressure forfinancial information’ (Parker, 1976, p. 6). Employers were encouraged to

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produce reports as a ‘concession to the workers’ and to create the impressionof a ‘progressive’ management style (Hilton, 1978). Managers were warnedthat if they did not take the initiative ‘they may eventually be confrontedwith externally imposed statutory provisions which could seriously hin-der the development and viability of private enterprise’ (Confederation ofAustralian Industry cited in Craig & Hussey, 1982, p. 7).

When surveyed on their reasons for producing reports during theemployee reporting boom of the 1970s and 1980s, individual managers alsoemphasized the benefits of shared purposes and the potential for encouragingmore ‘responsible’ and ‘productive’ attitudes. Managers surveyed by Marsh& Hussey (1979) in the UK, by Craig & Hussey (1980) in Australia andSmith (1985) in New Zealand reported that objectives such as ‘involvingemployees more in the affairs of the company’ and ‘encouraging a sense ofresponsibility’ were prominent in their decisions to issue employee reports.The following were typical of the responses in more open-ended surveys—to‘increase awareness among employees that they are part of a large group’,‘create a sense of togetherness’, ‘maintain the good family atmosphere’ and‘hope people will work better’ (Reeves, 1980, p. 15).

Unitarist ideology was also evident in the advice given to managers on thepreparation of reports;

‘Another area which is often neglected is the production of wealth. Schoolsand the mass media generally fail to educate on this important subject. Thetheme of an employee report on these lines could be ‘A common purpose’ or‘The social purpose of industry’ or ‘What we have achieved together’ ’ (Martin,1977, p. 341).

For the NZCOC (1979, 1980), the ‘Ten Pillars of Economic Wisdom’of the American Economic Foundation (a simplified version of the mainprinciples of neo-classical economics)6 summed up ‘the messages whichneed to be conveyed’. The importance of creating an ‘us feeling’ wasstressed throughout the publications.

In practice, the managers made good students. The reports that werepublished were replete with ‘team imagery’. The language was very inclusive,with some firms using value added reports and diagrams to emphasizeco-operation and teamwork in the creation of wealth;

‘ ‘It’s a Team Effort’ was the slogan for 1982, and it remains equally true for1983, as for all time. May the best team win—and let us make sure that weare that team’ (Unilever NZ, 1982 Employee Report).

The positive-sum nature of policies of capital accumulation was alsoemphasized. The information offered little, if any, challenge to the authorityof management. Unions rarely got a mention and there were few indicationsof any industrial conflict.

When the issue of disclosure resurfaced in New Zealand in the late 1980sin the context of a Labour Government sponsored inquiry into industrialdemocracy, the NZEF (1989) stressed the importance of communication


in introducing ‘more effective co-operation and consultation’ with theobject of improving ‘efficiency, productivity, profits and the quality oflife for everyone’ (p. 2). The principles of ‘good communication and asharing of information’ were seen as having an important role to play increating ‘mutual trust’ between managements and employees. However, theFederation was strongly opposed to any ‘imposed system’, and preferrednot to involve unions in communication exercises (p. 17).

Unitarist ideology is currently experiencing a renaissance in the form ofHRM strategies7 and this has seen renewed interest in employee communi-cation programmes (Townley, 1989; Marchington, 1996). Companies aredeclaring commitment to involving ‘their most important’ assets throughsuch mechanisms as consultative committees, project groups, quality circlesand team briefings. In terms of the rationales for disclosure, earlier themesof educating employees about financial realities, increasing employee com-mitment to business goals and reducing resistance to organizational changeresurface in the HRM literature (Storey, 1992; Marchington, 1996; Burchill,1997, pp. 185–206). The main changes lie in the details of the methodsadopted. HRM focuses on ‘face to face’ forms of communication ratherthan more indirect forms such as employee reports.

Financial participation schemes have also regained favour in the 1980s(Bougen, Ogden & Outram, 1988; Conte & Kruse, 1991) and 1990s. Thiscurrent vogue appears to be largely motivated by a desire on the part ofemployers and governments (through tax incentives) to foster an ‘enterpriseculture’ and to provide employees with a sense of ‘common purpose’ andsome form of ‘involvement’ in organizational affairs (Bougen et al., 1988;Ogden, 1992). As in the late nineteenth century, however, it is still difficultfor workers to monitor the definition and sharing of profits (Kruse, 1996,p. 517).

Many of the views above are reflective of a ‘soft’ version of unitarismwhich seeks to ‘win consent’ from employees and has its roots in Mayo’s(1933) conception of ‘social worker’ and the importance of communications.Even during periods of peak interest in employee reporting, however, somemanagers have remained sceptical of the claimed advantages and warned ofthe problems disclosure could bring if information was misunderstood ormisused. ‘Hard unitarists’ place less store on the idea of winning consentfrom the workforce (other than, perhaps, through the use of economicincentives) and have urged a more clinical weighing up of the potential costsand benefits of disclosure;

‘(Employee reporting) might, at best, lead employees to make numeroustrivial, time-wasting queries and suggestions concerning the management ofthe organization. At worst, it could lead employees to demand more detailand earlier provision of information. This in turn may lead employees todemand changes in the way the organization is run, particularly if they have amore detailed understanding of the employment consequences of investmentproposals at various levels of the organization’ (Taylor & Webb, 1980, p. 7).

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The CBI (1976, p. 11) agreed that the ‘strong benefits’ that could berealized (more realistic employees and improved morale) had to be offsetagainst the ‘inherent risks’. The challenge to management was ‘to managethe risks of employee communications in a positive planned fashion asprofessionally as it manages other aspects of its business’.

Since the 1980s the rise of economic rationalism has seen a moveto extend the ambit of managerial prerogative and the rights of capital(for example into areas of employment regulation previously accepted aslegitimate subjects of negotiation) and to substitute hard unitarism for soft.The NZEF (1989, p. 6), for example, favours the idea of giving managers‘increasing measures of freedom’ and balancing that by ‘accountability forthe use of resources, material and human, measured through profit’. Inaccordance with the teachings of neo-classical economics, this is viewedas being ‘in everyone’s interests: consumers, shareholders, the nation, andworkers alike’ (Storey, 1983, p. 104).

The unitarist frame of reference clearly dominates employer initiativesin the disclosure of financial information to employees. Although thedegree of interest has varied over time and across jurisdictions, thisapproach remains firmly grounded in assumptions of shared purposes,positive-sum relationships, the primacy of managerial authority and adenial of organizational conflict (although contradictory talk of the risksof information-sharing suggests that underneath there is recognitionof a separate set of employee interests). Managers view employeecommunication in terms of its potential to deliver a more co-operative,productive and responsible labour resource. Accounting’s contribution is aspart of a ‘social technology’ (Fox, 1985a). Suggestions of an enforceableright to information are viewed as contrary to the proper purposes ofcommunication.

In short, it is suggested that accounting has had to deal with aparticular ‘problem set’ to gain managerial patronage in the industrialrelations environment: employee misunderstanding, lack of team spirit,irresponsible attitudes and labour agitators. Within this framework, thevoluntary communication of accounting information has been designedto serve three main functions: an ‘educational function’ to encouragemore responsible and rational industrial attitudes; a ‘motivational function’to promote a greater sense of involvement in and commitment to theenterprise; and a ‘pre-emptive function’ to undermine the influence ofunions, to counter employee resistance to organizational change and to wardoff demands for greater corporate accountability and industrial democracy.

