Accounting and The Construction of The Governable Person

Accounti ng Organi zati ons andSoci ety, Vol. 12, No. 3, pp. 235-265, 1987.
Printed in Great Britain

0361-3682187 $3.00+.00
Pergamon Journals Ltd.
ACCOUNTING AND THE CONSTRUCTION OF THE GOVERNABLE PERSON*
PETER MILLER
Di vi si on of Economi c Studi es, Uni versi ty of Sheffi el d
and
TED OLEARY
Department ofAccounti ng, Uni versi ty Col l ege, Cork
Abstract
The concern of the paper is historical. It addresses one familiar event within the literature of the history of
accounting-the construction of theories of standard costing and budgeting in the first three decades of
the twentieth century. A different interpretation of this event is offered from that commonly found. This is
seen to have significant implications for the relevance of historical investigation to the understanding of
contemporary accounting practices. Instead of an interpretation of standard costing and budgeting as one
stage in the advance in accuracy and refinement of accounting concepts and techniques, it is viewed as an
important calculative practice which is part of a much wider modern apparatus of power which emerges
conspicuously in the early years of this century. The concern of this form of power is seen to be the con-
struction of the individual person as a more manageable and efficient entity. This argument is explored
through an examination of the connections of standard costing and budgeting with scientitic management
and industrial psychology. These knowledges are then related to others which, more or less simultaneously,
were emerging beyond the contines of the firm to address questions of the efficiency and manageability of
the Individual. The more general aim of the paper is to suggest some elements of a theoretical understand-
ing of accounting which would locate it in its interrelation with other projects for the social and organisa-
tional management of individual lives.
Accounting has remained remarkably insulated
from important theoretical and historical
debates which have traversed the social sci-
ences. Accounting history, for example, is a con-
text in which one can begin to substantiate this
lack of a problematisation of the roles of
accounting. A standard concept which guides
accounting history is one that sees accounting as
essentially having functional roles in society,
albeit ones which can change (American
Accounting Association, 1970). Little or no sus-
picion seems to surface that different
methodological starting points could be enter-
tained, which could lead to rather different
understandings of accountings history.
There are ripples, however. Recently there
l Earlier drafts of this paper were presented at the Symposium of the Roles of Accounting in Organizations and Society, Uni-
versity of Wisconsin-Madison, U.S.A., July 1984, and at the Accounting Workshop of the European Institute for Advanced
Studies in Management, Brussels, Belgium, December 1984. We are obliged to the participants at both gatherings for very
helpful comments.
We express our thanks especially to Anthony Hopwood for ideas and encouragement, and for suggesting this collaboration.
Ted OLeary Is grateful for the financial support of the Management Fund and the Development Fund, University College,
Cork We are both grateful to the Symposium Organizers, University of Wisconsin-Madison, for their financial contributions
towards travel costs.
235
236 PETER MILLER and TED O'LEARY
ha ve b e e n a t t e mp t s t o i n d i c a t e t h e d i r e c t i o n s
wh i c h a f ul l y s oc i a l i n t e r p r e t a t i o n o f a c c o u n t i n g
mi g h t f o l l o w ( Bu r c h e l l et aL, 1979, 1980) .
Th e s e s e e m t o us t o b e v e r y us ef ul f i r st s t eps .
Ou r c o n c e r n i n t hi s p a p e r c a n b e d e s i g n a t e d
hi s t or i c a l . We a r e c o n c e r n e d wi t h t h e
e me r g e n c e o f s t a n d a r d c o s t i n g a n d b u d g e t i n g i n
t h e e a r l y d e c a d e s o f t hi s c e n t u r y a n d t h e wa y t hi s
c a n b e r e l a t e d t o o t h e r s oc i a l p r a c t i c e s . To i de n-
t i f y o u r c o n c e r n as h i s t o r i c a l is, h o we v e r , t o b e g
t h e q u e s t i o n as t o t h e me a n i n g a nd s i gni f i c a nc e
o f h i s t o r i c a l anal ysi s. Ca r e i s n e e d e d i n f or mul a t -
i ng an a p p e a l t o an h i s t o r i c a l v i e wp o i n t f r o m
wh i c h t o u n d e r s t a n d c h a n g e s i n a c c o u n t i n g
t h o u g h t a n d p r a c t i c e . Th e r e a r e a n u mb e r of
q u i t e di f f e r e nt wa y s i n wh i c h t o u n d e r s t a n d t h e
c o n t r i b u t i o n o f an h i s t o r i c a l p e r s p e c t i v e . On e
r e q u e s t v o i c e d f r o m t i me t o t i me is f or mo r e hi s-
t o r i e s ( s e e e. g. Pa r ke r , 1981, p. 290; Sol omons ,
1968, p . 17) . Th e s e wo u l d , i t is s ugge s t e d,
u n c o v e r t h e h o w a nd t h e wh a t o f a c c o u n t i n g .
Wha t , f or i ns t a nc e , wa s a c t ua l l y a c c o u n t e d f or i n
a p a r t i c u l a r f i r m i n t h e e a r l y n i n e t e e n t h c e n t u r y ?
I t is t e mp t i n g t o r a l l y a r o u n d t hi s cal l . I t ha s an
i n n o c e n t a p p e a l a n d wo u l d a p p e a r t o ha ve u n d e -
n i a b l e f or ce.
I n o n e s e n s e we ha ve n o o b j e c t i o n t o t h e cal l
f or mo r e f act s. Ho we v e r , t h e s i mp l i c i t y o f t h e
r e q u e s t c a n b e mi s l e a di ng. We wo u l d l i ke t o
p r o p o s e a di f f e r e nt a g e n d a f or t h e i n t e r p r e t a t i o n
o f a c c o u n t i n g ' s pas t , o n e wh i c h cas t s a di f f e r e nt
l i ght o n t h e u n d e r s t a n d i n g o f a c c o u n t i n g pr a c -
t i ces . Thi s i s o n e wh i c h we f eel has c o n s i d e r a b l e
r e l e v a n c e f or u n d e r s t a n d i n g a c c o u n t i n g t oda y,
a nd wh i c h e n a b l e s us t o d e v e l o p a t h e o r e t i c a l
u n d e r s t a n d i n g o f a c c o u n t i n g as a s oc i a l a n d
o r g a n i s a t i o n a l p r a c t i c e .
On e c o n c e p t i o n o f a c c o u n t i n g hi s t or y, wh i c h
a p p e a r s t o ha ve a s i gni f i cant l e ve l o f a c c e p t a n c e
at t h e p r e s e n t t i me , is o n e wh i c h s e e s a c c o u n t i n g
as c ha ngi ng, o r c a p a b l e o f b e i n g c h a n g e d , i n
r e s p o n s e t o d e ma n d s e x p r e s s e d o r i mp l i e d b y a
c h a n g i n g e n v i r o n me n t . I t i s a n o t i o n o f a c c o u n t - "
i ng h i s t o r y i n wh i c h r e f e r e n c e s t o t h e me t a p h o r
o f e v o l u t i o n a r e n o t i n f r e q u e n t ( Ame r i c a n
Ac c o u n t i n g As s oc i a t i on, 1970; Chat f i el d, 1977;
Li t t l e t on & Zi mme r ma n , 1962; Lee & Pa r ke r ,
1979; Kapl an, 1984) . Wh a t is h e r e r e q u i r e d of
a c c o u n t i n g hi s t or y, i t wo u l d s e e m, i s t ha t
( p u r e l y a e s t h e t i c c o n s i d e r a t i o n a p a r t ) i t s h o u l d
s e e k t o e l u c i d a t e :
the evolution in accounting thought, practices and
institutions in response to changes in the environment
and societal needs. It also (should consi der). . , the effect
that this evolution has worked on the environment
(American Accounting Association, 1970, p. 53).
Th e ut i l i t y o f a c c o u n t i n g hi s t or y, i t s p o t e n t i a l i n
r e l a t i o n t o c u r r e n t t h e o r e t i c a l a nd p r a c t i c a l c on-
c e r n s , i s t ha t t h r o u g h e l u c i d a t i n g t h e r e s o l u t i o n
o f p a s t i n c o n g r u i t i e s o f a c c o u n t i n g wi t h i t s envi -
r o n me n t , i t c o u l d f a c i l i t a t e t h e mo r e e f f e c t i ve
r e s o l u t i o n o f s u c h i s s ue s i n t h e p r e s e n t . Th e
i ma g e t o b e g a i n e d i s t hat a c c o u n t i n g c a n
e n me s h wi t h i t s c o n t e x t i n wa y s t ha t a r e i nevi t a-
bl e, gi ve n s o me o v e r wh e l mi n g e n v i r o n me n t a l
shi ft , a n d t ha t ma y e v e n b e s oc i a l l y de s i r a bl e . We
d o n o t f i nd s u c h an i n t e r p r e t a t i o n o f a c c o u n t -
i ng' s h i s t o r y t o b e pe r s ua s i ve . I n pa r t i c ul a r , t h e
f u n c t i o n a l t o n e o f t h e v e r y l a n g u a g e i n wh i c h
a c c o u n t i n g h i s t o r y i s d e f i n e d s i gni f i c a nt l y obl i t -
e r a t e s t h e p o s s i b i l i t y o f a c c o u n t i n g ' s l oc a t i on,
a l o n g wi t h a r a nge o f o t h e r s oc i a l p r a c t i c e s , i n
r e l a t i o n t o mo d e s o f o p e r a t i o n o f p o we r .
On e wa y o f c o u n t e r i n g s u c h an a p p r o a c h i s t o
i n v e r t t h e p e r s p e c t i v e . Ac c o u n t i n g wo u l d t h e n
no l o n g e r b e v i e we d as b e c o mi n g , o r as h a v i n g
c a p a c i t y t o b e c o me , an i n c r e a s i n g l y r e f i n e d
t e c h n i c a l a ppa r a t us . I t wo u l d al so n o l o n g e r b e
v i e we d as n e u t r a l b u t r a t h e r s e e n, o n c e t h e vei l s
o f c u r r e n t mi s p e r c e p t i o n ha ve b e e n d r a wn ba c k,
t o c l e a r l y r e f l e c t a nd t o s e r v e c e r t a i n e c o n o mi c
o r p o l i t i c a l i nt e r e s t s . Suc h an a p p r o a c h has
a c h i e v e d c o n s i d e r a b l e c u r r e n c y wh e n a p p l i e d
t o d i s c i p l i n e s o t h e r t ha n a c c o u n t i n g ( s e e , e.g.
Bar i t z, 1960; Scul l , 1979; St edmanoJ ones , 1971 ).
We a r e n o t p e r s u a d e d b y t hi s l i ne o f a r g u me n t
e i t he r . Ce n t r a l t o i t is a n o t i o n t ha t t h e r e is a
mo r e o r l es s d i r e c t a n d u n p r o b l e ma t i c r e l a t i o n
b e t we e n e c o n o mi c a n d / o r p o l i t i c a l i nt e r e s t s ,
a n d t h e k n o wl e d g e s a nd t e c h n i q u e s wh i c h a r e
h e l d t o r e p r e s e n t s u c h i nt e r e s t s . Th e t e r ms a nd
c a t e g o r i e s t h r o u g h wh i c h s u c h i n t e r e s t s a r e r e p-
r e s e n t e d a r e s e e n t o ha ve n o ef f ect s. Wh e t h e r i t
i s a t he s i s c e n t e r e d o n a n o t i o n o f k n o wl e d g e as
a " s e r v a n t o f p o we r " ( Bar i t z, 1 9 6 0 ) o r k n o w-
ACCOUNTING AND THE CONSTRUCTION OF THE GOVERNABLE PERSON 237
l e d g e v i e we d as r e p r e s e n t i n g cl as s i nt e r e s t s , t h e
di f f i c ul t i e s r e ma i n . Th e n o t i o n o f c o n t r o l i n s u c h
a v i e w c o me s t o s u b s t i t u t e f or n o t i o n s o f p r o g -
r e s s o r e v o l u t i o n i n s t a n d a r d hi s t or i e s . Wh e r e a s
t h e l a t t e r s e e a c c o u n t i n g as p r o g r e s s i n g i n t e r ms
o f an u n p r o b l e ma t i c s oc i a l ut i l i t y, t h e f o r me r s e e
h i s t o r y as t h e e l a b o r a t i o n o f b e t t e r a nd mo r e
s u b t l e f o r ms o f c o n t r o l .
I t s e e ms t o us t ha t t h e r e i s a v e r y r e a l n e e d t o
d e v e l o p an u n d e r s t a n d i n g o f a c c o u n t i n g a n d i t s
p a s t wh i c h i s d i s t i n c t f r o m t h e s e t wo
a p p r o a c h e s . Thi s i s t h e t h r u s t o f o u r a t t e mp t i n
t hi s p a p e r , u n d e r t a k e n t h r o u g h a d i s c u s s i o n o f
t h e e me r g e n c e o f s t a n d a r d c o s t i n g a n d b u d g e t -
i ng wi t h i n t h e a c c o u n t i n g l i t e r a t u r e , a n d t h e
r e l a t i o n b e t we e n t h e s e a n d a n u mb e r o f o t h e r
r e l a t e d s oc i a l a n d o r g a n i s a t i o n a l p r a c t i c e s . Ou r
c o n c e r n i s wi t h a p a r t i c u l a r e p i s o d e i n t h e hi s-
t o r y o f a c c o u n t i n g wh i c h we s e e as c r uc i a l , a n d
i t s r e l e v a n c e a n d i mp l i c a t i o n s f or u n d e r s t a n d i n g
c o n t e mp o r a r y a c c o u n t i n g .
I f o u r c o n c e r n i n t hi s p a p e r c a n b e c a l l e d hi s-
t or i c a l , i t e nt a i l s an u n d e r s t a n d i n g o f h i s t o r i c a l
p r o c e s s e s wh i c h is unf a mi l i a r i n t h e a c c o u n t i n g
l i t e r a t ur e . I t ma y b e us ef ul t o r e f e r t o o n e o r t wo
l a n d ma r k s i n r e l a t i o n t o wh i c h t h e c o n c e r n s o f
t hi s p a p e r ma y b e i de nt i f i e d.
Th e i n t e r p r e t a t i o n o f h i s t o r i c a l p r o c e s s e s we
h a v e u t i l i z e d t a ke s mu c h o f i t s i n s p i r a t i o n f r o m
t h e wo r k o f Mi c h e l Fo u c a u l t a nd hi s a s s o c i a t e s
( Ca s t e l e t a l . , 1982; Do n z e l o t , 1979; Fouc a ul t ,
1973, 1977, 1981) . I n n o s e n s e wo u l d we wi s h
t o s u g g e s t t ha t s u c h s t u d i e s of f er a p a n a c e a f or
t h i n k i n g a b o u t a c c o u n t i n g . I n a ny c a s e t h e y d o
n o t d i r e c t l y a d d r e s s a c c o u n t i n g o r f or t ha t mat -
t e r e c o n o mi c p r o c e s s e s . But d e s p i t e t h e di f f er -
e n c e i n t h e f i e l d o f s t u d y we f eel t ha t t h e r e i s
s o me t h i n g d i s t i n c t i v e i n s u c h an a p p r o a c h
wh i c h i s us e f ul i n an a t t e mp t t o u n d e r s t a n d
a c c o u n t i n g as a s oc i a l a n d o r g a n i s a t i o n a l pr a c -
t i ce. Cl e a r l y we c a n d o no mo r e h e r e t ha n p o i n t
t o wh a t we s e e t o b e s o me i mp o r t a n t t h e me s . A
n u mb e r o f r e c e n t s t u d i e s a d d r e s s t h e s e i s s ues i n
mu c h g r e a t e r d e p t h ( Sh e r i d a n , 1980; Co u s i n s &
Hus s ai n, 1984; Bu r c h e l l e t a l . , f o r t h c o mi n g ; Mi l -
l er , f o r t h c o mi n g ) .
Ov e r a p e r i o d o f s o me t we n t y y e a r s Mi c h e l
Fo u c a u l t ha s wo r k e d o n wh a t c a n b e c a l l e d a
s e r i e s o f h i s t o r i e s o f t h e e me r g e n c e o f t h e
h u ma n s c i e n c e s . Hi s s t u d i e s ha ve c o v e r e d
me d i c i n e ( Fo u c a u l t , 1973) , t h e e me r g e n c e o f
p s y c h i a t r y ( Fo u c a u l t , 1967) , a n d t h e p r i s o n
( Fo u c a u l t , 1 9 7 7 ) t o n a me j us t s o me o f t h e mo r e
i mp o r t a n t . Th e h i s t o r i c a l f oc us f or t h e s e has gen-
e r a l l y b e e n o n t h e p e r i o d a r o u n d 1800 wh i c h h e
s e e s as a c r u c i a l p o i n t i n t h e f o r ma t i o n o f t h e
mo d e r n er a. Ot h e r wr i t e r s i n a s i mi l a r v e i n h a v e
e x p l o r e d t h e p e r i o d c l o s e r t o t h e p r e s e n t d a y
( Do n z e l o t , 1979; Ca s t e l e t a l . , 1982) . Al o n g s i d e
t h e h i s t o r i c a l s t u d i e s a n u mb e r o f me t h o d o l o g i -
cal i s s ue s c o n c e r n i n g t h e u n d e r s t a n d i n g o f hi s-
t o r i c a l p r o c e s s e s ha ve b e e n a d d r e s s e d
( Fo u c a u l t , 1972, 1981) . I n t h e mo r e r e c e n t
s t u d i e s an e x p l i c i t c o n c e r n wi t h t h e i s s ue o f
p o we r has e me r g e d .
Th e r e a r e t h r e e i s s ues we wo u l d l i ke t o s i ngl e
o u t f or o u r p u r p o s e s h e r e f r o m t hi s vas t a n d st i l l
g r o wi n g b o d y o f ma t e r i a l . Th e s e c o n c e r n wh a t
c a n b e c a l l e d a " g e n e a l o g i c a l " q u e s t i o n c o n c e r n -
i ng t h e r o l e o f h i s t o r i c a l i nve s t i ga t i on; an "ar -
c h a e o l o g i c a l " q u e s t i o n c o n c e r n i n g t h e wa y o n e
g o e s a b o u t d o i n g hi s t or y; a n d a t he s i s c o n c e r n -
i ng t h e i n t e r d e p e n d e n c e o f b o d i e s o f k n o wl e d g e
a n d r e l a t i o n s o f p o we r .
Th e n o t i o n o f g e n e a l o g y i s d e c e p t i v e l y s i mpl e .
I t c o n c e r n s c e n t r a l l y a q u e s t i o n i n g o f o u r c on-
t e mp o r a r i l y r e c e i v e d n o t i o n s b y a d e mo n s t r a - .
t i o n o f t h e i r h i s t o r i c a l e me r g e n c e . Th e p o i n t o f
h i s t o r y i n t hi s s e n s e i s t o ma k e i n t e l l i g i b l e t h e
wa y i n wh i c h we t h i n k t o d a y b y r e mi n d i n g us o f
i t s c o n d i t i o n s o f f o r ma t i o n . Wh e t h e r t h e t e r ms
b e ef f i ci ency, r a t i o n a l i t y o r mo t i v a t i o n ,
g e n e a l o g i c a l anal ys i s h e l p s us t o a p p r e c i a t e t h e i r
e p h e me r a l c h a r a c t e r . But g e n e a l o g y is n o t j us t a
ma t t e r o f d e - b u n k i n g , a v a l u a b l e e n o u g h e n t e r -
p r i s e i n i t s o wn r i ght . I t c o n c e r n s al so a p a r t i c u -
l a r a p p r o a c h t o t h e t r a c i n g o f t h e e me r g e n c e o f
o u r f r e q u e n t l y u n q u e s t i o n e d c o n t e mp o r a r y
r a t i ona l e s . Thi s i s o n e wh i c h d o e s n o t e nt a i l
l o o k i n g f or a s i ngl e p o i n t i n h i s t o r y wh i c h wo u l d
b e t h e p o i n t o f o r i g i n o f o u r c u r r e n t p r a c t i c e s .
Th e e me r g e n c e o f o u r c o n t e mp o r a r y be l i e f s is
v i e we d r a t h e r b y r e f e r e n c e t o a c o mp l e x o f di s-
p e r s e d e ve nt s . Ge n e a l o g y d o e s n o t l e a d us t o
s ol i d f o u n d a t i o n s ; r a t he r , i t f r a g me n t s a n d di s-
t u r b s wh a t we mi g h t l i ke t o s e e as t h e bas i s o f o u r
cur r ent ideas and pract i ces. Appl i ed t o account -
i ng it means quest i oni ng a search for t he ori gi ns
of account i ng i n t he i nvent i on of t echni ques,
whet her i n r ecent cent ur i es or i n ant i qui t y.
Ot her t ypes of event s, such as t he pol i t i cal obj ec-
tives of states, but also hi st ori cal cont i ngency,
part i cul ar nat i onal condi t i ons and t he devel op-
me nt of rel at ed di sci pl i nes, all ent er i nt o t he
expl anat i on. Geneal ogy opens out i nt o a much
less cer t ai n field t han t he st andard hi st ori es of
account i ng woul d l ead us to bel i eve.
The archaeol ogi cal quest i on is hi st ori cal also.
Its focus is on our most l egi t i mat ed forms of con-
t empor ar y di scourse, and t he real hi st ori cal con-
di t i ons whi ch have l ed t o t hei r emer gence. It
concer ns t he mor e soci ol ogi cal aspect s of t he
emer gence and f unct i oni ng of di scourses as wel l
as t hei r i nt er nal concept ual features. The status
of our most l egi t i mat ed forms of di scourse ( l aw
and medi ci ne, for exampl e, but also economi cs
and account i ng) are seen to depend, amongst
ot her things, on i nst i t ut i onal and legal cri t eri a as
wel l as on pedagogi cal nor ms for t hei r funct i on-
ing. Archaeol ogy di rect s our at t ent i on t o t hese
feat ures of di scourse. It also has an epi st emol og-
ical aspect. This concer ns t he rel at i onshi p bet-
we e n di scourses and t he obj ect s t o whi ch t hey
refer. Again t her e is an el ement of de-bunki ng.
Appl i ed t o our concer ns i n this paper one coul d
for i nst ance say t hat t her e is no obvi ous r eason
why we shoul d have come t o talk i n t er ms of effi-
ci ency and standards. Such not i ons do not exist
i n t he obj ect itself or i n l i mbo wai t i ng t o be dis-
covered. They are seen rat her to have been
f or med i n a compl ex of rel at i ons est abl i shed bet -
we e n a het er ogeneous range of di scourses and
pract i ces. Thi s is why we talk bel ow of t he stan-
dard cost i ng and budget i ng compl ex, and rel at e
it to a range of ot her di scourses and pract i ces
whi ch share a c ommon vocabul ar y and set of
obj ect i ves. St andard cost i ng is, we suggest,
i nt er t wi ned wi t h ot her at t empt s wi t hi n t he
ent er pr i se and out si de it to embar k on a vast pro-
j ect of st andardi sat i on and nor mal i sat i on of t he
lives of i ndi vi dual s. It is, we argue, to this web of
rel at i ons est abl i shed bet ween, for exampl e,
basi c t echni cal r equi r ement s and adj ust ment s,
and el aborat e forms of phi l osophi cal di scourse,
t hat one shoul d l ook i n t ryi ng to under s t and
redefi ni t i ons of t he pr act i ce of account i ng. It is
t he posi t i ve condi t i ons of a compl ex gr oup of
rel at i ons wi t hi n whi ch account i ng exists t hat we
shoul d address.
