Management accounting: the Western problematic against the Japanese application

Abstract

Management accounting (MA) in Japan as practised by a group of leading companies is often described and compared to the principles of MA in the Anglo-American tradition as exemplified in leading texts. Western textbook MA is shown to be a poor basis for productive intervention because it rests on a defective implicit model of manufacturing production which takes a single-product, single-process view of production and neglects the gains in labour and capital efficiency which can be realised by low stocks, small batches, faster set-up and improved layout. Little attention is paid to new product planning and development, whereas leading Japanese firms give these aspects of practice a privileged place corresponding to investment project appraisal in Western theory. The Japanese application of MA is shown to be of both intellectual interest and practical importance: it enables the exploitation of points of intervention which have been invisible (mostly) in the West, allowing Japanese companies to generate continuous cost reduction.