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In a recent article, written with Dr Massimo Contrafatto, I explored how management accounting helps to shape an organisation’s strategies for becoming more sustainable. The case study is an Italian multinational organisation, operating in the utilities industry, which over the last decade has drawn on its management accounting practices to assist a move towards ‘integrated reporting’ but also, more generally, to instil sustainable ways of working.

One of our main conclusions in this paper is that, despite intentions to (at least appear to) be more sustainable in its behaviour, the overriding goal of organisational managers was to maximise profits. One person interviewed in the Italian multinational said: “At the end of the day, the main objective of this company is always to make more and more profit – and this can not be otherwise”


And, of course, we should not really be surprised at this – making profits is the age-old mantra for all commercial organisations, plus profits are not necessarily a ‘bad’ thing.

However, in our paper we question the untouchable nature of conventional management accounting, and its seemingly taken-for-granted status in the corporate world as a vehicle upon which to shape sustainable development strategies. After all, management accounting is rooted in neoclassical economic theory, and thus rests on assumptions of rational decision-making, equilibrium and the optimisation of utility (which for organisations equates to profit maximisation).

Our concluding comments included a suggestion that if profit-seeking organisations genuinely wished to earn their profits in more sustainable ways (i.e., less social and environmental costs), it is likely that there will need to be some re-think in the management accounting tools that they adopt (starting with the philosophical foundations of such tools).

If we are to accept that a commercial organisation’s overriding objective is to earn as much financial profit as possible, do you see this as being something contrary to ambitions for being less harmful to society and the environment? And, how, if at all, do you think management accounting can be used (and/or re-developed) to assist progress in how organisations might earn their profits in less damaging ways?

Source: Contrafatto, M. and Burns, J. (2013) ‘Social and environmental accounting, organisational change, and management accounting: a processual view’, Management Accounting Research, 24(4), forthcoming


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