The t hi rd aspect of Foucaul t ' s wor k of rele-
vance to this paper concer ns t he rel at i onshi p
bet ween knowl edge and power. Foucaul t ' s argu-
ment s on this quest i on are di st i nct i ve. He
suggests t hat we can under s t and t he devel op-
ment of moder n soci et i es i n t er ms of power , and
t he shift i n its mode of exerci se. The br oadest
shift he refers t o is one whi ch he suggests t ook
pl ace ar ound 1800 and is from what he calls
sover ei gn power t o di sci pl i nary power.
Soverei gn power is i dent i fi ed as a di mi ni shed
form of power. Its ul t i mat e r ecour se is s e i z ur e - -
of things, of bodi es and ul t i mat el y of life. Discipli-
nary power is much r i cher and ent ai l s penet rat -
i ng i nt o t he very web of social life t hr ough a vast
seri es of regul at i ons and t ool s for t he admi ni st ra-
t i on of ent i r e popul at i ons and of t he mi nut ae of
peopl e' s lives. The cal cul at ed management of
social life is one way of desi gnat i ng t he form of
oper at i on of di sci pl i nary power. It can be wit-
nessed, Foucaul t suggests, i n t he fields of publ i c
health, housi ng, concer ns wi t h l ongevi t y, but
also i n t he schools, workshops, barracks and
pri sons.
Foucaul t ' s ar gument s concer ni ng power are
cl osel y l i nked to his i nvest i gat i on of t he
emer gence of t he huma n sci ences (Foucaul t ,
1970). The shift he i dent i fi es from soverei gn to
di sci pl i nary power is i nt i mat el y connect ed wi t h
changes i n our forms of knowl edge. His argu-
me nt is expr essed i n t he f or mul a "power / know-
l edge" and t he const i t ut i ve i nt er dependence of
t he t wo t er ms of t he equat i on m t he oper at i on of
t he huma n sci ences shoul d be under s t ood i n
rel at i on to t he el abor at i on of a range of
t echni ques for t he supervi si on, admi ni st r at i on
and di sci pl i ni ng of popul at i ons of human indi-
viduals. Thi s is seen t o take pl ace i n part i cul ar
i nst i t ut i ons and i n social rel at i ons i n a wi der
sense. This is not t o suggest t hat all i nst i t ut i ons
are homogeneous and cot er mi nous wi t h t he
t ype of admi ni st r at i on whi ch occur s i n soci et y at
large. Vi ewed i n t er ms of power and at t he l evel
o f c e r t a i n g e n e r a l p r i n c i p l e s f or i t s o p e r a t i o n
t h e r e i s n o n e t h e l e s s h e l d t o b e a n i mp o r t a n t
i n t e r - r e l a t i o n b e t we e n a d i v e r s e r a n g e o f p r a c -
t i ces .
Ou r a t t e mp t i n t hi s p a p e r t o u n d e r s t a n d o n e
p a r t i c u l a r i mp o r t a n t p e r i o d i n a c c o u n t i n g ' s hi s-
t o r y ha s b e e n i n f l u e n c e d b y t h e s e t h r e e b r o a d
t h e me s . Ho we v e r t h e h i s t o r i c a l p e r i o d
Fo u c a u l t ' s r e s e a r c h e s a ddr e s s , t h e i n s t i t u t i o n s
t h e y c o n c e r n , a n d t h e a b s e n c e o f a c l e a r l y i de nt i -
f i abl e " me t h o d " me a n t ha t we c a n n o t c l a i m t o b e
t e s t i n g a me t h o d b y t r a n s p o s i n g i t s f i e l d o f appl i -
c a t i on. We h a v e s t u d i e d a di f f e r e nt p e r i o d ,
n a me l y t ha t a r o u n d t h e y e a r 1900, a n d a di f f e-
r e n t d i s c i p l i n e , n a me l y a c c o u n t i n g . I n o u r pr e -
l i mi n a r y i n v e s t i g a t i o n s we we r e l e d t o f o r mu l a t e
a n u mb e r o f wo r k i n g p r o p o s i t i o n s , a n d i t i s t h e s e
wh i c h d i r e c t l y i n f o r m t h e p a p e r . Th e s e c o n c e r n
g e n e r a l me t h o d o l o g i c a l p r i n c i p l e s , a n a t t e mp t
t o l o c a t e a c c o u n t i n g wi t h i n a wi d e r s e t o f cal -
c u l a t i v e t e c h n i q u e s , a n d s o me r e f l e c t i o n s o n t h e
l e ve l o f o u r a na l ys i s a n d wh a t we s e e t o b e i t s si g-
ni f i c a nc e . I t ma y b e us e f ul t o b r i e f l y c o mme n t o n
t h e mo s t i mp o r t a n t o f t h e s e c o n c e r n s .
A f i r st a n d g e n e r a l me t h o d o l o g i c a l p o s t u l a t e
c a n b e c a l l e d " c o n s t r u c t i v i s t " . By t hi s we me a n
t ha t we h a v e b e e n c o n c e r n e d wi t h t h e wa y
a c c o u n t i n g , i n c o n j u n c t i o n wi t h o t h e r p r a c t i c e s ,
s e r v e s t o c o n s t r u c t a p a r t i c u l a r f i e l d o f vi s i bi l i t y.
Ra t h e r t h a n v i e w a c c o u n t i n g as a n e u t r a l t o o l o f
o b s e r v a t i o n we h a v e a t t e mp t e d t o e x a mi n e h o w
a c c o u n t i n g as s i s t s i n r e n d e r i n g vi s i bl e c e r t a i n
c r u c i a l a s p e c t s o f t h e f u n c t i o n i n g o f t h e e n t e r -
pr i s e . Qu e s t i o n s o f wa s t a g e a n d e f f i c i e nc y a r e
e x a mp l e s wh i c h we a d d r e s s i n t h e p a p e r .
A s e c o n d p o i n t wh i c h e me r g e d i n o u r r e a d i n g
o f t h e l i t e r a t u r e wa s t ha t t hi s p r o c e s s o f r e n d e r -
i ng vi s i bl e a l i g h t e d o n t h e i n d i v i d u a l p e r s o n .
Mo r e p a r t i c u l a r l y i t d i d s o b y s u r r o u n d i n g t h e
i n d i v i d u a l at wo r k b y a s e r i e s o f n o r ms a n d st an-
da r ds . Th r o u g h s u c h n o r ms a n d s t a n d a r d s t h e
i n e f f i c i e n c i e s o f t h e p e r s o n we r e r e n d e r e d
c l e a r l y vi s i bl e. Thi s wa s a n o v e l s t e p f or a c c o u n t -
i ng. I t i s s i gni f i c a nt al s o i n r e l a t i o n t o t h e i s s ue o f
p o we r i d e n t i f i e d a bove . At t h e r i s k o f b e i n g mi s-
u n d e r s t o o d we s hal l b e h i g h l y s c h e ma t i c t o
r e g i s t e r wh a t we s e e t o b e t h e s i gni f i c a nt c h a n g e
b r o u g h t a b o u t b y t h e e me r g e n c e o f s t a n d a r d
c o s t i n g a n d b u d g e t i n g a nd t h e i r a l l i a nc e wi t h
s c i e nt i f i c ma n a g e me n t , t o p i c s wh i c h we a d d r e s s
i n d e t a i l b e l o w. I n t h e n i n e t e e n t h c e n t u r y di s c i p-
l i ne wi t h i n t h e e n t e r p r i s e t o o k t h e f o r m o f d i r e c t
c o n f r o n t a t i o n s b e t we e n t h e wo r k e r a nd t h e
bos s . I n t h e e a r l y t we n t i e t h c e n t u r y , a n d t h r o u g h
t h e c h a n g e s we wi l l b e r e f e r r i n g t o, t h e
e mp l o y e e c o me s t o b e s u r r o u n d e d b y c a l c ul a -
t i r e n o r ms a n d s t a nda r ds , i n t e r p o s i n g b e t we e n
h i m a n d t h e b o s s a wh o l e r a n g e o f i n t e r me d i a r y
me c h a n i s ms . Wi t h t hi s shi f t d i s c i p l i n e c o me s t o
b e s e e n t o r e s i d e n o t i n t h e wi l l o f t h e b o s s b u t i n
t h e e c o n o mi c ma c h i n e i t sel f, i n t h e n o r ms a n d
s t a n d a r d s f r o m wh i c h t h e wo r k e r c a n b e s e e n t o
de pa r t . Ac c o u n t i n g is, we ar gue, an i mp o r t a n t
a s p e c t o f t hi s d e v e l o p me n t o f a r a n g e o f c a l c ul a -
t i ve p r o g r a mme s a nd t e c h n i q u e s wh i c h c o me t o
r e g u l a t e t h e l i ves o f i n d i v i d u a l s at wo r k i n t h e
e a r l y t we n t i e t h c e n t u r y . I t i s f or t hi s r e a s o n t ha t
we t al k o f s t a n d a r d c o s t i n g as b e i n g l o c a t e d
wi t h i n a s i gni f i c a nt r e o r i e n t a t i o n o f t h e e x e r c i s e
o f p o we r wi t h i n t h e e n t e r p r i s e .
A t h i r d i s s ue we wa n t e d t o a d d r e s s is t h e
wi d e r f r a me wo r k wi t h i n wh i c h c h a n g e s i n
a c c o u n t i n g t o o k pl a c e . Ou r c o n c e r n i n t h e p a p e r
i s wi t h t h e e n t e r p r i s e a nd t h e na t i on, v i e wi n g
t h e s e as d i s t i n c t l e ve l s f or t h e e l a b o r a t i o n o f a
r a n g e o f t e c h n i q u e s o f s u p e r v i s i o n a nd a dmi ni s t -
r a t i o n o f i n d i v i d u a l l i ves. Ex t e n d i n g o u r v i e w
b e y o n d t h e e n t e r p r i s e a n d b e y o n d a c c o u n t i n g i t
b e c a me c l e a r t o us t ha t an i mp o r t a n t r e de f i ni -
t i o n o f t h e t as ks a n d o b j e c t i v e s o f g o v e r n me n t
t o o k p l a c e a r o u n d t h e e a r l y y e a r s o f t hi s c e n t u r y .
Ce n t r a l t o t hi s r e d e f i n i t i o n wa s t h e e me r g e n c e
o f t h e s oc i a l s c i e n c e s , i n p a r t i c u l a r p s y c h o l o g y
a n d s o c i o l o g y . I n c o n j u n c t i o n wi t h a c h a n g e d
c o n c e p t i o n o f t h e r o l e o f t h e s t at e, t h e s oc i a l sci -
e n c e s we r e a b l e t o e n t e r an a l l i a nc e wi t h t h e
s t a t e a n d t o u n d e r t a k e a q u i t e n o v e l f o r m of
a d mi n i s t r a t i o n a nd s u r v e i l l a n c e o f i n d i v i d u a l
l i ves. Ce n t r a l t o t hi s p r o j e c t wa s t h e p o s s i b i l i t y
o f c o mp a r i n g t h e c a p a c i t i e s o f i n d i v i d u a l s
( h e a l t h , i n t e l l i g e n c e , l o n g e v i t y ) a ga i ns t s pe c i f i c
s t a nda r ds . I t i s o u r c o n t e n t i o n t hat o n e c a n
u n d e r s t a n d t h e e me r g e n c e o f s t a n d a r d c o s t i n g
a n d b u d g e t i n g i n t h e e a r l y y e a r s o f t h e t we n t i e t h
c e n t u r y b y s i t u a t i n g i t wi t h i n t hi s mo r e g e n e r a l
shi f t i n t h e f o r m o f a d mi n i s t r a t i o n o f s oc i a l l i f e
wh i c h o c c u r s a r o u n d t h e t u r n o f t h e c e n t u r y .
A f o u r t h a n d f i nal i s s ue c o n c e r n s t h e l e ve l o f
anal ys i s we ha ve u n d e r t a k e n he r e . We ha ve
p l a c e d g r e a t e s t e mp h a s i s o n wh a t we mi g h t cal l
p r o g r a mma t i c d i s c o u r s e s as o p p o s e d t o
a c c o u n t i n g as i t wa s p r a c t i s e d i n p a r t i c u l a r f i r ms.
Thi s i s n o t b e c a u s e we r e g a r d t h e l a t t e r as u n i m-
p o r t a n t . No r i s i t b e c a u s e we v i e w o u r c o n c e r n s
as e n t i r e l y i n d e p e n d e n t f r o m t hi s mo r e t e c h n i -
cal l e ve l o f anal ysi s. To cl ar i f y o u r vi e ws i t ma y
h e l p t o i de nt i f y wh a t we s e e t o b e t wo d i s t i n c t
o r d e r s o f e v e n t s a n d t h e i n t e r r e l a t i o n b e t we e n
t he m. Th e o n e we h a v e c o n c e n t r a t e d o n i n t hi s
p a p e r c a n b e c a l l e d t h e d i s c u r s i v e p r o g r a mme s
f or t h e a d mi n i s t r a t i o n a n d c a l c u l a t i o n o f
a c t i vi t i e s wi t h i n t h e e n t e r p r i s e a nd i n s o c i e t y as
a wh o l e . Th e o t h e r we wo u l d cal l t e c h n o l o g i c a l
a nd c o n c e r n s t h e a c t ua l o p e r a t i o n o f a c c o u n t i n g
p r a c t i c e s , t h e i r e l a b o r a t i o n t h r o u g h p a r t i c u l a r
p r o c e d u r e s a nd t e c h n i q u e s . Ou r p o i n t i s t ha t
t h e s e t wo l e ve l s a r e di s t i nc t , y e t c r u c i a l l y
i n t e r d e p e n d e n t . A d i s c u r s i v e p r o g r a mme ( f o r
t h e c a l c u l a t i o n o f i n d i v i d u a l i ne f f i c i e nc e s , s a y )
o n l y ful fi l s i t s v o c a t i o n wh e n i t ha s as i t s c o u n t e r -
p a r t an a d e q u a t e t e c h n o l o g y . Wh a t t h e p r o g -
r a mme c o n t r i b u t e s t o t h e t e c h n o l o g y i s a mo r e
g e n e r a l r e n d e r i n g o f r e a l i t y i n a f o r m s u c h t ha t i t
c a n b e k n o wn , a r e n d e r i n g vi s i bl e o f c e r t a i n
a c t i vi t i e s i n a wa y wh i c h i s i nt e l l i gi bl e b y v i r t u e
o f c e r t a i n g e n e r a l c a t e gor i e s . A p r o g r a mme is
al s o t h e s p a c e f or t h e a r t i c u l a t i o n o f p r o b l e ms ,
n e g o t i a t i o n a nd c o n f l i c t o v e r i nt e r e s t s . Th e r e is,
o f c o u r s e , c o n s i d e r a b l e p l a y i n t h e me c h a n i s m
wh i c h l i nks t h e p r o g r a mma t i c l e ve l wi t h t h e
t e c h n o l o g i c a l . Yet i t is p r e c i s e l y t h e l o o s e n e s s of
t h e l i nka ge wh i c h ma k e s i t i mp o r t a n t t o r e c a l l i t s
e x i s t e n c e .
Th e s e a r e t h e p r i n c i p l e t h e me s wh i c h i n f o r m
o u r t h i n k i n g i n t hi s p a p e r . I f t h e y ha ve va l i di t y
f or t h e u n d e r s t a n d i n g o f a c c o u n t i n g as an or ga ni -
s a t i ona l a n d s oc i a l p r a c t i c e t h e i mp l i c a t i o n s a r e
s i gni f i cant . Ac c o u n t i n g c a n n o l o n g e r b e r e-
g a r d e d as a n e u t r a l a n d o b j e c t i v e p r o c e s s . I t
c o me s r a t h e r t o b e v i e we d as an i mp o r t a n t p a r t
o f a n e t wo r k o f p o we r r e l a t i o n s wh i c h a r e bui l t
i nt o t h e v e r y f abr i c o f o r g a n i s a t i o n a l a n d s oc i a l
life. I t is a c o n s t i t u t i v e e l e me n t i n a f or m o f nor -
ma l i s i ng s o c i o - p o l i t i c a l ma n a g e me n t wh o s e
c o n c e r n i s wi t h r e n d e r i n g vi s i bl e al l f o r ms o f ac-
t i vi t y o f t h e i n d i v i d u a l i n v i e w o f t h e i r c o n t r i b u -
t i o n t o t h e ef f i ci ent o p e r a t i o n o f t h e e n t e r p r i s e
a n d o f s oc i e t y.
STANDARD COSTI NG AND BUDGETI NG
Be t we e n 1900 a n d 1930 t h e r e a p p e a r s i n t h e
a c c o u n t i n g l i t e r a t u r e an i ni t i al d e l i n e a t i o n o f
t h e o r i e s o f s t a n d a r d c o s t i n g a n d b u d g e t i n g . Thi s
i s a n o v e l e v e n t wi t h i n a c c o u n t i n g . At a p u r e l y
t e c h n i c a l l e ve l t h e i n n o v a t i o n b r o u g h t a b o u t
wa s n o t h i n g l es s t ha n an e n t i r e r e - c a s t i n g o f t h e
d e f i n i t i o n o f c o s t a c c o u n t i n g . I t s p r i ma r y c on-
c e r n wo u l d h e n c e f o r t h n o l o n g e r b e t h e as cer -
t a i n me n t o f o n l y t h e a c t u a l c o s t s ( Ni c h o l s o n ,
1913; Ch u r c h , 1917; Eps t ei n, 1978, pp. 9 0 -
120) , o f p r o d u c t i o n o r o f act i vi t i es . Th e r e wo u l d
b e an e x p a n s i o n o f d o ma i n t o p e r mi t a c o n c e r n
f or t h e f u t u r e as we l l as f or t h e past .
Th e v i r t u e o f t h e s e n o v e l p r a c t i c e s l ay i n t h e i r
c a p a c i t y t o r o u t i n e l y r a i s e q u e s t i o n s o f wa s t e
a n d e f f i c i e nc y i n t h e e mp l o y me n t o f r e s o u r c e s ,
wh e t h e r h u ma n , f i nanci al o r ma t e r i a l , at as ma n y
l e ve l s o f anal ys i s as r e q u i r e d . On e c o u l d , f or
e x a mp l e , r o u t i n e l y p o i n t t o, a n d anal ys e, var -
i a n c e s o f a c t u a l f r o m s t a n d a r d o r p l a n at t h e l e ve l
of t h e p r o f i t o f t h e t ot a l f i r m, o r at t h e l e ve l o f
ma t e r i a l o r l a b o u r us e i n p r o d u c t i o n or , i n d e e d ,
at t h e l e ve l o f e v e r y a c c o u n t a b l e p e r s o n wi t h i n
t h e f i r m.
Th e e x i s t i n g h i s t o r i e s n o t e t h e i mp o r t a n c e o f
t h e i n t r o d u c t i o n o f s t a n d a r d c os t i ng. For Sowe l l
( 1 9 7 3 ) s t a n d a r d c o s t i n g e n t a i l e d t h e d e v e l o p -
me n t o f a s e t o f t e c h n i q u e s a nd a t h e o r e t i c a l
r a t i o n a l e f or t h e " s c i e nt i f i c " p r e d e t e r mi n a t i o n o f
t h e c o s t s o f r a w ma t e r i a l , l a b o u r a n d o v e r h e a d ,
as we l l as f or t h e anal ys i s o f t h e v a r i a n c e o f s u c h
c o s t s f r o m t h e a c t u a l o r h i s t o r i c a l cos t s . Sol -
o mo n s ( 1 9 6 8 ) i de nt i f i e s s i mi l a r t h e me s a c r o s s a
r a n g e o f wr i t e r s , i n p a r t i c u l a r Ha r r i n g t o n Eme r -
s on ( 1 9 1 9 ) a n d Ch a r t e r Ha r r i s o n ( 1 9 3 0 ) .
Wh a t i n t e r e s t s us h e r e i s t h e wa y t h e e x i s t i n g
h i s t o r i e s c o n s t r u e t h e d e v e l o p me n t o f s t a n d a r d
c os t i ng. Th e y t e n d t o n a r r a t e t h e e me r g e n c e o f
s t a n d a r d c o s t i n g a n d b u d g e t i n g a c c o r d i n g t o
t wo di st i nct criteria. One of t hese consi st s i n a
careful and det ai l ed exposi t i on of t he ideas and
t echni ques i n t he t er ms of t hose who, at t he
t i me, had devel oped or art i cul at ed t hem. Such
an appr oach is t aken by Sowell ( 1973) who
decl ares his task as t hat of pr es ent i ng "i n
chr onol ogi cal successi on, t hose r el at ed event s,
forces, i ndi vi dual s, and i deas t hat have cont ri -
but ed t o and/ or have devel oped i nt o" (p. 2) a
t heoret i cal and t echni cal compl ex cal l ed stan-
dard cost i ng. That achi eved, t hr ough an
i mmens e weal t h of sour ce mat eri al consul t ed
and descr i bed, Sowell ends his work. A s econd
approach, whi ch Sol omons ( 1968) adopts, is to
const r ue t hese novel pract i ces t hr ough t he l ens
of progress, t o out l i ne t he difficult and of t en
er r or - pr one pat hs wher eby cost i ng has progres-
sed t o its cur r ent l evel of sophi st i cat i on. Thus,
for exampl e, he poi nt s to "weaknesses" i n one of
t he earl y out l i nes of a st andar d cost i ng, t hat of
Emerson, i ndi cat i ng its failures i n anal yt i c power
and i n cl ari t y of t hought rel at i ve to wr i t i ng
whi ch fol l ows it i n time.
We wi sh i n this paper t o pl ace a di fferent
i nt er pr et at i on on t he emer gence of st andar d
cost i ng. We do not vi ew t he devel opment of
st andar d cost i ng and budget i ng as part of t he
unf ol di ng of a soci al l y useful t heoret i cal -t echni -
cal compl ex, whose under l yi ng l ogi c is one of
progress. We wi sh t o l ocat e it r at her as an i mpor-
t ant cont r i but i on t o a compl ex of pract i ces
whi ch consi st i n a form of soci o-pol i t i cal man-
agement whose concer n is wi t h i ndi vi dual per-
sons and t hei r effi ci ent f unct i oni ng.
