Contingency formulations of organizational structure : implications for managerial accounting

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no. a

Faculty Working Papers

CONTINGENCY FORMULATIONS OF
ORGANIZATIONAL STRUCTURE:
IMPLICATIONS FOR MANAGERIAL ACCOUNTING

David J. H. Watson

#210

/

College of Commerce and Business Administration

University of Illinois at Urbana-Champaign

FACULTY WORKING PAPERS
College of Commerce and Business Administration
University of Illinois at Urbana -Champaign
October 1, 1974

CONTINGENCY FORMULATIONS OF
ORGANIZATIONAL STRUCTURE:
IMPLICATIONS FOR MANAGERIAL ACCOUNTING

David J. H. Watson

#210

Contingency Formulations of Organizational Structure:
Implications for Managerial Accounting

David J. H. Watson

Assistant Professor of Accountancy

University of Illinois at Urbana - Champaign

Paper to be presented at:

Workshop in Behavioral Accounting, National Meetings of the American
Institute of Decision Sciences, Atlanta, Georgia, 30th October, 1974.
Please do not quote without the consent of the author.

The author wishes to gratefully acknowledge the time and resources
made available by Peat, Marwick, Mitchell & Co., for the writing of
this paper.

Digitized by the Internet Archive

in 2012 with funding from

University of Illinois Urbana-Champaign

http://www.archive.org/details/contingencyformu210wats

In the companion paper to this one, Sathe (1974) clearly points out, that
advent of contingency theories of organization structure, and the
research these theories have stimulated, are very recent phenomena.
Consequently, their impact to date on the field of accounting, a different
discipline, is minimal. This, of course, is not meant to imply that
the impact will not be substantial. Just as managerial accounting
has been greatly influenced by the traditional theories of organization
so too this latest revolution in organizational theory is sure to have
its impact. However, at the moment, because of the paucity of re-
search connected with this emerging trend, the content of this paper is
largely speculative.

AN ORIENTATION

If the introduction is correct, where is the research? After all,
most academic accountants are fully aware of the recent growth in
behavioral accounting research. A goodly amount of this has been
concerned with such topics as decision making, motivation, perception,
budgeting etc., all behavioral questions having some connection with
organizations. Isn't some of this relevant?

A perspective on this can be gained by viewing accounting re-
search from a framework borrowed from Emery and Trist (1963). Con-
sider the following matrix:

Lll L12

L21 L22

where L indicates some potentially lawful connection, the subscript 1

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refers to the accounting system and the subscript 2 refers to the organi-
zation. Then L^j refers to processes within the accounting system - the
area of internal interdependences; 1.^2 an(* ^21 to excnan8es between the
accounting system and the organization - the area of transactional inter-
dependencies; and L22 to the processes through which parts of the organi-
zation become related to one another - that is, its causal texture - the
area of interdependencies that belong within the organization itself.

Nearly all technical accounting studies fall within I41, while if the
research is behaviorally oriented it will generally fall into Li 2* *"or
example, in Lji we find articles related to changing accounting systems
so that they perform better technically or so that they provide new infor-
mation, e.g., Wolk and Hillman (1972), as well as most mathematical ex-
positions on the accounting function or system, e.g., Cushing (1973). In
^12 we f-*-nc* tne tvPe °f research that uses accounting data as the inde-
pendent variable and observes the effect on some behavioral (dependent)
variable, e.g., Dermer and Seigel (1974), Ronen and Falk (1973), Mock
(1973), and Dickhaut (1973). This represents the popular kind of behav-
ioral accounting research and nearly all such studies adopt an in-
dividual psychology orientation, although it is conceivable that other
behavioral levels, e.g., a sociological or social psychological orienta-
tion, could provide the dependent variables.

The major implications for accounting of the contingency or structual
theories lie in cell L2-1 , where the transactional interdependencies flow
from the organization to the accounting system. About the only published
article that develops in reasonable detail the proposition that account-
ancy is a function of organization theory is by Golembiewski (1964). He
reviews the impact of traditional organization theory and briefly intro-
duces some ideas that were emerging at the time of his writing. The

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major portion of this paper will also fall in cell L^. m contrast,
L22 represents the area in which Sathe's (1974) paper is located.

