Innovations in management accounting research and practice: Whatever happened to Throughput Accounting?
Despite the identification of the potential to undertake scholarly research in Throughput Accounting (TA) (Noreen et al, 1995; Dugdale & Jones, 1998; Jones & Dugdale, 1998), to date there has been a paucity of published studies of TA. This paper argues that TA, and the production management system it supports – the Theory of Constraints (TOC) are fads/fashions in accordance with Abrahamson’s (1996) framework and posits that negative connotations regarding the term fads/fashions along with the likening of management fads/fashions to aesthetic fads/fashions could be likely reasons for the lack of scholarly interest from accounting researchers. Furthermore, this paper extends the management fads/fashions literature by extending the debate to include accounting academics and research networks. It is argued that accounting researchers, accounting research agendas and accounting research networks can be deemed to be fads/fashions as they exhibit many of the characteristics of management fads/fashions including, lifecycles, rhetoric and gurus. Such a classification however, does not rule out the potential for theoretically sound scholarly research, rather it widens the opportunities for researchers. This paper demonstrates empirically that TA is a topic worthy of inclusion in research agendas. TOC implementation causes several changes to management control systems and uses accounting information as the primary method of production scheduling. In addition, operational staff in firms with TOC use accounting information to plan and manage their work on a daily basis. Firms with TOC change the way they measure and evaluate performance as well as include throughput information in their capital budgeting processes. It is argued that a firm which implements TOC will change its Management Control System particularly in relation to overhead allocation and the dissemination of financial information to all levels of the firm. These changes are driven by an apparent paradigm shift in operational thinking by managers and staff of firms that have implemented TOC. Furthermore these changes are significant enough to warrant further investigation into TA and the processes relating to management control system change. This paper concludes with some suggestions for future research and poses some challenges to accounting scholars.