St andard cost i ng and budget i ng pr ovi ded
qui t e novel t heor i sat i on and t echni que whi ch
ser ved t o r ender vi si bl e t he i neffi ci enci es of t he
i ndi vi dual per s on wi t hi n t he ent erpri se. In
r out i nel y rai si ng quest i ons of wast e and ineffi-
ci ency i n t he empl oyment of human, fi nanci al
and mat eri al resources, t hey s uppl ement ed t he
t radi t i onal concer ns of account i ng wi t h t he
fi del i t y or hones t y of t he per son. Cost account -
i ng coul d now embr ace also t he i ndi vi dual per-
son and make t hem account abl e by r ef er ence to
pr escr i bed st andards of per f or mance. Wi t h this
st ep account i ng si gni fi cant l y ext ended its
domai n, enmes hi ng t he per s on wi t hi n a web of
cal cul at i ve pract i ces ai med not onl y at st eward-
shi p but effi ci ency also.
We can i dent i fy t he shift ent ai l ed i n t he
emer gence of st andar d cost i ng dur i ng t he
per i od 1900 and 1930 across a numbe r of cent -
ral t ext s of t hat peri od. Garcke & Fells ( 1911 )
make t he fol l owi ng st at ement concer ni ng t he
rol e of syst emat i c cost account s and t hei r rele-
vance for manageri al act i on:
it is only by means of systematic records that leakage,
waste, and fraud can be prevented, and that employers
can know the cost of any article of their manufacture, and
be able to determine accurately and scientifically, not
merely approximately and by hap-hazard, the actual pro-
fit they make or loss they sustain, not only on the aggre-
gate transactions during a given period, but also upon
each individual transaction (Garcke & Fells, 1911, pp. 3-
5).
I n a si mi l ar ma nne r A. L. Di cki nson ( 1908, ci t ed
i n Garcke & Fells, 1911, pp. 7--8), states t he pri n-
cipal obj ect s of a mode m cost syst em. They
shoul d compri se:
( 1 ) Ascertaining the cost of the same product at diffe-
rent periods in the same mill, or at the same period in dif-
ferent mills, and so to remedy inequalities in cost by
reducing all to the results shown by the best.
(2) The provision of an accurate, running book of
inventories on hand, so facilitating reduction in stocks
and capital invested to the lowest state consistent with
efficiency.
(3) The preparation of statistical information as to
costs of parts, quantity, and variety of output, relative effi-
ciency of different classes of labour, and relative costs of
labour and material, between different mills and periods.
(4) The preparation of periodical statements of profit
and loss in a condensed form, readily giving directors all
material information as to the results of the business.
These st at ement s are admi r abl e i n t hei r
ri gour. It is, however , what is mi ssi ng from t hem
whi ch is si gni fi cant for our pur poses here. Mis-
si ng from bot h is a cl ear st at ement of t he pur-
poses t hat mi ght be fulfilled by st andard or pre-
det er mi ned costs. Missing, as a cons equence, are
mat eri al s deal i ng wi t h how a r out i ne t echnol ogy
of st andar d or pr edet er mi ned cost s mi ght oper-
ate.
By 1930 t her e had be e n a cl ear est abl i shment ,
i n t ext s on bot h sides of t he Atlantic, of several
n e w p r o mi n e n t a d d i t i o n s t o t h e v o c a b u l a r y o f
c o s t s a c c o u n t s k e e p i n g . Th e s e a r e " t h e s t a n d a r d
c os t " , " t h e v a r i a n c e anal ys i s ", " t h e b u d g e t " ,
" b u d g e t a r y c o n t r o l " . Thi s i s t h e r u p t u r e wi t h
wh i c h we a r e c o n c e r n e d a n d i t s i mp l i c a t i o n s .
On e wa y o f d e s i g n a t i n g t h e c h a n g e wo u l d b e
f r o m t h e " r e g i s t r a t i o n o f c o s t s o f p r o d u c t i o n " t o
" t h e r e n d e r i n g o f al l a c t i vi t i e s c a p a b l e o f s us pi -
c i o n as t o t h e i r c os t l i ne s s " .
Ch a r t e r Ha r r i s o n ( 1 9 3 0 ) e x p r e s s e s mo s t
c l e a r l y t h e di s s a t i s f a c t i on wi t h t h e o l d s y s t e m
a nd t h e p r o mi s e o f t h e ne w:
The most seri ous defect of t he job-order cost plan was
that it failed, most ut t erl y and dismally to achi eve what
shoul d be t he pri mary purpose of any cost system,
namely, to bri ng pr ompt l y to t he at t ent i on of t he manage-
ment t he exi st ence of prevent abl e inefficiencies so that
st eps coul d be t aken to el i mi nat e t hese at t he earliest pos-
sible moment (Harrison, 1930, p. 8).
An d agai n:
one of t he pri mary advantages of standard cost s. . , is that
t he clerical wor k i nvol ved in t he operat i ng of a properl y
desi gned standard cost syst em is very much less than that
requi red to operat e any compl et e job-order cost plan.
That this is so is evi dent when it is consi dered that wi t h
st andard costs we are deal i ng wi t h the pri nci pl e of
exceptions, t hat is to say wi t h vari at i ons f r om the stan-
dards (Harrison, 1930, p. 12, emphasis added).
Fo r o u r c o n c e r n s i n t hi s p a p e r t h e r e i s o n e cr u-
ci al d i me n s i o n t o t hi s i n n o v a t i o n . Th e p r i n c i p l e
o f s t a n d a r d c o s t s ma d e i t p o s s i b l e t o a t t a c h t o
e v e r y i n d i v i d u a l wi t h i n t h e f i r m n o r ms a n d st an-
d a r d s o f b e h a v i o u r . Ev e r y o n e , i n r e l a t i o n t o al l
a c t i vi t i e s wh i c h t h e y d i r e c t l y c a r r i e d o u t o r
d i r e c t e d , c o u l d b e r e n d e r e d s u s c e p t i b l e t o a
c o n t i n u a l p r o c e s s of j u d g me n t . Thi s i mp l a n t i n g
o f n o r ms mo r e o v e r c o n c e r n e d n o t j us t n o r ms o f
p h y s i o l o g i c a l b e h a v i o r f or t h e wo r k e r at t h e
b e n c h , b u t al s o t h e me n t a l a c t i vi t y o n t h e p a r t o f
t h e e x e c u t i v e . Wi t n e s s Ch a r t e r Ha r r i s o n agai n:
We have i ncreased t he efficiency of t he average man
because we have appl i ed t he pri nci pl es of scientific man-
agement to his wor k - - i nst ead of l et t i ng hi m pr oceed
haphazardly we have set before hi m carefully det er mi ned
standards of accompl i shment r ender ed possi bl e by stan-
dardization of conditions, and have gi ven hi m scientific
training suppl ement ed by an efficiency reward. We have
combi ned mechani cal sci ences and psychology, wi t h t he
result that t oday every man, woman, and chi l d in this
count ry is reapi ng t he harvest (Harrison, 1930, pp. 27-
28).
Wi t h t hi s s t e p t h e p o s s i b i l i t y o f a k n o wl e d g e o f
e v e r y i n d i v i d u a l wi t h i n t h e e n t e r p r i s e wa s es t ab-
l i s hed. A vi s i bi l i t y a nd an a l l o c a t i o n o f r e s p o n s i -
b i l i t y c o u l d b e a t t a c h e d t o t h e i ndi vi dua l . Th e
p e r s o n ' s a c t i vi t i e s we r e at l as t r e n d e r e d k n o wa -
b l e a c c o r d i n g t o p r e s c r i b e d s t a n d a r d s a n d devi a-
t i ons f r o m t h e n o r m. St a n d a r d c o s t i n g a nd
b u d g e t i n g ma d e p o s s i b l e a p i n p o i n t i n g o f
r e s p o n s i b i l i t i e s f or p r e v e n t a b l e i ne f f i c i e nc i e s at
t h e l e ve l o f t h e v e r y i n d i v i d u a l f r o m wh o m t h e y
d e r i v e d . Th e h u ma n e l e me n t i n p r o d u c t i o n , a n d
mo s t i mp o r t a n t l y t h e i n d i v i d u a l p e r s o n , c o u l d
n o w b e k n o wn a c c o r d i n g t o t h e i r c o n t r i b u t i o n
t o t h e e f f i c i e nc y o f t h e e n t e r p r i s e .
Th e s i gni f i c a nc e o f s t a n d a r d c o s t i n g a nd
b u d g e t i n g as an i nnova t i on, h o we v e r , i s n o t o n l y
i n t e r n a l t o a c c o u n t i n g a n d t h e o r g a n i s a t i o n a n d
ma n a g e me n t o f t he e n t e r p r i s e . We s ugge s t t ha t i t
s h o u l d b e l o c a t e d a l o n g s i d e t h e e me r g e n c e o f a
r a n g e o f d i s c o u r s e s a n d p r a c t i c e s wh i c h , i n b o t h
Br i t ai n a n d t h e U.S.A. i n t h e e a r l y y e a r s o f t hi s
c e n t u r y , c o n c e r n e d t h e ms e l v e s wi t h t h e phys i -
cal a n d me n t a l h e a l t h o f t h e p o p u l a t i o n . I n t h e i r
c o n c e r n wi t h e f f i c i e nc y t h e s e p r a c t i c e s ha ve a
ma c r o - a nd a mi c r o - l e v e l c o n c e r n . Th e y t o o k as
t h e i r o b j e c t b o t h t h e h e a l t h a n d e f f i c i e nc y o f t h e
n a t i o n s as a wh o l e , a nd d e t a i l e d q u e s t i o n s c on-
c e r n i n g t h e habi t s , l i f e- s t yl es a nd a c t i vi t i e s o f t h e
i ndi vi dua l . Th e u n d e r l y i n g p r e o c c u p a t i o n wa s
wi t h wa y s i n wh i c h mo d i f i c a t i o n s i n t h e l a t t e r
mi g h t e n r i c h t h e f o r me r , an o v e r t l y p o l i t i c a l
c o n c e r n i n wh i c h t h e h e a l t h a nd o u t p u t o f t h e
i n d i v i d u a l wa s r e l a t e d t o t ha t o f t h e c o l l e c t i v i t y .
St a n d a r d c o s t i n g can, we ar gue, b e r e g a r d e d as
an i mp o r t a n t a s p e c t o f t hi s b r o a d e r c o n c e r n
wi t h e x t a b l i s h i n g n o r ms a n d s t a n d a r d s f or t h e
act i vi t i es of i ndi vi dual s a nd t he i r i mpl i c a t i ons f or
ef f i ci ency. At t h e l e ve l o f t h e e n t e r p r i s e s t a n d a r d
c o s t i n g a n d b u d g e t i n g c o n t r i b u t e d , we s ugges t ,
a f a c i l i t a t i ve t e c h n o l o g y wh i c h e n a b l e d a wh o l e
r a n g e o f a c t i vi t e s o f t h e p e r s o n t o b e r e n d e r e d
vi s i bl e a nd a c c o u n t a b l e . Wi t h i n t h e e n t e r p r i s e ,
o n e c o u l d at l ast l i t e r a l l y ma k e al l i n d i v i d u a l s
a c c o u n t a b l e .
Th e v a g u e n e s s as t o wh e t h e r t h e n o t i o n o f
s t a n d a r d i n t h e i ni t i al f o r mu l a t i o n s o f s t a n d a r d
c o s t i n g me a n t an i de a l o r an a t t a i n a b l e s t a n d a r d ,
a n d t h e q u e s t i o n o f t h e p o s s i b i l i t y o f a c t u a l l y
l o c a t i n g t h e s o u r c e o f wa s t e s ( So l o mo n s , 1968,
p. 41 ) a r e n o t c r u c i a l f or o u r p u r p o s e s . Fo r i t i s
n e i t h e r t h e t r u t h - v a l u e o f s t a n d a r d c o s t i n g n o r
i t s p r a c t i c a l ut i l i t y wh i c h we a r e s e e k i n g t o
e va l ua t e . Ra t he r , we a r e c o n c e r n e d t o l o c a t e
s u c h a p r a c t i c e as a f o r m o f s oc i a l p o we r , an
i mp o r t a n t e l e me n t o f wh i c h i s a n a bi l i t y t o s ub-
j e c t t h e i n d i v i d u a l t o an i n c r e a s i n g l y d e t a i l e d
f o r m o f o b s e r v a t i o n a nd s c r ut i ny. I n i t s p u r e s t
f or m, s u c h a t y p e o f p o we r c o n s i s t s i n t h e i ndi -
v i d u a l a t t e n d i n g t o hi s o r h e r o wn de f i c i e nc i e s . I t
i s a f o r m o f p o we r i n wh i c h t h e i n d i v i d u a l
b e c o me s an a u t o - r e g u l a t e d e nt i t y, b u t o n e f or
wh o m t h e s t a n d a r d s a c c o r d i n g t o wh i c h t h e y
j u d g e t h e i r l i ve s h a v e b e e n e s t a b l i s h e d f or t he m.
St a n d a r d c o s t i n g a n d b u d g e t i n g is, we s ugge s t ,
c e n t r a l t o s u c h a p r o c e s s .
THE EFFI CI ENT NATI ON AND THE EFFI CI ENT
I NDI VI DUAL
b e t h e mo r e i mp o r t a n t o f t h e s e c o n c e r n s a n d
p r a c t i c e s . Th e s e c a n b e l o c a t e d at a n u mb e r o f
d i s t i n c t l evel s . On e o f t h e s e i s wh a t we cal l , f ol -
l o wi n g o t h e r s ( Se a r l e , 1970; Hays, 1959; Ha be r ,
1964) , a d i s c o u r s e o f n a t i o n a l ef f i ci ency. Thi s
h a d an e x i s t e n c e t h r o u g h p o p u l a r p o l i t i c a l voc -
a bul a r y, j o u r n a l i s t i c wr i t i ngs , as we l l as t h e s t a t e
a n d g o v e r n me n t a l a ppa r a t us e s . A s e c o n d c on-
c e r n s p h i l o s o p h i c a l a n d s o c i o l o g i c a l wr i t i ngs ,
a n d t h e e me r g e n c e i n t h e m o f a n o t i o n t ha t o n e
c o u l d a c t i v e l y i n t e r v e n e wi t h i n s o c i e t y a n d
wi t h i n t h e l i ve s o f i ndi vual s . Th e g e n e r a l a i m t o
wh i c h s u c h wr i t i n g s s a w t hi s as c o n t r i b u t i n g wa s
t h e r a t i o n a l a d mi n i s u ' a t i o n o f t h e s oc i a l a nd
t h e a c t i v e p r o mo t i o n o f p r o g r e s s . Th e s t a t e wa s
t o p l a y a c e n t r a l r o l e i n s u c h a p r o g r a mme . A
t h i r d l e ve l i s t ha t o f t h e a c t u a l p r a c t i c e s o f s o c i o -
p o l i t i c a l ma n a g e me n t ( e u g e n i c s , me n t a l
h y g i e n e , me n t a l t e s t i n g ) i n r e l a t i o n t o wh i c h
s u c h s c h e me s o p e r a t e d . As n o t e d a b o v e we d o
n o t v i e w s u c h p r a c t i c e s as t h e s i mp l e i mp l e me n -
t a t i o n o f t h e f i r st t wo l e v e l s i de nt i f i e d. I t s e e ms
t o us, h o we v e r , t ha t t h e y c a n b e v i e we d i n t e r ms
o f a n d as r e l a t e d t o t h e s e mo r e g e n e r a l s e t s o f
c o n c e r n s .
St a n d a r d c o s t i n g a n d b u d g e t i n g p r o v i d e d a
wa y o f e x p r e s s i n g i n mo n e y t e r ms t h e c o n t r i b u -
t i o n o f i n d i v i d u a l s t o t h e c o l l e c t i v e e f f i c i e nc y o f
t h e e n t e r p r i s e . Thi s a l l o we d d e v i a t i o n s f r o m t h e
n o r m t o b e l o c a t e d at t h e l e ve l o f t h e i ndi vi dua l .
Th e c o l l e c t i v e e f f i c i e n c y o f t h e n a t i o n d u r i n g
t hi s p e r i o d wa s e x p r e s s e d i n di f f e r e nt t e r ms a n d
wi t h d i f f e r e n t o b j e c t i v e s i n mi nd. No n e t h e l e s s
s u r p r i s i n g p a r a l l e l s e me r g e i n t h e a t t r i b u t i o n o f a
vi s i bi l i t y t o t h e i n d i v i d u a l ( h i s he a l t h, i nt el l i -
g e n c e ) t h r o u g h wh i c h t h e i r c o n t r i b u t i o n t o col -
l e c t i v e e f f i c i e nc y c o u l d b e d e t e c t e d . Th e r e i s a
s i mi l a r i t y al s o i n t h e ma n n e r i n wh i c h s u c h
d e t e c t i o n wa s t o b e a c h i e v e d . St at i s t i cal de vi a -
t i ons f r o m a n o r m we r e c e n t r a l t o t hi s t as k o f t h e
i n d i v i d u a l i s a t i o n o f di f f e r e nc e . An d a p l e t h o r a o f
t e c h n i q u e s o f s o c i o - p o l i t i c a l ma n a g e me n t we r e
d e v e l o p e d wh i c h a l l o we d o b s e r v a t i o n t o p e n e t -
r a t e t o t h e mi n u t i a e o f t h e e v e r y d a y l i ves o f i ndi -
vi dua l s ( Ar ms t r o n g , 1 9 8 3 ) i n an a t t e mp t t o c or -
r e c t d e p a r t u r e s f r o m t h e n o r m.
We wa n t t o i d e n t i f y h e r e wh a t s e e m t o us t o
The discourse of national efficiency
A n u mb e r o f wr i t e r s h a v e a r g u e d f o r c e f u l l y
( Se a r l e , 1970; Hays, 1959; Ha be r , 1964) , t ha t t h e
n o t i o n o f e f f i c i e nc y e me r g e s i n t h e e a r l y y e a r s o f
t hi s c e n t u r y as a " c o n v e n i e n t l a b e l " u n d e r wh i c h
c o u l d b e g r o u p e d a r a n g e o f a s s u mp t i o n s , be l i e f s
a nd d e ma n d s c o n c e r n i n g g o v e r n me n t , i n d u s t r y
a n d s oc i a l o r g a n i s a t i o n . Wh i l s t b e i n g c a r e f ul n o t
t o t h i n k t ha t t hi s n o t i o n o f e f f i c i e nc y i s u s e d i n
t h e s a me wa y b y al l c o mme n t a t o r s , n o r t ha t i t
p r e s u p p o s e s a g r e e me n t o n ma t t e r s o f s oc i a l o r
i n d u s t r i a l p o l i c y , i t d o e s s e e m t o b e a v e r y c o m-
mo n t h e me i n t h e e a r l y y e a r s o f t hi s c e n t u r y . Of
c o u r s e , i t i s a n o t i o n wh i c h va r i e s n o t j us t f r o m
o n e f i e l d o f a p p l i c a t i o n t o a n o t h e r , b u t f r o m o n e
n a t i o n a l c o n t e x t t o a n o t h e r .
On e c a n b e g i n t o s u b s t a n t i a t e t h e e x i s t e n c e o f
a d i s c o u r s e o f n a t i o n a l e f f i c i e nc y t h r o u g h j our -
na l i s t i c wr i t i ngs , t h e a r g u me n t s o f pol i t i c i a ns , as
we l l as me d i c a l a n d p a c a - me d i c a l wr i t i ngs . Th u s
t h e Br i t i s h wr i t e r Ar n o l d Wh i t e ( 1 9 0 1 ) i n hi s
r a t h e r d e ma g o g i c b o o k Efficiency and Empire,
most of the material of whi ch had first appeared
in newspaper articles the previous year, proc-
laimed the need for a t horoughgoi ng reappraisal
of the nation' s political and moral values. White
was a polemicist, yet in a Britain whi ch was
stumbling t hrough the successive revelations
and disasters of the Boer War such arguments
were not out of place.
Inefficiency was consi dered by White to
derive from bot h physical and moral deteriora-
tion. The middle classes had, he argued, become
largely "a class of pleasure-seekers" whilst the
working classes "artificially restrict their labour"
(p.310). Meanwhile drink exercised its
despotism over all social groups. The result was
a softening of the fibre of the ruled and the rulers
alike. But the first element of efficiency, accord-
ing to White, was health (p.95). Here the prob-
lem was seen to be most acute. "Our species", he
proclaimed dramatically, "is being propagated
and cont i nued increasingly from undersized,
street-bred people". (p.lO0). White was refer-
ring here to "Spectacled school-children, hun-
gry, strumous, and epileptic" who "grow into
consumpt i ve bri degrooms and scrofulous brides
. . " (pp. 101-102) Outside certain institutions
such as the Army, the Navy and the police, the
population was seen to consist mainly in "hospi-
tal out-patients, enfeebled with bad air, seden-
tary lives, drink, and disease." (pp. 107-108). In
short, the nation was rapidly deteriorating and
the State was doing virtually nothing to prevent
this deterioration.
White was only one of many journalists to
suggest the need for a new political alignment,
whi ch woul d give expression to a programme of
"national efficiency". Such themes, moreover,
were not absent from the arguments and state-
ments of politicians. Whilst an astute politician
such as Roseberry shied away from White' s jour-
nalistic excesses, he admitted, however, to being
in "substantial agreement" with White' s opin-
ions (Searle, 1970, p.54). The question of
national efficiency was, at heart, one whi ch con-
cerned social organisation. Central here was the
utilisation of Germany and Japan as models or
exemplars of a form of social organisation whi ch
promot ed efficiency t hrough the incorporation
of science in the art of politics.
The i mprovement of the national physique
was one element of a programme of efficiency.
The need for this was seen to be highlighted by
the physical unfitness of those who came for-
ward for recrui t ment for the Boer War. Thus in
Manchester in 1900, 8000 out of 11,000 would-
be volunteers had to be turned away on grounds
of ill-health, and of the remainder 2000 were
declared fit only for the militia (Searle, 1970;
Winter, 1980).
The mood that devel oped around the ques-
tion of physical health was one of pessimism
whi ch at times shifted to hysteria. The concern
was that Britain was breeding a race of degener-
ates, and that this became more acute the further
one went down the social scale. White had
suggested restrictions on marriage to alleviate
the probl em ( 1901, p. 111 ). The eugenic move-
ment was the more ext reme version of such
arguments with demands for "the sterilization of
the unfit" gaining ground and appearing in polit-
ical debate. This was, moreover, not a matter of
party politics, eugenics appealing to Fabian
socialists and Conservatives alike. The sick had
to be taken in hand bot h for their own good and
for the efficient functioning of society.
Efficiency was a key-word also in relation to
the machi nery of government, education, and
the role of the scientific expert in government.
The purpose of the State was to promot e the
"good life" of its citizens and to develop the
moral nature of man (Dyson, 1980, p.192). To
achieve this the application of scientific know-
ledge and training was deemed necessary. It is
not altogether clear whet her this meant leaving
key decisions in the hands of experts, or making
politics and public administration itself a sci-
ence. Both lines of argument clearly existed, the
latter finding its institutional form in the found-
ing of the London School of Economics by the
Webbs at the very end of the nineteenth century.