The perspective adopted in this paper is one of the accounting
system as one system (dimension) in a multisystem (multidimensional)
system. This viewpoint lends itself to, what could be described as,
a partial equilibrium analysis. It is with this perspective that we
can think of a contingency theory of managerial accounting, for it
seems obvious that the accounting system can vary just as easily as
any other organizational dimension/1) The question then becomes,
under what organizational conditions is a particular accounting system
appropriate?

We will use as a springboard the technology structure and environ-
ment structure perspectives developed by Sathe, in particular, as he
enumerated the theoretical concepts of Lawrence and Lorsch (1967) and
Thompson (1967). These writers provide us with a contingency framework
for viewing basic organizational structure. Some further aspects of
this framework will be developed, and then these will be used to examine
the role as operating mechanisms cf certain managerial accounting sub-
systems or problems (the measurement and evaluation of organizational
performance, responsibility centers, transfer pricing, and aggregation)
and how these mechanisms should respond to differing basic organizational
structures.

SOME FUNDAMENTAL CONCEPTS
For the moment we will abstract from the complexities of the Sathe
paper and concentrate on what seems to be the key concepts that come out

(1) It s obvious that .the accounting system is multidimensional itself,
tor convenience we will consistently employ the undimensional
terminology, even though the concept is multidimensional.

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of the contingency theories of organization. The relevant concepts come
mainly from Lawrence and Lorsch (1967), Thompson (1967) and Lorsch (1972).
1. Environment . The environment is those factors external
to the organization that impinge on organizational
decision making. The environment is partitioned on two
dimensions - a simple-complex dimension and a stable
shifting dimension - which gives the following repre-
sentation. The environment is most difficult to deal

Insert Figure 1 about here

with in quadrant IV and least difficult to deal with
in quadrant I.

2. Differentiation. The differences in formal structure
among departments and the differences in cognitive
and emotional orientations among managers in different
departments that arise because of different environmental
demands.

3. Integration. The quality of the state of collaboration
that exists among departments that are required to
achieve unity of effort. The problems of integration
revolve around key organizational interdependencies
which seem to arise from two sources, namely,

( i) the dominant competitive issues facing the
organization - an environmental determinant,
and

(ii) the patterns of task interdependence - a techno-
logical determinant.

Stable

II

Simple

- Complex

III

IV

Dynamic

FIGURE I : Partitioning of the Environment

- 5 -

4. Basic Structure and Operating Mechanisms. It is useful
to follow Lorsch (1972) and make a distinction between
the basic organizational structure and the operating
mechanisms which implement and reinforce this basic
structure. The basic structure involves the central
issues of how the organization should be segmented and
how the organization should be integrated to accomplish
organizational objectives. The research reported by
Sathe concentrates on questions of basic structure.

On the other hand operating mechanisms help reinforce
the intent of the basic structual design. They include,
among other things, such factors as control procedures,
information systems and reward and appraisal systems -
the stuff of managerial accounting. They are crucial
to the proper functioning of an organization.

5. Boundary Proximity. This is the relative placement of
an organizational subsystem with respect to the organi-
zation boundary. This concept is envisioned, by McNaul,
Sathe and Shapiro (1974) as having three dimensions:
closeness (temporal and/or Spatial), intensity and
frequency. In this paper we will be concerned mainly
with the dimension of closeness.

DESIGNING THE BASIC STRUCTURE
Designing the basic structure involves balancing at least two anta-
gonistic states - differentation and integration. Differentiation
increases as we move from a certain environment to an uncertain environ*
ment (from quadrant I to quadrant IV in Figure I). So to does the
required integration. Required integration is partly a response to

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environmental demands but also partly a response to technological demands
or task interpendencies. Thompson (1967) identifies three concepts
of task interdependence. These are, on a scale of increasing complexity,
pooled, sequential and reciprocal interdependence. Watson and Baumler
(1973) have suggested the interaction of the environmental and inter-
dependency scales allow situations to be identified which can be ranked
according to their degree of difficulty of integration. The situations
and the implied partial ordering are illustrated below.

Insert Table 1 and Figure 2 about here

Integration is concerned with coordination of activities. The first
step is the logical grouping of activities into units. The concepts of
differentiation and integration suggest that activities with similar
orientations and tasks (low differentiation) should first be grouped
together. Second, units which are required to integrate their activities
closely should be grouped together (high integration) . If these two
criteria do not conflict, the basic design problems are not difficult.
However if these two criteria do conflict, and this is increasingly the
case as we move from A to F in the above partial ordering, one criterion
will be optimized at the expense of the other. This will have implications
for the use of other structual integrating devices and for the design of
operating mechanisms.

