ABSTRACT
The rationale underlying this attempt to explore an extended network of complex accounting and industrial relation interactions stems from a belief that irrespective of what was to transpire in the Company once such a relationship had been forged, the antecedents of the phenomenon are themselves of interest since they offer the possibility for a more ambitious line of enquiry to be undertaken. This relates to the special opportunity the research material presents to reconstruct, albeit inevitably in a partial and fragmented manner, the rise of accounting in one particular organisation and more specifically the beliefs and pressures which led to its encroachment into an aspect of organisational life with which it might be claimed to have no natural affinity. The study would, therefore, claim substantial sympathy with the recurring theme over the past 10 years or so in the management accounting literature which recognised that very little research was actually based or grounded in specific organisations. Tomkins and Groves (1983), for example, in a major review of the relevant literature discovered that during the period 1976–79 only 7 out of more than 650 research papers examined could be identified as being undertaken in such a way. This observation tended to reinforce earlier exhortations for a more careful consideration of the nature of accounting research. Hopwood (1978) in an influential editorial for the journal Accounting, Organizations and Society had advocated the exploration of ‘accounting in action’ placing the onus firmly upon researchers to undertake work more specifically oriented towards understanding specific relationships between accounting and actual organisational structures and processes, arguing:
“.…we still only have the barest understanding of the factors which shape either the design of information systems or the processes through which they, in turn, influence the consciousness and action of organisational participants. The challenge to understand accounting in action remains, in other words, a real one ….”
(Hopwood, 1978, p 10)The persistence of the demand for accounting researchers (Boland and Pondy, 1983; Colville, 1981; Hopwood, 1983; Otley, 1984; Roberts and Scapens, 1985; Scapens, 1984) to take more seriously the contexts in which accounting operates should be viewed as something more significant than merely an attempt to observe the intersection of accounting practices and organisational operations (although this in itself can be an interesting exercise). In a number of very important ways such work might offer the potential to expand the research agenda so as to incorporate questions and perspectives which have either been ignored or assumed unproblematic in much previous work. Although the pivotal element of this type of research would seem to be the more thorough examination of the roles of accounting in organisations and society (Burchell et al., 1980;) (an issue which is of critical importance later in this study) such analysis is closely related to, and often dependent upon, the expectations and priorities which preceded the introduction of a specific form of accounting (Banbury and Nahapiet, 1979).
This type of historical analysis which seeks to reassemble some of the contextual pressures (both institutional and environmental) which led to the emergence of accounting systems in specific organisations although advocated in the literature (Flamholtz, 1983; Johnson, forthcoming; Kaplan, 1984) has rarely been undertaken. Furthermore, the research which has been pursued (Chandler, 1977; Johnson, 1972, 1975, 1981 and 1983) has often tended to adopt a very narrow conceptualisation of both the aims and determinants of accounting development, focussing almost exclusively upon technical refinement as a response to market priorities and the demands placed upon organisational structures by the search for profits. Although this is a valid and indeed valuable line of enquiry, it does present the problem of having to accept accounting very much on its own terms both as regards its potential to determine and control organisational processes and the singularity of economic purpose and role underlying its functioning. In other words, explanations of the rise of accounting and its relationship to other organisational and social activities can become locked into a position which assumes “that accounting has some essential role or function ”(Burchell et al., 1985, p.409) and that such a function transcends any legitimate dispute as to the desirability of its objectives and purposes. (Tinker, 1980; Tinker et al., 1982; Tinker, 1985).
In contrast to this type of work, the study presented here attempts to be receptive to a much richer and more complex interplay of issues which impinged upon a specific instance of the rise of an accounting system. It has already been suggested that the profit-sharing scheme introduced by the Hans Renold company in 1920 provides the opportunity to examine the way that accounting can become involved in the conduct of industrial relations. In seeking to explain the factors which led to the emergence of the scheme the study will attempt to take a broad view of its origins. It will argue that although critical pressures at the time did create an urgency for managerial action, the decision to introduce what will be shown to be a rather unusual type of scheme and to do so at that particular conjuncture in time, might in some ways have stemmed from seeds sown 40 years earlier at the start of the Company's existence. This is not to imply that one can discern a continuity of intent, with the scheme being merely the catalyst of an inevitable series of demands and events, but rather that an organisational infrastructure and culture had emerged which influenced the decision to introduce the scheme, helped to shape its content, and facilitated its acceptance and development. In other words, to appreciate this particular interaction of accounting and industrial relations demands a consideration of an historical configuration of variables and influences which preceded it, and the ways in which they became enmeshed with a more immediate set of pressures which expedited managerial action.