Pluralist perspectives

‘The real question is whether financial information for employees should beregarded as just another hopeful device to increase productivity and loyalty, orwhether it is regarded as information to which a man or woman who spendshis working life in the company has a natural right’ (Taylor, 1975, p. 20).


The motives workers and unions have in seeking accounting informationare very different from the objectives employers have in volunteering it.Whereas employer rationales focus on opportunities for team-buildingand increased productivity, labour-oriented arguments emphasize theresponsibilities of management. Employees are seen as having a right tobe informed about the state of the organizations in which they work,irrespective of the possible economic benefits to the firm. Mandatorydisclosure8 is supported on the grounds that, to be effective, the ‘moralright. . . almost certainly needs converting into a legal right’ (Owen & Harte,1984, p. 184).

Labour-espoused rationales are based on a pluralist worldview. There isexplicit rejection of the unitarist assumption that ‘what is good for capitalis good for everyone else’. Firms are viewed as coalitions of groups withdiverse and at times conflicting interests and values. Labour-managementrelationships encompass mixed motives; parties have incentives to co-operate and incentives to compete. This complicates the issue of governance;the captains of industry cannot automatically be relied upon to lookafter the interests of all team members. Conflict is based on genuinelydifferent interests and is both inevitable and legitimate. The aim isnot to deny difference, but to accommodate it through institutionalmechanisms. The result is a form of negotiated order. The shift from aunitarist to a pluralist frame of reference leads to identification of a newproblem set and different roles for accounting in the industrial relationsenvironment.

Pluralists agree that concepts of information-sharing are fundamental toa more co-operative approach in the workplace and that the impact onproductivity can be positive. Accounting information can never eliminatethe differences between management and labour, however. The main valuelies in its potential for acknowledging, expressing and managing the conflictsthat arise. Within such a framework, disclosure may be used to strengthenmanagement accountability and to support wage bargaining and industrialdemocracy initiatives.

Accounting and managerial accountability. Since the advent of joint stockcompanies, the practice of preparing audited financial reports has aimed atsecuring the accountability of managers to the providers of equity capital(Littleton, 1958). The philosophical base for this rests on a proprietary viewof the firm, heavily influenced by neo-classical economic theory. Control ofcorporate resources is seen to be vested in managers who have discretionarypower over them but who remain accountable to the firm’s ‘owners’. Theowners seek to maximize their wealth (subject to various external and marketconstraints) and hold management responsible for achieving this objective.Financial statements are reports on the stewardship of resources and thus ameans by which shareholders can judge managerial performance. Rewardsor sanctions may then be applied on the basis of the information received.

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More recently, there have been calls for recognition that employees haveinterests in the functioning of organizations that are at least as important asthose of shareholders. This viewpoint reflects a pluralist conception of thefirm as a coalition of ‘stakeholder’ groups (Freeman, 1984; Hill & Jones,1992). The firm is viewed as a kind of ‘co-operative endeavour’ with partiesjoining together in the expectation of mutual benefit. As between managersand shareholders, however, conflicts of interest may emerge among differentstakeholders. Insofar as ‘the firm’ can be said to pursue goals, they becomea composite of those needed to attract all participants. Employees areregarded as being in an analogous position to that of shareholders inthat they ‘invest’ their labour, have ‘capital’ tied up in organizations and‘investment expectations’;

‘Our careers are our property. We have property rights in them, andinformation which affects these rights must be given freely and fully. Itisn’t so now’ (Jenkins, General Secretary, Association of Scientific, Technicaland Managerial Staffs, 1974, p. 43).‘Those who invest their livelihoods in an industry should have, at least,equal rights with those who invest their capital’ (NZ Meatworkers’ Union,1989).

Like suppliers of financial capital, employees also have contractual rightsto participate in the cash flows of the firm (for example, through wage,profit-sharing and pension entitlements) as well as rights to a safe workingenvironment and equal employment opportunities, all of which requireinformation for monitoring purposes. From labour’s point of view, profit isnot an adequate measure of the success of an enterprise9;

‘company reports and accounts are narrow, private, commercial and financialstatements. . . If. . . we are to obtain a comprehensive and realistic overview ofhow much better or worse off we are as the result of companies’ developmentstrategies, we need a far wider appraisal of social costs and benefits than thatoffered by a balance sheet’ (Gold, Levie & Moore, 1979, p. 19, emphasis inoriginal).

Accountability becomes even more important given that managers (actingas agents of finance capital) often have incentives to allocate resources in amanner detrimental to the interests of labour10 and that employees, unlikeshareholders, have little opportunity to diversify the risks associated withtheir investment relationship.

Collective bargaining and employment contracts. Financial disclosure is alsoviewed as important in the context of negotiating employment contracts.The issue is largely one of procedural justice. Union leaders have complainedthat in most bargaining situations ‘they don’t know what the real financialstatus of the employer is, nor do they know which (if any) of the conflictingfigures published on profits and productivity are accurate’ (Jain, 1981,


p. 749). They also observe that employers are often prepared to ‘open thebooks’ when they are making losses, but close them tight once profits arerestored (Strauss, 1996, p. 182).

Increasingly complex group corporate structures, coupled with movestowards enterprise-level bargaining, have rendered published financialreports of little value in negotiations. Individual subsidiaries do, of course,continue to prepare their own accounts. The bulk are not ‘public issuers’,however; they are regarded as ‘private companies’ and their accountsare not freely available. And even if they are provided, the reports arehighly aggregated and rarely contain substantive information relating tothe workforce. It is difficult to see how workers can be expected to regardthemselves as truly ‘involved’ with the fortunes of their own plants or toengage in ‘rational’ workplace bargaining without their having rights ofaccess to financial information for the relevant bargaining unit (includingfull details of accounting and transfer pricing policies).

Governments and courts in the USA and UK have had some sympathyfor union arguments. In the USA, for example, it has been held that theduty to bargain in good faith gives labour representatives rights to ‘relevantand necessary’ information on mandatory subjects of bargaining. In theUK, employers are obliged to disclose information to unions which itwould be ‘good industrial relations practice’ to disclose for the purposeof collective bargaining. Unions in New Zealand and Australia, however,have to date been unsuccessful in achieving statutory bargaining disclosurerights.11

In discussing the role of accounting information in collective bargaining,it is useful to draw on Walton & McKersie’s (1965) characterization ofnegotiations as involving integrative (‘win-win’), distributive (‘win-lose’) and‘attitudinal structuring’ aspects (Foley & Maunders, 1977, pp. 101–108). Inintegrative bargaining situations, a problem-solving approach can be takenand accounting might reasonably be expected to operate as unitarists suggestas an ‘answer machine’ or ‘learning machine’ (Burchell, Clubb, Hopwood,Hughes & Nahapiet, 1980). There is also potential for information to act asan attitudinal structuring tool, facilitating shifts towards more co-operativelabour–management relationships and thereby increasing the possibility of‘good integrative payoffs’. In distributive bargaining situations, however,decision-making is unavoidably ‘political’ and accounting systems are morelikely to be used as ammunition and rationalization machines to promotethe positions of interested parties and to legitimate actions.12 As Craft(1981) recognizes, there is clearly a role for ‘neutral’ accountants who canprepare or audit reports in accordance with a given set of standards. But,given the essentially contestable nature of accounting, there will alwaysbe room for controversy over the relevant standards and whether theyhave been correctly applied. Thus, from a pluralist perspective, unitaristefforts to limit accounting to an ‘answer machine’ role are both naive andmisleading.