The principle at work here was that "social
reconstructions require as much specialized
training and sustained study as the building of
bridges and railways, the interpretation of the
law, or technical i mprovement s in machinery
and mechanical processes" (quot ed in Searle,
1970, p . 8 5 ) . Aga i n t hi s wa s a t h e me wh i c h c u t
a c r o s s p a r t y pol i t i c s . Ro s e b e r r y , t h e l e a d e r o f t h e
" Li be r a l I mp e r i a l i s t s " c a l l e d f or g o v e r n me n t b y
" s c i e nt i f i c me t h o d s " . As qui t h, f or hi s pa r t ,
s u g g e s t e d t ha t s o c i a l r e f o r m s h o u l d b e c a r r i e d
o u t " n o t as a mo r a l q u e s t i o n . . , b u t as a q u e s t i o n
o f s o c i a l a n d i mp e r i a l e f f i c i e nc y" ( q u o t e d i n
Col l i ni , 1979, pp. 83- - 84) .
Thi s o f c o u r s e i s n o mo r e t h a n a s u g g e s t i v e
g l a n c e at t h e l i t e r a t u r e wh i c h wo u l d e n a b l e o n e
t o s u b s t a n t i a t e t h e e x i s t e n c e a n d d e p t h o f a di s-
c o u r s e o f n a t i o n a l e f f i c i e nc y i n Br i t a i n i n t h e
e a r l y y e a r s o f t hi s c e n t u r y . We f eel i t i s e n o u g h ,
h o we v e r , t o s u p p o r t o u r a r g u me n t s t ha t t h e
t e r m e f f i c i e n c y p r o v i d e d a d e g r e e o f c o h e r e n c e
t o t h e i d e n t i f i c a t i o n a n d e x p r e s s i o n o f a d i v e r s e
r a n g e o f n a t i o n a l c o n c e r n s . I f i t i s t h e c a s e t ha t
t hi s e n t i t l e s us t o t al k o f an i d e o l o g y o f e f f i c i e nc y
i n Br i t a i n d u r i n g t hi s p e r i o d wa s t hi s t r u e al s o o f
t h e Un i t e d St at es? I t wo u l d a p p e a r t ha t t hi s c a n
b e a n s we r e d i n t h e af f i r mat i ve, as l o n g as o n e
b e a r s i n mi n d t h e d i f f e r e n t s o c i o - p o l i t i c a l c o n -
t e x t o f Ame r i c a n s oc i e t y. Th e p r o g r e s s i v e er a, as
o n e a u t h o r ha s e x p r e s s e d it, "i s a l mo s t ma d e t o
o r d e r f or t h e s t u d y o f Ame r i c a n s i n l o v e wi t h effi-
c i e n c y " ( Ha b e r , 1964, p. i x; Hays, 1959) . Th e "ef-
f i c i e n c y c r a z e " o f t h e p r o g r e s s i v e e r a c o n s i s t e d
i n " a n o u t p o u r i n g o f i de a s a n d e mo t i o n s i n
wh i c h a g o s p e l o f e f f i c i e nc y wa s p r e a c h e d wi t h-
o u t e mb a r a s s me n t t o b u s i n e s s me n , wo r k e r s ,
d o c t o r s , h o u s e wi v e s a n d t e a c h e r s . . . " ( Ha b e r ,
1964, p. i x) . Ef f i c i e nc y i n t hi s s e n s e r e f e r r e d t o a
p e r s o n a l a t t r i b u t e , t o a me c h a n i c a l p r i n c i p l e o f
t h e o u t p u t - i n p u t r a t i o o f a ma c h i n e , t o a c o m-
me r c i a l e f f i c i e nc y i n t h e f o r m o f pr of i t , a n d t o
e f f i c i e nc y c o n c e i v e d as a r e l a t i o n s h i p b e t we e n
me n . I n t hi s l ast , a n d p o s s i b l y f or o u r p u r p o s e s
h e r e mo s t i mp o r t a n t s ens e, e f f i c i e nc y me a n t
s oc i a l e f f i c i e nc y, wh i c h i n t u r n me a n t s oc i a l
o r g a n i s a t i o n .
I f o n e c a n s p e a k h e r e o f a " p o l i t i c s o f effi-
c i e n c y " , i t wa s a r o u n d t h e i s s ue s o f d e mo c r a c y
a n d e x p e r t i s e t ha t t hi s p o l i t i c s c e n t r e d . Sci en-
t i f i c wi s d o m wa s t o b e u s e d t o a d v a n c e t h e c a u s e
o f " g o o d g o v e r n me n t " , wh e t h e r at t h e l e ve l o f
t h e mu n i c i p a l i t y o r t h e f a c t or y. " De mo c r a c y "
wa s t o me a n g o v e r n me n t f or t h e p e o p l e b a s e d
i n c r e a s i n g l y o n q u e s t i o n s o f f act , a p a r t n e r s h i p
b e t we e n t h e e x p e r t a n d t h e c i t i z e n wh i c h wa s
e s s e n t i a l t o g o o d g o v e r n me n t ( Ha b e r , 1964,
p. 110) . Ef f i ci ent g o v e r n me n t wa s t o b e a c h i e v e d
t h r o u g h e x p e r t g o v e r n me n t of f i ci al s a c t i n g i n
t h e i n t e r e s t s o f c i t i z e ns , s i n c e t h e l a t t e r c o u l d n o
l o n g e r r e a l i s t i c a l l y a c h i e v e t h e l e ve l o f e x p e r t i s e
r e q u i r e d :
Citizens of larger cities must frankly recognize the need
for professional service on behalf of citizen i nt er est s. . .
Even efficient private citizens cannot deal helpfully with
expert governmental questions. Efficient citizens will
evidence their efficiency by supporting constructive
efforts for governmental betterment (quoted in Haber,
1964, p.112).
Th e ut i l i s a t i on o f n o t i o n s o f e f f i c i e nc y i n r el a-
t i on t o t h e b u s i n e s s o f g o v e r n me n t c a n b e s e e n
i n s u c h b o d i e s as t h e Pr e s i d e n t i a l Co mmi s s i o n
o n E c o n o my a n d Ef f i c i e nc y wh i c h wa s r e p l a c e d
b y a Bu r e a u o f Ef f i c i e nc y wh e n t h e Wi l s o n ad-
mi n i s t r a t i o n t o o k of f i ce ( Ha b e r , 1964, p. 1 1 3 -
114) . Thi s wa s n o t s i mp l y f e d e r a l c o n c e r n , t h e
s t a t e s s o o n s e t t i n g u p t h e i r o wn e f f i c i e nc y c o m-
mi s s i ons . Wi n c o n s i n b e g a n i n 1911, a nd b y 1917
at l e a s t s i x t e e n s t a t e s h a d f o r me d s u c h c o mmi s -
si ons. Th e a c h i e v e me n t s o f s u c h c o mmi s s i o n s
s e e m t o h a v e c o n s i s t e d p r i n c i p a l l y i n c on-
s o l i d a t i n g s t a t e a ge nc i e s , i mp r o v i n g c o s t
a c c o u n t i n g t e c h n i q u e s , a n d i n g r a n t i n g mo r e
p o we r t o t h e g o v e r n o r ( Ha b e r , 1964, p. 115 ).
Th e g r e a t me r i t o f t h e n o t i o n o f e f f i c i e nc y was ,
h o we v e r , i t s pl i a bi l i t y, o r at l e a s t i t s a bi l i t y t o
s u p p l y a p o i n t o f f oc us f or a r g u me n t s c o v e r i n g a
va s t r a n g e o f i ssues. I t wa s n o t o n l y soci al effi-
c i e n c y t ha t wa s o f c o n c e r n i n t h e e a r l y y e a r s o f
t hi s c e n t u r y . Th e e f f i c i e nt ut i l i s a t i on o f n a t u r a l
r e s o u r c e s a r o u n d t h e p r i n c i p l e o f c o n s e r v a t i o n
wa s c e n t r a l al so. Th e n o t i o n o f c o n s e r v a t i o n , t o
b e a c h i e v e d t h r o u g h p l a n n e d a nd e f f i c i e nt ut i l i -
s a t i o n o f n a t u r a l r e s o u r c e s , a p p l i e d t o s u c h
i s s ue s as wa t e r r e s o u r c e ma n a g e me n t a n d t h e
c o n s e r v a t i o n o f f or e s t s ( Ha ys , 1959) . An d t h e
e l a s t i c i t y o f t h e t e r m " c o n s e r v a t i o n " a l l o we d i t
t o e x t e n d b a c k t o t h e q u e s t i o n o f t h e c o n s e r v a -
t i on o f h u ma n he a l t h. Th e Na t i o n a l Co n s e r v a t i o n
Co n g r e s s o f 1910 h a d o r g a n i z e d a s t a n d i n g c o m-
mi t t e e o n " vi t al r e s o u r c e s " wh i c h c o n c e r n e d
i t s e l f wi t h p u b l i c h e a l t h as we l l as h a v i n g uni t s
on forests, lands, wat er s and mi neral s. Two years
later, t he Congress devot ed t he ent i r et y of its
annual sessi on to "t he conser vat i on of huma n
life" (Hays, 1959, p. 176). And i n 1909 t he
Nat i onal Conser vat i on Congress had i ncl uded
speeches on t he conser vat i on of t he moral s of
yout h, t he conser vat i on of chi l dr en' s lives
t hr ough t he el i mi nat i on of chi l d l abour, t he con-
servat i on of civic beaut y, t he el i mi nat i on of
wast e i n educat i on and war, t he conser vat i on of
manhood, and t he conser vat i on of t he Anglo-
Saxon race.
Philosophical and sociological conceptions of
a rationally administered social
These wer e t he most forceful and readi l y i den-
tifiable forms i n whi ch t he not i on of nat i onal effi-
ci ency appear ed i n t he U.S. Again we feel t hey
pr ovi de suppor t to our ar gument t hat t he t er m
effi ci ency was a si gni fi cant one i n t he socio-
pol i t i cal debat es of t he time. We woul d like now
t o shift t he per spect i ve to t he phi l osophi cal and
soci ol ogi cal debat es of t he same peri od. At this
l evel we argue t hat t he emer gence i n t he early
decades of t he t went i et h cent ur y of a part i cul ar
soci ol ogi cal and phi l osophi cal form of ar gument
added l egi t i macy to, and pr ovi ded a br oad
rat i onal e for, t he pr oj ect of nat i onal efficiency.
In part i cul ar it cont r i but ed a t heoret i cal pri nci -
pl e for an art of gover nment f ounded on t wo
cent r al not i ons. The first of t hese was t he affir-
mat i on of t he possi bi l i t y of a rat i onal l y admi ni s-
t er ed and managed social order, somet hi ng
whi ch was to be under t aken wi t h t he aid of a
neut r al and obj ect i ve knowl edge. The second
was a specific concept i on of t he nat ur e of t he
social rel at i ons whi ch l i nked t he i ndi vi dual to
society. The i mage her e was of t he i ndi vi dual as
a part of a social machi ne concei ved as an
organi sm.
The soci ol ogi st Spencer ( 1878) had pr oposed
a sci ent i fi c st udy of soci et y whose pur pose
woul d be "not t o gui de t he consci ous cont r ol of
soci et al evol ut i on, but rat her t o show t hat such
cont r ol is an absol ut e i mpossi bi l i t y, and t hat
t he best t hat organi zed knowl edge can do is t o
t each me n to submi t mor e readi l y t o t he
dynami c factors i n progress" (Hofst adt er, 1955,
pp. 43--44). I n t he per i od we have be e n addres-
si ng her e such a r esi gned submi ssi on t o social
laws was bei ng r epudi at ed i n soci ol ogi cal and
phi l osophi cal debat es. The l i t erat ure of prag-
mat i sm was cent r al t o this repudi at i on. As one
aut hor has expr essed it:
Spencer's outlook had been the congenial expression of
a period that looked to automatic progress and laissez
faire for its salvation; pragmatism was absorbed into the
national culture when men were thinking of manipula-
tion and control Spencerianism had been the philosophy
of inevitability; pragmatism became the philosophy of
possibility (Hofstadter, 1955, p.123).
Pragmat i sm offered phi l osophi cal l egi t i macy
t o a per i od t hat was becomi ng i ncr easi ngl y con-
cer ned wi t h t he rat i onal , pur posef ul di r ect i on
and cont r ol of social affairs. Part i cul arl y i n t he
wr i t i ngs of James pr agmat i sm sought t o assert:
. . the fundamental idea of an open universe in which
uncertainty, choice, hypotheses, novelties and pos-
sibilities are naturalized . . . (John Dewey, cited in
Hofstadter, 1955, p. 123).
In seeki ng to nat ural i ze t hese concept s, t he
hope was per mi t t ed t hat t here was a space
wi t hi n whi ch huma n rat i onal i t y coul d act i vel y
shape and reform t he social organi zat i on.
Pragmat i sm was pri mari l y an Amer i can
phe nome non. I n Bri t ai n a si mi l ar t heme
emer ged t hr ough phi l osopher s of what woul d
become t he New Li beral i sm i n pol i t i cs
( Fr eeden, 1978). Here, one finds Hobhouse
argui ng t hat t he huma n mi nd must itself be seen
t o lie wi t hi n t he overal l pr ocess of evol ut i on. I n
so far as mi nd has evol ved t o a compl ex rat i onal -
ity, t hen it is onl y fi t t i ng t hat this cons equence of
t he evol ut i onar y process shoul d i nf l uence
f ur t her evol ut i on. Human rat i onal i t y, i n its dis-
t i nct i vel y sci ent i fi c form, had pr ovi ded human-
ity wi t h: "t he vastly i ncr eased power of cont r ol -
l i ng t he condi t i ons, ext er nal and i nt ernal , of
life c o. . . " ( Hobhouse, 1911, p. 156). For Hob-
house:
the turning-point in the evolution of thought . . . is
reached when the conception of the development of
humanity enters into explicit consciousness as the
di rect i ng pri nci pl e of human e nde a vour . . . (Hobhouse,
1911, p.155).
So c i a l s c i e n c e c o n c e i v e d i n t h i s ma n n e r c o u l d
b e c o me a n i n s t r u me n t wh i c h wo u l d c o n t r i b u t e
t o t h e b e t t e r c o n t r o l a n d d i r e c t i n g o f h u ma n
p r o g r e s s . So c i a l s c i e n c e c o u l d s e r v e h u ma n
n e e d s as n a t u r a l s c i e n c e d o e s , t h r o u g h b e i n g
c o n s c i o u s l y a d a p t e d a n d h a r n e s s e d t o t h e p u r -
p o s e f u l a c h i e v e me n t o f e n d s . Ac c o r d i n g t o t h e
Ame r i c a n s o c i o l o g i s t , L e s t e r Wa r d :
It is onl y t hr ough t he artificial cont r ol of nat ural phen-
momena t hat sci ence is made t o mi ni st er to human
needs; and if social laws are really analogous t o physical
laws, t her e is no reason why social sci ence may not re-
ceive pract i cal applications such as have been gi ven t o
physical sci ence (Ward, 1918, p.352; ci t ed in Hofstadter,
1955).
T h e i n t r o d u c t i o n o f a s p a c e f o r r a t i o n a l c h o i c e
e n t a i l e d t h e p o s s i b i l i t y f o r a n a p p l i e d s o c i a l s c i -
e n c e . Kn o wl e d g e c o u l d l o c a l i s e . I t s f u n c t i o n
c o u l d b e c o me t h a t o f f o l l o wi n g h u ma n r a t i o n a l -
i t y, i n o r d e r t o i mp r o v e i t s e f f e c t i v e n e s s , t h r o u g h
a mu l t i p l i c i t y o f a r e n a s o r s i t e s o f a c t i o n . So c i a l
s c i e n t i f i c k n o wl e d g e s a n d p r a c t i c e c o u l d , as i t
we r e , f o r m p a r t n e r s h i p wi t h t h e s t a t e , a s s i s t i n g
t h e l a t t e r i n t h e p u r p o s e f u l , d e l i b e r a t e i mp r o v e -
me n t o f b o t h t h e s o c i a l o r g a n i z a t i o n , a n d t h e l i f e
a n d b e h a v i o u r o f t h e i n d i v i d u a l wi t h i n i t .
T h i s c h a n g e d c o n c e p t i o n o f t h e n a t u r e o f t h e
s o c i a l a n d t h e p o s s i b i l i t y o f i t s r a t i o n a l a d mi n i s t -
r a t i o n wa s e x p r e s s e d i n t h e c o n c e p t i o n o f t h e
s o c i a l ma c h i n e a n d t h e o r g a n i c r e l a t i o n s wh i c h
we r e s e e n t o l i n k i n d i v i d u a l s t o i t . I n Br i t a i n , f o r
e x a mp l e , t h e F a b i a n s o c i a l i s t S i d n e y We b b
wo u l d p r o c l a i m t h a t :
. . we must take even mor e care t o i mprove t he social
organism of whi ch we form part, t han t o perfect our own
individual devel opment s. Or r at her t he perfect and fit-
t i ng devel opment of each individual is not necessarily t he
ut most and hi ghest cul t i vat i on of his own personality, but
t he Falling, in t he best possible way, of his humbl e func-
t i on in t he great social machi ne (Webb, 1899, p.58; ci t ed
i n Freeden, 1978).
An d t h e wo r k i n g - o u t o f a p h i l o s o p h y f o r wh a t
wo u l d b e c o me t h e Ne w L i b e r a l i s m o f Br i t i s h
p o l i t i c s t o o k , as o n e o f i t s i mp o r t a n t s t r a n d s , t h e
d i l e mma o f h o w t h e mo r e t r a d i t i o n a l l i b e r a l
i d e a l o f t h e f r e e d o m o f t h e i n d i v i d u a l wa s t o b e
r e n d e r e d c o mp a t i b l e wi t h a n o r g a n i c c o n c e p -
t i o n o f t h e s o c i a l ( F r e e d e n , 1 9 78, p p . 2 5 - 7 5) . F o r
Ho b h o u s e ( 1 9 1 1 ), s o c i e t y c o n s i s t e d of :
... individual per sons and not hi ng but individual persons,
just as t he body consists of cells and t he pr oduct of cells
. . . (p. 30).
B u t i n t h e s a me wa y t h a t o n e wo u l d f ai l t o
u n d e r s t a n d t h e l i f e o f a b o d y b y e x a mi n i n g i t s
s e p a r a t e c e l l s , s o o n e wo u l d a l s o f ai l t o u n d e r -
s t a n d s o c i e t y i n t e r ms o n l y o f i n d i v i d u a l p e r s o n s .
We must equally take i nt o account t hat organic i nt ercon-
nect i on wher eby t he living processes of each separate
cell cooperat e t oget her t o mai nt ai n t he heal t h of t he
organism whi ch cont ai ns t hem all. So, again, t o under-
st and t he social or der we have t o take i nt o account, not
onl y t he individuals wi t h t hei r capabilities and achieve-
ment s, but t he social organization i n vi rt ue of whi ch
t hese individuals act upon one anot her and jointly pro-
duce what we call social r e s u l t s . . . (Hobhouse, 1911,
p.29).
An i mp o r t a n t t a s k f a c i n g t h e s o c i a l r e f o r me r
wa s t h e r e d e s i g n o f t h e s o c i a l o r g a n i z a t i o n s o
t h a t t h e c o o p e r a t i o n o f i n d i v i d u a l s t o p r o d u c e
s o c i a l r e s u l t s c o u l d wo r k i n t h e l e a s t wa s t e f u l
wa y . B u t u n l i k e We b b ' s me c h a n i s t i c i ma g e r y , i n
wh i c h t h e f r e e d o m o f t h e i n d i v i d u a l s e e me d t o
d i s a p p e a r i n t h e f i l l i n g o f a s o c i a l r o l e , Ho b h o u s e
a r g u e d t h a t :
. . . t he life of t he body is not perfect ed by suppressing t he
life of t he cells, but by maintaining it at its hi ghest poi nt
of efficiency. Nor is t he organism devel oped by r educi ng
t he cells t o a uni form type, but r at her by allowing each
t ype to vary on its own lines, provi ded always t hat t he
several variations are in t he end mutually compatible.
These t hi ngs are applicable t o society, from t he wi dest t o
t he narrowest form t her eof ( pp. 90- 91 ).
T h e s e t wo d i me n s i o n s t o t h e s o c i o l o g i c a l a n d
p h i l o s o p h i c a l d e b a t e s o f t h e t i me c o mb i n e d
we l l . A r a t i o n a l l y a d mi n i s t e r e d s o c i a l wa s o n e i n
wh i c h a c o n c e r n wi t h t h e i n d i v i d u a l c o u l d b e
f o r mu l a t e d i n t e r ms o f t h e c o l l e c t i v e g o a l s o f s o-
c i e t y . A c o n c e r n wi t h i n d i v i d u a l b e h a v i o u r s wa s
a c o n c e r n wi t h s o c i e t y b e c a u s e t h e t wo we r e
organi cal l y i nt er dependent . Social reform coul d
be concei ved i n a manner anal ogous to t he
reform of t he ent erpri se. Bot h r equi r ed t he
el i mi nat i on of inefficiencies. Pover t y and
dest i t ut i on r epr es ent ed losses for t he ent i r e
social body. Issues of social reform mi ght now be
pr essed not onl y upon mor al grounds, but upon
i nt ensel y pract i cal ones as wel l ( Fr eeden, 1978,
pp. 117- 169) . It was a mat t er of enhanci ng t he
effi ci ency of i ndi vi dual s, and of seeki ng t o recon-
st ruct t he bases of t hei r i nt er act i ons so as to
achi eve a mi ni mi zat i on of vital wast es (Ri t chi e,
1891: Hobson, 1914; Ward, 1881 ).
Some ac t ual pract i ces o f soci o- pol i t i cal man-
a g e me n t
Act i ve i nt er vent i on i n t he lives of i ndi vi dual s
was a way of enhanci ng t he r esour ces of t he
nat i on. Such vi ews wer e not j ust abst ract
t heoret i cal f or mul at i ons but had a real exi st ence
at t he l evel of pract i ces. Eugeni cs is one exampl e
of such pract i ces. Eugeni cs was concer ned wi t h
t he det er i or at i on of t he nat i on' s physi cal st ock
and its effect on t he effi ci ency of t he human
c ompone nt of t he nat i on' s resources. Eugeni cs
pr ovi ded what mi ght be t er med a st rat egi c l i nk
bet ween a cer t ai n t heor y of social admi ni st ra-
t i on and a cer t ai n concept i on of huma n abilities
(Rose, 1979). Ar gument s concer ni ng t he
det er i or at i on of t he nat i onal physi que posed t he
quest i on of t he most appr opr i at e mode of i nt er-
vent i on i n t he or gani sat i on of t he popul at i on. I n
Britain t he pr i nci pal cont r i but i on of t he
eugeni cs move me nt (Mackenzi e, 1976), was,
perhaps, t hat it pr ovi ded a pr i nci pl e of legitima-
t i on for a seri es of oper at i ons on t hose i ndi vi du-
als suspect ed of sappi ng t he nat i on' s vi gour
t hr ough t hei r own defects, whet her i n t he field
of i nt el l i gence t est i ng (Sut herl and, 1972; Rose,
1979) or social admi ni st rat i on. I n t he Uni t ed
States eugeni cs devel oped furt her as a "practi-
cal" movement . (cf. Hailer, 1963; Pickens, 1968;
Castel et al., 1982). In 1907, after a numbe r of
at t empt s i n t he pr ecedi ng decade or so, (cf.
