COST ACCOUNTING, CONTROLLING LABOR AND THE RISE OF CONGLOMERATES

Through a detailed critique of Johnson & Kaplan's Relevance Lost, (Johnson, H.T. & Kaplan, R.S., Relevance Lost: The Rise and Fall of Management Accounting (Boston, MA: Harvard Business School Press, 1987)), based upon labour histories of control within North American firms, this article identifies major deficiencies in conventional historical studies of cost and management accounting and offers possibilities for their resolution. After noting the limitations of transaction cost theory for the theorisation of organisations and their history, the paper argues that accounting controls were not a consequence of economic or technological imperatives, but rather were rooted in struggles as firms attempted to control labour processes in various epochs of capitalistic development. Cost accounting developments are related to the destruction of internal subcontructing and craft control of production in early factories, the advent of "Scientific" Management and homogenised labour and, post-1930, with an accord between primary sectors of labour and corporations, which led to an increased emphasis on monopoly pricing, smoothing production and hence employment patterns, and a shift of economic pressures to secondary labour and producer markets. The paper concludes by arguing that, in the context of today's globalisation of capital, control associated with the labour and capital accord are being abandoned as corporations experiments with new methods and ideologies of control which are reflected in current fashions in accounting research. © 1991.