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Support of industrial democracy initiatives. Recognition of the extent towhich employees are affected by decisions made in firms, has led not onlyto calls for more accountability but also for more worker participation inthose decisions. The concept of workplace democracy has a long history(Fox, 1985b). Most recently, it has seen the labour movement trying toarticulate a vision of democratic governance that can compete with the‘new unitarism’ (see, for example, Hancock, Logue & Schiller, 1991; TUC,1996; Schurman & Eaton, 1996). While there are differences of opinionabout the precise forms of participation that should be pursued, disclosureis regarded as a ‘cornerstone of industrial democracy’;

‘whatever industrial democracy structures are implemented in any industry orenterprise/workplace, certain underlying rights need to be guaranteed beforethose structures can have any meaning. . . . The right to relevant informationis important because no realistic input can occur in the absence of knowledge’(NZCTU, 1989, pp. 16, 17).

A fundamental concern is that information-sharing should be ‘real’.The NZCTU (ibid.) dismisses the concept of ‘glossy annual reports toemployees’ as owing more to a ‘corporate relations gimmick than to conceptsof information sharing or participation’. Unions see many existing schemesas forms of ‘pseudo-participation’ (Verba, 1961) designed ‘to get workersto work harder without giving them any significant benefit or any real say’(Report of the Committee of Inquiry into Industrial Democracy, 1989,p. 6). This stems from their different approach to the involvement ofworkers. Managements tend to view disclosure as a process of consultationallowing problems to be solved before they become contested issues andprefer (somewhat optimistically) to keep consultative and negotiating forumscompletely separate. Unionists conceptualize industrial democracy more asan extension of collective bargaining, involving workers in negotiations overa wider range of strategic issues (including the right to information).

The democratization of working life would require a major rethink ofaccounting information systems and models. The whole framework ofmanagement accounting is heavily influenced by neo-classical economictheory (Caplan, 1966). It accepts the dominance of shareholder interestsand tends to define out the concerns of other stakeholders. There is afocus on the construction of the ‘governable person’ (Miller & O’Leary,1987). Some accountants have been keen to move into an HRM era,replacing old style ‘top-down accounting control systems’ with ‘bottom-up empowerment’ (Johnson & Kaplan, 1987; Johnson, 1992). This hasbeen hailed as a fundamental change in philosophy but unitarist ideologycontinues to dominate; the emphasis is still on ‘goal congruence’, and‘empowerment’ is for the same purposes—the optimization of profits.

The ‘new pluralism’ (Provis, 1996) calls for more discursive forms oforganization. It requires acceptance of and, indeed, active encouragement of,the idea that people with different interests and values may want to account


for things differently (as in the concept of divergent investment—see,for example, Finn, 1996; Ghilarducci, 1988). Notions of accountinginformation as an apolitical or neutral arbiter become untenable. Newforms of knowledge are required to realize ‘new possibilities’ (Carlsson,Ehn, Erlander, Perby & Sandberg, 1978), for example, the establishmentof information systems responsive to different goal systems and thedevelopment of alternative theories and analytical techniques more inaccordance with workers’ interests and values. Rights of opposition and theright to present counternarratives become crucial. Terms such as income,costs, profits, assets and value may all require redefinition to facilitatedialogue between the parties (Morgan, 1988) and thereby contribute to amore fairly negotiated order.

The labour movement has stressed the importance of access to educationand training in preparing employees to play a more participative role in theworkplace (NZCTU, 1989; Schurman & Eaton, 1996). From a pluralistperspective, it is important that this be geared towards the goals, valuesand interests of labour. Workers need to appreciate that they do notnecessarily have to accept ‘accounting as it is’ and that alternative modelsare possible. They also need to appreciate the pitfalls as well as possibilitiesfor workers and unions getting involved in the ‘world of accounting’. Giventhat many accountants see themselves as ‘neutral reporters of the facts’ andare oblivious to the values and assumptions underpinning their methods, itis also imperative not to overlook their educational need.

The pluralism of expediency

The pluralism set out above is a ‘pluralism of principle’. It should benoted, however, that unitarists and radicals sometimes also act as if they arepluralists for pragmatic reasons. Fox (1985a, p. 31), for example, observesthat during the 1970s employers, faced with well-organized workforcesassertive of their separate rights, were more disposed to accept pluralistpractices irrespective of their ‘real beliefs’. However, a return to highunemployment during the 1980s and the accompanying decline in shopfloor power brought ‘renewed hopes of welding a unified team’. Thishighlights the importance of locating ideologies in their wider structuralcontext—to understand people’s actions we need to understand not onlytheir worldviews but also the environments in which they operate. Some ofthe managers who adopted pluralist practices during the 1970s may havebeen ‘principled pluralists’ (or even ‘closet radicals’) who found it easierto rationalize and sell their pluralism to unitarist colleagues by acting as ifthey were expedient pluralists—a ‘corporate social responsibility is best forprofits’ approach.

Interestingly, management’s disposition to accept pluralist practicesduring the 1970s is not evident in the accounting field. A number of writersdid link employee reporting to growing managerial sensitivity to the concept

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of corporate responsibility and some managers indicated that they viewedtheir practice in this area as a way of discharging ‘the proper responsibilitiesof the company’ (Marsh & Hussey, 1979; Craig & Hussey, 1980). Therewere also warnings that the unitarist ‘win-win’ messages contained in manyemployee reports could be construed as propaganda (Lyall, 1981). Asindicated in the last section, however, in general, management practice anddiscourse remained firmly embedded within a unitarist framework. TheTUC (1974, p. 10) observed that ‘the control of information about thecompany’s activities has been a basic aspect of the managerial prerogativethat has proved extraordinarily difficult to break down’. Corina & Rees(1981, p. 87) surveyed a sample of winning entries in an employee reportingcompetition organized by Enterprise Australia and concluded that theyfailed to satisfy even the most fundamental employee disclosure needs. Thecost-benefit analysis clearly gave a different result in this area. Managementmay have felt it had more to lose by committing to pluralism in theaccounting field than in other areas of labour relations. Indeed, somecommentators openly expressed concerns that even voluntary disclosureinitiatives could create difficulties for management that would outweigh anypossible advantages;

‘Hence the school of management thought (and it’s still a lot stronger thanmany would like to admit) which says ‘Don’t tell the b. . .s anything; they’llonly want more’ ’ (Bland, 1980, p. 81).

On the labour side, the ‘well-organized workforces’ of the 1970s stillhad a lot to learn on the accounting front in terms of articulating theirinformation needs and were faced with a profession largely hostile to theircause (Jackson-Cox, McQueeney & Thirkell, 1987).