MEASUREMENT AND EVALUATION OF ORGANIZATIONAL PERFORMANCE
Introduction

Information generated by the accounting system is ultimately used
for judging performance or behavior, whether it is the total organization,
or subunits or individuals within the organization. Of course, the type
of information generated by the accounting system Is, presently, strictly
financial. Since the accounting system tends to be the dominant formal

""""-v^^ Environmental
^^^^TJncertainty

Organizational^-^^^
Interdependence ^-\.

Certain

Uncertain

Pooled

A

D

Sequential

B

E

Reciprocal

C

F

Table 1: Interaction of Environmental and Interdependency Scales

D

\7

Least difficult

Most difficult

Figure 2: Partial Ordering

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information system in an organization, and therefore a dominant operating
mechanism, two questions need to be continually asked. These are:

1. Is the appropriate financial data being reported?

2. Is financial data appropriate?

Contingency theorists (e.g., Thompson, 1967, Chapter 7) argue that the
assessment of organizational subunits (and the organization) should be
situation specific, the appropriate means of assessment depending upon the
type of interdependency existing between the subunits and on the task
environment faced by the firm. For example in cell A in the Watson and
Baumler formulation the environment is fairly certain and the interdependency
is of the relatively simple pooled form. Coordination can be achieved by
standardization - the establishment, of rules and procedures to maintain
consistent action by the subunits affected. Performance can be judged on
the basis of how closely the units obey the standards. When we move from
cell A to cell B an added mechanism for coordination, coordination by
planning, is called for. This also adds a measure of performance - how
well subunits meet the plan. In both of the above examples we can see
obvious relationships to accounting - for example, standard costs and
budgeting. In cell C the coordination is a little more complicated - one
of mutual adjustment - and so is the appropriate evaluation of organiza-
tional performance. Whereas in the first two cells the question "what is
the appropriate financial data?" could be asked, in cell C one can
legitimately question whether financial data is appropriate. To answer
this question, we need to enrich the framework by explicitly including
expectations regarding outcomes and. appropriate performance levels..

Cause - Effect and Levels of Performance

Most behavior in organizations and, more generally, most actions and
decisions are guided by some model of cause and effect. We take an action,
or cause and action to be taken, because we anticipate some consequence

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will occur. However, our knowledge of the cause-effect relationship is
rarely perfect. The typical situation can be explained as: we take
some action based on some anticipated chain of events (cause-effect),
but some other set of events occurs simultaneously which results in
some unanticipated consequences. The process can be depicted as in
Figure 3.

Insert Figure 3 about here

We can assume that when we implement a solution we expect the feed-
back to be positive, i.e., we expect the consequences of the solution
implementation to eliminate or at least relieve the problem. However we
have no such assurance with respect to the unanticipated consequences.
Since we have no model for that aspect of our solution implementation, we
have no way of knowing whether these unanticipated consequences will
relieve our problem or intensify it. The feedback may be positive or
negative.

This is one example of error in the predicted cause-effect relation-
ship. In this case what we expect to happen happens, but is confounded
by a set of events we did not expect to happen. We could also have the
case where the anticipated consequences did not happen or where they
are greatly modified in form. Thus, in our decision making and organiza-
tional behavior in general, we have some beliefs about our cause-effect
knowledge in a given situation. Usually, these beliefs fall on a
continium from complete knowledge (usually termed certainty in decision
making) to non-knowledge (uncertainty). Organizations tend to operate
in a range of incomplete knowledge or make assumptions or use other
techniques to convert non-knowledge to some state of incomplete knowledge.

Anticipated
Consequences

Organizational
Problem

~1

^

Problem Solving
Process

^k

Solution
Implementation

+

Unanticipated
Consequences

Figure 3: Decision Making and Feedback Process

« 9 -

Students of managerial accounting will be familiar with the following
equation (or some variation of this) :

Total Variance = Price Variance + Quantity Variance

= (Actual Price - Standard Price) Actual
Quantity + (Actual Quantity - Standard
Quantity) Standard PTice
For us the important element is the idea of standards (i.e., price and
quantity standards). Although these concepts are generally used by
managerial accountants as part of the control function we can generalize
this to behavioral or decision actions in general. We use standards of
desirability (decision criteria) to assess the effect parts, of the cause-

«

effect relationships, we are considering. These standards of desirability
can be undimensional, in that one state is preferred over another state,
or they may be multidimensional. In the above, for example, we may prefer
low input prices to high input prices. We may also prefer high input
quality to low input quality. However, we may have a problem when we must
decide between higher prices leading to higher quality. How different
dimensions are going to be weighed is a perplexing problem. On top of
this, preferences on some dimensions, and their measurement on these
dimensions, are clear but on other dimensions are quite vague. Thompson
(1967) has suggested that these standards of desirability can vary from
crystalized to ambiguous. They can be specific and applicable to a
particular situation, or they may be vague and general.