Kami n, 1974, p. l O) l egi sl at i on was passed i n
I ndi ana and Mi chi gan pr ovi di ng for t he steriliza-
t i on of "conf i r med cri mi nal s, idiots, i mbeci l es
and rapists" (Cast el et al., 1982, p. 47). Many
states fol l owed sui t dur i ng t he fol l owi ng t wo
decades. Much debat e fol l owed such legislation,
but t he eugeni c pr i nci pl e was uphel d i n 1927 by
t he Uni t ed States Supr eme Court , whe n it was
hel d t hat st eri l i zat i on fell wi t hi n t he pol i ce
power of t he state:
It would be strange if it could not call upon those who
already sap the strength of the State for those lesser sac-
rifices, often not felt to be such by those concerned, in
order to prevent our being swamped with incompe-
tence. It is better for all the world, if instead of waiting for
their imbecility, society can prevent those who are man-
ifestly unfit from continuing their kind. The principle that
sustains compulsory vaccination is broad enough to
cover cutting the Fallopian tubes (cited in Hailer, 1963,
p.139).
I n a famous aphor i sm t he j udgement con-
cl uded by st at i ng "Three gener at i ons of i mbe-
ciles are enough"( i bi d) . Eugeni c pr i nci pl es con-
t i nued t o spread dur i ng t he first t hr ee decades of
this cent ur y, so t hat by 1931 some t hi rt y states
had passed a st eri l i zat i on l aw at one t i me or
anot her. It shoul d be added, however , t hat by
1944 onl y 42, 000 official st eri l i sat i ons had actu-
ally been per f or med.
But it is not eugeni cs i n and of itself t hat con-
cer ns us here. Eugeni cs is i nt erest i ng, rat her, as
t he most ext r eme exampl e of a form of social
management whose concer n is t he effi ci ency of
t he i ndi vi dual . Eugeni cs ul t i mat el y failed as a dis-
t i nct st rand of social management ( Rose, 1979).
Yet al ongsi de eugeni cs, i ni t i al l y der i vi ng sup-
por t from it and ul t i mat el y suppl ant i ng it as a
form of social management , we can see devel op
i n t he first t hree decades of this cent ur y a vast
range of social i nt er vent i ons whi ch take as t hei r
t arget t he i neffi ci ent i ndi vi dual . Ment al hygi ene
is an i mpor t ant exampl e of such devel opment s.
In t he Uni t ed States i n 1909 t he Nat i onal Com-
mi t t ee for Ment al Hygi ene is f ounded wi t h its
ai m bei ng:
To work for the protection of the mental health of the
public; to help raise the standard of care for those in
danger of developing mental disorder or actually insane;
to promote the study of mental disorders in all their
forms and relations, and to disseminate knowledge con-
cerning their causes, treatment, and prevention; to
obtain from every source reliable data regarding condi-
tions and methods of dealing with mental disorders; to
enlist the aid of the Federal Government so far as may
seem desirable; to coordinate existing agencies and help
organize in each State in the Union an allied, but indepen-
dent, Society for Mental Hygiene, similar to the existing
Connecticut Society for Mental Hygiene (cited in Castel
etal., 1982, p.34).
Rapi dl y obt ai ni ng fi nanci al support , t he
resul t s of its first st udy car r i ed out in a Bal t i mor e
school in 1913 are hel d t o s how t hat 10% of t he
school chi l dr en we r e i n need of psychi at r i c
assistance. The war was t o add consi der abl e
f or ce t o such devel opment s , t he "war neur oses"
pr ovi di ng ne w mat er i al for obser vat i on and
hi ghl i ght i ng t he r el at i onshi p be t we e n psychi c
di sor der s and ever yday l i vi ng condi t i ons. In this
r es pect t he gr eat est cont r i but i on of t he ment al
hygi ene move me nt lay in t he t r eat ment of t he
pr obl ems of sol di ers r et ur ni ng home.
The ment al hygi ene move me nt in Amer i ca
was par t i cul ar l y c onc e r ne d wi t h chi l dr en' s
pr obl ems, and pl ayed a l eadi ng r ol e in t he chi l d
gui dance move me nt whi c h first f l our i shed i n t he
' t went i es. The i mpor t ance of such devel op-
ment s lay in t he ne w f or m of soci al management
whi ch t hey per mi t t ed. In t he wor ds of one offi-
cial of t he chi l d gui dance movement :
the (children's) clinic treats these problems by treating
not only the child through whom they become manifest,
but as well the family, schools, recreational and other
involved factors and persons which contribute to the
problem, and whose disorder the problem may reflect
(cited in Castel etal., 1982, p.35).
It was now possi bl e t o i nt er vene in t he whol e
r ange of behavi our s of t hese i ndi vi dual s whos e
per f or mance fell be l ow t he nor m. The gui di ng
pr i nci pl e was not t he cur i ng of di sease and t he
er adi cat i on of defect s, but t he i mp r o v e me n t of
t he heal t h of t he i ndi vi dual , t he opt i mi sat i on of
t hei r f unct i oni ng. Wi l l i am Whi t e was t o st at e this
pr i nci pl e cl ear l y in his i naugural address t o t he
First I nt er nat i onal Congr ess of Ment al Hygi ene:
Mental hygiene is on this account alone more important
than ever before, and its significance can be seen to be
gradually changing from one of the simple prevention of
mental disease, which is a negative program, to the posi-
tive attitude of finding ways and means for people to live
their lives at their best. Medicine has long enough main-
tained as ideals freedom from disease and the putting off
of death. It is time that these were replaced by ideals of
living, of actual creative accomplishment. The art of liv-
ing must replace the avoidance of death as a prime objec-
tive, and if it ever does succeed in replacing it in any
marked degree, it will be found that it has succeeded bet-
ter in avoiding death than the old methods that had that
particular objective as their principal goal. Health is a
positive, not a negative concept (cited in Castel et al.,
1982, p.37).
The advant ages wer e evi dent . One was now
fully ent i t l ed, even r equi r ed, t o do s omet hi ng t o
i ndi vi dual s mani f est i ng mi nor devi at i ons f r om a
st at i st i cal nor m whi ch t wo decades earl i er mi ght
have passed unnot i ced. One coul d now cl ai m t o
be abl e t o do somet hi ng, for i nst ance, t o chi l dr en
who mani f est ed such behavi our s as "t ant rums,
stealing, secl usi veness, t ruancy, cruel t y, sensi-
t i veness, rest l essness, and fears" ( Cast el e t al . ,
1982, p. 38). At least in pr i nci pl e, t her e was
hencef or t h no l i mi t t o t hose spher es of per sonal
life whi ch, once r ender ed visible, coul d now be
r egar ded as pot ent i al l y di sr upt i ve of t he effi ci ent
f unct i oni ng of t he i ndi vi dual .
The f ocus for all t hese ne w f or ms of soci al
i nt er vent i on was t he i ndi vi dual . What t hey
achi eved was t o br i ng t o t he surface all t hose
aspect s of an i ndi vi dual ' s per sonal life whi ch
mi ght be det r i ment al t o t hei r physi cal and men-
tal heal t h, and t her eby t o t hei r effi ci ency, and t o
open t hese up t o t he possi bi l i t y of a wi de r ange
of f or ms of soci al management . I nt el l i genge test-
i ng pr ovi ded a f ur t her and i mpor t ant di mens i on
t o this over al l st rat egy of r ender i ng vi si bl e t he
l evel of f unct i oni ng of t he i ndi vi dual . The advan-
t age of i nt el l i gence t est s was t hat t hey suppl i ed
an el abor at e and supposedl y obj ect i ve means
whe r e by one coul d di f f er ent i at e one i ndi vi dual
f r om anot her. It di d so wi t h t he aid of st at i st i cs
whi c h ser ved t o s how t he ext ent of t he indi-
vi dual ' s devi at i on f r om t he nor m( Hacki ng,
1975; Rose, 1979). I nt el l i gence tests we r e first
devel oped in Fr ance by Al fred Bi net in 1905,
al t hough as earl y as 1895 t he pr i nci pl es we r e
st at ed cl earl y:
we must search with the present knowledge and
methods at hand for a series of tests to apply to an indi-
vidual in order to distinguish him from others and to ena-
ble us to deduce general conclusions relative to certain
of his habits and faculties... (Binet & Henri, trans quoted
from Rose, 1979, p.8).
I n t e l l i g e n c e t e s t s we r e i mp o r t e d t o t h e Un i t e d
St at es b y Te r ma n at St anf or d, Go d d a r d at t h e Vi n-
e l a n d Tr a i n i n g Sc h o o l i n Ne w J e r s e y, a n d Ye r k e s
at Ha r va r d. Me n t a l t e s t i n g at t ha t t i me h a d c l o s e
c o n n e c t i o n s wi t h t h e e u g e n i c s mo v e me n t . Th e
p r o b l e ms we r e s e e n t o b e t h o s e o f c r i mi na l i t y,
p a u p e r i s m, i n d i g e n c e a n d i ne f f i c i e nc y, al l o f
t h e s e b e i n g a t h r e a t t o a we l l - o r d e r e d s oc i a l
b o d y . Th e di f f i cul t y, h o we v e r , l ay i n d e t e c t i n g
s u c h i n s i d i o u s c h a r a c t e r i s t i c s . Fo r wh i l s t a l ay-
p e r s o n c o u l d d e t e c t t h e mo s t e x t r e me a n d ma n-
i f est f or ms , h o w wa s o n e t o i de nt i f y t h e hi gh-
g r a d e de f e c t i ve s ? Th e i n e x p e r t o b s e r v e r c o u l d
e a s i l y mi s t a k e s u c h i n d i v i d u a l s as e n t i r e l y nor -
mal . Me n t a l t e s t i n g p r o d u c e d a " s o l u t i o n " i n i t s
p r o v i s i o n o f a me a n s o f s y s t e ma t i c a l l y i dent i f y-
i ng t h e f i ne d i f f e r e n t i a t i o n b e t we e n i n d i v i d u a l s
a c r o s s h u g e ma s s e s o f i ndi vi dua l s . St at i s t i cs a n d
t h e n o r ma l c u r v e s u p p l i e d a n o t h e r i mp o r t a n t
i n g r e d i e n t i n t h e f o r m o f a me c h a n i s m f or i de n-
t i f yi ng d e v i a t i o n f r om t h e n o r m ( Ga l t o n , 1883;
Ha c ki ng, 1975; Rose, 1979; Sut he r l a nd, 1972) .
I n t he Un i t e d St at es t h e q u e s t i o n o f i mmi g r a -
t i on c o n t r o l o f f e r e d a s u i t a b l e e x p e r i me n t a l
g r o u n d f or me n t a l t es t i ng. Th e t e s t i n g o f " t he
g r e a t ma s s o f a v e r a g e i mmi g r a n t s " i n 1912 h a d
r e v e a l e d t ha t 83% o f t h e J e ws , 80% o f t h e Hun-
gar i ans , 79% o f t h e I t al i ans, a nd 87% o f t h e Rus-
s i ans we r e " f e e b l e - mi n d e d " . I t i s we l l t o r e c a l l
t ha t f e e b l e - mi n d e d n e s s wa s a wa y o f qua l i f yi ng
f or d e p o r t a t i o n , a nd i t a p p e a r s t ha t me n t a l t es t -
i ng s i gni f i c a nt l y i n c r e a s e d t h e n u mb e r o f d e p o r -
t a t i o n s f or t hi s r e a s o n ( Ka mi n , 1974, p. 16) .
Th e f i r st wo r l d wa r wa s a f u r t h e r p o we r f u l fac-
t o r i n e n c o u r a g i n g t h e s p r e a d o f me n t a l t es t i ng.
Th e t e s t i n g p r o g r a mme , t h e Al pha a n d Bet a t es t s ,
wa s a p p l i e d t o s o me t wo mi l l i o n me n , p u b l i c
i n t e r e s t i n s u c h t e s t s b e i n g gi ve n a s t i mu l u s
wh e n i t wa s r e v e a l e d t ha t t h e " me n t a l age" o f t h e
a v e r a g e wh i t g e d r a f t e e wa s o n l y 13 ( Ye r ke s ,
1921) . Ex t r a p o l a t i n g s u c h r e s ul t s t o t h e e n t i r e
p o p u l a t i o n o f t h e Un i t e d St at es y i e l d e d a f i gur e
o f s o me 50 mi l l i o n me n t a l l y d e f e c t i v e ci t i zens !
( c i t e d i n Ca s t e l e t al . , 1982, p. 45) . Al t h o u g h i t
a p p e a r s t ha t s u c h f i gur e s we r e r a p i d l y r e v i s e d
d o wn wa r d , t h e y p r o v i d e d an i mp o r t a n t i mp e t u s
f or t h e s p r e a d o f me n t a l t e s t i n g t o o t h e r a r e a s o f
s oc i a l life.
I n Br i t a i n t h e wa r al s o wa s s i gni f i c a nt f or t h e
d e v e l o p me n t o f p s y c h o l o g i c a l t es t i ng. Th e i nf l u-
e n c e o f t h e wo r k o f C. S. Myer s is c r u c i a l he r e .
Qu e s t i o n s s u c h as f i t nes s i n r e l a t i o n t o l e n g t h o f
wo r k i n g t i me , t h e s e l e c t i o n a n d t r a i n i n g o f
i ndus t r i a l wo r k e r s , t h e e s t i ma t i o n o f " a c c i d e n t
p r o n e n e s s " as a p e r s o n a l a t t r i but e , al l s h o we d
t h e va l ue i n b e i n g a b l e t o i de nt i f y t h e p e r s o n a l
p s y c h o l o g i c a l c h a r a c t e r i s t i c s o f t h e i ndi vi dua l .
My e r s d e v i s e d a n d a p p l i e d s e l e c t i o n t e s t s f or
me n us i ng l i s t e n i n g d e v i c e s f or l o c a t i n g e n e my
s u b ma r i n e s , a n d wo r k e d o n p r o b l e ms o f t h e
" wa r n e u r o s e s " . Mye r s i n s i s t e d o n t h e
p s y c h o l o g i c a l n a t u r e o f wh a t wa s c a l l e d " s he l l
s h o c k " a nd p r o p o s e d a nd p r a c t i c e d
p s y c h o t h e r a p e u t i c me t h o d s o f t r e a t me n t . Hi s
p o s i t i o n wa s e mp h a t i c :
The physiological factors involved in purely muscular
fatigue are now fast becoming negligible, compared with
the effects of mental and nervous fatigue, monotony,
want of interest, suspicion, hostility, etc. The psychologi-
cal factor must therefore be the main consideration of
industry and commerce in the future (Myers, 1920,
pp.V-VI ).
Th e p s y c h o l o g i c a l a t t r i b u t e s o f t h e p e r s o n
we r e , i n d e e d , t o p r o v i d e t h e mo s t f r ui t f ul
g r o u n d f or t h e e x p r e s s i o n o f c o n c e r n s t o i mpl i -
c a t e t h e i n d i v i d u a l wi t h i n t h e o b j e c t i v e s o f t h e
e n t e r p r i s e a nd s oc i e t y.
THE FI RM AS A SITE I N THE CONSTRUCTI ON
OF THE GOVERNABLE PERSON
Th e a mb i g u i t i e s o f t h e wo r d e f f i c i e nc y ena-
b l e d i t t o o p e r a t e a c r o s s a s e r i e s o f d i s p e r s e d
s t r a t e g i e s c o n c e r n e d wi t h ma n a g i n g t h e l i f e o f
t h e p e r s o n . Th e s e r a n g e d f r o m b r o a d p o l i t i c a l
p l a t f o r ms t o p s y c h o l o g i c a l a n d s o c i o l o g i c a l c on-
c e r n s wi t h i n d i v i d u a l s wh o d e v i a t e d f r o m
s p e c i f i e d n o r ms i n a v a r i e t y o f ways . We h a v e
a r g u e d t ha t t h e s t a n d a r d c o s t i n g - b u d g e t i n g c o m-
pl ex can be vi ewed i n t er ms of such a pr eoccu-
pat i on. St andard cost i ng and budget i ng, how-
ever, wer e i nt ended t o oper at e wi t hi n a part i cu-
lar site - - t hat of t he firm. Our c onc e r n now is t o
i dent i fy t he way i n whi ch st andar d cost i ng and
budget i ng, i n conj unct i on wi t h sci ent i fi c man-
agement and i ndust r i al psychol ogy, came t o
defi ne t he fi rm as a ver y par t i cul ar ki nd of space.
It shoul d be one i n whi ch effi ci ency and rat i onal -
ity woul d prevail. Such obj ect i ves woul d be
st at ed not j ust i n t er ms of t he overal l obj ect i ves
of t he ent erpri se, but at t he l evel of t he act i vi t i es
and ul t i mat el y mot i vat i ons of t he i ndi vi dual
empl oyee. Ini t i al l y t he wor ker on t he fact ory
floor, and finally ever y empl oyee, woul d come
t o be i dent i fi ed i n t er ms of t hei r cont r i but i on to
such ends. Thi s was t o r equi r e a pr ocess of con-
t i nual moni t or i ng and observat i on. The st andar d
cost i ng and budget i ng compl ex was, we argue, a
cent r al el ement i n such a process.
The cr eat i on of a st andar d cost i ng wi t hi n t he
account i ng l i t erat ure, account i ng hi st ori ans
have acknowl edged, owes a consi der abl e debt
to t hat move me nt whi ch, or i gi nat i ng i n t he
U.S.A., became known as "sci ent i fi c manage-
ment ". Accor di ng t o Sol omons ( 1968, p. 37), for
exampl e, one cannot read F. W. Tayl or' s paper of
1903 on Shop Management wi t hout not i ci ng
t hat it cont ai ns many of t he essent i al el ement s of
what woul d l at er be c ome st andar d cost i ng.
Account i ng hi st ori ans have dr awn our at t ent i on,
also, to anot her l eadi ng pr opone nt of sci ent i fi c
management ideas, Har r i ngt on Emer son (see,
e.g. Sowell, 1973, pp. 206- 19; Epstein, 1978, pp.
90- 120) . Not onl y di d his wor k on effi ci ency
expl i ct l y envi sage a r equi r ement for s omet hi ng
aki n t o a st andar d cost i ng ( Emer son, 1919, pp.
149- 172) , but appar ent l y he exer ci sed a st r ong
i nf l uence on t he wr i t i ngs of G. Chart er Harri son,
whose 1930 book has be e n t aken as an earl y
exampl ar of a ful l y-i nt egrat ed and rat i onal i sed
st andar d- cost i ng and budget i ng syst em (Sowell,
1973, pp. 220- 70) .
Taki ng sci ent i fi c management and cost
account i ng as an i nt er l i nked compl ex, we wi sh
t o suggest an expl anat i on as t o t he ki nd of pro-
j ect t o whi ch it cont r i but ed. Thi s was one i n
whi ch not i ons of effi ci ency i dent i fi ed at t he l evel
of t he i ndi vi dual coul d come to be expr essed i n
mone y t er ms and rel at ed t o expect ed st andards
and norms.
Undoubt edl y, t he body of t hought and prac-
t i ce t hat became known as sci ent i fi c manage-
me nt was enmes hed wi t hi n t hat Amer i can quest
for nat i onal effi ci ency t o whi ch we have referred
i n t he pr ocedi ng sect i on (Haber, 1964; Hays,
1959). Accor di ng to F. W. Tayl or ( 1913, pp. 5-
7), i n t he i nt r oduct or y pages of his cel ebr at ed
Principles of Scientific Management, t he task
was to advance nat i onal effi ci ency t hr ough
r emedi at i on of t hose vast wast es whi ch, goi ng
far beyond t he poor use and i nadequat e conser-
vat i on of nat ur al resources, secr et ed t hemsel ves
wi t hi n t he dally act i ons of everyone. Roosevel t
had been pr ophet i c, says Taylor, i n r egar di ng t he
conser vat i on of nat ur al r esour ces as no mor e
t han pr el i mi nar y t o such a wi der quest i on of t he
effi ci ency of t he per son and, t hereby, of t he
nat i on.
For Tayl or t he cor e of t he issue was that,
wher eas wast es of nat ur al r esour ces have an easy
visibility, wast es of huma n r esour ces are hi dden:
We can see our forests vanishing, our water-powers
going to waste, our soil being carried by floods into the
sea. We can see and feel the waste of material things. Awk-
ward, inefficient, or ill-directed movements of men, how-
ever, leave nothing visible or tangible behind them. Their
appreciation calls for an act of memory, an effort of the
imagination. And for this reason, even though our daily
loss from this source is greater than from our waste of
material things, the one has stirred us deeply, while the
other has moved us but little ( Taylor, 1913, pp. 5-6 ).
Scientific management woul d take upon itself
t he pr oj ect of r epl aci ng t hat vagueness and ot her
acts of t he i magi nat i on wi t h exact sci ent i fi c
knowl edge of t he ext ent of t he wast es caused
t hr ough i nadequat e huma n act i on and social
organi sat i on. And, it woul d also set itself t he task
of t hei r syst emat i c el i mi nat i on.
We are not concer ned her e t o cont est Tayl or' s
cl ai ms t o scientificity. It is, rat her, wi t h t he way
i n whi ch such cl ai ms f unct i oned t hat we are
i nt erest ed. Lay knowl edges and pract i ces of all
kinds, such as trades, crafts and t radi t i onal prac-
tices, wer e t o be pl aced under suspi ci on as to t he
wast eful ness of t hei r modes of operat i on. As t he
above quot e shows, Tayl or was i n little doubt
t hat such wast es wer e vast. Gi l br et h also woul d
i l l ust rat e t he shocki ng wast e t hr ough awkwar d
and bl under i ng movement s i n a t rade as ol d as
bri ckl ayi ng ( Drury, 1915, pp. 108- 113) . Tayl or
hi msel f woul d poi nt to t he need for a sci ence of
such munda ne tasks as shovel l i ng and pi g-i ron
handl i ng, ur gent l y t o repl ace haphazard modes
of work.
Thi s r ender i ng suspi ci ous of t he i nadequacy
of lay knowl edges and pract i ces is i mport ant . It
hel ped to l egi t i mat e t he at t empl t of sci ent i fi c
management to appropri at e t he work-life of t he
i ndi vi dual wi t h a vi ew to i nt er veni ng i n it i n
or der to opt i mi se its efficiency. Ar ound t he pil-
lars of efficiency, t he need t o el i mi nat e wastes,
and t he assuredness of sci ence over and above
i nformal knowl edges, sci ent i fi c management
sought to est abl i sh for itself a ri ght t o i nt erfere i n
peopl e' s lives. Thi s ri ght was event ual l y t o be
t aken over by an army of t echni ci ans of t he social
and economi c life of t he ent erpri se.