Recognition of their material circumstances (including the dominantideologies of those around them) means that radical unionists may, in theirrelationships with management, also be ‘models of pluralist give-and-take’(Fox, 1985a, p. 40). Pluralism may also be accepted as a set of workingassumptions by radicals in the public policy arena. This approach reflectsa belief ‘that there are reforms and objectives worth pursuing within thestatus quo’ even though a radical analysis may be considered to have ‘greaterintellectual validity’ and be ‘a necessary stimulus and guide to the pursuitof more fundamental change’ (Fox, 1973, p. 229). In this sense it shouldbe noted that there is a difference between subscribing to a worldview on anormative (as a characterization of society as it should be), prescriptive (as aview about the practical strategies that should be followed to realize particularvalues) or empirical (as a description of society as it is) basis. One can be fullycommitted to pluralist values but not think this is a realistic characterizationof society as it is currently constituted. Fox (1979), for example, describeshimself as a normative pluralist but an empirical and prescriptive radical.Many Marxist radicals are, in effect, normative unitarists believing in thedesirability of community and a ‘shared common life’ but not seeing this


as achievable within the current capitalist order. It is to radical perspectivesand their implications for ‘accounting and industrial relations’ issues thatwe now turn.

Radical perspectives

Employer objections to increased disclosure are fairly predictable and surfacemost often in the context of calls for mandatory disclosure. They centrearound four main themes: the concept of managerial prerogative, theinability of employees and unions to understand information, the dangerthat labour recipients will misinterpret information and confidentialityconstraints (see, for example, Dickens, 1980; Reeves, 1980). Moreinterestingly, there has also been resistance to the idea from within thelabour movement. There is wariness about becoming involved in a discourseoverwhelmed by the assumptions of capitalism and over which labourinterests have traditionally had little influence.

Unionists and labour commentators with reservations about the valueof greater ‘information-sharing’ have expressed four specific concerns:that workers run the risk of being incorporated into capitalist objec-tives/rationalities; that disclosure could lead to a form of pseudo-participation; scepticism about the credibility and impartiality of man-agement’s facts and figures; and doubts about the accounting profession’scommitment to ‘truth and fairness’.

Risk of incorporation. Some unionists fear that in pursuing companyinformation, labour representatives will become socialized into endorsingmanagerial objectives and rationality, and that as a consequence capitalinterests will be the major beneficiaries of increased disclosure;

‘Fancy formulae for calculating bonuses or the ‘sharing’ of ‘added value’,combined with the selective doling out of misinformation, add to the possibilityof confusion amongst workers, and to the danger that some shop stewards mayfind themselves cosily incorporated into management’s ethos and ‘mysteries’ ’(Coates & Topham, 1974, p. 109).

Unions may, for example, be persuaded to forgo wage increases orto accept redundancies as inevitable (Gospel, 1976, p. 234; Knights &Collinson, 1987). Shop stewards ‘sucked in’ by management informationand arguments may, in turn, be used to sell them to their own members.Stewards thus effectively become ‘mini-managers’ (Gold et al., 1979) andlabour ends up acceding to its own exploitation. Settlements reached withgreater information may appear more equitable to both sides but, for radicals,the reality is quite different. Modern management’s emphasis on ‘mutualgains’ bargaining and ‘win-win’ relationships obscures ‘the question of whowins how much’ (Parker & Slaughter, 1994, p. 145).

The risk of incorporation is seen to be particularly high where labourrepresentatives are ill-equipped to engage in financial argument and in

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the absence of well-defined alternative information systems and analyticaltechniques consistent with workers’ interests and values;

‘Where bargaining resources [expert skills, information, ability to conferrewards and sanctions] are equal, participation produces real influence onwho gets what. When they are strikingly unequal. . . participation becomes asymbol of influence that encourages quiescence, rather than substantive gains,for the powerless. (It) produces predictable outcomes by reflecting existinginequalities in the resources of participants, especially their resources forinfluencing others to define the political world as they do. . .’ (Edelman, 1977,p. 121).

Jackson-Cox et al. (1987) identify a number of factors that could affectshop stewards’ ability to use company information effectively. These includethe structure of the internal labour market (for example, the degree ofsegmentation), perceptions union officials have of the resources that could bemobilized in relation to issues (for example, negotiating forums, standards)and the strength of workers’, and especially shop stewards’, identificationwith union values.

Pseudo-participation. A number of writers have emphasized the importanceof viewing disclosure in the context of union functions. Dickens (1980,p. 25), for example, suggests that information is of little value in the absenceof concessions to workplace democracy. Cooper (1984, p. 128) warns thatdisclosure can lead to a form of pseudo-participation, which;

‘leaves managers with the control over business policy and investment andoffers labour the appearance of participation and a shared (but false) sense ofresponsibility.’

Pseudo-participation is regarded by many radicals as largely inevitablegiven the logic of the capitalist system. Industrial democracy schemes,insofar as they only affect who takes decisions, cannot alter what decisionswill be taken.13 Pluralist conceptions of ‘negotiated orders’ sound nice intheory, but in practice only a very limited range of choices will be feasible;

‘Because of the fundamental conflict between capital and labour, capitalistsociety will only concede certain types of industrial democracy, i.e. those whichare weak and leave capitalism intact’ (Scargill & Kahn 1983, p. 21).

Whilst disclosure itself does not guarantee employee influence overorganizational decision-making, it may increase pressures for change. Otherradicals are adamant that all offers of information should be taken up‘since appetite grows with the eating’ (Coates & Topham, 1974, p. 110).According to this view, disclosure can activate objectives and lead to theidentification of new industrial relations issues. The more unionists andworkers learn, the more they appreciate what there is to know and canbe aware of not knowing. Hence, while some radicals view recent HRM-style collaborations with employers as a ‘sellout’, others see scope in suchinitiatives for far-reaching change (see, for example, Ogden, 1991).


Scepticism about management’s facts and figures. Radicals also have strongreservations about becoming involved in a disclosure process monopolizedby management (Parker, 1985, p. 56). Managers not only dominate thecollection, preparation and distribution of information, they also typicallyhave access to greater expertise and back-up;

‘(unions) are severely handicapped whenever they sit down across the bargain-ing table from management. . . The figures on the table are management’s,prepared by accountants in the employ of management, and reflecting thefinancial reporting strategies and choices of management. Moreover, theseaccountants often sit at the negotiating table, interpreting their own figures’(Estes, 1990, p. 39).

HRM-style communications are seen as largely ‘content-free’ (Vaughan,1996). Even where legislative information rights exist, management still haswide discretion over what to disclose or not to disclose (Brown, 1996).14

Writers have also observed that the flexibility inherent in currentaccounting practice and the received view of accounting as a technical,objective and neutral discipline are highly functional for managers. The ‘auraof objectivity’ surrounding accounting makes it difficult to argue againstdecisions presented as being based on accounting information (Hines, 1989;Knights & Collinson, 1987). Information may be ‘pre-processed’ to supportparticular outcomes and to convince workers that there are no alternatives.15

The attachment of financial information to supposedly disinterested andimpartial professionals may also make it appear unchallengeable.