These two dimensions, cause-affect relationships and standards of
desirability, may be related in terms of a simple paradigm (Thompson,
1967).

Insert Table 2 about here

Cause - Effect Relationships

Certain

Uncertain

Standards

of

Desirability

Crystalized

Ambiguous

III

II

IV

Table 2 ; Decision Making Framework

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Implications of the Cause-Effect - Standards Paradigin and the Differentia-
tion-Integration Paradigin

In cell I (of table 2) we would expect decision making to maximize. We
believe we know what actions will have what results and we know what results
are wanted. Generally, accounting data is not a suitable basis for making
maximizing decisions nor, in general, does accounting data provide the basis
for constructing efficiency tests of organizational performance. At times,
by making the appropriate assumptions and developing extra data, tests which
are inherently efficiency tests are applied. For example, in capital budget-
ing, extensive reliance is placed on present value analysis and in inventory
planning sophisticated inventory models have been developed. It is also true
that as the cause-effect relationships become more certain effectiveness
tests take on the character of efficiency tests. But most accounting measures
are primarily useful for decisions that fall into cell II.

In cell II we are faced with the problem of knowing what is required but
not knowing precisely what actions will achieve these results. Satisf icing
behavior replaces maximizing behavior and the tests of organizational per-
formance are effectiveness or instrumental tests. The traditional accounting
model (Assets - Liabilities = Owner Equity) provides data particularly useful
for judging effectiveness. Measures such as standard costs and variances and
accounting rate of return are useful for answering questions of the following
kind: "Did we or did we not operate at the cost level we expected?"; or,
*Vas the accounting rate of return satisfactory, i.e., was it equal to or
greater than we expected?". Techniques like standard costs, variances,
accounting rate of return, and efficiency and effectiveness tests in general,
are basically internal measures of performance. They are most appropriate
measures of performance where results cannot be influenced (or this
influence is minimized) by parties external to the subunit. In other words,
they are particularly useful where organizational integration requirements
are low.

- II -

Where standards of desirability are ambiguous the paradigm suggests
we use other guidelines in our decision making. Unfortunately, well
developed alternative measures do not exist. Consequently, we often find
instrumental tests being relied upon. In many respects this is under-
standable for it's hard to imagine an organization or an organizational
subunit where some kind of instrumental test cannot be used. For example,
even in social work agencies or advertising departments there is always
the instrumental test, "Did the agency or department operate within its
budget (or some other revenue or cost constraint)?". Thompson (1967),
however, suggests that in these cases of ambiguous standards, social
reference groups provide an improved basis for evaluating performance.
This raises the problem of defining the appropriate reference group.

It seems the fundamentals of the differentiation - integration
paradigm can help solve the problem for an organization. In an organi-
zation the answer to the question, "What makes cause-effect relationships
uncertain and standards of desirability ambiguous?", must include state-
ments about the degree of environmental uncertainty and patterns of task
interdependence. These factors may not be the only factors but,
intuitively, it appears they must be very influential. The implication
of this, is that the factors which increase the difficulty of integrating
an organization also affect decision making, in particular, they tend to
move the decision environment from cell I towards call IV in "Figure 1.
This provides a framework to identify appropriate reference groups and,
concomitantly, classes of performance evaluation variables.

In contrast to the "internal measures" of cells I and II, measures
particularly useful where integration requirements are greatest, i.e.,
"external meaures" of subunit performance, can no\; be entertained. Two
classes of measures seem appropriate and they are, conveniently, the two
dimensions of the integration paradigin of Watson and Baumler. One class

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is "the interdependency variables" and the other is "the environmental
variables". By interdependency measures is meant dimensions such as
confidence, prestige or respect, that reflect the quality of integra-
tion among the subunits. Other quantitative dimensions may include
the fulfilling of obligations or meeting of plans by the subunits. By
environmental measures is meant dimensions which reflect how well the
subunit copes with environmental demands. Data on some of these
dimensions will only be found in the environment.