Scientific management reflects t he al most
messi ani c rol e for t he engi neer i ng professi on en-
vi saged by some of its l eaders i n t he U.S.A.:
To attain the high efficiency of the atomic energy of the
fish, the high mechanical efficiency of the bird, the high
lighting efficiency of the firefly, is not an ethical or finan-
cial or social problem, but an engineering problem; and
to the engineering profession, rather than to any other,
must we look for salvation from our distinctly human ills,
so grievously and pathetically great (Emerson, 1919, p.
5).
Coupl ed wi t h its r ej ect i on of t he mer i t of lay
knowl edge and pract i ces, t he sci ent i fi c manage-
ment l i t erat ure also reveal s a bel i ef i n t he possi-
bi l i t y of act ual l y i mpr ovi ng t he effi ci ency of t he
person. It reflects a phi l osophy whi ch refuses to.
accept t hat great ness and success are sol el y acci-
dent s of bi rt h. "In t he fut ure", says Tayl or ( 1913,
pp. 6- 7) ,
it will be appreciated that our leaders must be trained
right as well as born right, and that no great man can
(with the old system of personal management) hope to
compete with a number of ordinary men who have been
properly organized so as efficiently to cooperate.
In t he l at er years of his career Tayl or envis-
aged t hat sci ent i fi c management woul d conquer
t he ent i r e social space. Whi l e his proposal s origi-
nat ed i n t he factory:
It is hoped, however, that it will be clear.., that the same
principles can be applied with equal force to all social
activities: to the management of our homes; the manage-
ment of our farms; the management of the business of our
tradesmen, large and small; of our churches, our philan-
thropic institutions, our universities, and our gov-
ernmental departments (Taylor, 1913, p. 8).
To achi eve such an obj ect i ve wi t hi n t he ent er-
pri se meant const r uct i ng nor ms or st andards of
what effi ci ency mi ght mean. I mpl ant ed wi t hi n
t he task per f or mance of t he wor ker t hese wer e
to pr ovi de a basis for obser vi ng devi at i ons from
expect at i ons. It is i n this cont ext t hat we can
appreci at e t he i nt er sect i on of sci ent i fi c manage-
me nt and cost account i ng. For it seems t hat from
an earl y date, sci ent i fi c management wr i t er s had
r ecogni sed t he pot ent i al of an effi ci ency mea-
sure gr ounded i n money, i n costs saved and pro-
fits earned. As earl y as 1886, for exampl e, H. R.
Towne, t hen pr esi dent of t he Amer i can Society
of Mechani cal Engi neers and a ment or of
Taylor' s, had want ed to const r ue t he engi neer as
an economi st ( Towne, 1886). For Towne, t he
t rue si gni fi cance of an engi neer ' s efforts t o pro-
mot e efficiency, some speci al cases of vital
nat i onal securi t y apart, ought ul t i mat el y t o be
j udged i n t er ms of economi cs. Efficiencies wer e
deemed t rue onl y if t hey coul d ul t i mat el y be
s hown to be so i n t er ms of cost s saved. One fi nds
Har r i ngt on Emer son ( 1919) echoi ng t hese sen-
t i ment s later, argui ng a need for engi neer s and
account ant s t o col l aborat e t owards t he mean-
i ngful exposi t i on of inefficiencies. It is hardl y
surpri si ng, t hen, t hat engi neer s associ at ed wi t h
sci ent i fi c management shoul d have come to
occupy such a cent r al rol e i n t he cons t r uct i on of
st andard costing.
The wor k of G. Chart er Harri son pr ovi des a
way of i dent i fyi ng this br i dge whi ch was estab-
l i shed bet ween engi neer i ng and account i ng.
Harri son' s cl ai ms to title span t he professi onal
bodi es of i ndust ri al engi neer i ng, char t er ed
account ancy and cost s account ancy. To hi m has
be e n at t r i but ed t he wr i t i ng of one of t he earl i est
full ar t i cul at i ons of st andard cost i ng, a wor k of
whi c h Sol omons woul d say in 1968 t hat it was
still part of t he cur r ent l i t erat ure. Har r i son t akes
f r om Emer s on ( 1919) his c onc e pt of t he funda-
ment al def ect of exi st i ng cost account i ng prac-
tices. Pr i or t o its i nt er sect i on wi t h sci ent i fi c
management , cost account i ng' s pr i me def ect
was t hat it had:
Failed most utterly and dismally to achieve what should
be the primary purpose of any cost system, namely, to
bring promptly to the attention of the management the
existence of preventable inefficiencies so that steps
could be taken to eliminate these at the earliest possible
moment (Harrison, 1930, p. 8).
In r ect i f yi ng this def i ci ency cost account i ng
woul d expand its domai n. It woul d suppl y t he
engi neer s and t hei r sci ent i fi c management wi t h
a faci l i t at i ve t echnol ogy for expr essi ng t hei r
nor ms and st andards in t er ms of money. The
ear l i er c onc e r n of cost account i ng wi t h
t he r egi st r at i on of t he move me nt s of wor ker s
and mat eri al s as t hey "at t ached" t hems el ves t o
pr oduc t i on (Epst ei n, 1978, pp. 90- 120) woul d
be augment ed. Thi s expansi on woul d r ef l ect a
c onc e pt of t he wor ker as al most cer t ai nl y ineffi-
ci ent , needi ng t o be e nme s he d wi t hi n a
r out i nel y- appl i cabl e cal cul at i ve apparat us
whi c h st andard cost i ng woul d pr ovi de.
Thi s al l i ance of cost account i ng wi t h t he
engi neer s was i mpor t ant in t he cons t r uct i on of
nor ms of efficfency. It pr ovi ded a way for maki ng
t he i ndi vi dual wor ke r r out i nel y knowabl e and
account abl e in t er ms of was t ed act i ons. And sci-
ent i fi c management was such an i ndi vi dual i si ng
endeavour p a r excel l ence. It was a mat t er of
ceasi ng t o t reat of wor ker s onl y in t he anonym-
ous t er ms of groups, cl assi fi ed by t r ade or skill.
At t ent i on was t o be pai d i nst ead t o t he perfor-
mance of each i ndi vi dual wor ker . Tayl or i sm
woul d insist t hat each wor ker be si ngl ed out , t o
be r ewar ded or puni s hed on t he basis of his or
her i ndi vi dual per f or mance (Tayl or, 1913, p.
121; Haber, 1964, p. 23). Whe n one ceases t o
deal wi t h me n in l arge gangs or groups, says
Tayl or ( 1913) ,
and proceeds to study each workman as an individual, if
the workman fails to do his task, some competent teacher
should be sent to show him exactly how his work can
best be done, to guide, help, and encourage him, and, at
the same time, to study his possibilities as a workman (pp.
69-70).
But over whom was this i ndi vi dual i sat i on t o
be exer ci sed? It is cl ear t hat l eader s of t he sci en-
tific management move me nt had envi saged t hat
t hei r pr i nci pl es coul d embr ace ever yone, wi t h
no task at all t oo l owl y or i mpor t ant t o escape.
Bot h physi ol ogi cal and ment al wor k we r e t o be
embr aced. But despi t e t hat hope, sci ent i fi c man-
agement woul d r emai n ent r apped at t he l evel of
fairly mundane, physi ol ogi cal tasks ( Dr ur y,
1915). Its fi rst -hand t echnol ogi es for const r uct -
i ng norms, such as t he t i me and mot i on study,
we r e hardl y equi pped for anyt hi ng mor e.
Thi s is pr eci sel y whe r e st andard cost i ng again
be c ome s significant. Toget her wi t h budget i ng it
woul d s eem t o have pr ovi ded an i mpor t ant
escape rout e, al l owi ng t he pr i nci pl es of standar-
di si ng and nor mal i si ng t o move away f r om t he
f act or y floor. At least in pr i nci pl e t hey coul d
now embr ace ever yone wi t hi n t he firm. Harri-
son' s ( 1930) st andard cost i ng t ext offers, in t he
t er ms of sci ent i fi c management , a rat i onal e for
such an endeavour :
We have increased the efficiency of the average man
because we have applied the principles of scientific man-
agement to his work.. .
Our accounting methods today are the best evidence
of our failure to apply scientific management principles
to the development of our executives. For the five-dol-
lars-a-day man our accounting records clearly set up the
objective and the accomplishment in comparision there-
with. But when we come to our records for executives
what do we find?... Of accomplishment, it is true that our
profit and loss account tells the story of the ultimate
result, but of executive objectives shown in relation to
the accomplishment, our records are si l ent . . . (p. 27-
28).
St andard cost i ng had al ready e nme s he d t he fac-
t or y wor ker wi t hi n a cal cul us of effi ci ency. It
shoul d now move on, by means of t he budget or
profi t plan, t o do t he same for execut i ves.
No man can realize his fullest possibilities, whether he be
a five-dollar-a-day trucker in the factory or a five-
thousand-dollar-a-year executive, unless he has before
him at all times ( 1 ) a carefully determined objective, (2)
records showing the relationship between accomplish-
ment and this objective, and (3) if he has failed to realise
the objective, information as to the causes of such failure.
Standard costs furnish the factory superintendent with
this information as regard factory costs, and standard pro-
fit or budget systems give the executive this information
as regards profits (Harrison, 1930, pp. 27-28).
The engi neer s (e.g. Emerson, 1919) had envis-
aged t hat st andard cost i ng woul d be no mor e
t han an appendage t o t hei r pr i nci pl es of sci en-
tific management . It woul d be a conveni ent cal-
cul at i ve apparat us i n r espect of t he cor e dat a t he
engi neer woul d supply. But account i ng' s facility
to oper at e i n t er ms of mone y effect ed a surpris-
i ng met amor phosi s. By concent r at i ng upon an
end- r esul t of money, account i ng coul d st andar-
dise effi ci ency for a much l arger group. I n t he
case of mor e "ment al " t ype of work, it coul d sim-
pl y express expect at i ons i n t er ms of a money
out come, l eavi ng uncer t ai n t he quest i on of t he
means.
A l i ne of cont i nui t y can, we suggest, be estab-
l i shed from sci ent i fi c management to st andard
cost i ng to budget i ng. It is a cont i nui t y whi ch
cent r es on t he nor m, on s ur r oundi ng t he per son
wi t h expect i ons of behavi our. Whi l e sci ent i fi c
management mi ght seem t o have faded i nt o
ext i nct i on, it has not done so wi t hout l eavi ng a
si gni fi cant resi due, i n st andard cost i ng and
budget i ng. If Tayl ori sm and sci ent i fi c manage-
me nt mor e general l y had envi saged t he ent er-
pri se as machi ne-l i ke, cost account i ng, t hr ough
t he budget and budget ar y cont rol , woul d pro-
vi de a means for r ender i ng t hat i mage opera-
tional. Money woul d, as it were, become t he
c ommon cur r ency wi t h whi ch to i nt egrat e and
aggregate t he act i vi t i es of i ndi vi dual s as compo-
nent s. For bot h br ai n- wor k and physi cal -work,
i ndeed for every account abl e per son wi t hi n t he
firm, st andards and devi at i ons t her ef r om
r eckoned i n money coul d r ecor d t he indi-
vi dual ' s cont r i but i ons, and also t hei r failure t o
cont r i but e, to t he ends of t he machi ne as a
whol e. At hand was a cal cul at i ve apparat us
t hr ough whi ch deep quest i ons of responsi bi l i t y
coul d r out i nel y be pr essed upon i ndi vi dual s.
But t he sci ent i fi c management - - cost account -
i ng compl ex was not t he onl y one i n t he earl y
decades of t he cent ur y to concer n itself wi t h t he
effi ci ency of t he per son and t hei r cont r i but i on
t o col l ect i ve efficiency. Whi l e st andard cost i ng
and budget i ng pr ovi ded t he l ens t hr ough whi ch
engi neer s and manager s mi ght gaze at wor ker s
and manager s and t hei r inefficiencies, ot hers
wer e also i nt er est ed to j oi n i n t he process of
observat i on. Specifically, t hese wer e t he earl y
i ndust ri al psychol ogi st s. A cent ral figure her e
was Hugo Munst er ber g. He f or mul at ed t he task
of i ndust ri al psychol ogy as follows:
Our aim is to sketch the outlines of a new science which
is to intermediate between the modern laboratory
psychology and the problems of economics: the
psychological experiment is systematically to be placed
at the service of commerce and industry (Munsterberg,
1913, p. 3).
What was now bei ng addressed was how t he
psyche of t he wor ker mi ght be known and man-
aged, so as t o serve effi ci ency on an even gr ander
scale t han t he pr omi se of t he engi neer s and t he
cost account ant s. The i ndust ri al psychol ogi st s
can be seen as a furt her gr oup t hat woul d i nvade
t he firm, gener at i ng and appl yi ng a knowl edge of
t he i ndi vi dual . Wi t h this devel opment concer ns
of t he mi nd as wel l as of t he body woul d be i nt ro-
duced i nt o t he pr oj ect of enmes hi ng t he indi-
vi dual wi t hi n nor ms of economi c per f or mance.
Ther e seems little doubt t hat t he earl y i ndust -
rial psychol ogy l i t erat ure shares much i n ori en-
t at i on wi t h t he sci ent i fi c ma na ge me nt - c os t
account i ng compl ex we have j ust l ooked at.
Indust ri al psychol ogy woul d also lay cl ai m t o
sci ent i fi c status. And it woul d do so i n a mor e
careful manner t han Tayl ori sm. Relative t o t he
"hel pl ess psychol ogi cal di l et t ant i sm" of ot hers
who woul d seek to mot i vat e t he worker,
( Munst er ber g, 1913, p. 56), it woul d t her eby
seek t o est abl i sh for itself a pri vi l eged posi t i on.
Now t hat it had moved beyond phi l osophi cal or
t heol ogi cal specul at i on, psychol ogy coul d offer
a pract i cal cont r i but i on t o t he goals of civilisa-
t i on ( Munst er ber g, 1913). It woul d est abl i sh a
l aborat ory wi t hi n whi ch to pl ace t he per son as a
subj ect upon whom exper i ment s coul d be con-
duct ed. Thi s woul d pl ace it al ongsi de t he nat ur al
sci ences. Its per i pat et i c l abor at or y woul d be t he
factory, i ndust r i al psychol ogi st s movi ng freel y
from t he one t o t he ot her wi t h great ease (Myers,
1920).
I ndust r i al psychol ogy woul d share wi t h sci en-
tific management a concent r at i on upon t he indi-
vidual. I ndeed as Munst er ber g ( 1913) poi nt s
out , t he ent i r e pr oj ect of an appl i ed psychol ogy,
wi t hi n whi ch i ndust ri al psychol ogy can be sited,
had be c ome possi bl e onl y whe n psychol ogi st s
came t o r ecogni se t he i mpor t ance of i ndi vi dual
di fferences. The quest for uni versal laws of t he
mi nd, for all of its i mpor t ance, had deni ed
psychol ogi st s t he possi bi l i t y of br i ngi ng t hei r
skills t o bear upon t he pract i cal wor l d of affairs:
In practical life we never have to do with what is com-
mon to all human beings, even when we are to influence
large masses; we have to deal with personalities whose
mental life is characterised by particular traits of national.
ity, or race, or vocation, or sex, or age, or special
interests, or other features by which they differ from the
average mind which the theoretical psychologist may
construct as a type (Munsterberg, 1913, p. 9).
It is t he i ndi vi dual whom t he psychol ogi st is t o
help. His or her part i cul ar apt i t udes or skills are
t o be exper t l y ascert ai ned, so t hat t he
psychol ogi st can r e c omme nd a per s on- t as k fit
t hat is congr uent wi t h i ndi vi dual wel l - bei ng and
t he exi genci es of effi ci ency (see e.g. Myers,
1920). And mot i vat i onal difficulties i n task per-
f or mance are t o be seen as s t emmi ng from men-
tal traits whi ch t he non- exper t cannot effec-
t i vel y di agnose. Onl y by such i nt er vent i ons of
t he psychol ogi st wi l l t her e be avoi ded t hat
whi ch
social statistics show with an appalling clearness, what a
burden and what a danger to the social body is growing
from the masses of those who do not succeed and who by
their lack of success become discouraged and embitted
(Munsterberg, 1913, p. 35).
Finally, t he earl y i ndust ri al psychol ogi st s
share wi t h Tayl ori sm an appeal t o effi ci ency as a
t r ans cendent purpose. They too, it seems, want
t hei r endeavour pl aced beyond t he reach of poli-
tics:
psychotechnics does not stand in the services of a party,
but exclusively in the service of civilisation (Munster-
berg, 1913, p. 20).
To any pr oj ect of enmes hi ng t he i ndi vi dual
wi t hi n nor ms of efficiency, an exper t psychol og-
ical sel ect i on process, as wel l as psychol ogi cal
i nt er vent i on i n i nt er pr et i ng task per f or mance
variables, is decl ar ed i ndi spensabl e. Later, as we
shall see, t he body of psychol ogi cal l i t erat ure
whi ch woul d emer ge i n al t ered form from t hese
begi nni ngs woul d si gni fi cant l y i nt er sect wi t h
budget i ng and st andard cost i ng. In so doi ng, it
woul d hel p t o br i ng i nt o part i cul ar rel i ef t he
compl ex i ndi vi dual i t y of t he per s on wi t hi n t he
firm. Thi s const r uct has, we shall suggest, rei n-
forced a rat i onal e for "behavi our al sci ent i st s" t o
i nt ensi fy t hei r at t ent i on t o managi ng t he organi -
sat i onal l y dysf unct i onal pr oper t i es of t he per-
son.
A GESTURE TOWARDS THE PRESENT
I n so far as t he concer n of this paper is histori-
cal we woul d like it to be read as a "hi st ory of t he
present ". By this we mean an at t empt to i dent i fy
t he di spersed event s whi ch i nt er sect t o est abl i sh
our cont empor ar y, and oft en unquest i oned,
rat i onal es. Thi s far, however , we have be e n
poi nt i ng l argel y t o not i ons and pract i ces whi ch
have been suppl ant ed or si gni fi cant l y redefi ned.
We woul d like now t o t ry schemat i cal l y t o i den-
tify some of t he r el ocat i ons and shifts whi ch
have occur r ed i n mor e r ecent times. We cannot
hope i n any way t o do j ust i ce to t he r i chness of
t he i nt er veni ng peri od. It is si mpl y some of t he
l i nes whi ch emer ge out of and fol l owi ng t he
per i od 1900- 1930 t o whi ch we wi sh to refer.
Thi s is under t aken wi t h a vi ew to l ocat i ng t he
cont i nui t i es bet ween t he pr esent and t he per i od
we have addressed above. It also ent ai l l s regis-
t er i ng t he effect and i mpl i cat i ons of t he shifts
whi ch have occur r ed i n t he account i ng litera-
t ure.
One issue whi ch i nt erest s us part i cul arl y i n
this cont i nui t y of concer ns, coupl ed wi t h a rede-
fi ni t i on of t er ms and obj ect i ves, is t he i nt r oduc-
t i on of t he not i on of t he "behavi oural " i nt o
account i ng (Devi ne, 1960; Bedford and
Dopuch, 1961; Asht on, 1983). Our suggest i on is
t hat this pr oduced a moder ni sat i on of t he
account i ng compl ex, but one whi ch ent ai l ed a
si gni fi cant cont i nui t y wi t h t he concer n t o
enmes h t he i ndi vi dual wi t hi n a compl ex web of
cal cul at i ve pract i ces. It is not t hat account i ng
si mpl y expands its domai n t hr ough t he i nt ro-
duct i on of t he behavi our al wi t hi n its sphere. It is
rat her a r edef i ni t i on of t he t er ms accor di ng t o
whi ch t he account i ng compl ex is under s t ood
that is at issue. Thi s is achi eved t hr ough i ncor-
por at i ng wi t hi n t he domai n of account i ng a
changed not i on of t he person. The change con-
cer ns t he at t r i but i on to t he i ndi vi dual of a com-
pl ex set of mot i ves and frust rat i ons, a pot ent i al
host i l i t y t o t he budget , for exampl e. The indi-
vi dual is vi ewed as a me mbe r of i nformal groups
out si de, from whi ch can be dr awn consi der abl e
suppor t and i nt o whi ch t her e is always t he
danger t hat he or she may wi t hdraw. In recogni -
t i on of such a danger account i ng comes, we
argue, to redefi ne its t erri t ory by i ncl udi ng
wi t hi n its l egi t i mat e spher e of oper at i on pre-
ci sel y t hese concer ns.
A second issue, and one we have referred to
already, concer ns t he l evel at whi ch t he redefi n-
i t i on takes place. Stated baldly, and as a quest i on,
t he issue is this: is our concer n her e si mpl y wi t h
di scourses? The answer is clear. The r edef i ni t i on
of account i ng t hr ough t he i nt r oduct i on of t he
behavi our al was carri ed out i n r el at i on to very
real pract i cal probl ems. One of t he pi oneer i ng
st udi es i n this field (Argyris, 1952) was i ndeed
under t aken as a r epor t to t he Cont r ol l er shi p
Foundat i on itself. Concer ned wi t h "t he poi nt at
whi ch me n and budget s meet " t he f or ewor d
decl ar ed cl earl y t he aims of t he report :
we hope the report sheds light on one of the most basic
"Control" questions faced by management - - how to
gain acceptance - - the real acceptance of standards and
goals (Argyris, 1952, foreword).
wi t hi n di scourse. It coul d not be ot herwi se. The
poi nt we woul d dr aw from this is t hat i mpor t ant
pract i cal issues pr oduce t he condi t i ons under
whi ch cer t ai n pr obl ems come t o be expressed.
They do not , however , det er mi ne t he t er ms
accor di ng t o whi ch t hey are expressed. Our con-
cer n here is wi t h t he latter.
A t hi rd poi nt rel at es t o t he not i ons of rational-
ity and efficiency, and t he ext ent t o whi ch t he
changes we poi nt to r epr esent a cont i nuat i on of
such a concer n. Our answer woul d be emphat i -
caUy affirmative. Yet we woul d again wi sh to
dr aw at t t ent i on to t he redefi ni t i ons whi ch
occur. Rat i onal i t y itself comes t o be prob-
l emat i sed. All i ndi vi dual s come to be vi ewed as
deci si on-makers, al bei t i n di fferent respect s.
Rat i onal i t y r emai ns as an issue of t he rel at i on
bet ween per sonal and col l ect i ve efficiency, yet
it is const r uct ed accor di ng t o a di fferent concep-
t i on of t he per s on and a revi sed not i on of t he
organi sat i on.
Our i nt er pr et at i on of t he i nt r oduct i on of t he
behavi our al i nt o account i ng ent ai l s a slight
det our. This is t hr ough t he psychol ogi cal and
soci ol ogi cal f or mul at i on of an i nt erest i n t he
human rel at i ons aspect of organi sat i ons dur i ng
t he second quar t er of t he t went i et h cent ur y.