For Coates & Topham (1974, p. 110), nothing less than ‘an unambiguous,general and unrestricted access to all commercial secrets’ is required. Again,this does not mean that workers should turn away all ‘doubtful and phoneyoffers of partial information’ since this may stimulate them to ‘probe deeperand deeper’. It is vital, however, that they ‘preserve an attitude of totalscepticism towards ‘information’ they are offered’ (ibid., p. 109).

Doubts about the accounting profession’s commitment to ‘truth and fairness’.There have long been perceptions of accountants as a tool of management.The British Institute for Workers’ Control, for example, has supportedthe concept of social audits for more than 20 years, but wants them tocome from the labour movement itself ‘because you can’t trust accountants’(Coates & Topham, 1974). Failure to communicate their social reality hasled to charges by some unionists that accounting representations do moreto mislead than enlighten;

‘accounting systems. . . seem to set out to. . . confuse (rather than) clarify. . .hide rather than expose. . . To whom is an accountant responsible whenaccounts are drawn up and checked? Is it to the management which paysthe accountant (a very plausible theory)? Is it to the shareholders, is it to theemployees in that company, or is it to the public in general? To put it anotherway, is there a wider social responsibility? Is there a real ethic?’ (Jenkins, 1974,Association of Scientific, Technical and Managerial Staffs, p. 42, emphasis inoriginal).

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Difficulties relating to the perceived independence of accountants in thecontext of the management/shareholder relationship are well documented(see, for example, Montagna, 1986; Jensen, 1990). As Foley & Maunders(1977, p. 185) observe, this is also arguably a far more ‘sympathetic’relationship than the management/employee one. It is, perhaps, notsurprising that some unionists find difficulty in accepting accountants as‘independent professionals’ when they are trained in schools of commercein a discipline conceptually oriented to shareholder interests, interactextensively with managers and are paid by management.16

The accounting profession has at times supported the idea of increaseddisclosure to labour. The Corporate Report gave backing to the idea thatemployees have ‘rights’ to information (Accounting Standards SteeringCommittee, 1975). However, unitarist philosophy is evident in muchof the document. In its proposals for the publication of value-addedstatements, the authors emphasize the ‘common interests’ of ‘stakeholder’groups;

‘the simplest and most immediate way of putting profit into proper perspectivevis-a-vis the whole enterprise as a collective effort by capital, management andemployees is by presentation of a statement of value added’ (para. 6.7).

A pluralist frame of reference might see its value more in terms ofmaking distributions and re-distributions of wealth within the firm moretransparent. The Committee’s recommendation that the conventionalaccounts (which show retained profits as ‘belonging’ to shareholders)continue to be produced, alongside a value-added statement that groupsretained profits with depreciation (‘to provide for maintenance andexpansion of assets’ rather than as a ‘return to capital’) also suggestsa degree of analytical confusion. The report also promotes a technicalview of accounting, advocating reporting standards which are ‘neutralas between competing interests’ (para. 3.8). In the event of ‘apparent’conflicts between user groups, it is up to management to determine theappropriate tradeoffs (para. 1.11). When the Labour Government soughtto implement some of the recommendations, the profession was quickto disown the document. The Consultative Committee of AccountancyBodies (CCAB, 1976a) complained that proposals for legislation wereboth ‘precipitate and hazardous’ (para. 2). It described the report as a‘radical and provocative’ document (para. 9) and emphasized that theviews expressed were not necessarily those of the committee and shouldnot be taken as reflecting the ‘generality of opinion of the profession asa whole’ (para. 2). There are suggestions that senior members of theprofession regretted that the report had ever been released (Hopwood 1985,p. 362).

The views of the profession in this area have generally been closestto those of management. Disclosure has been seen in terms of goodcommunications, with emphasis on encouraging the common interests of


management and labour through voluntary reporting initiatives (Institute ofChartered Accountants in England & Wales, 1974; CCAB, 1975, 1976a,1976b, 1981; Hundred Group, 1976). Accounting academics (with theexception of a small group of ‘radical’ researchers), when they have lookedat the area at all, have tended to research from a managerial perspective;the interests of labour are either ignored or assumed to be consistent withmanagerial interests (Ogden & Bougen, 1985). Very few accountants arecommitted to the interests of labour on their own terms, and as Jonsson’s(1988) survey indicates, they appear to have trouble even understandingwhat labour representatives mean.

Radicals also note that accountants (whatever they might think oracknowledge in private) do little to draw attention to the flexibility inherentin financial practice or to dispel the notion of accounting as a value-neutralinformation source. Indeed they are often seen to be actively promotingthe ideal of accounting as ‘uncontestable facts’ (Hines, 1989; cf. O’Leary,1985). The training of accountants also does little to make them questionthe view of accounting as objective and neutral (Humphrey, Lewis & Owen,1996).

The concerns outlined above (referred to as the ‘ostrich’ approach todisclosure by Gospel, 1978) reflect a radical perspective in terms of Fox’s(1973, 1985a) framework. The radical view is essentially a critique ofpluralist perspectives. Radicals maintain that pluralist frameworks fail totake sufficient account of the imbalances of power and resources in capitalistsociety. They imply a degree of equality between ‘stakeholder’ parties whichdoes not and cannot exist under current structural arrangements. Pluralistsassume that grievances are recognized and acted upon and that decision-making arenas are open to any organized group. Radicals stress that agendasmay be controlled and that potential issues may be kept out through theforces of socialization so that anyone challenging the status quo will belabelled a ‘trouble maker’. For radicals, capital can never be ‘just anotherinterest group’.

Disclosure, according to the radical perspective, is best understoodin terms of the hegemonic domination of capital. ‘Information-sharing’lapses too easily into an exercise in indoctrination; a managerial strategyfor inducing co-operation and securing compliance from workers forcapitalist values and objectives (Ogden & Bougen, 1985). Management usesaccounting information to implement its preferences by creating partial andone-sided views of reality and by shaping decision-making in accordancewith capital-oriented perspectives. This lends a selective visibility to theworld that plays an important role in influencing what people see asproblematic, possible, desirable and significant. As labour interests cannothope to enter the discourse on anything like equal terms, unions may wellbe advised to shun the world of orthodox accounting and concentrate onmore traditional methods of protecting employee interests.

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At the same time, counter information systems may have a role toplay in promoting social change. From a radical perspective, it is alwaysimportant to look for the potential in a situation. Jackson-Cox et al. (1987)emphasize that unions can use information as a source of intelligence (forexample, about corporate strategy and future intentions). Barratt Brown(1968) promotes the formation of workers’ control groups acting as socialaudit bodies to gather information on a wide range of financial and socialissues rather than waiting passively for management to provide information.Gold et al. (1979) emphasize the importance of shop stewards establishingtheir own information systems for future planning and the elaborationof alternative plans. McBarnet, Weston & Whelan (1993) explore theconcept of ‘adversary accounting’ and show how extant accounting modelsand information can be used strategically by unions as explicit weaponsagainst management (using techniques similar to those currently used inintra-capital disputes). Hird (1983) suggests ways of radicalizing traditionalfinancial statements in an attempt to get a measure of surplus value.