The above discussion leads to the following statements regarding
the role these various measures should play in the evaluation of sub-
unit performance.

Internal Measures: The importance of these measures should vary
inversely with the aggregate importance of interdependency and
environmental measures. To reiterate, these will be most
important when the requirement for integration of subunits is
low.

Interdependency Measures : The importance of these measures
varies directly with the complexity of the patterns of task
interdependence. That is, in moving from pooled to sequential
to reciprocal interdependence among subunits these measures
increase in importance.

Environmental Measures: The importance of these measures
varies directly with the environmental uncertainty confront-
ing the subunit and the subunit' s boundary proximity.

- 13 -

The above statements suggest alternative weights should be placed on

(2)
the measures depending upon organizational contingencies. This can be

illustrated through the Watson and Baumler integration paradigm. To

simplify the example the variable, boundary proximity, is held constant.

(In actual fact, the importance of the environmental measure would be

modified as the subunit became embedded in the organization.)

Insert Table 3 about here

Summary:

The measurement and evaluation of organizational performance is one
of the important contributions by accounting to organizational rationality
Accountants have, in the past, tended to concentrate solely on financial
aspects of the measurement process. There is evidence of increasing
interest in non- financial measures of performance by the accounting profes-
sion. This latest revolution in organization theory provides a rationale
for accelerating the emphasis.

(2) Some research is presently being conducted by David Hayes along lines
similar to those suggested here (see Hayes, 1973). Hayes argues for
a linear aggregation of the three measures to obtain an overall
performance measure. The argument in this paper suggests, rather, a
distributive form of aggregation if a composite performance measure
is desired.

Integration Available Performance Measures

Cell

A
B
C
D
E
F

Internal

Int<

ardendency

Environmental

1

3

3

1

1

3

2

1

3

1

3

2

3

2

1

3

1

1

1 implies major importance

2 implies moderate importance

3 implies minor Importance

Table 3 : Suggested Importance of Available Performance Measures as a

Function of the Degree of Difficulty in Integration .

- 14 «

RESPONSIBILITY CENTERS

Cost, profit, and investment centers are operating mechanisms
which are used to enhance structual differentiation. Responsibility
centers enhance structual differentiation by reinforcing cognitive
differences, especially goal and time orientations. If responsibility
centers are based upon structually differentiated units and, reporting, and
reward and performance systems are tied to these centers, individual
behavior will reflect the particular responsibility concept employed.
For example, cost centers will undoubtedly lead to performance and reward
systems, and consequently to personal orientations and behavior, based
upon meeting or beating short run cost standards. This kind of orien-
tation will differ from the orientations developed when performance
and reward systems reflect results reported from the operations of
investment centers. Even, say, investment centers designed around
different functions or investments may reinforce the development of
different goal orientations.

The crucial point here is that the responsibility centers should
reflect the environmentally demanded differentiation. Accountants
should not try to impose differentiation through the creation of
artificial responsibility centers. This is rarely mentioned in the
accounting literature which leads to the impression, and a position
that some authors seem to advocate (e.g. Goldschmidt, 1970), that
responsibility centers can be established successfully anywhere in an
organization. This may have dysfunctional behavioral consequences.
For example, such Inappropriate operating mechanisms may encourage the
development of different orientations among organizational members when
similar orientations are demanded.

- 15 -

Responsibility centers serve also as a basis on which an accounting
system can be established to encourage integration. These centers
represent fundamental units of a responsibility accounting system. This
is simply a reporting system in which reports build on one another, one
layer of reports forming the basis of another layer of reports. This
hierarchical reporting system normally reflects the formal management
hierarchy and thereby facilitates controlling and coordinating
activities through this hierarchy. We will return to this aspect of
responsibility accounting and responsibility centers when we broach the
topic of aggregation.