Cent ral here are t he Hawt hor ne i nvest i gat i ons
whi ch ext ended for five years from 1927 unt i l
1932 (Mayo, 1933; Whi t ehead, 1938; Roethlis-
ber ger & Di ckson, 1939). The familiarity of t he
vari ous comment ar i es on t he Hawt hor ne
researches ent ai l s t he possi bl e danger t hat we
become i nur ed to t he novel t y of t hei r i nvent i on
of an art of gover nment for t he ent erpri se. Thi s
woul d be unf or t unat e because t he reformul a-
t i on t hey pr oduced i n such a pr oj ect was pro-
found. The effect of t he Hawt hor ne researches
was t o enabl e a concer n to devel op wi t h t he life
of t he per son i n all its di mensi ons as a pr obl em
for t he col l ect i ve ends of t he t ot al organi sat i on.
Roet hl i sberger & Di ckson express this ambi t i on
clearly:
The st art i ng poi nt for t he r et hi nki ng of account -
i ng t hr ough t he i nt r oduct i on of t he behavi our al
was a concr et e pr obl em. The f or mul at i on of t he
t erms of such an issue was effected, however ,
In terms of the concept of an industrial organization as a
social system many of the human problems of manage-
ment can be reformulated. A traditional statement of
these problems frequently distorts the actual human situ-
ation in the industrial plant. The workers, supervisors, or
executives are often considered apart from their social
setting and personal history and are treated as essentially
"economic men". Simple cause and effect analysis of their
behaviour is substituted for the richer situational context
in which their lives are lived and in which the relation of
mutual interdependence obtains (Roethlisberger &
Dickson, 1939, p. 569).
The emphasi s whi c h emer ges is on col l ect i ve
goal s and mut ual i nt e r de pe nde nc e of t he var i ous
c ompone nt part s of t he ent er pr i se. Thi s was t o
ent ai l a r econcept ual i s at i on of what one coul d
e xpe c t f r om budget s and ot her f or ms of standar-
di sat i on of manager i al expect at i ons. One coul d
no l onger base budget s and per f or mance stan-
dards sol el y on an assumpt i on of rat i onal
e c onomi c per sonal mot i vat i ons. To do so ri sked
pr oduci ng s ever e uni nt ended c ons e que nc e s
and resi st ances. In pl ace of such l i mi t ed vi ews
must be put t he per s on char act er i sed by senti-
ment s, t o whom manager i al pol i ci es must be
addr essed i n t er ms of t hei r meani ngs t o t hat per-
son in t hei r par t i cul ar per sonal and soci al cir-
cumst ances. The c onc e r n wi t h efi $ci ency and
rat i onal i sat i on must be ar t i cul at ed wi t h an
under s t andi ng of t he possi bi l i t i es of secur i ng
cooper at i on and accept ance of manager i al goals.
A negot i at i ve c onc e pt i on of management shoul d
be subst i t ut ed for one based on t he cr ude i mpos-
i t i on of standards. The concept of manager i al
cont r ol woul d have t o be r edef i ned so as t o
i mpl i cat e i ndi vi dual s wi t hi n t he col l ect i ve ob-
j ect i ves of t he ent er pr i se. To achi eve this one
woul d have t o at t end t o a qui t e di fferent di men-
si on of t he ent er pr i se t o t hat pr evi ousl y:
A great deal of attention has been given to the economic
function of industrial organization. Scientific controls
have been introduced to further the economic purposes
of the concern and of the individuals within it. Much of
this advance has gone on in the name of efficiency or
rationalization. Nothing comparable to this advance has
gone on in the development of skills and techniques for
securing cooperation, that is, for getting individuals and
groups of individuals working together effectively and
with satisfaction to themselves (Roethlisberger &
Dickson, 1939, pp. 552-553).
Economi c ends are medi at ed t hr ough per sonal
and soci al sent i ment s. One cannot hope t o
achi eve t he f or mer if t he l at t er are i gnored. One
must cons t r uct a wor k si t uat i on whi c h is also a
soci al si t uat i on. Thr ough this one wi l l be abl e t o
i mpl i cat e t he per sonal di mensi ons of t he life of
t he wor ker wi t hi n t he e c onomi c obj ect i ve of t he
organi sat i on:
Where the work situation is such that it does not allow
the worker's preoccupations or attention to be socially
expressed or directed by conversation or by other
activities, an ideal setting is created for the development
of morbid preoccupations. He is likely to spend his time
brooding about his personal problems or his relations
with his co-workers and supervisors. Where the social
situation is such that it does allow for the social expres-
sion of preoccupation, much brooding about factors inci-
dental to the worker's personal history can be alleviated
(Roethlisberger & Dickson, 1939, pp. 573-574).
Now of cour s e t he c onc e r n wi t h t he per sonal
di mens i on of t he life of t he wor ker was a muc h
mor e c ompl e x issue t han t hese br i ef r emar ks
suggest. Thei r r el evance for our concer ns her e,
however , are in t er ms of t he way such t hemes
pr ovi ded a basis for t he r edef i ni t i on of account -
i ng whi c h was t o oc c ur in t he t hi rd quar t er of
this cent ury. Put simply, t he r edi f i ni t i on t ook
pl ace t hr ough t he i ncor por at i on ( wi t hi n t he
domai n of account i ng) of just t hese per sonal and
human r el at i ons concer ns.
Argyri s ( 1952) is t he cl ear est earl y formul a-
t i on of such a concer n. The For ewor d t o Argyris'
st udy r emi nds us of t he def ect s of account i ng
t echni ques as pr evi ousl y concei ved. Some of
t hese, it is argued:
have reached the ultimate state of dwelling within an
electronic tube and emerging only to shake a mechanical
finger at erring human beings (Argris, 1952, foreword).
The poi nt of Argyri s' st udy was t hat this concep-
t i on of account i ng must be drast i cal l y revi sed.
He dr e w at t ent i on t o "what peopl e t hi nk of
budget s", di st i ngui shi ng be t we e n "budget
peopl e", "fact ory super vi sor s" and " empl oyees "
or "f act or y peopl e". The poi nt of this cat egori sa-
t i on was t o demons t r at e t hat di fferent gr oups of
peopl e had di fferent vi ews on budget s, on how
t hey we r e used and why t hey of t en we r e not
met . The negat i ve cons equences of budget s
whi c h we r e si mpl y i mpos ed on peopl e we r e
i dent i f i ed cl ear l y by Argyris. Pr essur e t o meet
t arget s laid down in budget s ri sked i ncr easi ng
t ensi on, r esent ment , and suspi ci on. This woul d
of t en l ead t o t he f or mat i on of gr oups as a way of
combat t i ng management pressure. The real
danger, however , lay in t he l onger t erm. In t he
shor t t er m management may r ecogni se t he dan-
gers and r educe t he pressure. In pr i nci pl e t he
gr oup shoul d di sappear. Howe ve r t he concl u-
si on t o whi ch Argyris came was t hat t her e was a
t endency for t he gr oup t o remai n. If it r emai ned,
it woul d cont i nue t o cause pr obl ems wel l after
t he initial i rri t ant had been r emoved.
The r emedy pr opos ed was t he i nt r oduct i on of
a negot i at i ve pol i t i cs for t he gove r nme nt of t he
ent er pr i se. A numbe r of t er ms came t o oper at e
wi t hi n this br oad space - - cooper at i on, bargain-
ing, communi cat i on. Of cour se as a negot i at i ve
pol i t i cs it was wei ght ed heavi l y in t he favour of
one side. The poi nt howe ve r was clear. As far as
budget s we r e c onc e r ne d one shoul d seek t o gain
accept ance of budget s by all t hose whom t hey
affected. Account i ng shoul d be r ef or mul at ed so
as t o take account of such factors. The wor ker as
a c ompl e x per s on and as a me mbe r of an infor-
mal gr oup shoul d be i ncor por at ed wi t hi n
account i ng' s domai n.
Thi s shift t o a behavi our al concept i on of
account i ng can be i ndi cat ed across a r ange of
wri t i ngs whi ch have appear ed over t he past t wo
decades and mor e (Capl an, 1966; Hofst ede,
1968; Hopwood, 1974; Schiff & Lewin, 1974;
Harri son e t a l . , 1981). Devi ne ( 1960) woul d
argue t hat t he behavi our al assumpt i ons of ac-
count i ng needed drast i c revi si on:
Let us. . . turn to that part of accounting which is related
directly to the psychological reactions of those who con-
sume accounting output or are caught in its threads of
control. On balance it seems fair to conclude that
accountants seem to have waded through their relation-
ships to the intricate psychological network of human
activity with a heavy-handed crudity that is beyond
belief. Some degree of crudity may be excused in a new
discipline, but failure to recognise that much of what pas-
ses as accounting theory is hopelessly entwined with
unsupported behaviour assumptions is unforgiveable
(Devine, 1960, p. 394).
Anot her wr i t er (Capl an, 1966) woul d ar gue t hat
account i ng as a management t ool needed t o take
account of t he compl exi t y of t he i ndi vi dual ' s
mot i vat i ons, t hei r di ver se needs and desi res:
It is possible that the failure of management accountants
to consider the more complex motivating forces which
organisation theory recognizes in the individual contri-
butes to the use of accounting systems and procedures
which produce "side-effects" in the form of a variety of
unanticipated and undesired responses from particip-
ants. For example, many management accounting
techniques intended to control costs, such as budgeting
and standard costing, may virtually defeat themselves
because they help to create feelings of confusion, frustra-
tion, suspicion and hostility. These techniques may not
motivate effectively because they fail to consider the
broad spectrum of needs and drives of the participants
(Caplan, 1966, p. 506).
The cl ear l esson was t hat account ant s shoul d
accept as r el evant t hose bodi es of knowl edge
whi ch hi t her t o t hey had over l ooked, What
mi ght have s eemed t o Harri son ( 1930) as no
mor e t han commons ens e, namel y t hat budget s
ought t o be set so as t o encour age t hei r achi eve-
ment , was comi ng t o be seen as i t sel f r at her a
l arge t er r i t or y for i nvest i gat i on, r equi r i ng t he
medi at i on of ot her and unfami l i ar t heor i es and
concept s. I ndeed, one mi ght say, t he whol e
meani ng of cost account i ng' s ef f ect i veness was
bei ng chal l enged. Inst ead of dependi ng j ust
upon t he t echni cal sophi st i cat i on of t he
account i ng syst em, ef f ect i veness was comi ng t o
be seen as cruci al l y dependent upon whe t he r
t he syst em woul d act ual l y i mpel peopl e t o
achi eve desi r ed pur poses ( Benst on, 1963; Cap-
lan, 1966; Hopwood, 1973). The enci r cl i ng of
t he per s on wi t h cal cul at i ve pr act i ces whi ch
woul d r out i nel y const r uct or moni t or his or her
cont r i but i ons t o effi ci ency, as t radi t i onal l y
ef f ect ed by budget i ng, was seen t o be dependent
upon an i nadequat e psychol ogy.
Ot her st udi es we r e t o refi ne t he issues at stake
her e (e.g. Likert & Seashore, 1963; Becker &
Gr een, 1962). The encount er be t we e n t he per-
son and t he budget was t o l ead account ant s t o
obs er ve t he organi zat i onal life of t he per s on at
first hand. Quest i ons woul d be asked as t o t he
ext ent of t he r el evant psychol ogi cal , soci ol ogi -
cal and or gani zat i on t heor i es whi ch account ant s
ought t o know, and t he opt i ons whi c h exi st ed
for col l abor at i ons wi t h t he mor e est abl i shed
"behavi our al sci ent i st s" ( Devi ne, 1960; Hofst edt
e t al . , 1970). And some subst ant i ve empi ri cal
st udi es woul d be carri ed out. Tendi ng t o take
budget i ng and st andar d cost i ng as poi nt s of
depar t ur e, such st udi es woul d expl or e t he
i mpact , bot h upon t he psychol ogi cal wel l - bei ng
of t he per s on and upon his or her pr opensi t i es to
meet organi zat i onal effi ci ency or goals, of t hose
" uni nt ended cons equences " pr oduced by such
cal cul at i ve pract i ces ( see e.g. Hofstede, 1968;
Hopwood, 1973). More knowl edge was needed,
i n or der t hat t he syst ems and t hei r met hods of
use mi ght be redesi gned, so as to enhance t he
wel l - bei ng of per s on and organi zat i on. One
mi ght say t hat t he di scover y of t he mot i vat i onal
compl exi t y of t he per s on reveal ed t he i nadequ-
acy of such as budget s i n pr ocur i ng i ndi vi dual
efficiency. A space was opened for fresh
appr oaches t o t hat endeavour . And i n addi t i on to
empi r i cal field st udi es, account ant s woul d come
not onl y t o j oi n t he psychol ogi st i n l abor at or y
obser vat i ons of t he organi zat i onal subj ect , but
even to make some si gni fi cant at t empt s to con-
st r uct si mi l ar l aborat ori es of t hei r own (see e.g.
Libby, 1981 for a revi ew). Account ancy woul d
ent er al l i ances wi t h t he ot her behavi our al sci-
ences to gaze upon and t o di r ect t he organiza-
t i onal life of t he per son.
One par t i cul ar expr essi on of t he shift we are
referri ng to her e was t he re-cast i ng of organisa-
t i on t heor y t hr ough a not i on of t he per s on vie-
wed as a deci si on-maker. For our concer ns her e
this is an i mpor t ant devel opment . It had t he
effect of si gni fi cant l y r edef i ni ng t he pr oj ect of
management and t he at t empt t o est abl i sh
mechani sms for t he i mpl i cat i on of t he i ndi vi dual
wi t hi n organi sat i onal obj ect i ves. Or r at her it
r ender ed pr obl emat i c t he nat ur e of t he social
bond wi t hi n t he ent erpri se.
The i nt r oduct i on of t he not i on of t he per s on
as a deci si on- maker r ender ed obsol et e t he i mage
of t he i ndi vi dual as a machi ne and subst i t ut ed
one of an i ndi vi dual capabl e of choi ce. Thi s ele-
me nt of choi ce ent ai l ed i n t he not i on of t he deci-
si on- maki ng i ndi vi dual pl aced t he per sonal
di mens i on of i ndi vi dual behavi our at t he mar-
gi ns of t he possi bi l i t y of cont rol . The i ndi vi dual ,
and t he pr oj ect of organi sat i onal management ,
woul d have t o ent er a per pet ual seri es of moves
and count er - moves. The pr oj ect of management
vi ewed i n t hese t er ms coul d never t er mi nat e
because t he per s on was always seen t o possess
t he possi bi l i t i es of choi ce whi ch coul d be
organi sat i onal l y dysfunct i onal . The deci si on-
maki ng per s on is seen to have an i ner adi cabl e
el ement of freedom. The task of organi sat i onal
management woul d come to be under s t ood as
t he super vi si on and def i ni t i on of this freedom,
somet hi ng whi ch coul d al ways be subvert ed. An
expanded gr oup of "behavi our al scientists", in-
cl udi ng at least some account ant s, woul d set
itself t he task of at t endi ng t o such quest i ons.
One can l ocat e such a shift t hr ough t he wri t -
ings of Barnard ( 1938) , Si mon ( 1957) , March &
Si mon ( 1958) and Cyert & March ( 1963) . These
wor ks wer e t o be seen as havi ng enr i ched t he
concer ns of account ant s wi t h huma n mot i va-
t i on, and t hey achi eved rapi d r ecogni t i on wi t hi n
t he academi c account i ng l i t erat ure (Devi ne,
1960; Benst on, 1963). As earl y as 1937 Barnard
was l ect ur i ng on t he di st i nct i on bet ween per-
sonal ends and organi zat i onal ends. He was to
suggest t he exi st ence of "a sort of dual personal -
ity", one whi ch was organi sat i onal and one
whi ch was personal . An i mpor t ant issue this
rai sed was that of t hei r congr uence on mat t er s of
aut hori t y. The l at t er was seen to depend cru-
cially on per sonal accept ance and not on pur el y
formal criteria:
Ifa directive communication is accepted by one to whom
it is addressed, its authority for him is confirmed or estab-
lished. It is admitted as the basis of action. Disobedience
of such a communication is a denial of its authority for
him. Therefore, under this definition the decision as to
whether an order has authority or not lies with the per-
sons to whom it is addressed, and does not reside in "per-
sons of authority" or those who issue these orders (Bar-
nard, 1938, p. 163).
Aut hor i t y is i nt erpersonal . The i ndi vi dual is seen
to be free t o deci de for or against accept ance of
nor ms, i nst r uct i ons and st andards; at t he very
least t hey are no l onger vi ewed as unpr obl emat -
ically i nt ernal i sed. The r eact i ons of subor di nat es
is seen t o be medi at ed by varyi ng degr ees of con-
vi ct i on. Wher eas for an organi sat i on:
decision is in its important aspects a social process. . , the
process of decision in i ndi vi dual s. . , is a psychological
process socially conditioned (Barnard, 1938, cited in
Sofer, 1972, p. 165).
Ma r c h & S i mo n ( 1 9 5 8 ) , S i mo n ( 1 9 5 7 ) a n d
Cy e r t & Ma r c h ( 1 9 6 3 ) we r e t o d e v e l o p t hi s
n o t i o n o f t h e d e c i s i o n - ma k i n g o r g a n i s a t i o n . " De -
c i d i n g " c a me t o b e v i e we d n o t as a mo me n t a r y
a c t b u t as a p r o c e s s wh i c h p e r v a d e d t h e e n t i r e
o r g a n i s a t i o n :
Although any practical activity involves both "deciding"
and "doing", it has not commonly been recognised that a
theory of administration should be concerned with the
processes of decision as well as with the processes of
action. This neglect perhaps stems from the notion that
decision-making is confined to the formulation of over-all
policy. On the contrary, the process of decision does not
come to an end when the general purpose of an organiza-
tion has been determined. The task of "deciding" per-
vades the entire administrative organization quite as
much as does the task of "doing" - - indeed, it is integrally
tied up with the latter. A general theory of administration
must include principles of organization that will insure
correct decision-making, just as it must include princi-
ples that will insure effective action (Simon, 1957, p. 1 ).
A d r a s t i c r e v i s i o n o f t h e c o n c e p t o f " e c o n o mi c
ma n " wa s s e e n t o b e n e e d e d . T h e r e v i s i o n me a n t
i n c o r p o r a t i n g t h e e n v i r o n me n t a n d t h e
p s y c h o l o g i c a l a t t r i b u t e s o f i n d i v i d u a l s wi t h i n a
n e w c o n c e p t i o n o f t h e i n d i v i d u a l h u ma n b e i n g .
Cy e r t & Ma r c h ( 1 9 6 3 ) we r e t o f o r mu l a t e t hi s
s hi f t i n a " b e h a v i o u r a l t h e o r y o f t h e f i r m" wi t h i n
wh i c h s u c h a n o t i o n o f t h e p e r s o n a n d o f d e c i -
s i o n s we r e c e n t r a l . T h e b u d g e t a n d i t s a bi l i t y t o
d e f i n e o r g a n i s a t i o n a l o b j e c t i v e s wa s c e n t r a l t o
u n d e r s t a n d i n g t h e f i r m i n s u c h a ma n n e r . T h e
i s s u e wa s e x p r e s s e d s i mp l y . I n d i v i d u a l s h a v e
goa l s ; c o l l e c t i v i t i e s d o not . A me a n s o f g e n e r a t -
i n g c o l l e c t i v e g o a l s s o t h a t t h e y a r e c o n g r u e n t
wi t h p e r s o n a l g o a l s wa s s e e n t o b e r e q u i r e d .
T h e e l a b o r a t i o n o f o r g a n i s a t i o n a l g o a l s c a me
t o b e d e f i n e d i n a wa y wh i c h s a w t h e m as i n h e -
r e n t l y c o n f l i c t u a l . T h e o r g a n i s a t i o n wa s , a f t e r al l ,
o n l y a " c o a l i t i o n " o f i n d i v i d u a l s , s o me o f t h e m
o r g a n i z e d i n t o s u b c o a l i t i o n s ( C y e r t & Ma r c h ,
1963, pp. 2 7 - 2 9 ) . C o o p e r a t i o n wa s a p r o c e s s o f
n e g o t i a t i o n , o f b a r g a i n i n g . Bu t h u ma n b e i n g s
h a v e l i mi t e d c a p a c i t i e s . Co n t r o l - s y s t e ms a r e
n e e d e d t o i d e n t i f y t h e c o n s i d e r a t i o n s r e l e v a n t t o
me mb e r s o f t h e c o a l i t i o n . On e s u c h c o n t r o l - s y s -
t e m is t h e b u d g e t :
The budget in a modern, large-scale corporation plays
two basic roles. On the one hand, it is used as a manage-
ment control device to implement policies on which
executives have decided and to check achievement
against established criteria. On the other hand, a budget
i sa device to determine feasible programs. In either case,
it tends to define - - in advance - - a set of fixed commit-
ments and (perhaps more important) fixed expectations.
Although budgets can be flexible, they cannot help but
result in the specification of a framework within which
the firm will operate, evaluate its success, and alter its
program (Cyert & March, 1963, pp. 110-111 ) .
T h e b u d g e t ma y s e t o r g a n i s a t i o n a l o b j e c t i v e s .
Bu t i t i s n o n e t h e l e s s c o n s t r a i n e d b y t h e mo r e
g e n e r a l c o n s t r a i n t s o f t h e mo t i v a t i o n a l c o mp l e x -
i t y o f i n d i v i d u a l s . Wh a t i s i n t e r e s t i n g f or o u r p u r -
p o s e s h e r e i s t h e p r o p o s e d r e s o l u t i o n t o t hi s di f-
f i c ul t y. On e n o l o n g e r s e e k s o n l y t o f o r c e p e o p l e
i n t o t h e s t r u c t u r e s o f t h e b u d g e t . Ra t h e r o n e
r e d e f i n e s t h e a c c o u n t i n g s i d e o f t h e e q u a t i o n
t h r o u g h t h e i n c o r p o r a t i o n o f a c o n c e p t o f t h e
p e r s o n as mo t i v a t i o n a l l y c o mp l e x . T h e b u d g e t
a n d s t a n d a r d c o s t i n g c o me t o b e d i s p l a c e d i n
f a v o u r o f a t a s k o f s e e k i n g t o e n g i n e e r t h e r a t i o n -
a l i t y o f t h e p e r s o n . T h e i mp l i c a t i o n a n d n o r ma l i -
s a t i o n o f t h e i n d i v i d u a l wi t h i n c a l c u l a t i v e p r a c -
t i c e s is n o l o n g e r t o b e a c h i e v e d t h r o u g h s i ngl e -
mi n d e d p u r s u i t o f b u d g e t r e q u i r e me n t s ( Ho p -
wo o d , 1 9 7 3 ) .