IDEOLOGY, KNOWLEDGE INTERESTS AND MODESOF RATIONALITY

This paper offers a framework which identifies three frames of referenceto explain and prescribe practice in the accounting and industrialrelations environment. Preceding sections illustrated how each perspectiveentails a different account of management–labour relations and differentunderstandings of the actual and potential role(s) of accounting informationin industrial relations. In this section, it is suggested that the three ideologiesidentified also incorporate particular knowledge interests (Habermas, 1972;Apel 1979, 1980) and involve three distinct modes of rationality: technical,hermeneutic and emancipatory (Giroux, 1983).

Technical rationality

Technical rationality is associated with principles of control and certainty(Giroux, 1983). Its knowledge-constitutive interest lies in the mastery andcontrol of an objectified environment (Apel, 1979). Technical rationalityrelies on positivism for its model of theoretical development and for its viewsabout knowledge, human values and social inquiry (Giroux, 1983, p. 177).Knowledge, like scientific inquiry, is regarded as value-free and objective.It can be reduced to concepts and facts that exist a priori and which canbe described in a neutral fashion. The mediating link between theory andpractice is instrumental; the role of knowledge to predict and control theenvironment. Knowledge is developed and applied with an emphasis on the‘most efficient and effective’ means to pre-given ends.

Unitarist perspectives in accounting and industrial relations are stronglyinfluenced by the principle of technical rationality.17 This is reflected in the


perception of accounting as a primarily technical discipline which distributesvalue-free and objective information. The ‘facts’ about organizational life aresimply out there to be gathered, organized and communicated. Similarly, theproper ‘ends’ of organizational life are regarded as given and management’srole is to find the most efficient and effective way of achieving these pre-givengoals. Concepts such as ‘profit’ and ‘efficiency’ are seen to exist a prioriand to be situated above and beyond the social realities and relationshipsof the people who produce and define them. Labour is expected to remaina passive recipient of objective meanings sanctified by professional experts.Accounting ‘facts’ are not open to negotiation and questions about wholegitimizes those facts are not valid. There is no recognition that the ‘reality’being reported may be historically or socially specific. The primary purposeof providing information to labour is as part of a social technology to‘educate’ workers to the ‘correct’ view of economic reality and to ‘motivate’them towards taken for granted ends.

Critical theory teaches us to be sensitive to the interested nature ofideologies; in particular, that it is unwise to assume that dominant groupsnecessarily believe the worldviews they espouse. In some instances thepromotion of technical rationality seems quite politically aware. Althoughmanagers and accountants have actively promoted a unitarist conceptionof the proper role of accounting in industrial relations, performativecontradictions suggest that many really conceive of labour as a separateand identifiable interest. The response of professional accounting bodies tolabour calls for disclosure legislation (see, for example, Jackson-Cox et al.,1987, pp. 28–40), suggests that they regard themselves very much as theupholders of shareholder and managerial prerogatives and interests andadopt a conscious policy of supporting capital against any encroachment byemployees or unions.

Laissez-faire pluralist approaches have also been popular in recent times(notably in agency theory—see, for example, Liberty & Zimmerman, 1986;Wong, 1988) but it is difficult to regard these as a very serious formof pluralism. As noted earlier, there are clear links between neo-classicaleconomic theory and unitarist ideology. The enterprise is still regarded as aunitary entity in which one goal (shareholder wealth-maximization) servesthe interests of all. Agency theory views the firm as a ‘nexus of contracts’.Most writers concentrate on the relationship between shareholders andmanagers, but even when it is extended to other groups all the actorsare usually assumed to be ‘rational economic maximizers’. Conflictingobjectives are brought into equilibirum within a framework of optimalcontractual relationships. There is little sense of any real conflict (and wherethey are recognized at all, the interests of consumers and employees aresubsumed under the heading ‘political costs’ implying those groups are notreally legitimate users of accounting information).

In such circumstances, it is difficult to avoid the conclusion that unitaristand laissez-faire ideologies are being used as self-serving rhetoric. The

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appeal to shared values, harmony and common interests and promotionof a technical rationality provides management with a way of legitimizingits dominant position and makes it easier for accountants to claim thatthey are ‘not taking sides’. It allows both groups to downplay the relevanceor importance of ideological conflict (‘the ideology of no ideology’) andthereby inhibits the development of ideological awareness in others andhelps convince workers and unions not to make unreasonable demands.This is especially true if accountants (and others) are never taught toquestion the role of accounting in society.

Hermeneutic rationality

Hermeneutic rationality is primarily concerned with meaning and inter-action. It rejects the presuppositions of a common framework of experiencefor all people and fixed goals embedded in technical reason (Popkewitz,1987, p. 11). Its cognitive interest is in ‘understanding the communicativeand symbolic patterns of interaction that shape individual and intersubjectivemeaning’ (Giroux, 1983, p. 184). Hermeneutic rationality draws uponinterpretive modes of inquiry. Meaning is firmly rooted in the world ofthe social actors and their value commitments rather than in some externalobjective reality. Through the use of language and thought, human beingsare seen to constantly produce meanings and interpret the world in whichthey find themselves. Furthermore, meaning is never final; it is constantlynegotiated and renegotiated as social actors mutually produce and definethe rules that shape their interactions. The hermeneutic problematic isone of elucidating values, assumptions and goals. The aim is not technicalcontrol, but rather clarification ‘of the conditions for communication andintersubjectivity’ (Bernstein, 1976, p. 197).

This mode of rationality is evident in pluralist perspectives in accountingand industrial relations. There is a strong emphasis on the social constructionof knowledge. The ‘facts’ and proper ends of organizational life are nolonger ‘out there’. Human beings rather than nature are the ultimateauthors of accounting knowledge. The emphasis is on negotiation andparticipation. Labour is no longer characterized as a passive receiver ofinformation. Debates over the worth of competing goals are not onlyvalid but to be expected. Concepts such as profit and efficiency are‘ineradicably value dependent’ (Apel, 1979) and open to renegotiationas values and perspectives change. For pluralists, about the only ‘givens’ arethat organizational and societal conflict are quite legitimate, not likely to goaway and need to be faced up to. The aim is to improve communication anddialogue; to seek understanding and interaction if not agreement. The ideaof good accounting lies in recognizing its interpretive and perspective-basednature. Accountants (and others) need to confront the basic subjectivity ofaccounting, to recognize that they cannot be truly objective commentators,and to be sensitive to the ‘many dimensions of the realities which they are


attempting to account for’ (Morgan, 1988, p. 484). This is a very differentview than that of the technical accounting practitioner who represents reality‘as it is’ in a manner designed to facilitate pre-given ends.

Emancipatory rationality

Emancipatory rationality is based on principles of critique and action. Itscognitive interest is in unravelling how the relationship between power,values and meaning functions within a specific socio-historical context topromote forms of self-misunderstanding and to support and sustain modesof domination (Giroux, 1983, p. 190). It draws upon critical modes ofinquiry. Emancipatory rationality retains the hermeneutic understanding ofpeople as active, intentional beings who create the world they live in. At thesame time, it attempts to locate meaning and behaviour in a societal contextin order to explore how the latter may limit and constrain human thoughtand action. The invisible hand of dominant political and economic interestsis seen to exert a powerful influence on the nature and quality of interactionand to militate against the development of an ‘open, self critical communityof inquirers’ (Bernstein, 1976, p. 198). Active efforts are made to changesituations in the name of principles such as autonomy, freedom, justice andequality.