TRANSFER PRICING

Interaction among differentiated units may very well involve the
transfer of goods and services. If these units also represent res-
ponsibility centers this transfer will undoubtedly require the pricing
of these goods and services. To begin with, this process helps separate
and pinpoint responsibility for different aspects of the organization's
functioning, i.e. it enhances differentiation. However, just as impor-
tant, if not more important, is the function transfer pricing performs
in integration. From this point of view we can consider the transfer
pricing system as one of the operating mechanisms that reinforces the
integrating mechanisms of the basic structure. The logical implication
for transfer pricing from contingency theories is that the particular
transfer pricing mechanism chosen should reflect the environmental
uncertainties and task interdependencies . This implication is examined
thoroughly in the paper by Watson and Baumler (1973). Their argument
is summarized here by considering their two dimensional integration
paradigm and the coordination mechanisms (from Thompson, 1967) that
were introduced earlier in the section on performance measurement and
evaluation.

- 16 -

Watson and Baumler argued that in moving from cell A towards cell
F in their representation the difficulty of integration increased,
Consequently, the transfer pricing mechanism should, and could, reflect
this increase in integration difficulty. In the simplest cases (e.g.
cell A) coordination through rules and standardized procedures is
appropriate. Therefore transfer price formulae reflecting standardized
procedures, such as fixed prices, cost plus or market price, seem
appropriate. Where the integration problem demands coordination through
processes such as planning (e.g. cell B) standard variable costs or
marginal costs are very appropriate as these mechanisms give the greatest
flexibility to units further along in the sequential process. Similarly
most mathematical programming solutions to the transfer pricing or
resource allocation problem are applicable in this case.

Finally the most complicated integrating situations require coor-
dination by mutual adjustment. Galbraith (1974) develops in detail
the kinds of integrating mechanisms that are of this type. Watson and
Baumler suggest, that when the integration required is achieved by
mutual adjustment, the appropriate transfer pricing mechanism is one
of negotiated prices. What kind of useful pricing information the
accounting system can provide in these cases is unclear. The information
will probably be multiple cost or price choices or suggested bounds on
the final negotiated price. At the moment, however, research on this
issue is non-existent.

AGGREGATION

A most interesting accounting analogy comes from the concept of
integration. Integration is concerned with the quality of coordination.

- 17 -

For an accounting system, an equivalent concept appears to be the
quality of aggregation. Once the accounting system is collecting in-
formation through basic cost, profit and investment centers, how should
this information be aggregated? The traditional answer lies in the
management hierarchy, For example, if a sales unit is segmented into
a number of product lines, each one a profit center, these profit
centers will probably be aggregated so as to form a single sales unit
picture. This is the usual responsibility accounting presentation
found in managerial accounting texts. Is this aggregation always
appropriate?

The contingency theories suggest that the major integration problems
(or key organizational interdependences) arise from the dominant com-
petitive issues and the patterns of task interdependence. These key
organizational interdependences are, analogously, the dominant com-
petitive issues for the accounting system. The aggregation problem is
to combine raw input data so that the appropriate financial data is
compiled and transmitted to where the organizational interdependences
exist. The patterns of task interdependence for the accounting system
arise because of the three functions the accounting system performs.
These were identified by Simon et, al. (1954) as:

1. the scorecard function: The accumulation of data.
This allows both internal and external parties to
evaluate organizational performance.

2. the attention directing function: This aspect of
accounting is commonly associated with current planning
and control and with the analysis and investigation re-
curring, routine Internal accounting reports.

- 18 -

3. the problem solving function: This aspect of account-
ing is commonly associated with non-recurring decision
situations that require special accounting analysis or
reports.
The major task interdependency is between the first and second
functions above. These are the functions that dominate day to day account-
ing and it is here that the major task integration will occur. The
typical mechanisms used for obtaining this integration are budgets and
standard costs. Actual scorecard data is compiled and matched against
predetermined budget and cost data. Significant differences (variances)
represent the attention directing mechanism. Combining these mechanisms
with a responsibility accounting system which reflects the key organi-
zational interdependences is the accounting integration or aggregation
problem.

CONCLUSION

Managerial accounting today is still largely dependent upon the
organizational theory developments of the 1950' s and previous decades. Yet
it is becoming apparent that organization theory is rapidly changing.
Significant new insights have been made with regard to organizational
behavior. The task facing behaviorial accountants, interested in
managerial accounting and organizational behavior, is to integrate these
new insights to enrich the area of managerial accounting and, eventually,
developing a theory of the subject. This paper presented a few of the
topics which will receive attention in the coming years.

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Wolk, H. I. and Hillman, A. D,

"Material Mix and Yield Variances: A Suggested Improvement", Accounting
Review (July, 1972), 549-55

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