Le t u s t r y a n d e x p r e s s wh a t we s e e t o b e at
i s s u e h e r e , f o r i t i s n o t s i mp l y a ma t t e r o f de f i ni -
t i ons . Wh a t we s e e t o b e o c c u r r i n g i n t h e t e x t s
we h a v e c i t e d i s a r e c o n c e p t u a l i s a t i o n o f t h e
b o u n d a r i e s o f t h e a c c o u n t i n g c o mp l e x t h r o u g h
a n i n c l u s i o n wi t h i n i t o f a r e v i s e d n o t i o n o f t h e
p e r s o n a n d t h e f i r m. Wi t h t hi s s hi f t a c c o u n t i n g
c o me s t o f u n c t i o n as a n i n t e r d e p e n d e n t e l e me n t
i n a r a n g e o f o p e r a t i o n s wh o s e c o n c e r n i s wi t h
t h e i mp l i c a t i o n o f t h e i n d i v i d u a l wi t h i n o r g a n i s a -
t i o n a l o b j e c t i v e s . Wh a t we a r e s u g g e s t i n g , a d mi t -
t e d l y b y me r e l y g e s t u r i n g t o wa r d s s o me r e l e v -
a n t e x a mp l e s , i s t h a t a n i mp o r t a n t r e f o r mu l a t i o n
o f t h e o b j e c t i v e s o f a c c o u n t i n g o c c u r s t h r o u g h
t h e i n t r o d u c t i o n o f t h e n o t i o n o f t h e b e h a v i o u r a l
wi t h i n i t s t e r ms o f r e f e r e n c e . I t i s n o t j u s t a
b r o a d e n i n g o f t h e c o n c e r n s o f a c c o u n t i n g . I t is a
s i gni f i c a nt r e d e f i n i t i o n o f t h e t e r ms a n d o b j e c -
t i ve s o f a c c o u n t i n g as a s oc i a l p r a c t i c e . Ac c o u n t -
i ng wo u l d s e e k t o wo r k mo r e c l o s e l y wi t h
p s y c h o l o g y wi t h i n a c o mp l e x o f h u ma n s c i e n c e s
wh o s e o b j e c t wa s d e f i n e d as t h e p e r s o n a nd hi s
o r h e r l i f e wi t h i n t h e o r g a n i s a t i o n . Th e r e de f i ni -
t i o n wh i c h t a ke s pl a c e , h o we v e r , d o e s n o t obl i t -
e r a t e t h e c o n c e r n s o f a c c o u n t i n g we h a v e i de n-
t i f f ed a b o v e as e me r g i n g i n t h e e a r l y d e c a d e s o f
t hi s c e n t u r y . To a d a p t Ma r c h ' s ( 1 9 7 8 ) us ef ul
a na l ogy, a c c o u n t i n g c o n t i n u e s t o b e c o n c e r n e d
wi t h t h e a c t i v e e n g i n e e r i n g o f t h e o r g a n i s a t i o n -
al l y us e f ul p e r s o n . I t c o me s t o pos s e s s , h o we v e r ,
a mu c h mo r e p r o mi s i n g s e t o f c o n c e p t s ,
t e c h n i q u e s a n d me c h a n i s ms wi t h wh i c h t o
a c h i e v e s u c h a n o b j e c t i v e .
I MPLI CATI ONS AND CONCLUSI ONS
We h a v e p o i n t e d i n t hi s p a p e r t o a n u mb e r o f
e v e n t s o c c u r r i n g r o u g h l y wi t h i n t h e f i r st t h r e e
d e c a d e s o f t hi s c e n t u r y wh i c h we s e e t o b e si g-
ni f i c a nt f or t h e u n d e r s t a n d i n g o f a c c o u n t i n g as a
s oc i a l a n d o r g a n i s a t i o n a l p r a c t i c e . Th e s e e v e n t s
ha ve b e e n t h e c o n s p i c u o u s e me r g e n c e o f di f f e-
r e n t b o d i e s o f e x p e r t k n o wl e d g e a n d p r a c t i c e , as
we l l as pol i t i c a l , j o u r n a l i s t i c a n d p h i l o s o p h i c a l
d i s c o u r s e s , al l o f wh i c h s ha r e as a p o i n t o f c on-
v e r g e n c e t h e a c t i v e ma n a g e me n t o f t h e l i f e o f
t h e p e r s o n i n i t s v a r i e d f acet s. Cl u s t e r i n g a r o u n d
t h e wo r d ef f i ci ency, we ha ve s u g g e s t e d , o n e c a n
wi t n e s s wi t h i n t hi s p e r i o d a d i v e r s e g r o u p ,
i n c l u d i n g e n g i n e e r s , p s y c h o l o g i s t s , a c c o u n t a n t s ,
me d i c a l p r a c t i t i o n e r s , p r o p o n e n t s o f e u g e n i c s ,
j o u r n a l i s t s a n d pol i t i c i a ns , p r o p o s e v a r i o u s p r o -
j e c t s f or i mp r o v i n g t h e l i f e o f t h e p e r s o n and,
t h e r e b y , o f t h e na t i on. At s t ake, i t s e e ms , i s an
u r g e n t f el t n e e d t o i d e n t i f y a n d t o e l i mi n a t e
s h o r t c o mi n g s i n s u c h ma t t e r s as p e o p l e ' s me n t a l
a n d p h y s i c a l he a l t h, a n d t h e q u a l i t y o f t h e i r
of f s pr i ng, as we l l as t h e i r c o n t r i b u t i o n t o t h e
e c o n o my , t h e p r o t e c t i o n o f t h e e mp i r e , a n d p u b -
l i c l i f e ge ne r a l l y. A t h e me r u n n i n g t h r o u g h al l
t h e d i s c o u r s e s a n d p r a c t i c e s we h a v e l o o k e d at i s
a p o s i t i v e c o n c e r n t o t a ke a n d t o i mp r o v e t h e l i f e
o f t h e p e r s o n . Qu i t e l i t e r a l l y, t h e p e r s o n wa s t o
b e wo r k e d u p o n , t o b e ma n a g e d t h r o u g h a s e r i e s
o f i n t e r v e n t i o n s i nt o an e n h a n c e d s t a t e o f life.
We h a v e s u g g e s t e d t ha t t h e f i r m c a n b e s e e n as
o n e o f t h e s i t e s i n s o c i e t y t o wa r d s wh i c h s u c h
p r o j e c t s wo u l d a d d r e s s t h e ms e l v e s . Speci f i cal l y,
we h a v e l o o k e d at s c i e nt i f i c ma n a g e me n t , at t h e
b i r t h o f i n d u s t r i a l p s y c h o l o g y a n d o f mo d e r n
c o s t a c c o u n t i n g .
Vi e we d i n t e r ms o f a c o n c e r n wi t h n a t i o n a l
ef f i ci ency, t h e p r o j e c t o f s c i e nt i f i c ma n a g e me n t
h e l p e d t o r e n d e r a p p a r e n t a n d r e me d i a b l e t h e
wa s t e l yi ng d e e p wi t h i n t h e e v e r y mo v e o f t h e
wo r k e r . No r ms o r s t a n d a r d s we r e t o b e c on-
s t r u c t e d f or t h e d o i n g o f wo r k o f e v e r y ki nd.
Th o s e n o r ms , r e f l e c t i n g as t h e y wo u l d an
i n c r e a s e d l e ve l o f ef f i ci ency, we r e e x p e c t e d t o
y i e l d t ha t e x t r a o u t p u t a n d p r o s p e r i t y wh i c h
wo u l d r e n d e r cl as s c o n f l i c t o b s o l e t e . Suc h a c on-
g r u e n c e o f s e l f - i nt e r e s t o f wo r k e r , e mp l o y e r a n d
t h e s oc i a l b o d y al i ke, j o i n e d t o t h e a s s u r a n c e o f
s c i e n c e , wa s t o r e n d e r t h e wo r k e r a c q u i e s c e n t
i n t hi s " t a ki ng h o l d " o f hi s o r h e r p h y s i o l o g y , i n
o r d e r t o e x p e r i me n t wi t h i t a n d t o i mp r o v e i t s
p r o d u c t i v e c a pa bi l i t i e s .
We ha ve n o t e d t h e a l l i a nc e o f s c i e nt i f i c ma n-
a g e me n t a nd c os t i ng. F r o m i t s e a r l i e s t b e g i n -
ni ngs , i t s e e ms , t h e s c i e nt i f i c ma n a g e me n t l i t er a-
t u r e h a d r e c o g n i s e d t h e p o we r o f an e f f i c i e nc y
me a s u r e me n t g r o u n d e d i n c o s t s a n d pr of i t s . An d
we ha ve n o t e d t h e i n f l u e n c e o f s c i e nt i f i c ma n-
a g e me n t o n t h e c o n s t r u c t i o n o f s t a n d a r d c os t -
i ng, wh i c h i t s e l f me r g e s i nt o b u d g e t i n g . Th e
r e s u l t a n t c a l c u l a t i v e a p p a r a t u s wa s t o e nt a i l t h e
p o s s i b i l i t y f or g o i n g b e y o n d a r o u t i n e r e n d e r i n g
vi s i bl e o f o n l y t h e f a c t o r y - f l o o r wo r k e r ' s effi-
c i e n c y . We h a v e v i e we d t h e s u p e r i mp o s i t i o n o f
a n o t i o n o f s t a n d a r d i z e d ma g n i t u d e s u p o n t h e
t r a d i t i o n a l a c c o u n t i n g s t a t e me n t s o f i n c o me a nd
f i na nc i a l p o s i t i o n as f a c i l i t a t i ng t h e nor ma l i z a -
t i o n ( i n t e r ms o f e c o n o mi c a c c o mp l i s h me n t ) o f
e v e r y o n e wi t h i n t h e f i r m. Budge t i ng, o n e mi g h t
say, wo u l d s e r v e as an e s c a p e - r o u t e b y wh i c h
s t a n d a r d s c o u l d l e a ve t h e f a c t o r y f l oor a n d
e n me s h , p o t e n t i a l l y , e v e r y o n e i n t h e f i r m. Wi t h-
o u t ef f aci ng t h e n o t i o n o f t h e p e r s o n as p o t e n t i a l
t hi ef , t ha t l o n g e r - s t a n d i n g s t e wa r d s h i p c o n c e r n
o f a c c o u n t i n g , s t a n d a r d c o s t i n g a n d b u d g e t i n g
wo u l d r e n d e r a c c e s s i b l e t o v a r i o u s e x p e r t a n d
a u t h o r i t a t i v e i n t e r v e n t i o n s t h e i n d i v i d u a l as "al -
mo s t c e r t a i n l y i nef f i ci ent " . Cos t a c c o u n t i n g
wo u l d e x p a n d i t s d o ma i n , t o e n me s h t h e p e r s o n
i n a c a l c u l u s o f e x p e c t a t i o n s . I n t hus c o n s t r u c t -
i ng a n o t i o n o f t h e p e r s o n we ha ve a r g u e d t hat
s t a n d a r d c o s t i n g a n d b u d g e t i n g p r o v i d e d a
f a c i l i t a t i ve t e c h n o l o g y wh e r e b y , i n t i me , v a r i o u s
i n t e r v e n t i o n s t o i mp r o v e t h e p e r s o n ' s pe r f or -
ma n c e wo u l d b e c o me pos s i bl e . For t h e wh o l e
p r o j e c t o f e n me s h i n g t h e p e r s o n wi t h i n n o r ms
o f ef f i ci ency, o n c e be gun, c a me q u i c k l y e n o u g h
t o b e s e e n as a c o mp l e x , s o p h i s t i c a t e d
e n d e a v o u r .
I mp o r t a n t i n b r i n g i n g a b o u t s u c h a s e ns e o f
c o mp l e x i t y wa s i ndus t r i a l p s y c h o l o g y , t o wh o s e
b i r t h we ha ve b r i e f l y a t t e s t e d. Mo r e o r l es s
s i mu l t a n e o u s l y wi t h t h e e me r g e n c e o f s c i e nt i f i c
ma n a g e me n t a n d s t a n d a r d c os t i ng,
p s y c h o l o g i s t s b e g a n t o a r gue t he i n a d e q u a c y o f
s u c h e n d e a v o u r s ' c o n c e p t o f t h e p e r s o n . Wa s t e s
a nd i ne f f i c i e nc i e s , f or t h e i r d e t e c t i o n a n d el i mi -
nat i on, we r e n o w a r g u e d t o r e q u i r e t h e e x p e r -
t i s e o f t h o s e wh o c a n k n o w t h e p e r s o n ' s mi nd. A
p r o j e c t wo u l d b e i n i t i a t e d wh i c h e s t a bl i s he s t h e
i ndi vi dua l ' s p s y c h e as t h e k e y me d i a t i n g f o r c e i n
ma t c h i n g p e r s o n a n d t as k a nd i n i n t e r p r e t i n g
t as k p e r f o r ma n c e var i abl es . And we ha ve
p o i n t e d out , a l b e i t t o o s k e t c h i l y a nd br i ef l y, h o w
a r e d e f i n e d i n d u s t r i a l p s y c h o l o g y c o me s , l a t e r i n
t h e c e n t u r y , t o s i gni f i c a nt l y i n t e r s e c t wi t h
a c c o u n t i n g . By t he 1950s, we ha ve s ugge s t e d,
t h e p e r s o n as ma c h i n e has b e e n r e p l a c e d b y t h e
mo t i v a t i o n a l l y - c o mp l e x d e c i s i o n - ma k e r . Thi s
a d d s g r e a t l y t o t h e c o mp l e x i t y o f r e n d e r i n g effi-
c i e n t hi s o r h e r e c o n o mi c p e r f o r ma n c e , a n d p r o -
d u c e s a r e d e f i n i t i o n o f wh a t we ha ve c a l l e d t h e
a c c o u n t i n g c o mp l e x .
I n l o o k i n g at s u c h p r o c e s s e s i n t hi s ma n n e r we
ha ve wa n t e d t o s u g g e s t a wa y o f v i e wi n g
a c c o u n t i n g as h a v i n g c o n t r i b u t e d t o a mo r e gen-
e r a l p r o j e c t o f s o c i o - p o l i t i c a l ma n a g e me n t . Thi s
is o n e wh i c h o p e r a t e s t h r o u g h a v a r i e t y o f e x-
p e r t k n o wl e d g e s a n d p r a c t i c e s . Th e e f f i c i e nc y
o f i n d i v i d u a l p e r s o n s a n d t h e i r c o n t r i b u t i o n t o
c o l l e c t i v e e f f i c i e nc y is c e n t r a l t o s u c h p r o c e s s e s .
But t h e e f f i c i e nc y o f t h e p e r s o n i n t h e f i r m, as we
ha ve s e e n Ta y l o r p o i n t out , is n o t s o me t h i n g
wh i c h c a n b e o b s e r v e d wi t h t h e n a k e d eye.
I n d e e d , o n e mi g h t say, i t c a n n o t e xi s t unt i l wh a t
is t o b e r e g a r d e d as n o r ma l o r s t a n d a r d has f i r st
b e e n c o n s t r u c t e d . But o n c e a n o r m i s t o ha nd,
a n d e s p e c i a l l y wh e n i t gai ns e x p r e s s i o n wi t h i n a
r o u t i n e l y a p p l i c a b l e c a l c u l a t i v e a p p a r a t u s l i ke
s t a n d a r d c o s t i n g o r b u d g e t i n g , t h e p e r s o n c a n
b e c o me a s u b j e c t f or v a r i o u s h u ma n s c i e nc e s .
Th e d e v i a t i o n s o f t h e p e r s o n f r o m a n o r m, wi t h
al l o f t h e i r p o s s i b l e c a u s e s a nd c o n s e q u e n c e s ,
b e c o me a va i l a bl e f or i n v e s t i g a t i o n a nd f or r e me -
di al a c t i on. And, we wo u l d s ugge s t , o n e di s t i nc -
t i ve c o n t r i b u t i o n o f s t a n d a r d c os t i ng, h i t h e r t o
a p p a r e n t l y i g n o r e d , i s i t s c o n t r i b u t i o n t o a mu c h
wi d e r p r o c e s s , wh e r e b y t h e l i f e o f t h e p e r s o n
c o me s t o b e v i e we d i n r e l a t i o n t o s t a n d a r d s a n d
n o r ms o f b e h a v i o u r .
No w o f c o u r s e t h e p r o c e s s e s wh i c h we ha ve
b e e n r e f e r r i n g t o h e r e a r e o f a g r e a t e r c o mp l e x -
i t y t ha n we ha ve b e e n a bl e t o i ndi c a t e . But wh a t
we wa n t e d t o d o wa s t o at l e a s t ma k e a s t a r t i n
u n t a n g l i n g s o me o f t h e s t r a n d s o f t h e c o n t r i b u -
t i o n o f a c c o u n t i n g t o a mo d e o f o p e r a t i o n o f
p o we r i n o u r s o c i e t i e s wh i c h , we ar gue, e me r g e s
i n i t s d i s t i n c t i v e f o r m at t h e b e g i n n i n g o f t hi s
c e n t u r y . Thi s i s o n e wh i c h , we f eel , c a n n o t b e
e x p l a i n e d a d e q u a t e l y b y o v e r - z e a l o u s a d h e r -
e n c e e i t h e r t o a n o t i o n o f e c o n o mi c d e t e r mi n a -
t i on a n d i nt e r e s t s , o r t o an e x p l a n a t i o n wh i c h
h i n g e s o n a d e s i r e o n b e h a l f o f t h e p r o f e s s i o n s t o
c o n t i n u a l l y e x t e n d t h e i r f i el d o f o p e r a t i o n s . Of
c o u r s e t hi s i s n o t t o i mp l y t ha t e c o n o mi c pr e s -
s ur e s a n d p r o f e s s i o n a l i n f l u e n c e s a r e u n i mp o r -
t ant . I t is, r a t he r , t o s ugge s t wh a t we s e e t o b e a
di f f e r e nt l i ne o f i n v e s t i g a t i o n f or t h e u n d e r s t a n d -
i ng o f a c c o u n t i n g i n r e l a t i o n t o p o we r i n o u r
s oc i e t i e s . Thi s i s o n e wh i c h l o c a t e s i t as an i m-
p o r t a n t p a r t o f t ha t c o mp l e x o f i n t e r v e n t i o n s
wh i c h c a n b e gi ven t he n a me t he h u ma n s ci ences .
We h a v e o u t l i n e d br i e f l y h o w o u r t h i n k i n g o n
t h e s e ma t t e r s has b e e n s i gni f i c a nt l y i n f l u e n c e d
b y t he wo r k of Mi c he l Fouc a ul t a nd hi s associ at es.
We d o n o t f eel t ha t o u r c o n c e r n s i n t hi s p a p e r
c a n b e a d e q u a t e l y c a p t u r e d b y r e f e r r i n g t o a gen-
er al p r o c e s s o f r a t i o n a l i s a t i o n o f We s t e r n i ndus t -
r i al s o c i e t i e s ( We b e r , 1978) . I n t a l ki ng o f p r o -
j e c t s f or s oc i a l a nd o r g a n i s a t i o n a l ma n a g e me n t
we ha ve wa n t e d t o gi ve we i g h t t o t h e a c t u a l c on-
s t r u c t i o n o f s u c h p r o j e c t s , a n d t o t h e t e r ms i n
wh i c h t h e y a r e c o n s t r u c t e d . We ha ve s o u g h t
t e n t a t i v e l y t o e x p l a i n h o w a c c o u n t i n g s u p p l i e s
a n i mp o r t a n t c o n t r i b u t i o n t o a c o mp l e x o f i n t e r -
v e n t i o n s d i r e c t e d at p r o v i d i n g me c h a n i s ms f o r
t h e i mp l i c a t i o n o f i n d i v i d u a l s wi t h i n t h e l i f e o f
t h e o r g a n i z a t i o n a n d o f s o c i e t y . T h e g e n e r a l
p r i n c i p l e o p e r a t i v e h e r e h a s b e e n we l l e x p r e s -
s e d b y Re x f o r d Tu g we l l , g o v e r n me n t a d v i s o r ,
e c o n o mi c s p r o f e s s o r , a n d s t a u n c h a d v o c a t e o f
t h e a p p l i c a t i o n s o f s c i e n t i f i c ma n a g e me n t t o t h e
wi d e r s o c i e t y :
is it possible that, instead of appealing to sets of emotions
of an immediate and piecemeal sort, the problem of moti-
vation might be resolved by fixing in each individual
mind a rationale of ends to be tried for, and of the means
available? For if this cannot be done, it seems very little
use to hope that group action will ever become coherent
and cooperative in a larger, a genuinely social sense; . . .
( Tugwell, 1933).
I n d e f i n i n g o u r c o n c e r n as wi t h t h e " c o n s t r u c -
t i o n o f t h e g o v e r n a b l e p e r s o n " we wo u l d n o t
wa n t t o i mp l y a n i ma g e o f a t o t a l l y o b e d i e n t i ndi -
vi dua l . We wa n t e d r a t h e r t o e x a mi n e t h e p r o g -
r a mma t i c f r a me wo r k s a n d p o we r r e l a t i o n s i n
t e r ms o f wh i c h t h e l i v e s o f i n d i v i d u a l s a r e
v i e we d , me a s u r e d a n d s u p e r v i s e d . I n g e s t u r i n g
t o wa r d s r e c e n t d e v e l o p me n t s wi t h i n a c c o u n t -
i n g we wa n t e d t o s u g g e s t wa y s o f i n t e r p r e t i n g
t h e c o n s t r u c t i o n o f t h e n o t i o n o f t h e c o mp l e x
p e r s o n as a r a t i o n a l e f o r a s e r i e s o f p r a c t i c a l i n-
t e r v e n t i o n s . T o p u t t hi s r a t h e r p r o v o c a t i v e l y ,
o n e c o u l d s a y t h a t wh a t i s at i s s u e i n t h e s e mo r e
r e c e n t d e v e l o p me n t s i s a f o r m o f p o we r wh i c h
o p e r a t e s t h r o u g h f r e e d o m: a f r e e d o m f o r t h e
i n d i v i d u a l t o h a v e a n i n f o r ma l l i f e wi t h i n t h e
o r g a n i z a t i o n , t o d e v i a t e f r o m c r i t e r i a o f r a t i o n a l -
i t y, t o b r o o d o n p e r s o n a l p r o b l e ms , a n d t o b e i n-
f l u e n c e d b y t h e e n v i r o n me n t o u t s i d e t h e f i r m. I n
i t s mo r e r e c e n t d e v e l o p me n t a c c o u n t i n g ha s
p r o v i d e d f o r s u c h a f r e e d o m i n i t s a t t e mp t t o i n-
c o r p o r a t e t h e b e h a v i o u r a l a n d t h e d e c i s i o n t a k e r
wi t h i n i t s s p h e r e . I n s o d o i n g we wo u l d s u g g e s t
t h a t a c c o u n t i n g t o d a y c a n b e v i e we d as i n c o n -
t i n u i t y wi t h , a l b e i t i n a c o n s i d e r a b l y mo d i f i e d
f o r m, a mo d e o f e x e r c i s e o f p o we r wh i c h wa s i n-
s t a l l e d i n t h e e a r l y d e c a d e s o f t hi s c e n t u r y .
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Accounti ng Organi zati ons andSoci ety, Vol. 12, No. 3, pp. 235-265, 1987.

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