Radical perspectives on accounting and industrial relations are clearlyinformed by emancipatory rationality. Actors (including accountants) areencouraged to reflect on their situations and to identify connectionsbetween their daily activities and the wider social, economic and politicalcontext within which those activities take place. Accounting is regardedas an inherently political endeavour; an arena characterized by conflictsand power struggles (or by the potential for such conflicts). Outcomesare seen to be mediated by institutional relationships—in this instance,relations between unions, managements, the accounting profession and theState. A central concern is that the imposition of meanings and practicesdominated by capital perspectives leads to ‘systematically distorted (partial)communication’ which impedes free and open dialogue. Where pluralistsrecognize there may be conflicts over means and ends and that alternativechoices can always be made, radicals emphasize that some choices remainmore likely than others. ‘Good’ accounting empowers; it seeks to developcritical consciousness and looks for ways of resisting and overcomingdomination by identifying the ‘limitations and possibilities’ for action (Fay,1987).

CONCLUSION

The framework presented in this paper should help to dispel any notionsof ideological consensus within the domain of accounting and industrial

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relations. To the contrary, it is suggested that three frames of reference areevident, each based on a particular conceptualization of management–labourrelations and each entailing different understandings of the actual andpotential role(s) of accounting in that environment. More generally, thesemay be seen to incorporate different knowledge interests and to involvedistinct modes of rationality. The paper also makes it clear that thesedifferences exist across Western industrialized countries and have a longhistory (outside accounting faculties if not inside).

The framework, based on the notion of competing ideologies, continues inthe tradition of Chua (1986) and Ogden & Bougen (1985), who categorizeresearch approaches on the basis of underlying sets of philosophicalassumptions. However, it extends this work in three ways; firstly,it applies the notion of competing worldviews to the world of the‘researched’ (the producers and users of accounting information) as well asresearchers; secondly, it supports the view that ideologies are not ‘randomly’distributed—material drawn from four Western economies reveals classsimilarities across geographical boundaries (cf. traditional comparative workthat implicitly assumes that differences between nations are more significantthan intra-national differences); and finally it suggests that structuralconditions help to privilege certain views over others.

In drawing attention to alternative ideologies, it is hoped not only tocontribute to a better understanding of the variety of perspectives on labourdisclosure but to also bring those views to the level of conscious inspection.As Fox (1985a, p. 40) observes, it is only when people realize that theirattitudes and behaviour implicitly contain assumptions that they are in aposition to examine them and decide whether they find them convincing.The paper also seeks to promote a mutual understanding (but not asynthesis) of divergent viewpoints and thereby to increase the possibility ofdialogue between different groups. At the very least, it should help to clarifydebate at both the academic and practitioner level by allowing readers to seea ‘larger vision of things’, enabling them to see inter-relationships betweenperspectives and how perspectives relate to existing practices (Tinker, 1984,p. 139).

In particular, it is hoped that actors in the accounting and industrialrelations environment will be encouraged to confront competing ideologiesmore explicitly. Before we can debate whose ideas most accurately reflectthe world the way it is or how it ought to be, we need to acknowledgethat differences exist (and their long-standing nature). If we are to debatethese matters intelligently, we also need to understand what the differencesare. If newcomers come to the debate, they need to know what choices areavailable to them. Rather than denying or trying to avoid the influence ofideology, we should expect it. We should not suppose that it is simply amatter of the ‘right’ view being agreed upon; history shows us that debatewill not necessarily lead to consensus. In short, accounting and industrialrelations should be seen as an ‘essentially contested terrain’.


It is also important to reflect on the socio-political contexts of competingideologies. This paper suggests that, in the accounting environment (bothwithin the academy and outside), unitarist discourse dominates. There isan emphasis on technical rationality, positivist models of social inquiryand a belief that accounting theory and practice can (and should) befundamentally apolitical. The pluralist models that do exist are partial,recognizing conflicts of interest between different fractions of capital butnot between capital and labour. Where conflicts are recognized, the primacyof capital interests is generally assumed. Alternative accounting research hashad little impact on teaching (Humphrey, Lewis & Owen, 1996) or ‘everydaystreet practices’ (Moore, 1991). Accountants and others need to ask whyunitarist models dominate, why the pluralist models that do exist rarelyadmit labour interests and why radical viewpoints are passed over so readily.The suggestion here is that it is partly the result of socialization processes (forexample, accounting education and the middle-class backgrounds and/oraspirations of accountants) and partly a reflection of material self-interest.We also need to consider who has benefited and who has lost out as a result.

The dominance of unitarist and partial-pluralist perspectives arguablybenefits capital interests at the expense of labour. It seems difficult todeny that when accounting ‘has affected the work-lives of employees, ithas done so overwhelmingly on behalf of corporations and employers’(Tinker, Merino & Neimark, 1982, p. 192). Neo-classical economics hasled to narrow notions of accountability, a focus on returns to capital andan individualistic rather than a societal focus. Capital is helped to observeand control labour but not vice versa. Positivism has led to uncriticalacceptance of the representational character of accounting language andhelped to reify the status quo. By assuming a value and interest consensus,social conflicts are obscured and issues that might otherwise be recognizedas political are seen as merely technical matters. Encouraging a belief inthe objectivity of accounting and in the essentially technical nature ofquestions concerning what and how things should be accounted for helpsmanagers and accountants avoid negotiation with labour over these issues.Technical rationality in such circumstances is profoundly ‘anti-dialogue’. Italso amounts to ‘a specific form of unacknowledged political domination’more difficult to challenge than openly political judgements because of ‘itsseeming scientific and expert base’ (Wilding, 1982, p. 17).

The public policy implications of this paper are considerable. Theaccounting profession exerts considerable power over policy making, thedefinition of user needs and accounting problems and over its own work(for example, entry to the profession and training requirements) and has asignificant influence over the allocation of resources in society. Accountantsclaim authority in these areas on the basis of their technical expertiseand impartial service to society. If society is characterized by consensusthis perspective is plausible. Once one moves outside a unitarist frame ofreference, however, claims to political neutrality and an ideal of public

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service look rather thin. Acceptance of the existence of multiple ideologiesmeans that accounting choices are not and never can be neutral; there are nouniversal interests. If capital interests have been privileged, serious questionsarise about the accountability of the accounting profession. Should theprofession or capital interests be the final arbiter of the values and prioritiesof accounting activity? Important questions also arise concerning thesocialization of accountants, in particular, the role of accounting educationin reinforcing particular ideological perspectives. Closer attention also needsto be paid to the ‘ideology of professionalism’. As in the educational context(Grace, 1978, p. 249), what passes for ‘professionalism’ in accounting toooften amounts to an avoidance of controversy and a naive belief that ‘beingpolitical’ is being socialist.

NOTES

1. The notion of ideology as worldview reflects a trend away from the narrower view ofideology as ‘false consciousness’ (ideology in the pejorative sense). There is growingacceptance of the idea that we all have underlying sets of beliefs and values and thatone cannot blame or praise an individual or group for ‘having an ideology’ per se. Thisdoes not mean that all worldviews are equal; one can be cognisant of different framesof reference but have strong grounds—epistemological and/or normative—for preferringsome ideologies over others. (For further discussion of the evolution of the concept ofideology and the bases for evaluating ideologies, see Geuss, 1981 and Eagleton, 1991).

2. For discussion in an accounting context, see Hines (1989).3. Research in industrial relations also indicates that many managers adopt a unitarist

perspective (see, for example, Bendix, 1963; Deeks & Boxall, 1989; Poole & Mansfield,1992). This is not to say that all managers are unitarists. As explained in the nextsection, employers sometimes commit to pluralist practices for reasons of expediency.There is also evidence that within employers some may be more pluralistically inclinedthan others, for example, human resource managers (notwithstanding the unitaristassumptions underpinning much of the management theory in this area—Blyton &Turnbull, 1992). Some line managers are also reported to feel uncomfortable with theirnew human resource management (HRM) role as ‘team leaders’ (Storey, 1992, p. 207).

4. For a full discussion of managerial initiatives, see Brown (1997). This section draws onthat paper.

5. Correspondents to The Accountant, for example, recommended profit-sharing to achieve‘. . . altogether better work, and total freedom from strikes’ (18/3/1893, p. 247), as‘the best and most efficient plan of combating the. . . pernicious nonsense of Socialism’(9/1/1897, p. 56), to ‘widen the outlook of the great mass of our people, increasetheir sense of responsibility, give them a different view of life altogether. . .’ (1/4/1911,p. 528), to ‘sound the death-knell of trade unionism’ (ibid., p. 529) and to overcome‘the apparent inability of employees as a class to realize the community of interest whichreally exists between themselves and their employers’ (21/9/1912, p. 375).Profit-sharing schemes did not guarantee access to financial information. A Board ofTrade Report (The Accountant, 22/9/1894, p. 823) noted that one of the principalobjections of unions to profit-sharing was that employees were expected ‘to take theword of their employer, without means of verification, as to the rate of profit earned’.


6. Neo-classical economics is also underpinned by unitarist ideology. It involves anunderstanding of the firm as a unitary entity in which the goal of shareholder wealth-maximization and the operation of ‘free markets’ operate ‘in the interests of everyone’(Tomlinson, 1984).

7. Some versions of HRM are openly unitarist, notably the ‘Michigan school’ (Blyton& Turnbull, 1992, p. 4). Others—including the influential ‘Harvard model’ (Beer,Spector, Lawrence, Mills & Walton, 1984)—claim pluralist underpinnings. However,closer inspection reveals an emphasis on the ‘common’ rather than the separate valuesand interests evident in the employment relationship. The essential aim is still toharmonize the interests of stakeholders and foster teamwork and ‘worker identification’with the company.

8. As the worldview changes, so the language tends to change. Whereas unitarists favourterms such as ‘communication’ and ‘employee involvement’, pluralists prefer labelssuch as ‘disclosure’ and ‘worker participation/industrial democracy’. The NZEF (1989,pp. 12, 13), for example, made a ‘most strong and earnest plea’ for the Governmentand CIID not to use the term ‘industrial democracy’ on the grounds that it ‘will arousestrong negative reactions, because of the inherently political and ideological overtonesthat emanate from it’. The CBI (1977, p. 11) preferred to talk about ‘providing’information rather than ‘disclosing’ because ‘the former implies something desirable andpositive, and the latter rather the reverse’. Notwithstanding employer protestations, thedifferent connotations are perfectly consistent with differences in underlying worldviews(and in that sense equally ideological). ‘Provision’ implies passivity on the part ofrecipients and fits well with the idea of managerial prerogative and the unitarist approach,while ‘disclosure’ is more consistent with management accountability and the pluralistperspective.

9. For suggestions of the sorts of disclosures that might benefit labour, see Owen & Harte(1984).

10. A variety of performance-related compensation schemes have been developed to createincentives for the control of corporations in accordance with the goals of absenteeowners. More generally, managers who do not give priority to finance capital are likelyto face difficulty in raising funds from capital markets, the threat of takeover andpoor employment prospects (Watts & Zimmerman, 1986). The internalized values ofmanagers may also lead them to favour shareholders; shareholder as ‘owners’ are seenas deserving priority and managers act accordingly because it is the ‘right thing to do’(Cooper, 1980, p. 30).

11. For a review of international legislative provisions and a discussion of the extent towhich they reflect ‘a move towards pluralism’, see Brown (1996). Legislative provisionsimply State acceptance of a pluralist perspective. In practice, however, labour hasstill been disadvantaged by restrictive (or at least restrictively interpreted) exemptionclauses, a lack of access to original documents, inadequate financial training and weakenforcement. The dominance of capital perspectives in accounting generally and withinthe judiciary is also a problem; unitarist reasoning is, for example, evident in many ofthe judicial interpretations.

12. Storey (1992), for example, in his survey of HRM practices, found some senior managerstalked of it being the corporate manager’s duty to create periodic crises (p. 45). GeoffArmstrong, at the time Chair of the CBI Employment Committee, believed ‘there wasmerit in engendering an almost permanent sense of crisis’ and advised that this could beachieved through ‘the timely release of information’ (p. 151).

13. In this sense, radicals accept many of the propositions of unitarists about the realities ofthe current system—for example, that the role of management is to maximize wealth forshareholders. They draw very different conclusions about the desirability or inevitabilityof that situation, however. Rather than being socially optimal, such arrangements areseen to reflect the particular interests and rationality of capital.

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14. For example, allegations by the NZ National Union of Railway Workers about decliningmaintenance standards could not be substantiated because of the nature of NZ Rail’saccounting system. When asked to provide a breakdown of the amounts spent in thepast three years on rail ferry maintenance, NZ Rail initially refused to supply theinformation on the grounds that it was ‘commercially sensitive’. An appeal to the chiefombudsman, brought the response that ‘NZ Rail did not know how much was beingspent on maintenance because of the way it did its accounting’ (Dominion 19/7/1993).

15. This theme is evident in the literature on the UK experience with ‘worker-directors’during the 1970s. Research points to a ‘filter’ system by which decisions assume an‘appearance of inevitability’ (Batstone, Ferner & Terry, 1983, p. 39, also see Brannen,Batstone, Fatchett & White, 1975; Brannen, 1983). Towers, Cox & Chell (1981) foundworker-directors were unable to handle the limited information which was available tothem effectively and did not appreciate the extent to which information could be usedas a strategic good.

16. Such suspicions are supported by literature that suggests that ‘corporate elites’, becauseof their similar socialization experiences, tend to be unified in terms of their valuesand attitudes and have little understanding of working class perspectives (Stanworth &Giddens, 1974; Giddens & Held, 1982). The process by which individuals become topmanagers (accountants) also involves at least instrumental acceptance of capitalist values(Watson, 1980; Brannen, 1983). As Nichols (1969, p. 125) observes it seems highlyunlikely that aspiring managers [accountants] ‘will ‘de-internalize’ these upon attainingboardroom [partner] status, or. . . that they will get that far if they do so’.

17. This is not to say that pluralists or radicals could not have a use for technical rationality(for example, in terms of determining the practical strategies for getting from onesocial reality to another) but their overall orientation is different. Radicals, for example,might accept ‘pragmatic pluralism’ as the best means to realize ‘emancipation’ but theirinstrumentalism is still embedded in an ‘emancipatory rationality’.

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